Early Look

Monday, June 24, 2024

After closing Friday mixed on better PMI manufacturing data and higher for the week as the S&P 500 gained 0.61%, the Nasdaq was flat, and the Dow climbed 1.46%, major averages are looking at a higher open ahead of a big week of inflation data. The Nasdaq eked out a small weekly gain of +0.0027% for the week extending its streak to 8 of the past 9 weeks but is looking down slightly to start. A pullback off record highs for semiconductors led to the late week pullback. In Asian markets, The Nikkei Index jumped 208 points to 38,804, the Shanghai Index fell -35 points to 2,963, and the Hang Seng Index was little changed at 18,027. In Europe, the German DAX is up 103 points to 18,267, while the FTSE 100 gains 33 points to 8,271. The big economic data this week is expected on Thursday/Friday with the Federal Reserve’s favored inflation gauge, the May personal consumption expenditures (PCE) price index on Friday, followed by Q1 GDP on Thursday. Economists expect no change in the May personal consumption expenditures price index and a minimal 0.1% gain in the core measure. In other news, weather wreaked havoc across parts of the United States this weekend as in South Dakota, Gov. Kristi Noem declared an emergency after severe flooding in the southeastern part of the state bordering Nebraska while several highways were closed. From the mid-Atlantic to Maine, across the Great Lakes region, and throughout the West to California, public officials cautioned residents about the dangers of excessive heat and humidity. In northwest Iowa, 13 rivers flooded the area.

• The Dow Jones Industrial Average rose 15.57 points, or 0.04%, to 39,150.33.
• The Nasdaq Composite dropped -32.23 points, or 0.18%, to 17,689.36.
• The Russell 2000 Index advanced 4.64 points, or 0.23% to 2,022.03

• 2:00 PM ET                   Fed’s Daly Gives Remarks on Economy, Policy

• Earnings After the Close: EPAC

• Design Automation Conference (DAC) conference 6/23-6/27, in San Francisco, CA
• Goldman Sachs European Business Services, Transport & Leisure Conference, 6/24-6/26, in London
• Goldman Sachs China Healthcare Corporate Day 2024, 6/24-6/26 (virtual)
• Oppenheimer Novel Targets in Immunology Summit, 6/24, in NY

• In France, the Far-Right National rally 36%, Left Wing New Popular Front 27%, Macron alliance 20% according to Bloomberg. The Financial Times reported that 25% of respondents think Le Pen’s National Rally will take the correct decisions on economic issues vs 22% for New Popular Front and 20% for Macron’s alliance.
• China wants the European Commission to drop its tariff decision by July 4 and adhere to WTO rules the Global Times reported. This comes as both sides agreed to start consultations on the EU’s anti-subsidy investigation into Chinese EVs. The EU’s provisional duties of up to 38.1% on Chinese EV imports are set to kick in by July 4 – CNBC.

• Group 1 Automotive (GPI) said CDK cyberattack had disrupted business applications and processes at U.S. operations that rely on its systems.
• MGM Resorts (MGM) announces agreement to acquire Tipico’s U.S. sportsbook.
• Nike (NKE) with a positive mention in Barron’s saying shares of the athletic shoemaker have fallen, but the arrival of the Olympics could signal that a turnaround is set to begin.
• Sonic Automotive Inc. (SAH) said CDK Global, a third-party provider of information systems used by Sonic Automotive, suspended some systems used by the company after a cybersecurity incident. Sonic experienced disruptions to its dealer management system hosted by CDK as a result.
• Under Armour Inc. (UAA) agreed to pay $434 million to settle claims it misrepresented the level of demand for its products.

• KPS Capital Partners, LP entered into an agreement for its portfolio company, Eviosys, to be sold to Sonoco Products Company (SON) for EUR3.615 billion (or approximately $3.9 billion).
• United Parcel Service Inc. (UPS) said Sunday it has agreed to sell its freight-brokerage business, Coyote Logistics, to RXO Inc. (RXO) for $1.025 billion in cash. RXO said the acquisition will result in “annualized cost synergies” of at least $25 million and expects the deal to close by the end of 2024. UPS bought Coyote in 2015 for $1.8 billion.
• @zerohedge tweeted “the world currently has 7000 data centers built, or in development, double from 2015. If they ran constantly, these data centers would consume 508 terawatt hours of electricity per year, more than the total annual electricity production for Italy or Australia”

• Prudential Plc (PUK) plans a $2 billion share buyback program which will be completed no later than mid-2026.

• BioNTech (BNTX) and DualityBio receive FDA fast track designation for antibody-drug conjugate candidate BNT324/DB-1311 in prostate cancer.
• Bristol Myers Squibb (BMY) said the FDA has granted accelerated approval for Krazati in combination with cetuximab as a targeted treatment option for adult patients with KRASG12C -mutated locally advanced or metastatic colorectal cancer, or CRC, as determined by an FDA-approved test.
• ResMed (RMD) shares declined after hours late Friday after clinical data showed Eli Lilly’s (LLY) drug tirzepatide (sold as Zepbound for weight loss) reduced obstructive sleep apnea severity. Citi downgraded ResMed after the SURMOUNT study showed that between 40%-50% of patients on tirzepatide had obstructive sleep apnea remission.
• Sarepta (SRPT) was upgraded to Outperform at Mizuho and tgt to $200 from $179 following Thursday’s Elevidys label expansion.

• Disney’s (DIS) ‘Inside Out 2’ earns $100M in the film’s second domestic weekend; the 7th film ever to gross $100M+ in second weekend; and has earned $724M, already the highest grossing movie of 2024 worldwide.
• LG Display’s shares climbed after it started mass producing new and improved organic light-emitting diode panels for use in laptop computers; said it began mass production of the industry’s first 13-inch “Tandem OLED” panels for laptops.