Morning Briefing - Taking a breather after a record-setting run

 

U.S. equity futures are retracing some of Wednesday's record-setting gains, with relative weakness in technology stocks. Currently, the S&P 500 futures trade 13 points, or 0.3%, below fair value while the Nasdaq 100 futures trade 1.0% below fair value. 

Continued profit-taking activity in Apple (AAPL 127.95, -3.45, -2.3%), Tesla (TSLA 416.15, -31.22, -7.0%), and Zoom Video (ZM 406.00, -17.56, -4.2%), which were a few of the notable stocks that didn't participate in yesterday's relatively broad-based advance, has been a negative factor today.

It's fair to assume that others are under similar pressure given the extent of yesterday's index gains and the number of record-setting days before that. Generally, though, there appears to be a sense of buying exhaustion. Whether that continues after the open remains to be seen. 

On the data front, investors will receive the weekly Initial Claims report (Briefing.com consensus 915,000), the Trade Balance report for July (Briefing.com consensus -$58.6 billion), and revised Q2 Productivity (Briefing.com consensus 7.0%) and Unit Labor Costs (Briefing.com consensus 12.6%) at 8:30 a.m. ET. The ISM Non-Manufacturing Index for August (Briefing.com consensus 56.7%) will be released at 10:00 a.m. ET. 

U.S. Treasuries are holding steady near their flat lines. The 2-yr yield is flat at 0.13%, and the 10-yr yield is flat at 0.65%. The U.S. Dollar Index is up 0.2% to 93.01. WTI crude futures are down 2.4%, or $0.97, to $40.54/bbl after declining 3% yesterday.

In U.S. Corporate news:

  • JPMorgan Chase (JPM 102.75, +1.10): +1.1% after Deutsche Bank upgraded the stock to Buy from Hold.
  • Five Below (FIVE 126.88, +9.80): +8.4% after beating top and bottom-line estimates.
  • Campbell Soup (CPB 51.33, -1.12): -2.1% despite beating top and bottom-line estimates and guiding Q1 revenue above consensus. 
  • Pager Duty (PD 24.40, -8.59): -24.6% despite beating top and bottom-line estimates and issuing in-line guidance. 

Prepare for a Covid-19 vaccine to be ready by Nov. 1," the Centers for Disease Control and Prevention declared, notifying public health officials in all 50 states and five large cities to prepare for distribution. Technical specifications were given for two candidates, dubbed "Vaccine A" and "Vaccine B," including requirements for shipping, mixing, storage and administration. The details appear to match vaccines being developed by Pfizer (NYSE:PFE) and partner BioNTech (NASDAQ:BNTX), as well as Moderna (NASDAQ:MRNA), which both require two shots 28 days apart. Pfizer has also stated publicly that it is on track to seek an emergency use nod as early as next month.
What else is happening...

Tesla's (NASDAQ:tsla) largest independent investor cuts stake due to concentration rule.

Robinhood (rbnh) faces SEC fine over high speed trading deals - WSJ.

DraftKings (NASDAQ:dkng) soars after Michael Jordan comes on board

Another heat wave set to test California electric grid.

Verizon (NYSEvz), Amazon (NASDAQ:amzn) may invest 4bn in Vodafone Idea - Mint.


Today's Economic Calendar

7:30 Challenger Job-Cut Report
8:30 Jobless Claims
8:30 Goods and Services Trade
8:30 Productivity and Costs
9:45 PMI Composite Final
10:00 ISM Service Index
10:30 EIA Natural Gas Inventory
12:00 PM Fed's Bostic: Economic Outlook
1:00 PM Fed's Evans: U.S. Monetary Policy
4:30 PM Money Supply
4:30 PM Fed Balance Sheet


Gapping up
In reaction to earnings/guidance:

  • FIVE +8%, GWRE +4.7%, CONN +4.7%, HOFT +3.8%, MIK +3.7%, SPWH +3.5%, SIG +3.2%, CPRT +2.5%, MDB +2.3%, MEI +2.1%, GCO +2%, DCI +0.9%, POR +0.8%, PVH +0.8%, PDCO +0.7%

Other news:

  • STRO +15.3% (to discuss update on "promising" STRO-002 interim data)
  • FLGT +12.7% (partners with NYC for back-to-school COVID-19 testing)
  • ADMA +12.7% (launches COVID-19 ImmunoRank Neutralization MICRO-ELISA)
  • AGTC +8% (to provide update on trial and data on Sep 9)
  • NVAX +5.6% (announces publication of Phase 1 data for COVID-19 vaccine in NEJM)
  • ICLK +4.9% (upsizes and prices stock offering)
  • BE +4.3% (co and SK E&C announce 28-MW deployment of fuel cell technologies)
  • BKR +3% (President/CEO disclosed the purchase of ~71K shares on 9/2)
  • CRY +1.5% (acquires Ascyrus Medical)
  • SONO +1.2% (gets extension on exclusion of the co's core speaker products from tariffs through end of 2020)
  • COST +1% (reports Q4 sales slightly better than consensus; Aug comps +14.5%)

Analyst comments:

  • CS +2.5% (upgraded to Outperform from Neutral at Exane BNP Paribas)
  • LLY +1.6% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • AGCO +1.5% (upgraded to Buy from Neutral at BofA Securities)
  • BAC +1.1% (upgraded to Buy from Hold at Deutsche Bank)
  • JPM +1% (upgraded to Buy from Hold at Deutsche Bank)
  • BYND +1% (initiated with an Outperform at Robert W. Baird)


Gapping down
In reaction to earnings/guidance:

  • PD -23.6%, ZUO -22.8%, DBI -18.8%, RKT -9.5%, CRWD -9.2%, MOMO -9.2%, SMAR -8%, CIEN -7.8%, CLDR -7.1%, SAIC -5.5%, AMBA -3%, CPB -2.1%

Other news:

  • AKBA -70.6% (following top-line results from PRO2TECT)
  • TSLA -6.8% (continued weakness following yesterday's plunge; there was positive article about Tesla competitor Lucid Motors)
  • AMC -3.7% (files for 30 mln share offering)
  • OSTK -3.4% (introduces zero trading fees)
  • CYCN -2.6% (entered into $50 mln Open Market Sale Agreement with Jefferies)
  • NIO -2.3% (August deliveries)
  • IONS -1.4% (announces publication of compassionate-use study)

Analyst comments:

  • WMC -2.2% (downgraded to Underperform from Neutral at BofA Securities)
  • FAST -1.8% (downgraded to Equal Weight from Overweight at Wells Fargo)
  • UPS -1.1% (downgraded to Sell from Hold at Berenberg)

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