Traders Market Weekly: Fed, Inflation and Profit Warnings

Viewing 15 posts - 16 through 30 (of 62 total)
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    Fed in its blackout period

    There are three-year and 10-year Treasury auctions

    Tomorrow is the highly anticipated August US CPI report and that’s a potential watershed. The Sept Fed meeting is priced at 89% and don’t see that changing but a soft reading (particularly on core) could change the narrative for the Nov 2 meeting.


    Amgen data supports KRAS cancer drug, but survival benefit remains in question

    Full details from a late-stage study of Amgen’s KRAS-blocking drug confirm its effectiveness over standard chemotherapy in treating lung cancer, but fall short of proving that benefit translates into patients living longer.

    The results, released over the weekend and on Monday, show that treatment with Amgen’s drug, called Lumakras, reduced the risk of tumor growth or death by 34% compared to chemotherapy in patients with a certain kind of non-small cell lung cancer.

    On that measure, known as progression-free survival, study participants given Lumakras went a median of 5.6 months without disease progression or dying, versus 4.5 months for patients in the trial who received the chemotherapy docetaxel. More than twice as many Lumakras-treated patients responded to the drug as did those on chemo, according to the data.

    In late August, Amgen had said the study succeeded, but didn’t provide any specific data then. The full results were disclosed as part of the European Society for Medical Oncology’s annual conference in Paris, where they were presented Monday.

    The study’s outcome should help Amgen validate Lumakras’ accelerated approval in the U.S. last May, which was supported by data from a mid-stage study that did not compare the drug to other treatment. As a condition of that approval, Amgen is required to confirm its benefit via further testing.

    Notably, however, the study data do not show that Lumakras helps patients live longer than does chemotherapy. Details in a presentation Monday indicated no benefit to Lumakras, with median overall survival among patients on Amgen’s drug reaching 10.6 months, versus 11.3 months for those given chemo.

    The study was not designed, or “powered,” to compare survival between the two groups, Amgen noted. Additionally, about a third of those who initially received chemo went on to receive Lumakras or another targeted therapy like it. This kind of patient “crossover” in studies can sometimes distort results.

    Even so, the lack of a survival benefit is disappointment and could affect how doctors perceive Lumakras. While it’s the only drug of its type currently approved, others are being developed and one, from Mirati Therapeutics, is currently under review by the Food and Drug Administration with a decision expected by December.

    There were other shortfalls, too. The treatment response rate of 28% that researchers reported from the study is lower than the 36% included in Lumakras’ approved labeling, which was based on that earlier, single-arm study.

    While treatment with Lumakras was associated with fewer treatment-related side effects overall as well as fewer serious treatment-related adverse reactions, the drug more commonly led to diarrhea and liver enzyme elevations than chemotherapy. Liver toxicity has also cropped up as a concern in testing of Lumakras with a type of cancer immunotherapy.

    Amgen’s study, called CodeBreak-200, enrolled 345 previously treated patients with non-small cell lung cancer that was either locally advanced, metastatic or not removable by surgery. Patients’ tumors had to test positive for a specific mutation in a gene called KRAS. Often mutated in lung, colorectal and pancreatic cancers, the KRAS gene has been a target for cancer researchers for decades, but until Lumakras no drug had been able to successfully target it.

    It’s an important drug for Amgen and its approval has helped catalyze similar drug development efforts across the industry.

    Amgen also released data Monday from an early trial of Lumakras combined with the drug Vectibix in KRAS-mutated metastatic colorectal cancer.

    Shares in Amgen fell by 3% in Monday morning trading.


    Market has taken a lot of shorts ahead of CPI tomorrow … interesting tomorrow


    Dow 32,381.34 229.63 0.71%
    S&P 500 4,110.41 43.05 1.06%
    Nasdaq 12,266.41 154.10 1.27%
    GlobalDow 3,615.20 50.11 1.41%
    Gold 1,735.70 7.10 0.41%
    Oil 87.85 1.06 1.22%


    U.S. Treasuries opened the week positive territory.

    Today’s $41 bln 3-yr note auction, which met weak demand slipping to fresh lows after the $32 bln 10-yr note reopening also met underwhelming demand, producing the biggest tail (2.7 bps) since April.

    5-yr note joining longer tenors in the red while shorter tenors held onto slight gains. Today’s backtracking lifted the 30-yr yield to a fresh high for the year, took place ahead of tomorrow’s release of August CPI even though the New York Fed released a report showing that inflation expectations for the next three years dropped to 2.8% in August from 3.2% in July and 3.6% in June while expectations for the year ahead decreased to 5.7% from 6.2%.

    Crude oil climbed for the third consecutive day
    U.S. Dollar Index fell 0.6% to 108.35, reaching its lowest level in nearly three weeks.

    Yield Check:
    2-yr: -1 bp to 3.56%
    3-yr: -2 bps to 3.60%
    5-yr: +1 bp to 3.46%
    10-yr: +4 bps to 3.36%
    30-yr: +6 bps to 3.51%


    8.3% in AUGUST (higher than expected) with super-sized FED HIKE ahead
    DOW down 700+ points & NASDAQ down 400+ points


    Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note with South Korea’s KOSPI (+2.7%) outperforming after Monday’s closure.

    —Equity Markets—

    Japan’s Nikkei: +0.3%
    Hong Kong’s Hang Seng: -0.2%
    China’s Shanghai Composite: +0.1%
    India’s Sensex: +0.8%
    South Korea’s Kospi: +2.7%
    Australia’s ASX All Ordinaries: +0.6%


    China reportedly tightened coronavirus restrictions in two cities.
    Japan’s defense minister is expected to meet with the U.S. Secretary of Defense tomorrow.
    Japan may implement a national travel incentive program in the coming weeks.
    Japan’s August PPI 0.2% m/m (expected 0.4%; last 0.7%); 9.0% yr/yr (expected 8.9%; last 9.0%). Q3 BSI Large Manufacturing Conditions 1.7 (expected -8.1; last -9.9)
    Australia’s September Westpac Consumer Sentiment 3.9% (last -3.0%). August NAB Business Confidence 10 (last 8) and NAB Business Survey 20 (last 20)
    New Zealand’s August FPI 1.1% m/m (last 2.1%)


    Major European indices trade in the red following hotter-than-expected US inflation data.

    —Equity Markets—

    STOXX Europe 600: -0.1%
    Germany’s DAX: -0.4%
    U.K.’s FTSE 100: -0.3%
    France’s CAC 40: -0.4%
    Italy’s FTSE MIB: -0.4%
    Spain’s IBEX 35: -0.8%


    There are growing doubts that EU officials will agree to cap the price of Russian gas.
    The bloc’s energy officials are scheduled to hold another emergency meeting on September 30.
    The leader of the Federation of German Industries said that a “massive” recession is expected in Germany.
    The U.K.’s unemployment rate reached its lowest level in nearly 50 years in July.
    Eurozone’s September ZEW Economic Sentiment -60.7 (expected -58.3; last -54.9)
    Germany’s August CPI 0.3% m/m, as expected (last 0.9%); 7.9% yr/yr, as expected (last 7.5%). September ZEW Economic Sentiment -61.9 (expected -60.0; last -55.3) and ZEW Current Conditions -60.5 (expected -52.2; last -47.6)
    U.K.’s July three-month employment change 40,000 (expected 128,000; last 160,000) and July Unemployment Rate 3.6% (expected 3.8%; last 3.8%). July average earnings index + bonus 5.5% yr/yr (expected 5.4%; last 5.2%)
    Italy’s Q2 Unemployment Rate 8.1%, as expected (last 8.6%)
    Spain’s August CPI 0.3% m/m (expected 0.1%; last -0.3%); 10.5% yr/yr (expected 10.4%; last 10.8%)
    Swiss August PPI -0.1% m/m (expected 0.1%; last -0.1%); 5.5% yr/yr (last 6.3%)


    Akero Therapeutics (AKRO 23.47, +11.20, +91.28%): In Akero Therapeutics’ Phase 2b HARMONY Study, Both the 50mg and 28mg EFX Doses Achieved Statistical Significance on Primary and Secondary Histology Endpoints after 24 Weeks
    Peloton (PTON 11.18, +0.13, +1.18%): announces leadership changes, including resignation of Executive Chair John Foley, who co-founded the company; appoints Karen Boone as Chairperson of the Board, who previously served as President and CFO of Restoration Hardware
    Planet Labs (PL 6.07, +0.65, +11.99%): misses by $0.04, beats on revs; guides Q3 revs in-line; guides FY23 revs above consensus
    Rent the Runway (RENT 3.7300, -1.20, -24.34%): beats by $0.07, beats on revs; guides Q3 revs below consensus; guides FY23 revs below consensus; announces restructuring plan to reduce costs, including a 24% workforce reduction
    Oracle (ORCL 78.42, +1.34, +1.74%): misses by $0.04, reports revs in-line; guides Q2 (Nov) adjusted EPS below consensus, revs below consensus largely due to FX headwinds; announces that MySQL HeatWave is now available on AWS
    Catalyst Pharma (CPRX 16.30, +1.15, +7.59%): will replace Mantech International Corp. (MANT) in the S&P SmallCap 600 effective prior to the opening of trading on September 15
    Braze (BRZE 41.49, -2.09, -4.80%): beats by $0.04, beats on revs; guides Q3 EPS below consensus, revs in-line; guides FY23 EPS above consensus, revs in-line
    Twitter (TWTR 41.71, +0.30, +0.72%): Twitter shareholders approve sale to Elon Musk
    AppLovin (APP 29.27, +0.76, +2.67%): confirms that it does not intend to submit another proposal to combine with Unity Software and has withdrawn its initial proposal
    Eastman Chemical (EMN 93.94, -0.93, -0.98%): sees Q3 EPS well below consensus



    NFIB Small Business Optimism reading was 91.8 compared to the prior 89.9 reading

    The Treasury Budget for August showed a deficit of $219.6 bln versus a deficit of $170.6 bln a year ago. The Treasury Budget data is not seasonally adjusted, so the August deficit cannot be compared to the deficit of $211.1 bln for July.


    And keep an EYE on the tropical skies … as the “F” storm is likely to form soon


    While FUTURES were up after the -1275 DOW close yesterday .. Markets are doing a “DYING QUAIL”
    and may turn negative again … PPI was 8.7% and -0.1% month-to-month as expected
    Still staying GREEN so far … but the future FED rate hike + even RAILROAD strike this weekend
    are indeed concerns to keep the WALL STREET BULLS on the run from the BEARS in near term


    Equity indices in the Asia-Pacific region ended the midweek session on a lower note after yesterday’s sharp slide on Wall Street.

    —Equity Markets—

    Japan’s Nikkei: -2.8%
    Hong Kong’s Hang Seng: -2.5%
    China’s Shanghai Composite: -0.8%
    India’s Sensex: -0.4%
    South Korea’s Kospi: -0.4%
    Australia’s ASX All Ordinaries: -2.5%

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