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Monday, September 23

Some of the largest macro moves in the market today include: USD/CNH +0.2%. Ethereum +2.6%. Nikkei 225 Index (Japan) +1.6%. 

The latest economic data from Germany indicates a significant slowdown in both the services and manufacturing sectors. The HCOB Flash Germany Composite PMI fell to 47.2 in September, marking its lowest level since February, driven by sharp declines in new orders and employment within the private sector.

In Europe more broadly, business activity contracted at an accelerated pace with Eurozone's Manufacturing PMI dropping to 44.8 while Services PMI also declined sharply to 50.5 for September; this has led markets to anticipate potential further easing measures from the European Central Bank (ECB).

Meanwhile, U.S market sentiment is influenced by recent Federal Reserve actions including speeches scheduled today that may provide insights into future monetary policy directions amidst ongoing rate cuts expectations following last week's substantial interest rate reduction of half a percentage point.

Vanguard Information Technology ETF (VGT) [+0.8%, +600.6M]
The Vanguard Information Technology ETF (VGT) has seen a price increase of 0.8% since Friday. Significant movements among the ETF's holdings contributed to this performance. Notably, NVIDIA (NVDA) recorded a modest return, while Micron Technology (MU) experienced a stronger increase. Applied Materials (AMAT) also posted gains, alongside Broadcom (AVGO) and KLA Corporation (KLAC), which all contributed positively to the ETF's overall performance. These movements reflect a range of positive returns from key holdings within the technology sector.

EUR/USD (EUR/USD) [-0.4%]
The EUR/USD pair has declined by 0.4% since Friday, settling around 1.1160 after attempts to breach the 1.1200 level. Disappointing economic sentiment in Germany and the Eurozone further complicates the outlook, as the European Central Bank has already reduced interest rates, contrasting with the Fed's aggressive stance. Additionally, the US Dollar Index has increased, reflecting a strengthening dollar against other currencies, which inversely correlates with the decline in EUR/USD. Mixed signals from Eurozone PMI data also suggest a contraction in private sector activity, potentially weighing on the euro's strength against the dollar.

INTC |+5.2%|+5.1B
Intel Corp | Semiconductors
Intel Corporation has recently gained traction following substantial investment interest. Reports indicate that Apollo Global Management is contemplating a potential equity-like investment of up to $5 billion in Intel, with discussions currently underway among Intel executives. Concurrently, Qualcomm has expressed interest in a potential acquisition of Intel, which could represent a significant shift in the semiconductor industry. Despite Intel's challenges, including a nearly 60% decline in shares this year and disappointing earnings reports, the prospect of substantial investment and acquisition discussions has invigorated market sentiment. Additionally, recent social media activity highlights the potential takeover by Qualcomm as one of the largest deals in semiconductor history, though regulatory challenges may complicate this acquisition. Amid these developments, Intel continues to face scrutiny over market share losses and ongoing restructuring efforts.

GM | -2.3%|-1.3B
General Motors Co | Automobile Manufacturers
General Motors Co announced significant layoffs affecting 1,695 workers at its Fairfax Assembly plant in Kansas, as detailed in a Worker Adjustment and Retraining Notification. The first round of layoffs will begin on November 18, involving the temporary layoff of 686 full-time employees and the termination of 250 temporary workers. A second round, commencing January 12, 2025, will see an additional 759 full-time workers temporarily laid off. These layoffs coincide with the planned cessation of production for the Chevrolet Malibu and Cadillac XT4, with production expected to resume in late 2025 for the next-generation Chevrolet Bolt EV and XT4 after retooling. This follows a previous announcement of over 1,000 salaried employee reductions globally across GM's software and service units. The company is investing approximately $390 million in the Fairfax plant to facilitate the production of the new Chevrolet Bolt EV.

CEG |+2.9% | +2.4B
Constellation Energy Corp | Electric Utilities
Constellation Energy Corp has seen a notable price increase since Friday, coinciding with several upward revisions to its price targets by analysts. KeyBanc raised its target to 265 from 230, maintaining an Overweight rating, while Mizuho increased its target from 189 to 255. Evercore ISI adjusted its target to 254 from 212, keeping an Outperform rating, and Morgan Stanley lifted its target significantly to 313 from 233. Additionally, social media sentiment has been positive, particularly following a significant electricity supply agreement with Microsoft and reports of CEG reaching all-time highs alongside VST on Friday. This positive sentiment has been reflected in sustained bullish engagement on social media over recent weeks.

MU |+1.5% | +1.5B
Micron Technology Inc | Semiconductors
Micron Technology Inc is set to announce its Q4 FY2024 earnings after market close on September 25, 2024, with an expected earnings per share of $1.13, a significant increase from the previous estimate of -$1.07. Revenue is projected at $7.6 billion, up from $4.0 billion. Concurrently, Intel Corp has seen a substantial increase in its stock price, driven by interest from Apollo Global Management for a potential $5 billion investment and Qualcomm's exploration of an acquisition of Intel. These developments in the semiconductor sector may be influencing market sentiment surrounding Micron, which recently reported a robust fiscal third quarter for 2024, generating $6.8 billion in revenue, largely attributed to strong demand in artificial intelligence.

NKE | -1.3% | -1.7B
Nike Inc | Footwear
Nike Inc. has experienced a pre-market decline of 1.3%, aligning with a significant downturn in the Footwear sub-sector. J.P. Morgan Chase has placed Nike on a negative catalyst watch while maintaining a neutral rating on the stock. This classification coincides with concerns regarding future performance. Additionally, social media activity highlights employee celebrations following the replacement of CEO John Donahoe with Elliott Hill, suggesting a positive internal reception to the leadership change. Analysts, including Piper Sandler, Morgan Stanley, and JPMorgan Chase, have reiterated neutral ratings, with price targets ranging from $79 to $83, while some firms have lowered their targets but maintained hold and buy ratings. Overall, the consensus remains a moderate buy sentiment with an average target price of approximately $96.15.

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