>>> Europe : Brokers Upgrades & Downgrades - 28th of September 2021

>>> Up
* Bouygues Raised to Buy at Jefferies; PT 40 euros
* British Land Raised to Neutral at Citi; PT 526 pence
* Electrocomponents Raised to Outperform at RBC; PT 1,350 pence
* Flutter Raised to Buy at HSBC; PT 17,400 pence
* H&M Raised to Buy at Handelsbanken; PT 220 kronor
* Land Sec. Raised to Neutral at Citi
* Lenzing Raised to Accumulate at Erste Group; PT 118.50 euros
* Nokia Raised to Buy at LBBW; PT 5.75 euros
* Peab Raised to Buy at SEB Equities; PT 110 kronor
* SES GDRs Raised to Buy at Berenberg; PT 10 euros
* SpareBank 1 Helgeland Raised to Buy at DNB Markets

>>> Down
* Beiersdorf Cut to Underperform at Bernstein; PT 90 euros
* Eutelsat Cut to Hold at Berenberg; PT 12 euros
* Logitech Cut to Underweight at Morgan Stanley; PT $82
* Sage Cut to Sell at Goldman; PT 700 pence
* Siemens Gamesa Cut to Neutral at Citi; PT 26.50 euros

>>> Initiation
* Boozt Rated New Sell at Handelsbanken; PT 140 kronor
* Clipper Logistics Rated New Hold at Peel Hunt; PT 865 pence
* Entain Rated New Hold at Investec; PT 2,400 pence
* Leroy Rated New Underweight at Barclays; PT 70 kroner
* Mowi Rated New Overweight at Barclays; PT 298 kroner
* Playtech Reinstated Hold at Investec; PT 460 pence
* Rvrc Holding Rated New Hold at Handelsbanken; PT 80 kronor
* UPS Rated New Outperform at Evercore ISI

>>> Call
* Beiersdorf Margin Expectations Too High, Bernstein Downgrades
* British Land, Land Securities Raised on Office Resilience: Citi
* Citi Rejigs Wind Stock Ratings; Upgrades Nordex, Cuts Gamesa
* SES’s C-Band Exposure Makes it Preferable to Eutelsat: Berenberg

>>> What to look at today - 28th of September 2021

Asia stocks were mixed on Tuesday as Treasury yields climbed with investors pricing in the start of Federal Reserve tapering and elevated energy prices stoking inflation concerns.  
MSCI Inc.’s index of Asia Pacific stocks snapped a three-day advance. Japan and Australia slid. China and Hong Kong advanced, led by property stocks, after China’s central bank said it will work to safeguard the “healthy” development of the property market amid the China Evergrande Group crisis. U.S. futures fluctuated after the tech-heavy Nasdaq 100 dropped.
The benchmark 10-year U.S. yield topped 1.5%, the highest level since June, and the two-year yield hit an 18-month high as traders increasingly priced in the prospect of the Fed trimming its $120 billion in monthly asset purchases soon. The dollar edged higher.
Oil built on a rally as fears of a global energy crunch intensified. Brent hit $80 a barrel for the first time since October 2018. WTI crude climbed above $76 a barrel. Goldman Sachs Group Inc. said Brent could hit $90 by year-end as the market is in a bigger deficit than many realize.
US After Hours EDR jumps +14.5% on deal to buy OpenBet; CNXC +4.7% higher on earnings/buyback; GFF +5.8% higher on alternative review for subsidiary

Nikkei -0,38% Hang Seng +1,40% CSI +0,16% Shanghai +0,46% Shenzen -0,09%

Eur$ 1;1699 CNH 6,4569 CNY 6,4550 JPY 111,19 GBP 1,3710 CHF 0,9265 RUB 72,4366 TRY 8,8230 WTI$ 76,07 Gold 1,751 BTC 42,525 -190 ETH 2,947 -8

S&P +0,03% Nasdaq -0,14% EuroStoxx +0,07% FTSE +0,05% Dax +0,08% SMI

Macro :
- The Uranium Market is Being Roiled by Meme Traders
- Natural Gas Soars Most Since Last Winter on U.S. Scarcity Fears
- Unregulated Crypto Markets Will ‘Not End Well,’ SEC Chair Says

Keep an eye on :
- YOU GY : About You Boosts FY Revenue Forecast
- AIR FP : Air Travel to Reach Pre-Covid Levels by 2023, Airbus China CEO
- AIR FP : Airbus to Start Hiring Thousands of Staff From 2022: Les Echos
- ASM NA : ASMI Boosts 3Q Orders Forecast
- Chronext IPO : Chronext Sets IPO Price Range at CHF16 to CHF21 Per Share
- G IM : Generali Said to Back Plan to Go Ahead With Its Board List
- HLAG GY : Hapag-Lloyd Buys Stakes in Jadeweserport Wilhelmshaven Terminals
- IMPN SW : Implenia, Deutsche Seereederei Form Sustainable Real Estate JV
- IPS FP : Ipsos Names Ben Page as CEO; Roos No Longer to Be Appointed
- JUVE IM : UEFA Says Proceedings Against Super League Backers Are Dropped
- LAND SW : Landis+Gyr to Buy Luna for ‘High Double-Digit’ Million USD
- LOGN SW : Logitech Falls After Morgan Stanley Cuts Rating to Underweight
- LOTB BB : Lotus Bakeries Share Sale Book Covered on Full Deal Size: Terms
- LHA GY : Lufthansa Prepared for Travel Ramp-Up in December, Becker Says
- NOVN SW : Novartis Sues Crystal, Adding Patents to Their Entresto Dispute
- Octopus Energy : Al Gore’s Generation Takes $600 Million Stake in Octopus Energy
- OPTI SS : OptiCept Technologies Offers Up to 1.5m Shares, OptiCept Technologies Offering Prices at SEK55.5/Share
- PRSM LN : Vista Said Near $1.5 Billion Deal for Software Firm Blue Prism
- ORANO : French Government Buys EU563m Stake in Nuclear Group Orano
- QDT FP : Quadient Sees FY Adjusted Ebit Above +6%, Saw +5% to +6%
- LIT IM : Marbles Says Reached 66.67% Threshold in Retelit Offer
- SAF FP : Safran Names Pascal Bantegnie as New CFO From January, 2022
- SLT GY : Carlyle Secures 79.8% of Schaltbau Shares
- GLE FP : SocGen Interested in Buying ING’s French Retail Clientele: Echos
- TEVA IT : Pfizer Sues Five Generic-Drug Makers to Block Copies of Eucrisa
- VLA FP : Valneva, Pfizer: Positive Addl Phase 2 Results for Lyme Vaccine
- WKL NA : Wolters Kluwer to Sell U.S. Legal Education Business for $88m

>>> US Close Dow +0,21% S&P -0,28% Nasdaq -0,52% Russell +1,46%

Closing Stock Market Summary

The S&P 500 decreased 0.3% on Monday in a session that featured positive momentum in long-term interest rates and energy prices, as well as influential weakness in the growth stocks.

The Nasdaq Composite, having more exposure to growth stocks, declined 0.5%, although it was down as much as 1.2% in early action. The Dow Jones Industrial Average gained 0.2% while the Russell 2000 outperformed with a 1.5% gain.

Prior to the open, the 10-yr yield hit 1.51% after it flirted with 1.30% last week. This speedy ascent was attributed to the early weakness in the growth stocks, and in effect the Nasdaq, due to their high valuations. The 10-yr yield quickly leveled off, though, and settled at 1.48%, or two basis points above Friday's settlement. 

Growth stocks came off their lows as yields leveled off, and some buyers stepped into the market as the S&P 500 found support at its 50-day moving average (4442), which it managed to close above. The S&P 500 information technology sector still declined 1.0%, though. 

The health care (-1.4%), real estate (-1.7%), and utilities (-1.2%) sectors underperformed with losses over 1.0%. On the upside, the cyclical energy (+3.4%), financials (+1.3%), materials (+0.8%), consumer discretionary (+0.4%), and industrials (+0.1%) sectors closed higher.

Bank stocks benefited from the higher interest-rate environment while energy stocks rallied with the upwards momentum in WTI crude futures ($75.39/bbl, +1.39, +1.9%) and natural gas futures ($5.71/MMBtu, +0.51, +9.8%). The SPDR S&P Bank ETF (KBE 53.65, +1.81, +3.5%) rose 3.5%. 

Energy prices were supported by reports of fuel shortages in the UK and an energy crunch in China amid supply constraints and rising demand. On a related note, some technology suppliers in China were forced to halt production this week in order to comply with a policy from Beijing aimed at preserving energy. 

Separately, Boston Fed President Rosengren announced he will retire this Thursday, up from June 2022, due to health issues. CNBC reported right after the close that Dallas Fed President Kaplan announced he will now retire Oct. 8, citing the distractions his trading disclosures have created for the Fed. Mr. Rosengren was supposed to be an FOMC voter in 2022 while Mr. Kaplan had a vote in 2023. 

The 2-yr yield increased one basis point to 0.28%. The U.S. Dollar Index increased 0.1% to 93.40. 

Reviewing Monday's economic data:

  • The August Durable Goods Orders report was mixed. Total durable goods orders up 1.8% (consensus +0.6%) following an upwardly revised 0.5% increase (from -0.1%) in July. Excluding transportation, orders were up 0.2% (consensus +0.6%) after an upwardly revised 0.8% increase (from 0.7%) in July. On a year-over-year basis, durable goods orders were up 24.7%, while orders, excluding transportation, were up 17.7%.
    • The key takeaway from the report is that business spending remained on a positive track, evidenced by the 0.5% increase in nondefense capital goods orders excluding aircraft.

Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for September; Advanced Intl Trade in Goods, Retail Inventories, and Wholesale Inventories for August; the FHFA Housing Price Index for July; and the S&P Case-Shiller Home Price Index for July on Tuesday. 

  • S&P 500 +18.3% YTD
  • Nasdaq Composite +16.2% YTD
  • Russell 2000 +15.5% YTD
  • Dow Jones Industrial Average +13.9% YTD

>>> US After Hours Summary: EDR jumps +14.5% on deal to buy OpenBet; CNXC +4.7%

After Hours Summary: EDR jumps +14.5% on deal to buy OpenBet; CNXC +4.7% higher on earnings/buyback; GFF +5.8% higher on alternative review for subsidiary

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CNXC +4.7% (also authorizes up to $500 mln for share repurchases)

Companies trading higher in after hours in reaction to news: FEIM +23.8% (wins contract from Office of Naval Research worth up to $17.75 mln), EDR +14.5% (SGMS to sell OpenBet to EDR for $1.2 bln in cash and stock), GFF +5.8% (authorizes strategic alternative review for its subsidiary Telephonics), MMX +4.7% (reaches agreement with Auramet Capital to acquire a gold stream and enters into long-term partnership), SGMS +4.3% (SGMS to sell OpenBet to EDR for $1.2 bln in cash and stock), ALT +3.9% (to announce ALT-801 Phase 1 Trial data on Sept 28), HUN +3.8% (Starboard Value fund has 8+% stake, according to WSJ), SPNE +2.9% (receives CE Mark certification for its Cranial Module and Percutaneous Spine Module), GMED +1.5% (announces performance of first surgery with ExcelsiusGPS Cranial Solutions), PING +1.2% (acquires Singular Key), NTUS +0.8% (wins 5-yr govt contract), CVE +0.6% (files for $5 bln mixed securities shelf offering), GILD +0.2% (Trodelvy approved by Health Canada), EGO +0.2% (identifies new mineralized lenses at Ormaque), PFE +0.1% (begins mRNA-based flu vaccine program after first participants dosed in a Phase 1 trial), AL +0.1% (delivers new Boeing 737-9 aircraft to Alaska Airlines)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ACB -0.1%

Companies trading lower in after hours in reaction to news: ZIOP -13.2% (will conduct strategic restructuring to extend TCR program cash runway into 1H23), BKD -7.1% (announces $200 mln convertible note offering). PRTK -0.4% (receives additional funding under BARDA contract to advance development of NUZYRA), SHLX -0.2% (provides update on financial impact of Hurricane Ida), NOVA -0.1% (announces partnership with AutoGrid), ETD -0.1% (to expand manufacturing production in Vermont; announces wage increases), BA -0.1% (awarded $3.5 bln Air Force contract and $760 mln Navy contract), TSLA -0.1% (State AG's from 21 states urge Biden Admin to finalize stricter vehicle emissions rules, according to Reuters)

FT : Electric car maker Polestar to go public via $20bn Spac deal

Electric car maker Polestar to go public via $20bn Spac deal
Swedish start-up set to be one of most valuable EV groups to list through blank-cheque company

Polestar, a premium Swedish electric vehicle company spun off from Volvo Cars and backed by actor Leonardo DiCaprio, has agreed to go public through a special purpose acquisition company at a $20bn valuation.

The Gothenburg-based company will combine with Gores Guggenheim, a Spac backed by billionaire private equity investor Alec Gores and Guggenheim Capital. The deal would rank Polestar, which was founded four years ago by Volvo Cars and its Chinese owner Geely, as one of the most valuable electric vehicle companies to list through a Spac. 

Polestar will receive $800m raised by Gores Guggenheim earlier this year as well as $250m of cash from a private investment in public equity transaction, a fundraising that often accompanies Spac deals. The transaction values Polestar at three times its projected revenues for 2023. 

Electric vehicle start-ups have been among the biggest winners from the boom in blank-cheque companies, as they seek to capitalise on demand for greener transportation and the popularity of Elon Musk’s Tesla. 

However, several high-profile listings — such as that of electric truckmaker Nikola — have fallen short of expectations, with companies failing to meet rosy projections set out in presentations to investors. The industry has also drawn attention from US regulators. 

Mark Stone, senior managing director of Gores Group, said Polestar was different from other electric vehicle companies that had listed through Spacs because it was already selling vehicles in several countries.

“All the other electric vehicles players are PowerPoints, they’re presentations, they’re visions, and they require massive capital,” he said. “[Polestar] have everything they need to come to market. They’re actually in the market.” 

Polestar sold its first vehicle in 2019 and has projected $1.6bn in revenue for 2021. That figure is expected to double next year as it increases production on its flagship vehicle, Polestar 2, and launches its SUV model Polestar 3. 

“We have a very intense period of growth in front of us with three cars in three years coming out,” chief executive Thomas Ingenlath told the Financial Times.

Polestar now had the funds to expand from the 14 markets it is in at present to 30, and there was no need for further fundraising in the near future, he added. The company would focus especially on the Asia-Pacific region, said Ingenlath.

Polestar, which raised $550m from Chinese investors in April, makes its flagship car in Chengdu, China. The company plans to use a factory in South Carolina to make some of its vehicles as it faces stiff tariffs when exporting to the US.

Gores, who is among the most prolific Spac sponsors in the market, has helped take companies such as United Wholesale Mortgages and Twinkie maker Hostess Brands public. He has also previously ventured into the electric vehicle space, last year agreeing a deal with Luminar Technologies that valued it at $3.4bn. Shares in the company shot up 300 per cent following its listing but have since lost much of those gains. 

The Spac market has soured significantly since the heady days of the boom in the first quarter of the year. Investor redemptions have substantially increased in the third quarter and the stock price bump typically seen when deals are announced has largely faded away. 

FT : Spac redemptions: the money is illusory until shareholders decline refunds

Spac redemptions: the money is illusory until shareholders decline refunds
Some investors are exercising their right to get their money back

“Assumes no redemptions” may be the diciest phrase on Wall Street. The Spac boom that raged in early 2021 is in sharp retreat. Many so-called blank-cheque mergers are under water. Litigation and a regulatory crackdown are under way. Some investors are exercising their right to get their money back.

More than half of Spac shares have been redeemed during the third quarter so far. That compares with just a tenth in the first three months of the year, according to data provider Dealogic.

For all the hype and occasional masterstrokes, Spac mergers are a high-wire act. The company that is going public does not know exactly how much money it is raising until the last moment. In contrast, the financial analysis presented in deal marketing documents assumes there will be no leakage. Mass redemptions are not merely an embarrassment, Spac companies are often in their early stages and need the proceeds to survive.

In May, the Spac Locust Walk Acquisition Corp announced that it would merge with cancer biotech eFFECTOR, valuing the target at $419m. The company did not have a product on the market yet. The $175m raised by Locust Walk, which owes its odd name to a University of Pennsylvania thoroughfare, was important to the business. But even as the deal prepares to close, investors have redeemed 17m shares — $170m of the $175m eFFECTOR had originally expected.

While the company still managed to raise $60m in cash from institutional investors in a so-called Pipe transaction, the echoing Spac pot is likely to force the company to scrounge for new money more quickly than it had expected.

The blank-cheque merger method was supposed to be a quick and efficient way for businesses to reach public company status. Rule changes around Spacs in recent years have made it easier for deals to win shareholder approval. The sting in the tail for companies is that little financial commitment is required from investors. It is a point bankers should make to their corporate clients as enthusiasm ebbs away.

WSJ : TikTok Tops 1 Billion Monthly Users

TikTok Tops 1 Billion Monthly Users
Video-sharing app has said it plans to let users create longer-form videos

More than 1 billion people use TikTok every month, according to a statement posted on the video-sharing app’s website Monday.

The social-media platform known for the short videos its users make and share is owned by Beijing-based ByteDance Ltd. Content ranges from pranks to people doing dances that sometimes go viral.

“TikTok has become a beloved part of life for people around the world because of the creativity and authenticity of our creators,” the company’s statement said.

TikTok said this summer that it plans to allow users to create longer videos, part of an effort to help its top users make more money.

The social-media platform’s algorithms can drive minors—among its biggest users—to sexual and drug-related content, an analysis by The Wall Street Journal found.