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Morning Prep 08/17

  • Global Equity Overview: S&P futures are slightly down from our last report but remain buoyed above Wednesday's close, amidst varied sessions in European and Asian markets.

  • Market Sentiments and Considerations: There's no significant shift in the overall market narrative. Pessimism looms with factors like upward pressure on interest rates, skepticism regarding the Fed's near-term peak policy signals, concerns about waning disinflation momentum, and more. Notable bullish perspectives include expectations of a soft landing and an earnings rebound in the latter half of the year and 2024. (I believe that these are all signs of a bottom in this correction, but it is just an observation)

  • Today's Economic Calendar: Attention is drawn to U.S. economic releases including Initial claims, Philly Fed manufacturing, and Leading Economic Indicators. China continues to be a focus, with critical comments from Premier Li and reports on the housing market slump.

  • Earnings and Corporate News: Walmart and Cisco are among the companies reporting this morning, with key insights from other market players. Earnings from Tapestry, Applied Materials, and others are also on the horizon.

  • Macro Economic Indicators: Scheduled releases include the Philadelphia Fed Index, Weekly Initial Jobless Claims, and Leading Indicators.

European Markets:

  • Indices: FTSE 100 (0.20%), DAX (0.12%), and CAC40 (0.13%) are mostly lower.
  • Central Bank Activities: Norges Bank increased rates by 25 bps and signaled another tightening move. Latvian central bank chief Kazaks expressed reluctance to hike in September.
  • Macroeconomic Releases: Includes Spain's June trade balance, Eurozone's June trade balance, and Netherlands' July unemployment rate.
  • Political and Corporate Highlights: Acting Spanish PM faces parliamentary vote; reports from Aegon, Medigene, and others; M&A news includes acquisitions by BAE Systems and TE Connectivity.

Asian Markets:

  • Indices: Nikkei (-0.44%), Hang Seng (-0.01%), Shanghai Composite (+0.43%).
  • Market Dynamics: Asian equities ended mostly lower; volatility in Hong Kong; South Korea's currency weakened.
  • Economic Indicators: Australian labor market is loosening; Japan's exports shrank; Singapore's non-oil export decline quickened.
  • Corporate News: China Evergrande's investigation, Country Garden's bond warning, Woodside Energy's wage disputes, and others.

News Since Prior Close:

  • International Developments: Ongoing concerns about China's housing market; Singapore's renewed export slump; Chinese corporate bond defaults causing market strains.
  • Company News Highlights:
  • +13.8% MEKKO.FH (Marimekko) -- Q2 earnings.
  • -27.3% ADYEN.NA (Adyen) -- H1 earnings.
  • +9.7% 1910.HK (Samsonite International) -- H1 reports.
  • -6.0% 182400.KS (NKMAX Co Ltd) -- U.S. subsidiary approval for Nasdaq listing

US Morning News Summary:

Earnings and Financial Reports:
  • $FORTY (Formula Systems (1985)): Q2 EPS $1.11, down from year-ago $2.12.
  • $TPR (Tapestry): Q2 EPS $0.95, compared to FactSet consensus of $0.97 [16 estimates, $0.94-1.00].
  • $SFL (SFL Corp.): Q2 EPS $0.13, significantly above FactSet's $0.04 consensus [4 estimates, ($0.05)-0.10].
  • DESP ( Q2 EPS $0.25, a rebound from the year-ago ($0.26).
  • $DOLE (Dole Plc): Q2 EPS $0.51 ex-items, beating FactSet's $0.35 [4 estimates, $0.29-0.38].
  • SQM.B.CI (Sociedad Quimica y Minera de Chile): Q2 EPS $2.03, trailing FactSet's $2.44 [7 estimates, $1.93-3.20].
  • $CSCO (Cisco Systems): Q4 EPS $1.14 ex-items, outpacing FactSet's $1.06 [23 estimates, $1.03-1.07].
  • $SNPS (Synopsys): Q3 EPS $2.88 ex-items, surpassing FactSet's $2.74 [10 estimates, $2.72-2.77]; guidance raised.

Partnerships, Product Announcements, and Trials:
  • KVHI ($KVHI): Three-year renewal of satellite partnership with Intelsat.
  • FSR ($FSR): Additional details released on the Fisker Alaska pickup truck.
  • $IMUX (Immunic): Completed enrollment of Phase 2 CALLIPER trial of vidofludimus calcium in progressive multiple sclerosis.
  • $MODD (Modular Medical): Partnership with Phillips-Medisize to expand insulin delivery alternatives announced (yesterday post-close).
  • $RVPH (Reviva Pharmaceuticals): Enrollment completed in phase 3 RECOVER study of Brilaroxazine in schizophrenia; topline data expected in October.

Corporate and Legal Matters:
  • $DWACU (Digital World Acquisition): Postponed shareholder meeting to 5-Sep (yesterday post-close) - 8-K filing.
  • $AHCO (AdaptHealth): Linde filed a lawsuit against incoming CEO Crispin Teufel - 8-K filing.
  • $BALL (Ball Corporation): BAE Systems acquires Ball Aerospace for ~$5.55B in cash.
  • $NYT (New York Times): Considering suing OpenAI to protect IP rights associated with reporting - NPR, citing sources.
  • $TSN (Tyson Foods): Planning to divest China poultry business - Reuters.
  • $NU (Nu Holdings): CEO David Velez sells 25M shares, reducing stake by 3% - Bloomberg.
  • $PARA (Paramount Global): Drops plans to sell a majority stake in BET Media Group - Reuters.

Traded Higher Post-Close:
  • $AVT (Avnet) +7.4% on earnings.
  • $STNE (StoneCo) +3.4% on earnings.
  • $CHGG (Chegg) +2.7%, announces increased authorization of securities repurchase program by $200M.

Traded Lower Post-Close:

  • $KULR (KULR Technology Group) -35.2% on earnings, offering of indeterminate size.
  • $CREX (Creative Realities) -29.4% on "reasonable best efforts" common stock offering of an indeterminate amount.
  • $WOLF (Wolfspeed) -15.0% on earnings.
  • $LOVE (Lovesac) -7.4%, internal investigation of financial statements; determines certain financial statements should no longer be relied upon.

Market Insights and Economic Data:

  • S&P Futures: +7.5, or +0.17% vs prior close.
  • FTSE 100: (0.17%) to 7344.72; DAX: (0.10%) to 15773.27.
  • WTI Crude: +$0.69 or +0.87% to $80.07; Gold: ($1.40) or (0.07%) to $1926.90.
  • Macau Visitor Arrivals: +28,176.9% y/y to 2.76M in July.
  • Japan Jun Core Machinery Orders: m/m +2.7% vs consensus +4.5% and prior (7.6%).

  • Upgrades: $ALC (Alcon) to overweight from neutral at JPMorgan.
  • Downgrades: $SLG (SL Green Realty) to market performance from outperforming at BMO Capital Markets; $DEN (Denbury) to sector weight from overweight at KeyBanc.

Upcoming U.S. Earnings:

Did we finally find our bottom yesterday? I want to hear your opinions about it~

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