US EARLY MORNING: US index futures have pared away overnight losses, although Treasuries are still bid

SNAPSHOT: US equity futures have pared back losses seen overnight through a downbeat APAC and a cautious start to European trade, where global growth concerns were in vogue once again as NatGas prices continue their surge, which is expected to drag on growth and pile further pressure onto consumers whose real incomes are already being squeezed by unrelenting consumer price increases, particularly in Europe. Purchasing managers’ surveys in Europe have painted a mixed picture at the regional level, with French data disappointing but German manufacturing data a little better than expected, as was the European aggregate gauge, but the accompanying commentary was gloomy. Nevertheless, the latter two has helped to support risk sentiment in Europe, seeing US futures rise in sympathy. Treasury yields are off lows, but still narrower on the session ahead of today’s 2yr supply. The Dollar Index climbed to a 109.00 handle, and the EUR slumped to the lowest in two-decades, although the single currency has seen a pull-back in recent trade. NatGas is higher, as are crude benchmarks, despite news of further progress in Iran talks, where Iran has reportedly dropped some key demands on the Iranian Nuclear Deal; crude traders are likely taking cues from the Saudi energy minister, who said volatility and lack of liquidity mean the futures market is increasingly disconnected from fundamentals and OPEC+ may be forced to cut production when it meets next month to consider output targets.

MONDAY’S DECLINES: Monday saw the worst daily performance on Wall Street in around 2 months. Nomura suggests that it may have been a function of dealers being long gamma pre-OpEx last Friday to short-gamma this week, requiring them to sell stocks. Technical factors were also playing a role, with desks noting the recent breach of the 4164 level, coinciding with the 23.6% Fibonacci retracement of the June low to the August high, as well as the recent breach of the 4232 level, which is the mid-point of the 2022 bear market which has been previously in focus by technicians. We are reminded about thin holiday trading conditions, while traders are awaiting the next catalyst on Friday (Powell at Jackson Hole, PCE), meaning price action could take a technical tone ahead of the events.

AHEAD: The US Day sees the release of its own flash PMI data, and although these do not provide a straight read-through to what the ISM data might look like, it may be able to provide some insight after mixed readings in the regional Empire and Philly Fed surveys released for August. New home sales for July; Fed discount rate minutes; Eurozone flash consumer confidence data for August; while the API reports energy inventory data after the US close. The US Treasury will issue 2yr notes. Full Day Ahead here. Meanwhile, the looming Jackson Hole Economic Symposium is the main event of the week, featuring remarks from Fed chair Powell on Friday, and the ECB’s Schnabel on Saturday. There is a developing feeling that Powell could disappoint: the market is looking for clues on the size of the rate hike in September, where the Fed now ses the terminal rate, how long it will be able to remain at terminal; the first is likely to be determined by NFP and CPI Data due in September as the Fed is now data dependent, while the Fed is unlikely to have great visibility ahead, and forecasts – including the terminal rate – will be updated at the September 21st FOMC, and Powell is unlikely to front-run these.

COMMUNICATIONS:

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  Manchester United plc (MANU) - Trades higher in premarket trade after it beat last year's English Premier League and European Champions League runners-up Liverpool FC by 2-1 to register its first win and points of the new season.


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  Netflix, Inc. (NFLX) - Netflix has posted job ads for cloud gaming specialists, a possible hint at what’s to come for its ongoing gaming venture, TechCrunch reported, noting that if Netflix were to launch a cloud gaming service similar to PlayStation Now, Google Stadia, or Amazon Luna, it would help it branch out beyond mobile, bringing its games to TVs and PCs without relying on game consoles.


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  Twitter, Inc. (TWTR) - Elon Musk subpoenas former Twitter CEO Jack Dorsey as he prepares for his October 17th trial vs Twitter to make the case to break his USD 44bln acquisition agreement, The Verge reported.


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  Warner Bros. Discovery, Inc. (WBD) - The premiere of “House of the Dragon” drew 9.986mln viewers across linear and HBO Max platforms in the US on Sunday night, the largest audience for any new original series in the history of HBO, WBD said.


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  Sony Group Corporation (SONY) - Sony announced that the PlayStation.VR2 was coming early 2023.

TECH:

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  Apple Inc. (AAPL), Hon Hai Precision Industry Co., Ltd. (HNHPF) - Apple Inc. plans to begin manufacturing the iPhone 14 in India about two months after the product’s initial release out of China, Bloomberg reports. The report said Apple had been working with suppliers to ramp up manufacturing in India and shorten the lag in production of the new iPhone from the typical six to nine months for previous launches. Separately, CFO Luca Maestri sold 96.7k shares for a total USD 16.9mln.


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  Palo Alto Networks, Inc. (PANW) - Q4 adj. EPS USD 2.39 (exp. 2.28), Q4 revenue USD 1.6bln (exp. 1.54bln). Billings +44% in Q4. Exec was encouraged after it saw GAAP profitability for the first time in four years. Board boosted share buyback programme by USD 915mln, taking total authorisation to USD 1bln, and Board approves a 3-for-1 stock split. Sees Q1 adj. EPS between 2.03-2.06 (exp. 2.04), sees Q1 revenue between USD 1.535-1.555bln (exp. 1.53bln),  and sees Q1 total billings between USD 1.68-1.7bln. FY23 adj. EPS is seen between 9.40-9.50 (exp. 9.26), FY23 revenue is seen between USD 6.85-6.9bln (exp. 6.73bln), and FY23 total billings are expected between USD 8.95-9.05bln.


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  Zoom Video Communications, Inc. (ZM) - Q2 EPS USD 1.05 (exp. 0.92), Q2 revenue USD 1.1bln (exp. 1.12bln). Exec said Zoom Phone delivered milestone results, hitting a record number of licenses sold in the quarter and reaching nearly 4 million seats, up more than 100% Y/Y. Notes continued momentum with its Enterprise customers. Revenue was impacted by the strengthening of the USD, performance of the online business, and to a lesser extent sales weighted to the backend of the quarter. Consequently, it lowers outlook: Sees Q3 EPS between 0.82-0.83 (exp. 0.91), and sees Q3 revenue between USD 1.095-1.1bln (exp. 1.16bln). For FY23, EPS is seen between 3.66-3.69 (exp. 3.76), and FY23 revenue is seen between USD 4.385-4.395bln (exp. 4.54bln).


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  Intel Corporation (INTC) - Intel's planned USD 20bln Ohio fab, due to open in 2025, needs 7,000 construction workers to build the facility in an already booming building environment when there’s also a national shortage of people working in the trades, AP reported.


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  Blackbaud, Inc. (BLKB) - Acquires gamified, activity-based engagement app Kilter, allowing Blackbaud to expand activity-based peer-to-peer fundraising engagement, and to support activity-based health and wellness initiatives for socially responsible companies.

HEALTH CARE:

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  Roche (RHHBY) - Roche launches a digital PCR system, a powerful new diagnostics platform in the fight against cancer and other diseases.


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  Bausch Health Companies Inc. (BHC) - Has hired advisers to advise on strategic alternatives after the company lost a major patent dispute and as it draws controversy over the recent spinoff of its eye-care business, WSJ reports.


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  Cano Health, Inc. (CANO) - Owl Creek Asset Management strongly encourages Board to actively pursue strategic alternatives by engaging with investment bankers and other advisors to pursue a sale of the Company. Owl Creek said it Cano Health was worth USD 14 a share (vs close of 5.55 on Monday).

ENERGY:

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  Energy - Saudi Energy Minister said “extreme” volatility and lack of liquidity mean the futures market is increasingly disconnected from fundamentals and OPEC+ may be forced to cut production when it meets next month to consider output targets, Bloomberg reported. “Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve,” he said.

MATERIALS:

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  Antofagasta (ANFGY) - The Twin Metal Minnesota subsidiary sued the Biden Administration over the cancellation of Minnesota mining leases, said cancellation harm’s goal of boosting US production of strategic minerals for green energy transition.

INDUSTRIALS:

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  Nordson Corporation (NDSN) - Q3 EPS USD 2.49 (exp. 2.44), Q3 revenue USD 662.1mln (exp. 650.6mln). Reiterates outlook for FY22 EPS growth between 18-21% (exp. USD 9.31bln), and reiterates FY22 revenue growth between 8-9% (exp. 2.56bln).


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  Renault (RNLSY), Stellantis (STLA) - Production at car plants in France will resume after closing for the annual summer break, Reuters reported. Production will be better than 2021 as the chip situation eases, according to spokesperson.

CONSUMER CYCLICAL:

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  The TJX Companies, Inc. (TJX) - CFO Scott Goldenberg sold 16,551 shares USD 68/shr; senior executive VP and Group President Louise Greenlees sold 8,822 shares at USD 68/shr; executive chairman Carol Meyrowitz sold 70,720 shares at USD 67.6197/shr; senior executive VP and Group President Kenneth Canestrari sold 29,977 shares at USD 68/shr.


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  Richemont (CFRUY) - ISS has recommended shareholders reject Bluebell's proposal to name Francesco Trapani as a board member.


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  Sonoco Products Company (SON) - Due to continued rises in the cost of European energy, Sonoco will raise prices by EUR 70/tonne on all recycled paperboard grades sold in the EMEA region, effective September. Exec said it will continue to monitor the situation, will take every action necessary to maintain supplies to customers. Says it cannot rule out further increases or surcharges.

23 Aug 2022 - 09:25- Fixed IncomeData- Source: Newsquawk