Early Look

Sunday, June 9, 2024

U.S. futures pulling back after modest losses last Friday off recent record highs for the S&P 500 and Nasdaq Comps. The S&P 500 Index (SPX), which initially sold off on the jobs report last Friday report, swung from a 0.4% loss to a new all-time high, up 0.4%, before closing with a fractional loss. At the same time, U.S. Treasuries sold off, pushing the yield on the 10-year US Treasury yield up over 14 basis points to 4.43%, the biggest one-day gain in almost two months. In headlines/technology news this morning, Apple (AAPL) will kick off its week long World Wide Developer Forum (WWD) this week, where significant potential catalysts are expected for AI capabilities on phones. Also, Nvidia (NVDA) stock split takes effect starting today. Mid-week we get the FOMC rate decision on Wednesday afternoon and the May consumer price index (CPI) inflation data in the morning at 8:30 AM ET. On Thursday the May Producer Price Index (PPI) and Tesla (TSLA shareholder meeting. Gold prices slip further following the biggest one-day plunge in 4-years on Friday ahead of this week’s FOMC meeting (dropped -2.76% on Friday). The U.S. dollar (DXY) adding to last week gains (at 105.25) on the back of higher treasury yields and the large payroll surprise. The surprisingly large rise in headline US payrolls helped to drive the surge in US treasury yields and the US dollar, with jobs bouncing 272k vs 180k expected and a mildly downward revised 165k previous. In Asian markets, The Nikkei Index rose 354 points to 39,038, the Shanghai Index gained 2 points to 3,051, and the Hang Seng Index dropped -109 points to 18,366. In Europe, the German DAX is down -151 points to 18,405, while the FTSE 100 is down -31 points to 8,213.

• The Dow Jones Industrial Average slid -87.18 points, or 0.22%, to 38,798.99.
• The Nasdaq Composite slipped -39.99 points, or 0.23%, to 17,133.13.
• The Russell 2000 Index declined -22.89 points, or 1.12% to 2,025.55.

• 1:00 PM ET U.S. Treasury to sell $58B in 3-year notes.

• Earnings After the Close: CVGW MIND SKIL YEXT ZDGE

• Goldman Sachs Annual Global Healthcare Conference, 6/10-6/13, in Miami, FL
• JP Morgan Canada 1×1 Forum, 6/10-6/11, in Toronto, CA
• Morgan Stanely Financials, Payments & CRE Conference, 6/10-6/12, in New York
• Oppenheimer 25th Annual Consumer Growth and E-Commerce Conference, 6/10-6/12
• Oppenheimer 2024 Software Bus Tour, 6/10-6/13, in San Francisco

• French President Emmanuel Macron said he would dissolve parliament and call for a new election after suffering a heavy defeat in EU elections.
• U.S. bank deposits fell to $17.555 trillion from $17.597 trillion in prior week.

• Planet Fitness (PLNT) upgraded to Buy from Hold at Jefferies and raise tgt to $100 from $62.
• Southwest Airlines (LUV) shares rise 6% pre mkt following a report by The Wall Street Journal that Elliott Investment Management has built a stake of nearly $2 billion in the company and plans to push for change aimed at reversing the airline’s underperformance.

• Noble Corp (NE) to acquire Diamond Offshore (DO) for $15.52 per share in cash, stock; As part of the transaction, Diamond shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock, representing an 11.4% premium to closing stock prices on June 7, 2024.
• Lockheed Martin Corp. (LMT) mentioned positively in Barron’s saying while the defense contractor’s shares returned about 9% per year on average over the past five years, they have lagged the S&P 500 but notes with growing order backlogs and improved manufacturing could boost business, along with capital returns.
• Berkshire Hathaway (BRKA) purchased 2.6 million shares of Occidental Petroleum (OXY) stock in recent days, lifting its stake to 250.6 million shares, or a 28% interest in the big U.S. energy company. Berkshire bought the stock, valued at more than $150 million, on Wednesday through Friday and paid just under $60 a share, according to a Form 4 filing.
• The International Air Transport Association is anticipating record passenger numbers this year, and planes that will be about as full as they were before Covid-19 using record amounts of fuel.
• Iraq, OPEC’s second-largest oil producer, said it expects to soon reach a final agreement with the semi-autonomous region of Kurdistan and international oil companies there to restart oil exports.

• Moderna (MRNA) said its combination Covid and flu vaccine topped rivals from GSK and Sanofi (SNY), and its own Spikevax Covid shot. In a study of about 8,000 people, Moderna’s combination vaccine proved it’s not inferior to the licensed comparators — Fluarix, Fluzone and Spikevax. The company also found its combo shot generated higher antibodies against three influenza strains and Covid.

• Advanced Micro Devices (AMD) downgraded to equal-weight from overweight at Morgan Stanley, saying investor expectations for the chipmaker’s AI business “seem too high.”
• Cognizant (CTSH) to acquire Belcan for $1.3B, sources say according to Reuters.
• Microsoft (MSFT) kicked off its annual Xbox Games Showcase on Sunday, unveiling a new all-digital version of its Xbox Series X and S consoles as well as trailers for more than a dozen games including the next installment of “Call of Duty.”
• Deutsche Telekom (DTEGY) buys ~6.7M shares in T-Mobile US (TMUS), exercising call options on T-Mobile US shares held by Softbank from Japan, which were agreed in June 2020. Fixed exercise price at that time of $101.46 U.S. per share is being adjusted to $99.51 to account for the cumulative dividend payments by T Mobile US of $1.95 since then.