Early Look

Monday, July 8, 2024

U.S. futures are down slightly after posting strong gains last week and ahead of several potential market moving catalysts. Last week, the S&P 500 gained 1.95%, the Nasdaq jumped 3.5%, and the Dow climbed 0.66%. U.S. stocks hit all-time highs on Fed-friendly data and continued upside momentum as all-time highs for Apple, Amazon, Alphabet, Meta, Microsoft and Oracle helped push the Nasdaq Comp to its 4th straight record closing high and the S&P 500 to its 3rd straight record into some key inflation data later this week. Comm Services (XLC +20.7% YTD) and Technology (XLK +20.99% YTD) led the gains while Energy (XLE) fell the most. Key items to watch this week include Federal Chairman Powell testimony this week on Capitol Hill on monetary policy, rates, and the economy as well as key consumer price index (CPI) and producer price index (PPI) inflation data Thursday and Friday respectively and bank earnings beginning Friday morning (7/12). In Asian markets, The Nikkei Index fell 131 points to 40,780, the Shanghai Index dropped -27 points to 2,922, and the Hang Seng Index declined -275 points to 17,524. In Europe, the German DAX is up 85 points to 18,561, while the FTSE 100 is up 21 points to 8,255. Bitcoin prices rebounding after falling last week, +1.85% to $57,420 while Ethereum +2.55% to $3,050. The 10-yr yield is at 4.30% while the dollar index (DXY) edges higher and gold retreats.

• The Dow Jones Industrial Average rose 67.87 points, or 0.17%, to 39,375.87.
• The Nasdaq Composite jumped 164.46 points, or 0.90%, to 18,352.76.
• The Russell 2000 Index declined -9.90 points, or 0.49% to 2,026.73.

• 3:00 PM ET                   Consumer Credit for May

• Earnings After the Close:

• Vista Outdoor Inc. (VSTO) said its board has unanimously voted to reject a $42-a-share offer from MNC Capital in favor of a competing bid from the Czechoslovak Group A.S. for its Kinetic Group business. CSG is seeking to buy the company’s Kinetic Group business for $2.1 billion, while MNC is seeking to buy the whole company for about $3.2 billion. The company said the CSG offer is $7 to $16 more value to shareholders than the MNC final offer.

• Canadian National (CNI) downgraded to Market Perform from Outperform at Bernstein.
• CSX Corp. (CSX) downgraded to Neutral from Buy at Bank America.
• Fortive upgraded to Buy from Hold at TD Cowen
• TD Cowen (FTV) upgraded Fortive to Buy from Hold with a price target of $90, up from $75.
• Hurricane Beryl made landfall on the Texas coast, bringing heavy rains and life-threatening storm surge after churning across the Caribbean Sea and Gulf of Mexico. In futures, West Texas Intermediate edged lower by 1% after touching a two-month high last week.

• Eli Lilly and Company (LLY) to acquire Morphic Holding, Inc. (MORF) for a purchase price of $57 per share in cash (an aggregate of approximately $3.2 billion) payable at closing. The transaction has been approved by the boards of directors of both companies.
• Grifols (GRFS) shares +25% following news the Grifols family and Canadian fund Brookfield have agreed to launch a joint takeover bid for Spanish drugmaker with the intent to delist it, the companies said in regulatory filings on Monday. Grifols said its board held an extraordinary meeting over the weekend to study a preliminary offer presented by Brookfield and the founding family, which has a nearly 30% stake.
• Ideaya Biosciences (IDYA) said that it has received positive results from the second phase of its monotherapy expansion dose to treat certain cancers. The company said it had received positive clinical data for the IDE397 phase 2 monotherapy expansion doses in methylthioadenosine phosphorylase-deletion urothelial and NSCLC.
• R1 RCM Inc. (RCM) shares rose late Friday on report TCP-ASC said it’s in the process of finalizing a proposal to acquire all the outstanding R1 RCM shares that it doesn’t already own at a higher price than a proposal described in an earlier standstill waiver request by CoyCo.
• Private insurers involved in the Medicare Advantage program, such as UnitedHealth (UNH) and Humana (HUM), made hundreds of thousands of questionable diagnoses to trigger taxpayer-funded payments between 2018 and 2021, including making outright incorrect diagnoses – WSJ

• Skydance Media and Paramount (PARA) announced that they have entered into a definitive agreement to form “New Paramount”, through a two-step transaction including the acquisition of National Amusements, or NAI, which holds the controlling share stake in Paramount, and subsequently a merger of Skydance and Paramount Global.
• Apple (AAPL): The Apple Watch Series 10 will be thinner and have bigger screens, Bloomberg reports. In addition, says that Apple’s big Siri upgrade should arrive next spring as part of iOS 18.4, with a developer beta in January 2025.