DAILY MORNING BRIEFING

The S&P 500 futures are rallying to start the week, trading 42 points, or 1.3%, above fair value. The positive bias follows not only a strong outing on Friday, but four straight weeks of losses, lending itself to a view that the market's correction might have run its course. Notwithstanding this upbeat view, the consensus among market participants remains that there'll still be volatility surrounding the election and other unresolved uncertainties, such as more fiscal relief, the coronavirus, and China. House Speaker Pelosi (D-CA) believes another stimulus package is possible, while other lawmakers are more pessimistic. Equities in Asia and Europe, meanwhile, are benefiting from a bargain-hunting mindset, with the news flow being mostly mixed. One that has impacted U.S. markets is news that there have been some signs of progress entering the final stage of Brexit talks this week. The U.S. Dollar Index is down 0.5% to 94.19 amid strength in the British pound (+1.3% to 1.2911). U.S. Treasuries remain range-bound at historically low levels. The 2-yr yield is flat at 0.13%, and the 10-yr yield is up one basis point to 0.67%. WTI crude futures are up 0.4%, or $0.17, to $40.42/bbl. In U.S. Corporate news: FedEx (FDX 255.06, +4.89): +2.0% after the stock was upgraded to Buy from Hold at Deutsche Bank. Devon Energy (DVN 9.95, +1.13): +12.8% after agreeing to merge with WPX Energy (+5.03, +0.59, +13.3%) in an all-stock transaction. Uber (UBER 36.00, +1.54): +4.5% after winning a legal battle to regain its license in London. Thor Industries (THO 98.00, +4.79): +5.1% after beating top and bottom-line estimates. Virgin Galactic (SPCE 18.00, +1.57): +9.6% after being initiated with the equivalent of a Buy rating at Susquehanna and BofA Securities. Reviewing overnight developments: Equity indices in the Asia-Pacific region started the week on a fairly upbeat note. Japan's Nikkei: +1.3%, Hong Kong's Hang Seng: +1.0%, China's Shanghai Composite: -0.1%, India's Sensex: +1.6%, South Korea's Kospi: +1.3%, Australia's ASX All Ordinaries: -0.1%. In economic data: China's August Industrial Profit +19.1% (last 19.6%) In news: The positive bias flowed from Wall Street's bullish-minded action on Friday, which helped spur a bargain-hunting effort in Asian markets following recent struggles. Still a lot of tension on the U.S-China line, with reports indicating the U.S. has imposed restrictions on exports to SMIC, China's largest chip-making company, and that more Chinese companies are shifting away from Wall Street for stock listings in Hong Kong and Shanghai. A U.S. federal judge has temporarily blocked the order banning TikTok from app stores Australia's Victoria state is beginning to lift restrictions put in place to contain the spread of the coronavirus. Industrial profits in China increased for the fourth straight month. Major European indices have made big strides to begin the week after getting their legs swept out from under them last week. STOXX Europe 600: +1.9%, Germany's DAX: +2.6%, U.K.'s FTSE 100: +1.3%, France's CAC 40: +1.9%, Italy's FTSE MIB: +1.9%, Spain's IBEX 35: +1.8%. In economic data: There were no economic reports of note In news: Bargain-hunting efforts are part of the equation as major bourses dropped 4-6% last week. Banks have led the bargain-hunting charge, bolstered in part by M&A speculation and news that Ping An Insurance is going to increase its stake in HSBC. The British pound has made a big move against the dollar (+1.3% to 1.2911) with the FT reporting that there have been some signs of progress entering the final stage of Brexit talks this week. UK ministers are mulling a plan that would lead to a total shutdown of bars, pubs, and restaurants in northern Britain (and maybe London) for two weeks and that there is an emerging gap among ECB members on what the proper next step for policy should be. U.S equity futures: S&P 500 Futures +42 @ 3329 DJIA Futures +349 @ 27392 Nasdaq Futures +189 @ 11325 Overseas: Europe: DAX +2.6%, FTSE +1.3%, CAC +1.9% Asia: Nikkei +1.3%, Hang Seng +1.0%, Shanghai -0.1% Commodities: Crude Oil +0.14 @ 40.39 Nat Gas -0.062 @ 2.745 Gold +0.05 @ 1866.35 Silver +0.125 @ 23.218 Copper +0.0197 @ 2.9907 U.S. Summary: Earnings/Guidance (Full Earnings Calendar): Cal-Maine Foods (CALM) beats by $0.15, beats on revs SINA (SINA) beats by $0.04, beats on revs Thor Industries (THOR) beats by $0.74, beats on revs Weibo (WB) beats by $0.04, beats on revs; guides Q3 revs below consensus General News: President Trump nominates Judge Amy Coney Barrett to serve as Associate Justice of the United States Supreme Court; Senate confirmation expected late October House Speaker Nancy Pelosi (D-CA) believes another stimulus package is possible as House could vote on $2.4 trillion plan this week. The plan is more than the White House is willing to accept, but both sides agreed to restart talks, according to CNBC Federal appeals court halts 6 day extension for counting mail-in ballots in Wisconsin, a key swing state, according to Associated Press Joe Biden leads President Trump by 7 points nationally based on an average of recent polls ahead of Tuesday's first presidential debate, according to Real Clear Politics 33 states are showing increasing coronavirus cases. New York reported 1000 cases for the first time since June, according to the New York Times President Trump paid $750 in taxes in 2016 & 2017. He paid no income taxes in 10 of the previous 15 years largely because he lost more money than he made. Additional articles will be published in the coming weeks, according to the New York Times Airline industry could eliminate 35,000 jobs this week, according to the Washington Post A judge halts White House ban of TikTok downloads US commercial real estate properties could have lost 25% of their value, according to the Financial Times Approx. 3,500 US companies have filed suits challenging Trump administration tariffs on Chinese goods during the past two weeks, according to Reuters American Airlines (AAL) closed $5.48 bln loan with US government, according to Bloomberg Apogee Enterprises (APOG) CEO entered into a trading plan in accordance with Rule 10b5-1 ArcelorMittal (MT) authorizes share repurchase program of up to $500 mln Aquestive Therapeutics (AQST) announces that the FDA has issued a CRL regarding the NDA for Libervan Boeing (BA) considering cuts to executive ranks and real estate, according to Bloomberg BBX Capital (BBX) announces shareholder approval of spin-off of BBX Capital Florida; expects to change name to "Bluegreen Vacations Holding Corporation" and ticker to "BVH" Dr. Reddy's (RDY) launches generic Tecfidera in the US General Motors (GM) is having success with a sub $5000 electric car in China, according to Bloomberg Genfit (GNFT) and LabCorp (LH) sign exclusive agreement to commercialize a novel diagnostic test for liver disease GlaxoSmithKline (GSK) announces FDA approval of Nucala for the treatment of Hypereosinophilic Syndrome Granite Constr (GVA) appoints Kyle T. Larkin as President and Principal Executive Officer Immunic (IMUX) reports results from interim safety analysis and recruitment update from its ongoing Phase 2 CALVID-1 trial of IMU-838 in Patients with moderate COVID-19 Inovio Pharma (INO) notified that FDA has additional questions about the company's planned Phase 2/3 trial of its COVID-19 vaccine candidate INO-4800, including its CELLECTRA 2000 delivery device to be used in the trial Johnson & Johnson (JNJ) confirms COVID-19 vaccine candidate induced a strong neutralizing antibody response in Phase 1/2a clinical trial Kimco Realty (KIM) initiated a restructuring plan, which includes a voluntary early retirement program and the merging of the Company's Southern and Mid-Atlantic regions in order to streamline the organization Lockheed Martin (LMT) authorizes the repurchase of an additional $1.3 bln of common stock under its repurchase program Microsoft (MSFT): Source code for Windows XP and Windows Server 2003 has leaked online, according to TheVerge Nikola's (NKLA) founder Trevor Milton purchased truck designs from third parties, according to Financial Times NIO (NIO) to subscribe for additional registered capital in NIO China Piedmont Lithium (PLL) signs sales agreement with Tesla (TSLA) Pretium Resources (PVG) CFO to step down Sep 30; Matthew Quinlan named as successor PTC Therapeutics (PTCT) reports two-year data for Evrysdi; continues to demonstrate continued improvement of developmental milestones Quotient (QTNT) received FDA EUA for Quotient's COVID-19 antibody test Uber (UBER) wins legal battle to regain its license in London, according to CNBC M&A: Clarus Corporation (CLAR) to acquire certain assets relating to the Barnes Bullets brand of specialty hunting bullets for $30.5 million in cash Cleveland-Cliffs (CLF) acquires ArcelorMittal's (MT) US business for $1.4 bln Devon Energy (DVN) and WPX (WPX) to combine in an all-stock merger of equals transaction Enpro Industries (NPO) to acquire Alluxa for $255 mln MobileIron (MOBL) to be acquired by Ivanti for $7.05 in cash per share representing a 27% premium to the unaffected closing price as of September 24, 2020 SINA (SINA) enters "Going Private" transaction for $43.30 per share Teledyne Tech (TDY) to terminate discussions regarding its proposed acquisition of Photonis International SAS and affiliates Waste Mgmt (WM) pushes back likely close date for ADSW acquisition to early Q4 Syndicate: Alaska Air (ALK) files mixed securities shelf offering A-Mark Precious Metals (AMRK) files mixed securities shelf offering Caesars Entertainment (CZR) commenced an underwritten public offering of 30 mln shares of its common stock Immunogen (IMGN) files Form S-3 with respect to the sale of up to $100,000,000 of shares of common stock Lincoln National (LNC) files mixed securities shelf offering IPOs: Expected to Price: Academy Sports + Outdoors (Nasdaq: ASO): The leading full-line sporting goods and outdoor recreation retailer is expected to price its 15.6 M share IPO between $15-$17. Mission Produce (Nasdaq: AVO): The leader in sourcing, producing and distributing fresh avocados is expected to price its 9.4 M share IPO between $15-$17. Palantir Technologies (NYSE: PLTR): The software developer for defense, intelligence agencies, law enforcement, and commercial enterprises is expected to price its 257.1 M share IPO at $10. PULMONX (Nasdaq: LUNG): The commercial-stage medical technology company that provides a minimally invasive treatment for patients with severe emphysema is expected to price its 6.7 M share IPO between $14-$16. Yalla Group (NYSE: YALA): The voice-centric social networking and entertainment platform in MENA is expected to price its 18.6 M share IPO between $7-$9. Gapping Up/Down Gapping up: PLL +113.6%, GNFT +43.9%, CPK +9.5%, MT +8.4%, CLF +7.5%, SINA +5.9%, WB +5.3%, THO +5%, MOBL +4.7%, TLRY +4.6%, CALM +4.6%, CNTG +3.8%, NIO +2.9%, SNOW +2.6%, CZR +1.6%, QQQ +1.6%, SPY +1.2%, DIA +1.2%, IWM +1.2%, JNJ +1.1%, LMT +0.9% Gapping down: AQST -35.1%, VXX -1.3%, KIM -1.2%, TDY -1.1%, WM -0.5% Analyst Research (see Upgrades/Downgrades calendarfor full list): Upgrades: Afya (AFYA) upgraded to Buy from Neutral at Goldman; tgt raised to $30.20 Citizens & Northern Corp. (CZNC) upgraded to Overweight from Neutral at Piper Sandler; tgt lowered to $20 Costamare (CMRE) upgraded to Buy from Sell at Citigroup; tgt raised to $6.50 FedEx (FDX) upgraded to Buy from Hold at Deutsche Bank; tgt $318 GP Strategies (GPX) upgraded to Buy from Neutral at B. Riley FBR; tgt $12 Huntsman (HUN) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $23 Itron (ITRI) upgraded to Strong Buy from Outperform at Raymond James; tgt $78 MercadoLibre (MELI) upgraded to Buy from Hold at Jefferies; tgt raised to $1350 Merit Medical (MMSI) upgraded to Equal Weight from Underweight at Wells Fargo; tgt $42 Plug Power (PLUG) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $14 Qiagen (QGEN) upgraded to Buy from Hold at Kepler Snap (SNAP) upgraded to Buy from Neutral at Guggenheim; tgt $28 Spotify (SPOT) upgraded to Neutral from Sell at Guggenheim; tgt $250 UPS (UPS) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $190 Downgrades: Azure Power (AZRE) downgraded to Hold from Buy at HSBC Securities; tgt raised to $27 Choice Hotels (CHH) downgraded to Neutral from Buy at Longbow Copa Holdings (CPA) downgraded to Underweight from Overweight at Barclays Expedia Group (EXPE) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $93 Mettler-Toledo (MTD) downgraded to Underweight from Neutral at JP Morgan; tgt $880 Par Pacific (PARR) downgraded to Underperform from Neutral at Credit Suisse; tgt lowered to $8 PBF Energy (PBF) downgraded to Underperform from Outperform at Credit Suisse; tgt lowered to $5 Others: 21Vianet (VNET) initiated with a Buy at BofA Securities; tgt $35 Anavex (AVXL) initiated with a Buy at Ladenburg Thalmann; tgt $12 Darling Ingredients (DAR) initiated with an Outperform at Credit Suisse; tgt $50 Grid Dynamics (GDYN) initiated with a Buy at Canaccord Genuity; tgt $10 KE Holdings (BEKE) initiated with an Outperform at CICC Mirati Therapeutics (MRTX) initiated with a Neutral at BofA Securities; tgt $172 Pinterest (PINS) initiated with a Buy at Guggenheim; tgt $48 Tenable (TENB) initiated with an Overweight at Piper Sandler; tgt $45 Virgin Galactic (SPCE) initiated with a Positive at Susquehanna; tgt $20 Virgin Galactic (SPCE) initiated with a Buy at BofA Securities; tgt $35 Upcoming Events: Econ Data: 07:00 ET: No economic data releases. Asia & Europe detail: Asia: Nikkei +1.3%, Hang Seng +1.0%, Shanghai -0.1% Equity indices in the Asia-Pacific region started the week on a fairly upbeat note. China and Australia were stragglers, losing 0.1% each, while other major indices gained more than 1.0%. The positive bias flowed from Wall Street's bullish-minded action on Friday, which helped spur a bargain-hunting effort in Asian markets following recent struggles. Still a lot of tension on the U.S-China line, with reports indicating the U.S. has imposed restrictions on exports to SMIC, China's largest chip-making company, and that more Chinese companies are shifting away from Wall Street for stock listings in Hong Kong and Shanghai. Separately, a U.S. federal judge has temporarily blocked the order banning TikTok from app stores, Australia's Victoria state is beginning to lift restrictions put in place to contain the spread of the coronavirus, and industrial profits in China increased for the fourth straight month. In economic data: China's August Industrial Profit +19.1% (last 19.6%) ---Equity Markets--- Japan's Nikkei: +1.3% Hong Kong's Hang Seng: +1.0% China's Shanghai Composite: -0.1% India's Sensex: +1.6% South Korea's Kospi: +1.3% Australia's ASX All Ordinaries: -0.1% ---FX--- USD/JPY: -0.3% to 105.32 USD/CNH: -0.1% to 6.8161 USD/INR: flat at 73.665 Europe: DAX +2.6%, FTSE +1.3%, CAC +1.9% Major European indices have made big strides to begin the week after getting their legs swept out from under them last week. Bargain-hunting efforts are part of the equation as major bourses dropped 4-6% last week. Banks have led the bargain-hunting charge, bolstered in part by M&A speculation and news that Ping An Insurance is going to increase its stake in HSBC. The British pound has made a big move against the dollar (+1.3% to 1.2911) with the FT reporting that there have been some signs of progress entering the final stage of Brexit talks this week. This news has overshadowed separate reports that UK ministers are mulling a plan that would lead to a total shutdown of bars, pubs, and restaurants in northern Britain (and maybe London) for two weeks and that there is an emerging gap among ECB members on what the proper next step for policy should be. In economic data: There were no economic reports of note ---Equity Markets--- STOXX Europe 600: +1.9% Germany's DAX: +2.6% U.K.'s FTSE 100: +1.3% France's CAC 40: +1.9% Italy's FTSE MIB: +1.9% Spain's IBEX 35: +1.8% ---FX--- EUR/USD: +0.3% to 1.1659 GBP/USD: +1.3% to 1.2911 USD/CHF: -0.3% to 0.9260