DAILY MORNING CHAI BRIEFING

Morning Briefing - Returning to rally mode The S&P 500 futures have reversed yesterday's downside reversal and trade 27 points, or 0.8%, above fair value in a presumptive buy-the-dip trade. Key pre-market movers this morning include Moderna (MRNA 77.00, +8.03, +11.6%) and Tesla (TSLA 1468.00, +93.61, +6.8%). Moderna reached a $1.525 billion deal with the U.S. government to manufacture and deliver 100 million doses of its COVID-19 vaccine, while Tesla announced a 5:1 stock split, effective Aug. 31. Separately, a report from Bloomberg suggested that coronavirus relief talks could be deadlocked for weeks, but the market has evidently brushed past any negativity on that front today. World markets mixed; US futures claw back from late day sell off The global equity markets are mixed in the early stages of today's trading. S&P Futures appear to be rebounding from yesterday's afternoon swoon on Wall Street. Spoos are up about 0.8% and hovering around the 3355 area. This is just off the session high of 3358.75. The low was established in the early portion of Asian trade at 3326.25. In Asia, the two major markets finished mixed again with China falling 0.6%, while Japan rose 0.4%. The Shanghai saw pressure from the prior day's release of New Yuan Loans for July, falling short of expectations. The Chinese benchmark managed to stabilize after the lunch break to close near the upper end of the day's range. The Nikkei continued to benefit from a weaker yen. Export stocks such as Toyota, Honda and Panasonic all gained well over 1% to pace the way to gains in the index. In Europe, the major bourses are lacking congruence. Financials are among the best performing sectors with lenders such as Credit Agricole, Societe Generale and BNP Paribas trading more than 1% higher. In economic data, investors will receive the Consumer Price Index for July (Briefing.com consensus 0.3%) at 8:30 a.m. ET and the Treasury Budget for July at 2:00 p.m. ET. The weekly MBA Mortgage Applications Index rose 6.8% following a 5.1% decline in the prior week. U.S. Treasuries trade near their flat lines after yesterday's shake-out in longer-dated maturities. The 2-yr yield is down one basis point to 0.15%, and the 10-yr yield is up one basis point to 0.67%. The U.S. Dollar Index is little changed at 93.61. WTI crude futures are up 1.4% to $42.23/bbl. In U.S. Corporate news: Tesla (TSLA 1468.00, +93.61): +6.8% after announcing a 5:1 stock split, effective Aug. 31. Moderna (MRNA 77.00, +8.03): +11.6% after reaching a $1.525 billion deal with the U.S. government to manufacture and deliver 100 million doses of its COVID-19 vaccine. Deere (DE 192.00, -1.22): -0.6% after the stock was downgraded to Hold from Buy at Deutsche Bank. As the White House and Democratic leaders struggle to restart coronavirus relief negotiations, Senator Kamala Harris of California was announced as Joe Biden's running mate for the 2020 presidential election. The two will appear together today in Wilmington, Del., to deliver joint remarks. On the economic side of things, Harris is for a $15/hour minimum wage, advocated for closer regulatory scrutiny of Big Tech and has proposed taxing Wall Street trades and derivative transactions to pay for her Medicare for All healthcare plan. She has also promoted a tax credit for the middle-class (and rent relief), supports the Green New Deal, but has opposed the Trans-Pacific Partnership and NAFTA. raders will examine the latest consumer price report before the opening bell. The CPI is forecast to have increased 0.3% in July, half the monthly increase seen in June, while the core CPI is expected to rise by 0.2%, or 1.2% on an annualized basis. U.S. stock index futures rebounded 1% overnight after the S&P 500 closed down 0.8% on Tuesday - snapping a seven-day winning streak - as the tech sector weighed on the benchmark. On the earnings front, Cisco (NASDAQ:CSCO), Lyft (NASDAQ:LYFT) and SmileDirectClub (NASDAQ:SDC) will all report after the closing bell. Worst economic plunge in Europe The U.K. economy shrank 20.4% in the second quarter, equivalent to an annualized rate of 59.8%, notching the worst economic hit from coronavirus in Europe as well as reporting the highest death toll. Over the same period, the U.S. and Germany lost around 10% of their output, with Italy losing 12%, France 14% and Spain 19%. The outsize hit reflects the timing and duration of the U.K.'s nationwide lockdown, though there were signs of a recovery in June as GDP grew by 8.7% from May. Officials warn it could take until the end of 2021 to fully recover. Vaccine news Allegations that Russia's coronavirus vaccine is unsafe are groundless and driven by competition, Russian Health Minister Mikhail Murashko told the Interfax news agency. Yesterday's announcement is being viewed by some as a propaganda coup for the Kremlin, and the name of the vaccine, Sputnik V, references the world's first satellite that was launched by Russia during the Cold War. Experts and public health officials have also voiced concerns, given the lack of data and Phase 3 trials, which test a vaccine's safety and efficacy on a larger number of people across multiple locations. Go deeper: Moderna reaches $1.5B vaccine supply deal with the U.S. Precious metals In what felt like "a mini-crash," gold plunged 4.6% on Tuesday to settle at $1,946.30/oz. for its steepest one-day dollar decline since April 15, 2013, and biggest percentage slide since March 13. Other precious metals also took a beating, with silver down 11% - giving up all its gains since the start of August - as well as losses for platinum and palladium. "The precious metals complex was driven by a drop in rates, a steady increase in inflation expectations and a falling U.S. dollar," according to Bart Melek, head of commodity strategies at TD Securities. "The rally is now giving up some of these gains as these drivers lose momentum." Go deeper: CME raises margins on gold and silver futures. 5-for-1 stock split After shares tripled in value this year - and rose nearly sixfold over the past 12 months - Tesla (NASDAQ:TSLA) has approved a five-for-one split to make stock ownership more accessible to employees and investors. Each stakeholder of record on August 21 will receive a dividend of four additional shares that will begin trading on a stock split-adjusted basis on August 31. The decision follows a similar move by Apple (NASDAQ:AAPL), which announced a 4-for-1 split last month, as well as criticism from Elon Musk that Tesla's stock price was too high. TSLA +4.5% premarket. IPO filing from Airbnb The home-sharing giant will confidentially file IPO paperwork with the SEC later this month for a listing that could still happen this year, WSJ reports. Airbnb (AIRB) was recently valued at $18B during an April fundraising round (down from the prior $31B), as the coronavirus pandemic drove bookings toward zero, though those have rebounded to March levels as of July 8. The IPO market has been a hot one, with more than $60B raised so far in 2020 - putting this year on track to be the highest since the tech boom in 2000. What's in the TikTok ban? "Prohibited transactions may include, for example, agreements to make the TikTok app available on app stores... purchasing advertising on TikTok, and accepting terms of service to download the TikTok app onto a user device," according to a White House document seen by Reuters. Barring legal challenges, a deal for TikTok (BDNCE) seems like the only way out of the current predicament. The chances of a Microsoft (NASDAQ:MSFT) purchase stand at 20%, according to the SCMP, while the odds of a Twitter (NYSE:TWTR) deal are said to be even smaller. Go deeper: Gaming surge drives Tencent growth despite similar crackdown on WeChat. College football season Other conferences were expected to quickly fall in line with the Big Ten and Pac-12, each of which elected to put off fall sports due to ongoing challenges from the COVID-19 pandemic. But as of Tuesday night the Atlantic Coast Conference suggests it's business as usual, in addition to the Southeastern Conference, Big 12 and American Athletic Conference. The quick developments for the fall season have been closely watched by broadcasters like ABC (NYSE:DIS), NBC (NASDAQ:CMCSA), CBS (NASDAQ:VIAC) and Fox (NASDAQ:FOX), as well as betting firms including DraftKings (NASDAQ:DKNG) and Penn National Gaming (NASDAQ:PENN). Gapping up In reaction to strong earnings/guidance: CNR +14.3%, CMBM +10.7%, CVET +7.4%, KODK +6.6%, HBM +6.3%, XP +5.1%, ARCO +4.9%, LRN +4.8%, NARI +4.2%, TUFN +3.9%, EAT +3.3%, VIR +1.6% (also expects to start a Phase 2/3 trial for VIR-7831 in August), KRNT +1% M&A news: CBMG +34.8% (enters into definitive merger agreement; transaction would result in company going private) LBTYA +2.4% (acquires Sunrise Communications Group) Other news: BLDR +12% (to join S&P MidCap 400) MRNA +11.1% (announces supply agreement with US govt for MRNA vaccine against COVID-19) FBK +8.2% (to join S&P SmallCap 600) TSLA +6.5% (announces 5-for-1 stock split) ALPN +5.9% (stock offering) CXW +5.2% (to join S&P SmallCap 600) CDE +3% (provides update on 2020 exploration program) PACB +2.9% (prices offering of 19.43 mln shares of common stock at $4.47/share) ALGT +2.5% (reports July traffic) IVZ +2.3% (reports July AUM) SSTK +2.3% (prices pricing offering of 2.58 mln shares of common stock at $48.50/share; co is selling 516,000 shares and Jon Oringer [Founder, Executive Chairman] is selling 2,064,000 shares in this offering) W +1.6% (prices $1.32 bln(upsized from $1.2 bln) aggregate principal amount of 0.625% convertible senior notes due 2025) UPLD +1.5% (prices offering of 3.5 mln shares of common stock at $34.00/share) BKD +1.4% (stock offering) REGN +1.1% (announces FDA has accepted for Priority Review a Biologics License Application for evinacumab as an adjunct to other lipid-lowering therapies in patients with homozygous familial hypercholesterolemia) APAM +1% (reports July AUM) WWW +1% (names Brendan Hoffman as future CEO) Analyst comments: AEO +9.1% (upgraded to Overweight from Neutral at JP Morgan) CNX +5.1% (upgraded to Overweight from Neutral at Piper Sandler) AN +2.6% (upgraded to Buy from Neutral at Guggenheim) MPC +2.4% (upgraded to Outperform from Market Perform at Cowen) ROKU +2.4% (initiated with a Buy at Deutsche Bank) GOLD +1.9% (upgraded to Buy from Hold at Canaccord Genuity) INVH +1.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley) MGRC +1.8% (upgraded to Outperform from Perform at Oppenheimer) ATCO +1.5% (upgraded to Neutral from Underperform at BofA Securities) HD +1.5% (upgraded to Accumulate from Hold at Gordon Haskett) JCOM +1.3% (upgraded to Outperform from Sector Perform at RBC Capital Mkts) ______________________________________________________________________________________________________ Gapping down In reaction to disappointing earnings/guidance: OSPN -25.3% (also to delay 10-Q filing), JMIA -18.8%, SMCI -7%, RRGB -6.4%, HCAT -4.6%, ALEC -4%, LMND -3.6%, VIAV -3%, KMDA -2.4%, PFGC -0.8% M&A news: MR -7.9% (to be acquired by Southwestern Energy (SWN) in an all-stock transaction) SWN -4.9% (acquiring MR in all-stock deal; commences 55 mln common stock offering) STNE -1.3% (confirms combination agreement with LINX; also stock offering) Other news: TRVN -14.6% (stock offering) HLX -9.6% (prices offering of $200 mln principal amount of 6.75% Convertible Senior Notes due 2026) PLUG -9.4% (prices offering of 30,675,000 shares of its common stock at $10.25 per share) PSNL -7.5% (prices offering of 6,578,947 shares of its common stock at $19.00 per share) GFF -6.4% (stock offering) TFII -5.4% (stock offering) OMER -5% (priced concurrent underwritten public offerings of 6,900,000 of shares of its common stock at $14.50/share) MCRB -4.6% (stock offering) ADVM -4.4% (stock offering) OSTK -2.4% (prices offering of 2.1 mln shares of common stock at $84.50 per share) WYND -1.7% (confirms cut in dividend) PRTS -1.6% (stock offering) STC -1.3% (stock offering) NFG -1.2% (files mixed securities shelf offering) Analyst comments: TGI -2% (downgraded to Underweight from Neutral at JP Morgan) BR -0.8% (downgraded to Neutral from Buy at BTIG Research) DE -0.6% (downgraded to Hold at Deutsche Bank) _______________________________________________________________________________________________________ What else is happening... Xbox (MSFT) Series X coming in November; Halo Infinite delayed. Court throws out antitrust ruling against Qualcomm (NASDAQ:QCOM). Shake Shack (NYSE:SHAK) opens first restaurant in Beijing. Overstock (NASDAQ:OSTK) slips 5% after pricing equity offering. Icahn's 'mall short' pays $1.3B in wake of pandemic. Wednesday's Key Earnings Eastman Kodak (NYSE:KODK) +6.4% AH forecasting sales, working capital improvement. NIO (NYSE:NIO) -8.6% retreating after record-high quarterly deliveries. Today's Markets In Asia, Japan +0.4%. Hong Kong +1.4%. China -0.6%. India -0.1%. In Europe, at midday, London +1%. Paris +0.4%. Frankfurt -0.2%. Futures at 6:20, Dow +1%. S&P +0.8%. Nasdaq +1%. Crude +1.6% to $42.28. Gold -0.4% to $1938.70. Bitcoin -1.7% to $11519. Ten-year Treasury Yield +2 bps to 0.68% Today's Economic Calendar 7:00 MBA Mortgage Applications 8:30 Consumer Price Index 10:00 Atlanta Fed's Business Inflation Expectations 10:00 Fed's Rosengren: “U.S. Economy and Current Economic Conditions” 10:30 EIA Petroleum Inventories 11:00 Fed's Kaplan Speech 1:00 PM Results of $38B, 10-Year Note Auction 2:00 PM Treasury Budget 3:00 PM Fed's Daly: “U.S. Economy and The Ongoing Impacts of COVID-19” 6:00 PM Fed's Kaplan Speech