Early Look

Tuesday, October 8, 2024

U.S. stock index futures gained on Tuesday, recovering after a selloff in the previous session, as investors await fresh clues on the interest rate path from key inflation data and the third-quarter earnings season that starts later this week. Some of the top market moving stock headlines this morning include Hurricane Milton barrels toward Florida, expected to make landfall around Tampa tomorrow, Israel to hold talks in US and China’s stock euphoria cools as the Hang Seng falls over 9% as US listed Chinese stocks tumble. Markets also await several Fed speakers today; CPI inflation data Thursday and PPI on Friday and earnings season kick off. This morning Pepsi (PEP) reported mixed results and lowered its sales guidance. The CBOE volatility index (VIX) slips -2% this morning after closing at 22.64, highest closing level since Aug. 8. Oil prices are pulling back after Brent topped $80 per barrel for the first time since early August on Monday.

In Asian markets, The Nikkei Index fell -395 points to 38,937, the Shanghai Index reopened after its weeklong Golden Week holiday to rise 153 points to 3,489, while the Hang Seng Index plunged 2,172 points or 9.41% to settle at 20,926. U.S. listed China stocks are pulling back this morning after Beijing disappointed investors by not announcing further stimulus measures on Tuesday, sending shares of Chinese companies sharply lower.

Utilities (XLU) tumbled over 2% on Monday, its first four consecutive down days since early April as higher Treasury yields and a recent pop in the U.S. dollar weighed on interest rate sensitive sectors on Monday. The reduced chances of aggressive rate cuts by the Fed, due to better jobs data on Friday, led to a decline in homebuilders, Smallcaps, solar and other sectors that had benefitted in recent weeks after the aggressive 50-bps cut by the Fed in September. Traders have priced in a nearly 89% chance of a 25-basis point interest rate cut from the Fed at its November meeting. Bets on no rate change at the meeting also crept up slightly, according to CME FedWatch.

• The Dow Jones Industrial Average fell -398.51 points, or 0.94%, to 41,954.24.
• The Nasdaq Composite dropped -213.95 points, or 1.18%, to 17,923.90.
• The Russell 2000 Index declined -19.71 points, or 0.89% to 2,193.09.

• 6:00 AM ET NFIB Small Business Optimism for September
• 7:45 AM ET ICSC Weekly Retail Sales
• 8:30 AM ET                  International Trade for August
• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 12:45 PM ET                Fed’s Bostic Speaks on the Economic Outlook
• 1:00 PM ET US Treasury to sell $58B in 3-year notes
• 4:00 PM ET                   Fed’s Collins Speaks at Community Banking Conference
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: IDT SAR

• Global Gaming Expo on 10/8
• JP Morgan Software Forum, 10/7-10/9, in Napa

• Boston Beer (SAM) authorizes $400M buyback increase
• General Motors (GM) is hosting its 2024 investor day. The event begins at 1:45 p.m. Eastern time Tuesday. Analysts expect updated investment and profitability plans for the company’s electric-vehicle business.
• Penn Gaming (PENN) said it expects Q3 retail operations adj EBITDAR in range $465M to $475M and raises Interactive adjusted EBITDA loss for 3Q outlook to ($90M-$100M) from est. ($125.2M)
• Uber Technologies (UBER) will roll out an AI assistant powered by OpenAI’s technology to help drivers transition to electric vehicles, as part of its efforts to lower emissions. UBER has advocated a shift to EVs for several years and has pledged $800 million to support its driver partners’ switching entirely to EVs by 2040.

• MDU Resources (MDU) to replace Chuy’s (CHUY) in S&P 600 at open on 10/11. Darden Restaurants (DRI) is acquiring Chuy’s Holdings in a deal expected to be completed soon, pending final closing conditions.
• TechnipFMC (FTI) awarded iEPCI™ contract for BP’s greenfield 20k development in the Paleogene; contract valued between $250M and $500M for TechnipFMC.
• Dominion Energy (D), American Electric Power (AEP), FirstEnergy (FE) reach joint planning agreement to propose regional transmission projects across PJM footprint – watch shares of PWR, PRIM, MTZ, WCC on headlines.
• Late Monday, Reuters reported the Biden administration is working on plans to bring additional decommissioned nuclear power reactors back online to help meet soaring demand for emissions-free electricity, White House climate adviser Ali Zaidi said on Monday (shares of CEG, VST, CW, BWXT among names potentially impacted by news).

• American Express (AXP) downgraded to Sell from Neutral at BTIG.
• Ares Management (ARES) has agreed to pay up to $5.2B to buy the international arm of real estate investment manager GLP Capital Partners, in one of the largest combinations in the private investment industry in recent years. Ares Management announces launch of offering of series b mandatory convertible preferred stock.

• Procept BioRobotics (PRCT) said the FDA gave a go-ahead to the company’s pivotal clinical trial comparing Aquablation therapy to radical prostatectomy.
• Sage Therapeutics (SAGE) shares slide after announced topline results from LIGHTWAVE, a 12-week, Phase 2 placebo-controlled study to evaluate the effects of dalzanemdor in participants with mild cognitive impairment – MCI – or mild dementia due to Alzheimer’s Disease – AD -. The LIGHTWAVE Study did not demonstrate a statistically significant difference from baseline in participants treated with dalzanemdor versus placebo.

• DocuSign (DOCU) to replace MDU Resources (MDU) in S&P 400 at open on 10/11
• Microsoft (MSFT) downgraded to Perform from Outperform at Oppenheimer.
• Match Group (MTCH) announced the appointment of Steven Bailey as CFO, effective March 1st, 2025. Gary Swidler will transition out of his CFO role on that date and continue in his position as President of Match Group.