DAILY MORNING CHAI BRIEFING

Today's Markets In Asia, Japan +0.8%. Hong Kong +0.1%. China +0.7%. India -0.1%. In Europe, at midday, London -0.4%. Paris -1.5%. Frankfurt -1.1%. Futures at 6:20, Dow flat. S&P -0.6%. Nasdaq -2.3%. Crude -4.5% to $37.98. Gold -0.8% to $1919.30. Bitcoin -0.6% to $10058. Ten-year Treasury Yield -3 bps to 0.69% The global equity markets are mixed with Asia closing stronger, while the US and Europe are trading lower. US futures are off to a rocky start, led lower by the Nasdaq, which is down nearly 2%. This appears to be an extension to losses after the Nasdaq suffered its worst weekly decline since March. S&P Futures are down about 0.5%, hovering just above the 3400 level. The range was wide, encompassing Monday's holiday session with a high of 3447.00 and a low of 3380.25. In Asia, the equity markets finished the day in positive territory. The Shanghai drifted higher on a relatively quiet day of news and finished with a 0.7% advance. Japan was led higher by retail and export names with Fast Retailing and Panasonic pacing the way with gains of 1-2%. In Europe, the major bourses are giving back gains from Monday. Airline stocks are under pressure following the UK's policy change for travel restrictions, adding travelers from the Greek Islands to the quarantine list. Energy names are also taking a hit with Crude oil futures down nearly 4% and flirting with the $38 level. S&P 500 rebalance skips Tesla In a fairly heavy shuffle, several companies are moving among the S&P 500 Index, the S&P MidCap 400 and SmallCap 600 as part of September's quarterly rebalance. Not added to the S&P 500 in the rebalance: Tesla (NASDAQ:TSLA), which is down another 10% premarket to $377/share. At its current level, Tesla is over 25% below its all-time high recorded just weeks ago, but still about 30% above where it was when speculation of its S&P 500 inclusion began. Brexit tensions weigh on the pound Brexit trade talks plunged into crisis on Monday after the U.K. warned the EU that it could effectively override key parts of the divorce deal it signed last year unless the bloc agrees to a free trade deal by Oct. 15. In response, the EU chief warned that Britain has a legal obligation to respect the Brexit withdrawal agreement. "We are not going to accept level playing field provisions that lock us in to the way the EU do things," added British chief negotiator David Frost, ahead of fresh talks today with EU counterpart Michel Barnier. Sterling -1% to $1.3039. COVID Second-highest coronavirus case count India has surpassed Brazil as the country with the world's second-highest number of coronavirus cases, reaching more than 4.2M confirmed infections as the epidemic surges across the South Asian nation. India added the largest number of cases in a day with 90,802 recorded on Sunday. More than 71,000 people have died from COVID-19, making India the third-largest by number of deaths. Prime Minister Narendra Modi’s government initiated the world’s biggest virus lockdown in the country of 1.3B people in late March, leading to a GDP contraction of 23.9% in Q2, but the economic and social costs have forced a gradual reopening. Energy Oil demand remains weak Saudi Aramco (ARMCO) has cut the October official selling price for Arab Light crude it sells to Asia by the most since May, while the world's top oil exporter also lowered prices to the U.S. for the first time in six months. The move compounded losses in the WTI crude benchmark, which fell 4.5% to $37.98/bbl on the news, after tumbling 7.5% last week as the coronavirus crisis appeared to stage a comeback in parts of Europe, while cases in India surged. U.S. energy firms also added oil and natural gas rigs for the second time in the past three weeks, according to a weekly report by Baker Hughes, while shale producers are stockpiling federal drilling permits in the Permian Basin What else is happening... GDP figures flag Japan's worst postwar economic downturn. Reports suggest AB InBev (NYSE:BUD) is planning to replace longtime CEO. Expansion... Beyond Meat (NASDAQ:BYND) inks production deal near Shanghai. Boeing (NYSE:BA) problems prompt FAA review of Dreamliner jets - WSJ Next Virgin Galactic (NYSE:SPCE) spaceflight test set for Oct. 22. Epic makes another attempt at reversing 'Fortnite' App Store (NASDAQ:AAPL) ban ___________________________________________________________________-- Gapping up In reaction to earnings/guidance: PRGS +0.7% (guidance update) Other news: ALBO +90% (phase 3 trial meets both primary endpoints for Odevixibat in PFIC) NKLA +35% (Nikola Corporation and General Motors (GM) form strategic partnership; Nikola badger to be engineered and manufactured by General Motors) SPRO +23.1% (announces topline results from ADAPT-PO) KMDA +18.6% (announces completion of enrollment and initial interim results from its ongoing Phase 1/2 open-label clinical trial in Israel of the company's anti-SARS-CoV-2 plasma-derived hyperimmune immunoglobulin product as a potential treatment for coronavirus disease) VRNA +9.8% (initiates pilot study with pMDI Ensifentrine in US patients hospitalized with COVID-19) VXX +8.7% (trading higher with futures indicated lower) BYSI +8.5% (receives Breakthrough Therapy Designation for the chemotherapy-induced neutropenia indication from both the FDA and China's Center for Drug Evaluation of the National Medical Products Administration) GRFS +4% (to acquire Alkahest for $146 mln) OCUL +3.5% (received a letter from the FDA closing out the Warning Letter it received from the FDA on October 18, 2018 concerning ReSure Sealant) CHDN +2.9% (following Derby weekend) LMNL +2.4% (announces resubmission of biologics license application to FDA for Ryplazim for treatment of congenital plasminogen deficiency) BPMC +2.3% (receives FDA approval for GAVRETO) ETSY +1.9% (will move to the S&P 500) AZN +1.7% (New analyses from Breztri Aerosphere Phase III ETHOS trial to be presented at the European Respiratory Society International Congress 2020) Analyst comments: CWH +1.8% (upgraded to Overweight from Neutral at JP Morgan) PLAY +1.7% (upgraded to Buy from Hold at Deutsche Bank) DIS +0.9% (upgraded to Buy from Hold at Deutsche Bank) AA +0.8% (upgraded to Buy from Neutral at BofA Securities) ___________________________________________________________________________________________________________________________________ Gapping Down In reaction to earnings/guidance: ACB -0.5% (guidance update) Select ETFs showing early weakness: XLK -3.5%, QQQ -3.4%, SMH -3.2%, IGV -2.3% Other news: CRBP -73% (announced topline results from the 52-week Phase 3 RESOLVE-1 study of lenabasum in patients with diffuse cutaneous systemic sclerosis) TTWO -17.2% (files for 603,817 share common stock offering by selling shareholders) SBBP -15.6% (positive and statistically significant top-line results from the pivotal phase 3 Logics study of Recorlev for the treatment of endogenous cushing's syndrome) TSLA -13.2% (not added to S&P 500 (expectation that it would)) DOCU -5.5% (may be related to lack of inclusion in S&P 500) RIG -4.5% (files for 67,696,498 share common stock offering by selling shareholder) ZM -4.3% (cautious article in Barrons; also - may be related to lack of inclusion in S&P 500) FOUR -3.1% (transaction update) GERN -1.6% (files for $350 mln mixed securities shelf offering) Analyst comments: NOK -5.4% (downgraded to Mkt Perform from Strong Buy at Raymond James) DSX -4.2% (downgraded to Hold from Buy at Pareto) PAGS -3.2% (downgraded to Neutral from Buy at Goldman) FAST -2.9% (downgraded to Underperform from Mkt Perform at Raymond James) WYNN -2.5% (downgraded to Neutral from Buy at Goldman and removed from Conviction Buy List) ROP -1.7% (downgraded to Underweight from Neutral at JP Morgan)