>>> Europe : Brokers Upgrades & Downgrades - 2nd of Ocotber 2020

>>> Up
* Bureau Veritas Raised to Buy at Goldman; PT 29 euros
* Deutsche Bank Raised to Hold at SocGen
* Endesa Raised to Buy at Citi; PT 25.80 euros
* Erste Raised to Outperform at KBW; PT 27.40 euros
* Getlink SE Raised to Buy at HSBC; PT 14.20 euros
* H&M PT Raised to 205 kronor from 190 kronor at Citi
* Iliad Raised to Buy at MainFirst; PT 195 euros
* IMI Raised to Overweight at Morgan Stanley; PT 1,260 pence
* Intertek Raised to Neutral at Goldman; PT 6,630 pence
* Krones Raised to Buy at HSBC; PT 67 euros
* RBI Raised to Market Perform at KBW; PT 17.60 euros
* Scor Raised to Outperform at KBW; PT 29 euros
* Sydbank AS Raised to Buy at ABG; PT 120 kroner

>>> Down
* Bayer Cut to Add at AlphaValue
* Burckhardt Cut to Add at Baader Helvea; PT 270 Swiss francs
* FLSmidth Cut to Equal-Weight at Morgan Stanley; PT 207 kroner
* Lonza Cut to Neutral at JPMorgan; PT 600 Swiss francs
* Melrose Industries Cut to Sell at Panmure Gordon; PT 95 pence
* Rolls-Royce Cut to Hold at MainFirst; PT 120 pence
* Sanlorenzo/Ameglia Cut to Add at Intesa Sanpaolo; PT 18 euros
* William Hill Cut to Hold at Berenberg; PT 272 pence

>>> Initiation
* Chi-Med ADRs Reinstated Buy at Deutsche Bank; PT $40
* TechnipFMC Rated New Market Perform at BMO; PT $7.50

>>> Call
* ‘Hidden Gems’ to Be Found Among U.K. AIM Stocks: Berenberg
* IMI Margin Recovery, Returns Not Priced in: Morgan Stanley

>>> What to look at today - 2nd of October 2020

U.S. and European equity futures fell with Asian stocks and the dollar climbed after President Donald Trump said he had tested positive for the coronavirus.
Trump said that both he and the First Lady Melania Trump tested positive and that they will now quarantine themselves. They were tested after Hope Hicks, one of his closest aides, returned a positive result for Covid-19. The yen and Treasuries, often seen as havens in times of market stress, rose. Nasdaq futures were 2% lower and crude oil extended losses.
US After Hours TWLO +9.2% and NUS +7.2% jump on bullish guidance; SGH -4.8% falls on earnings

Nikkei -0.84%% Hang Seng Close CSI Close Shanghai Close% Shenzen close

Eur$ 1.1730 CNH 6.7636 CNY 6.7910 JPY 105.04 GBP 1.2879 CHF 0.9186 RUB 77.8036 WTI$ 37.69 -2.71%

S&P -1.60% Nasdaq -1.92% EuroStoxx -0.91%% FTSE -1.25%% Dax -0.84%% SMI

Macro :
- Bafin Forbids Staff to Trade Shares of Cos. It Oversees: Reuters
- Londoners Told to Act to Stop Covid With City at ‘Tipping Point’

SPACS :
- SPAC Backed by Billionaire Ergen Seeks to Raise $1 Billion
- Richard Branson’s Blank-Check Firm Is Said to Raise $480 Million
- CF Finance Acquisition Corp. Announces Record Date for Special Meeting to Approve Proposed Business Combination with GCM Grosve

Keep an eye on :
- AF FP : KLM Says Talks With Pilot Union on State Aid Pact Ongoing: ANP
- ATL IM : Italy Says Dual-Track Autostrade Sale Goes Against Deal: Ansa
- ATL IM : ASTM May Have Expressed Interest in Autostrade Stake: Sole
- BAKKA NO : Bakkafrost 3Q Faroe Islands Harvest Volume 11.1k Tons
- ENGI FP : Engie to Choose New CEO Friday: Figaro
- EQNR NO : Equinor to Slash Hundreds of Exploration Jobs, E24 Reports
- FME GY : Davita Falls; JPMorgan Says Humana Excluded It From In Network
- G1a GY : GBL Launches EU450m Bonds Offering Exchangeable into GEA Shares
- GFC FP : Gecina, Nexity to Develop 4,000 New Housing Units Over 4 Years
- GLJ GY : Grenke Nine Month Leasing New Business Volume Falls 23.5%
- KORI FP ; Korian in Talks With Antin to Buy Inicea for About EU360 Million
- KORI FP : Korian Names Durpieu Chairman as Chautard Steps Down
- MMB FP : *Vivendi Owns 26.7% of Lagardere's Share Capital, 20.2% of voting rights
- NXI FP : Gecina, Nexity to Develop 4,000 New Housing Units Over 4 Years
- NKLA US : GM Said to Consider Boosting Stake in Nikola in Reworked Deal
- RR/ LN : Financial Times: Goldman and Morgan Stanley scaled back underwriting on Rolls-Royce cash call https://t.co/KqRpCXiILZ
- RYA ID : Ryanair Threatens Irish Base Closures Over Covid Travel Policy
- SAN FP : Sanofi Says EMA Accepts Application for Pompe Disease Therapy
- SFL IM : Safilo Sees 3Q Sales Growth Mid-Single Digit at Constant FX
- SEV FP : Suez Ready to Talk With Veolia, Sees ‘Real Flaws’ in Plan: AFP
- TSLA US : Tesla Has Clear Path for First German Plant, State Premier Says
- TKA GY : Thyssenkrupp Is Said to Pick Banks for Next Round of Divestments
- TUI LN : TUI AG Considering Capital Increase Lower Than EU1B to EU1.5B
- UCB BB : UCB to Propose Merck KGaA’s Stefan Oschmann as Chairman
- DG FP : Vinci Acquires Transelec Common Inc. in Canada
- VIV FP : *Vivendi Owns 26.7% of Lagardere's Share Capital, 20.2% of voting rights
- VOW3 GY : Volkswagen of America Third-Quarter Total Sales Fall 7.6%
- VOw3 GY : BlackRock attacks Volkswagen’s post-Dieselgate governance https://t.co/NIecY6etJz
- WMH LN : Betting Family to Pocket $220 Million From William Hill Trade

>>> US After Hours Summary: TWLO +9.2% and NUS +7.2% jump on bullish guidance; SGH -4.8% falls on earnings


After Hours Summary: TWLO +9.2% and NUS +7.2% jump on bullish guidance; SGH -4.8% falls on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: TWLO +9.2% (guides Q3 revs above consensus), NUS +7.2% (guides Q3 revenue well above consensus),

Companies trading higher in after hours in reaction to news: NNOX +27.1% (to demonstrate Nanox.ARC system live at RSNA 2020), CFFN +9.9% (to join S&P SmallCap 600), NBEV +8.7% (amends merger agreement with ARIIX), AGO +8.5% (to join S&P SmallCap 600), CWST +4.4% (acquires Pinto Trucking Services), MTCR +4.2% (to present new data from MET409 program), MRO +2.4% (reinstates base quarterly dividend and provides update on debt reduction initiatives), MTSC +1.2% (awarded two contracts), AMC +1% (announces 23 additional theatre reopenings in NC), ITCI +1% (names new Chief Medical Officer), PBR +1% (Brazil's Supreme Ct vote to allow sale of eight refineries, according to Reuters), ENDP +0.6% (begins shipping generic version of Kuvan tablets and powder), LEN +0.5% (increases dividend), GOOG +0.5% (highlights new ways to use Live View), EBAY +0.4% (to start reporting its Classifieds segment as discontinued ops), SHLL +0.3% (completes previously announced combination with Hyliion), IPHI +0.3% (to transfer from NYSE to Nasdaq on Oct 14), RCUS +0.1% (new COO), ATVI +0.1% (delays release of World of Warcraft: Shadowlands), FDX +0.1% (among recipients of US Transportation Command contracts),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SGH -4.8%,

Companies trading lower in after hours in reaction to news: SSD -2.9% (to join S&P MidCap 400), BE -2.8% (attributed to block trade pricing), NEOG -2.4% (to join S&P MidCap 400), POOL -1% (to join S&P 500), NVAX -0.5% (CEO sold approx 12,200 shares this week), AMZN -0.2% (discloses that 19,816 employees have tested positive since pandemic began), BA -0.2% (awarded $300 mln Air Force contract), COR -0.1% (files mixed securities shelf offering), H -0.1% (S&P 'BBB-' rating affirmed, removed from CreditWatch; outlook negative),

>>> US Close Dow +0.13% S&P +0.53% Nasdaq +1.42% Russell +1.56%

Closing Stock Market Summary

The S&P 500 gained 0.5% on Thursday, as strength in technology stocks outweighed losses in cyclical stocks amid stimulus bill uncertainty. The tech-sensitive Nasdaq Composite rose 1.4%, and the small-cap Russell 2000 rose 1.6%. The Dow Jones Industrial Average increased just 0.1%. 

The session highs for the S&P 500 (+1.0%) came shortly after the open on reports that suggested Treasury Secretary Mnuchin and House Speaker Pelosi were narrowing their stimulus disagreements. Follow-up reports, however, indicated that distance remains between both sides. The benchmark index wavered with smaller gains for the rest of the day. 

Technology stocks weren't hit by the stimulus headlines, as investors presumably bid up shares to find growth in case there is no stimulus or to benefit from growth if there is stimulus. Many of these stocks were found in the consumer discretionary (+1.5%), communication services (+1.4%), and information technology (+1.0%) sectors.

Amazon (AMZN 3221.26, +72.53, +2.3%) outperformed, aided by Pivotal Research Group raising its AMZN price target to a Street-high $4500. The Philadelphia Semiconductor Index (+2.1%) got an added boost from STMicroelectronics (STM 33.21, +2.52, +8.2%) after it issued upside revenue guidance.

The stimulus uncertainty, however, negatively affected the cyclical stocks on worries that extended time without fiscal relief could slow down a recovery. The energy sector dropped 3.1% amid reeling oil prices ($38.71/bbl, -1.50, -3.7%), followed by materials (-1.4%) and industrials (-0.3%). The health care sector (-0.5%) also closed lower. 

In addition, today's economic data didn't instill confidence in these sectors. Weekly jobless claims remained elevated at 837,000 (consensus 850,000), personal income declined 2.7% m/m in August (consensus -2.0%), and the ISM Manufacturing Index for September decelerated to 55.4% (consensus 56.0%) from 56.0% in August.

For what it's worth, the S&P 500 found support at its ascending 50-day moving average (3359) after it briefly dipped into negative territory. It closed above the technical level for the second straight day. 

U.S. Treasuries finished little changed, with longer-dated maturities reclaiming their early losses. The 2-yr yield was flat at 0.13%, and the 10-yr yield was flat at 0.68%. The U.S. Dollar Index declined 0.2% to 93.70. 

Reviewing Thursday's economic data, which included several key reports on unemployment, manufacturing, and inflation: 

  • The ISM Manufacturing Index for September checked in at 55.4% (consensus 56.0%) versus 56.0% in August.
    • The key takeaway from the report is that it underscores the view that the manufacturing sector continues to recover after its sharp downturn in the April-May period when the index was running at 41.5% and 43.1%, respectively.
  • Initial claims for the week ending September 26 declined by 36,000 to 837,000 ( consensus 850,000) while continuing claims for the week ending September 19 decreased by 980,000 to 11.767 million.
    • The key takeaway from the report remains the same: initial claims continue to run at excessively high levels that speak to the ongoing challenges businesses face getting back to pre-pandemic levels.
  • Personal income declined 2.7% m/m in August (consensus -2.0%) following an upwardly revised 0.5% increase (from 0.4%) in July. Personal spending increased 1.0% ( consensus 0.6%) following a downwardly revised 1.5% increase (from 1.9%) in July. The PCE Price Index and Core PCE Price Index were both up 0.3% m/m, as expected. That left the year-over-year increases for the Fed's preferred inflation gauge at 1.4% and 1.6%, respectively.
    • The expiration of enhanced unemployment benefits helps explain the big drop in personal income, yet the key takeaway from the report is that consumers appear to be spending more out of savings now, evidenced by the increase in spending and the concurrent drop in the personal savings rate (to 14.1% from 17.7%).
  • Total construction spending increased 1.4% m/m in August (consensus +0.8%) on the heels of an upwardly revised 0.7% increase (from +0.1%) in July. The key takeaway from the report is that total construction spending, despite the economic challenges posed by the coronavirus, was up 2.5% year-over-year.

Looking ahead to Friday, investors will receive the Employment Situation Report for September, the revised University of Michigan Index of Consumer Sentiment for September, Factory Orders for August, and auto and truck sales for September.

  • Nasdaq Composite +26.2% YTD
  • S&P 500 +4.6% YTD
  • Dow Jones Industrial Average -2.5% YTD
  • Russell 2000 -8.2% YTD