US EQUITY OPEN: Stocks mixed as China stimulus hopes fade and oil plummets

OPEN: Stocks have opened mixed with slight gains seen in the SPX and NDX with the latter outperforming while DJI and RUT opened slightly in the red. The majority of sectors are green with Tech, Consumer Discretionary and Communication Services outperforming, while Energy Materials and Consumer staples lag. It is worth noting that China ADRs are also tumbling as participants question whether the recent stimulus measures are enough, while some likely profit taking is also taking place. Energy stocks are seeing notable declined as crude prices pare some of the recent geopolitical induced rally, although participants are still awaiting Israel's response to Iran, but the magnitude of the response is yet to be determined, although commentary from Israel last week suggests it will not be done in a way to result in an all out war. Meanwhile, recent reports suggest Hezbollah's deputy leader has expressed openness to a deal with Israel, according to dpa. Elsewhere, the US data saw NFIB rise marginally, while August International trade saw a slightly narrower deficit than forecasted while attention turns to the updated Atlanta Fed GDPNow tracker due later today, including the RCM/TIPP economic optimism data. There is also Fed speak from Bostic (no text, but there is a Q&A) and Collins (text and Q&A expected). T-notes are continuing to flatten with 10yr yield holding above 4.00%. The pound is outperforming while AUD lags as China stimulus hopes fade.

STOCK SPECIFICS

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  American Express (AXP): Downgraded at HSBC and BTIG, with positives priced in and unachievable expectations as the reasons, respectively.


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  Bank of America (BAC): Berkshire continued selling its stake in the Co., taking its total ownership to 10.1% worth around USD 31.4bln.


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  Nvidia (NVDA): Foxconn said it was building the world's largest superchip manufacturing facility for Nvidia's GB200, and said the outlook for Q4 was strong. In addition, Morgan Stanley was constructive on NVDA.


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  Penn National Gaming (PENN): Announced prelim Q3 figures, whereby retail operation EBITDA beat and sees EBITDA loss shallower than expected.


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  PepsiCo (PEP): Revenue missed and trimmed FY annual sales forecast. In commentary, said inflation and higher borrowing costs over the last few years continue to impact consumer spending and there is a subdued growth environment.


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  Honeywell (HON): To spin off advanced material business to shareowners, on pace to deploy USD 25bln through 2025; spin off transactions will not impact FY24 guidance.


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  Samsung Electronics (SSNLF): Reported Q3 prelim figures, whereby both operating profit and revenue came in light and cited delays in AI chip sales, increased competition from Chinese rivals in conventional chips, and one-off costs.


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  Roblox (RBLX): Hindenburg Research short on the name.

08 Oct 2024 - 14:59- EquitiesResearch Sheet- Source: Newsquawk