DAILY MORNING BRIEFING

The S&P 500 futures trade 26 points, or 0.8%, above fair value on signs that President Trump is responding well to several COVID-19 treatments and amid lingering stimulus optimism. According to the president's White House physician, President Trump could be released from the hospital today, which has relieved some of the political uncertainty that sent markets lower on Friday. Mr. Trump's health will continue to be watched closely throughout the week. Separately, there was no fiscal relief bill reached over the weekend, but House Speaker Pelosi said both sides have made progress. Reports are speculating that a deal could be reached relatively soon, especially after President Trump tweeted from the hospital to "get it done." Today's economic data will include the Markit Services PMI for September at 9:45 a.m. ET and the ISM Non-Manufacturing Index for September (Briefing.com consensus 55.6%) at 10:00 a.m. ET. Longer-dated Treasuries have edged lower to extend last week's modest losses. The 2-yr yield is flat at 0.13%, and the 10-yr yield is up two basis points to 0.72%. The U.S. Dollar Index is down 0.3% to 93.57. WTI crude futures are up 4.4% to $38.67/bbl after falling 8% last week. In U.S. Corporate news: Regeneron (REGN 593.00, +28.20): +5.0% after its COVID-19 antibody cocktail was used to treat President Trump. Gilead Sciences' (GILD 64.25, +2.08, +3.4%) remdesivir drug was also to treat the president over the weekend. AT&T (T 28.45, -0.23): -0.8% after the stock was downgraded to Underweight from Sector Weight at KeyBanc Capital Markets. Fortive (FTV 79.30, +1.90): +2.5% after issuing upside revenue guidance for Q3. Reviewing overnight developments: Asian equity markets started the week on an upbeat note, as most major indices gained at least 1.0%. Japan's Nikkei: +1.2%, Hong Kong's Hang Seng: +1.3%, China's Shanghai Composite: CLOSED, (holiday) India's Sensex: +0.7%, South Korea's Kospi: +1.3%, Australia's ASX All Ordinaries: +2.5%. In economic data: Australia's August AIG Construction Index 45.2 (last 42.7); M1 Inflation Gauge 0.1% (last 0.1%); September NAB Business Confidence -4 (last -8) South Korea's September Nikkei Manufacturing PMI 49.8 (last 48.5) Japan's September Final Services was PMI 46.9 (expected 45.6; last 45.0) Singapore's August Retail Sales 1.4% m/m (last 27.2%) In news: Shanghai remained closed for the Golden Week holiday. Market sentiment was boosted by reports that the U.S. is making progress toward another coronavirus relief bill, as well as some encouraging progress on coronavirus containment efforts in Asian countries. Australia's Victoria state is said to be reopening schools next week, New Zealand dialed back some of its restrictions, and Japan and South Korea are on track to restart business travel between the two countries. China's largest semiconductor manufacturing company, SMIC, warned that U.S. export restrictions could have a material adverse effect on its business and Australia is expected to unveil a budget that pulls forward tax cuts and increases infrastructure spending. Major European indices are trading with a positive bias, feeding off the improved global sentiment. STOXX Europe 600: +0.8%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.8%, France's CAC 40: +0.8%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +1.0%. In economic data: Eurozone's September Services PMI 48.0 (expected 47.6; last 50.5); September Markit Composite PMI 50.4 (expected 50.1; last 51.9); October Sentix Investor Confidence -8.3 (expected -9.5; last -8.0); August Retail Sales 4.4% m/m (expected 2.4%; last -1.8%) and 3.7% yr/yr (expected 2.2%; last -0.1%) Spain's September Services PMI 42.4 (expected 46.3; last 47.7) Italy's September Services PMI 48.8 (expected 46.6; last 47.1); September Composite PMI 50.4 (last 49.5) France's September Services PMI 47.5 (expected 47.5; last 51.5) Germany's September Services PMI 50.6 (expected 49.1; last 52.5; September Composite PMI 54.7 (expected 53.7; last 54.4) UK's September Services PMI 56.1 (expected 55.1; last 58.8); September Composite PMI 56.5 (expected 55.7; last 59.1) In news: Chatter that the U.S. is making progress on another stimulus bill, some generally improved September Services PMI readings, and reports that the UK and EU have agreed to extend Brexit talks for another month because of the progress that has been happening, have helped underpin equity markets. Separate reports that Italy, France, and the UK are on the cusp of announcing new lockdown restrictions to contain the spread of the coronavirus have tempered some of the bullish bias. S&P affirmed Germany's sovereign rating at 'AAA/A-1+'; outlook stable and affirmed France's sovereign rating at 'AA/A-1+'; outlook stable. U.S equity futures: S&P 500 Futures +22 @ 3361 DJIA Futures +195 @ 27761 Nasdaq Futures +93 @ 11327 Overseas: Europe: DAX +0.7%, FTSE +0.8%, CAC +0.8% Asia: Nikkei +1.2%, Hang Seng +1.3%, Shanghai CLOSED Commodities: Crude Oil +1.62 @ 38.67 Nat Gas +0.077 @ 2.515 Gold -1.75 @ 1905.85 Silver +0.123 @ 24.152 Copper -0.0223 @ 2.9552 U.S. Summary: Earnings/Guidance (Full Earnings Calendar): Alpha and Omega Semi (AOSL) sees Q1 revs well above consensus Caledonia Mining (CMCL) raises FY20 production guidance Fortive (FTV) sees Q3 revs above consensus NeoPhotonics (NPTN) sees Q3 EPS and revenues above consensus Targa Resources (TRGP) announces $500 million common share repurchase program and provides updated 2020 outlook Xpeng Inc (XPEV) reports Q3 deliveries increased 266% to 8,578 vehicles General News: President Trump was administered dexamethasone following drop in his oxygen levels, which is a steroid usually given to patients with severe coronavirus cases. White House doctor Sean Conley said Mr. Trump's condition was improving & could be discharged from hospital today, according to the Washington Post White House national security adviser Robert O'Brien says there are no plans for VP Mike Pence to take temporary presidential authority under the 25th amendment, according to CBS News Dr. Scott Gottlieb CNBC interview: He should know by late this week if President Trump is out of the woods; Patients that do well in the first week tend not to have a serious outcome in the second week House Speaker Nancy Pelosi (D-CA) says there is no deal yet on stimulus and she is waiting for White House to agree to her terms. Negotiations are continuing, but there is little sign a breakthrough is imminent. Ms. Pelosi also said President Trump's coronavirus case could speed up negotiations, according to the Washington Post Senate Majority Leader Mitch McConnell (R-KY) says previously-scheduled floor activity will be rescheduled until after October 19; Senators will be given at least 24 hours notice should votes need to occur during the pro forma posture (before October 19) Joe Biden leads President Trump by 8 points nationally based on average of recent polls versus a 7 point lead before the debate, according to RCP. New York City Mayor Bill de Blasio says non-essential businesses and schools will close Wednesday due to coronavirus in 9 zip codes in Brooklyn and Queens, according to NBC News Semiconductor Manufacturing is having "preliminary exchanges" with US over export restrictions, according to Reuters House unanimous consent resolution to extend payroll support for airlines was rejected; House is now on recess, but can be called back if deal was reached Airbus (EADSY) expecting to eliminate 15,000 jobs, according to Handelsblatt Alphabet (GOOG): The Trump administration to launch antitrust lawsuit against GOOG as soon as this week, according to Politico American Airlines (AAL) provided Payroll Support Program Agreement updates Amgen (AMGN) reports five-year data reinforcing safety and efficacy profile of Aimovig Apellis Pharmaceuticals (APLS) reports new analysis demonstrating targeted C3 Therapy Pegcetacoplan slows progression of early disease in patients with geographic atrophy Arcturus Therapeutics (ARCT) awarded grant from the Singapore Economic Development Board argenx (ARGX) reports Phase 3 ADAPT data consistent with positive topline results AVROBIO (AVRO) announced an exclusive, worldwide license agreement and a collaborative research funding agreement with The University of Manchester for an investigational lentiviral gene therapy for mucopolysaccharidosis type II (MPS II), or Hunter syndrome Bristol-Myers (BMY): FDA confirms approval of Opdivo in combination Yervoy for the treatment of mesothelioma Bristol-Myers (BMY) provides update on CheckMate -015 evaluating Opdivo plus Yervoy vs Opdivo in resected high-risk melanoma patients; addition of Yervoy did not result in statistically significant improvement in RTS in the intent-to-treat population Brookfield Renewable Partners (BEP) names Connor Teskey CEO Coca Cola (KO) to eliminate Zico coconut water brand and could eliminate other brands, according to the Wall Street Journal Commercial Vehicle Group (CVGI) appoints Christopher H.Bohnert as CFO Corvus Pharmaceuticals (CRVS) announced updated data from its ongoing Phase 1 study investigating the potential for CPI-006 to provide a novel immunotherapy approach for patients with COVID-19 Dr. Reddy's (RDY) launches generic Sapropterin Dihydrochloride Tablets in the US Facebook (FB), Twitter (TWTR), and Google (GOOG) will testify to Senate on October 28, according to Reuters Gilead Sciences (GILD) presents Biktarvy findings from switch studies & analysis of real-world BICSTaR study At HIV Glasgow 2020 Haemonetics (HAE) receives FDA clearance for NexSys PCS with Persona Technology Immunogen (IMGN) announces FDA breakthrough therapy designation for IMGN632 in relapsed or refractory blastic plasmacytoid dendritic cell neoplasm Johnson & Johnson (JNJ) CEO says COVID vaccine not likely until next year, a lot will depend on Phase 3 results, according to Bloomberg TV interview Macerich (MAC) announced that all 47 of the Company's major retail properties nationwide will soon be fully open for business, now that LA County has approved indoor mall reopenings on October 7 MeiraGTx (MGTX) reports nine-month data from Phase 1/2 trial of AAV-RPGR demonstrating significant and sustained vision improvement Myriad Genetics (MYGN) COO Alexander Ford resigned effective Oct 2 Nam Tai Property (NTP) entered into a Securities Purchase Agreement Pacific Ethanol's (PEIX) Michael D. Kandris became the sole President and Chief Executive Officer Quidel (QDEL) receives EUA for ABC Test - a combination diagnostic assay for Influenza A+B and COVID-19 RBC Bearings (ROLL) names Robert Sullivan as CFO Regeneron Pharma (REGN): White House Press Secretary Kayleigh McEnany tweets that President Trump has been treated with a dose of Regeneron's polyclonal antibody cocktail Sony (SNE) and Kioxia want approval to supply components to Huawei, according to Nikkei SpringWorks Therapeutics (SWTX) announces clinical collaboration with Pfizer (PFE) to evaluate nirogacestat in combination with PF-06863135 in patients with relapsed or refractory multiple myeloma Steven Madden (SHOO) reinstates the salaries of Founder Steven Madden and CEO Edward Rosenfeld Summit Therapeutics (SMMT) announces agreement for fundraising of ~$50 million; believes that the net proceeds of the Fundraising will extend its cash runway to the third quarter of 2021 United Airlines (UAL) resumes nonstop service between San Francisco and Shanghai; flights no longer require stop and crew change in Seoul, South Korea Vale S.A. (VALE) is in talks with Tesla (TSLA) and others about securing nickel, according to Reuters Visteon (VC) approves restructuring plan, including job cuts M&A: BeiGene (BGNE) to acquire 5% interest held by joint venture partner BridgeBio Pharma (BBIO) to acquire all of the outstanding common stock of Eidos (EIDX) it does not already own Gilat Satellite (GILT) and Comtech Telecommunications (CMTL) terminate merger agreement MyoKardia (MYOK) to be acquired by Bristol Myers Squibb (BMY) for $225.00/share in cash Navistar (NAV) willing to sell to Volkswagen (VWAGY) unit for $50/share, according to the New York Post RMG Acquisition (RMG) and Romeo Power Technology form business combination that would result in Romeo Power becoming a publicly listed company TC Pipelines (TCP) received non-binding offer from TC Energy Corporation (TRP) to acquire all of the outstanding common units of TCP XPO Logistics (XPO) considering sale of European supply chain unit, according to Bloomberg Syndicate: Agile Therapeutics (AGRX) files for $200 mln mixed securities shelf offering DCP Midstream (DCP) files for $750 mln common unit offering DraftKings (DKNG) files for 16 mln share Class A common stock by company and 16 mln shares by selling shareholders IPOs: Expected to Price: AZIYO Biologics (Nasdaq: AZYO): The commercial-stage regenerative medicine company is expected to price its 2.9 M share IPO between $16-$18. fuboTV (NYSE: FUBO): The sports-focused, live TV streaming platform is expected to price its 15.0 M share IPO between $9-$11. Gapping Up/Down Gapping up: MYOK +58.8%, IMGN +23.3%, MGTX +9.6%, XPEV +5.6%, REGN +4.9%, SMMT +4.9%, TRGP +4.8%, GILT +4.4%, SRNE +4.1%, AOSL +4.1%, QDEL +3.7%, VALE +3.2%, GILD +2.9%, TEX +2.4%, PTEN +2.3%, ARGX +1.7%, QQQ +1%, IWM +1%, UAL +0.8%, AAL +0.8%, SPY +0.8%, DIA +0.8% Gapping down: VXX -1.5%, BMY -0.7%, RMG -0.5% Analyst Research (see Upgrades/Downgrades calendarfor full list): Upgrades: Altice USA (ATUS) upgraded to Outperform from Mkt Perform at Bernstein; tgt $34 Cogent Communications (CCOI) upgraded to Mkt Perform from Underperform at Raymond James DocuSign (DOCU) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $260 Eversource Energy (ES) upgraded to Neutral from Underperform at BofA Securities; tgt $87 Helmerich & Payne (HP) upgraded to Equal Weight from Underweight at Barclays; tgt $14 Houghton Mifflin Harcourt (HMHC) upgraded to Neutral from Sell at Citigroup; tgt raised to $2.50 Intuit (INTU) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $400 JELD-WEN (JELD) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $32 Liberty Oilfield Services (LBRT) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $10 ONEOK (OKE) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $36 Polaris Industries (PII) upgraded to Outperform from Neutral at Robert W. Baird; tgt $122 Regeneron Pharma (REGN) upgraded to Overweight from Neutral at Cantor Fitzgerald; tgt $690 Sensata Tech (ST) upgraded to Outperform from Market Perform at Cowen; tgt raised to $55 Downgrades: American Campus Communities (ACC) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets AT&T (T) downgraded to Underweight from Sector Weight at KeyBanc Capital Markets; tgt $25 Dunkin (DNKN) downgraded to Neutral from Buy at BTIG Research Installed Building Products (IBP) downgraded to Hold from Buy at The Benchmark Company TopBuild (BLD) downgraded to Hold from Buy at The Benchmark Company Others: Apple Hospitality REIT (APLE) initiated with a Buy at Compass Point; tgt $13 CRISPR Therapeutics (CRSP) initiated with a Buy at BofA Securities; tgt $110 CrowdStrike (CRWD) resumed with a Buy at Goldman; tgt raised to $176 Dada Nexus (DADA) initiated with an Overweight at Morgan Stanley; tgt $34 Diamondrock Hospitality (DRH) initiated with a Neutral at Compass Point Freshpet (FRPT) initiated with an Overweight at Atlantic Equities; tgt $131 Hain Celestial (HAIN) initiated with a Hold at R5 Capital Host Hotels (HST) initiated with a Neutral at Compass Point; tgt $12 Park Hotels & Resorts (PK) initiated with a Neutral at Compass Point; tgt $11.50 Pebblebrook Hotel Trust (PEB) initiated with a Neutral at Compass Point; tgt $14.50 Ping Identity (PING) resumed with a Neutral at Goldman; tgt $33 Repay Holdings (RPAY) initiated with an Equal-Weight at Morgan Stanley; tgt $25 RLJ Lodging Trust (RLJ) resumed with a Neutral at Compass Point; tgt $9.50 Shopify (SHOP) initiated with an Equal-Weight at Morgan Stanley; tgt $970 Sunstone Hotel (SHO) initiated with a Neutral at Compass Point; tgt $9 Translate Bio (TBIO) initiated with a Buy at Goldman; tgt $19 Turning Point Brands (TPB) initiated with an Overweight at Barclays; tgt $38 Vector Grp (VGR) initiated with an Equal Weight at Barclays; tgt $11 Vir Biotechnology (VIR) initiated with a Buy at BofA Securities; tgt $55 Upcoming Events: Econ Data: 10:00 ET: ISM Non-Manufacturing Index for September (Briefing.com Consensus 55.6%; Prior 56.9%) Asia & Europe detail: Asia: Nikkei +1.2%, Hang Seng +1.3%, Shanghai CLOSED Asian equity markets started the week on an upbeat note, as most major indices gained at least 1.0%. Shanghai remained closed for the Golden Week holiday. Market sentiment was boosted by reports that the U.S. is making progress toward another coronavirus relief bill, as well as some encouraging progress on coronavirus containment efforts in Asian countries. Australia's Victoria state is said to be reopening schools next week, New Zealand dialed back some of its restrictions, and Japan and South Korea are on track to restart business travel between the two countries. Separately, China's largest semiconductor manufacturing company, SMIC, warned that U.S. export restrictions could have a material adverse effect on its business and Australia is expected to unveil a budget that pulls forward tax cuts and increases infrastructure spending. In economic data: Australia's August AIG Construction Index 45.2 (last 42.7); M1 Inflation Gauge 0.1% (last 0.1%); September NAB Business Confidence -4 (last -8) South Korea's September Nikkei Manufacturing PMI 49.8 (last 48.5) Japan's September Final Services was PMI 46.9 (expected 45.6; last 45.0) Singapore's August Retail Sales 1.4% m/m (last 27.2%) ---Equity Markets--- Japan's Nikkei: +1.2% Hong Kong's Hang Seng: +1.3% China's Shanghai Composite: CLOSED (holiday) India's Sensex: +0.7% South Korea's Kospi: +1.3% Australia's ASX All Ordinaries: +2.5% ---FX--- USD/JPY: +0.3% to 105.62 USD/CNH: -0.2% to 6.7378 USD/INR: -0.1% to 73.252 Europe: DAX +0.7%, FTSE +0.8%, CAC +0.8% Major European indices are trading with a positive bias, feeding off the improved global sentiment. Chatter that the U.S. is making progress on another stimulus bill, some generally improved September Services PMI readings, and reports that the UK and EU have agreed to extend Brexit talks for another month because of the progress that has been happening, have helped underpin equity markets. Separate reports that Italy, France, and the UK are on the cusp of announcing new lockdown restrictions to contain the spread of the coronavirus have tempered some of the bullish bias. S&P affirmed Germany's sovereign rating at 'AAA/A-1+'; outlook stable and affirmed France's sovereign rating at 'AA/A-1+'; outlook stable. In economic data: Eurozone's September Services PMI 48.0 (expected 47.6; last 50.5); September Markit Composite PMI 50.4 (expected 50.1; last 51.9); October Sentix Investor Confidence -8.3 (expected -9.5; last -8.0); August Retail Sales 4.4% m/m (expected 2.4%; last -1.8%) and 3.7% yr/yr (expected 2.2%; last -0.1%) Spain's September Services PMI 42.4 (expected 46.3; last 47.7) Italy's September Services PMI 48.8 (expected 46.6; last 47.1); September Composite PMI 50.4 (last 49.5) France's September Services PMI 47.5 (expected 47.5; last 51.5) Germany's September Services PMI 50.6 (expected 49.1; last 52.5; September Composite PMI 54.7 (expected 53.7; last 54.4) UK's September Services PMI 56.1 (expected 55.1; last 58.8); September Composite PMI 56.5 (expected 55.7; last 59.1) ---Equity Markets--- STOXX Europe 600: +0.8% Germany's DAX: +0.7% U.K.'s FTSE 100: +0.8% France's CAC 40: +0.8% Italy's FTSE MIB: +0.7% Spain's IBEX 35: +1.0% ---FX--- EUR/USD: +0.3% to 1.1752 GBP/USD: +0.1% to 1.2942 USD/CHF: -0.5% to 0.9167