After Hours Report

The equity market held up well today. The S&P 500 (+0.01%), Nasdaq Composite (+0.1%), Russell 2000 (-0.1%) and Dow Jones Industrial Average (+0.1%) traded near prior closing levels through the entire session. The price action was encouraging due to lingering uncertainty around a potential escalation in the Middle East.

Israel said it would retaliate against Iran, but the market wasn't bothered by this today. Stocks also had a muted response to the ADP Employment Change Report for September, which didn't impact the market's thinking on soft landing scenario for the economy. Payroll growth was decent (143,000), wage inflation moderated, hiring was seen in both the goods and service-providing sectors, and across all geographic regions.

Relative strength in the semiconductor space provided some support to the stock market, leading the PHLX Semiconductor Index (SOX) to settle 1.5% higher. The price action also boosted the S&P 500 information technology sector (+0.6%), along with a gain in Apple (AAPL 226.78, +0.57, +0.3%).

The energy sector (+1.1%) also closed higher amid rising oil prices. WTI crude oil futures, which traded at $72.41/bbl earlier, settled 0.7% higher at $70.20/bbl. 

The consumer discretionary sector was the worst performer, closing 0.8% lower due in part to a solid loss in NIKE (NKE 83.10, -6.03, -6.8%), which reported fiscal Q1 results and withdrew its FY25 guidance.

Humana (HUM 246.49, -32.96, -11.8%) was another losing standout after reporting that only 25% of its members are enrolled in 4-star plans and above, versus 94% in 2024.

The 10-yr note yield rose four basis points today to 3.79% and the 2-yr yield settled two basis points higher at 3.64%.

• Nasdaq Composite: +19.4% YTD
• S&P 500: +19.7% YTD
• Dow Jones Industrial Average: +12.0% YTD
• S&P Midcap 400: +11.4% YTD
• Russell 2000: +8.3% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications -1.3%; Prior 11.0%
• September ADP Employment Change 143K (Briefing.com consensus 120K); Prior was revised to 103K from 99K

Looking ahead to Thursday, market participants receive the following data:

• 8:30 ET: Weekly Initial Claims (Briefing.com consensus 223,000; prior 218,000) and Continuing Claims (prior 1.834 mln)
• 9:45 ET: Final September S&P Global U.S. Services PMI (prior 55.7)
• 10:00 ET: August Factory Orders (Briefing.com consensus 0.1%; prior 5.0%) and September ISM Non-Manufacturing Index (Briefing.com consensus 51.6%; prior 51.5%)
• 10:30 ET: Weekly natural gas inventories (prior +47 bcf)

Overseas:

• Europe: DAX -0.3%, FTSE +0.2%, CAC +0.1%
• Asia: Nikkei -2.2%, Hang Seng +6.2%, Shanghai market closed

Commodities:

• Crude Oil +0.46 @ 70.20
• Nat Gas -0.01 @ 2.89
• Gold -18.80 @ 2670.90
• Silver +0.23 @ 31.97
• Copper +0.09 @ 4.65

After-Hours Spotlight:

• Fidelity National (FNF) announces acquisition of the commercial operations of First Nationwide Title Agency; Terms not disclosed... FNF up 2.8%
• Levi Strauss (LEVI) beats by $0.02, misses on revs; guides FY24 EPS in-line, lowers FY24 revenue guidance; initiates review of strategic alternatives for Dockers brand... LEVI down 8.6%
• Lockheed Martin (LMT) increases quarterly cash dividend to $3.30/share from $3.15/share; authorizes the purchase of up to an additional $3 billion of Lockheed Martin common stock under its share repurchase program... LMT up 0.6%
• Parsons (PSN) awarded position on $4 bln defense contract... PSN up 1.3%
• Toyota Motor (TM) pushing back production of EVs in North America to 1H26 amid slowing sales, according to Nikkei... TM down 1.3%

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

• Earnings/Guidance (Full Earnings Calendar):
  • Cal-Maine Foods (CALM) misses by $0.30, beats on revs (two ests); to pay dividend of $1.02/share
  • Conagra (CAG) misses by $0.07, misses on revs; reaffirms FY25 EPS guidance
  • Diamondback Energy (FANG) revises Q3 production and capital guidance to reflect Endeavor Energy Resources merger
  • DTE Energy (DTE) reaffirms FY24 guidance
  • Lamb Weston (LW) beats by $0.01, beats on revs; guides FY25 EPS below consensus, reaffirms FY25 revs guidance; announces restructuring
  • NIKE (NKE) beats by $0.18, reports revs in-line, North America revenue down 11%; Withdrawing FY25 guidance given CEO transition; to provide quarterly guidance for balance of the year
  • Resources Connection (RGP) misses by $0.01, reports revs in-line
  • RPM Inc (RPM) beats by $0.09, misses on revs; guides Q2 revs below consensus; reaffirms FY25 revs guidance
  • SEMRush (SEMR) sees Q3 revs at high end of range
  • Stellantis (STLA) reports Q3 2024 total U.S. sales; total US sales declined 20% yr/yr to 305,294 units
  • Tesla (TSLA) reports it produced approximately 470,000 vehicles in Q3, delivered approximately 463,000 vehicles, and deployed 6.9 GWh of energy storage products
  • TotalEnergies SE (TTE) provides strategy & outlook presentation 2024
  • Volkswagen AG (VWAGY) reports Q3 US sales +6% yr/yr to 93,271 units
• General News
  • Senator JD Vance and Governor Tim Walz found agreement on housing policy during VP debate
  • 51% of debate watchers felt Senator JD Vance had better performance while 49% felt Governor Tim Walz had a better performance, according to CNN
  • Israel will launch a "significant retaliation" to Iran's attack; will target oil production facilities; attacks against nuclear facilities are also on the table, according to Axios
  • Israel considers retaliatory options following Iran's missile attack, according to the New York Times
  • Saudi oil minister says oil could fall to $50/barrel if OPEC members do not follow production cuts, according to the Wall Street Journal
  • During OPEC meeting, Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation confirmed that they had achieved full conformity and compensation according to the schedules submitted for September
  • President Biden says he does not support Israel attacking Iran's nuclear sites; says they should respond "proportionally"
  • SEC announces departure of enforcement director Gurbir S. Grewal
  • 10x Genomics (TXG) Announces Mega-Scale Single Cell Analysis for One Cent Per Cell at Human Cell Atlas General Meeting
  • AerCap (AER) signs lease agreements with Azerbaijan Airlines for six new Airbus A320NEO Family Aircraft
  • AeroVironment (AVAV) successfully flight tests solar-powered aircraft
  • Align Tech (ALGN): Court Grants Preliminary Approval of Settlement to Resolve All Outstanding Shareholder Derivative Litigation Involving Align
  • Alphabet's (GOOG) Waymo says "This week, we’re beginning to welcome riders in Austin from our interest list to try our fully autonomous ride-hail experience. Riders will travel across 37 square miles of the city, as we prepare for our commercial launch early next year - exclusively on the Uber (UBER) app"
  • Amazon (AMZN) secured partial dismissal of antitrust lawsuit, according to Reuters
  • Amazon (AMZN) will include higher number of advertisements on Prime Video, according to FT
  • Amazon (AMZN) warehouse workers in San Francisco formed a union with the Teamsters
  • Amgen (AMGN): Volastra Therapeutics granted FDA Fast Track Designation for Novel KIF18A inhibitor in ovarian cancer
  • Apple (AAPL): NLRB accused Apple of illegal workplace rules, according to Reuters
  • Arthur J. Gallagher (AJG) acquires Fairlawn Ohio-based RIBV Holdings, LLC, and its subsidiaries, collectively doing business as Risk International; financial terms were not disclosed
  • BAE Systems (BAESY) receives Phase 2 contract to develop autonomous network technology for mission-critical communications
  • BioCryst (BCRX) Begins Enrollment in Phase 1 Trial Evaluating BCX17725, a KLK5 Inhibitor, for the Treatment of Netherton Syndrome
  • Boeing's (BA) largest union appeals to CEO following health coverage cut, according to Reuters
  • BWX Technologies (BWXT) announces Hurricane Helene relief
  • CAE (CAE) signs a 25-year sub-contract valued at approximately $1.7 billion from SkyAlyne, a joint venture between CAE and KF Aerospace, to provide the Royal Canadian Air Force with modern, state-of-the-art pilot training
  • Caesars Entertainment (CZR) announces that its board of directors authorized and approved a new repurchase program for up to $500 million of shares of common stock
  • Chipotle Mexican Grill (CMG) announces the opening of its first restaurant in Dubai today in partnership with leading international franchise retail operator Alshaya Group
  • CME Group (CME) sets new records for quarterly and Sep ADV
  • Complete Solaria (CSLR) and SunPower (SPWR / SPWRQ) and the other Debtors entered into a Transition Services Agreement In connection with the closing of the transactions under the Asset Purchase Agreement
  • Costco (COST) aiming to add platinum to list of metal offerings, according to Fortune
  • Crown Castle (CCI): Zayo Group and TPG compete to acquire Crown Castle’s fiber and wireless assets in deal valued up to $10 billion, according to Reuters
  • CVS Health (CVS): Glenview Capital issues statement; notes that it is not pushing for a break-up of CVS; goals are to strengthen CVS's culture and operating performance
  • Definitive Healthcare (DH) promoted Kate Shamsuddin Jensen, the Company’s current Chief Strategy Officer, to the role of Chief Operating Officer, effective as of October 1, 2024
  • Delta Air Lines (DAL) signs codeshare agreement with Saudia Airlines
  • Dr. Reddy's (RDY) discloses dissolution of step down wholly owned overseas subsidiary
  • Dr. Reddy's (RDY) signs voluntary licensing agreement with Gilead Sciences (GILD) to manufacture and commercialise Lenacapavir in India and other countries
  • Duke Energy (DUK) continues rebuilding power grid in South Carolina upstate and North Carolina mountains, service restored to nearly 1.6 million customers impacted by Helene
  • Duke Energy (DUK) Florida issues estimated times of restoration for Pinellas County's barrier islands; mobilizes customer care units in severely impacted areas
  • Eli Lilly (LLY) is benefiting from demand for weight loss drugs, according to Financial Times
  • Eli Lilly (LLY) to create new $4.5 bln facility in Indiana
  • Enerflex (EFXT) announces partial redemption of senior secured notes, further debt reduction
  • EQT Corp. (EQT) to reduce its workforce by approximately 15% as part of integration process following Equitrans Midstream Corporation acquisition
  • Fanhua (FANH) announced that Ms. Hang Suong Nguyen has been appointed as the new Chairperson of the Board, effective September 30, 2024
  • Ford Motor (F) reports Q3 US sales +0.7% yr/yr to 504,039 units
  • Formula One Group (FWONA / FWONK) and LVMH (LVMUY) confirm 10-year global partnership; LVMH will become a Global Partner in 2025
  • Great Lakes Dredge & Dock (GLDD) announces receipt of several dredging awards totaling $342.3 mln
  • Humana (HUM) discloses it has approximately 1.6 million, or 25%, of its members currently enrolled in plans rated 4 stars and above for 2025, a reduction from 94% in 2024
  • Huntington Ingalls' (HII) Mission Technologies division opened its new Advanced Materials and Coatings Lab facility in Willowbrook, Illinois
  • ICF International (ICFI) awarded a $75 mln single-award blanket purchase agreement by The U.S. Environmental Protection Agency Office of Water
  • J.B. Hunt Transport (JBHT): The Benchmark Company anticipates continued challenges for JBHT amid cost pressures, sees potential for recovery with improved intermodal volume
  • Leonardo DRS (DRS) opens new facility designed to enhance collaboration on current and future programs based at the U.S. Army’s Aberdeen Proving Grounds
  • Liquidia Technologies (LQDA) expands collaboration with Pharmosa Biopharm to develop sustained release inhaled Treprostinil
  • LPL Financial (LPLA) terminates CEO Dan H. Arnold, effective immediately for violating the company's commitment to a respectful workplace; appoints interim CEO
  • Meta Platforms (META) is rolling out Facebook Content Monetization beta
  • Microsoft (MSFT) announces it is creating an AI companion "for everyone"
  • Microsoft (MSFT): OpenAI confirns new funding to scale the benefits of AI
  • Microsoft (MSFT): OpenAI funding has been closed at $157 bln valuation; Microsoft (MSFT), Nvidia (NVDA), SoftBank (SFTBY) were involved, according to CNBC
  • Microsoft (MSFT) aiming to invest EUR 4.3 bln in Italy AI infrastructure, according to Reuters
  • Mitek Systems (MITK) appoints Ed West as CEO, effective immediately; Scott Carter, who has served as Interim CEO since June 2024, will serve as non-executive Chairman of the Board of Directors
  • ModivCare (MODV) amends credit agreements and cash collection update
  • Morgan Stanley (MS) wants $750 mln private equity lawsuit dismissed, according to Bloomberg
  • Myriad Genetics (MYGN) Announces Third Patent Granted for Molecular Residual Disease (MRD) with Early Priority Date
  • Norfolk Southern (NSC) provides update on Hurricane Helene recovery
  • Opendoor Technologies (OPEN) announces appointment of Selim Freiha as CFO, who previously served as Vice President at Alphabet (GOOG)
  • Oracle (ORCL) to Invest More Than $6.5 Billion in AI and Cloud Computing in Malaysia
  • Organogenesis (ORGO) Announces Publication of Randomized Clinical Trial Results Demonstrating the Safety and Efficacy of NuShield for Diabetic Foot Ulcers
  • Petrobras (PBR) updates operations in South Africa
  • Reliance, Inc. (RS) announces appointment of James Kamsickas to Board of Directors and Douglas W. Stotlar as Chairman of the Board
  • Resources Connection (RGP) announces new brand identity to reflect new go-to-market strategy; Positions RGP as parent company with three principal business segments
  • RTX (RTX) has been awarded a three-year, two-phase contract from DARPA to develop foundational ultra-wide bandgap semiconductors
  • SandRidge Energy (SD) appoints Vincent Intrieri as Chairman; Jonathan Frates as CFO
  • Scripps (SSP) will wind down Scripps News’ 24/7 national network programming after November 15
  • Service Corp (SCI) announces leadership promotions; COO promoted to President; CFO taking on additional role
  • Starbucks (SBUX) union announces it has secured union approval at 500 stores
  • State Street (STT) and TCW announce an expansion of their decades-long partnership that now includes the provision of middle office services
  • Teladoc (TDOC) COO Michael Waters to resign, effective December 31
  • Tutor Perini (TPC) in a joint venture with its subsidiary, Black Construction, awarded a contract valued at ~$113.3 million by the Naval Facilities Engineering Systems Command, Pacific, for the P-541 Missile Integration Test Facility at Naval Base Guam
  • Vera Therapeutics (VERA) Announces Late-Breaking Oral Presentation of ORIGIN Phase 2b Long-term Results at the American Society of Nephrology Kidney Week 2024; also announces Expanded Atacicept Development Program In Multiple Autoimmune Kidney Diseases
  • Willis Towers Watson (WTW) announces co-brokerage arrangement with The J. Morey Company, an Ori-gen family company
  • Workday (WDAY) discloses Doug Robinson will retire from his role as Co-President effective January 31, 2025
  • ZenaTech (ZENA) announces that its subsidiary company, ZenaDrone, has been granted an exemption by the Federal Aviation Authority for visual line-of-sight commercial applications and data collection in the United States, subject to specified conditions and limitations

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

• Upgrades:
  • Bank of Hawaii (BOH) upgraded to Mkt Perform from Underperform at Keefe Bruyette; tgt raised to $67
  • CVB Financial (CVBF) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $22
  • Diamondback Energy (FANG) upgraded to Overweight from Equal Weight at Barclays; tgt lowered to $210
  • Hanmi Financial (HAFC) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $22
  • Home Depot (HD) upgraded to Buy from Accumulate at Gordon Haskett; tgt $450
  • Salesforce (CRM) upgraded to Outperform from Market Perform at Northland Capital; tgt $400
• Downgrades:
  • Booz Allen Hamilton (BAH) downgraded to Underweight from Neutral at JP Morgan; tgt raised to $158
  • Charles River (CRL) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $215
  • Esquire Financial (ESQ) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt raised to $72
  • First Mid-Illinois Bancshares (FMBH) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $42
  • GE Vernova (GEV) downgraded to Mkt Perform from Outperform at Raymond James
  • Harley-Davidson (HOG) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $40
  • IBM (IBM) downgraded to Hold from Buy at DZ Bank; tgt $215
  • Mobileye Global (MBLY) downgraded to Underperform from Neutral at Exane BNP Paribas; tgt $12
• Others:
  • Absci Corporation (ABSI) initiated with a Buy at Guggenheim; tgt $10
  • Allurion Technologies (ALUR) initiated with a Buy at TD Cowen; tgt $2
  • Amdocs (DOX) initiated with a Buy at Stifel; tgt $100
  • Angel Oak Mortgage REIT (AOMR) initiated with a Buy at JonesResearch
  • Archrock (AROC) initiated with an Outperform at Mizuho; tgt $24
  • Atmos Energy (ATO) initiated with a Hold at Jefferies; tgt $155
  • Carter Bank & Trust (CARE) initiated with an Outperform at Hovde Group; tgt $22
  • Curbline Properties (CURB) initiated with a Buy at Stifel; tgt $24.75
  • Diamondback Energy (FANG) resumed with an Overweight at JP Morgan; tgt raised to $182
  • FactSet (FDS) initiated with an In-line at Evercore ISI; tgt $470
  • Iris Energy (IREN) initiated with a Buy at ROTH MKM; tgt $14
  • Kodiak Gas Services (KGS) initiated with an Outperform at Mizuho; tgt $36
  • Larimar Therapeutics (LRMR) initiated with a Buy at H.C. Wainwright; tgt $15
  • Moody's (MCO) initiated with an Outperform at Evercore ISI; tgt $521

• Econ Data (Thursday):
  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 223,000; prior 218,000) and Continuing Claims (prior 1.834 mln)
  • 9:45 ET: Final September S&P Global U.S. Services PMI (prior 55.7)
  • 10:00 ET: August Factory Orders (Briefing.com consensus 0.1%; prior 5.0%) and September ISM Non-Manufacturing Index (Briefing.com consensus 51.6%; prior 51.5%)
  • 10:30 ET: Weekly natural gas inventories (prior +47 bcf)
• 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