The big picture of today
Market nervousness continued today in Asia-Pacific, with most markets closing in the red. Japan’s Nikkei 225 lost 2.1%, China’s Shanghai Composite fell 1.8%, South Korea’s Kospi lost 1.2%, and Australia’s ASX 200 lost 1.1%. Hang Seng of Hong Kong was the only winner, adding 0.7%. European markets, on the other hand, rebounded from yesterday’s midday declines, and US equity futures are showing positive moves at the open.
Investors remain focused on Capitol Hill as Democrats try to find a way to raise the debt ceiling. U.S. Treasury Secretary Janet Yellen warned policymakers the government would run out of cash to pay its obligations to debt holders on October 18. The usual big names on Wall Street are adding to the pressure. On Tuesday, JPMorgan Chase CEO Jaime Dimon said his bank had started to prepare for the âpotentially catastrophic eventâ of a US default. Morgan Stanley would also prepare for such an extreme eventuality.
Wells Fargo (WFC) is the latest company to extend plans to return to the office until January 2022.
Last night, United Airlines (UAL) shared that up to 593 employees were threatened with layoffs after refusing to be vaccinated against the coronavirus after the carrier’s deadline this week.
Spain’s inflation rate (preliminary estimate) fell from 3.3% to 4.0% year-on-year in September, well above the expected increase of 3.5%.
Consumer confidence in the Eurozone rose as expected to -4 from -5.3, the second highest level in the past twelve months as Europeans appear to engage in activities such as shopping, eat out and visit cinemas at pre-pandemic levels. Economic sentiment in the region unexpectedly rose to 117.8 from 117.6, against expectations for a dip to 116.9.
Yesterday’s Conference Board consumer confidence data was very negative, falling more than expected to a 7-month low of 109.3 from 115.2 compared to expectations of a dip to just 114.5, with declines in recent months across all age groups. The mismatch between the number of open positions in the economy, the growing gap between those reporting abundant and hard-to-find jobs (meaning more see the labor market as strong than weak) and the overall declining levels of consumption are of particular concern. confidence.
The Case-Shiller Home Price Index for July was released yesterday and showed prices nationwide were up 19.7% year-on-year and 43.7% above their peak of 2006. It was the fourth consecutive month of record increases, even though inventories rose 7.3% month-on-month but are still down -12% year-on-year. June’s price increase was revised up to 27% (annualized), and July slowed to 20.3% (annualized), which, although lower, remains a record pace before the pandemic. Before the pandemic, the fastest rate recorded in March 2005 was at 18% annualized.
Later today, we’ll get data on pending home sales and the usual weekly crude and gasoline inventory report.
The Nasdaq Composite had its most difficult day since March yesterday, falling 2.8% as tech stocks led the market as a whole lower. This was the 10th day of Nasdaq decline over the past 15 sessions. The S&P 500 lost 2.0%, with just 10% of the index closing higher, and the Dow Jones fell 1.6%. The 10-year Treasury yield continued to rise as bond prices fell, reaching 1.567%, its highest level since June. Natural gas is experiencing a significant decline well beyond historical standards, with the premium for short-term contracts over long-term contracts in the 99th percentile of all periods and the highest in more than 15 years.
Actions to watch
Profit announcements and advice
Before the US stock markets open this morning, Cintas (CTAS) and Jabil (JBL) will be among the few companies to publish their quarterly results.
While the memory chip company Micron (UM) reported better-than-expected results for the August quarter on the strength of the data center and graphics markets, its stocks were under pressure last night as Micron issued weaker-than-expected guidance for its quarter November. The company now sees EPS of $ 2.00 to $ 2.20 versus consensus of $ 2.48 and revenue in the range of $ 7.45 to $ 7.85 billion, well below the consensus. consensus of $ 8.5 billion. According to the company’s short-term outlook, âShipments will decline modestly in both DRAM and NAND from very high levels at FQ4. Some PC customers are adjusting their memory and storage purchases due to shortages of non-memory components that are needed to complete PC builds. some components of the chip. During the 2022 timeline, Micron sees data centers, server deployments, 5G mobile shipments and the continued strength of the automotive and industrial markets driving year-over-year revenue growth. In particular, Micron sees the 5G smartphone market growing by 50% year-over-year from 2021.
Painting company shares Sherwin Williams (SHW) slumped in secondary market trading last night after the company announced lower expectations for the current quarter and 2021. For the September quarter, the company now sees EPS of $ 2.00 to $ 2.10 against the consensus of $ 2.46; For 2021, his updated view projects EPS of $ 8.35 to $ 8.55 against the consensus of $ 9.21. For 2021, Sherwin sees its revenue increase by a high single-digit year-over-year percentage compared to its earlier forecast of a “high single-digit to low double-digit% increase” and the current consensus of + 10%. In addition to the reduced revenue outlook, Sherwin is grappling with “the persistent and industry-wide constraints on raw material availability and the price inflation that we previously reported have worsened, and we do not expect an improvement in supply or lower commodity prices in our fourth quarter as expected.
At its virtual investor meeting earlier today, the semiconductor equipment company ASML Holdings SA (ASML) has split its revenue of 24 to 30 billion euros by 2025, as the “global megatrends” of the electronics industry continue to fuel growth in the semiconductor market. Over the period 2020-2030, the company expects its lithography, metrology and inspection systems business and its installed base management (sales of field services and upgrades) to generate a rate of annual turnover growth of around 11%.
China Evergrande (EGRNF), who has $ 300 billion in debt and faces a $ 47.5 million interest payment owed today, shared in a Hong Kong Stock Exchange filing that he will sell his $ 1.75 billion Shengjing Bank shares to Shenyang Shengjing Finance Investment Group, priced at 5.70 yuan per share. According to reports, Evergrande is also looking to sell stakes in other assets.
Nikkei Asia reports that customers are looking to buy Apple (AAPL) The iPhone 13 will face “longer than expected delivery times due to the COVID wave in Vietnam”. The extended delivery times are due to the limited supply of camera modules for the four iPhone 13 models.
Yesterday, Lucid group (LCID) brought its first customer-grade Lucid Air electric sedans off the assembly line at its AMP-1 plant in Arizona. According to the company, there are more than 13,000 reservations for the Lucid Air, which starts at $ 77,400 and has a maximum range of 520 miles.
Actions of Warby Parker (WRBY) will begin trading on the NYSE later today, using a direct quote. Last night, the NYSE assigned a benchmark price of $ 40 to Warby’s 111.5 million outstanding shares, giving it a valuation of around $ 4.6 billion.
Technology-driven beauty company Olaplex (OLPX) is expected to reach 67 million IPO shares later today. The discussion on the price is $ 14 to $ 16 per share.
Investment manager technology provider Allvue Systems Holdings (ALVU) chose to postpone its initial public offering, citing unfavorable market conditions.
Merger and acquisition activity
Netflix (NFLX) has acquired Night School Studio, its first game developer, and terms of the transaction have not been disclosed. Netflix is ââexpected to add games to its subscription service, with no ads or in-app purchases. Night School Studio is best known for its first game, WITHOUT BUF.
Akamai Technologies (AKAM) has reached a definitive agreement to acquire Guardicore, based in Tel Aviv, Israel, and will integrate its micro-segmentation solution into Akamai’s extensive Zero Trust security portfolio. For fiscal 2022, Guardicore is expected to generate around $ 30-35 million in revenue.
Southern Missouri Bancorp (SMBC) and Fortune Financial Corporation have entered into a merger agreement whereby the former will acquire the latter in a stock and cash transaction.
Dividends and more
Following the spin-off of International paper (IP) and before the market opens on October 4, the shares of Sylvamo (SLVM) will be added to the S&P SmallCap 600, replacing Stamps.com (STMP), which is acquired by Thoma Bravo.
After today’s market closes
Herman Miller (MLHR) is expected to publish its quarterly results. A few days before the end of the quarter, we will be on the lookout for early announcements on the September quarterly results, good or bad. Those looking to get a glimpse of the revenue reports to be had in the coming days should visit Nasdaq earnings calendar page.
On the horizon
- September 30: Q2 GDP (final estimate), weekly jobless claims, Chicago PMI
- October 1: Personal income and expenditure, PCE price index, Markit and ISM manufacturing PMI, Michigan consumer sentiment, construction spending
- October 4: Factory orders
- October 5: Total vehicle sales for September, trade balance, ISM market and services PMI, IBD / TIPP economic optimism
- October 6: Job change at ADP
- October 7: Unemployment claims
- October 8: Non-agricultural payroll, Wholesale inventories
- October 12: JOLTs report
- October 13: IPC, FOMC report
- October 14: Weekly unemployment registrations, PPI, Monthly budget statement
- October 15: Retail sales, import and export prices, NY Empire State Manufacturing, Michigan consumer sentiment (preliminary), business inventories
Thought of the day
âEveryone should take the time to sit down and watch the leaves turn. ~ Elisabeth Laurent
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.