After Hours Report

The stock market started the fourth quarter on a weak note. There are growing expectations for consolidation activity after a stellar third quarter and today's headlines provided fuel.

Initial reports indicated that the White House was concerned about a potential Iranian strike on Israel. This concern materialized, but subsequent reports suggested that most of Iran's missiles were destroyed by Israel's defense system.

The price action in equities, bonds, and commodities reflected uncertainty around the situation in the Middle East, but also reflected some relief that today's attacks by Iran were largely unsuccessful. 

The major indices moved lower across the board, but closed above their worst levels of the session; Treasuries experienced some safe-haven buying, but opening gains dissipated somewhat by the close; and oil prices settled sharply higher, but pulled back from session highs by the close.

The market-cap weighted S&P 500 declined 0.9% after being down as much as 1.8%. The equal-weighted S&P 500 settled 0.5% lower after trading down as much as 1.1%. The 10-yr note yield, which dropped to 3.70% after the open, settled six basis points lower than Monday at 3.74%. WTI crude oil futures traded above $71.00/bbl at their highs, but settled at $69.74/bbl.

Other contributing factors in today's downbeat session included growth concerns that were stirred by the start of the East Coast and Gulf Coast dockworkers strike, along with another contraction reading (sub-50.0%) for the ISM Manufacturing PMI in September. 

A sizable decline in shares of Apple (AAPL 226.21, -6.79, -2.9%) after Barclays suggested iPhone 16 demand is sluggish also clipped index performance. This price action weighed down the S&P 500 information technology sector (-2.7%), along with declines in Microsoft (MSFT 420.69, -9.61, -2.2%) and NVIDIA (NVDA 117.00, -4.44, -3.7%).

• S&P 500: +19.7% YTD (+5.5% for 11.9% YTD
• Nasdaq Composite: +19.3% YTD
• S&P Midcap 400: +11.3% YTD
• Russell 2000: +8.4% YTD

Reviewing today's economic data:

• The S&P Global US Manufacturing PMI fell to 47.3 in the final September reading from 47.9 in the preliminary reading.
• JOLTS - Job Openings totaled 8.04 million in August, up from 7.711 million in July (revised from 7.673 million).
• The September ISM Manufacturing Index checked in at 47.2% (Briefing.com consensus 47.7%), unchanged from August. The dividing line between expansion and contraction is 50.0%, so the September reading suggests the pace of contraction in the manufacturing sector was the same as the prior month. This was the sixth straight month (and 22nd out of 23) that economic activity in the manufacturing sector contracted.
  • The key takeaway from the report is that it has reinforced the understanding that conditions in the U.S. manufacturing sector are weak, reflected further in the weakening employment index.
• Total construction spending declined 0.1% month-over-month in August (Briefing.com consensus 0.1%) following a downwardly revised 0.5% decline (from -0.3%) in July. Total private construction was down 0.2% month-over-month while total public construction was up 0.3% month-over-month. On a year-over-year basis, total construction spending was up 4.1%.
  • The key takeaway from the report is that new single-family construction weakened further despite sliding interest rates.

Overseas:

• Europe: DAX -0.7%, FTSE +0.5%, CAC -0.8%
• Asia: Nikkei +2.0%, Hang Seng market closed, Shanghai market closed

Commodities:

• Crude Oil +1.61 @ 69.74
• Nat Gas -0.01 @ 2.90
• Gold +30.90 @ 2689.70
• Silver +0.31 @ 31.74
• Copper +0.01 @ 4.56

After-Hours Spotlight:  

• LPL Financial (LPLA) terminates CEO Dan H. Arnold, effective immediately for violating the company's commitment to a respectful workplace; appoints interim CEO... LPLA down 4.7%
• NIKE (NKE) beats by $0.18, reports revs in-line, North America revenue down 11%; withdrawing FY25 guidance given CEO transition... NKE down 6.9%
• Resources Connection (RGP) misses by $0.01, reports revs in-line; announces new brand identity to reflect new go-to-market strategy... RGP down 4.8%

Fair Value for Wednesday, Oct 2:

• S&P 500: 5,763
• Nasdaq 100: 19,984
• DJIA: 42,492

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Acuity Brands (AYI) beats by $0.03, reports revs in-line
  • Acuity Brands (AYI) provides in line FY25 guidance during conference call
  • AMN Healthcare (AMN) CFO Jeffrey Knudson will step down effective November 8; reaffirms guidance
  • BGC Group (BGC) updates Q3 outlook: expects to be around high end of revenue and adjusted EPS guidance ranges
  • CTO Realty Growth (CTO) provides 2024 business update: closes $274 mln in investments YTD
  • General Motors (GM) reports Q3 U.S. retail sales increased by 3% yr/yr, deliveries down 2% yr/yr to 659,601 total vehicles
  • McCormick (MKC) beats by $0.16, reports revs in-line; guides FY24 EPS in-line, reaffirms FY24 revs guidance
  • Nokia (NOK) provides recast comparative quarterly financial information reflecting Submarine Networks business as discontinued operation
  • Obsidian Energy (OBE) raises 2024 production outlook
  • Paychex (PAYX) beats by $0.02, reports revs in-line; reaffirms FY25 EPS guidance, revs guidance
  • ReposiTrak (TRAK) beats by $0.02 (single est), beats on revs (single est); increases dividend
  • ResMed (RMD) unveils 2030 strategy to drive growth; projects high-single-digit revenue growth over the next five years
  • United Natural Foods (UNFI) beats by $0.09, beats on revs; guides FY25 EPS in-line, revs below consensus
• General News
  • International Longshoremen’s Association port union members go on strike
  • Israel begins invasion into southern Lebanon, according to the New York Times
  • Vice presidential candidates Senator JD Vance and Governor Tim Walz will face off tonight in the vice presidential debate
  • Texas Stock Exchange to launch next year and compete with NYSE, according to Reuters
  • Macau Gaming Inspection and Coordination Bureau reported September gross revs +15.5 yr/yr to HKD 17.3 bln versus +404.2% in August of 2023
  • White House issues statement from President Joe Biden on the Negotiations between USMX and the International Longshoremen’s Association
  • White House announces new actions to reduce medical debt and address illegal medical debt collection practices
  • Israel's IDF posts on X: "All Israeli civilians are in bomb shelters as rockets from Iran are fired at Israel."
  • President Biden will allow chip projects to avoid environmental reviews, according to NY Times
  • Brent crude futures, at $70.00/bbl earlier this morning, hitting session highs (+4.6% to $74.95/bbl) with Israel's announcement that rockets have been fired from Iran at Israel
  • Two terrorists carried out shooting attack in Jaffa, Israel, according to Times of Israel
  • US placed additional duties on solar panels from Southeast Asia, according to Bloomberg
  • Port of Montreal says impacts already apparent after one day of partial strike action at the Port of Montreal?
  • Israel military spokesperson says this attack was serious and will have consequences - CNBC
  • US confirms preliminary affirmative determinations in the countervailing duty investigations of crystalline photovoltaic cells whether or not assembled into modules from Cambodia, Malaysia, Thailand and Vietnam
  • Amazon (AMZN) Pharmacy customers can have their medications pre-sorted into packets using this new PillPack feature
  • Amneal Pharmaceuticals (AMRX) and Metsera announce strategic collaboration to develop and supply portfolio of next-generation medicines for obesity and metabolic diseases
  • Apple (AAPL) prepares to launch new iPhone SE and upgraded iPads as it modernizes low-end market strategy, according to Bloomberg
  • Arcos Dorados (ARCO) exercises renewal option for its master franchise agreement with McDonald’s (MCD)
  • AstraZeneca (AZN) reports ENHERTU granted Priority Review in the U.S. for patients with HER2 Low or HER2 Ultralow metastatic breast cancer who have received at least one line of endocrine therapy
  • AstraZeneca (AZN): ENHERTU granted Priority Review in the US for patients with HER2-low or HER2-ultralow metastatic breast cancer who have received at least one line of endocrine therapy
  • Banco Santander Chile (BSAC) releases information on decision to increase provision for dividends
  • Barclays PLC (BCS): CFTC ordered Barclays to pay $4 million for swap reporting violations
  • Bausch + Lomb (BLCO) announces U.S. launch of its digital e-commerce marketplace, Opal
  • BioNTech (BNTX) highlights AI capabilities and R&D Use cases at Inaugural AI Day
  • Bitfarms (BITF) provides September 2024 production and operations update
  • Boeing (BA) awarded $6.9 bln U.S. Air Force contract for Small Diameter Bombs Increment One; also awarded $1.68 bln U.S. Air Force contract modification
  • Boeing (BA): Foreign operators might be using Boeing 737 jets with improper rudder controls, according to Reuters
  • Caledonia Mining (CMCL) to sell solar plant
  • CGI Group (GIB) announced the award of a contract by Anne Arundel County Public Schools (AACPS) in Maryland
  • Citigroup (C): Fed announces termination of enforcement action with Citigroup Inc.
  • Clover Health (CLOV): SEC concludes investigation of the company commenced in 2021; not intend to recommend enforcement action by SEC
  • Codexis (CDXS) has entered into a non-exclusive commercial and manufacturing license agreement with Alphazyme LLC, part of Maravai LifeSciences (MRVI), for multiple enzymes in Codexis’ life science enzyme portfolio
  • Colliers (CIGI) extended the term of the existing management services agreement with its Global Chairman and Chief Executive Officer and largest shareholder, Jay S. Hennick, to January 1, 2029
  • Cosan (CSAN) subsidiary Moove Lubricants Holdings (NYSE pending MOOV) launched initial public offering of 25 mln common shares
  • CVS (CVS) mulling options including breakup, according to the Wall Street Journal
  • CVS Health (CVS) aiming to eliminate 3000 jobs, according to CNN
  • Cybin (CYBN) expands clinical team to support CYB003 phase 3 program
  • Delek Logistics Partners (DKL) announces the execution of a 12-year acreage dedication & crude oil gathering agreement for an additional 50,000 acres with an independent oil and gas producer
  • eBay (EBAY) announced certain business plans internally with a letter to Company employees from Jamie Iannone, its President and Chief Executive Officer
  • F&G Annuities & Life (FG) files mixed securities shelf offering for an undisclosed amount
  • First National (FXNC) completes acquisition of Touchstone Bankshares (TSBA); Touchstone Bank merges with and into First Bank
  • FTI Consulting (FCN) extends the term of CEO Agreement, which currently terminates on the close of business on April 1, 2025, for an additional term commencing on April 1, 2025 and terminating on the close of business on June 2, 2027
  • Genesco (GCO) names Sandra Harris Chief Financial Officer
  • Honda Motor (HMC) American unit reports September sales of 105,527 units takes 2024 sales over 1 million mark a month earlier than in 2023; sales are up 8.8% YTD
  • Hope Bancorp (HOPE): Blue Hill advisors announces ISS recommendation AGAINST Territorial Bancorp (TBNK) merger with Hope Bancorp
  • Huntington Ingalls (HII) announces that its Mission Technologies division was awarded a $458 million contract to modernize communications and information technology networks for the U.S. government that will enable rapid decision-making in the battlespace
  • Huntsman (HUN): ISN announces that Huntsman Corporation has selected ISNetworld as its primary contractor information management platform
  • IAMGOLD (IAG) submits 60 days notice to sumitomo for repurchase of 9.7% Cote Gold Mine Interest
  • IGM Biosciences (IGMS) appoints new CEO; announces strategic pivot and pipeline transformation to accelerate development of T cell engaging IgM antibodies
  • Interactive Brokers (IBKR) reports its Electronic Brokerage monthly performance metrics for September; DARTs +46% yr/yr to 2.634 mln
  • Invivyd (IVVD) announces that the U.S. FDA has re-issued an updated Emergency Use Authorization Fact Sheet for Healthcare Providers for PEMGARDA to provide accurate in vitro neutralization activity of PEMGARDA against dominant circulating variants including KP.3.1.1 and LB.1
  • Ionis Pharma (IONS) receives FDA Fast Track designation for Zilganersen
  • Johnson Controls (JCI) begins sale process of its ADT alarms unit, according to Bloomberg
  • Johnson & Johnson (JNJ) files for U.S. FDA approval of DARZALEX FASPRO®-based quadruplet regimen for newly diagnosed multiple myeloma patients for whom transplant is not planned
  • Johnson & Johnson (JNJ) to invest more than $2 billion in new, advanced technology manufacturing facility in North Carolina to support robust portfolio growth
  •  KB Home (KBH) CFO Jeff J. Kaminski to retire in early 2025; company is following succession planning process to identify next CFO
  • Keysight (KEYS) files mixed securities shelf offering for an undisclosed amount
  • Kura Oncology (KURA) Announces Publication of Ziftomenib Phase 1 Results in The Lancet Oncology
  • LiveOne (LVO) announces renewed partnership with Tesla through May 2026
  • Main Street Capital (MAIN) amends credit facility
  • National Grid Renewables (NGG) executes a power purchase agreement with Microsoft (MSFT) for its Portage Solar Project, a 250-megawatt development located in Portage County, Wisconsin
  • NCR Voyix Corporation (VYX) reduces debt after closing sale of its Digital Banking business
  • LanzaTech (LNZA) to expand its biorefining platform capabilities to include operations that produce LanzaTech Nutritional Protein as the primary product
  • Li Auto (LI) reports September deliveries increased 48.9% yr/yr
  • Lockheed Martin (LMT) awarded $2.11 bln U.S. Navy contract modification; also awarded $1.17 bln U.S. Navy contract
  • NIO (NIO) reports September deliveries increased 35.4% yr/yr
  • Pebblebrook Hotel Trust (PEB) provides update on Hurricane Helene impact; several resorts impacted but repair costs net of insurance payments not expected to be material
  • PG&E (PCG) cuts power for over 9,000 customers in northern California over wildfire risks, according to Reuters
  • PowerSchool (PWSC) announces the close of its acquisition by Bain Capital for $22.80/share in cash, representing a total enterprise value of ~$5.6 bln
  • Premier (PINC) entered into a partnership with Prestige Ameritech
  • Qiagen (QGEN) announces launch of the QIAcuityDx Digital PCR System for clinical testing in oncology
  • QuantaSing Group Limited (QSG) approves declaration and distribution of a special dividend of $0.067 per ordinary share ($0.201 per American depositary share)
  • Reitar Logtech Holdings Limited (RITR) has secured a Letter of Award for upgrade work at the smart logistics center located in Hong Kong International Airport
  • Repare Therapeutics (RPTX) Announces Phase 1 Data Highlighting Camonsertib in Combination with Radiotherapy Treatment Presented at the ASTRO Annual Meeting
  • RTX (RTX) awarded $1.31 bln U.S. Navy contract; also receives F135 Engine Core upgrade contract
  • Sagimet Biosciences (SGMT) receives FDA breakthrough therapy designation for denifanstat in MASH
  • Samsung (SSNLF) as part of a plan to reduce global headcount will cut thousands of jobs in Southeast Asia, Australia and New Zealand, according to Bloomberg
  • Sanofi (SNY) wants bidders to revise offers for its consumer health business, according to Bloomberg
  • Shattuck Labs (STTK) provides company update and announces SL-325, a first-in-class death receptor 3 (DR3) antagonist targeting the TL1A/DR3 signaling pathway
  • Shattuck Labs (STTK) and Ono Pharmaceutical mutually agree to termination of license agreement; to discontinue SL-172154 program; implemented restructuring plan
  • ShotSpotter (SSTI): Chicago alderman wants ShotSpotter contract reactivated after deadly shooting, according to NBC News
  • SITE Centers (SITC) announces completion of spin-off of curbline properties
  • Snap (SNAP) releases another statement on New Mexico Attorney General’s complaint; made deliberate design choices to make it difficult for strangers to discover minors
  • SnapChat (SNAP): Lawsuit says that SnapChat did not warn users of sextortion risks, according to the Wall Street Journal
  • Solid Power (SLDP) amended Joint Development Agreement with BMW (BMWYY) of North America
  • Sony (SONY): Pink Floyd aiming to sell music rights to SONY for $400 mln, according to FT
  • State Street (STT) announced an extension of its exchange traded fund and mutual fund servicing relationship with VanEck
  • Super Micro Computer (SMCI) disclosed ABL Amendment
  • Surmodics (SRDX) Receives FDA 510(k) Clearance for Pounce XL Thrombectomy System, Expanding the Pounce Thrombectomy Platform to Larger Peripheral Arteries up to 10 mm in Diameter
  • Tesla (TSLA) facing strike risks in Sweden, according to Bloomberg
  • Tigo Energy (TYGO) informed Jeffrey Sullivan, the Chief Operating Officer of the Company, that his employment would end with the Company on October 11, 2024
  • Toronto-Dominion Bank (TD) to pay over $20 mln to resolve fraud trading tactics, according to Reuters
  • TotalEnergies SE (TTE) confirmed the Final Investment Decision for the 'GranMorgu' development located on offshore Block 58
  • Toyota Motor (TM) North America reported U.S. September sales of 162,595 vehicles, down 20.3% on a volume basis and down 9.9% on a daily selling rate basis versus September 2023
  • Transportadora de Gas del Sur (TGS) discloses October tariff adjustment
  • Trinseo (TSE) announces restructuring initiatives to better position the business for longer-term growth, improved profitability, and increased cash generation
  • Trump Media & Technology Group Corp. (DJT): content delivery network now operating from multiple sites nationwide
  • Twilio (TWLO) announces an integration in collaboration with OpenAI to bring the company’s new Realtime API to the Twilio platform
  • U.S. Steel (X): Nippon Steel (NPSCY) investment would generate incremental economic impact of nearly $1 billion in Pennsylvania beyond base investment
  • V2X (VVX) announces its selection for the $11.9 billion Defense Logistics Agency J6 Enterprise Technology Services 2.0 contract, securing its place amongst a select group of providers
  • Verizon (VZ) says "Verizon engineers have fully restored today's network disruption that impacted some customers. Service has returned to normal levels."
  • Vizsla Silver Corp. (VZLA) reports results from 11 new drill holes targeting the Copala resource area at its 100%-owned, flagship Panuco silver-gold project
  • Walt Disney (DIS) aiming to shutter ABC Signature studio, according to Hollywood Reporter
  • XPeng (XPEV) reports September deliveries increased 39% yr/yr
  • ZEEKR Intelligent Technology Holding Limited (ZK) reports September deliveries increased 77% yr/yr
  • ZEEKR Intelligent Technology Holding Limited (ZK) says "Keep your eyes peeled as we continue testing our 6th-gen Waymo (GOOG, GOOGL) Driver on the Zeekr platform across our Waymo One cities this fall"
  • Zscaler (ZS) announces appointment of Adam Geller as Chief Product Officer, who previously launched multiple product lines for Palo Alto Networks (PANW)

Ratings Changes (see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Anheuser-Busch InBev (BUD) upgraded to Buy from Neutral at Citigroup
  • Becton Dickinson (BDX) upgraded to Buy from Neutral at Citigroup; tgt raised to $275
  • Bio-Rad Labs (BIO) upgraded to Buy from Neutral at Citigroup; tgt raised to $400
  • CareTrust REIT (CTRE) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $34
  • Clorox (CLX) upgraded to Buy from Hold at Jefferies; tgt raised to $187
  • Datadog (DDOG) upgraded to Buy from Neutral at DA Davidson; tgt raised to $140
  • Ford Motor (F) upgraded to Buy from Neutral at Goldman; tgt raised to $13
• Downgrades:
  • Antero Resources (AR) downgraded to Underweight from Overweight at Wells Fargo; tgt lowered to $25
  • CDW (CDW) downgraded to Neutral from Buy at Citigroup; tgt lowered to $245
  • Charles River (CRL) downgraded to Sell from Neutral at Citigroup; tgt lowered to $175
  • Fastly (FSLY) downgraded to Mkt Perform from Strong Buy at Raymond James
  • First Interstate Bancsystem (FIBK) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $28
  • Fluence (FLNC) downgraded to Neutral from Buy at Citigroup; tgt lowered to $24
  • General Dynamics (GD) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $317
  • Gritstone bio (GRTS) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
  • Hologic (HOLX) downgraded to Neutral from Buy at Citigroup; tgt lowered to $85
  • HP Inc. (HPQ) downgraded to Neutral from Buy at Citigroup; tgt $37
  • IGM Biosciences (IGMS) downgraded to Hold from Buy at Truist; tgt lowered to $12
  • IGM Biosciences (IGMS) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $9
  • Interpublic (IPG) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $33
  • Popular (BPOP) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $105
• Others:
  • Alphabet (GOOG/L) initiated with a Buy at Pivotal Research Group; tgt $215
  • Equifax (EFX) initiated with a Buy at UBS; tgt $360
  • Epsilon Energy (EPSN) initiated with a Buy at ROTH MKM; tgt $7
  • Fair Isaac (FICO) initiated with a Neutral at UBS; tgt $2100
  • Incyte (INCY) initiated with an Outperform at Wolfe Research; tgt $84
  • LCI Industries (LCII) initiated with a Mkt Perform at Raymond James

• Econ Data (Wednesday):
  • 7:00 ET: Weekly MBA Mortgage Index (prior 11.0%)
  • 8:15 ET: September ADP Employment Change (Briefing.com consensus 120,000; prior 99,000)
  • 10:30 ET: Weekly crude oil inventories (prior -4.47 mln)
• Earnings:
  • Monday (Sept 30)
    • Pre-Market: CCL
    • After-Hours: None
  • Tuesday (Oct 1)
    • Pre-Market: AYI MKC PAYX UNFI
    • After-Hours: CALM LW NKE RGP
  • Wednesday (Oct 2)
    • Pre-Market: CAG RPM
    • After-Hours: LEVI
  • Thursday (Oct 3)
    • Pre-Market: ANGO STZ
    • After-Hours: None
  • Friday (Oct 4)
    • Pre-Market: APOG
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike