US EARLY MORNING: US equity futures are seeing some stability after the post-Fed slide, but still on course to finish the week lower

US PRE-MARKETS: After the downside seen in wake of the hawkish Fed policy announcement on Wednesday, US equity futures are regaining some stability, and trading with very slight gains. However, the complex is still on course to finish red for the week. Treasury yields are mixed, with near-term yields lower by 2-3bps, though longer-term yields are up by 0-2bps. The Dollar Index is a little better than flat, largely as a function of the JPY downside, with the BoJ's policy announcement providing no surprises (see here), and Governor Ueda generally refraining from hawkishness in his post meeting press conference (see here). Meanwhile in Europe, the EUR has pared some of its losses following soft French PMI data (downside surprise, see here), with the German numbers coming in better than expected (see here). US PMI data will be out later today, and so far, the regional Fed manufacturing reports have been mixed. Traders will also be looking to commentary from Fed officials today (2023 voters Cook and Kashkari, as well as 2024 voter Daly) for further framing of the central bank's recent hawkish hold.

TODAY'S AGENDA:

DAY AHEAD: Flash PMI data will be in focus, and both the manufacturing and services gauges are seen improving very slightly; this week, the Fed upgraded its language on the economy, so economic metrics are not expected to slip too aggressively in the near-term. After the Fed’s hawkish hold this week, policymakers Cook (voter), Daly (2024 voter) and Kashkari (voter) are due to make remarks. Baker Hughes Rig Count data will be released in the afternoon. On the ECB speaker's slate, VP de Guindos will give remarks followed and a Q&A. On the credit ratings docket, S&P is set to review Germany (currently AAA), and DBRS is set to review France (AA).

EQUITY NEWS:

TECH:

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  Stratasys (SSYS), Desktop Metal (DM), 3D Systems (DDD) - Donerail Group, a major shareholder of Stratasys, has expressed serious concerns about Stratasys' proposed acquisition of Desktop Metal. It notes that proxy advisory firm ISS recommended voting against the acquisition, and other shareholders plan to do the same. Donerail questions the board's ability to act in shareholders' best interests.


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  3D Systems (DDD) - Michael Turner is resigning as CFO of 3D Systems on October 15th, for a new job. Andrew Johnson will become the interim CFO starting October 16th. DDD is searching for a permanent CFO.


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  Alphabet (GOOG), ByteDance (not listed) - TikTok is testing third-party integrations, including Google Search links in search results. This aims to improve the in-app experience as social media apps become more important for online searches, according to Android Central.


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  Alphabet (GOOG), Marvell (MRVL), Broadcom (AVGO) - Google said that its relationship with Broadcom remains unchanged despite reports suggesting it might stop using Broadcom as a supplier of AI chips by 2027, Reuters reports. Google is considering designing these chips in-house, potentially saving money. This move comes after a pricing dispute between Google and Broadcom. Google is also exploring using Marvell Technology as an alternative chip supplier for their servers, Reuters said.


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  Texas Instruments (TXN) - Texas Instruments raised quarterly dividend +5% to USD 1.30/shr (prev. USD 1.24/shr).


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  Apple (AAPL) - Apple is expected to sell more high-end iPhone 15 Pro and Pro Max models in India, increasing its market share from 5% to 7% in the second half of 2023, Reuters reports. Demand for these models is high, with wait times stretching into late October.

COMMUNICATIONS:

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  Microsoft (MSFT), Activision (ATVI), Ubisoft (UBSFY) - UK CMA regulator said the sale of Activision's (ATVI) cloud gaming rights to Ubisoft (UBI FP) has made significant progress in resolving previous concerns, is now seeking input on potential solutions before making final decision on Microsoft (MSFT) deal. Said that while some limited concerns remain with the new deal, Microsoft has proposed remedies that the CMA believes can effectively address these issues. As part of the revised agreement, Microsoft will not acquire Activision's cloud gaming rights.


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  Adevinta (ADEVY), Permira (not listed), Blackstone (BX), eBay (EBAY) - A consortium led by Permira and Blackstone has made a non-binding proposal to acquire all shares of Adevinta. eBay and Schibsted support this proposal but would keep some of their shares. Discussions are early, and no final offer terms are confirmed. eBay said it was aware of Adevinta's statement, and has expressed support for this proposal.


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  Zoom Video (ZM) - Zoom Video COO Aparna Bawa sold 13.3K shares on September 19th for a total USD 920K.

CONSUMER:

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  Amazon (AMZN), UPS (UPS) - Teamsters union says Amazon workers across the country are demanding real wage increases after the company announced pay rates this week that fall well below the industry standard set by the Teamsters at UPS.


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  BorgWarner (BWA) - BorgWarner said that the initial impact of auto strikes on its revenue was 'relatively modest', and it expects to make around USD 250mln per month in sales to Ford (F), Stellantis (STLA), and General Motors (GM) in North America for 2023. Initial strikes at some assembly plants may have a limited impact, but if it continues or affects more plants, it could impact BorgWarner's sales. Further updates will be provided in its Q3 earnings call.


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  Tesla (TSLA) - Tesla is considering building battery storage systems in India and has proposed this idea to officials, Reuters reports. It wants to use the "Powerwall" technology to store electricity from solar panels or the grid for use when needed. While Tesla sought incentives for a factory, Indian officials may instead offer subsidies for buyers of their products.


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  O-I Glass (OI) - O-I Glass approved the closure of its glass container plant in Waco, Texas, with the shutdown expected around October 16th. Approximately 300 employees will be affected. O-I said that the decision aligns with its efforts to improve overall efficiency. The closure is anticipated to result in a charge of around USD 60mln in Q3.


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  Coty (COTY) - US beauty and fragrance company Coty is moving ahead with plans for a listing in Paris, possibly in the coming weeks, Bloomberg reports, and may raise fresh capital through the listing. Coty aims to announce details soon and potentially list shortly after. Coty is looking to expand its investor base and strengthen its presence in the region with a Paris listing.

MATERIALS:

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  US Steel (X), Stelco Holdings (STLC), Cleveland-Cliffs (CLF) - Canada's largest steelmaker Stelco mulls making a bid to buy US Steel, BBG reports. Stelco wants to expand its steel assets, and gain a bigger share of the automotive metal supply market. Stelco is talking to a potential partner, but has not made a final decision yet. This comes as US Steel is exploring its options, and there's competition from Cleveland-Cliffs.


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  Newmont (NEM) - Newmont confirmed it was in negotiations with striking Mexico miners.

ENERGY:

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  Chevron (CVX) - An Australian union alliance canceled strikes at Chevron's LNG projects after resolving pay disputes with help from an arbitrator, Reuters reports. This ends a 6-week wage fight that had caused LNG prices to rise by up to 35% in August, affecting around 7% of global LNG supplies, the report added.


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  Sempra (SRE) - Sempra Infrastructure received approval from the FERC for the Port Arthur LNG Phase 2 expansion project in Texas. This project will add two liquefaction trains, doubling liquefied natural gas production capacity to approximately 26mln tonnes per annum.

INDUSTRIALS:

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  Deere (DE) - John Deere is laying off 225 production employees at its Harvester Works in East Moline starting from October 16th, QC Times reports. The decision is based on the factory's need to balance its workforce, despite hiring more employees in recent years. The factory has around 2,300 total employees, with most in production and maintenance roles.

FINANCIALS:

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  Regions Financial (RF) - Chief Risk Officer Matt Lusco will retire by the end of 2023. Russell Zusi will take over on January 2nd. RF said Lusco's leadership has strengthened risk management at Regions, setting a solid foundation for the future.

22 Sep 2023 - 09:30- Research Sheet- Source: Newsquawk