Early Look

Monday, October 21, 2024

U.S. futures are taking a slight breather, with S&P futures down slightly after stock upside momentum continued last week, showing no signs of slowing or uncertainty concerns heading into the Presidential election, as the S&P 500 Index capped its sixth straight weekly gain with a 0.4% advance on Friday to close at 5,864.67. Better earnings from Netflix (NFLX) and a jump in Apple (AAPL) shares helped propel the Nasdaq Composite again as well. Gold topped $2,700 for the first time while silver prices hit the highest levels since 2012, and Bitcoin neared $70,000 (have since pulled back under $69K). Oil prices rise after falling 8% last week after Israel widened its bombing campaign in Lebanon over the weekend, targeting financial institutions it says help fund Hezbollah’s military operations. In Asian markets, The Nikkei Index declined -27 points to 38,954, the Shanghai Index gained 6 points to 3,268, and the Hang Seng Index dropped -325 points to 20,478. In Europe, the German DAX is down -102 points to 19,554, while the FTSE 100 is down a few points to 8,354. The busiest week of earnings seasons for the S&P 500 is upon us, with more than 35% of components expected to report!

• The Dow Jones Industrial Average edged higher 36.86 points, or 0.09%, to 43,275.91.
• The Nasdaq Composite gained 115.94 points, or 0.63%, to 18,489.55.
• The Russell 2000 Index declined -4.76 points, or 0.21% to 2,276.09.

• 10:00 AM ET                Leading Index M/M for September
• 1:00 PM ET                   Fed’s Kashkari Participates in Townhall Event
• 5:05 PM ET                   Fed’s Schmid Speaks on Economic and Monetary Policy Outlook

• Earnings After the Close: AGNC ARE BOKF CADE CATY ESFC ELS ESRT FLXS HSTM HXL KREF MEDP NUE RBB RLI SFBS SIGI SMBK SSD TRST WASH WRB WTFC ZION

• Chinese commercial banks have fully passed their latest round deposit rate cuts of about 25bps onto lower Loan Prime Rates (LPR). One-year LPR is now at 3.10%, whereas five-year stands at 3.6%.
• U.S. Sept budget surplus $64B (consensus $61B surplus) vs Sept 2023 deficit $171B – Treasury; U.S. fiscal 2024 deficit $1.833 trln vs fiscal 2023 $1.695 trln deficit; U.S. Sept budget outlays $463B vs $638B in Sept 2023; receipts $528B, record for month of September, vs $467B in Sept 2023.

• Activist investor Elliott Investment Management and Southwest Airlines (LUV) are in talks to settle their months-long battle, according to reports Sunday, with a potential deal that would give Elliott representation on the budget airline’s board, citing sources familiar with the matter, both Bloomberg News and CNBC reported Sunday.
• Spirit Airlines (SAVE) shares jump over 40% late Friday after the low-cost carrier said it received added months to refinance its 2025 debt (shares if discount airlines JBLU, ULCC down in reaction).

• Parsons Corporation (PSN) entered into a definitive agreement to acquire BCC Engineering, LLC, one of Florida’s leading transportation engineering firms, in an all-cash transaction valued at $230M.
• Piedmont Lithium (PLL) was downgraded to underweight from neutral at JP Morgan as market price declines are set to eat into earnings despite management’s focus on cash efficiencies.
• Sandvik (SDVKY) shares fell as the metal cutting and mining equipment maker’s Q3 EBIT came in at 5.38 billion Swedish crowns ($511.05 million) missing a mean forecast of 5.68 billion crowns by analysts.
• Sempra’s (SRE) general rate case received a proposed decision from the California Public Utilities Commission for service operations for 2024 through 2027, the agency said.
• Titan International (TWI) has repurchased more than 10% of its outstanding shares or bought back 8 million shares from MHR Fund Management for $57.6 million, or $7.20 apiece, about 3.3% above Friday’s closing price of $6.97.

• New York Community Bancorp Inc. (NYCB) said it will incur one-time cash charges of about $20 million tied to a workforce reduction at Flagstar Bank.
• U.S. banks are considering more aggressive cuts to interest payments for corporate depositors as they seek to protect profit margins after the Federal Market cut lending rate, the Financial Times reported.

• Gilead Sciences (GILD) and Merck (MRK) announced new results from a Phase 2 clinical study evaluating the investigational combination of islatravir, an investigational nucleoside reverse transcriptase translocation inhibitor, and lenacapavir, a first-in-class HIV-1 capsid inhibitor.
• Novo Nordisk’s (NVO) once-daily pill to treat type 2 diabetes has shown it cuts the risk of heart attacks and strokes in patients by up to 14%, according to a new trial. Rybelsus is an oral form of semaglutide, the active ingredient in the company’s blockbuster Ozempic and Wegovy diabetes and weight-loss drugs and was tested in the trial on diabetic patients who also suffered from established cardiovascular disease and/or chronic kidney disease.
• Starboard Value has a sizable stake in Kenvue (KVUE) and wants the company to make changes to boost its share price, the WSJ reported this weekend, citing people familiar with the matter. Starboard believes Kenvue has some of the best consumer brands in its industry despite the stock’s underperformances.