Daily morning uptodate

The S&P 500 futures trade 21 points, or 0.6%, above fair value ahead of key retail sales data this morning and the FOMC's policy decision later this afternoon. Futures are up for the third straight session as the market tries to extend its rebound. _____________________________ The Retail Sales report for August (Briefing.com consensus 1.0%) will be released at 8:30 a.m. ET, followed by the NAHB Housing Market Index for September (Briefing.com consensus 78) and Business Inventories for July (Briefing.com consensus 0.2%) at 10:00 a.m. ET, and Net Long-Term TIC Flows for July at 4:00 p.m. ET. As for the Fed, while no rate change is expected today (or years by some estimates), investors will look for any clearer guidance on the path of interest rates in addition to updated forecasts for economic growth, unemployment, and inflation. The policy directive will be released at 2:00 p.m. ET, followed by Fed Chair Powell's press conference at 2:30 p.m. ET. On the earnings front, FedEx (FDX 258.50, +21.83, +9.2%) and Adobe (ADBE 508.00, +10.33, +2.1%) are up 9% and 2%, respectively, after beating top and bottom-line estimates. U.S. Treasuries trade little changed. The 2-yr yield is flat at 0.13%, and the 10-yr yield is down one basis point to 0.67%. The U.S. Dollar Index is down 0.2% to 92.86. WTI crude futures are up 2.2%, or $0.84, to $39.12/bbl. In U.S. Corporate news: FedEx (FDX 258.50, +21.83): +9.2% after beating top and bottom-line estimates. Adobe (ADBE 508.00, +10.33): +2.1% after beating top and bottom-line estimates. Boeing (BA 161.85, -1.64): -1.0% amid a condemning report from the House Committee regarding the 737 Max and a cautious note from Cowen regarding 787 concerns.wo fatal crashes of Boeing 737 Max aircraft were partly due to the plane-maker's unwillingness to share technical details, a congressional investigation has found. ____________________________________________________________________________________________________________________ It blames a "culture of concealment" at Boeing, but says the regulatory system was also "fundamentally flawed". Boeing said it had "learned many hard lessons" from the accidents. But families of the victims accused the company and the regulator of continuing to hide information. The US report is highly critical of both Boeing and the regulator, the Federal Aviation Authority (FAA). "Boeing failed in its design and development of the Max, and the FAA failed in its oversight of Boeing and its certification of the aircraft," the 18-month investigation concluded. The Boeing 737 Max has been grounded since March 2019 after two crashes, in Indonesia and Ethiopia, caused the deaths of 346 people. The nearly 250-page report found a series of failures in the plane's design, combined with "regulatory capture", an overly close relationship between Boeing and the federal regulator, which compromised the process of gaining safety certification. "[The crashes] were the horrific culmination of a series of faulty technical assumptions by Boeing's engineers, a lack of transparency on the part of Boeing's management, and grossly insufficient oversight by the FAA." Concealment Boeing said it had made "fundamental changes" to the company as a result of the accidents. The FAA said it would work with lawmakers to "implement improvements identified in the report". 'Nothing will ever be the same' after Boeing crash Boeing's 737 Max moves closer to flying again Boeing wins first 737 Max order since fatal crash The report said Boeing had failed to share information about a key safety system, called MCAS, designed to automatically counter a tendency in the 737 Max to pitch upwards. Boeing was at fault for "concealing the very existence of MCAS from 737 pilots", it found. MCAS was not in crew manuals and Boeing sought to convince regulators not to require simulator training for Max pilots, which would incur extra costs. The MCAS system has been blamed for both crashes that came within months of each other, shortly after the plane went into operation. 'Halt the process' "The FAA should immediately halt the recertification process for the 737 Max in light of this report," said Michael Stumo, whose daughter Samya Rose Stumo died in the Ethiopian crash in March 2019. "The FAA and Boeing hid information before and are doing it again," he added. "Both Boeing and the FAA have refused to provide their data that support their efforts to unground the plane. The Max should not fly until Boeing and the FAA provide this data, so independent experts and the public can confirm the aircraft is safe." Paul Njoroge of Canada, whose entire family was killed on their trip to Kenya to visit grandparents, said the report documented "clear dereliction of duty by Boeing and the FAA in the design and certification process of the 737 Max". "It is, therefore, clear that at Boeing, safety comes after cost-cutting, profit-maximisation and share price pumpage," he added. "Further, the report has undoubtedly cast the FAA as a 'captured' regulator - the FAA is therefore an agency promoting Boeing and the industry, instead of promoting the safety of the flying public." ________________________________________________________________________________________________________________ Reviewing overnight developments: Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -0.4%, India's Sensex: +0.7%, South Korea's Kospi: -0.3%, Australia's ASX All Ordinaries: +1.1%. In economic data: Japan's August trade surplus JPY248.30 bln (expected deficit of JPY37.50 bln; last surplus of JPY10.90 bln). August Imports -20.8% yr/yr (expected -18.0%; last -22.3%) and Exports -14.8% yr/yr (expected -16.1%; last -19.2%) New Zealand's Q2 Current Account NZD1.83 bln (expected surplus of NZD600 mln; prior surplus of NZD1.56 bln) Australia's August HIA New Home Sales -14.4% m/m (last 64.4%) and August MI Leading Index 0.5% m/m (last 0.1%) In news: Japan's Lower House elected Yoshihide Suga as prime minister, in-line with expectations. The World Trade Organization ruled that the U.S. violated trade rules with respect to tariffs, but U.S. Trade Representative, Robert Lighthizer, said that the decision has no impact on the Phase 1 deal with China. New Zealand's Treasury expects that the country's 2021 GDP will contract 0.5%, down from the previous forecast for growth of 0.6%. Major European indices trade near their flat lines. STOXX Europe 600: +0.4%, Germany's DAX: UNCH, U.K.'s FTSE 100: -0.2%, France's CAC 40: UNCH, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: +0.2%. __________________________________________________________________________________________________________________ In economic data: Eurozone's July trade surplus EUR27.90 bln (expected surplus of EUR12.60 bln; last surplus of EUR20.20 bln) U.K.'s August CPI -0.4% m/m (expected -0.6%; last 0.4%); 0.2% yr/yr (expected 0.1%; last 1.0%). August Core CPI -0.6% m/m (expected -0.9%; last 0.4%); 0.9% yr/yr (expected 0.6%; last 1.8%). August Input PPI -0.4% m/m (expected 0.3%; prior 1.8%) and Output PPI 0.0% m/m (expected 0.2%; prior 0.3%) In news: The British government will reportedly make more changes to the Internal Markets Bill to appease some Tory members. Bank of Italy Governor, Ignazio Visco, said that he continues expecting Italy's GDP to contract less than 10% with a gradual recovery to follow. Bank of Spain widened its forecast range for Spain's 2020 GDP to -12.6% to -10.5% from -11.6% while growth in 2021 is expected between 4.1% and 7.3%, down from the previous forecast for 9.1% growth. U.S equity futures: S&P 500 Futures +17 @ 3412 DJIA Futures +134 @ 28042 Nasdaq Futures +31 @ 11481 Overseas: Europe: DAX UNCH, FTSE -0.2%, CAC UNCH Asia: Nikkei +0.1%, Hang Seng UNCH, Shanghai -0.4% Commodities: Crude Oil +0.87 @ 39.15 Nat Gas -0.013 @ 2.349 Gold +6.35 @ 1972.55 Silver +0.066 @ 27.530 Copper +0.0068 @ 3.0562 ____________________________________________________________________________________________________ U.S. Summary: Earnings/Guidance (Full Earnings Calendar): Adobe (ADBE) beats by $0.16, beats on revs; guides Q4 EPS in-line, revs in-line AxoGen (AXGN)guides Q3 revenue above consensus Brady (BRC) beats by $0.01, reports revs in-line Del Taco (TACO) guides Q3 revenue above consensus FedEx (FDX) beats by $2.15, beats on revs; continues policy of not providing full year guidance Triton International (TRTN) guides Q3 EPS above consensus; says global containerized trade volumes have rebounded strongly in Q3 US Foods (USFD) provides investor update in presentation; recovering volumes and cost reduction inititives are expected to lead to Q3 adj EBITDA more than doubling from Q2 _____________________________________________ General News: Multiple House Democrats are frustrated about lack of progress on stimulus bill as House Speaker Nancy Pelosi (D-CA) holds out for a larger package. House Majority Leader Steny Hoyer (D-MD) says members will leave for month long recess on October 2 despite Ms. Pelosi's earlier statement that members will remain in Washington, according to the Washington Post White House Chief of Staff Mark Meadows says stimulus proposal from moderate Democrats "a very thoughtful proposal." He said it currently doesn't align with White House priorities but could provide a "real opening for further discussions", according to Reuters Some Democrats are backing away from pledge to immediately reverse recent tax cuts if they take control of Senate and White House next year, according to The Hill Ray Dalio says dollar status as a reserve currency is under threat because fiscal spending and monetary injections, according to Bloomberg Fed officials could predict that rates stay low until 2023 at today's meeting, according to Bloomberg Hurricane Sandy makes landfall in Alabama as a category 2 storm Alaska Air (ALK) reportedly to resume flights to Portland and Spokane, according to Anchorage Press Alphabet (GOOG) unveils Google Meet Series One, video conferencing hardware for post-pandemic office spaces, according to CNET Applied DNA Sciences (APDN) to launch clinical trial for veterinary use of linear COVID-19 vaccine candidate Arrowhead (ARWD) announced positive interim 24-week liver biopsy results in four subjects from AROAAT2002 as a treatment for the rare genetic liver disease associated with alpha-1 antitrypsin deficiency AT&T (T) could offer cell phone plans partially subsidized by advertising, according to Reuters AVEO Oncology (AVEO) announces publication of final overall survival results from Phase 3 TIVO-3 study Boeing (BA): House Committee issues report on Boeing 737 Max Clear Channel Outdoor (CCO) discloses planned headcount reductions for its international division Corporacin Amrica Airports (CAAP) reports August traffic declined 88.8% yr/yr Eli Lilly (LLY) announces proof of concept data for neutralizing antibody LY-CoV555 in the COVID-19 outpatient setting Emerson (EMR) in slide presentation says that order activity turned positive in August driven by US HVAC and home improvement channels Ethan Allen (ETH) provided several updates on its current business trends Eventbrite (EB) provided an update on the company's event ticketing trends and advance payout program Facebook (FB): FTC preparing antitrust action against Facebook, according to Bloomberg General Motors (GM) aiming to manufacture family of electric car drive systems and motors, according to Reuters Google (GOOG): Senators were critical of Google at antitrust hearing, according to the Wall Street Journal Hill-Rom (HRC) commits to a workforce reduction plan Host Hotels (HST) provides update on 3Q20 business trends; RevPar improved 33.7% in August on a month-over-month basis Kodak (KODK) panel finds that company did not break law with loan deal, according to the Wall Street Journal Kohl's (KSS) announces further actions in response to COVID-19 impact; has reduced corporate positions by approx. 15% Lincoln Electric (LECO) provides investor update in presentation; July order rates trended down in high-teens percentage range and August orders continue to improve; shape of recovery remains unknown LPL Financial (LPLA) reports total brokerage and advisory assets served at August-end of approx. $823 bln MediWound (MDWD) announces FDA accepted for review BLA for NexoBrid for eschar removal (debridement) in adults with deep partial-thickness and/or full-thickness thermal burns Merck KGaA (MKKGY) provides business updates on Capital Markets Day Perspecta (PRSP) receives $98.2 mln to support the FSAIC 2020 program Rush Enterprises (RUSHA) declares 3-for-2 stock split for both A and B shares; co plans to recommend to its board to maintain dividend at current level, which equates to a 50% increase if board approves Southwest Air (LUV) details operational trends Spotify (SPOT) issues criticism of Apple's (AAPL) new services bundle, citing antitrust concerns, and calls for action from competition authorities, according to Reuters Spotify (SPOT) strikes deal with Songkick to promote live streaming events on its app, according to Financial Times SpringWorks Therapeutics (SWTX) announces collaboration with children's oncology group to conduct a phase 2 clinical trial of Nirogacestat in pediatric patients with desmoid tumors and reports publication of nirogacestat case series in pediatric/young adult desmoid tumor patients Starbucks (SBUX) believes sales recovery is at least six months away as urban centers remain quiet, according to the Wall Street Journal M&A: Monocle Acquisition (MNCL) files registration statement in connection with proposed business combination with AerSale Takeda Pharma (TAK) to divest TachoSil for 350 mln Teladoc (TDOC) and Livongo (LVGO) file definitive joint proxy statement and prospectus with the U.S. Securities and Exchange Commission in connection with the proposed merger of the two companies Tiziana Life Sciences (TLSA) announces planned spin out of StemPrintER into a new publicly listed company, Accustem Sciences Westport Fuel Systems (WPRT) agrees to sell assets of Rohan BRC Gas Equipment subsidiary to Minda Emer Technologies; terms not disclosed Syndicate: ADT (ADT) commences secondary public offering of 43.5 mln shares of common stock by selling stockholders AMC Networks (AMCX) plans to commence "modified Dutch auction" tender offer for up to $250 mln in value of its Class A common shares; appoints James L. Dolan as Non-Executive Chairman Shopify (SHOP) prices offering of 1,100,000 Class A subordinate voting shares at $900 per share and its previously announced public offering of $800 mln of convertible senior notes due 2025 Syneos Health (SYNH) commences 7 mln share offering by selling stockholders pursuant to shelf registration IPOs: Expected to Price: Amwell (NYSE: AMWL): The leading telehealth company enabling digital delivery of care for healthcare's key stakeholders is expected to price its 35.0 M share IPO between $14-$16. Broadstone Net Lease (NYSE: BNL): The REIT that acquires, owns, and manages primarily single-tenant commercial real estate properties is expected to price its 33.5 M share IPO between $17-$19. Dyne Therapeutics (Nasdaq: DYN): The muscle disease company focused on advancing therapeutics for patients with genetically driven disease is expected to price its 10.3 M share IPO between $16-$18. JFrog (Nasdaq: FROG): The developer of an end-to-end, hybrid, universal DevOps platform is expected to price its 11.6 M share IPO between $33-$37. Pactiv Evergreen (Nasdaq: PTVE): The largest manufacturer and distributor of foodservice and food merchandising products and beverage cartons in North America is expected to price its 41.0 M share IPO between $18-$21. Sumo Logic (Nasdaq: SUMO): The pioneer of Continuous Intelligence, a new category of software which enables organizations to address opportunities presented by digital transformation and cloud computing, is expected to price its 14.8 M share IPO between $17-$21. Unity Software (NYSE: U): The leading platform for creating and operating interactive, real-time 3D content is expected to price its 25.0 M share IPO between $34-$42. Vitru (Nasdaq: VTRU): The leading distance learning education group in postsecondary digital education market in Brazil is expected to price its 11.0 M share IPO between $22-$24. Priced to Trade: Frog (Nasdaq: FROG): The developer of an end-to-end, hybrid, universal DevOps platform priced its 11.6 M share IPO at $44, above the upwardly revised $39-$41 price range. Snowflake (NYSE: SNOW): The developer of a data cloud platform that enables customers to consolidate data into a single source to drive business insights priced its 28.0 M share IPO at $120, above the upwardly revised $100-$110 price range. StepStone Group (Nasdaq: STEP): The global private markets investment firm priced its 17.5 M share IPO at $18, above the $15-$17 expected price range. __________________________________________________________________________________________________________________ Gapping Up/Down Gapping up: AXGN +20%, AMCX +15.7%, TLSA +15.2%, FDX +10.3%, AVEO +9.9%, BRC +5.1%, APDN +4.8%, UPS +4.7%, WPRT +3.1%, SPOT +2.7%, ADBE +2.7%, TACO +2.6%, HST +1.8%, OI +1.7%, TRTN +1.5%, MSFT +1.1%, GOOG +0.9%, HRC +0.9%, USFD +0.9%, TAK +0.8% Gapping down: ADT -8.3%, NEE -2.8%, SYNH -2.5%, CAAP -1.8%, SHOP -1.1%, RUSHA -1% Analyst Research (see Upgrades/Downgrades calendarfor full list): Upgrades: BHP Group (BHP/BBL) upgraded to Buy from Hold at Jefferies Covetrus (CVET) upgraded to Buy from Hold at Stifel; tgt raised to $26 Digital Realty Trust (DLR) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $167 Endeavour Silver (EXK) upgraded to Neutral from Sector Underperform at CIBC Endava (DAVA) upgraded to Buy from Neutral at Citigroup; tgt raised to $67 KB Home (KBH) upgraded to Outperform from In-line at Evercore ISI Kraft Heinz (KHC) upgraded to Neutral from Sell at Guggenheim; tgt raised to $34 Lennar (LEN) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $89 New Gold (NGD) upgraded to Sector Outperform from Neutral at CIBC Tapestry (TPR) upgraded to Buy from Hold at Deutsche Bank; tgt $21 UNITIL Corporation (UTL) upgraded to Neutral from Underperform at BofA Securities Veeco Instruments (VECO) upgraded to Buy from Neutral at Goldman; tgt raised to $16 __________________________________________________________________________________________________________ Downgrades: Dow (DOW) downgraded to Reduce from Hold at HSBC Securities; tgt $33 LyondellBasell (LYB) downgraded to Hold from Buy at HSBC Securities; tgt $72 Transocean (RIG) downgraded to Neutral from Positive at Susquehanna; tgt lowered to $1.15 Others: Acuity Brands (AYI) initiated with a Sell at UBS; tgt $91 Allegion (ALLE) initiated with a Neutral at UBS; tgt $99 Alteryx (AYX) initiated with a Hold at Loop Capital; tgt $110 Amphenol (APH) initiated with a Buy at UBS; tgt $133 Atlassian (TEAM) initiated with an Overweight at Piper Sandler; tgt $212 Cactus (WHD) initiated with a Sector Perform at Scotiabank; tgt $22 ChampionX (CHX) initiated with a Sector Outperform at Scotiabank; tgt $12 Colfax (CFX) initiated with a Neutral at UBS; tgt $36 Datadog (DDOG) initiated with a Buy at Loop Capital; tgt $110 Dynatrace (DT) initiated with a Hold at Loop Capital; tgt $40 Fastenal (FAST) initiated with a Neutral at UBS; tgt $44 HD Supply Holdings (HDS) initiated with a Neutral at UBS; tgt $42 Hubbell (HUBB) initiated with a Neutral at UBS; tgt $149 Keysight (KEYS) initiated with a Buy at UBS; tgt $133 New Relic (NEWR) initiated with a Hold at Loop Capital; tgt $60 Overstock.com (OSTK) initiated with an Outperform at Credit Suisse; tgt $91 Overstock.com (OSTK) initiated with an Outperform at Wedbush; tgt $92 Paycom Software (PAYC) initiated with an Outperform at Cowen; tgt $325 Paylocity (PCTY) initiated with an Outperform at Cowen; tgt $165 PTC (PTC) initiated with a Buy at Loop Capital; tgt $110 Snap-On (SNA) initiated with a Sell at UBS; tgt $143 TE Connectivity (TEL) initiated with a Buy at UBS; tgt $130 Teekay LNG Partners (TGP) initiated with a Buy at B. Riley FBR; tgt $13 Tenaris (TS) initiated with a Sector Outperform at Scotiabank; tgt $16 Texas Roadhouse (TXRH) initiated with a Neutral at MKM Partners; tgt $68 Utz Brands (UTZ) initiated with a Neutral at Piper Sandler; tgt $18 Upcoming Events: Econ Data: 07:00 ET: MBA Mortgage Applications Index for September 12 (Briefing.com Consensus NA; Prior 2.9%) 08:30 ET: Retail Sales for August (Briefing.com Consensus 1.0%; Prior 1.2%) 08:30 ET: Retail Sales ex-auto for August (Briefing.com Consensus 1.0%; Prior 1.9%) 10:00 ET: Business Inventories for July (Briefing.com Consensus 0.2%; Prior 1.1%) 10:00 ET: NAHB Housing Market Index for September (Briefing.com Consensus 78; Prior 78) 10:30 ET: EIA Crude Oil Inventories for September 12 (Briefing.com Consensus NA; Prior +2.03M) 14:00 ET: FOMC Rate Decision (Briefing.com Consensus 0.125%; Prior 0.125%) 16:00 ET: Net Long-Term TIC Flows for July (Briefing.com Consensus NA; Prior $113.0B) _____________________________________________________________________________________________________________________ Earnings: Monday (Sept 14) Afternoon: LEN Tuesday (Sept 15) Morning: CBRL DAVA Afternoon: ADBE FDX Wednesday (Sept 16) Morning: BRC Afternoon: MLHR Thursday (Sept 17) Morning: APOG CMD Friday (Sept 11) None Confirmed Full Earnings Calendar Asia & Europe detail: Asia: Nikkei +0.1%, Hang Seng UNCH, Shanghai -0.4% Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note. Japan's Lower House elected Yoshihide Suga as prime minister, in-line with expectations. The World Trade Organization ruled that the U.S. violated trade rules with respect to tariffs, but U.S. Trade Representative, Robert Lighthizer, said that the decision has no impact on the Phase 1 deal with China. New Zealand's Treasury expects that the country's 2021 GDP will contract 0.5%, down from the previous forecast for growth of 0.6%. In economic data: Japan's August trade surplus JPY248.30 bln (expected deficit of JPY37.50 bln; last surplus of JPY10.90 bln). August Imports -20.8% yr/yr (expected -18.0%; last -22.3%) and Exports -14.8% yr/yr (expected -16.1%; last -19.2%) New Zealand's Q2 Current Account NZD1.83 bln (expected surplus of NZD600 mln; prior surplus of NZD1.56 bln) Australia's August HIA New Home Sales -14.4% m/m (last 64.4%) and August MI Leading Index 0.5% m/m (last 0.1%) ---Equity Markets--- Japan's Nikkei: +0.1% Hong Kong's Hang Seng: UNCH China's Shanghai Composite: -0.4% India's Sensex: +0.7% South Korea's Kospi: -0.3% Australia's ASX All Ordinaries: +1.1% ---FX--- USD/JPY: -0.4% to 105.05 USD/CNH: -0.4% to 6.7538 USD/INR: -0.1% to 73.51 Europe: DAX UNCH, FTSE -0.2%, CAC UNCH Major European indices trade near their flat lines. The British government will reportedly make more changes to the Internal Markets Bill to appease some Tory members. Bank of Italy Governor, Ignazio Visco, said that he continues expecting Italy's GDP to contract less than 10% with a gradual recovery to follow. Bank of Spain widened its forecast range for Spain's 2020 GDP to -12.6% to -10.5% from -11.6% while growth in 2021 is expected between 4.1% and 7.3%, down from the previous forecast for 9.1% growth. In economic data: Eurozone's July trade surplus EUR27.90 bln (expected surplus of EUR12.60 bln; last surplus of EUR20.20 bln) U.K.'s August CPI -0.4% m/m (expected -0.6%; last 0.4%); 0.2% yr/yr (expected 0.1%; last 1.0%). August Core CPI -0.6% m/m (expected -0.9%; last 0.4%); 0.9% yr/yr (expected 0.6%; last 1.8%). August Input PPI -0.4% m/m (expected 0.3%; prior 1.8%) and Output PPI 0.0% m/m (expected 0.2%; prior 0.3%) ---Equity Markets--- STOXX Europe 600: +0.4% Germany's DAX: UNCH U.K.'s FTSE 100: -0.2% France's CAC 40: UNCH Italy's FTSE MIB: -0.4% Spain's IBEX 35: +0.2% ---FX--- EUR/USD: +0.2% to 1.1868 GBP/USD: +0.6% to 1.2968 USD/CHF: -0.2% to 0.9059