US EARLY MORNING: US index futures trade with modest gains ahead of ECB, PPI, retail sales, weekly claims data

US PREMARKETS: US equity futures are trading a little better than flat, Treasury yields have been moving higher in the European morning, and the Dollar Index has been gaining. Equities on Wall Street were indecisive on Wednesday, ultimately shrugging-off a mixed CPI report; the tone overnight was more constructive, and ahead of the ECB rate decision later today, Euro stocks are trading a little above neutral. While the ECB rate decision will have macro ramifications, US traders will also note that PPI, retail sales and weekly claims data are to be released just after the rate decision, and just before the press conference with ECB President Lagarde (ECB preview can be accessed below). For US traders, we are expecting mixed PPI data, where the annual rate of headline PPI is seen picking up (energy prices have been driving inflation headlines higher), though the core measure is expected to pare back a little. Meanwhile, the growth in August retail sales is expected to cool, while the control group is likely to have slipped in the month. Weekly claims data are seen ticking up a touch vs last week's levels (neither of this week's initial jobless claims or continuing claims syncs with the BLS survey window).

TODAY’S AGENDA:

• Our full, interactive calendar can be accessed here; a pdf version can be downloaded here.


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  EUROPEAN DAY AHEAD: The ECB rate decision, updated economic forecasts, and press conference delivered by its President is the main event of the day (preview below). The Norges Bank's Regional Network survey is released in the morning, which will help guide expectations for the central bank's upcoming confab.


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  ECB PREVIEW: Rate decision and statement due at 13:15BST/08:15EDT; press conference 13:45BST/08:45EDT. The ECB is expected to maintain its deposit rate at 3.75%, though many analysts look for a 25bps rate hike to 4.0%. Since the Reuters poll was conducted, a sourced article noted that the 2024 inflation forecast was expected to be revised higher from the 3% projected in June. As such, markets now assign a c.68% chance to a 25bps hike. Data since the July meeting has put the ECB in a bind of needing to be cautious in the face of slowing growth, but not conveying a sense of complacency over inflation. Any decision to hike will likely be judged as the ECB having reached its terminal rate. (Full Newsquawk preview here).


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  US DAY AHEAD: Despite the firmer than expected core rate of inflation, CPI did not change the dial too much for Fed policy; today’s PPI data, which will be released between the ECB rate decision and press conference, is expected to show the headline annual rate of PPI climbing, though the core measure is seen moderating. The PPI data is also being released at the same time as weekly jobless claims data (small tick higher expected) and retail sales (the pace of gains seen cooling to +0.2% M/M from +0.7%), though the Control Group is expected to print -0.1% M/M. In the late morning, the Treasury will announce auction sizes for next week’s 10yr TIPS and 20yr sales. Afterhours, traders will be looking to numbers from Adobe (ADBE), Lenar (LEN) and Copart (CPRT) (expectations here).

EQUITY NEWS:

TECH:

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  Arm Holdings (ARM), SoftBank (SFTBY) - Arm achieved a USD 54.5bln valuation in its US IPO, Reuters reports, the high end of the expected range and surpassing its previous private buyout price of USD 32bln.


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  3D Systems (DDD), Stratasys (SSYS), Desktop Metal (DM) - 3D Systems submitted a binding offer for Stratasys after havings its previous bid rejected. The offer values Stratasys at over USD 27 per share, seen as superior to Stratasys' acquisition of Desktop Metal. The offer expires on October 5th, pending a vote on September 28th. If successful, it would terminate 3D Systems' planned USD 1.8bln all-stock purchase of Desktop Metal.


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  Intuit (INTU) - Intuit EVP Marianna Tessel sold 8.7k shares on September 11th for a total USD 4.8mln.

COMMUNICATIONS:

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  AMC Entertainment (AMC) - AMC completes its at-the-market equity offering to raise more than USD 325mln.


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  T-Mobile (TMUS) - Consumer Group President Jon Freier sold 15K shares on September 11th for a total USD 2.1mln.

CONSUMER:

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  Amazon (AMZN) - Amazon has introduced generative AI to simplify product listing creation for sellers, making it easier to create listings. Separately, Morgan Stanley names Amazon a top stock pick; sees potential improvements in North American retail profitability, aims to restore 2019 margins and reach USD 5.00 or higher in GAAP EPS by 2025, and foresees 20-60% upside in Amazon's share price; has an Overweight rating and a USD 175 price target.


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  Ford (F), General Motors (GM), Stellantis (STLA) - The UAW union is planning strikes at individual US auto plants if agreements with the Detroit Three automakers aren't reached by late Thursday (deadline is 23:59EDT on Thursday), President Shawn Fain said, adding that they will not have company-wide walkouts, but will escalate if negotiations don't improve. The strikes would be unprecedented, targeting specific plants, and could be one of the largest US industrial labour actions in recent years.


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  China EVs - China Passenger and Car Association head said China's EV industrial chain was highly competitive, urged the EU to take an objective view of the industry's development, adding that China's strong EV exports was not the outcome of heavy state subsidies.


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  Starbucks (SBUX) - Former Starbucks CEO Howard Schultz steps down from coffee chain’s board, CNBC reports. Schultz, who stepped down as CEO in March, now holds the title of chairman emeritus. Former Alibaba executive Wei Zhang will take his seat.


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  MGM Resorts (MGM) - MGM Resorts faced a cybersecurity issue, launched an investigation with external experts, informed law enforcement, and is working to protect its systems. The investigation is ongoing, and security measures are being implemented.


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  Nordstrom (JWN) - Nordstrom announced key executive leadership appointments: Jamie Nordstrom as Chief Merchandising Officer, Fanya Chandler as President of Nordstrom stores, and Gemma Lionello as President of Nordstrom Rack stores.


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  International Game Technology (IGT), Apollo Global Management (APO) - Apollo is reportedly one of the potential buyers competing to acquire International Game Technology's global gaming division, which could be valued at USD 4-5bln including debt, BBG reports. IGT had previously expressed interest in strategic alternatives for this division.

MATERIALS:

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  Rio Tinto (RIO) - JPMorgan upgrades Rio Tinto to Overweight, and names the stocks as a new top pick, with a PT of AUD 131; JPM cites strong iron ore prices due to Chinese steel production and policy easing, and notes that the stock is slightly cheaper than rival BHP Group (BHP).


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  Standard Lithium (SLI) - Standard Lithium has acquired 118 acres of land in Arkansas for its South West Arkansas Project. The project aims to produce battery-quality lithium hydroxide by 2027, with high lithium brine concentrations and potential for 91 employees upon commercial production.

ENERGY:

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  Chevron (CVX) - Workers at Chevron's LNG projects in Australia are escalating industrial action, which could range from total strikes to hours-long work stoppages, Reuters reports. This comes after talks with Chevron over wages and working conditions failed. The Gorgon and Wheatstone facilities are affected, potentially impacting over 5% of global LNG supply. Union officials are reviewing the action every 12 hours. Separately, Chevron said that a fault has impacted 25% of LNG production at Australia's Wheatstone plant, the cause has been identified, and restart activities have commenced; domestic gas facility unaffected.


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  Vital Energy (VTLE) - Vital Energy is acquiring three assets in the Permian Basin for USD 1.17bln. These transactions will add nearly 53,000 net acres and increase production by approximately 35 MBOE/d. Pro forma, Vital Energy will have about 250,000 net acres and expected average full-year 2024 production of 112.0 MBOE/d, with improved capital efficiency and increased free cash flow. The acquisitions are expected to close in Q4. Sees Q4 production between 83.3-87.3 MBOE/d.

INDUSTRIALS:

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  PureCycle Technologies (PCT) - PureCycle Technologies has declared force majeure due to a severe thunderstorm impacting its Ironton Facility in southern Ohio, causing power outages and uncertainties in achieving milestones.

HEALTHCARE:

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  Harpoon (HARP), AbbVie (ABBV) - AbbVie decided against exercising its exclusive license option for Harpoon Therapeutics' HPN217 programme, targeting BCMA.

FINANCIALS:

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  Goldman Sachs (GS) - The bank terminated several executives in transaction banking, according to a memo cited by Reuters. GS did not name the individuals, but said "as a general matter, we take our communications policy seriously, and we expect all of our personnel to comply with it." Bloomberg later reported that the bank had fired individuals including the head of the unit Hari Moorthy due to compliance violations.


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  Robinhood (HOOD) - August assets under custody -5% at USD 89.7bln; net cumulative funded accounts +30k at 23.2mln; MAU -400k to 10.6mln.


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  Visa (V) - The card payment company is seeking authorisation to conduct an exchange offer programme that would have the effect of releasing transfer restrictions on portions of Visa's Class B common stock.

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