US EARLY MORNING: US index futures continue upside; PPI, retail sales, Biden-Xi meeting ahead

US PRE-MARKETS: US equity futures continue the upside seen in wake of the cooler than expected CPI data for October, which resulted in an easing of global macro financial conditions, as bonds and equities rallied. Overnight, China released better-than-expected activity data, which overall suggests that the recovery was struggling to gain a strong footing at the start of Q4, but was not nearly as weak as some had feared, according to Capital Economics, while the UK reported cooler-than-expected CPI data too. Bond yields are mixed, with the short-end giving back some of Tuesday’s gains, while the longer-end is only marginally lower. The Dollar Index is around flat; ING warns the correction lower in the buck is gaining much attention: ING said Tuesday's moves were extreme, noting that its short-term fair value model now has the USD as undervalued against all G10 currencies except for the JPY, CAD, and NOK; "this is quite remarkable given the dollar had been generally overvalued in the short term for many months," the bank said. Its analysts will be watching today's PPI data for confirmation that the disinflation process effectively accelerated in October. Other than the PPI data, there are retail sales due from the US today (primer below), but the main focus will be on a meeting between Presidents Biden and Xi on the sidelines of the APEC summit; the two will meet at 10:45PST/18.45GMT/13:45EST, Biden will then hold a press conference at 16:15PST/00:15GMT/19:15EST; our primer is here.

PREVIEW – US RETAIL SALES (13:30GMT/08:30EST): Headline retail sales are seen slipping in October, with the consensus looking for -0.3% M/M (prev. +0.7%); the ex-autos gauge is seen unchanged (prev. +0.6%), while the Control Group is seen up +0.2% M/M (prev. +0.6%). Bank of America’s October credit and debit card spending data showed a decline of 0.2% M/M in October (vs prev. +0.2% M/M in September), taking the annual rate to -0.5% Y/Y (vs +0.7% in September). The bank said that in contrast to the trends seen in the summer, there is no longer a convergence of services and retail spending. “This month, we saw a meaningful convergence between lower- and higher-income households’ spending growth, which could be partly explained by the rebound in wage growth for the latter,” it writes, noting that rising mortgage payments have started to disproportionately weigh on some higher-income households. “This has led to slower spending for homeowners relative to high-income renters, and if rent inflation softens further, renter spending outperformance could play out in middle- and lower-income families too.” BofA adds that despite a jump in households resuming student loan repayments, it is still seeing little signs of a negative impact on spending, and says that household balance sheets still remain in robust shape.

PREVIEW – BIDEN-XI MEETING (meeting 10:45PST/18.45GMT/13:45EST, Biden press conference 16:15PST/00:15GMT/19:15EST): US President Biden and China’s President Xi will hold talks on the sidelines of the APEC forum in San Francisco, which will be only the second in-person meeting between the two. No big breakthroughs are expected from the talks. Instead, analysts will be looking for incremental signs of improvements in relations. An official has said Biden will discuss Ukraine, Israel, human rights, Taiwanese elections, South China Sea, North Korea and fair economic relations when the two meet on November 15th. The official added that Biden might raise Chinese election influence operations, Fentanyl, AI and US detainees in China. The US also plans to take necessary steps to restore military communication with China and will press the issue "assertively" with Xi, and underscore a desire for China to tell Iran to not escalate the crisis in the Middle East. Geopolitical analysts at RANE said that the talks will help to restart working-level dialogues on issues like trade disputes, but will fail to address the root cause of escalating US-China tensions and augur little progress on key policy disputes, including climate change mitigation. Newsquawk primer here.

TODAY’S AGENDA:

DAY AHEAD: Our interactive calendar can be accessed here; a pdf version can be downloaded here. Highlights include: Final French and Italian CP, EZ Trade Balance and Industrial Production; US Retail Sales and PPI; speeches due from Fed's Barr (voter), Barkin (2024), Biden-Xi Meeting (Biden-Xi to meet Wednesday at 10:45PST/18.45GMT/13:45EST, Biden to hold a press conference at 16:15PST/00:15GMT/19:15EST; our primer is here). US corporate earnings releases today will include JD, TGT, CTLT, FI, TJX, PANW, CSCO; our Daily US Earnings Estimates sheet can be accessed here.

EQUITY NEWS:

FINANCIALS:

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  Appaloosa Q3 13F: new buys: KE Holdings (BEKE). Exited: Marvell Technology (MRVL), Broadcom (AVGO), Apple (AAPL), Synopsys (SNPS), Constellation Energy (CEG). Increased: Meta (META), Microsoft (MSFT), PDD (PDD), Alphabet (GOOG), Amazon (AMZN). Reduced: TSMC (TSM), Baidu (BIDU), Qualcomm (QCOM), Alibaba (BABA), AMD (AMD).


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  Berkshire Hathaway (BRK.B) Q3 13F: New buys: Sirius XM (SIRI), Atlanta Braves (BATRK). Exited: Activision Blizzard (MSFT), General Motors (GM), Celanese (CE), Johnson & Johnson (JNJ), P&G (PG). Reduced: HP Inc. (HPQ), Chevron (CVX), Markel Group (MKL), Globe Life (GL), Aon plc (AON).


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  Greenlight Capital Q3 13F: New buys: DHT Holdings (DHT). Exited: Capri Holdings (CPRI). Increased: SPDR Gold Shares (GLD), Kyndryl (KD), Net Power (NPWR), Herc Holdings (HRI), Southwestern Energy (SWN). Reduced: Green Brick (GRBK), Tenet (THC), Resideo (REZI), First Horizon (FHN), Talis (TLIS).


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  Icahn Capital Q3 13F: Exited: Xerox (XRX). Increased: Southwest Gas (SWX), Icahn Enterprises (IEP). Reduced: Newell Brands (NWL), CVR Energy (CVI).


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  Paulson & Co. Q3 13F: Exited: Newmont (NEM). Increased: Horizon Therapeutics (HZNP), Madrigal Pharma (MDGL).


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  Pershing Square Q3 13F: Increased: Alphabet (GOOG), Hilton Worldwide (HLT), Howard Hughes (HHC). Reduced: Lowe's (LOW).


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  Soros Fund Management Q3 13F: new buys: Activision Blizzard (MSFT), Abcam (ABCM), Novo Nordisk (NVO), CRH (CRH), Splunk (SPLK). Exited: Rivian (RIVN), Aramark (ARMK), Celanese (CE), Vulcan Materials (VMC), Pioneer Natural (PXD). Increased: AerCap Holdings (AER), Jacobs (JEC), Cboe (CBOE), iShares iBoxx High Yield Corporate Bond ETF (HYG), Booking (BKNG). Reduced: iShares iBoxx Investment Grade Corporate Bond ETF (LQD), RenaissanceRe (RNR), Alibaba (BABA), T-Mobile (TMUS), Fortive (FTV).


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  Starboard Value Q3 13F: new buys: Bloomin' Brands (BLMN). Exited: Splunk (SPLK), Willis Towers Watson (WTW), Abcam (ABCM), Papa John's (PZZA), LivePerson (LPSN). Increased: Acacia Research (ACTG), iShares Russell 2000 Value ETF (IWN), Algonquin Power (AQN), iShares Russell Mid-Cap ETF (IWR). Reduced: Vertiv Holdings (VRT), Aecom (ACM), Salesforce (CRM), Rogers (ROG), Gen Digital (GEN).


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  Third Point Q3 13F: New buys: Meta Platforms (META), US Steel (X), T-Mobile (TMUS), Regal Rexnord (RRX), Telephone and Data Systems (TDS). Exited: Alibaba (BABA), Nvidia (NVDA), HCA Healthcare (HCA), Denbury (DEN), Activision Blizzard (MSFT). Increased: Microsoft (MSFT), Jacobs (JEC), Uber (UBER), Option Care Health (OPCH), Amazon (AMZN). Reduced: TSMC (TSM), Alphabet (GOOG), International Flavors (IFF), DuPont (DD), Danaher (DHR).


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  Trian Fund Management Q3 13F: new buys: Allstate (ALL), Sysco (SYY). Exited: Mondelez (MDLZ). Increased: Disney (DIS), Wendy's (WEN), GE (GE). Reduced: Ferguson (FERG).


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  Truist Financial Corporation (TFC) - Appoints Beau Cummins as COO, overseeing strategy, transformation, and operations. Donta Wilson becomes Chief Consumer & Small Business Banking Officer, managing client segments. Kristin Lesher joins as Chief Wholesale Banking Officer from Wells Fargo (WFC).


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  Nu Holdings (NU) - Q3 revenue USD 2.1bln (exp. 2.05bln). Q3 purchase volume USD 29.0bln (vs 21.2bln Y/Y); Added 5.4mln customers in Q3, bringing total to 89.1mln; monthly average revenue per active customer USD 10.0 (prev. 9.30 Q/Q, and prev. 7.90 Y/Y); deposits increased to USD 19.1bln (prev. 18.0bln Q/Q).

COMMUNICATIONS:

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  Social Media Stocks - A US District Judge in California denied dismissal of nationwide lawsuits against major social media companies Alphabet (GOOG), Meta Platforms (META), ByteDance (not listed), and Snap (SNAP); hundreds of suits claim platforms induced addiction in children, causing mental health issues. Lawsuits seek damages and cessation of alleged harmful practices.


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  Getty Images (GETY) - Q3 EPS -0.05 (exp. 0.04), Q3 revenue USD 229.3mln (exp. 228.1mln). Exec said it continues to operate in a challenging environment; saw continued growth across Ecommerce; annual subscriber numbers were up. Exec said it was revising guidance due to the ongoing challenging market conditions, including the adverse impacts from the Hollywood strikes and pressures on its agency business, as well as due to the impact from the unexpected strengthening of the USD. Updated 2023 also reflects a change to how it reports legal fees associated with the warrant litigation. Lowers FY23 revenue outlook to between 900-910mln (vs prior guidance of 920-935mln; exp. 926.9mln).


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  Charter Communications (CHTR) - SEC fines Charter Communications USD 25mln for unauthorised stock buybacks via Rule 10b5-1 plans with "accordion" provisions, allowing flexibility but not meeting conditions. Charter violated Exchange Act's Section 13(b)(2)(B) by bypassing board authorisation.

ENERGY:

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  Energy Inventories - API weekly energy inventory data reportedly showed headline Crude stocks +1.3mln (exp. +1.8mln), Cushing +1.1mln; Gasoline +0.2mln (exp. +0.6mln), Distillates -1.0mln (exp. -1.2mln).


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  TotalEnergies (TTE) - A planned overhaul of the gasoline-producing FCC at its 238k BPD Port Arthur refinery in Texas is expected to continue into late November, Reuters reports.


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  Emissions - EU finalised an agreement mandating methane emission limits on oil and gas imports starting 2030, aiming to reduce potent greenhouse gases, Reuters reports. This measure targets international suppliers such as the US, Algeria, and Russia, potentially impacting major gas exporters while favoring suppliers with lower methane intensity like Norway.

MATERIALS:

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  Glencore (GLNCY), Teck Resources (TECK) - United Steelworkers, representing over 4,000 Teck employees in British Columbia, reserved the union’s support for the proposed sale of Teck’s steelmaking coal operations to Glencore.


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  Royal Gold (RGLD) - Raises annual dividend to USD 1.60/shr (prev. 1.50/shr).

CONSUMER:

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  Nike (NKE) - Raises quarterly dividend by 9% to USD 0.37/shr. Announced leadership changes: appoints John Hoke as Chief Innovation Officer and Martin Lotti as Chief Design Officer, while Nicole Hubbard Graham rejoins as Chief Marketing Officer. Dirk-Jan van Hameren retires as CMO, and Dr. Muge Erdirik Dogan joins as Chief Technology Officer.


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  PepsiCo (PEP) - CFO Hugh Johnston sold 48,388 shares at USD 166.65/shr for a total USD 8.06mln.

HEALTHCARE:

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  Eli Lilly (LLY), Point Biopharma (PNT) - Eli Lilly received US Nuclear Regulatory Commission's approval for control transfer of Point Biopharma's radioactive materials license, the final regulatory step for Lilly's acquisition of POINT's shares at USD 12.50/share cash, pending completion of the tender offer, set to expire November 16th.


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  Alcon Inc. (ALC) - Q3 core EPS 0.66 (exp. 0.67), Q3 revenue USD 2.3bln (exp. 2.35bln). Q3 operating margin 19.5% (exp. 19.8%). Vision Care revenue +13%, Surgical revenue +6%. Narrows FY23 core EPS outlook to between 2.70-2.75 (vs prior guidance of 2.70-2.80; exp. 2.75), and narrows its FY23 revenue outlook to between USD 9.3-9.4bln (vs prior guidance of 9.3-9.5bln; exp. 9.5bln).

TECHNOLOGY:

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  Apple (AAPL) - Apple extends its emergency SOS via Satellite for an additional free year for existing iPhone 14 users.


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  AI Names - Microsoft-backed OpenAI said it was pausing new ChatGPT Plus sign-ups, surge in usage post DevDay has exceeded capacity.


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  Amkor Technology (AMKR) - Raises quarterly dividend to 0.07875/shr (prev. 0.075/shr).

15 Nov 2023 - 09:30- EquitiesData- Source: Newsquawk