Morning Reads

Morning Reads

Open Interest

Futures

PREMIUM

This Morning

The S&P 500 futures are up 24 points and are trading 0.6% above fair value. The Nasdaq 100 futures are up 94 points and are trading 0.6% above fair value. The Dow Jones Industrial Average futures are up 123 points and are trading 0.4% above fair value.

Futures are indicating a higher open after some better-than-expected earnings reports from technology companies. Salesforce Inc (CRM) and NVIDIA (NVDA), though, disappointed with guidance. 

Tesla (TSLA) is providing some underlying support, as its shares move up with a 3-for-1 stock split that takes effect today. Other mega cap stocks are sporting gains in premarket action that have also helped the standing of the futures market.

In overseas news, Germany's Q2 GDP was revised higher by ten basis points after the flash reading showed no growth. The Bank of Korea raised its base rate by 25 bps to 2.50%, as expected.

Treasury yields are little changed this morning. The 10-yr note yield is down two basis points to 3.09% while the 2-yr note yield is unchanged at 3.37%. Atlanta Fed President Bostic (not an FOMC voter) said he's not sure the U.S. has reached peak inflation and Kansas City Fed President George (FOMC voter) said more work needs to be done on inflation.

WTI crude oil futures are up 0.2% to $95.13/bbl. Natural gas futures are up 0.2% to $9.35/mmbtu.

Market participants will receive the Q2 GDP second estimate (Briefing.com consensus -0.9%; prior -0.9%), Q2 GDP Deflator second estimate (Briefing.com consensus 8.7%; prior 8.7%), weekly initial jobless claims (Briefing.com consensus 253,000; prior 250,000) and conti8nuing claims (prior 1.437 million) at 8:30 a.m. ET. Weekly natural gas inventories (prior +18 bcf) are out at 10:30 a.m. ET.

In corporate news:

  • Snowflake (SNOW 189.39, +29.90, +18.75%):  reports Q2 results, beats on revs; raises FY23 product revenue guidance, raises non-GAAP gross margin guidance
  • Salesforce (CRM 167.43, -12.58, -6.99%): beats by $0.16, reports revs in-line; guides OctQ EPS and revs below consensus; guides FY23 EPS and revs below consensus; announces $10 bln share repurchase authorization
  • Splunk (SPLK 99.41, -10.95, -9.92%): beats by $0.44, beats on revs; guides Q3 revs above consensus; guides FY23 revs above consensus
  • Autodesk (ADSK 234.02, +19.59, +9.14%): beats by $0.08, reports revs in-line; guides Q3 (Oct) EPS mostly above consensus, revs above consensus; guides FY23 EPS mostly above consensus, revs in-line
  • NVIDIA (NVDA 166.15, -6.07, -3.52%): misses by $0.01, reports revs in-line; guides Q3 revs below consensus due to a sequential decline in Gaming and Professional Visualization revs as OEMs reduce inventory levels to align with demand
  • Peloton (PTON 11.33, -2.15, -15.95%): misses by $2.91, reports revs in-line; guides Q1 revs below consensus
  • Amazon (AMZN 135.24, +1.44, +1.08%): ticks higher on report it plans to shut down its telehealth offering, according to Washington Post
  • Dollar General (DG 241.90, -5.55, -2.24%): beats by $0.04, reports revs in-line; guides FY23 EPS in-line, revs above consensus
  • NetApp (NTAP 77.77, +4.95, +6.80%): beats by $0.10, beats on revs; guides Q2 EPS in-line, revs in-line; reaffirms FY23 EPS guidance, revs guidance
  • Williams-Sonoma (WSM 165.11, +2.67, +1.64%): beats by $0.37, beats on revs, comps +11.3%; reaffirms its FY22 and long-term financial outlook
  • Dollar Tree (DLTR 153.12, -12.86, -7.75%): misses by $0.02, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus
  • Tesla (TSLA 303.51, +6.41, +2.16%): 3-for-1 stock split goes into effect today 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: +3.6%, China's Shanghai Composite: +1.0%, India's Sensex: -0.5%, South Korea's Kospi: +1.2%, Australia's ASX All Ordinaries: +0.7%.
    •  In economic data:
      • Japan's July Corporate Services Price Index 2.1% yr/yr (expected 2.2%; last 2.1%)
      • South Korea's July PPI 0.3% m/m (last 0.6%); 9.2% yr/yr (last 10.0%)
      • Hong Kong's July trade deficit HKD27.60 bln. July Imports -9.9% m/m (last 0.5%) and Exports -8.9% m/m (last -6.4%)
      • New Zealand's Q2 Retail Sales -2.3% qtr/qtr (expected 1.7%; last -0.9%)
    •  In news:
      • Trading at the Hong Kong Exchange was suspended for the first part of the day due to a typhoon.
      • Japan's cabinet office maintained its overall economic assessment for August but raised its view of factory production and public investment.
      • The Bank of Korea raised its base rate by 25 bps to 2.50%, as expected. Bank of Korea Governor Rhee said that the base rate is currently in the middle of the neutral range and it should hit the upper end of that range if hot inflation persists.
  •  Major European indices trade on a modestly higher note while Germany's DAX (+0.6%) outperforms. STOXX Europe 600: +0.2%, Germany's DAX: +0.6%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.
    •  In economic data:
      • Germany's Q2 GDP 0.1% qtr/qtr (expected 0.0%; last 0.2%); 1.8% yr/yr (expected 1.5%; last 1.5%). August ifo Business Climate Index 88.5 (expected 86.8; last 88.7). August Current Assessment 97.5 (expected 96.0; last 97.7) and Business Expectations 80.3 (expected 79.0; last 80.4)
      • U.K.'s August CBI Distributive Trades Survey 37 (expected -7; last -4)
      • France's August Business Survey 104, as expected (last 106)
      • Spain's July PPI 40.4% yr/yr (last 43.1%)
    •  In news:
      • Germany's Q2 GDP was revised higher by ten basis points after the flash reading showed no growth.
      • Germany's economy ministry warned that it sees future problems with the supply of coal for power plants and the supply of oil for the eastern part of the country. Economists from Germany's ifo Institute warned that the risk of recession remains present, though supply chain bottlenecks eased in August.
      • Norwegian Air reported a decrease in profit for Q2 and warned that high fuel prices will impact results for the year.


U.S. equity futures:

  • S&P 500 Futures: +24 @ 4,165
  • DJIA Futures: +112 @ 33,082
  • Nasdaq 100 Futures: +91 @ 13,009

Overseas:

  • Europe: DAX +0.6%, FTSE +0.3%, CAC +0.2%
  • Asia: Nikkei +0.6%, Hang Seng +3.6%, Shanghai Composite +1.0%

Commodities:

  • Crude Oil +0.33 @ 95.22
  • Nat Gas  +0.013 @ 9.343
  • Gold +15.50 @ 1777.00
  • Silver +0.261  @ 19.168
  • Copper +0.0512 @ 3.6952


U.S. Summary
:

  • Earnings/Guidance:
    • Abercrombie & Fitch (ANF) misses by $0.53, misses on revs; guides Q3 revs below consensus; guides FY23 revs below consensus
    • Autodesk (ADSK) beats by $0.08, reports revs in-line; guides Q3 (Oct) EPS mostly above consensus, revs above consensus; guides FY23 EPS mostly above consensus, revs in-line
    • Box (BOX) reports EPS in-line, revs in-line; guides Q3 EPS in-line, revs in-line; raises FY23 EPS in-line, revs in-line
    • Burlington Stores (BURL) beats by $0.14, misses on revs; guides Q3 EPS below consensus; guides FY23 EPS below consensus
    • CIBC (CM) misses by CAD 0.18
    • Coty (COTY) reports EPS in-line, beats on revs; provides Q1 and FY23 guidance
    • Dollar General (DG) beats by $0.04, reports revs in-line; guides FY23 EPS in-line, revs above consensus
    • Dollar Tree (DT) misses by $0.02, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus
    • Frontline (FRO) beats by $0.01
    • Gold Fields (GFI) beats by $0.06
    • Guess? (GES) misses by $0.02, beats on revs; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS above consensus, revs in-line
    • Hain Celestial (HAIN) misses by $0.10, misses on revs
    • Hibbett (HIBB) misses by $0.30, reports revs in-line; guides FY23 EPS above consensus, revs above consensus
    • Lancaster Colony (LANC) beats by $0.55, beats on revs
    • Malibu Boats (MBUU) beats by $0.14, beats on revs; guides FY22 revs above consensus
    • NetApp (NTAP) beats by $0.10, beats on revs; guides Q2 EPS in-line, revs in-line; reaffirms FY23 EPS guidance, revs guidance
    • NVIDIA (NVDA) misses by $0.01, reports revs in-line; guides Q3 revs below consensus due to a sequential decline in Gaming and Professional Visualization revs as OEMs reduce inventory levels to align with demand
    • Peloton (PTON) misses by $2.91, reports revs in-line; guides Q1 revs below consensus
    • Salesforce (CRM) beats by $0.16, reports revs in-line; guides OctQ EPS and revs below consensus; guides FY23 EPS and revs below consensus; announces $10 bln share repurchase authorization
    • Sibanye-Stillwater (SBSW) reprots H1 results
    • Snowflake (SNOW) reports Q2 results, beats on revs; raises FY23 product revenue guidance, raises non-GAAP gross margin guidance
    • Splunk (SPLK) beats by $0.44, beats on revs; guides Q3 revs above consensus; guides FY23 revs above consensus
    • Titan Machinery (TITN) beats by $0.40, beats on revs; guides FY23 EPS above consensus
    • Toronto-Dominion Bank (TD) beats by CAD 0.05
    • Victoria's Secret (VSCO) beats by $0.14, misses on revs, comps of -8%; guides Q3 revs below consensus; guides FY23 below consensus
    • Williams-Sonoma (WSM) beats by $0.37, beats on revs, comps +11.3%; reaffirms its FY22 and long-term financial outlook
    • Zuora (ZUO) beats by $0.02, beats on revs; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS in-line, revs below consensus
  • General News:
    • Economists are concerned that student loan forgiveness will trigger higher inflation, according to Financial Times
    • White House confirms details of student loan forgiveness plan
    • US and Iran are getting closer to nuclear deal, according to the Wall Street Journal
    • Atlanta Fed President Raphael Bostic (not a voting FOMC member) says that he is not sure that US has reached peak inflation - CNBC
    • California confirms that it will ban new gasoline powered car sales by 2035
    • Texas Comptroller Glenn Hegar announces list of financial companies that boycott energy companies
    • AbbVie (ABBV) receives FDA approval for IMBRUVICA
    • AstraZeneca's (AZN) Ultomiris approved in Japan; Tagrisso approved in Japan
    • AstraZeneca (AZN) and Merck's (MRK) Lynparza approved in Japan
    • Avalara (AVLR) announces new partnership with Xero
    • Bed Bath and Beyond (BBBY) nearing $375 mln loan deal, according to Bloomberg
    • BioCryst Pharma (BCRX): U.S. Gov't exercises option to purchase additional 10K doses of RAPIVAB (peramivir injection) for ~$7 mln
    • BRP Inc. (DOOO) provides update on data leak
    • Callaway Golf (ELY) announces plans to change its name to "Topgolf Callaway Brands Corp."; name change expected to be effective on or about September 6, 2022
    • Century Therapeutics (IPSC) Receives Study May Proceed Notification from FDA for CNTY-101, the First Allogeneic Cell Therapy Product Candidate Engineered to Overcome Three Major Pathways of Host vs Graft Rejection
    • Citigroup (C) aiming to wind down Russian unit, according to the Wall Street Journal
    • Clearway Energy (CWEN) announces resource adequacy agreement for El Segundo Energy Center
    • Clover (IBB) announces positive phase 2/3 results in adolescents for its COVID-19 vaccine
    • Dollar Tree (DLTR) announces a key executive leadership addition, as Jeffrey A. Davis will be joining the organization as Chief Financial Officer
    • Energy Transfer's (ET) subsidiary, Energy Transfer LNG Export, enters into 20-year LNG Sale and Purchase Agreement with Shell
    • GameStop (GME) is boosting compensation for some store employees, according to the Wall Street Journal
    • Glatfelter Co (GLT) announced that Thomas Fahnemann has been appointed to the role of President and Chief Executive Officer, effective immediately
    • Honda (HMC) power plant in China remains closed amid power issues, according to Bloomberg
    • Hudbay Minerals (HBM) announces exploration agreement for Maria Reyna and Caballito satellite properties near Constancia in Peru
    • Hyliion (HYLN) has entered into a definitive agreement to acquire a new hydrogen and fuel agnostic capable generator from GE Additive – part of GE (GE)
    • ICF International (ICFI) recently selected by EPA as awardee under EARTH blanket purchase agreement; five-year BPA has ceiling value of $5.7 bln across all awardees
    • Iovance Biotherapeutics (IOVA) has initiated a rolling Biologics License Application submission to the U.S. Food and Drug Administration for lifileucel in patients with advanced melanoma who progressed on or after prior anti-PD-1/L1 therapy, and if BRAF mutation positive, also prior BRAF or BRAF/MEK inhibitor therapy
    • Ligand Pharma (LGND): Janssen Biotech receives conditional marketing authorization (CMA) from the European Commission for TECVAYLI for the treatment of patients with relapsed or refractory multiple myeloma
    • Novartis AG (NVS) intends to separate Sandoz business to create a standalone company by way of a 100% spin-off
    • NuScale Power (SMR) and Fermi Energia sign MOU to explore advanced nuclear application in Estonia
    • NXP Semi (NXPI) sees expanded customer engagements for its S32 platform
    • Olin (OLN) plans to permanently shut down approx. 225,000 ECU tons of diaphragm-grade chlor alkali capacity at its TX facility
    • Pfizer (PFE) announces positive top-line data from phase 3 trial of older adults for its bivalent respiratory syncytial virus vaccine candidate
    • Raymond James (RJF) reports operating data for July; Client Assets Under Administration increased 1% yr/yr
    • Sony (SONY) announces price increases for Playstation 5
    • Stellantis (STLA): Production at Stellantis' French car plant suspended until Saturday amid chip supply issues, according to Reuters
    • TG Therapeutics (TGTX) Announces Results from the ULTIMATE I & II Phase 3 Trials of Investigational Ublituximab in RMS Published in The New England Journal of Medicine
    • Twitter (TWTR): Senate Judiciary Committee announces a full Committee hearing to investigate allegations of widespread security failures at Twitter and foreign state actor interference on Tuesday, September 13 at 10:00
  • M&A:
    • Amazon (AMZN) plans to shut down its telehealth offering, according to Washington Post
    • Aurora Cannabis (ACB) acquires controlling interest in Bevo Farms; expected to be immediately accretive to adj. EBITDA
    • Flexsteel Ind (FLXS) confirms receipt of unsolicited proposal from CSC Generation Holdings for $20.80 per share in cash
    • GSR II Meteora Acquisition Corp. (GSRM): Bitcoin Depot to merge with GSRM in SPAC deal with enterprise value of $755 million
    • MiX Telematics (MIXT) to acquire Trimble's Field Service Management Business
    • Zuora (ZUO) to acquire Zephr to accelerate its leadership in the media industry for $44 mln in cash; expects the acquisition to add $2 mln of subscription revs for FY23
  • Syndicate
    • Absci Corporation (ABSI) files for $250 mln mixed securities shelf offering
    • Charge Enterprises (CRGE) files for 28,697,543 share common stock offering by selling shareholders
    • eHealth (EHTH) files for $300 mln mixed securities shelf offering
    • Lordstown Motors (RIDE) files for $500 mln mixed securities shelf offering
    • MKS Instruments (MKSI) files for 8,482,732 share common stock offering by selling shareholders
    • PDS Biotechnology (PDSB) files for $150 mln mixed securities shelf offering
    • The Beauty Health Company (SKIN) files for 65,618 share common stock offering by selling shareholders
    • Waldencast plc (WALD) files for 29,533,282 share common stock offering; also files for 121,120,063 share common stock offering by selling shareholders; relates to warrants
  • IPOs:
    • Expected to Price:
      • No IPOs expected.


Gapping Up/Down

  • Gapping up:
    • SNOW +17.4%, ADSK +8.7%, NTAP +6%, GDRX +5%, CM +5%, AMWL +4.5%, TDOC +4.2%, ZTO +3.8%, FLXS +3.1%, WSM +2.6%, NXPI +2.5%, SBSW +2.3%, FRO +2.3%, ELY +2.1%, GFI +1.8%, GME +1.5%, BMRN +1.5%, AMZN +1.2%, DOOO +1%, ABBV +0.7%, LGND +0.6%, RIDE +0.5%
  • Gapping down:
    • SPLK -10.8%, VSCO -8.6%, CRM -6.3%, ZUO -5.7%, NVDA -3.7%, GES -1.2%, BOX -1.2%, CRGE -1%, PDSB -1%, SKIN -0.5%

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

  • Upgrades
    • FREYR Battery (FREY) upgraded to Buy from Neutral at Goldman; tgt raised to $19
  • Downgrades:
    • Edgewise Therapeutics (EWTX) downgraded to Sell from Neutral at Goldman; tgt $5
  • Others:
    • Adaptive Biotechnologies (ADPT) initiated with an Underperform at Credit Suisse; tgt $8
    • Agilent (A) initiated with an Outperform at Credit Suisse; tgt $165
    • Avantor (AVTR) initiated with a Neutral at Credit Suisse; tgt $32
    • Bio-Rad Labs (BIO) initiated with an Outperform at Credit Suisse; tgt $715
    • Certara (CERT) initiated with an Outperform at Credit Suisse; tgt $22
    • Charles River (CRL) initiated with an Outperform at Credit Suisse; tgt $285
    • Danaher (DHR) initiated with an Outperform at Credit Suisse; tgt $340
    • Enhabit Inc. (EHAB) initiated with a Neutral at Credit Suisse; tgt $19
    • Exact Sciences (EXAS) initiated with an Outperform at Credit Suisse; tgt $55
    • Fulgent Genetics (FLGT) initiated with an Outperform at Credit Suisse; tgt $65
    • Guardant Health (GH) initiated with an Outperform at Credit Suisse; tgt $80
    • ICON plc (ICLR) initiated with a Neutral at Credit Suisse; tgt $260
    • Illumina (ILMN) initiated with a Neutral at Credit Suisse; tgt $230
    • IQVIA (IQV) initiated with an Outperform at Credit Suisse; tgt $300

Upcoming Events:

  • Econ Data:
    • 08:30 ET: GDP - Second Estimate for Q2 (Briefing.com Consensus -0.9%; Prior -0.9%)
    • 08:30 ET: GDP Deflator - Second Estimate for Q2 (Briefing.com Consensus 8.7%; Prior 8.7%)
    • 08:30 ET: Initial Claims for Aug 20 (Briefing.com Consensus 253K; Prior 250K)
    • 08:30 ET: Continuing Claims for Aug 13 (Briefing.com Consensus NA; Prior 1437K)
    • 10:30 ET: EIA Natural Gas Inventories for Aug 20 (Briefing.com Consensus NA; Prior +18 bcf)
  • Earnings:
    • Monday (Aug 22)
      • Afternoon: DLO NDSN PANW ZM
    • Tuesday (Aug 23)
      • Morning: BNS BZUN DKS DOLE GDS SJM JD BEKE M MDT
      • Afternoon:  AAP CAL INTU LZB JWN PYCR SCSC TOL URBN
    • Wednesday (Aug 24)
      • Morning:  EAT DY IIVI WOOF RY
      • Afternoon:  ADSK BOX GES NTAP NVDA CRM SNOW SPLK VSCO WSM ZUO
    • Thursday (Aug 25)
      • Morning: ANF BURL CM COTY DG DLTR FRO HAIN HIBB LANC MBUU PTON TITN TD
      • Afternoon:  AFRM DELL DOMO ESTC FTCH GPS MRVL SUMO ULTA VMW WDAY
    • Friday (Aug 26)  
      • Morning:  JKS


Asia & Europe detail:

Asia: Nikkei +0.6%, Hang Seng +3.6%, Shanghai Composite +1.0%

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Trading at the Hong Kong Exchange was suspended for the first part of the day due to a typhoon. Japan's cabinet office maintained its overall economic assessment for August but raised its view of factory production and public investment. The Bank of Korea raised its base rate by 25 bps to 2.50%, as expected. Bank of Korea Governor Rhee said that the base rate is currently in the middle of the neutral range and it should hit the upper end of that range if hot inflation persists.

  • In economic data:
    • Japan's July Corporate Services Price Index 2.1% yr/yr (expected 2.2%; last 2.1%)
    • South Korea's July PPI 0.3% m/m (last 0.6%); 9.2% yr/yr (last 10.0%)
    • Hong Kong's July trade deficit HKD27.60 bln. July Imports -9.9% m/m (last 0.5%) and Exports -8.9% m/m (last -6.4%)
    • New Zealand's Q2 Retail Sales -2.3% qtr/qtr (expected 1.7%; last -0.9%)

---Equity Markets---

  • Japan's Nikkei: +0.6%
  • Hong Kong's Hang Seng: +3.6%
  • China's Shanghai Composite: +1.0%
  • India's Sensex: -0.5%
  • South Korea's Kospi: +1.2%
  • Australia's ASX All Ordinaries: +0.7%

---FX---

  • USD/JPY: -0.5% to 136.49
  • USD/CNH: -0.3% to 6.8577
  • USD/INR: +0.1% to 79.87


Europe: 
DAX +0.6%, FTSE +0.3%, CAC +0.2%

Major European indices trade on a modestly higher note while Germany's DAX (+0.6%) outperforms. Germany's Q2 GDP was revised higher by ten basis points after the flash reading showed no growth. Germany's economy ministry warned that it sees future problems with the supply of coal for power plants and the supply of oil for the eastern part of the country. Economists from Germany's ifo Institute warned that the risk of recession remains present, though supply chain bottlenecks eased in August. Norwegian Air reported a decrease in profit for Q2 and warned that high fuel prices will impact results for the year.

  • In economic data:
    • Germany's Q2 GDP 0.1% qtr/qtr (expected 0.0%; last 0.2%); 1.8% yr/yr (expected 1.5%; last 1.5%). August ifo Business Climate Index 88.5 (expected 86.8; last 88.7). August Current Assessment 97.5 (expected 96.0; last 97.7) and Business Expectations 80.3 (expected 79.0; last 80.4)
    • U.K.'s August CBI Distributive Trades Survey 37 (expected -7; last -4)
    • France's August Business Survey 104, as expected (last 106)
    • Spain's July PPI 40.4% yr/yr (last 43.1%)

---Equity Markets---

  • STOXX Europe 600: +0.2%
  • Germany's DAX: +0.6%
  • U.K.'s FTSE 100: +0.3%
  • France's CAC 40: +0.2%
  • Italy's FTSE MIB: +0.3%
  • Spain's IBEX 35: +0.2%


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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