Daily mornimg briefing

The S&P 500 futures trade six points, or 0.2%, above fair value amid some encouraging developments on the domestic front, helping the market maintain yesterday's advance. Specifically, Johnson & Johnson (JNJ 147.99, +3.78, +2.6%) initiated a Phase 3 clinical trial of its single-shot COVID-19 vaccine candidate, Nike (NKE 131.70, +14.83, +12.7%) blew past quarterly expectations and raised its full-year revenue guidance, and the House passed a government funding bill through Dec. 11 that the Senate is expected to pass this week. The news could contribute to a relative outperformance of value/cyclical stocks today, many of which are sporting gains in pre-market action. The influential mega-caps are currently trading little changed, keeping equity index futures in check. On the data front, investors will receive the FHFA Housing Price Index for September at 9:00 a.m. ET. Earlier, the weekly MBA Mortgage Applications Index increased 6.8% following a 2.5% decline in the prior week. U.S. Treasuries continue to trade near their flat lines. The 2-yr yield is flat at 0.13%, and the 10-yr yield is up one basis point to 0.67%. The U.S. Dollar Index is little changed at 94.03. WTI crude futures are up 0.3% to $39.91/bbl. In U.S. Corporate news: Johnson & Johnson (JNJ 147.99, +3.78): +2.6% after initiating a Phase 3 clinical trial of its single-shot COVID-19 vaccine candidate. Nike (NKE 131.70, +14.83): +12.7% after exceeding top and bottom-line estimates and raising its full-year revenue guidance. Tesla (TSLA 405.30, -18.93): -4.5% following its Battery Day presentation yesterday. CEO Elon Musk unveiled a plan to introduce a $25,000 electric car. Lululemon athletica (LULU 320.78, +7.18): +2.3% after disclosing it will resume its share repurchase program. KB Home (KBH 39.32, -1.18): -2.9% despite beating top and bottom-line estimates. Reviewing overnight developments: Equity indices in the Asia-Pacific region ended Wednesday on a mostly higher note. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: +0.2%, India's Sensex: -0.2%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +2.3%. In economic data: Japan's September flash Manufacturing PMI 47.3 (last 47.2) and flash Services PMI 45.6 (last 45.0) Australia's September flash Manufacturing PMI 55.5 (last 53.6) and flash Services PMI 50.0 (last 49.0) Singapore's August CPI -0.4% yr/yr (expected -0.5%; last -0.4%) In news: Japan is reportedly considering lifting its ban on foreign travelers. China will reportedly lower its GDP growth target to about 5.0% in its next five-year plan, which is expected sometime in October. Australia's Manufacturing PMI expanded for the fourth consecutive month, reaching its highest level since April 2018. However, Westpac expects that the Reserve Bank of Australia will lower its cash rate on October 6. The Reserve Bank of New Zealand left its official cash rate at 0.25%, as expected. Major European indices trade in the green. STOXX Europe 600: +1.3%, Germany's DAX: +1.4%, U.K.'s FTSE 100: +2.3%, France's CAC 40: +1.7%, Italy's FTSE MIB: +1.2%, Spain's IBEX 35: +1.7%. In economic data: Eurozone's September flash Manufacturing PMI 53.7 (expected 51.9; prior 51.7) and flash Services PMI 47.6 (expected 50.5; last 50.5). Germany's September flash Manufacturing PMI 56.6 (expected 52.5; last 52.2) and flash Services PMI 49.1 (expected 53.0; last 52.5). October GfK Consumer Climate -1.6 (expected -1.0; last -1.7) U.K.'s September flash Manufacturing PMI 54.3 (expected 54.1; last 55.2) and flash Services PMI 55.1 (expected 56.0; last 58.8) France's September flash Manufacturing PMI 50.9 (expected 50.5; last 49.8) and flash Services PMI 47.5 (expected 51.5; last 51.5) Spain's Q2 GDP -17.8% qtr/qtr (expected -18.5%; last -5.2%); -21.5% yr/yr (expected -22.1%; last -4.2%) In news: This week's EU summit was delayed until the next weekend after EU Council President, Charles Michel, placed himself in isolation after a staff member was diagnosed with the coronavirus. Flash manufacturing PMI readings for September showed expanding activity in Germany, U.K., and France while activity in the services sector contracted in Germany and France. Germany's cabinet reportedly approved a draft budget for 2021, which calls for EUR96.20 bln in new debt. U.S equity futures: S&P 500 Futures +11 @ 3310 DJIA Futures +190 @ 27333 Nasdaq Futures -8 @ 11142 Overseas: Europe: DAX +1.4%, FTSE +2.3%, CAC +1.7% Asia: Nikkei -0.1%, Hang Seng +0.1%, Shanghai +0.2% Commodities: Crude Oil -0.02 @ 39.78 Nat Gas +0.053 @ 1.887 Gold -20.35 @ 1887.25 Silver -0.976 @ 23.547 Copper -0.0338 @ 3.0722 U.S. Summary: Earnings/Guidance (Full Earnings Calendar): Aurora Cannabis (ACB) reports Q4 adjusted EBITDA of ($34.6) mln; revenue down 5% sequentially to $72.1 mln vs. $71.5 mln consensus estimate Beazer Homes (BZH) announces preliminary operating results; net new orders for first two months of Q4 up 37% General Mills (GIS) beats by $0.18, beats on revs Genmab (GMAB) commences binding arbitration of two matters arising under license agreement with Johnson & Johnson's (JNJ) Jansseen Biotech JinkoSolar Holding (JKS) beats by $0.45, reports revs in-line; Q2 shipments in line with guidance; sees Q3 revs midpoint above consensus KB Home (KBH) beats by $0.32, beats on revs NIKE (NKE) beats by $0.45, beats on revs Steelcase (SCS) beats by $0.18, beats on revs; guides NovQ EPS in-line, revs in-line Stitch Fix (SFIX) misses by $0.27, beats on revs Virtu Financial (VIRT) provides quarter to date results for Q3 Worthington (WOR) reports Q1 (Aug) results, beats on revs General News: House passes continuing resolution 359-57 to fund government through December 11 after deal was reached with White House & Congress; Senate expected to pass bill later this week (this does not include stimulus funding) President Trump appears to secure enough Senate votes to confirm his nominee to the Supreme Court, according to the Washington Post Pennsylvania Republicans will ask Supreme Court to decide on the legality of allowing voters to return mail ballots up to 3 days after Election Day, according to the Washington Post China does not have a reason to approve TikTok deal, according to Reuters New York City Council mulling several bills to support restaurants, according to the Wall Street Journal NBA commissioner Adam Silver says next NBA season may not start until January, according to CNBC AC Immune (ACIU) announced that Genentech (RHHBY) informed the Company of top line results from a Phase 2 trial of the anti-Tau antibody, semorinemab, in early (prodromal to mild) Alzheimer's disease (AD) which show that semorinemab did not meet its primary efficacy endpoint Athenex (ATNX) announces FDA allowance of IND for TCRT-ESO-A2 Athersys (ATHX): FDA grants RMAT designation to multistem cell therapy for the treatment of acute respiratory distress syndrome Bluebirdbio (BLUE) receives PRIME designation for LentiGlobin by European Medicines Agency Citigroup (C) closes market making business in retail options, according to the Financial Times Eagle Pharma's (EGRX) Japanese licensing partner receives approval of TREAKISYM Facebook (FB): UK CMA is investigating the completed acquisition by FB of Giphy Fortis (FTS) announces the retirement of Barry Perry, President and CEO, from Fortis and the Board, effective December 31, 2020 Google (GOOG): DOJ case against Google will focus on search, according to the New York Times GW Pharma (GWPH) receives Australian Therapeutic Goods Administration approval for EPIDYOLEX Hailiang Education (HLG) announces record student enrollment Healthcare Trust of America (HTA) reactivates share repurchase program Humanigen (HGEN) announced a strategic collaboration with Thermo Fisher Scientific to expand the manufacturing capacity for lenzilumab Itron (ITRI) announces plan to deliver $20-25 mln in annual savings from a global cost savings project, that includes continued execution towards its asset light strategy, to be substantially complete by the end of 2022 Johnson & Johnson (JNJ) initiates Phase 3 clinical trial of Janssen's COVID-19 vaccine candidate lululemon athletica (LULU) restarts share repurchase program MacroGenics (MGNX) announces publication of interim Phase 1/2 clinical results for flotetuzumab MediciNova (MNOV) announces that its intranasal COVID-19 vaccine successfully induced systemic IgG and mucosal iga neutralizing antibodies against SARS-CoV-2 in mice using BC-PIV vector technology Novartis (NVS) to initiate new pivotal confirmatory study to evaluate use of AVXS-101 Pfizer (PFE): FDA has accepted and granted priority review to the Company's sNDA for XALKORI for the treatment of pediatric patients with relapsed or refractory systemic anaplastic large cell lymphoma that is anaplastic lymphoma kinase-positive Pinterest (PINS) app estimated to have broken its daily download record following iOS 14 rollout, according to TechCrunch Sysco (SYY) awarded $800 mln Defense Logistics Agency contract Tesla (TSLA) CEO Elon Musk unveiled plan to introduce $25,000 electric car at Battery Day United (UAL) to tap Treasury for loans, according to Reuters Veeva Systems (VEEV) and Bioforum today announced their collaboration with RedHill Biopharma (RDHL) on a global Phase 2/3 clinical study evaluating opaganib in patients hospitalized with severe COVID-19 pneumonia requiring treatment with supplemental oxygen vTv Therapeutics (VTVT) presented data from the completed Phase 2 Simplici-T1 study (NCT03335371) that support the clinical potential of TTP399 as an oral adjunctive therapy in type 1 diabetes WalMart (WMT) aiming to hire 20,000 holiday season workers, according to CNBC Western Digital (WDC) aligns product strategy through new Flash and HDD business units M&A: 3M (MMM) working with advisers to explore a sale of its food safety division valued at approx. $3.5 bln, according to Bloomberg KKR (KKR) in talks to purchase 1-800 Contacts in deal valued at more than $3 bln, according to Bloomberg People's United Financial (PBCT) agrees to sell People's United Insurance Agency to AssuredPartners for purchase price of $120 mln in cash Newmont Goldcorp (NEM) sells portfolio of 11 royalties to Maverix Syndicate: National Storage Affiliates (NSA) prices offering of 4.5 mln common shares at $33.15 per share Unum Therapeutics (UMRX) files for 169,530,903 share common stock offering by selling shareholders WAVE Life Sciences (WVE) commences stock offering, no amount given Zogenix (ZGNX) announces private offering of $200.0 mln aggregate principal amount of convertible senior notes due 2027 IPOs: Expected to Price: Corsair Gaming (Nasdaq: CRSR): The provider of high-performance gear for gamers and content creators is expected to price its 14.0 M share IPO between $16-$18. GoodRx Holdings (Nasdaq: GDRX): The provider of a leading, consumer-focused digital healthcare platform in the United States is expected to price its 34.6 M share IPO between $24-$28. Graybug Vision (Nasdaq: GRAY): The clinical-stage biopharmaceutical company developing medicines for treatment of diseases of the retina and optic nerve is expected to price its 4.7 M share IPO between $15-$17) Orphazyne (Nasdaq: ORPH): The late-stage biopharmaceutical company harnessing the amplification of Heat Shock Proteins to develop therapeutics for the treatment of neurodegenerative orphan diseases is expected to price its 7.6 M share IPO between $13-$14. PMV Pharmaceuticals (Nasdaq: PVMP): The precision oncology company developing small molecule, tumor-agnostic therapies targeting p53 mutations is expected to price its 7.4 M share IPO between $16-$18. Taysha Gene Therapies (Nasdaq: TSHA): The gene therapy company focused on developing AAV-based gene therapies for the treatment of monogenic diseases of the central nervous system is expected to price its 6.6 M share IPO between $18-$20. Priced to Trade: Bentley Systems (Nasdaq: BSY): The provider of software for infrastructure engineering priced its 10.75 M share IPO at $22, above the $17-$19 expected price range. Gapping Up/Down Gapping up: ACET +26%, MNOV +20.9%, NKE +12.8%, ATHX +11.7%, CNTG +7.2%, JKS +4.8%, UAA +4.4%, FL +4.1%, WDC +3.2%, BZH +3%, LULU +2.5%, JNJ +2.3%, MGNX +2.1%, BLUE +2%, DKS +1.5%, PBCT +1.2%, KKR +0.8%, ING +0.7% Gapping down: WVE -27.4%, ACB -15.6%, SFIX -14.4%, GMAB -12.6%, ZGNX -7%, TLRY -3.3%, NEM -2.3%, SCS -2.2%, NSA -2%, KBH -1.9%, VIRT -1% Analyst Research (see Upgrades/Downgrades calendarfor full list): Upgrades: Ameris Bancorp (ABCB) upgraded to Strong Buy from Outperform at Raymond James; tgt $27 BankUnited (BKU) upgraded to Buy from Neutral at Compass Point; tgt $22 Cassava Sciences (SAVA) upgraded to Buy from Neutral at H.C. Wainwright; tgt $20 CME Group (CME) upgraded to Overweight from Neutral at Atlantic Equities; tgt $195 CSX (CSX) upgraded to Overweight from Neutral at Atlantic Equities; tgt $92 Greif (GEF) upgraded to Market Perform from Underperform at BMO Capital Markets; tgt raised to $38 Hasbro (HAS) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $90 Leidos (LDOS) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $110 NIKE (NKE) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $151 NiSource (NI) upgraded to Buy from Hold at Jefferies; tgt $25 Terreno Realty (TRNO) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $60 Twitter (TWTR) upgraded to Buy from Hold at Pivotal Research Group; tgt raised to $59.75 Waste Connections (WCN) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $108 Winnebago (WGO) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $59 ZoomInfo (ZI) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $46 Downgrades: American Express (AXP) downgraded to Underperform from Neutral at BofA Securities Autoliv (ALV) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $77 Discovery (DISCA) downgraded to Neutral from Overweight at JP Morgan; tgt $25 Genmab (GMAB) downgraded to Sell from Neutral at Bryan Garnier KB Home (KBH) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets Republic Services (RSG) downgraded to Neutral from Overweight at JP Morgan; tgt $99 STAG Industrial (STAG) downgraded to Neutral from Outperform at Robert W. Baird; tgt $35 Stock Yards Bancorp (SYBT) downgraded to Mkt Perform from Outperform at Raymond James Vaccinex (VCNX) downgraded to Neutral from Buy at BTIG Research Waste Mgmt (WM) downgraded to Underweight from Neutral at JP Morgan; tgt $99 Others: Accenture (ACN) resumed with a Neutral at UBS AGCO Corp (AGCO) initiated with an Outperform at Bernstein; tgt $98 Apple (AAPL) resumed/downgraded with a Neutral from Buy at UBS; tgt raised to $115 Arista Networks (ANET) resumed with a Buy at UBS; tgt $260 Aspen Tech (AZPN) resumed with a Neutral at BofA Securities Carrol's Restaurant Group (TAST) initiated with an Outperform at Wolfe Research; tgt $8 Caterpillar (CAT) resumed with a Mkt Perform at Bernstein; tgt $156 Cisco (CSCO) resumed with a Neutral at UBS; tgt $41 Cornerstone OnDemand (CSOD) initiated with a Market Perform at BMO Capital Markets; tgt $39 Cummins (CMI) resumed with an Outperform at Bernstein; tgt $255 Deere (DE) resumed with a Mkt Perform at Bernstein; tgt $244 Dell (DELL) resumed/upgraded with a Buy from Neutral at UBS; tgt raised to $80 EastGroup (EGP) initiated with a Neutral at Robert W. Baird; tgt $140 Hewlett Packard Enterprise (HPE) resumed with a Neutral at UBS HP (HPQ) resumed/upgraded with a Buy from Neutral at UBS; tgt raised to $25 IBM (IBM) resumed with a Neutral at UBS Jacobs Engineering (J) initiated with an Outperform at Bernstein; tgt $144 Juniper Networks (JNPR) resumed with a Neutral at UBS; tgt $24 MarineMax (HZO) initiated with an Outperform at Wolfe Research; tgt $29 MediWound (MDWD) initiated with a Buy at BTIG Research; tgt $6 Neoleukin Therapeutics (NLTX) initiated with an Outperform at Robert W. Baird; tgt $25 Oshkosh (OSK) initiated with a Mkt Perform at Bernstein; tgt $83 PACCAR (PCAR) initiated with a Mkt Perform at Bernstein; tgt $94 PDC Energy (PDCE) resumed with an Overweight at JP Morgan; tgt $23 Performance Food Group (PFGC) initiated with an Outperform at Wolfe Research; tgt $43 Plymouth Industrial REIT (PLYM) initiated with an Outperform at Robert W. Baird; tgt $16 Professional Holding Corp (PFHD) initiated with an Overweight at Piper Sandler; tgt $16 Quanta Services (PWR) initiated with an Outperform at Bernstein; tgt $62 Rexford Industrial Realty (REXR) initiated with an Outperform at Robert W. Baird; tgt $50 Trimble (TRMB) initiated with an Outperform at Bernstein; tgt $61 United Rentals (URI) initiated with a Mkt Perform at Bernstein; tgt $188 US Foods (USFD) initiated with an Outperform at Wolfe Research; tgt $28 Upcoming Events: Econ Data: 07:00 ET: MBA Mortgage Applications Index for September 19 (Briefing.com Consensus NA; Prior -2.5%) 09:00 ET: FHFA Housing Price Index for September (Briefing.com Consensus NA; Prior 0.9%) 10:30 ET: EIA Crude Oil Inventories for September 19 (Briefing.com Consensus NA; Prior -4.39M) Asia & Europe detail: Asia: Nikkei -0.1%, Hang Seng +0.1%, Shanghai +0.2% Equity indices in the Asia-Pacific region ended Wednesday on a mostly higher note. Japan is reportedly considering lifting its ban on foreign travelers. China will reportedly lower its GDP growth target to about 5.0% in its next five-year plan, which is expected sometime in October. Australia's Manufacturing PMI expanded for the fourth consecutive month, reaching its highest level since April 2018. However, Westpac expects that the Reserve Bank of Australia will lower its cash rate on October 6. The Reserve Bank of New Zealand left its official cash rate at 0.25%, as expected. In economic data: Japan's September flash Manufacturing PMI 47.3 (last 47.2) and flash Services PMI 45.6 (last 45.0) Australia's September flash Manufacturing PMI 55.5 (last 53.6) and flash Services PMI 50.0 (last 49.0) Singapore's August CPI -0.4% yr/yr (expected -0.5%; last -0.4%) ---Equity Markets--- Japan's Nikkei: -0.1% Hong Kong's Hang Seng: +0.1% China's Shanghai Composite: +0.2% India's Sensex: -0.2% South Korea's Kospi: UNCH Australia's ASX All Ordinaries: +2.3% ---FX--- USD/JPY: +0.1% to 104.99 USD/CNH: +0.2% to 6.7922 USD/INR: -0.1% to 73.43 Europe: DAX +1.4%, FTSE +2.3%, CAC +1.7% Major European indices trade in the green. This week's EU summit was delayed until the next weekend after EU Council President, Charles Michel, placed himself in isolation after a staff member was diagnosed with the coronavirus. Flash manufacturing PMI readings for September showed expanding activity in Germany, U.K., and France while activity in the services sector contracted in Germany and France. Germany's cabinet reportedly approved a draft budget for 2021, which calls for EUR96.20 bln in new debt. In economic data: Eurozone's September flash Manufacturing PMI 53.7 (expected 51.9; prior 51.7) and flash Services PMI 47.6 (expected 50.5; last 50.5). Germany's September flash Manufacturing PMI 56.6 (expected 52.5; last 52.2) and flash Services PMI 49.1 (expected 53.0; last 52.5). October GfK Consumer Climate -1.6 (expected -1.0; last -1.7) U.K.'s September flash Manufacturing PMI 54.3 (expected 54.1; last 55.2) and flash Services PMI 55.1 (expected 56.0; last 58.8) France's September flash Manufacturing PMI 50.9 (expected 50.5; last 49.8) and flash Services PMI 47.5 (expected 51.5; last 51.5) Spain's Q2 GDP -17.8% qtr/qtr (expected -18.5%; last -5.2%); -21.5% yr/yr (expected -22.1%; last -4.2%) ---Equity Markets--- STOXX Europe 600: +1.3% Germany's DAX: +1.4% U.K.'s FTSE 100: +2.3% France's CAC 40: +1.7% Italy's FTSE MIB: +1.2% Spain's IBEX 35: +1.7% ---FX--- EUR/USD: UNCH at 1.1706 GBP/USD: -0.1% to 1.2719 USD/CHF: +0.2% to 0.9204