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Futures

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 S&P 500 futures are down 2 points and are trading roughly in-line with fair value. The Nasdaq 100 futures are down 43 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are up 30 points and are trading 0.1% above fair value.

Equity futures are mixed and little changed from the flat line as market participants play a waiting game ahead of the September Employment Report at 8:30 a.m. ET.

Fed Governor Waller piled on to recent comments by other Fed officials saying, “Inflation is far from the FOMC’s goal and not likely to fall quickly." He added that he sees little reason to ease the pace of rate hikes soon. 

In other central bank news, the European Central Bank has reportedly told some banks that it expects them to implement dividend and compensation limits due to a fear about a wave of defaults. 

Geopolitical worries are at the forefront after President Biden said at a fundraising event that the risk of nuclear "armageddon" is at the highest level since the Cuban Missile Crisis, according to PBS.

Treasury yields are inching higher. The 2-yr note yield is up six basis points to 4.30% and the 10-yr note yield is up two basis points to 3.84%.

Energy complex futures are mixed. WTI crude oil futures are up 1.3% to $89.58/bbl while natural gas futures are down 2.5% to $6.80/mmbtu. 

Market participants receive the following economic data today:

  • 8:30 ET: September Nonfarm Payrolls (Briefing.com consensus 250,000; prior 315,000), Nonfarm Private Payrolls (Briefing.com consensus 275,000; prior 308,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.3%), Unemployment Rate (Briefing.com consensus 3.7%; prior 3.7%), and Average Workweek (Briefing.com consensus 34.5; prior 34.5)
  • 10:00 ET: August Wholesale Inventories (prior 0.6%)
  • 15:00 ET: August Consumer Credit (prior $23.30 bln)

In corporate news:

  • Twitter (TWTR 48.90, -0.49, -0.99%):  trial appears to be stayed by Delaware court until Oct 28 to permit the parties to close on the transaction, according to the court docket
  • Chewy (CHWY 38.24, +0.30, +0.79%): initiated with an Outperform at Oppenheimer
  • Credit Suisse (CS 4.5500, +0.26, +6.06%): announces public tender offers for debt securities
  • Advanced Micro (AMD 64.30, -3.55, -5.23%): lowers Q3 revenue and gross margin guidance due to lower than expected PC demand and a significant inventory correction in PC supply chain
  • Taiwan Semiconductor Manufacturing (TSM 72.45, -1.90, -2.56%):  reports Sep revs increased 36.4% yr/yr to ~NT$208.25 bln; reports Q3 revs above consensus
  • Levi Strauss (LEVI 15.08, -0.85, -5.34%): beats by $0.03, misses on revs; lowers FY22 EPS and revenue guidance

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a lower note while markets in China remained closed. Japan's Nikkei: -0.7% (+4.6% for the week), Hong Kong's Hang Seng: -1.5% (+3.0% for the week), China's Shanghai Composite: CLOSED (UNCH for the week), India's Sensex: -0.1% (+1.3% for the week), South Korea's Kospi: -0.2% (+3.6% for the week), Australia's ASX All Ordinaries: -0.8% (+4.5% for the week).
    • In economic data:
      • China's September FX Reserves $3.029 trln (expected $3.000 trln; last $3.055 trln)
      • Japan's August Household Spending -1.7% m/m (expected 0.2%; last -1.4%); 5.1% yr/yr (expected 6.7%; last 3.4%). August overall wage income 1.7% yr/yr (last 1.3%). August Leading Index 2.0% m/m (last -1.4%) and Coincident Indicator 1.6% m/m (last 0.9%)
    • In news:
      • Chinese equities will resume trading on Monday, but markets in Japan and South Korea will be closed to start next week.
      • Japan's Prime Minister Kishida confirmed that additional steps will be taken to offset higher gas prices.
      • South Korea's finance ministry noted that it will be prepared to provide foreign exchange liquidity to financials if needed.
  • Major European indices trade near their flat lines. STOXX Europe 600: UNCH (+2.2% week-to-date), Germany's DAX: -0.1% (+2.9% week-to-date), U.K.'s FTSE 100: +0.2% (+1.7% week-to-date), France's CAC 40: +0.1% (+3.1% week-to-date), Italy's FTSE MIB: +0.3% (+2.6% week-to-date), Spain's IBEX 35: -0.2% (+1.7% week-to-date).
    • In economic data:
      • Germany's August Retail Sales -1.3% m/m (expected -1.1%; last 0.7%); -4.3% yr/yr, as expected (last -2.3%). August Industrial Production -0.8% m/m (expected -0.5%; last -0.3%). August Import Price Index 4.3% m/m (expected 2.0%; last 1.4%); 32.7% yr/yr (expected 29.9%; last 28.9%)
      • U.K.'s September Halifax House Price Index -0.1% m/m (last 0.3%); 9.9% yr/yr (last 11.4%)
      • France's August trade deficit EUR15.30 bln (expected deficit of EUR14.80 bln; last deficit of EUR14.80 bln)
      • Italy's August Retail Sales -0.4% m/m (last 1.3%); 4.3% yr/yr (last 4.1%)
      • Swiss September Unemployment Rate 2.1%, as expected (last 2.1%)
    • In news:
      • British Prime Minister Truss would not rule out the possibility for widespread blackouts during the winter if her country fails to import enough energy.
      • Credit Suisse offered to buy back up to $3 bln worth of debt.
      • The European Central Bank has reportedly told some banks that it expects them to implement dividend and compensation limits due to a fear about a wave of defaults.

U.S. equity futures:

  • S&P 500 Futures: -1 @ 3,743
  • DJIA Futures: +50 @ 29,977
  • Nasdaq 100 Futures: -75 @ 11,073

Overseas:

  • Europe: DAX -0.1%, FTSE +0.2%, CAC +0.1%
  • Asia: Nikkei -0.7%, Hang Seng -1.5%, Shanghai Composite CLOSED

Commodities:

  • Crude Oil +1.16 @ 89.61
  • Nat Gas  -0.191 @ 6.781
  • Gold -3.35 @ 1717.55
  • Silver +0.043  @ 20.703
  • Copper -0.0163 @ 3.4297


U.S. Summary:

  • Earnings/Guidance:
    • Accolade (ACCD) reports Q2 (Aug) results, beats on revs; guides Q3 revs below consensus; guides FY23 revs in-line
    • Advanced Micro (AMD) lowers Q3 revenue and gross margin guidance due to lower than expected PC demand and a significant inventory correction in PC supply chain
    • AdvanSix (ASIX) expects Q3 Adjusted EBITDA to be in the range of $31-34 mln
    • Aehr Test Systems (AEHR) releases two new enhancements for its FOX-P family of wafer level test and burn-in systems; releases Q1 earnings: revs grew 89% yr/yr
    • ChipMOS TECHNOLOGIES (IMOS) reports Q3 revs below consensus
    • CVS Health (CVS): change in Star Ratings not projected to have any impact on FY22 guidance; expects to mitigate any financial impact on FY23 guidance; maintains FY24 outlook
    • Levi Strauss (LEVI) beats by $0.03, misses on revs; lowers FY22 EPS and revenue guidance
    • Matrix Service (MTRX) misses on bottom line; beats on revs
    • Mondelez (MDLZ) Reaffirms Long-Term Growth Strategy
    • Niu Technologies (NIU) reports Q3 sales volumes declined 19.2% yr/yr
    • Samsung (SSNLF) announced its earnings guidance for Q3: sales: 75-77 trillion Korean won; operating profit: 10.7-10.9 trillion Korean won
    • Taiwan Semiconductor Manufacturing (TSM) reports Sep revs increased 36.4% yr/yr to ~NT$208.25 bln; reports Q3 revs above consensus
    • Teck Resources (TECK) provides Q3 steelmaking coal sales volumes and realized prices
    • Tilray (TLRY) misses by $0.06, misses on revs
  • General News:
    • President Biden said at a fundraising event that the risk of nuclear "armageddon" is at the highest level since the Cuban Missile Crisis, according to PBS
    • Fed's Waller: "Inflation is far from the FOMC's goal and not likely to fall quickly;" sees little reason to ease the pace of policy tightening, according to Financial Post
    • Senator Ben Sasse of Nebraska expected to resign before end of year, according to NBC News
    • President Biden stopped short of calling for marijuana decriminalization in yesterday's announcement. That will be up to Congress, according to the New York Times
    • Federal judge declared that most of New York's gun control law violated the constitution and blocked the law, according to the New York Times
    • CMS announces 2023 Medicare Advantage and Part D star ratings
    • Allogene Therapeutics (ALLO) Initiates Industry’s First Allogeneic CAR T Phase 2 Trial
    • Alnylam Pharma (ALNY) receives FDA approval of sNDA for OXLUMO
    • Apple (AAPL) getting ready for 2nm chips and speaking with TSMC (TSM), according to Digitimes
    • AstraZeneca (AZN) aims to redefine liver, biliary tract and prostate cancer treatment with practice-changing Imfinzi and Lynparza data at ASCO GI and GU
    • BioMarin Pharmaceutical (BMRN) simplifies organizational structure to increase efficiency; reduces work force; expects to save ~$50 mln annually beginning 2023
    • BioNTech (BNTX) and Australia’s State of Victoria form strategic partnership to establish mRNA research center and manufacturing facility
    • DraftKings (DKNG) and Disney's (DIS) ESPN are close to signing exclusive partnership, according to The Action Network
    • Griffon (GFF): strategic alternatives process is active and ongoing; expects to provide an update by the end of November 2022
    • Healthpeak's (PEAK) Board of Directors and CEO Tom Herzog mutually agree for him to step down as CEO; company appoints President and CIO Scott Brinker as next CEO
    • Humana (HUM) announced that its statewide Louisiana Medicare Advantage HMO plan has received a top 5-star rating from the Centers for Medicare and Medicaid Services for a second consecutive year
    • Karuna Therapeutics (KRTX) to Present Data from the Phase 3 EMERGENT-2 Trial of KarXT in Schizophrenia at the 35th European College of Neuropsychopharmacology (ECNP) Congress
    • Lithium Americas (LAC) confirms oral hearing schedule for the Thacker pass record of decision appeal
    • Lyell Immunopharma (LYEL) Announces FDA Clearance of its IND for LYL845, a TIL Product Candidate Enhanced with its Novel Epigenetic Reprogramming Technology for Solid Tumors
    • Merck (MRK) and Ridgeback Biotherapeutics provide update on new clinical and non-clinical studies of LAGEVRIO
    • Merck's (MRK) coronavirus pill did not lower hospitalization, according to Financial Times
    • Mersana Therapeutics (MRSN) Announces Completion of Enrollment in UPLIFT, a Single-Arm Registrational Trial of Upifitamab Rilsodotin (UpRi) in Platinum-Resistant Ovarian Cancer
    • MSG Sports (MSGS) declares special, one-time cash dividend of $7.00/share, payable on October 31; Board authorizes a $75 mln accelerated share repurchase (ASR) program
    • NeoGames (NGMS) launches content on the BetMGM (MGM) Casino Platform in Michigan
    • Open Lending (LPRO) CEO John Flynn to retire, but continue as Chairman; Keith A. Jezek appointed CEO, effective immediately; COO Ross Jessup also retiring
    • Paramount Global (PARA): Showtime could potentially be added to Paramount+, according to CNBC
    • Peloton (PTON) CEO issues statement "I joined Peloton for the comeback story, not to sell the business"
    • Plymouth Industrial REIT (PLYM) announces its leasing and acquisition activity for the third quarter of 2022
    • ServiceNow (NOW) secures Department of Health and Human Services enterprise-wide contract
    • Shopify (SHOP): EU Commission says SHOP commits to new practices to make it safer for consumers buying from web stores on the platform
    • SJW Group (SJW) Announces the California Public Utilities Commission’s Approval of San Jose Water’s General Rate Case
    • Terreno Realty (TRNO) announces operating activity for Q3; occupancy of 98.4% compared to 97.9% in Q2 and 98.0% in the year-ago period
    • Tesla (TSLA) CEO Elon Musk announces start of production of Tesla Semi Truck with deliveries to Pepsi (PEP) on Dec 1st
    • Twitter (TWTR) opposes Musk's motion to delay trial, according to CNBC
    • United Airlines (UAA) planning to have electric aircraft flying routes by 2030, according to CNBC
    • Walmart (WMT) aiming to eliminate 1500 Atlanta jobs, according to Reuters
  • M&A:
    • Arco Platform (ARCE) agrees to acquire 75.1% of the share capital of INCO Limited, a provider of a suite of financial and software products to K-12 schools
    • Atlas Corp (ATCO): Poseidon Acquisition Corp makes meaningful progress in its discussions with the Special Committee of the Board of Atlas to acquire all outstanding shares not already owned for $15.50/share in cash
    • Light & Wonder (LNW) acquires House Advantage, LLC, a loyalty and marketing software provider, in a cash transaction; financial details not disclosed
    • Twitter (TWTR) trial appears to be stayed by Delaware court until Oct 28 to permit the parties to close on the transaction, according to court docket
    • Twitter (TWTR): Elon Musk might have to pay larger portion of $44 bln for Twitter, according to the New York Post
  • Syndicate: 
    • Amylyx Pharmaceuticals (AMLX) prices offering of 6,693,750 shares of its common stock at $32.00 per share
    • Credit Suisse (CS) announces public tender offers for debt securities
    • Semtech (SMTC) announces upsize and pricing of private offering of $300 million of new convertible senior notes
  • IPOs:
    • Expected to Price:
      • No IPOs expected.


Gapping Up/Down

  • Gapping up:
    • AEHR +13.8%, DKNG +8.1%, ATCO +7.3%, ALLO +6.8%, CS +6.8%, PAYO +6.5%, LAND +5%, EXTN +5%, TECK +4%, MSGS +3.7%, GFF +3.2%
  • Gapping down:
    • AMD -5.8%, LNTH -5.2%, CVS -4.7%, LEVI -4.6%, KTB -4.2%, LOGI -3.7%, NVDA -3.2%, TSM -3%, INTC -2.9%, DELL -2.6%, CLOV -1.8%, WDC -1.5%, PTON -1.5%, MU -1.3%, HPQ -1.2%, QCOM -1.2%, STX -1.2%, TXN -0.9%, NTAP -0.8%, MSFT -0.6%, TRGP -0.6%, BMRN -0.6%, AVGO -0.5%, NIU -0.5%

Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades
    • Algonquin Power & Utilities (AQN) upgraded to Outperform from Sector Perform at National Bank Financial; tgt lowered to $14.25
    • Federal Signal (FSS) upgraded to Buy from Neutral at DA Davidson; tgt raised to $46
    • Goldman Sachs (GS) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $429
  • Downgrades:
    • C.H. Robinson (CHRW) downgraded to Neutral from Buy at Citigroup; tgt lowered to $107
    • Lyft (LYFT) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $16
    • Southern States Bancshares (SSBK) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $27
    • Zions Bancorp (ZION) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $72
  • Others:
    • Check Point Software (CHKP) initiated with a Neutral at SMBC Nikko; tgt $115
    • Chewy (CHWY) initiated with an Outperform at Oppenheimer; tgt $42
    • Coupang (CPNG) initiated with a Buy at HSBC Securities; tgt $27.80
    • CrowdStrike (CRWD) initiated with an Outperform at SMBC Nikko; tgt $240
    • Fortinet (FTNT) initiated with an Outperform at SMBC Nikko; tgt $70
    • Navient (NAVI) initiated with an Underweight at Morgan Stanley; tgt $14.50
    • Palo Alto Networks (PANW) initiated with an Outperform at SMBC Nikko; tgt $230
    • Sallie Mae (SLM) initiated with an Underweight at Morgan Stanley; tgt $15
    • Senti Bio (SNTI) initiated with an Equal-Weight at Morgan Stanley; tgt $7.50
    • SentinelOne (S) initiated with a Neutral at SMBC Nikko; tgt $30
    • Unity Software (U) initiated with a Buy at Needham; tgt $50


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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