Daily morning chai

The S&P 500 futures are down 36 points and trade 1.0% below fair value amid news that stimulus talks remain deadlocked and the U.S. hit a new record in daily coronavirus cases. Naturally, growth concerns are at the root of the negative bias since the resurgence of the virus threatens more lockdowns and the lack of a stimulus deal threatens to exclude many struggling businesses and households from the economy. The 10-yr yield is down two basis points to 0.82% amid increased demand for the growth/inflation-sensitive bond. In addition, Germany's SAP (SAP 119.30, -30.38, -20.3%) disappointed investors by lowering its revenue outlook due to the lockdowns in Europe and a muted demand recovery. Shares of SAP are down 20% at the NYSE. Separately, investors are looking ahead to a huge week in tech earnings. Microsoft (MSFT 214.59, -1.64, -0.8%) will report on Tuesday, followed by Apple (AAPL 114.01, -1.03, -0.9%), Amazon (AMZN 3193.52, -10.88, -0.3%), Alphabet (GOOG 1624.00, -17.00, -1.0%), and Facebook (FB 284.01, -0.78, -0.3%) on Thursday. Today's economic data will be limited to New Home Sales for September (Briefing.com consensus 1.022 million), which will be available at 10:00 a.m. ET. The 2-yr yield is down one basis point to 0.15%. The U.S. Dollar Index is up 0.2% to 92.95. WTI crude futures are down 2.0%, or $0.81, to $39.04/bbl. In U.S. Corporate news: Dunkin (DNKN 103.50, +14.71): +16.6% after confirming that it has held preliminary discussions to be acquired by Inspire Brands. Hasbro (HAS 90.00, -2.00): -2.2% despite beating top and bottom-line estimates. HCA Healthcare (HCA 136.59, unch): UNCH despite beating revenue estimates. Reviewing overnight developments: Equity indices in the Asia-Pacific region began the week on a mostly lower note while markets in Hong Kong and New Zealand were closed for holidays. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: CLOSED, China's Shanghai Composite: -0.8%, India's Sensex: -1.3%, South Korea's Kospi: -0.7%, Australia's ASX All Ordinaries: -0.3%. In economic data: Japan's August Leading Index 88.4 (expected 88.8; last 86.7) and Coincident Indicator 0.9% m/m (last 1.1%). September Corporate Services Price Index 1.3% yr/yr (expected 1.0%; last 1.1%) Singapore's September Industrial Production 10.1% m/m (expected -7.8%; last 15.5%); 24.2% yr/yr (expected 2.5%; last 15.4%) In news: Japanese press reported that the country's third extra budget is expected to be around JPY10 trillion. The latest plenary session began in China overnight and it will continue through Thursday. The country's five-year plan will reportedly focus on technology investment. China's Iron and Steel Association expects 2020 crude steel production to show a 3-5% increase yr/yr. Major European indices trade on a lower note with Germany's DAX (-2.3%) leading the retreat. STOXX Europe 600: -0.7%, Germany's DAX: -2.3%, U.K.'s FTSE 100: -0.1%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.5%, Spain's IBEX 35: -0.1%. In economic data: Germany's October ifo Business Climate Index 92.7 (expected 93.0; last 93.2). October Current Assessment 90.3 (expected 89.8; last 89.2) and Business Expectations 95.0 (expected 96.5; last 97.4) Spain's September PPI -3.3% yr/yr (last -3.5%) In news: SAP has fallen nearly 20% after reporting mixed results and lowering its outlook. Sentiment in the region has been pressured by a rising number of coronavirus infections. Economists from Germany's ifo Institute observed a deterioration in exports other than autos. The Institute expects the German economy to grow 2.1% in Q4, assuming no new lockdowns. Standard & Poor's affirmed U.K.'s AA rating and Greece's BB- rating. The ratings agency also affirmed Italy's BBB rating and raised the outlook to Stable from Negative. U.S equity futures: S&P 500 Futures -33 @ 3419 DJIA Futures -286 @ 27903 Nasdaq Futures -92 @ 11571 Overseas: Europe: DAX -2.3%, FTSE -0.1%, CAC -0.6% Asia: Nikkei -0.1%, Hang Seng CLOSED, Shanghai -0.8% Commodities: Crude Oil -0.83 @ 39.02 Nat Gas +0.063 @ 3.258 Gold +1.55 @ 1906.75 Silver -0.265 @ 24.740 Copper -0.0105 @ 3.1185 U.S. Summary: Earnings/Guidance (Full Earnings Calendar): Affiliated Managers (AMG) beats by $0.42, beats on revs Bank of Hawaii (BOH) beats by $0.11 Celanese (CE) beats by $0.26, beats on revs; guides FY20 EPS above consensus Community Bank (CBU) beats by $0.16, beats on revs Hasbro (HAS) beats by $0.27, beats on revs HCA (HCA) reports Q3 (Sep) results, beats on revs New Residential Investment (NRZ) misses by $0.05, beats on revs Otis Worldwide (OTIS) beats by $0.13, beats on revs; raises FY20 EPS above consensus SAP SE (SAP) beats by 0.40, misses on revs; lowers FY20 outlook Simply Good Foods (SMPL) beats by $0.04, beats on revs; provides H1 outlook General News: US COVID-19 data mostly moving in an unfavorable direction; US hit record daily cases over the weekend Stimulus talks remain deadlocked as two sides accuse each other of moving the goal posts, according to CNN VP Mike Pence's chief of staff and other aides have tested positive for coronavirus, but Mr. Pence and his wife have tested negative, according to the New York Times Republican voters are strongly coming out for early in person voting in Florida and eating away at Democratic lead from mail in ballots in the key swing state, according to Politico Wisconsin, Michigan, and Pennsylvania are likely to decide the presidential election, according to the Washington Post Even if Democrats take presidency and Senate it is unlikely they will have 60 votes in Senate, which could act as a constraint around the scope and type of fiscal stimulus in 2021, according to CNBC Joe Biden's $2 trillion climate change policy almost certainly will not be enacted even if he wins White House and Democrats take Senate, however he could connect parts of it to other legislation, according to the New York Times European nations impose new coronavirus restrictions amid rising cases, according to the Wall Street Journal Final confirmation vote for Supreme Court nominee Amy Coney Barrett will be held tonight China purchases of US farm products are 71% of target under phase one trade deal, according to Reuters Alibaba (BABA) and BMW Group (BMWYY) signed a Memorandum of Understanding for strategic partnership in Beijing Alibaba's (BABA) Ant Group launched concurrent IPOs in Shanghai and Hong Kong - offer prices for A Share Offering and H Share Offering have been set at RMB68.80 per share and HK$80.00 per share, respectively Allakos (ALLK) reports results from a Phase 1 Study of subcutaneously administered lirentelimab in healthy volunteers Amarin (AMRN) reports VASCEPA (icosapent ethyl) was found to significantly reduce cardiovascular events in patients with compromised renal function Amazon (AMZN) wins order to put hold on Reliance Industries/Future $3.4 bln deal, according to Bloomberg Apple (AAPL): DOJ to target Apple and Google (GOOG) partnership, according to the New York Times AstraZeneca (AZN) confirms FDA authorises restart of the COVID-19 AZD1222 vaccine US Phase III trial Bayer AG (BAYRY) says FDA has approved FoundationOneCDx for use as diagnostic for NTRK gene fusion-positive patients BELLUS Health (BLU): Point72 (Steven A. Cohen) increases passive stake to 7.9% (prior 1.2%) BioSig Technologies (BSGM) halts its Phase 2 hospitalized COVID-19 trial BioXcel Therapeutics (BTAI) announces IND application for BXCL501 received clearance by the Division of Psychiatry Products at the FDA for the treatment of agitation associated with delirium Boeing (BA): FAA determined that software fix for certain planes was not adequate Crinetics Pharmaceuticals (CRNX) announces Phase 2 ACROBAT Edge study with paltusotine in acromegaly met primary endpoint CVS Health (CVS) and Walgreens (WBA): Senior official at HHS says thousands of facilities have opted in to coronavirus vaccine for seniors, according to CNBC CytoDyn (CYDY) announced two patients have demonstrated noticeable signs of improvement following treatment with leronlimab (PRO 140) in helping their recovery from stroke ESSA Pharma (EPIX) reports therapeutic potential of EPI-7386 for the treatment of prostate cancer Facebook (FB) demands that NYU cease collecting data about its political-ad targeting practices, according to Wall Street Journal Facebook (FB): State and federal charges against Facebook could come in November, according to the Washington Post Forma Therapeutics (FMTX) announces "positive" top-line olutasidenib data from a planned interim analysis of a registrational Phase 2 clinical trial in acute myeloid leukemia Galera Therapeutics (GRTX) announces positive interim data from first cohort of patients in pilot Phase 1/2 clinical trial of GC4419 in pancreatic cancer Global Blood Therapeutics (GBT) presented two abstracts at conference provide greater insight into the safety and efficacy of Oxbryta Honeywell (HON) discloses reduction in the aggregate carrying value of certain receivables and a corresponding $350 million pre-tax and after-tax, non-cash charge Honeywell has recorded as part of its third quarter 2020 statement of operations Johnson & Johnson (JNJ) confirms it's preparing to resume recruitment in Phase 3 ENSEMBLE trial of COVID-19 vaccine in the US after a temporary pause Mirati Therapeutics (MRTX) reports investigational Adagrasib preliminary data demonstrating tolerability and durable anti-tumor activity Moderna (MRNA) announces supply agreement with the ministry of public health to supply qatar with mRNA vaccine against COVID-19 Momo (MOMO) appoints Yan Tang as the Executive Chairman and Li Wang as the new CEO MYR Group (MYGR) announces a new $50 mln share repurchase program Northwest Pipe (NWPX) files for $150 mln mixed securities shelf offering Novartis (NVS) presents promising interim Phase II data of potential first-in-class oral therapy iptacopan in rare renal disease C3 glomerulopathy Passage BIO (PASG) receives orphan drug designation from European Commission for the company's lead gene therapy candidate PBGM01 for the treatment of GM1 gangliosidosis Revolution Medicines (RVMD) reports progress and expansion of combination strategy with RMC-4630; new clinical collaboration with AstraZeneca (AZN) Spectrum Pharma (SPPI) announced that an inspection of the Hanmi Bioplant in South Korea is required before the FDA can approve the company's Biologics License Application for ROLONTIS Syros Pharmaceuticals (SYRS) reports initial data from Phase 1 clinical trial of SY-5609; demonstrates proof of mechanism and support ongoing development Tencent (TCEHY): Judge rejects DOJ request to reverse her decision blocking the govt from barring Apple (AAPL) and Google (GOOG) from offering WeChat, according to Reuters Tesla (TSLA) details trends in cash flow, capital expenditures and operating expenses in 10-Q Turning Point Therapeutics (TPTX) reports initial clinical data from Phase 1 SHIELD-1 study; recommended Phase 2 dose determination ongoing M&A: Bayer AG (BAYRY) acquires Asklepios BioPharmaceutical for $2 bln Blackstone Real Estate Income Trust (BX) to acquire Simply Self Storage for ~$1.2 billion Carlyle Group (CG) nearing deal to acquire Siemens (SIEGY) mechanical drive unit for approximately EUR 2 bln, according to Bloomberg Cenovus Energy (CVE) and Husky Energy combine in an all-stock transaction valued at $23.6 billion Coca-Cola European Partners (CCEP) made a non-binding proposal to acquire Coca-Cola Amatil Limited (CCLAY); reports Q3 update - continue to be unable to provide FY20 financial guidance given COVID-19 uncertainty Contango Oil & Gas (MCF) and Mid-Con Energy Partners (MCEP) entered into an agreement to combine in an all-stock merger transaction Dunkin (DNKN) issues statement about possible acquistion; confirms that it has held preliminary discussions to be acquired by Inspire Brands Fiat (FCAU): EU set to approve Fiat deal for PSA, according to Reuters PAE (PAE) will acquire CENTRA Technology, Inc. in a $208 million transaction, net of tax benefits; expected to be accretive SolarWinds (SWI) announces agreement to acquire SentryOne; terms not disclosed SpringWorks Therapeutics (SWTX): Jazz Pharmaceuticals (JAZZ) acquires SpringWorks Therapeutics' FAAH inhibitor program Syndicate: AC Immune (ACIU) files for 11,999,999 share common stock offering by selling shareholders Acuity Brands (AYI) files mixed securities shelf offering Co-Diagnostics (CODX) files for $100 mln mixed securities shelf offering Contango Oil & Gas (MCF) to sell 26,451,988 shares of common stock in a private placement Hyliion (HYLN) files for 19,185,637 share common stock offering; also files for 132,637,517 share common stock offering by selling shareholders Mustang Bio (MBIO) files for $100 mln mixed securities shelf offering New Oriental Education & Technology (EDU) files for common stock offering by both the company and by selling shareholders Turning Point Therapeutics (TPTX) announces $400 mln commencement of public offering of common stock IPOs: Expected to Price: Allegro Microsystems (NYSE: AHM): The leading U.S. residential mortgage producer and servicer is expected to price its 14.7 M share IPO between $16-$18. AmeriHome (NYSE: AHM): The leading U.S. residential mortgage producer and servicer is expected to price its 14.7 M share IPO between $16-$18. Biodesix (Nasdaq: BDSX): The diagnostic solutions company leveraging its proprietary artificial intelligence platform to develop solutions for clinical unmet needs, with a primary focus in lung disease, is expected to price its 4.2 M share IPO between $17-$19. Caliber Homes (NYSE: HOMS): The second largest independent mortgage originator based on purchase volume since 2016 is expected to price 23.0 M share IPO between $14-$16. Galecto (Nasdaq: GLTO): The clinical-stage biotechnology company developing therapeutics designed to target the biological processes that lie at the heart of fibrosis and impact fibrotic and related diseases, including cancer, is expected to price its 5.7 M share IPO between $14-$16. Leslie's (Nasdaq: LESL): The largest direct-to-consumer brand in the United States pool and spa care industry is expected to price its 40.0 M share IPO between $14-$16. Lufax (NYSE: LU): The China-based personal financial services platform is expected to price its 175.0 M ADS IPO between $11.50-$13.50. MediaAlpha (NYSE: MAX): The provider of a technology platform bringing insurance carriers and consumers together through a real-time, transparent, results-driven ecosystem is expected to price its 9.3 M share IPO between $18-$20. Root (Nasdaq: ROOT): The technology company revolutionizing the personal insurance market by using telematics, data science and smart phone technology is expected to price its 24.2 M share IPO between $22-$25. Gapping Up/Down Gapping up: DNKN +18.3%, RVMD +5%, SWI +4.7%, GBT +3.4%, VXX +2.8%, SYRS +2.3%, BCLI +2.3%, EBON +2.1%, OTIS +1.3%, GRTX +1.1%, MRTX +1.1%, CE +0.8%, AZN +0.7%, CCEP +0.7% Gapping down: SAP -19.4%, MBIO -6.8%, CVE -4.3%, HYLN -3.7%, NRZ -2.6%, HAS -2%, BA -1.8%, IWM -1.5%, SPY -1.1%, DIA -1.1%, QQQ -0.9% Analyst Research (see Upgrades/Downgrades calendarfor full list): Upgrades: Amgen (AMGN) upgraded to Outperform from Mkt Perform at Raymond James; tgt $255 Apollo Global Management (APO) upgraded to Outperform from In-line at Evercore ISI; tgt $52 Autoliv (ALV) upgraded to Buy from Hold at Pareto Cabot Oil & Gas (COG) upgraded to Neutral from Underperform at BofA Securities; tgt $22 Check Point Software (CHKP) upgraded to Neutral from Sell at Goldman; tgt $128 Crown Castle (CCI) upgraded to Outperform from Mkt Perform at Raymond James; tgt $172 D.R. Horton (DHI) upgraded to Outperform from Mkt Perform at Raymond James; tgt $85 First Midwest Banc (FMBI) upgraded to Outperform from Mkt Perform at Raymond James; tgt $15 First Solar (FSLR) upgraded to Buy from Neutral at ROTH Capital; tgt $100 Independent Bank (INDB) upgraded to Buy from Neutral at Compass Point; tgt $70 Installed Building Products (IBP) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $120 Kontoor Brands (KTB) upgraded to Buy from Underperform at BofA Securities; tgt raised to $38 Live Oak Bancshares (LOB) upgraded to Strong Buy from Outperform at Raymond James; tgt $42 Owl Rock Capital (ORCC) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt $14 Pearson Plc (PSO) upgraded to Buy from Neutral at UBS Range Resources (RRC) upgraded to Buy from Neutral at BofA Securities TechnipFMC (FTI) upgraded to Buy from Hold at Societe Generale Toll Brothers (TOL) upgraded to Outperform from Mkt Perform at Raymond James; tgt $55 Winnebago (WGO) upgraded to Buy from Neutral at Citigroup; tgt raised to $63 Downgrades: Ardmore Shipping (ASC) downgraded to Hold from Buy at Pareto Cenovus Energy (CVE) downgraded to Neutral from Outperform at Credit Suisse Daqo New Energy (DQ) downgraded to Neutral from Buy at ROTH Capital; tgt lowered to $200 Exelon (EXC) downgraded to Neutral from Buy at Guggenheim; tgt lowered to $42 First Solar (FSLR) downgraded to Underperform from Neutral at Credit Suisse; tgt $64 SAP SE (SAP) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $130 SunPower (SPWR) downgraded to Neutral from Outperform at Credit Suisse; tgt $16 Others: AppFolio (APPF) initiated with a Mkt Perform at Keefe Bruyette; tgt $150 Apple (AAPL) resumed with an Overweight at Atlantic Equities; tgt $150 Asana (ASAN) initiated with a Neutral at Piper Sandler; tgt $25 Asana (ASAN) initiated with a Buy at Jefferies; tgt $30 Asana (ASAN) initiated with an Outperform at RBC Capital Mkts; tgt $30 Asana (ASAN) initiated with a Mkt Outperform at JMP Securities; tgt $31 Asana (ASAN) initiated with a Neutral at JP Morgan; tgt $25 Asana (ASAN) initiated with a Neutral at Credit Suisse; tgt $23 Asana (ASAN) initiated with a Sector Weight at KeyBanc Capital Markets Asana (ASAN) initiated with an Equal-Weight at Morgan Stanley; tgt $27 Canadian Natrl Res (CNQ) initiated with a Sector Outperform at CIBC Immunogen (IMGN) resumed with a Buy at H.C. Wainwright; tgt $11 Imperial Oil (IMO) initiated with a Neutral at CIBC Mission Produce (AVO) initiated with an Overweight at Stephens; tgt $18 Mission Produce (AVO) initiated with a Buy at Citigroup; tgt $16 Mission Produce (AVO) initiated with an Overweight at JP Morgan; tgt $18 Mission Produce (AVO) initiated with a Buy at DA Davidson Nomad Foods (NOMD) initiated with a Buy at BTIG Research; tgt $30 Orphazyme (ORPH) initiated with a Buy at Guggenheim; tgt $27 Orphazyme (ORPH) initiated with a Buy at BofA Securities; tgt $13 Palantir Technologies (PLTR) initiated with a Buy at Jefferies; tgt $13 Palantir Technologies (PLTR) initiated with an Overweight at Morgan Stanley; tgt $13 Palantir Technologies (PLTR) initiated with a Neutral at Goldman; tgt $10 Palantir Technologies (PLTR) initiated with a Neutral at Credit Suisse; tgt $11 Palantir Technologies (PLTR) initiated with a Sector Perform at RBC Capital Mkts; tgt $11 Pulmonx (LUNG) initiated with an Equal Weight at Wells Fargo; tgt $46 Pulmonx (LUNG) initiated with a Buy at Canaccord Genuity; tgt $49 Pulmonx (LUNG) initiated with a Buy at Stifel; tgt $50 Pulmonx (LUNG) initiated with an Equal-Weight at Morgan Stanley; tgt $44 Suncor Energy (SU) initiated with a Sector Outperform at CIBC Xcel Energy (XEL) initiated with a Neutral at Citigroup; tgt $76 Upcoming Events: Econ Data: 10:00 ET: New Home Sales for September (Briefing.com Consensus 1022K; Prior 1011K) Asia & Europe detail: Asia: Nikkei -0.1%, Hang Seng CLOSED, Shanghai -0.8% Equity indices in the Asia-Pacific region began the week on a mostly lower note while markets in Hong Kong and New Zealand were closed for holidays. Japanese press reported that the country's third extra budget is expected to be around JPY10 trillion. The latest plenary session began in China overnight and it will continue through Thursday. The country's five-year plan will reportedly focus on technology investment. China's Iron and Steel Association expects 2020 crude steel production to show a 3-5% increase yr/yr. In economic data: Japan's August Leading Index 88.4 (expected 88.8; last 86.7) and Coincident Indicator 0.9% m/m (last 1.1%). September Corporate Services Price Index 1.3% yr/yr (expected 1.0%; last 1.1%) Singapore's September Industrial Production 10.1% m/m (expected -7.8%; last 15.5%); 24.2% yr/yr (expected 2.5%; last 15.4%) ---Equity Markets--- Japan's Nikkei: -0.1% Hong Kong's Hang Seng: CLOSED China's Shanghai Composite: -0.8% India's Sensex: -1.3% South Korea's Kospi: -0.7% Australia's ASX All Ordinaries: -0.3% ---FX--- USD/JPY: +0.2% to 104.85 USD/CNH: +0.4% to 6.6915 USD/INR: +0.1% to 73.97 Europe: DAX -2.3%, FTSE -0.1%, CAC -0.6% Major European indices trade on a lower note with Germany's DAX (-2.3%) leading the retreat. SAP has fallen nearly 20% after reporting mixed results and lowering its outlook. In addition, sentiment in the region has been pressured by a rising number of coronavirus infections. Economists from Germany's ifo Institute observed a deterioration in exports other than autos. The Institute expects the German economy to grow 2.1% in Q4, assuming no new lockdowns. Standard & Poor's affirmed U.K.'s AA rating and Greece's BB- rating. The ratings agency also affirmed Italy's BBB rating and raised the outlook to Stable from Negative. In economic data: Germany's October ifo Business Climate Index 92.7 (expected 93.0; last 93.2). October Current Assessment 90.3 (expected 89.8; last 89.2) and Business Expectations 95.0 (expected 96.5; last 97.4) Spain's September PPI -3.3% yr/yr (last -3.5%) ---Equity Markets--- STOXX Europe 600: -0.7% Germany's DAX: -2.3% U.K.'s FTSE 100: -0.1% France's CAC 40: -0.6% Italy's FTSE MIB: -0.5% Spain's IBEX 35: -0.1% ---FX--- EUR/USD: -0.3% to 1.1822 GBP/USD: +0.2% to 1.3059 USD/CHF: +0.4% to 0.9067