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Friday, September 27

Some of the largest macro moves in the market today include: Nikkei 225 Index (Japan) -4.2%. USD/JPY -1.6%. 

Recent economic data from the United States indicates a slower-than-expected rise in personal spending and income for August 2024. Personal spending increased by just 0.2%, while personal income rose by only 0.2%, both below market forecasts, suggesting potential cooling of consumer activity.

In Europe, inflation rates have significantly declined in France and Spain to levels not seen since before mid-2021, fueling speculation that the European Central Bank may accelerate rate cuts soon. This has led to notable movements in bond markets with yields on Italy’s 10-year BTP falling sharply as investors anticipate further monetary easing.

China's industrial profits showed modest growth amid ongoing concerns about weak domestic demand and deflation risks within its economy despite recent stimulus measures aimed at boosting recovery efforts across various sectors including real estate financial policies and infrastructure investments.

iShares MSCI Japan ETF (EWJ) [-1.7%]
In pre-market trading, the iShares MSCI Japan ETF (EWJ) experienced a decline of 1.7%. This follows significant movements among its holdings, with the USD/JPY exchange rate contributing positively to performance. Key contributors included Toyota Motor Corp, which reported a notable decrease in global output due to production suspensions and a decline in worldwide sales, despite increased demand in the U.S. for its new Camry model. Additionally, Shigeru Ishiba's leadership victory in Japan's Liberal Democratic Party may influence future monetary and fiscal policies. The Japanese yen has gained significantly, coinciding with political developments. Furthermore, Tokyo's inflation data showed a decrease in the annual increase for September, potentially impacting monetary policy decisions ahead.

iShares Russell 2000 ETF (IWM) [+0.9%]
The iShares Russell 2000 ETF (IWM) has seen a pre-market increase of 0.9% following notable movements among its holdings. Key contributors included MSTR, TMDX, ELF, ESNT, and IONQ, with IONQ's share price rising significantly after securing a $54.5 million contract with the U.S. Air Force Research Lab. TransMedics Group Inc. (TMDX) is set to replace Ensign Group in the S&P SmallCap 600, resulting in a pre-market price increase. Recent macroeconomic data revealed personal spending and income figures below expectations, alongside a modest rise in the Core PCE Price Index, suggesting a slowdown in inflation. This economic backdrop has coincided with cautious sentiment on social media regarding IWM's recent performance, with discussions highlighting a lack of bullish patterns and low levels of the IWM Put/Call ratio.

BMY |+3.9%|+4.1B
Bristol-Myers Squibb Co | Pharmaceuticals
Bristol-Myers Squibb Co's shares increased significantly following the FDA's approval of COBENFY (xanomeline and trospium chloride) for the treatment of schizophrenia. This approval, granted approximately 13 hours ago, introduces a new mechanism of action targeting M1 and M4 receptors, differing from traditional antipsychotics. The EMERGENT clinical program demonstrated substantial symptom reduction in patients compared to placebo. Analysts project peak sales for COBENFY could reach up to $4.2 billion, supported by its favorable safety profile. Additionally, social media discussions highlighted a 4% increase in BMY's stock price after the approval news, with users noting the significance of this development for treatment approaches and affirming the strategic value of BMY's acquisition of Karuna Therapeutics earlier this year.

NVO | -3.5%|-14.0B
Novo Nordisk A/S | Pharmaceuticals
Novo Nordisk A/S has experienced a notable decline of 3.5% in pre-market trading. Analysts from J.P. Morgan have indicated that the company's upcoming third-quarter results, set for November 6, are likely to show sales and earnings slightly below consensus estimates. Forecasted sales are projected at DKr70.6 billion, reflecting a year-on-year growth of 21%, yet falling short of the Bloomberg consensus of DKr74.1 billion due to supply constraints and reduced prices for its obesity drug, Wegovy. Wegovy's sales are anticipated at DKr14.9 billion, which is below expectations by 9%. Ozempic's sales are expected to reach DKr29.8 billion, marking a growth of 25%, but also missing consensus by 7%. Operating profit is forecasted at DKr33.1 billion, approximately 3% below consensus. Despite these projections, J.P. Morgan maintains an "overweight" rating with a price target of DKr834.80 for September 26, 2024.

COST | -0.9% | -3.7B
Costco Wholesale Corp | Consumer Staples Merchandise Retail
Costco Wholesale Corp reported its fourth-quarter earnings on September 26, revealing earnings per share of 5.29, surpassing expectations of 5.08, while revenue fell short at 79.7 billion against forecasts of 79.97 billion. This mixed performance led to a decline in after-hours trading, contributing to a 1.1% drop in pre-market activity. The company noted cautious consumer spending on higher-priced items and lower gasoline prices. Comparable sales growth, excluding fuel and foreign exchange, was reported at 6.9% for the quarter, with e-commerce sales increasing by 19.5%. CEO Ron Vachris highlighted preparations for potential strikes at U.S. ports starting October 1, which may disrupt supply chains, and indicated plans to pre-ship holiday goods to mitigate impact. Additionally, Costco's membership fee increase was mentioned as a potential positive for future revenue streams.

SMCI | -0.8% | -197.4M
Super Micro Computer Inc | Technology Hardware, Storage & Peripherals
Super Micro Computer Inc (SMCI) has faced significant scrutiny following a U.S. Department of Justice investigation into potential accounting violations, as reported by The Wall Street Journal. The company's shares dropped sharply after these revelations, with some social media users drawing parallels to past corporate scandals such as Enron. Notably, the stock has lost over 30% of its value since late August, reaching an eight-month low during intraday trading. Analysts' earlier price targets from Goldman Sachs and Bank of America, set at $921 and $1,040 respectively, now seem distant. Additionally, concerns about coordinated fraud have emerged, compounded by a recent downgrade in the company’s rating. SMCI's relative strength rating has also plummeted significantly, reflecting a broader crisis of confidence among market participants.

LVS | +4.2% | +1.6B
Las Vegas Sands Corp | Casinos & Gaming
Las Vegas Sands Corp's stock has seen a premarket increase of 4%, contributing to a cumulative rise of 15.3% for the week. This movement follows a post from yesterday after market hours, which reported an 8% increase in the stock price and highlighted a significant transaction involving the purchase of 7,200 call options for October 11th, with a strike price of 50 at a price of 0.84. The post also noted an upward adjustment in the October $48 call options and mentioned the availability of various long-term expirations for investments related to casinos with exposure to China.

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