Asian stocks dropped with U.S. and European futures Thursday after Federal Reserve Chair Jerome Powell highlighted uncertainty about the economic rebound. The dollar advanced against major peers.
Shares in Japan, Hong Kong and South Korea dipped, with stocks in the region on course to end a five-day run of gains. S&P 500 futures slipped about 1%. The U.S. benchmark erased gains on Wednesday to end the session lower after Powell said policy will remain accommodative while cautioning that the pace of economic activity will likely slow. A tumble in tech giants such as Apple Inc. and Facebook Inc. weighed on the index. The offshore yuan retreated.
The Treasury yield curve steepened slightly as Powell stopped short of offering new specifics on the Fed’s approach to the monthly bond purchases that have buttressed markets. Some traders may have been expecting signals regarding plans to target longer maturities.
US After Hours MLHR +16.1% up big on earnings, pulling up other office furniture names as well: KNL +16.2%, SCS +6.6%; EQC +7.8% jumps on special dividend; MRNA +2.1% announces two deals
Nikkei -0.64% Hang Seng -1.61% CSI -1.12% Shanghai -0.99% Shenzen -0.81%
Eur$1.1751 CNH 6.7783 CNY 6.7776 JPY 105.08 GBP 1.2912 CHF 0.9132 RUB 75.0745 WTI$39.70 1.15%
S&P -1.15% Nasdaq -1.35% EuroStoxx -0.96% FTSE -0.61% Dax -0.91% SMI
Macro :
- FOMC Sees Longer-Run Median Fed Funds Rate at 2.5%
- Stimulus Deal Likely to Be Over $1 Trillion, Sen. Blunt Says
Keep a eye on :
- ADP FP : Aeroports De Paris Aug. Passenger Traffic -68.8%
- ALO FP : Bombardier Lowers Sale Price of Planned Rail Unit (Correct)
- CEC GY : CECONOMY’s Duttmann Reappointed as CEO for Another 12 Months
- CTY1S FH : ‘Last Mile’ Dilemma May Have Been Solved by a CEO in the Nordics
- DHER GY : Delivery Hero Gets Full Feet on Glovo's Fast-Growth LatAm: React
- DBK GY : Deutsche Bank NYC-Area Employees Can Stay Home Until Mid-2021
- GFS LN : Telegraph: GFS LN (cites speculation another bid could emerge)
- MC FP : LVMH Opposes Fast-Tracking Tiffany’s Suit Over Busted Deal
- NTGY SM : Naturgy Is Said to Consider Sale of Liquefied Natural Gas Unit
- NESTE FH : Neste to Select Next Renewable Investment Location in Early 2021
- NKLA US : Nikola Investor Sues After Short-Seller Allegations Sink Shares
- RR/ LN : Rolls-Royce Says Continues to Review A Range of Funding Options
- SIX2 GY : Volkswagen Plans ~15% Stake in Sixt, Manager Magazin Reports (1)
- SNOW US : Snowflake’s CEO on Having Year’s Biggest IPO: ‘So Far, So Good’
- SRCG SW : Sunrise: Zurich Court Rejects Salt’s Application for Injunction
-SWECB SS / Sweco Proposes SEK3.10/Share Extraordinary Dividend, Share Split
- TKO FP : Tikehau 1H Loss EU241M As Coronavirus Hits Investment Division
- TIF US : LVMH Opposes Fast-Tracking Tiffany’s Suit Over Busted Deal
- URW NA : Unibail-Rodamco Plans Capital Raise of EU3.5 Billion (1)
- VK FP : Vallourec Extends Consent Solicitation Until Sept. 21
- VIV FP : Music Publisher Kobalt Is Said to Explore a Potential Sale
- VOW3 GY : Volkswagen Plans ~15% Stake in Sixt, Manager Magazin Reports (1)
>>> Up
* Bankia Raised to Buy at HSBC; PT 1.65 euros
* CaixaBank Raised to Buy at HSBC; PT 2.43 euros
* Electrocomponents PT Raised to 900 pence at Jefferies
* Evraz Raised to Hold at BCS; PT 410 pence
* Fraport Raised to Buy at Berenberg; PT 50 euros
* MMK Group GDRs Raised to Buy at BCS; PT $9.80
* NLMK Group GDRs Raised to Buy at BCS; PT $28
* Ocado PT Raised to 850 pence from 700 pence at Jefferies
* Segro Raised to Buy at HSBC; PT 1,102 pence
* Severstal GDRs Raised to Buy at BCS; PT $18
* X5 Retail GDRs Raised to Overweight at JPMorgan; PT $48
>>> Down
* BBVA PT Cut to 2.10 euros from 2.50 euros at Berenberg
* Banco Santander PT Cut to 1.60 euros at Berenberg
* Euronext Cut to Hold at HSBC; PT 107 euros
* Informa Cut to Neutral at JPMorgan; PT 389 pence
* Julius Baer Cut to Market Perform at KBW
* RWE Cut to Hold at SocGen; PT 33.80 euros
* Solarpack Corp. Tecnologica Cut to Hold at SocGen
>>> Initiation
* Boku Rated New Buy at Berenberg; PT 160 pence
* Ceres Power Rated New Buy at Citi; PT 810 pence
* Essity Rated New Buy at Jefferies; PT 343 kronor
* FDM Group Rated New Hold at Berenberg; PT 1,100 pence
* ITM Power Rated New Buy at Citi; PT 430 pence
* Kainos Rated New Hold at Berenberg; PT 915 pence
* NEL Rated New Neutral at Citi; PT 21 kroner
* Ontex Rated New Hold at Jefferies; PT 12.35 euros
* Sika Rated New Buy at Goldman; PT 287 Swiss francs
>>> Call
* Essity a Buy, But Ontex Rerating Potential Limited: Jefferies
After Hours Summary: MLHR +16.1% up big on earnings, pulling up other office furniture names as well: KNL +16.2%, SCS +6.6%; EQC +7.8% jumps on special dividend; MRNA +2.1% announces two dealsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: MLHR +16.1%
Companies trading higher in after hours in reaction to news: KNL +16.2% (in sympathy with strong earnings report from MLHR), EQC +7.8% (announces special distribution of $3.50/sh), GTH +7.2% (announces partnership with dMed Biopharma), SCS +6.6% (in sympathy with strong earnings report from MLHR), IRBT +2.9% (Chief R&D Officer to resign), MRNA +2.1% (announces collaboration with Chiesi Group; also announces collaboration and licensing agreement with VRTX), SNE +1.3% (tweets that PlayStation 5 will launch Nov 12), VRTX +1.2% (announces new collaboration and licensing agreement with MRNA), VEEV +1.1% (to explore becoming a public benefit corp), LLY +0.4% (announces proof of concept data for LV-CoV555 in COVID-19 outpatient setting), WLL +0.4% (announces certain organizational changes and 2020 forecasts), DUK +0.3% (reaches deal with RUN and others for South Carolina residential solar industry expansion), AUY +0.3% (provides update on UK listing process), T +0.3% (CEO provides update), SOI +0.3% (increases view on US frac and co activity in Q3), TRIL +0.2% (prices stock offering), GOOG +0.2% (Google Shopping introduces new "Nearby" feature), FICO +0.1% (to reduce global workforce by 3.5%)
After Hours Losers:
Companies trading lower in after hours in reaction to news: SBBP -14.3% (stock offering), NCNA -9.3% (ADS offering), CDLX -2.5% (files for $200 mln convertible notes offering), FRGI -2.5% (files for $100 mln mixed securities shelf offering), FSLR -2.3% (stock offering), CHWY -2.1% (files mixed securities shelf offering; also commences $275 mln stock offering), RUN -0.2% (reaches deal with DUK and others for South Carolina residential solar industry expansion)
Closing Stock Market SummaryThe S&P 500 declined 0.5% on Wednesday due to weakness in the mega-cap stocks, while the Fed signaled rates will remain near zero through 2023 as inflation is expected to remain muted. The Nasdaq Composite fell 1.3%, while the Dow Jones Industrial Average (+0.1%) and Russell 2000 (+0.9%) finished higher.
The Fed left the fed funds rate unchanged, and the policy statement noted they'll remain there until the economy achieves maximum employment and an average 2.0% inflation rate is reached for some time. Note, two FOMC members preferred slightly different stances on how inflation guidance should be communicated. The central bank also raised its GDP forecast for 2020 but lowered its projections for 2021 and 2022.
The S&P 500 rose to session highs (+0.8%) following the statement, but then turned negative during Fed Chair Powell's press conference. Some criticized the Fed chair for not clearly explaining his thinking on future monetary policy, but one shouldn't attribute the intraday weakness to Mr. Powell.
Mega-cap stocks were weak all day, and their weakness was manifested in the declines in the S&P 500 information technology (-1.6%), communication services (-1.2%), and consumer discretionary (-1.0%) sectors. The cyclical energy (+4.1%), financials (+1.1%), and industrials (+1.0%) sectors had strong outings.
Shares of Facebook (FB 263.52, -8.90, -3.3%) fell 3% amid reports that the FTC is preparing a possible antitrust suit against the company. Adobe (ADBE 476.00, -21.67, -4.4%) fell 4% despite beating top and bottom-line quarterly estimates.
In other corporate news, FedEx (FDX 250.30, +13.63, +5.8%) provided better-than-expected earnings results, Snowflake (SNOW 253.93, +133.93, +111.6%) surged 100% in the largest software IPO in history, and General Electric (GE 6.75, +0.65, +10.7%) predicted it will be cash-flow positive in the second-half of this year.
Separately, White House Chief of Staff Meadows, who is a lead negotiator in the coronavirus relief talks, sounded uncharacteristically optimistic in a CNBC interview regarding the prospects for another round of fiscal stimulus. President Trump tweeted that Republicans should "go for the much higher numbers" on stimulus.
U.S. Treasuries gave up their modest gains following the release of the FOMC policy statement. The 2-yr yield increased one basis point to 0.14%, and the 10-yr yield increased one basis point to 0.69%. The U.S. Dollar Index increased 0.1% to 93.17.
Reviewing Wednesday's economic data:
- Total sales were up 0.6% m/m in August (consensus 1.0%), following a downwardly revised 0.9% increase (from 1.2%) in July, and were up 2.6% yr/yr. Excluding autos, sales were up 0.7% (Briefing.com consensus 1.0%), following a downwardly revised 1.3% increase (from 1.9%) in July, and were up 2.1% yr/yr.
- The key takeaway from the report is that it points to some slowing in retail spending activity following the expiration of enhanced unemployment benefits, but, importantly, it didn't reveal a spending contraction as increases were seen in many categories.
- The NAHB Housing Market Index increased to a new all-time high of 83 in September (consensus 78) following the previous all-time high of 78 in August.
- Business inventories increased 0.1% in July following a 1.1% decline in June.
Looking ahead, investors will receive weekly Initial and Continuing claims, Housing Starts and Building Permits for August, and the Philadelphia Fed Index for September on Thursday.
- Nasdaq Composite +23.2% YTD
- S&P 500 +4.8% YTD
- Dow Jones Industrial Average -1.8% YTD
- Russell 2000 -7.0% YTD
Nexi, SIA near deal to create Italian payments powerhouse - sources - Reuters News
16-Sep-2020 15:36:19
By Pamela Barbaglia, Elisa Anzolin and Valentina Za
LONDON/MILAN, Sept 16 (Reuters) - Italian payment firm Nexi NEXII.MI and smaller rival SIA are working flat out to resolve final differences over governance as they aim to seal a merger deal in the coming weeks, sources familiar with the matter told Reuters.
The two companies have reached a broad accord on valuation and Nexi's boss Paolo Bertoluzzo will lead the combined entity as its chief executive, three sources said.
The deal could be announced by the end of September, after the companies failed to reach an agreement earlier this month due to prolonged discussions over the corporate governance structure of the merged entity, two of the sources said.
Nexi and SIA declined to comment.
Gapping down
News:
- ADT -9.4% (stock offering by selling shareholders)
- NNOX -7.5% (continued weakness following Citron's report yesterday)
- SYNH -4.9% (commences 7 mln share offering by selling stockholders)
- NEE -3.9% (to sell $2.0 bln of equity units)
- CAAP -1.8% (reported Aug traffic)
- RUSHA -1% (declares 3-for-2 stock split, plans to ask board for div increase)
- SHOP -0.6% (prices offering of 1,100,000 Class A subordinate voting shares at $900 per share and its previously announced public offering of $800 mln of convertible senior notes due 2025)