Early Look

Tuesday, September 17, 2024

U.S. futures are pointing to a higher open, with the S&P looking for its 7^th straight daily advance in what has been a slow, steady, methodical move higher for main U.S. averages since the 4-day losing streak to kick off the month. On Monday the Dow Jones Industrial Averages advanced to close at a fresh all-time high, while the S&P 500 Index (SPX) is not far from its all-time bests, rising a 6^th straight day on Monday ahead of the FOMC interest rate policy meeting on Wednesday where a 25 or 50-bps cut is expected. In technology news overnight, MSFT announced a $60B stock buyback program and raised its dividend by 10% while Intel (INTC) shares rose a second day as the company lined up Amazon.com Inc.’s AWS as a customer for its manufacturing business. Yesterday, it was the technology sector that lagged in the S&P behind weakness in Apple (AAPL) and semiconductors, while nearly all other sectors finished the day with gains. Utilities remain the best gainer on the year (XLU +25% YTD) ahead of expected rate cuts by the Fed. In Europe, the German DAX is up 155 points to 18,790, while the FTSE 100 gains 65 points to 8,343. In Asia, the Nikkei tumbles as much as 2.1% following a 3-day weekend and the Hang Seng rallies more than 1%, while mainland China indexes closed for a holiday. The dollar remains subdued as traders weigh a 50-bps Fed rate-cut chance ahead of Tuesday’s retail sales report. The yen briefly weakens above 141-handle before recouping the move. The CBOE Volatility index (VIX) remains subdued as well holding around the 17 level. On the calendar today, one main economic data point with August Retail Sales data at 8:30 AM, along with Industrial Production and Business Inventory data as well today.

• The Dow Jones Industrial Average rose 228.30 points, or 0.55%, to 41,622.08.
• The Nasdaq Composite dropped -91.85 points, or 0.52%, to 17,592.13.
• The Russell 2000 Index advanced 6.68 points, or 0.31% to 2,189.17.

• 8:30 AM ET                  Retail Sales M/M for August…est. (-0.2%)
• 8:30 AM ET                  Retail Sales – Less Autos M/M for August…est. +0.2%
• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 9:15 AM ET                  Industrial Production M/M for August…est. +0.3%
• 9:15 AM ET                  Capacity Utilization M/M for August…est. 77.9%
• 10:00 AM ET                Business Inventories M/M for July…est. +0.3%
• 10:00 AM ET NAHB Housing Market Index for September…est. 40 9prior 39)
• 1:00 PM ET US Treasury to sell $16B in 20-year notes
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: None

• Goldman Sachs European Communacopia Conference, 9/17-9/18, in London
• JP Morgan 15th Annual U.S. All Stars Conference London, UK, 9/17/9/18
• Salesforce.com (CRM) Dreamforce Conference 9/17-9/19, in San Francisco, CA
• Truist Semiconductors Bus Tour

• Entergy (ETR) upgraded to Overweight from Equal Weight at Barclays and raised tgt to $138 from $115 saying the company had several positive regulatory developments this summer but the shares still trade at a discount to peers.
• GE Vernova (GEV) upgraded to Buy from Neutral at Banc America and raised tgt to $300 from $200.
• SolarEdge (SEDG) downgraded to Underperform from Hold at Jefferies and cut tgt to $17 from $27.
• Steel Dynamics (STLD) guides Q3 EPS $1.94-$1.98 vs. est. $2.10; says underlying steel demand remains steady; says Q3 profitability from steel operations expected to be meaningfully lower than sequential Q2 results.

• Healthcare Realty Trust (HR) announces key leadership changes as Austen Helfrich to become interim CFO, succeeding Kris Douglas effective October 1^st; also reaffirms guidance for Q3 and full year 2024.
• Merck (MRK) and Daiichi Sankyo said a Phase 3 study evaluating patritumab deruxtecan in patients with locally advanced or metastatic EGFR-mutated non-small cell lung cancer who received prior EGFR tyrosine kinase inhibitor treatment met its primary endpoint of progression-free survival.
• Sage Therapeutics (SAGE) files mixed-securities shelf.

• Separately, Intel (INTC) CEO said the company intends to establish Intel Foundry as an independent subsidiary inside of Intel. This governance structure will complete the process they initiated earlier this year when the company separated the P&L and financial reporting for Intel Foundry and Intel Products. Intel also is pausing factory projects in Germany and Poland for two years and putting a manufacturing project in Malaysia on hold until demand picks back up.
• Microsoft (MSFT) board approves a new share buy-back plan of up to $60B and raised its quarterly dividend by 10% to $0.83
• Box Inc. (BOX) announces proposed private offering of $400M of convertible senior notes.
• HP Enterprise (HPE) upgraded to Buy from Neutral at Banc America with $24 tgt.
• Inseego (INSG) announces sale of Telematics Business for $52M in cash; said proceeds to drive further deleveraging and improvement of capital structure and support company focus on driving growth in 5G Mobility and fixed Wireless.
• MicroStrategy (MSTR) announces $700M convertible senior notes offering.