Good Morning US Marex Equities 3rd July 2024

Stock Futures Waver After ADP Payrolls Report. Half Session today (closing @ 6pm UK) // US closed tomorrow

Indicators

Wake Up Call

• Hello ! Stock futures fluctuated as traders waded through a private US labor-market reading for clues on the outlook for the Federal Reserve’s next steps. US companies added workers at a more moderate pace in June and wage growth cooled, consistent with a gradual cooling in labor demand. Private payrolls increased 150,000 last month, after a revised 157,000 gain in May, acc. to the ADP Research Institute (vs est 165,000 increase). 
  Out now : US Initial Jobless Claims w/e 238.0k vs. Exp. 235.0k (Prev. 233.0k, Rev. 234k)
  
  
• FOCUS will turn to initial jobless claims and ADP employment data later Wednesday. The data dump will also include factory orders and ISM services index, ahead of the release of the minutes from the FOMC’s June gathering.
  
  
• FOMC MEETING MINUTES - The Fed left rates on hold in June, as was widely expected, but the updated dot plots now signal only one rate cut in 2024 vs. three in the March projections, while money markets and analysts were looking for two rate cuts in 2024. Four policymakers even see no rate cuts this year, seven pencil in just one reduction, while eight expect there to be two rate cuts this year. Looking ahead, the 2025 median dot plot is at 4.1%, (prev. 3.9% in March), while the 2026dot was unchanged at 3.1%, but the longer run rate ticked up again to 2.8% (prev. 2.6%)
  
  
• EQUITY MARKET CLOSURE
  • Half Session in the US today (closing @ 6pm UK - Independence Day observed)
  • US closed on Thursday (Independence day)

Wall Street Movers

• APPLE flat will get an observer role on OpenAI’s board as part of a landmark agreement announced last month, further tightening ties between the once-unlikely partners.
  
  
• CONSTELLATION BRANDS +3.80% 1Q Comparable net sales $2.66b, +5.8% y/y, est $2.67b ; Comparable EPS $3.57, est $3.47. Still sees FY25 operating cash flow $2.8b to $3b, est $3.06b. Maintains FY25 Comparable EPS Forecast $13.50 to $13.80, est $13.65. 
  
  
• DESKTOP METAL +6.30% NANO DIMENSION (+6%) has reached a deal to acquire Desktop Metal for up to $183 m or $5.50/sh in cash
  
  
• PARAMOUNT +14% Independent film and TV producer Skydance Media has reached a preliminary agreement to buy Shari Redstone’s National Amusements and merge with Paramount Global, acc. to Bloomberg. Skydance would pay $1.75bn in the revived deal, the WSJ reported. Earlier, Paramount was said to be in talks to sell BET Network for up to $1.7bn.

At A Glance

• SCILEX HOLDING its subsidiary Semnur Pharmaceuticals signs a letter of intent for a merger with Denali Capital Acquisition Corp.
• SIMULATIONS PLUS board said it’s discontinuing the company’s quarterly cash dividend and is instead reallocating those funds to its long-term growth strategy. It also reported its 3Q results and gave an outlook.
• SOUTHWEST AIRLINES  has adopted a shareholder rights plan to defend against a push for a leadership overhaul and other changes by activist firm Elliott Investment Management.
• TESLA Bernstein notes Tesla reported Q2 deliveries of 444K, slightly above sell-side consensus and better than buyside expectations of about 420K

Broker Moves

UPGRADES

• DELL BofA adds the personal computer maker to its US 1 list. 
• TESLA PT Raised to $260 from $220 at BofA(Earlier) ; TSLA: Tesla price target raised to $134 from $126 at Guggenheim

DOWNGRADES

• AMPHENOL is removed to BofA's US 1 List, although buy rating maintained
• SPIRIT AEROYSTEMS Barclays downgraded to Equal Weight from Overweight with a price target of $37, down from $40. Following Boeing's acquisition announcement, the firm lowered its price target and says the deal price is fair value for Spirit. It does not see a higher bid emerging.

INITIATIONS

• INTUIT initiated with an Outperform at RBC Capital

Today's Key Events (UK Time)

2.45pm : S&P Global Services & Composite PMI 
3pm : US ISM Services Index & Prices Paid & Employment & New Orders; US Durable Good Orders 
7pm : FOMC Meeting Minute

Game Of Corporate Actions

DIV EX DATE 

• Today : Campbell Soup ($0.37); Comcast ($0.31); Progressive ($0.1)
  
  
• Friday : American Express ($0.7); Bristol-Myers ($0.6); Cisco Systems ($0.4); General Dynamics  ($1.42); Globe Life ($0.24); JPMorgan($1.15); Lennar ($0.5); NetApp ($0.52); Sysco ($0.51)

Stay Tuned