>>> TradeGate Pre-Market Indications

DAX:
  • No major moves
MDAX:
  • Nemetschek (NEM TH) +0.8%
  • Lufthansa (LHA TH) +0.7%
  • Aixtron (AIXA TH) -0.2%
    • Watch Chip Stocks After ASML’s Forecast Falls Short of Estimates
  • Software AG (SOW TH) -0.8%
  • Fraport (FRA TH) -0.9%
SDAX:
  • About You (YOU TH) +2%
  • LPKF (LPK TH) +1.3%
  • VERBIO Vereinigte (VBK TH) +0.9%
  • Aareal Bank (ARL TH) -1.5%

>>> Europe : Brokers Upgrades & Downgrades - 20th of October 2021

>>> Up
* Castellum Raised to Hold at Handelsbanken; PT 230 kronor
* Moneysupermarket Raised to Buy at Berenberg; PT 275 pence
* Platzer Raised to Hold at Handelsbanken; PT 150 kronor
* Wizz Air Raised to Buy at Wood & Company; PT 5,500 pence

>>> Down
* BHP Group PLC Cut to Hold at Jefferies; PT 2,000 pence
* BHP Group PLC ADRs Cut to Hold at Jefferies; PT $56
* Rio Tinto ADRs Cut to Hold at Jefferies; PT $71

>>> Initiation
* Alstom Reinstated Buy at HSBC; PT 40 euros

>>> Call
* Akzo Nobel Outlook May See Shares Under Pressure: Jefferies
* IAG Downgraded to Hold at Peel Hunt on Fuel Cost Pressures
* Goldman Sachs chief insists bank can close valuation gap with rivals
* Gucci ‘Party Is Postponed’ as 3Q Misses Expectations: Bernstein
* Kering 3Q More About Gucci Miss Than Other Wins: Jefferies
* Moneysupermarket Upgraded at Berenberg, Risks Skewed to Upside
* Netcompany Pullback Creates Opportunity; Morgan Stanley Upgrades
* Telekom Austria 3Q Strength Driven Outside Austria: Jefferies

>>> What to look at today - 20th of october 2021

An Asia-Pacific stock gauge rose for a second day Wednesday, tracking a U.S. climb as corporate earnings helped to improve investor sentiment. Treasury yields advanced and the dollardipped.
A rally in Chinese technology firms such as Alibaba Group Holding Ltd. bolstered Hong Kong shares on hopes the worst of Beijing’s regulatory crackdown is over. Equities fluctuated in China, where the central bank boosted short-term liquidity, held loan prime rates steady and set a weaker-than-expected yuan reference rate in a sign of discomfort over currency strength.
U.S. and European futures were little changed. The S&P 500 closed near a record as traders weighed the corporate impact of supply-chain snarls and higher commodity prices. Johnson & Johnson raiseda profit forecast, Netflix Inc. subscribers jumped and Procter & Gamble Co. faced rising costs.
The earnings season has taken some of the spotlight away from concerns about a slowing pandemic recovery, price pressures stoked by energy costs and reduced central bank support. The Cboe Volatility Index, a measure of implied equity swings for the S&P 500, has fallen back to the lowest level since August.
Traders continue to monitor the debt woes at China’s real-estate developers. Sinic Holdings Group Co. became the latest to default, while the wait continues for China Evergrande Group’s overdue interest payments on dollar bonds. A property slump saw China’s home prices fall for the first time in six years. 
US After Hours NFLX -1.1% trades modestly lower on earnings; EAT -10.1% is sharply lower on weak guidance, taking down other casual restaurant chains

Nikkei +0.07 Hang Seng +1.30% CSI -0.17% Shanghai -0.10% Shenzen +0.16%

Eur$ 1.1646 CNH 6.3809 CNY 6.3882 JPY 114.57 GBP 1.3803 CHF .9243 RUB 70.8827 TRY 9.3039 WTI$ 82,76 Golds 1776BTC 63,700 -0,68% ETH 3850 +0.90%

S&P -0.06% Nasdaq -0.10% EuroStoxx -0.13% FTSE +0.3% Dax -0.10% SMI +0.45%

Macro :
- Goldman Sachs chief insists bank can close valuation gap with rivals
- U.K. to Cut Bank Profit Tax Surcharge to 3% From Apr 2023: FT
- Crypto Shares Ride Bitcoin Rally to Outstrip Energy, Financials

Keep an eye on :
- AED BB : Aedifica to Spend EU43.5m on 3 Irish Care Home Projects
- AKZA NA : Akzo Nobel 3Q Revenue Misses Estimates
- ANTIN FP : *ANTIN HIRES DEUTSCHE BANK, ING TO PREPARE LYNTIA SALE: CONFI
- ASML NA : ASML 4Q Forecasts Impacted by Materials Shortage in Supply Chain
- Autostore ipo : AutoStore Final IPO Price Set at NOK31/Share
- AG1 GY : Used Car Platform AUTO1 Expands Partnership With Volvo
- BAR BB : Barco 3Q Revenue Misses Estimates
- CTM SS : Catena Media Prelim 3Q Adjusted Ebitda Misses Estimates
- CSGN SW : Credit Suisse to Pay at Least $400 Million in Mozambique Scandal
- DB1 GY : Deutsche Boerse Maintains FY Ebitda About EU2B, Est. EU2.03B
- ELISA FH : Elisa 3Q Revenue Beats Estimates
- FGR FP : Eiffage’s APPR 3Q Rev. Ex-Construction Rises 10.3% to EU797M
- EQT SS : EQT 3Q Total Investments EU7.7B Vs. EU6B Y/y
- ERF FP : Eurofins Says Working on Providing Covid-19 Tests to Schools
- FABG SS : Fabege 9M Rental Income SEK2.14B Vs. SEK2.10B Y/y
- GALP PL : Galp Agrees to Acquire Two Solar Energy Projects in Brazil
- GJF NO : Gjensidige 3Q Pretax Profit Beats Estimates
- GVOLT PL : Greenvolt Says It May Carry Out Private Bond Offering of EU75m
- HUSQB SS : Husqvarna 3Q Operating Profit Beats Estimates
- IBS PL : Ibersol Plans to Offer up to 10m Shares at EU4/Share
- KER FP : Gucci Growth Slows, Raising the Stakes for New Fashion Line
- KNIN SW : Kuehne + Nagel 3Q Net Revenue Beats Estimates
- KWS GY : KWS Saat Sees 2022 Adjusted Ebit Margin 11% to 12%
- MU US : Micron Plans $7b DRAM Plant in Japan, Nikkan Kogyo Says (1)
- MRW LN : Morrison Shareholders Vote to Approve Scheme at Court Meeting
- MOY GY : Mynaric Files for IPO of American Depositary Shares
- NESN SW : Nestle Boosts FY Organic Revenue Forecast
- NET DC : Netcompany Pullback Creates Opportunity; Morgan Stanley Upgrades
- OHLA SM : OHL Sells Stake in Montreal Hospital Center to BBGI for C$88m
- ORSTED DC : Orsted Sells $1.4 Billion Wind Farm Stake to Nuveen’s Glennmont
- RI FP : Pernod Ricard Is Said to Acquire Stake in Abasolo Mexican Whisky
- RECSI NO : REC Silicon 3Q Ebitda Loss $3.7M Vs. Profit $7.9M Q/q
- REP SM : *REPSOL MULLS IMPROVEMENT OF DIVIDEND PROGRAM, EXPANSION REPORTS
- ROG SW : Roche 3Q Sales Beat Estimates
- SAN FP : Sanofi Hopes to IPO Euroapi in Early 2022: Les Echos
- SRT GY : Sartorius Maintains FY Sales At Constant FX About +45%
- SHBA SS : Danske, S-Bank, Swedbank May Eye Handelsbanken’s Finnish Ops: OP
- 9984 JP : SoftBank Weighs Stake in Ampere, Valuing Chipmaker at $8 Billion
- SO FP : Somfy 3Q Like-for-like Sales -7.5%
- STERV FH : Stora Enso 3Q Operating Ebit Beats Estimates; Keeps Outlook (1)
- TKWY NA : Baupost Group Holds ~5.13% of Just Eat Takeaway’s Voting Rights
- TKWY NA : Just Eat Takeaway Aims for Reset Button as Shares Trail Rivals
- TKA AV : Telekom Austria Boosts FY Revenue Forecast
- TRST PL : Trustpilot Share Sale by Holders Order Book Is Covered: Terms
- UCG IM : Italy’s UniCredit Joins Net-Zero Banking Alliance
- DG FP : Vinci 9M Like-for-like Sales +15.3%
- VPK NA : Vopak to Nominate Insider Dick Richelle as New CEO
- VOW3 GY : VW CEO in ‘Regular’ Talks for Partners to Catch Up in Tech-Race

>>> US Close +0,56% S&P +0.74% Nasdaq +0.71% Russell +0.36%

Closing Stock Market Summary

The S&P 500 (+0.7%) and Nasdaq Composite (+0.7%) both advanced 0.7% on Tuesday and extended their winning streaks to five sessions. Risk sentiment was supported by better-than-expected earnings reports from a diversified group of companies while the market continued to weather supply chain challenges. 

The Dow Jones Industrial Average increased 0.6%, and the Russell 2000 increased 0.4%. 

The earnings lineup included EPS beats from Johnson & Johnson (JNJ 163.87, +3.75, +2.3%), Procter & Gamble (PG 140.66, -1.68, -1.2%), Travelers (TRV 155.39, +2.51, +1.6%), Dover (DOV 167.91, +1.12, +0.7%), and Steel Dynamics (STLD 63.50, +1.08, +1.7%). P&G, however, warned about higher commodity and freight costs this fiscal year. 

P&G's warning pressured shares of the company and fed into the inflation concerns that have been driving oil prices ($83.01/bbl, +0.57, +0.7%) and long-term interest rates higher. The 10-yr yield rose five basis points to 1.64%, while the 2-yr yield fell three basis points to 0.39%. 

Buyers in the stock market, however, looked past inflation/supply chain headwinds and took the earnings news at face value. Ten of the 11 S&P 500 sectors closed higher, led by utilities (+1.3%), health care (+1.3%), and energy (+1.2%) with gains over 1.0%.

The consumer discretionary sector (-0.3%) was the lone holdout amid weakness in the retail stocks, including Ulta Beauty (ULTA 363.35, -43.00, -10.6%), which provided disappointing long-term financial targets. 

Aside from JNJ, other heavyweights like Apple (AAPL 148.76, +2.21, +1.5%), Facebook (FB 339.99, +4.64, +1.4%), and Walmart (WMT 144.69, +3.01, +2.1%) also provided key leadership. Walmart was added the Conviction Buy List at Goldman Sachs. 

Separately, the market overlooked a disappointing housing starts and building permits report September. The report featured a 7.7% m/m decline in building permits to a seasonally adjusted annual rate of 1.555 million units (consensus 1.620 million). 

As highlighted earlier, the Treasury yield curve steepened amid selling interest in longer-dated maturities. Bank stocks, though, underperformed on relative basis despite the potential benefit for net interest margins. The SPDR S&P Bank ETF (KBE 55.60, +0.14, +0.3%) increased just 0.3%. The U.S. Dollar Index fell 0.2% to 93.77. 

Reviewing Tuesday's economic data:

  • Housing starts declined 1.6% month-over-month in September to a seasonally adjusted annual rate of 1.555 million units ( consensus 1.620 million), but were up 7.4% year-over-year. Building permits were down 7.7% month-over-month to a seasonally adjusted annual rate of 1.589 million (consensus 1.670 million) and were flat year-over-year.
    • The key takeaway from the report is that it reflects a slowdown in the pace of new construction, which is a byproduct of supply shortages, labor constraints, and high prices.

Looking ahead, investors will receive the Fed's Beige Book for October and the weekly MBA Mortgage Applications Index on Wednesday. 

  • S&P 500 +20.3% YTD
  • Nasdaq Composite +17.4% YTD
  • Dow Jones Industrial Average +15.9% YTD
  • Russell 2000 +15.2% YTD;"-%

>>> US After Hours Summary: NFLX -1.1% trades modestly lower on earnings; EAT -1

After Hours Summary: NFLX -1.1% trades modestly lower on earnings; EAT -10.1% is sharply lower on weak guidance, taking down other casual restaurant chains

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LRN +5.4%, CNI +4.5% (also CEO to retire; also announces dividend increase), DMS +4% (lowers revenue guidance for Q3 and FY21), UAL +2.1%, WTFC +0.5%

Companies trading higher in after hours in reaction to news: SESN +13.9% (discloses scheduling of CMC Type A Meeting with the FDA for Vicineum BLA), AKRO +5.7% (receives FDA Fast Track designation for steatohepatitis treatment, efruxifermin), RKLB +1.9% (to attempt controlled ocean splashdown and recovery of Electron rocket during Nov launch), CLLS +1.9% (presents initial preclinical data on two gene therapies), ALSN +0.1% (announces partnership with Zhongtong Bus to provide city buses in Armenia), MDT +0.1% (announces clinical data on children with diabetes using the MiniMed 780G system)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ATIP -13.7%, EAT -10.1% (guides SepQ EPS and revs well below consensus), WDFC -8.9%, UCBI -1.6%, NFLX -1.1%, IBKR -0.6%, ISRG -0.5%

Companies trading lower in after hours in reaction to news: BBIG -19.3% (CEO and CFO resign), CAKE -3.1% (weak guidance from peer EAT), TXRH -2.9% (weak guidance from peer EAT), AERI -2.7% (interim CFO departs), BLMN -2.2% (weak guidance from peer EAT), BJRI -1.9% (weak guidance from peer EAT), DRI -1.7% (weak guidance from peer EAT), EXPR -1.4% (CFO to leave company), PLAY -1.2% (weak guidance from peer EAT), RRGB -0.8% (weak guidance from peer EAT), ROKU -0.4% (in sympathy with NFLX), PENN -0.3% (stock offering), CMP -0.1% (announces successful conversion testing of sustainable lithium brine resource to battery-grade lithium hydroxide), DIN -0.1% (weak guidance from peer EAT), CNM -0.1% (to acquire Catalone Pipe & Supply)

(ZH) LME Takes Action To Counter Copper Market Mayhem

LME Takes Action To Counter Copper Market Mayhem

Update (1400ET): The London Metals Exchange said it would unleash its tools and it just did "in order to ensure market orderliness" in copper trading.
Steps include:
  • Amending certain requirements within the lending rules
  • Imposing a limit on the backwardation for tom-next contracts
  • Introducing a deferred delivery mechanism for certain contracts
While the Spot-3m spread remains at unprecedented levels, the tom/next spread (backwardation) is just as impressively decoupled... so maybe this limit will help discourage the carry trade...
These changes are intended to be temporary and will be reviewed as appropriate by the special committee
“This is an extreme situation,” Oliver Nugent, metals analyst at Citigroup Inc., said by phone from London.
“Across metal markets, one of the big themes has been consumers wanting to build up their working inventories, and that’s escalated a lot of the tightness.”
* * *
Update (1130ET): It appears the culprit for the chaos in the copper markets has been identified.
Bloomberg reports, citing 'people familiar with the matter' that Trafigura Group was behind a significant proportion of the orders to withdraw copper from London Metal Exchange warehouses.
It’s not unusual for physical traders to withdraw metal from the exchange to ship to their customers, and Trafigura isn’t the only trading house to have taken metal off the exchange in recent months, the people said. And the move comes against a backdrop of very low inventories globally.
Still, total requests to withdraw more than 150,000 tons of copper from LME warehouses in the past two months have all but drained the available stocks on the exchange, and Trafigura represents a significant proportion of those, the people said.
This is not that much of a surprise since during the pandemic, Trafigura emerged as one of the most high-profile bulls in the global copper market, with head trader Kostas Bintas predicting that prices will hit $15,000 in the coming years as the industry witnesses a new supercycle underpinned by booming demand in electric vehicles and renewable energy.
Additionally, Trafigura traded 4.4 million tons of copper last year, one million tons more than its largest rival, Glencore.
* * *
The chaotic moves in various energy markets around the world have spread to the metals markets with copper inventories available on the LME plunging to the lowest on record (since 1974), in a dramatic escalation of a squeeze on global supplies that sent spreads spiking and helped drive prices back above $10,000 a ton.
Copper tracked by LME warehouses that’s not already earmarked for withdrawal has plunged 89% this month after a surge in orders for metal from warehouses in Europe.
Source: Bloomberg
As Bloomberg reports, the last time that type of dynamic developed was during a historic squeeze in 2006, when a buying spree early on in China’s industrial boom drained LME on-warrant inventories to a near-record low. LME inventories are now at even lower levels than was the case then, while Chinese inventories also dropped Friday.
“If more metal doesn’t make it into the exchange, then it really is in a difficult position,” Michael Widmer, head of metals research at Bank of America, said by phone.
“Right now the LME is running a physical contract that effectively is not really backed by physical metal.”
And that 'difficult position' just showed up in a huge way in the copper spread as spot/cash contracts on the LME traded at more than a $1,000 premium to those maturing in three months, the widest spread since at least 1994, surging higher in recent days as freely available stock on the London bourse dwindled...
Source: Bloomberg
“The LME notes recent price activity in the copper market. We will continue to closely monitor the situation, and have further options available to ensure continued market orderliness if these are required,” the exchange said in an emailed statement to Bloomberg.
Is another oil-esque delivery debacle here?