>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:
  • AIR +3.8%
Select Chinese ADRs showing strength following stimulus:
  • FUTU +8.6%, KC +8.1%, BEKE +8%, DADA +7.9%, LI +7.7%, JD +7.6%, NIO +7.4%, BILI +7.2%, XPEV +7.2%, TME +5.7%, ASHR +5.6%, BABA +5.5%, FXI +5.3%, HUYA +5.2%, WB +5%, NIU +4.8%, BIDU +4.3%, VIPS +3.7%, MLCO +3.3%, MOMO +2.3%
Select mining stocks trading higher following China's stimulus:
  • AA +5.1%, FCX +5%, ALB +4.8%, VALE +4.6%, MT +4.5%, SQM +4.4%, RIO +4.4%, BHP +4%, LAC +2.6%, CLF +2.5%, ALTM +2.4%
Other news:
  • LBRDA +21.1% (issues counterproposal to Charter Communications)
  • LWAY +16.1% (Danone (DANOY) proposes to acquire all shares of LWAY for $25/share)
  • CANF +15.2% (veterinary partner Vetbiolix exercised its option and signed a development and commercialization agreement with Can-Fite)
  • PANL +5.4% to merge vessels from M.T. Maritime Management into its fleet)
  • KSPI +3.7% (responds to investor questions)
  • ACAD +3% (names new CEO)
  • BASE +2.9% (bought 21,080 shares at $14.0766 - $14.1953 worth approx. $298K)
  • RUN +2.8% (partners with Toll Brothers (TOL) to provide solar power and storage to Toll Brothers homes)
  • LVO +2.5% (enters into distribution partnerships with SOKO and Kelly Family Distributors)
  • HES +2.3% (FTC to greenlight CVX's merger proposal)
  • ARLO +2.3% (approves $50 mln stock repurchase plan)
  • BIIB +1.7% (Biogen and UCB Announce Positive Topline Results From Phase 3 Study of Dapirolizumab Pegol in Systemic Lupus Erythematosus and are Initiating Second Phase 3 Study in 2024)
  • DNN +1.7% (announces option of non-core exploration projects to foremost for up to $30 million in combined consideration)
  • FANG +1.5% (Diamondback Energy, Kinetik Holdings and EPIC Midstream announce transformative transactions for EPIC Crude; also announces the upsize and pricing of public offering of 12.77 mln shares of common stock by certain Legacy Endeavor Stockholders)
  • GFL +1.2% (offering of $210 million of tax-exempt industrial revenue bonds)
  • NVO +1.1% (treatment of transthyretin amyloidosis granted orphan designation)

>>> US Research Calls I

Research Calls I
  • Upgrades:
    • Banc of California (BANC) upgraded to Outperform from Neutral at Wedbush; tgt raised to $18
    • BioNTech (BNTX) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $145
    • CNH Industrial (CNH) upgraded to Outperform from Mkt Perform at Raymond James; tgt $14
    • Columbia Banking (COLB) upgraded to Outperform from Neutral at Wedbush; tgt raised to $31
    • Comerica (CMA) upgraded to Outperform from Neutral at Wedbush; tgt raised to $75
    • Salesforce (CRM) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $325
  • Downgrades:
    • Baidu (BIDU) downgraded to Hold from Buy at HSBC Securities; tgt $100
    • BP (BP) downgraded to Neutral from Buy at Redburn Atlantic
    • Costco (COST) downgraded to Hold from Buy at Truist; tgt $873
    • Customers Bancorp (CUBI) downgraded to Neutral from Outperform at Wedbush; tgt lowered to $53
    • DouYu (DOYU) downgraded to Reduce from Hold at HSBC Securities
    • Equity Residential (EQR) downgraded to Neutral from Buy at BofA Securities; tgt raised to $82
    • Essex Property (ESS) downgraded to Neutral from Buy at BofA Securities; tgt raised to $321
    • First Citizens BancShares (FCNCA) downgraded to Neutral from Outperform at Wedbush; tgt lowered to $2150
    • First Horizon (FHN) downgraded to Neutral from Outperform at Wedbush; tgt lowered to $17
    • Invitation Homes (INVH) downgraded to Neutral from Buy at BofA Securities; tgt $37
    • Kenvue (KVUE) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $24
    • Leonardo DRS (DRS) downgraded to Neutral from Buy at BofA Securities; tgt raised to $30
  • Others:
    • Church & Dwight (CHD) initiated with an Overweight at Piper Sandler; tgt $120
    • Colgate-Palmolive (CL) initiated with an Overweight at Piper Sandler; tgt $121
    • Crescent Energy Company (CRGY) resumed with an Outperform at Evercore ISI; tgt $17
    • Dayforce (DAY) initiated with an Overweight at KeyBanc Capital Markets; tgt $70
    • DoorDash (DASH) resumed with an Outperform at Raymond James; tgt $155
    • EHang (EH) initiated with a Buy at China Renaissance
    • GE Vernova (GEV) initiated with a Buy at Guggenheim; tgt $300
    • Instacart (CART) initiated with a Mkt Perform at Raymond James
    • Juniper Networks (JNPR) resumed with a Neutral at Citigroup; tgt $40
    • Kenvue (KVUE) initiated with a Buy at Jefferies; tgt $27

>>> China ADRs higher across the board after the announcement of several stimulu

China ADRs higher across the board after the announcement of several stimulus measures

  • Among names making notable moves ahead of the US open: BEKE 9.32%, DADA 7.94%, FUTU 7.79%, KC 7.62%, IQ 7.01%, BILI 7.47%, XPEV 7.32%, TIGR 7.12%, NIO 7.14%, YSG 6.92%, DAO 6.71%, HTHT 6.31%, ZK 6.19%, TME 5.99%, TAL 5.57%, YMM 5.37%, BZ 5.18%, EH 5.18%, YUMC 5.06%, RERE 4.98%, NIU 4.79%, LU 4.78%, HSAI 4.68%, MLCO 4.50%, HUYA 4.49%, TUYA 4.32%, VNET 4.25%, DQ 4.23%, ZTO 4.20%, LX 4.19%, WB 5.03%, JFIN 4.09%, BIDU 4.11%, YY 3.50%, VIPS 3.45%, ZH 3.38%, GHG 3.24%, MOMO 3.23%, ATHM 3.20%, RLX 2.99%, YRD 2.87%, QFIN 2.81%

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • LBRDA +18.6%, LWAY +16%, LVO +5%, NTRA +3.6%, AIR +3.6%, ACAD +3%, ESEA +3%, HES +2.7%, APLD +2.2%, BIIB +2.1%, RUN +2.1%, NVO +1.5%, NEO +1.3%, ARLO +1.3%, GFL +1.2%, CPRX +1%, CVX +0.8%, GME +0.8%, HIG +0.7%, OPRT +0.7%, META +0.6%
  • Gapping down:
    • LNW -15.5%, HE -12.1%, THO -6.4%, FOR -6%, SNOW -3%, IVT -3%, JAMF -2%, LUNR -1.5%, PANL -1.4%, BNED -1.3%, BAH -1%, CRH -0.8%, DE -0.5%, NVS -0.5%

>>> US After Hours Summary: LBRDA +21.9% soaring on counterproposal to Charter C

After Hours Summary: LBRDA +21.9% soaring on counterproposal to Charter Communications; HE -9.5% slides on stock offering

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: AIR +3.5%

Companies trading higher in after hours in reaction to news: LBRDA +21.9% (issues counterproposal to Charter Communications), LWAY +15.6% (Danone (DANOY) proposes to acquire all shares of LWAY for $25/share), GME +1.4% (completes ATM offering program), ACAD +1.3% (names new CEO), HES +1.2% (FTC to greenlight CVX's merger proposal, according to Reuters), ATR +0.2% (N-Sorb nitrosamine mitigation accepted to FDA's Emerging Technology Program), BA +0.2% (awarded U.S. Navy contract)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: None

Companies trading lower in after hours in reaction to news: HE -9.5% ($500 mln stock offering), SNOW -3.3% ($2.0 bln convertible senior notes offering) IVT -2.7% (stock offering), PANL -2% to merge vessels from M.T. Maritime Management into its fleet), DE -1.5% (Trump threatens 200% tariff on goods imported from Mexico, according to Bloomberg), CVX -1.2% (FTC to greenlight merger proposal of HES, according to Reuters), FOR -1% (files $750 mln mixed shelf), KKR -0.4% (intra-quarter monetization activity), RILY -0.3% (President, CEO of a subsidiary resigns), CHTR -0.2% (receives counterproposal from Liberty Broadband), MSFT -0.2% (OpenAI rival Anthropic floats $40 bln valuation, according to The Information), ZION -0.1% (to acquire four branches)

WSJ : How Meta’s Smart Ray-Ban Glasses Spawned a Silicon Valley Hit

How Meta’s Smart Ray-Ban Glasses Spawned a Silicon Valley Hit
Video-taking capabilities, not AI, have proven to be a key attraction to buyers as market expects Meta to unveil latest tech-enabled glasses Wednesday

Mark Zuckerberg has touted virtual-reality headsets as the next big thing. It turns out people may want something simpler: sunglasses with a camera.

Meta’s META 0.55%increase; green up pointing triangle Ray-Ban smart glasses are gaining traction among consumers, who say they like using them to take photos for their friends and family as well as to create content for social media. The excitement comes as interest in the metaverse, an online world accessed via virtual-reality headsets, remains muted.

Meta is expected to preview its latest pair of tech-enabled glasses at its annual developer and hardware conference Wednesday. A Meta spokeswoman declined to comment.

The second version of Meta’s smart glasses—which are made in collaboration with Italian eyewear giant EssilorLuxottica EL 0.84%increase; green up pointing triangle and are equipped with a camera, microphones and artificial intelligence—went on sale in October 2023. Zuckerberg, Meta’s CEO, said demand has been higher than expected. EssilorLuxottica didn’t respond to requests for comment.

“They did a really good job of boiling it down to the things that it’s supposed to do really well,” said Ben Taft, a tech entrepreneur who sold his augmented-reality startup, Mira, to Apple. “For the early adopters like me who seek that experience, it’s a really robust piece of technology.”

The surprise excitement contrasts sharply with the tepid interest that greeted the first generation of glasses in 2021. Meta sold about 300,000 pairs in 18 months, and less than 10% of purchases were still being actively used two years later.

The company hasn’t disclosed sales figures for the more recent iteration of the glasses, but Meta has shipped more than 700,000 pairs, according to data provider IDC. Shipments more than doubled from the first to second quarter this year.

Meta still shipped more mixed-reality Quest 3 headsets than Ray-Bans in the most recent quarter. But analysts such as Bernstein’s Mark Shmulik see that changing soon. He forecasts that the glasses will be a holiday hit.

In an interview earlier this month with the hosts of the business podcast “Acquired,” Zuckerberg said he thinks the market for smart glasses is massive.

“If all we get is all the people in the world wearing glasses upgrading to glasses that have AI in them, then this is already going to be one of the most successful products in the history of the world,” he said.

Meta might also be finding an interested user base among creators, who use its Instagram and Facebook apps. There are more than 50 million content creators globally who post videos online to make money, according to Goldman Sachs.

“They really did put a lot of effort into reaching out to creators and getting them to try out the product,” said Jitesh Ubrani, an analyst at IDC. “That’s really what drove the success of the second generation.”

Videos key, not AI

Christopher Söderberg, a freelance consultant for influencers who lives in Stockholm, bought the smart glasses in May. He said they helped him kick-start his own influencer career.

Söderberg films videos for social media of himself interviewing people on the streets of Stockholm. Before he bought the glasses, he said he asked his brother to go with him to film the interactions, but his brother was too busy.

Now, Söderberg said, he can film the videos himself seamlessly and walk up to people in a way that is less intimidating while still letting them know he’s recording.

To record with the glasses, Meta Ray-Ban users press a button to start a 30-second, 60-second or three-minute video. A white light stays on for the duration of the recording.

“It’s a game changer,” said the 36-year-old. Söderberg has since made more than 20 videos with the glasses. The first one has upward of two million views.

Lindsey Witmer Collins, a mom of two young children who owns a software studio in San Francisco, said she recently bought the smart glasses to be able to capture more videos of her 6-year-old and 3-year-old.

“I wasn’t really sold on the first glasses,” the 38-year-old said. “It wasn’t until I realized how much I wanted these videos of my kids that I got them.”

She said she has used the glasses to take videos of her children in moments where she wouldn’t have enough time to whip out her phone or want to—such as a recent instance when her daughter made a face at her in a split-second. Taking out her phone can sometimes spoil the moment, she said.

Witmer Collins said she isn’t interested in the AI features of the glasses and would turn them off if she could.

“I don’t want them analyzing what they’re seeing,” she added. “I just want them to record it.”

Meta is hoping people will come to enjoy the AI features. The company said it redesigned the second-generation glasses from the ground up, improving the audio and camera capabilities—and also adding the AI tools. The team working on the glasses has also grown significantly.

Rivals take notice
Beyond Meta, other tech companies are also exploring tech-enabled glasses. But none of them have yet managed to capture the market.

Snap, the parent company of the popular app Snapchat, launched its latest pair of advanced augmented-reality glasses at its developer conference last week. The glasses have more technical capabilities than Meta’s Ray-Bans, including a display and the ability to simultaneously experience AR with other users.

Amazon sells a pair of smart glasses called Echo Frames that has received little fanfare, and Google years ago launched a glasses product called Google Glass that has since been shut down several times, in part over privacy concerns.

Google intends to re-enter the market. EssilorLuxottica’s chief executive Francesco Milleri said in July that the company had seen interest from Google and other tech companies in exploring partnerships.

Meta, meanwhile, has taken steps to strengthen its own partnership with the eyewear giant that owns brands Oakley, LensCrafters and Supreme in addition to Ray-Ban.

In July, The Wall Street Journal reported that Meta was in talks to buy a 5% stake in EssilorLuxottica. The status of those talks couldn’t be learned. EssilorLuxottica last week said it had struck a new long-term agreement with Meta to work on developing smart glasses into the next decade.

“I think what you’re going to end up with is just a whole series of different potential glasses products at different price points with different levels of technology in them,” Zuckerberg said recently.

FT : Levi Strauss warns of delay in hitting $10bn sales goal

Levi Strauss warns of delay in hitting $10bn sales goal
Denim maker is pressing ahead with hundreds of store openings and plan to boost appeal to women

Levi Strauss has warned it will take longer than planned to reach a $10bn revenue target after the higher cost of living put pressure on western consumers, as it presses ahead with hundreds more store openings and a plan to increase the brand’s appeal to women.

The retailer’s new chief executive, Michelle Gass told the Financial Times that an existing target to hit $9bn to $10bn in revenues by 2027 would be pushed back. The Californian denim maker reported annual revenues of $6.2bn for the year to November 26 2023, while net income fell to $250mn, from $569mn the year before.

Gass, who joined Levi’s in 2023 as CEO-designate before taking the top job earlier this year, said the company would “do our homework again” before giving investors a more precise timeline because “since those [initial] goals were shared, there has been a lot of disruption in the industry”. 

Finance and growth chief Harmit Singh said: “In terms of the timing, we’ll announce it, probably, you know, about a year from now, but it will be pushed out a couple of years.”

He blamed largely flat revenues over the past 18 months partly to “the consumer being under pressure, especially in the western world”. While US consumers were “in a better place” than earlier this year — especially those earning more than $100,000 annually, who are Levi’s target customers — more cost-conscious US shoppers continued to be under pressure he said.

“The consumer in Europe is probably a little bit more cautious,” he added, despite inflation coming down quicker than in the US, while “Asia and Latin America” were generally fine. 

Gass said she was confident “that we’re going to get there [$10bn], because I just see so many opportunities across the board”. 

Under Gass, Levi’s is accelerating a plan to sell its wares, which include the classic 501 jeans for around £90, through more of its own shops as well as more dresses and jumpsuits to women all over the world, as well as non-denim products.

Her predecessor, Chip Bergh, spent 12 years as CEO implementing a turnaround of the once struggling brand and making it popular with consumers again. The company listed on the New York Stock Exchange in 2019 and set its original revenue target of $9bn to $10bn by 2027 three years later. It has a market capitalisation of around $8bn.

“The company was losing market share, it had really challenged [profit] margins, it was highly levered,” said Laurent Vasilescu, a managing director at BNP Paribas Exane. “Chip [Bergh] with Harmit [Singh] put processes in place to improve distribution, margins, pay down the debt and they were able to IPO. That would have never been the case 10 years prior.”

Vasilescu believes Levi’s $10bn sales mark is realistic. Many other companies and investors had to recalibrate their expectations after the global pandemic and the war in Ukraine, he added.

Gass, who previously ran US department store chain Kohl’s and was a senior executive at Starbucks, helping to expand the coffee chain internationally, said it was “a phenomenal opportunity to come in with the foundation as solid as it is”.

She said her priority is to “really rewire the entire business to now be a best in class, direct to consumer retailer” after predominantly selling through wholesalers for decades.  

The company, which has about 1,200 stores and around 1,200 franchise outlets, plans to open 500-600 more of its own shops in territories including Asia, Latin America and Europe in the next few years. It suspended its activities in Russia in 2022 and has since wound down operations in the country.

Gass insisted that wholesale partners were just as important to its global growth plan. “For me it’s not an either or,” she said. “There have been others who have been more declarative of things like ‘we’re going big on direct-to-consumer and pulling out [of wholesale]’. We see wholesale as an amplifier. They are going to reach consumers where we wouldn’t just be able to.”

The decision by sportswear giant Nike to focus on selling directly to consumers instead of through third-party stores such as Footlocker has backfired, alienating many of its third-party sellers.

Shares in Levi’s are around 10 per cent lower than when they first listed but have also gained almost 50 per cent over the past 12 months.


Gass also plans to win more women customers given they currently only account for about a third of sales. “It sounds so simple but if you’re going to really win with women, you need to win head to toe,” she said, adding that they want sales to achieve gender parity.

“Yes, women like to wear jeans, but they like to wear skirts, dresses. And as someone who wears these things, I was like, ‘where are these skirts?’ when I joined, and now you can find a lot more — we are just scratching the surface.” Gass also wants to sell more garments beyond jeans as shoppers increasingly opt for head-to-toe denim outfits.  

Levi’s, which owns activewear brand Beyond Yoga and chinos label Dockers, wants to increase operating margins from 10 per cent currently to 15 per cent over time.

The brand started life in 1853 when Levi Strauss, an immigrant from Bavaria, opened a dry goods company in San Francisco and together with tailor Jacob Davis created a product that became blue jeans. 

Levi jeans have long been a fashion icon, with the 501 jeans gracing the cover of Bruce Springsteen’s 1984 album Born In The USA and singer Beyoncé naming a song after the brand on her album this year.

Vasilescu added: “Denim, the fabric itself, is having a moment. All the trends are in its favour and Levi’s is one of the few brands that actually gets to embrace this style shift that happens every 10 years or so.”

Levi’s has sought to cultivate close relationships with celebrities and fashion influencers over the years in a bid to promote and sell some of its more premium clothes. On September 25 it is opening its fifth so-called Haus of Strauss space in the 17th century Libéral Bruant mansion in Paris’s Le Marais district. The 1,300 square metre space will include a made-to-order service for jeans costing €595, a workshop and a showroom. Shopping is by appointment only: the spaces often act as private retail spaces for celebrities buying their own bespoke creations such as the band Kasabian for the Glastonbury music festival this year.

FT : UAE president meets Joe Biden in push for more US AI technology

UAE president meets Joe Biden in push for more US AI technology
Sheikh Mohamed seeks to formalise fledgling partnership between both countries

The United Arab Emirates’ leader met US President Joe Biden in Washington on Monday to advance artificial intelligence co-operation as the Gulf nation tries to secure easier access to US-made technology.

The meeting comes during Sheikh Mohamed bin Zayed al-Nahyan’s first official trip to the US in seven years and underscores his determination to win White House support in his efforts to transform the UAE into an AI leader.

As well as discussing technology and trade, Biden said the UAE would now have “major defense partner” status along with India, to foster greater security ties through measures such as joint military training and exercises.

The UAE is one of the US’s most important allies in the Middle East, but relations have been strained at times in recent years. Talks for a formal security pact with Washington have stalled, and Abu Dhabi was infuriated by what it saw as a lukewarm US response to attacks on the UAE’s capital by Houthi rebels from Yemen in 2022.

Yet AI has brought new energy to the relationship. Oil-rich Abu Dhabi has made AI central to its plan to wean itself off fossil fuel exports and has taken a strategic decision to work with US companies producing cutting-edge technology.

“AI and new changes in cloud computing, etc, are going to change the way the world looks,” Anwar Gargash, Sheikh Mohamed’s diplomatic adviser, said in Dubai last week. “We cannot let this sort of wave of technological breakthroughs pass by us.

“If we believe that hydrocarbon is on the way out, slowly but surely, then we have to replace the revenue stream through something else,” he added. 

However, the US last year added the Gulf states to a list of countries restricted from freely importing cutting-edge US-made AI chips over concerns about technology leaks to China. This means companies have to apply for licences to export the chips, and the process has held up some UAE companies’ AI plans.

The presidents instructed officials to develop a memorandum of understanding on AI co-operation, the next step in formalising the partnership. But they also sketched out several broad areas for collaboration, including supporting bilateral investment and “efficient licensing”.

One person briefed on the UAE’s plans said the Gulf state had wanted to sketch out a “road map” ahead of the upcoming US election “so that progress is locked in . . . whatever president assumes office in January”. 

The person added officials were aiming to get the UAE’s export designation changed so it would be easier to get hold of chips.

Brad Smith, president of Microsoft, which invested $1.5bn in the UAE’s most important AI group G42 in April, told the Financial Times last week that clarity over the export controls was “emerging”, but it had “taken several months to work through”.

Smith added that export applications by Microsoft and other technology companies were not fully complete but were “getting very close”.

In a sign of the UAE’s drive to deepen relationships with US companies, G42 announced last week that it was working with Nvidia, the US company that makes chips critical for AI, on a weather forecasting initiative.

US companies looking to finance expensive AI projects have also welcomed Abu Dhabi’s petrodollars.

MGX, a new Abu Dhabi investment vehicle dedicated to AI, last week announced it was joining asset manager BlackRock, Global Infrastructure Partners and Microsoft to launch a $30bn fund to invest in data centres and the energy to power them.

Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser and chair of G42, visited Washington in June and has spearheaded the UAE’s efforts to secure US backing for its AI ambitions.

The FT previously reported that OpenAI founder Sam Altman and Sheikh Tahnoon were in discussions to finance an ambitious chipmaking project.

Gargash said Sheikh Tahnoon had “a good understanding of tech”, suggesting this could help the UAE’s negotiations with US officials and executives. “When he sits with somebody like Altman or whatever, he’s really talking his language,” Gargash said.

Sheikh Tahnoon attended the meeting between Biden and Sheikh Mohamed.