US EARLY MORNING: US index futures are lower, bond yields little changed

TODAY’S AGENDA:         

• 
  DAY AHEAD: Today’s agenda is fairly thin ahead of a busy week (see below). In Europe, the UK CBI Distributive Trades data is due. Remarks are expected from the NATO Secretary-General Stoltenberg, who will give a press conference, while Bono watchers will be on the lookout for remarks from Spain's finance minister Montero. There will also be a EU Foreign Affairs Council meeting on trade. The Israeli central bank is expected to keep rates unchanged at 4.75%. The US day features Building Permits revisions for October, New Home Sales data, and the Dallas Fed Manufacturing Business Index for November. Treasury supply is due by way of a 2yr and 5yr auction.


• 
  WEEK AHEAD: Key events this week include US PCE inflation data, the ISM PMI data, China PMI data, Eurozone inflation data, OPEC+ meeting; the RBNZ is also set to report this week. Our week ahead briefing can be accessed here. This week, key US corporate earnings reports are due from ZS on Monday; PDD, INTU, and WDAY on Tuesday; CRM and SNPS on Wednesday; DELL on Thursday; our weekly US earnings estimates sheet can be found here. Meanwhile, month-end dynamics will start kicking in this week; Barclays' model suggests strong USD selling against most majors driven primarily by the significant rally in global equity/bonds in November.

EQUITY NEWS:

CONSUMER:

• 
  Black Friday - Black Friday US online spending +7.5% Y/Y to a record USD 9.8bln in sales, CNBC reports citing data from Adobe Analytics. Online sales were boosted by demand for electronics, smartwatches, TVs and audio equipment. The spending bump reflects consumers looking to advantage of big deal days and finding it easier to compare discounts online. The report adds that after Cyber Monday, sales will likely taper off through the rest of the holiday season as retailers trim discounts.


• 
  Amazon (AMZN), iRobot (IRBT) - Reuters Friday reported that Amazon was set to win unconditional EU antitrust approval for its USD 1.4bln acquisition of iRobot.


• 
  Travel - The US is expected to report the busiest air travel day in history on Sunday, CNBC reports. Separately, Barron's reports that business travel is set to pick up, and positively mentioned Hilton (HLT), Hyatt (H), Delta (DAL), United Airlines (UAL) as likely beneficiaries.


• 
  Retailer Hiring - Retailers are reducing holiday hiring with the fewest job openings since 2013, and are scrapping sign-on perks, NBC reports. Major employers like the US Postal Service, Macy’s, (M) and Walmart (WMT) plan fewer seasonal hires due to a cooled labour market.


• 
  Automakers - Chinese automakers are winning over millions of consumers around the world with affordable EVs, but are conspicuously absent from the US market, WSJ notes, as Washington has effectively built a fortress to keep out Chinese EVs with President Trump's 25% tax on Chinese auto imports, which President Biden backed and took further.


• 
  General Motors (GM) - GM's Cruise unit plans to eventually reintroduce its robotaxi service following safety mishaps, but will narrow the focus to one city and shelve plans for the Origin, a GM-built driverless taxi, WSJ reports.


• 
  Tesla (TSLA) - Tesla is ready to invest up to USD 2bln to set up a factory in India if the government cuts import duty on its vehicles to 15% for the first two years of operations, Reuters reports citing an Economic Times report from Friday. Separately, Tesla "faces ban" on selling self-driving cars in the UK, under new driverless car laws, The Telegraph said. The changes to law are set to be implemented as soon as next year.


• 
  Vontier (VNT) - Positive mention in Barron's; says that it is an auto stock to buy now, noting that while the transition to electric vehicles has hit a speed bump, Vontier shares should still benefit.


• 
  Hennes & Mauritz AB (HNNMY) - H&M to up prices paid to suppliers for clothing to offset increased Bangladeshi worker wages, Bloomberg reports. The retailer plans to absorb wage hikes in product costs following the government's 56% minimum wage rise.

TECH:

• 
  Nvidia (NVDA) - Reports Friday said Nvidia told customers in China it was delaying the launch of a new AI chip it designed to comply with US export rules until Q1 next year.


• 
  Microsoft (MSFT) - Positive mention in Barron's; said that although Microsoft is trading near its record high, it is still undervalued.

COMMUNICATIONS:

• 
  Advertising - X faces potential USD 75mln ad revenue loss by year-end as major brands pause campaigns after Elon Musk's endorsement of an antisemitic conspiracy theory, NYT reports. Internal documents reveal over 200 companies considering or halting ads on the platform, impacting its strongest quarter. Musk is due to meet Israeli president today; Israel will emphasise the ‘need to act’ against rising anti-Jewish hate, Guardian reports.


• 
  Digital Platforms - Australia's competition watchdog calls for new laws due to digital giants' growth like Amazon (AMZN), Apple (AAPL), Google (GOOG), Meta (META), and Microsoft (MSFT), Reuters reports. Concerns over invasive data collection and customer-limiting practices prompted the Australian Competition and Consumer Commission's report.


• 
  Meta Platforms (META) - Meta received 1.1mln reports of under-13 users on Instagram since 2019 but disabled only a few accounts, NYT reports. Accused by 33 states, Meta allegedly collected minors' data without consent, breaching children's privacy laws and facing potential hefty civil penalties.

ENERGY:

• 
  OPEC Meeting - African states are yet to reach a resolution over baselines, though the OPEC+ meeting is still due to take place on November 30th, Energy Intel reports.


• 
  Energy Policy - Former President Trump plans to dismantle President Biden's climate laws, boost fossil fuel investment, and revoke measures for electric vehicles if re-elected, FT reports. He aims to overhaul climate policy, prioritising fossil fuel production, targeting Biden's USD 369bln Inflation Reduction Act.


• 
  Shell (SHEL) - UK's Unite union says Kaefar Contractors at Shell's Mossmoran and St Fergus energy plants will begin week-long strike action.


• 
  Ethanol Expansion - The White House delays Farm Belt states' ethanol-blended gasoline sales due to oil industry warnings of regional supply issues and price spikes, Reuters reported.

MATERIALS:

• 
  BASF (BASFY) - Shares in chemicals giant BASF rose on Friday after a report that Abu Dhabi's ADNOC was exploring an acquisition of the German group's energy business Wintershall Dea, Reuters said.

HEALTHCARE:

• 
  Healthcare Hiring - WSJ reports that a healthcare hiring boom is helping offset weaker job growth in other areas of the softening US economy, boosting its chances of skirting a recession. Adds that the healthcare industry could serve as a strong job generator for years to come as an aging population and Covid-19 fuel widespread worker shortages and greater needs for healthcare services.


• 
  Walgreens (WBA) - UK Pharmacy Boots transfers its GBP 4.8bln pension obligations to Legal & General, potentially enabling Walgreens Boots Alliance's UK pharmacy chain sale, FT reports. Legal & General has assumed liabilities for 53,000 retirees, aiding Boots in removing a hurdle for a sale after market conditions thwarted a previous attempt.


• 
  Teva Pharmaceutical (TEVA), Eli Lilly (LLY) - Teva settled a patent lawsuit with Eli Lilly over Emgality after the US Patent Office invalidated Teva's patents, Reuters reports. Both companies agree to dismiss the case with prejudice, barring its re-filing.


• 
  Bayer (BAYRY) - CEO said breaking up the firm will not itself fix Bayer's issues, blames thin drug pipeline on ‘years of under-investment’, though adds that the group is generating a series of promising new drugs after R&D strategy change, the FT reports.


• 
  Roche (RHHBY) - Roche expands hepatitis diagnostics portfolio to help clinicians diagnose and monitor patients with acute or chronic hepatitis B infection.


• 
  GSK (GSK) - Announces positive DREAMM-7 headline results. (Newswires)

REAL ESTATE:

• 
  Crown Castle (CCI) - Elliott plans to push for changes at Crown Castle after the activist failed to gain traction when it first took a stake in the big owner of wireless towers, WSJ reports. Elliott has amassed a stake of more than USD 2bln and plans to engage with the company about ways to boost its shares, sources said.

FINANCIALS:

• 
  UK Banks - Barclays (BCS) working on USD 1.25bln cost cutting plan which could see up to 2,000 jobs cut, Reuters reports. Separately, the UK’s largest high-street Lloyds Banking Group (LYG) is preparing review of middle-management roles in response to expected income squeeze, and more than 2,500 jobs are at risk, The Guardian reports.


• 
  Aviva (AVVIY) - To acquire Optiom, a Canadian vehicle replacement insurance business for GBP 100mln.

27 Nov 2023 - 09:30- Research Sheet- Source: Newsquawk