After Hours Report

Today's session started sluggish in front of the afternoon's headline event. The Federal Open Market Committee (FOMC) voted in favor of cutting the target range for the fed funds rate by 50 basis points to 4.75-5.00%. It was not a unanimous vote. Fed Governor Bowman preferred a 25-basis points rate cut.

The directive indicated that the Committee has "gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance."

The Summary of Economic Projections showed a shift in the median estimate for the 2024 unemployment rate to 4.4% (from 4.0% in June) and a downward shift in PCE inflation to 2.3% (from 2.6% in June) and core-PCE inflation to 2.6% (from 2.8%). The dot-plot, meanwhile, shows a median estimate for 2024 (4.40%) that implies another 50 basis points of rate cuts this year and another 100 basis points in 2025.

Fed Chair Powell defended the larger, 50-basis points cut today as a proper "recalibration" to make sure the labor market and the economy remain in a solid condition and that the intent of today's move is to make sure they remain there. He also said that the Fed doesn't feel like it is behind the curve with its policy rate and that the larger cut today can be construed as a sign of the Fed's commitment not to get behind.

There was some whipsaw trading action in the stock market and the Treasury market after the FOMC announced a 50-basis points rate cut at 2:00 p.m. ET and as Fed Chair Powell conducted his press conference, which began at 2:30 p.m. ET.

The major indices hit session highs in response, which marked fresh record highs for the S&P 500 (-0.3%) and Dow Jones Industrial Average (-0.3%), but ultimately settled lower than yesterday. Nine of the 11 S&P 500 sectors closed with declines ranging from 0.1% (industrials) to 0.8% (utilities). The energy (+0.3%) and communication services (+0.02%) sectors were alone in positive territory at the close.

The interesting action was in the Treasury market. The monetary policy rate was cut, and it is likely to get cut again (several times) based on the Fed's own projections. The interesting thing is that Treasury yields, which dropped initially, moved higher, with the 10-yr note yield settling the session higher than where it was before the 2:00 p.m. ET policy decision.

The connection here is that the Treasury market could be pricing in some inflation angst in a curve-steepening trade. The 2-yr note yield settled today's session at 3.60%, up one basis point, while the 10-yr note yield settled at 3.69%, up four basis points. They had traded down to 3.54% and 3.64%, respectively, in the initial wake of the policy announcement.

Reviewing today's economic data:

• The weekly MBA Mortgage Applications Index rose 14.2% with refinance applications surging 24% and purchase applications jumping 5%
• Housing starts increased 9.6% month-over-month to a seasonally adjusted annual rate of 1.356 million units (Briefing.com consensus 1.320 million), bolstered by a 15.8% increase in single-unit starts. Building permits increased 4.9% month-over-month to a seasonally adjusted annual rate of 1.475 million (Briefing.com consensus 1.415 million), aided by a 2.8% increase in single-unit permits.
  • The key takeaway from the report is that single-unit starts and permits were up in every region, reflecting increased activity among builders that has been facilitated by sliding interest rates and pent-up demand.
• The weekly EIA Crude Oil Inventories showed a draw of 1.63 million barrels following last week's build of 833,000 barrels

Looking ahead to Thursday, participants receive the following data:

• 8:30 ET: Weekly Initial Claims (Briefing.com consensus 232,000; prior 230,000), Continuing Claims (prior 1.850 mln), Q2 Current Account (prior -$237.6 bln), and September Philadelphia Fed (Briefing.com consensus 3.0; prior -7.0)
• 10:00 ET: August Existing Home Sales (Briefing.com consensus 3.90 mln; prior 3.95 mln) and August Leading Indicators (Briefing.com consensus -0.3%; prior -0.6%)
• 10:30 ET: Weekly natural gas inventories (prior +40 bcf)

Overseas:

• Europe: DAX -0.0%, FTSE -0.7%, CAC -0.6%
• Asia: Nikkei +0.4%, Hang Seng market closed, Shanghai +0.5%

Commodities:

• Crude Oil +1.05 @ 71.27
• Nat Gas -0.06 @ 2.32
• Gold +6.30 @ 2598.40
• Silver -0.29 @ 30.70
• Copper +0.02 @ 4.29

After-Hours Spotlight:

• Hess Midstream Partners (HESM) announces commencement of public offering of 10.0 mln Class A shares by an affiliate of Global Infrastructure Partners... HESM down 3.0%
• Johnson Controls (JCI) launches update to its Building Automation System, Metasys... JCI up 1.6%
• Playtika (PLTK) enters into definitive agreement to acquire SuperPlay for $700 mln and additional contingent consideration of up to $1.25 billion... PLTK up 1.4%
• Progyny (PGNY) notified by significant client (comprised 13% of 2023 revs) that they have terminated services agreement, effective January 1, 2025... PGNY down 25.5%
• Steelcase (SCS) beats by $0.02, reports revs in-line; guides Q3 EPS in-line, revs below consensus; reaffirms FY25 EPS guidance... SCS down 10.3%

Fair Value for Thursday, Sept. 19:

• S&P 500: 5,683
• Nasdaq 100: 19,592
• DJIA: 41,932

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

• Earnings/Guidance (Full Earnings Calendar):
  • Aspen Tech (AZPN) outlines multi-year financial outlook at Investor Day; reiterates FY25 guidance
  • General Mills (GIS) beats by $0.01, reports revs in-line, reaffirms FY25 guidance
  • T-Mobile US (TMUS) provides highlights from today's Capital Markets Day event -- increases quarterly dividend to $0.88 per share from $0.65 per share
• General News
  • SEC confirms it has adopted rules to amend minimum pricing increments and access fee caps and to enhance the transparency of better priced orders
  • Fitch says most U.S. banks have improved interest rate risk management; well-positioned for anticipated rate cuts
  • I-80 Gold Corp (IAUX) names Richard Young as CEO
  • Aecom Tech (ACM) awarded program management contract for San Diego International Airport expansion project
  • Alaska Air (ALK) announces interim Honolulu leadership team to guide Hawaiian Airlines (HA) operations from transaction close through a full combination of operations under a single operating certificate with two brands
  • Alaska Air (ALK) completes acquisition of Hawaiian Holdings (HA); expanding benefits and choice for travelers
  • Allison Transmission (ALSN) announces partnership with LiuGong, including a Memorandum of Understanding (MOU) in Balikpapan, Indonesia
  • Alphabet (GOOG): Google's offer to sell AdX falls flat with European publishers amid ongoing EU antitrust probe, according to Reuters
  • Amazon (AMZN) announces investment in pay and benefits for hourly employees, boosting compensation and support
  • Amazon (AMZN): Buy with Prime and Amazon Multi-Channel Fulfillment expand with new capabilities and more brands
  • Analog Devices (ADI) and Tata announce strategic alliance to explore joint opportunities for semiconductor ecosystem in India
  • Apple (AAPL): TF Int'l analyst Kuo suggests Apple employees can purchase iPhone 16 amid signs of lower-than-expected demand
  • Applied Therapeutics (APLT) provides regulatory update on govorestat for the treatment of Classic Galactosemia
  • AstraZeneca (AZN) receives FDA approval for Fasenra
  • Bausch + Lomb (BLCO): Private equity giants, including Blackstone and KKR, eye Bausch + Lomb amid parent company's debt struggles, according to Financial Times
  • Becton Dickinson (BDX) announced the commercial release of the BD Neopak XtraFlow Glass Prefillable Syringe and the latest capacity expansion of the BD Neopak Glass Prefillable Syringe platform to serve the growing market for biologic therapies
  • BlackRock (BLK) confirms it is launching new AI partnership with Microsoft (MSFT), Global Infrastructure Partners, and MGX
  • Blink Charging (BLNK) will implement its planned operational cost reduction actions to position it for short and long-term success within current economic conditions; cutting workforce by 14%
  • Boeing (BA) announcing temporary furloughs across the company as machinists strike continues; CEO and leadership team to take undisclosed pay cuts - CNBC
  • Braskem SA (BAK) provides news clarifications
  • Bristol-Myers (BMY) announced new data from the Phase 3 DAYBREAK trial demonstrating that decreased rates of brain volume loss were sustained in the open-label extension (OLE) for patients treated with Zeposia (ozanimod)
  • Cassava Sciences (SAVA) entered into a non-exclusive Consulting Agreement with Remi Barbier, the Company’s former Chief Executive Officer
  • Charter Comm's (CHTR) Spectrum Reach announces a multi-year collaboration with Amazon (AMZN) Ads
  • Chevron (CVX) CEO blames the White House for increasing energy prices, according to Financial Times
  • ChipMOS TECHNOLOGIES (IMOS) provides clarification of Taiwan media report
  • Comcast (CMCSA) launches new free streaming app The Network on its entertainment platforms in partnership with actor/entrepreneur/activist John Leguizamo
  • Confluent (CFLT) invests in Onibex and Psyncopate amid increased demand for complete data streaming platforms
  • CrowdStrike (CRWD) unveils Falcon Cloud Security innovations to unify protection across cloud infrastructure, applications, data and AI models
  • CVS Health's (CVS) Oak Street Health agrees to pay $60 mln to resolve alleged False Claims Act liability for paying kickbacks to insurance agents in Medicare Advantage patient recruitment scheme
  • G1 Therapeutics (GTHX) and Pharmacosmos Group announce successful closing of tender offer; G1 stockholders to receive U.S. $7.15 per share in cash
  • Gerdau S.A. (GGB) Ameristeel unit signed an agreement to acquire the assets of Dales Recycling Partnership
  • Ginkgo Bioworks (DNA) announces the launch of Ginkgo Datapoints to usher in the next era of biotechnology by making the training of AI models easier and more efficient
  • Gladstone Investments (GLAD) announces that it has declared a supplemental distribution of $0.70/share of common stock with payment date of October 14, 2024
  • GlaxoSmithKline (GSK) announces "positive" topline data from the phase 3 trial in adults 50 years and older evaluating the immunogenicity, reactogenicity and safety of AREXVY when co-administered with SHINGRIX, both AS01-adjuvanted vaccines
  • Golar LNG (GLNG) signs EPC agreement with CIMC Raffles
  • Google (GOOG) will not have to pay EUR1.49 bln fine for blocking rival advertisers, according to BBC
  • Graco (GGG) announces a new organizational structure to unlock global growth opportunities and drive sustainable profitability and operational efficiency
  • HubSpot (HUBS) launches new AI, Breeze, plus hundreds of product updates at INBOUND 2024
  • Intuitive Machines (LUNR) awarded a Near Space Network contract for communication and navigation services from NASA with maximum potential value of $4.82 billion
  • JPMorgan Chase (JPM) increases its quarterly dividend by 8.7% to $1.25/share; annual yield of 2.4%
  • KBR (KBR) awarded estimated $230 million cost-plus-fixed-fee recompete contract under the DOD Information Analysis Center's multiple-award contract vehicle
  • Keysight (KEYS) unveils optical reference transmitter to validate next-generation data transmission
  • Kroger (KR) workers in Virginia ratify a new contract
  • Lions Gate Entertainment (LGF.A) confirms partnership with Runway to develop custom AI model for film and TV production
  • Liquidia Technologies (LQDA) provided litigations updates
  • Lockheed Martin (LMT) selected by NASA to develop lightning mapper for NOAA
  • Lockheed Martin (LMT): NASA awarded Lockheed Martin a $297 mln contract to design and build the next-generation GeoXO Lightning Mapper instruments for the National Oceanic and Atmospheric Administration
  • Longboard Pharmaceuticals (LBPH) Dravet syndrome treatment granted orphan designation
  • Mannkind (MNKD) received clearance from Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to initiate the Phase 3 study (ICoN-1) of Clofazimine Inhalation Suspension for the treatment of NTM lung disease
  • Masimo (MASI): Leading Proxy Advisory Firm Glass Lewis Reiterates Recommendation That Masimo Shareholders Vote FOR Both of Politan’s Independent Director Nominees
  • Merck (MRK): FDA approves Merck's treatment for pleural mesothelioma, according to OncLive
  • Meta Platforms (META) may be fined by EU authorities for ad practices, according to Financial Times
  • Microsoft (MSFT) wants to see consistent approach to chip sales to the Middle East, according to Financial Times
  • Modine Manufacturing (MOD) launches coolant distribution unit to meet increasing demand for high-performance cooling in the global data center industry
  • NextEra Energy (NEE): NRC authorizes FPL's Turkey point nuclear power plant to operate for another 20 years
  • NIO (NIO) begins EL8 deliveries in Europe as it navigates tariffs, according to electrek
  • Opthea Ltd. (OPT) announces the completion of its drug substance Process Performance Qualification campaign for sozinibercept
  • PayPal (PYPL) is making progress on strategic transformation with new campaigns and partnerships
  • Petrobras (PBR) clarifies media reports on fuel prices - it is not true that the company has decided to reduce fuel prices
  • Phreesia (PHR) announces that the CDC has awarded it a research grant for a joint project focused on treating urinary incontinence (UI) in women
  • Purple Biotech (PPBT) reported new positive biomarker findings for its lead oncology therapeutic candidate CM24
  • Roku (ROKU) launches Roku Ads Manager
  • RTX (RTX) business, Collins Aerospace, receives the first-ever FAA Technical Standard Order approval for a fully enabled multi-core processor
  • Saia (SAIA) expands Western U.S. footprint with new terminals in North Dakota and Montana
  • Salesforce (CRM) and NVIDIA (NVDA) announce a strategic collaboration to develop advanced AI capabilities for the enterprise with autonomous agent and interactive avatar experiences
  • Science Applications (SAIC) awarded a new $229 million contract by the U.S. Department of Defense to provide vital IT solutions under the NORAD/USNORTHCOM Information Technology Enterprise Services program
  • Scilex Holding (SCLX) announces the continuing support from Endeavor Distribution LLC on Scilex’s commercial products and the satisfaction of the FSF 33433 LLC $10 mln loan under the Commitment Side Letter dated June 11, 2024
  • SLB (SLB) and Aramco signed agreement - the framework seeks to create digital sustainability technologies
  • Southern Missouri Bancorp (SMBC) provides investor updates in presentation
  • Southwest Air (LUV): Elliott Investment Management still wants to replace LUV CEO Robert Jordan, according to Reuters
  • Stellantis (STLA) to hold strike authorization votes (UAW President Shawn Fain Holding announced at Facebook Live event last night)
  • Sunrun (RUN) Prices $365 million Senior Securitization of Residential Solar & Battery Systems
  • Synchrony Financial (SYF) announces the acceptance of its CareCredit health and wellness credit card in Albertsons' (ACI) stores
  • Sysco (SYY) at Wells Fargo conference commented on traffic trends
  • T-Mobile US (TMUS) announces technology partnership with NVIDIA (NVDA), Ericsson (ERIC) and Nokia (NOK) to advance the future of mobile networking with AI at the Center
  • T-Mobile US (TMUS) and OpenAI enter multi-year agreement for intent-driven AI-decisioning platform; IntentCX set to launch in 2025
  • T-Mobile (TMUS) introduces ‘T-Priority’ featuring the world’s first network slice for first responders
  • T-Mobile US (TMUS) at Capital Markets Day says it expected 12mln mobile broadband customers by 2028, sees $38-$39bln EBITDA in 2027
  • Taiwan Semiconductor Manufacturing (TSM) to fabricate chips for Apple (AAPL) in Arizona, according to Tim Culpan
  • TE Connectivity (TEL) will reorganize its management and segments to better align the organization around the Company’s strategy effective for the first quarter of fiscal 2025
  • TEGNA (TGNA) announces that Lynn Beall, executive vice president and chief operating officer of media operations, will depart from TEGNA in mid-2025 after a significant transition period, enabling the company to benefit from her invaluable experience as it transitions to a new organizational structure
  • TELUS International (TIXT) officially launched its global rebrand today, transitioning from TELUS International to TELUS Digital
  • Tenable (TENB) launches Tenable Enclave Security to meet demands of highly secure environments
  • Textron (TXT) Aviation announces customers can now upgrade their Cessna Citation XLS+ and Citation XLS Gen2 aircraft with the Garmin G5000 integrated flight deck following Garmin’s (GRMN) receipt of FAA supplemental type certification for the avionics upgrade
  • TG Therapeutics (TGTX) presents updated data from the ENHANCE Phase 3b trial evaluating BRIUMVI in patients with relapsing forms of multiple sclerosis, at the 2024 European Committee for Treatment and Research in Multiple Sclerosis annual meeting
  • TotalEnergies (TTE) agrees to supply 1.1 million tons per year to BOTAS for 10 Years
  • Valneva (VALN) submits label extension applications for its chikungunya vaccine to Health Canada and EMA
  • Workday (WDAY) details several AI updates including Ventures' latest AI investments
  • Zoom Video (ZM) announces partnership with Mitel to deliver AI-first hybrid communications and collaboration solution for enterprises

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

• Upgrades:
  • Ambac (AMBC) upgraded to Buy from Neutral at ROTH MKM; tgt raised to $15
  • Braskem SA (BAK) upgraded to Buy from Neutral at UBS
  • Extra Space Storage (EXR) upgraded to Buy from Hold at Jefferies; tgt raised to $204
  • GE HealthCare (GEHC) upgraded to Buy from Neutral at BTIG Research; tgt $100
  • Intercontinental Hotels Group (IHG) upgraded to Buy from Neutral at Goldman
  • NMI Hldgs (NMIH) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $48
  • Sirius XM (SIRI) upgraded to Buy from Neutral at Guggenheim; tgt $30
  • SL Green Realty (SLG) upgraded to Neutral from Sell at Compass Point; tgt raised to $60
  • Ubisoft (UBSFY) upgraded to Outperform from Market Perform at BMO Capital Markets
  • V.F. Corp (VFC) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $22
  • Victoria's Secret (VSCO) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $25
• Downgrades:
  • Edwards Lifesciences (EW) downgraded to Hold from Buy at Jefferies; tgt lowered to $70
  • Incyte (INCY) downgraded to Hold from Buy at Truist; tgt lowered to $74
  • Portland Gen Elec (POR) downgraded to Equal Weight from Overweight at Barclays; tgt raised to $49
  • ResMed (RMD) downgraded to Underperform from Peer Perform at Wolfe Research; tgt $180
• Others:
  • Arm Holdings plc (ARM) initiated with an Outperform at William Blair
  • Beam Therapeutics (BEAM) initiated with a Hold at JonesResearch
  • BeiGene (BGNE) initiated with a Mkt Outperform at JMP Securities; tgt $288
  • Broadcom (AVGO) initiated with an Outperform at William Blair
  • Canaan (CAN) initiated with a Buy at B. Riley Securities; tgt $2
  • CervoMed (CRVO) initiated with a Buy at Chardan Capital Markets; tgt $55
  • Choice Hotels (CHH) initiated with a Sell at Goldman; tgt $105
  • Civitas Resources (CIVI) initiated with an Overweight at JP Morgan; tgt $67
  • Crescent Energy Company (CRGY) initiated with a Neutral at JP Morgan; tgt $12
  • Editas Medicine (EDIT) initiated with a Buy at JonesResearch
  • Halliburton (HAL) initiated with a Buy at DBS Group
  • Hilton Grand Vacations (HGV) initiated with a Sell at Goldman; tgt $31
  • Hilton (HLT) initiated with a Buy at Goldman; tgt $245
  • Hyatt Hotels (H) initiated with a Neutral at Goldman; tgt $151
  • ICON plc (ICLR) initiated with an Outperform at Leerink Partners; tgt $379
  • Inari (NARI) initiated with a Hold at Stifel; tgt $50
  • Intellia Therapeutics (NTLA) initiated with a Buy at JonesResearch
  • KKR (KKR) initiated with a Buy at HSBC Securities; tgt $148
  • Kodiak Gas Services (KGS) resumed with a Buy at BofA Securities; tgt $30
  • Marriott (MAR) initiated with a Buy at Goldman; tgt $267
  • Marriott Vacations (VAC) initiated with a Sell at Goldman; tgt $62
  • NVIDIA (NVDA) initiated with an Outperform at William Blair
  • OSI Systems (OSIS) initiated with an Overweight at Wells Fargo; tgt $170
  • Penumbra (PEN) initiated with a Buy at Stifel; tgt $238
  • Rhythm Pharmaceuticals (RYTM) initiated with a Buy at H.C. Wainwright; tgt $64
  • SLB (SLB) initiated with a Buy at DBS Group
  • Super Micro Computer (SMCI) initiated with a Buy at Needham; tgt $600
  • Talen Energy (TLN) initiated with a Buy at UBS; tgt $197
  • Travel + Leisure Co (TNL) initiated with a Neutral at Goldman; tgt $44
  • Wyndham Hotels & Resorts (WH) initiated with a Buy at Goldman; tgt $96

• Econ Data (Thursday):
  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 232,000; prior 230,000), Continuing Claims (prior 1.850 mln), Q2 Current Account (prior -$237.6 bln), and September Philadelphia Fed (Briefing.com consensus 3.0; prior -7.0)
  • 10:00 ET: August Existing Home Sales (Briefing.com consensus 3.90 mln; prior 3.95 mln) and August Leading Indicators (Briefing.com consensus -0.3%; prior -0.6%)
  • 10:30 ET: Weekly natural gas inventories (prior +40 bcf)
• Earnings:
  • Monday (Sept 16)
    • Pre-Market: None
    • After-Hours: None
  • Tuesday (Sept 17)
    • Pre-Market: FERG
    • After-Hours: None
  • Wednesday (Sept 18)
    • Pre-Market: GIS
    • After-Hours: SCS
  • Thursday (Sept 19)
    • Pre-Market: CBRL DRI DAVA FDS
    • After-Hours: FDX LEN MLKN
  • Friday (Sept 20)
    • Pre-Market: None
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike