>>> What to look at today - 10th of September 2020

The rebound in global stocks eased on Thursday as investors weighed whether a recovery in technology shares could overcome lingering concern about valuations. The dollar edged down.
U.S. and European futures fluctuated, while equities across most of Asia saw modest gains. Earlier, the S&P 500 rose the most since June overnight and the Nasdaq rebounded following an 11% rout that took the gauge down to its 50-day moving average, a closely-watched technical level. Indonesian shares slumped after officials said the capital, Jakarta, will bring back social distancing measures due to a spike in Covid-19 cases. Treasuries ticked higher. Crude oil dipped and gold was steady.
US After Hours SLQT +14%, RH +13% gain while GME -10%, BIGC -5% decline following earnings/guidance

Nikkei +0.86% Hang Seng +0.16% CSI +0.91% Shanghai +0.40% Shenzen -0.51%

Eur$ 1.1827 CNH 6.8395 CNY 6.8391 JPY 106.13 GBP 1.3006 CHF 0.9110 RUB 75.38 WTI$ 38.05 0.00%

S&P +0.12% NasdaQ +0.30% eUROsTOXX +0.27% ftse -0.24% dAX +0.35% smi -0.20%

Macro :
- EU Sees Case for Infringement Proceedings Against U.K. Over Bill

Keep an aye on :
- AED BB : Aedifica Buys Dutch Mental Health Center for EU10m at 6% Yield
- AI FP : Air Liquide to Buy Sasol’s Air Separation Unit for $510 Million
- ASRNL NA : ASR Nederland to Carry Out Remaining EU24.3m of Buyback Program
- ASA NO : Atlantic Sapphire Offering Prices 8.88m Shares at NOK102/Share
- AZN LN : AstraZeneca Study Halted After Spinal-Cord Issue, NIH Chief Says
- BCP PL : BCP Ends Legal Proceeding on N. Banco Capitalization Mechanism
- CO FP : Casino CFO Says EU4.5b Asset Divestment Plan ‘On Track’
- COFA FP : Coface Appoints Natixis CEO Namias as Chairman
- DUFN SW : Dufry Plans Rights Offering to Raise Gross Proceeds Of CHF500m
- ENX FP : Gualtieri: Hopes Borsa Italiana Finds Its Place in Eurozone Mkt
- EQNR NO : Equinor to Sell 50% Interest in U.S. Wind Assets to BP for $1.1b
- RF FP : Eurazeo to Buy Remaining Capital of Idinvest Partners
- FERRO SS : Ferroamp Elektronik to Offer 2m Shares via ABG Sundal Collier
- HUSQB SS : Husqvarna Proposes Dividend Again as Sales Jump in Early 3Q
- IBE SM : Iberdrola Seals Infigen Energy Takeover After Buying AC Stake
- INGA NA : ING Starts Taking on New Customers in Italy Again
- KBX GY : Knorr-Bremse Second Quarter Ebitda EU245.3 Mln, -27% Y/y
- KOJAMO FH : Kojamo Holders to Offer Shares
- MC FP : French Request to LVMH Was Meant as Advice, Not Binding: Reuters
- MC FP : LVMH’s Arnault Leaned On French Government to Exit Tiffany Deal
- MS IM : Mediaset CEO Talks With Head of Vivendi About Ending Legal Feud
- NEXI IM : *NEXI, SIA ARE SAID TO CLEAR HURDLE FOR EUROPEAN PAYMENTS MERGER
- PSON LN : Pearson Holders Advised by ISS to Oppose CEO Pay Proposal: Sky
- PDL LN : Petra Diamonds Accused of Violating Human Rights in Tanzania: FT
- RNO FP : Renault CEO Prods Staff to Emulate French Peer’s Cost Discipline
- ROG SW : Roche’s Enspryng Reduces Relapse Severity, Frequency in NMOSD
- SHA GY : Schaeffler's Structural Shift Signals Slow Recovery Ahead: React
- SO FP : Somfy First Half Current Operating Income EU102.6 Mln
- VLA FP : Valneva in Ixiaro Supply Deal With U.S. Govt. Worth Up to $166M
- VIE FP : Suez Reviewing Options to Boost Strategy V. Veolia Hostile Bid

>>> Europe : Brokers Upgrades & Downgrades - 10th of September 2020

>>> Up
* Baloise Raised to Buy at HSBC; PT 162 Swiss francs
* Boiron Raised to Hold at SocGen; PT 37 euros
* Computacenter PT Raised to 2,600 pence at Berenberg
* Croda PT Raised to 6,600 pence at Morgan Stanley
* Euskaltel Raised to Buy at Grupo Santander; PT 9.30 euros
* Hargreaves Lansdown Raised to Hold at Deutsche Bank
* Rio Tinto Raised to Buy at Citi
* Swatch Raised to Hold at SocGen; PT 217 Swiss francs

>>> Down
* Bouygues Cut to Equal-Weight at Barclays; PT 36 euros
* Cineworld PT Cut to 45 pence from 60 pence at Morgan Stanley
* Petrofac Cut to Underperform at Bernstein; PT 110 pence
* Scout24 Cut to Neutral at Exane; PT 78 euros
* Sunrise Cut to Equal-Weight at Morgan Stanley
* Travis Perkins Cut to Add at AlphaValue
* UniCredit Cut to Hold at HSBC; PT 9 euros

>>> Initiation
* Adevinta Rated New Outperform at Exane; PT 200 kroner
* Bayer Rated New Market Perform at BMO; PT 70 euros
* Cellnex Rated New Buy at Berenberg; PT 75 euros
* Continental AG Rated New Hold at Berenberg; PT 95 euros
* Evotec SE Rated New Outperform at RBC; PT 30 euros
* Faurecia SE Rated New Buy at Berenberg; PT 49 euros
* Learning Tech Rated New Neutral at Citi; PT 160 pence
* Reabold Rated New Buy at Stifel; PT 1.60 pence
* SCHAEFFLER RATED NEW BUY AT BERENBERG, PT EU7.4
* Schibsted Rated New Neutral at Exane; PT 405 kroner
* VALEO RATED NEW BUY AT BERENBERG, PT EU34

>>> Call
* Bouygues Shares Already Include Recovery Expectations: Barclays
* Cellnex Upside from M&A Undervalued, Berenberg Starts at Buy
* Hargreaves Lansdown Raised on Better Flow Outlook: Deutsche Bank

>>> US Close Dow +1.60% S&P +2.01% Nasdaq +2.71% Russell +2.05%

Closing Stock Market Summary

The S&P 500 rebounded 2.0% on Wednesday amid gains across all 11 of its sectors, although the market did lose some steam into the close. The Nasdaq Composite rose 2.7% amid strength in technology stocks, while the Dow Jones Industrial Average (+1.6%) and Russell 2000 (+1.5%) underperformed. 

Eight sectors advanced more than 1.0%, but the 3.4% gain in the information technology sector was the most influential given its top-weighted position in the S&P 500. Note, it was also the sector that led the market lower yesterday. 

The materials (+2.6%) and consumer discretionary (+2.3%) sectors also outpaced the benchmark index, while the energy sector (+0.6%) was today's laggard despite a 3.5% gain in oil prices ($38.05/bbl, +$1.29).

Today's rebound was largely described as a technical bounce following a three-day period in which the S&P 500 fell 7% from its record high and the Nasdaq fell 10% from its record high. There were no fundamental news catalyzing the buying activity, and there were several negative-sounding headlines that the market brushed aside. 

To name a few, AstraZeneca (AZN 53.64, -1.07, -2.0%) paused its COVID-19 vaccine trial in the UK due to a serious adverse reaction in a patient, there was some reported pessimism in Washington regarding another coronavirus relief package before the election, and several airlines remained cautious about the travel demand outlook. 

Separately, shares of lululemon athletica (LULU 323.93, -25.87, -7.4%) and Slack (WORK 25.24, -4.08, -13.9%) fell 7% and 14%, respectively, despite providing better-than-expected earnings reports.

U.S. Treasuries ended the session mixed. The 2-yr yield declined one basis point to 0.13%, while the 10-yr yield increased two basis points to 0.70%. The U.S. Dollar Index declined 0.2% to 93.24.

Reviewing Wednesday's economic data:

  • July job openings increased to 6.618 mln from a revised 6.001 mln in June (from 5.889 mln).
  • The weekly MBA Mortgage Applications Index increased 2.9% following a 2.0% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the Producer Price Index for August, and Wholesale Inventories for July on Thursday.

  • Nasdaq Composite +24.2% YTD
  • S&P 500 +5.2% YTD
  • Dow Jones Industrial Average -2.1% YTD
  • Russell 2000 -8.5% YTD

>>> US After Hours Summary: SLQT +14%, RH +13% gain while GME -10%

After Hours Summary: SLQT +14%, RH +13% gain while GME -10%, BIGC -5% decline following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SLQT +14.2%, RH +13.2%, AGX +9.8%, VRNT +6.8%, NCNO +5.0%, LAKE +3.1%

Companies trading higher in after hours in reaction to news: FBRX +3.8% (announced publication of Phase 1/2a data for FB-401), TXMD +3% (announced patent update for ANNOVERA), AZN +1.1% (reportedly denied COVID-19 vaccine trial patient suffered from transverse myelitis)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: GME -10.2%, BIGC -5.0%, ZS -1.6%

Companies trading lower in after hours in reaction to news: QTNT -11.2% (announced $60 mln public offering of ordinary shares), PRPL -5.4% (launched secondary public offering of 11,826,087 common shares by InnoHold), CSIQ -3.3% (announced offering of US$200 mln aggregate principal amount of convertible senior notes due 2025), TRIL -2.4% (commenced public offering of 8.5 mln common shares), SPRO -2.3% (commenced public offering of 8.0 mln common shares), ITCI -1.4% (announced public offering of $350 mln of its common shares), MXL -1.4% (acquired NanoSemi for $10 mln in cash and 804,163 shares)

FT : Why merger of black holes should have been impossible

Why merger of black holes should have been impossible
This intriguing collision of light-slurping titans was a cataclysmic event that defies convention

Out of the ancient cosmic darkness swirled the impossible. That is one way to describe the biggest recorded collision of two black holes, a cataclysmic event detected in May last year but revealed by scientists only last week.

The distant merger, 17bn light years away, revealed itself through the gravitational waves that rippled outwards from this violent union, which happened around 7bn years ago and took just a fraction of a second. The waves — wobbles in the space-time fabric of the universe — were detected by the Ligo (laser interferometer gravitational wave) and Virgo observatories based in the US and Italy respectively. These detectors are designed to pick up gravitational ripples induced by the most dramatic events in the universe, such as black holes devouring each other or huge stars exploding.

The event, named GW190521, challenges our understanding of these extreme objects. So-called stellar black holes are the corpses of stars; when massive stars run out of fuel, they collapse in on themselves. In some cases, this contraction creates a core so dense that nothing, not even light, can escape its gravitational grasp. Our own sun, whose solar mass provides the benchmark for star sizes, is not massive enough to become a black hole in its dotage.

GW190521 captures the moment when a black hole the size of 85 suns barged into one the size of 66 suns. These are the biggest black holes that have ever been “observed” colliding. The swollen black hole left behind is the size of 142 suns, with the missing solar masses lost as energy. 

The thrill of the observation comes wrapped in mystery: the two original black holes should not even exist, according to some. Because of the competing forces that play out in dying stars of different masses, it has been long thought theoretically impossible for stellar black holes to form in a narrow mass gap of between about 65 and 120 solar masses. Both participants in this set-up defied that convention.

“We can reconcile the smaller one but even if we tweak the parameters we shouldn’t find one around 85 solar masses,” said Alberto Vecchio, director of the Institute of Gravitational Wave Astronomy at the University of Birmingham, UK, and a member of the Ligo team. The professor remembers the observations sparking excitement within an hour of being recorded. Future research will investigate how the universe engineers these “impossible” objects, perhaps through collisions of smaller ones.

Beyond that, the clash of these two light-slurping titans produced a black hole that, at 142 solar masses, is in a class of its own. Stellar black holes, up to a few tens of solar masses, lie at the bijou end of the size spectrum; supermassive black holes, found at the centre of galaxies and at least as big as 1m suns, lie at the other. Supermassives are thought to form in a completely different way from their puny stellar cousins, perhaps through gas collapse at the heart of galaxies. GW190521 provides the strongest evidence yet of a so-called intermediate mass black hole, lying in an observational desert stretching between roughly 100 and 100,000 suns.

The allure of black holes, Prof Vecchio thinks, comes from the fact that “they are monster objects but we can comprehend them on a human scale”. A black hole of 100 solar masses would have a radius of around 200 miles, he explains, about the distance between London and Manchester. “Imagine taking a sphere of that radius and packing 100 suns into it.”

Even the sharpest minds struggled with cosmic concepts. Albert Einstein first predicted gravitational waves in 1916 but later doubted his calculations. How gratified he would have been, after his own wobble, to see that the universe wobbles too.