Daily morning briefing

The S&P 500 futures trade ten points, or 0.3%, above fair value following yesterday's afternoon rebound and ahead of Fed Chair Powell's testimony on the CARES Act before the House Financial Services Committee. In his prepared remarks, Mr. Powell said, "The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government," suggesting again the need for further fiscal stimulus. The hearing begins at 10:30 a.m. ET, and the Fed chair will speak two more times this week after today. Just before the congressional testimony, investors will receive the Existing Home Sales report for August (Briefing.com consensus 6.0 million) at 10:00 a.m. ET. Later today, Tesla's (TSLA 428.31, -21.08, -4.7%) Battery Day will be in focus, starting at 4:30 p.m. ET. Tesla CEO Elon Musk tempered some expectations last night, though. In the meantime, the market action has stabilized compared to recent sessions amid influential gains in the mega-caps. Yesterday saw buyers return to the market after the S&P 500 reached a 10% decline from its record high. U.S. Treasuries trade little changed. The 2-yr yield is flat at 0.14%, and the 10-yr yield is flat at 0.67%. The U.S. Dollar Index is down 0.1% to 93.53. WTI crude futures are up 0.6% to $39.79/bbl. In U.S. Corporate news: Amazon (AMZN 3020.00, +59.53): +2.0% after the stock was upgraded to Outperform from Mkt Perform at Bernstein. Tesla (TSLA 428.31, -21.08): -4.7% ahead of its Battery Day event today. CEO Elon Musk tweeted yesterday that the company won't reach serious high-volume production until 2022. AutoZone (AZO 1229.88, +43.87): +3.7% after beating top and bottom-line estimates. Reviewing overnight developments: Equity indices in the Asia-Pacific region followed the lead of U.S. markets, ending in the red. Japan's Nikkei: CLOSED, Hong Kong's Hang Seng: -1.0%, China's Shanghai Composite: -1.3%, India's Sensex: -0.8%, South Korea's Kospi: -2.4%, Australia's ASX All Ordinaries: -0.7%. In economic data: South Korea's August PPI 0.5% m/m (expected -0.9%; last 0.2%); -0.5% yr/yr (last -0.8%) In news: The People's Bank of China injected liquidity ahead of the upcoming Golden Week, which begins on October 1. Chinese companies have reportedly sold a record amount of dollar-denominated investment grade bonds in Q3. South Korea's government passed its fourth extra budget, as expected. Hyundai's unionized employees reportedly agreed to the first wage freeze in 11 years. Major European indices trade in the green. STOXX Europe 600: +0.6%, Germany's DAX: +1.0%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.5%, Italy's FTSE MIB: +1.3%, Spain's IBEX 35: +0.2%. In economic data: U.K.'s September CBI Industrial Trends Orders -48 (expected -40; last -44) In news: British Prime Minister, Boris Johnson, will reportedly call for a lockdown that is less aggressive than the first round of measures that was implemented in March. Germany's ifo Institute expects the country's 2020 GDP to contract 5.2%, up from the previous forecast for a 6.7% drop. However, the growth forecast for 2021 was lowered to 5.1% from 6.4%. Germany's association of retailers expects 2020 nominal sales to increase 1.5%, up from the previous forecast for a 4.0% contraction. U.S equity futures: S&P 500 Futures -3 @ 3273 DJIA Futures -84 @ 26971 Nasdaq Futures +24 @ 11013 Overseas: Europe: DAX +1.0%, FTSE +0.3%, CAC +0.5% Asia: Nikkei CLOSED, Hang Seng -1.0%, Shanghai -1.3% Commodities: Crude Oil +0.22 @ 39.76 Nat Gas +0.026 @ 1.861 Gold -2.00 @ 1908.65 Silver -0.087 @ 24.300 Copper +0.0387 @ 3.0707 U.S. Summary: Earnings/Guidance (Full Earnings Calendar): Agile Therapeutics (AGRX) reaffirms expense and revenue guidance AutoZone (AZO) beats by $8.21, beats on revs CoreLogic (CLGX) raises Q3, FY20, and FY21 guidance Kforce (KFRC) expects Q3 revenue and EPS to exceed the top end of its guidance RE/MAX Holdings (RMAX) guides Q3 revenue slightly below consensus; announces the acquisition of the Gadberry Group Spirit Realty Capital (SRC) reinitiates acquisition guidance for FY20 WEC Energy Group (WEC) reaffirms full year EPS guidance General News: Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell will testify to House today on need for more stimulus Republicans have objected to government funding bill because it omits $30 billion in aid to farmers. House & Senate must pass government funding bill by September 30 to avoid a shutdown, according to the Washington Post Leaders in China are divided on releasing blacklist of US companies, according to the Wall Street Journal Momentum is growing for President Trump to nominate former Notre Dame professor and current Appeals Court judge Amy Coney Barrett to replace Justice Ruth Bader Ginsburg on the Supreme Court, according to the Washington Post Republicans appear to have enough support to confirm a new Supreme Court Justice before Election Day, according to the New York Times UK coronavirus alert may get raised to 4 from 3, according to The Guardian UK to impose new restrictions on nightlife, pubs, and restaurants, according to the New York Times Fed Chairman Powell testimony on the CARES Act and alleviating economic fallout before the Committee on Financial Services, U.S. House of Representatives released Hollywood unions reach deal to restart production, according to Variety ADC Therapeutics (ADCT) submits BLA to the FDA for loncastuximab tesirine (Lonca) Alphabet (GOOG): Google appears it has discontinued original Pixelbook, according to TheVerge.com ALX Oncology (ALXO) entered into a clinical trial collaboration with Merck to evaluate the combination of ALX148 and KEYTRUDA Apple (AAPL) CEO Tim Cook predicts that some remote work trends will be permanent, according to Bloomberg Blueprint Medicines (BPMC) announces top-line results from the Phase 1 EXPLORER and Phase 2 PATHFINDER clinical trials of AYVAKIT in patients with advanced systemic mastocytosis Disney (DIS): DisneyLand (DIS) in Hong Kong to reopen on September 25, according to Reuters Exxon (XOM) receiving interest for its North Sea assets, according to Bloomberg Facebook (FB) will restrict users if there is unrest after the election, according to Financial Times Fortune Brands Home & Security (FBHS) authorizes $500 mln share repurchase program GameStop (GME): RC Ventures says in 13D filing that it has expressed its views and willingness to mgmt to become more involved in the company to produce the best results for all shareholders Howard Hughes (HHC) announces that David O'Reilly, President and Chief Financial Officer, has been named interim Chief Executive Officer Huntington Ingalls (HII) awarded $350 mln Navy contract Inari (NARI) announces that the interim results from the FLASH study have been accepted for presentation KLA Corporation (KLAC) launches new advanced packaging portfolio Oracle (ORCL): China is not likely to approve Oracle deal for TikTok which includes Wal Mart (WMT) Parsons (PSN) announces three task orders totaling $69 mln from U.S. Air Force Silk Road Medical (SILK) appoints current Chief Financial Officer, Lucas Buchanan, to also serve as Chief Operating Officer SolarEdge Technologies (SEDG) commences $500 mln offering of Convertible Senior Notes due 2025 STORE Capital (STOR) announces September rent collections of 88% Tesla (TSLA) CEO Elon Musk tweets ahead of Battery Day event that Tesla expects to increase battery cell purchase from partners including Panasonic; still foresees future shortages "unless we also take action ourselves" TherapeuticsMD (TXMD) and Knight Therapeutics announce Health Canada approval of BIJUVA Uber (UBER) shareholders said to push for re-evaluation of strategy for self-driving vehicles division, according to Bloomberg Unicredit S.p.A (UNCFF): Italy's Finance Ministry reportedly discuss possible sale to the bank of govt's stake in Banca Monte, according to Bloomberg Vaccinex (VCNX) announced topline results from the early manifest treatment arm (Cohort B1, N=179) of the Phase 2 double-blind, placebo-controlled SIGNAL trial of its lead clinical candidate, pepinemab, in patients with early manifest and prodromal Huntington's disease M&A: Tiffany & Co's (TIF) lawsuit against LVMH regarding cancelled buy-out put on fast track, setting trial for January, according to Bloomberg Syndicate: Accel Entertainment (ACEL) files for 8 mln share common stock offering; also files for 4 mln share common stock offering by selling shareholders ADC Therapeutics (ADCT) files for 5.5 mln share common stock offering; also files for 825,000 share common stock offering by selling shareholders Encompass Health (EHC) files mixed securities shelf offering ERYTECH Pharma (ERYP) files for $100 mln mixed securities shelf offering Kingsoft Cloud (KC) files for 8 mln ADS offering; also files for 9,677,310 ADS offering by selling shareholders TPI Composites (TPIC) files mixed securities shelf offering Utz Brands (UTZ) files for 23,033,332 share common stock offering, issuable on exercise of warrants; also files for 86,548,607 share common stock offering by selling shareholders and warrants IPOs: Expected to Price: Bentley Systems (Nasdaq: BSY): The provider of software for infrastructure engineering is expected to price its 10.8 M share IPO between $17-$19. 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. Gapping Up/Down Gapping up: GME +13.1%, FLGT +10.2%, SAVA +10.2%, UNIT +2.5%, LI +2.3%, TXMD +2.1%, HHC +2.1%, BP +1.6%, HAL +1.3%, AGRX +1.2%, MTDR +0.9%, RDS.A +0.8%, KFRC +0.8%, PSN +0.7%, TIF +0.7%, XOM +0.7%, SLB +0.7%, TOT +0.5% Gapping down: SNCR -6.5%, TSLA -3.4%, KC -2.4%, UTZ -2.4%, ACEL -1.9%, RMAX -0.6% Analyst Research (see Upgrades/Downgrades calendarfor full list): Upgrades: Allstate (ALL) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $108 Amazon (AMZN) upgraded to Outperform from Mkt Perform at Bernstein; tgt $3400 British American Tobacco (BTI) upgraded to Outperform from Sector Perform at RBC Capital Mkts CACI Intl (CACI) upgraded to Overweight from Neutral at JP Morgan; tgt $275 Carvana (CVNA) upgraded to Buy from Neutral at Goldman; tgt raised to $205 CBTX (CBTX) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt $22 First Horizon (FHN) upgraded to Strong Buy from Outperform at Raymond James; tgt $12 Five Prime Therapeutics (FPRX) upgraded to Buy from Neutral at Guggenheim; tgt $11 Leidos (LDOS) upgraded to Overweight from Neutral at JP Morgan; tgt $115 Malibu Boats (MBUU) upgraded to Outperform from Neutral at Robert W. Baird; tgt $64 MasterCraft (MCFT) upgraded to Outperform from Neutral at Robert W. Baird; tgt $22 Matador Resources (MTDR) upgraded to Buy from Hold at Truist; tgt $15 OneWater Marine (ONEW) upgraded to Outperform from Neutral at Robert W. Baird; tgt $30 Portland Gen Elec (POR) upgraded to Buy from Neutral at Guggenheim Progressive (PGR) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt $87 Tyler Tech (TYL) upgraded to Outperform from Neutral at Robert W. Baird; tgt $370 VEON (VEON) upgraded to Buy from Hold at VTB Capital Veritex Holdings (VBTX) upgraded to Strong Buy from Outperform at Raymond James; tgt $22 Vroom (VRM) upgraded to Buy from Neutral at Goldman; tgt raised to $60 WPX Energy (WPX) upgraded to Buy from Hold at Truist; tgt $8 Downgrades: BioLife Solutions (BLFS) downgraded to Perform from Outperform at Oppenheimer CytomX Therapeutics (CTMX) downgraded to Neutral from Buy at Guggenheim Eidos Therapeutics (EIDX) downgraded to Neutral from Buy at Guggenheim Illumina (ILMN) downgraded to Neutral from Buy at UBS; tgt lowered to $285 Illumina (ILMN) downgraded to Hold from Buy at Stifel; tgt lowered to $280 Kratos Defense and Security (KTOS) downgraded to Neutral from Overweight at JP Morgan; tgt $20 Others: Accolade (ACCD) initiated with a Buy at DA Davidson; tgt $45 Air Products (APD) initiated with an Outperform at Evercore ISI APi Group (APG) initiated with an Overweight at Barclays; tgt $19 Celanese (CE) initiated with an Outperform at Evercore ISI Central Federal (CFBK) initiated with a Neutral at Piper Sandler; tgt $12 Ecolab (ECL) initiated with an Outperform at Evercore ISI Immatics N.V. (IMTX) initiated with a Buy at Goldman; tgt $17 Linde plc (LIN) initiated with an Outperform at Evercore ISI LyondellBasell (LYB) initiated with an Outperform at Evercore ISI NextEra Energy (NEE) initiated with a Buy at Seaport Global Securities; tgt $229 Phreesia (PHR) initiated with a Buy at DA Davidson; tgt $35 Primo Water (PRMW) initiated with an Outperform at Raymond James; tgt $17 Teladoc (TDOC) initiated with a Buy at DA Davidson; tgt $250 Upcoming Events: Econ Data: 10:00 ET: Existing Home Sales for August (Briefing.com Consensus 6.0M; Prior 5.86M) Asia & Europe detail: Asia: Nikkei CLOSED, Hang Seng -1.0%, Shanghai -1.3% Equity indices in the Asia-Pacific region followed the lead of U.S. markets, ending in the red. The People's Bank of China injected liquidity ahead of the upcoming Golden Week, which begins on October 1. Chinese companies have reportedly sold a record amount of dollar-denominated investment grade bonds in Q3. South Korea's government passed its fourth extra budget, as expected. Hyundai's unionized employees reportedly agreed to the first wage freeze in 11 years. In economic data: South Korea's August PPI 0.5% m/m (expected -0.9%; last 0.2%); -0.5% yr/yr (last -0.8%) ---Equity Markets--- Japan's Nikkei: CLOSED Hong Kong's Hang Seng: -1.0% China's Shanghai Composite: -1.3% India's Sensex: -0.8% South Korea's Kospi: -2.4% Australia's ASX All Ordinaries: -0.7% ---FX--- USD/JPY: -0.2% to 104.42 USD/CNH: -0.2% to 6.7748 USD/INR: -0.2% to 73.44 Europe: DAX +1.0%, FTSE +0.3%, CAC +0.5% Major European indices trade in the green. British Prime Minister, Boris Johnson, will reportedly call for a lockdown that is less aggressive than the first round of measures that was implemented in March. Germany's ifo Institute expects the country's 2020 GDP to contract 5.2%, up from the previous forecast for a 6.7% drop. However, the growth forecast for 2021 was lowered to 5.1% from 6.4%. Germany's association of retailers expects 2020 nominal sales to increase 1.5%, up from the previous forecast for a 4.0% contraction. In economic data: U.K.'s September CBI Industrial Trends Orders -48 (expected -40; last -44) ---Equity Markets--- STOXX Europe 600: +0.6% Germany's DAX: +1.0% U.K.'s FTSE 100: +0.3% France's CAC 40: +0.5% Italy's FTSE MIB: +1.3% Spain's IBEX 35: +0.2% ---FX--- EUR/USD: -0.1% to 1.1757 GBP/USD: +0.3% to 1.2845 USD/CHF: UNCH at 0.9145