Traders Market Weekly: Hedge Funds, Bonds and China Distortion

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    Campbell Soup To acquire Sovos Brands for $23/share; expects deal to be accretive to adj. EPS by year two
    $CPB 44.39, -0.76, -1.7%
    $SOVO 22.53 +4.51 +25.03%


    Another #biotech, healthcare takeover:

    Tabula Rasa HealthCare $TRHC 10.25, +2.42, +30.9% to be acquired by private equity firm Nautic Partners for $10.50 in cash per share Will combine with ExactCare Pharmacy


    The S&P 500 futures are up 12 points and are trading 0.3% above fair value.
    The Nasdaq 100 futures are up 63 points and are trading 0.4% above fair value.
    The Dow Jones Industrial Average futures are up 61 points and are trading 0.2% above fair value.


    ADTRAN (ADTN 8.00, -1.05, -11.6%): sees Q3 revs below consensus

    Berkshire Hathaway (BRK.B 355.67, +5.68, +1.6%): reports Q2 results

    Elanco Animal Health (ELAN 12.32, +0.67, +5.8%): beats by $0.13, beats on revs; guides FY23 EPS above consensus, revs above consensus

    SAGE Therapeutics (SAGE 18.36, -17.74, -49.1%): misses by $0.13, misses on revs; is evaluating resource allocation, including pipeline prioritization and a workforce reorganization, with a goal of extending its cash runway and anticipates operating expenses will decrease in 2024

    Tyson Foods (TSN 52.54, -3.92, -6.9%): misses by $0.11, misses on revs; guides FY23 revs in-line
    Yellow Corporation (YELL 1.91, -1.66, -46.5%): files voluntary Chapter 11 petitions


    Equity indices in the Asia-Pacific region began the week on a mostly lower note.

    —Equity Markets—

    Japan’s Nikkei: +0.3%
    Hong Kong’s Hang Seng: -0.1%
    China’s Shanghai Composite: -0.6%
    India’s Sensex: +0.4%
    South Korea’s Kospi: -0.9%
    Australia’s ASX All Ordinaries: -0.2%


    Japan’s National Personnel Authority recommended the largest salary increase for public workers in 26 years.
    The Bank of Japan released its summary of opinions for July, noting that yield curve control policy will be conducted with greater flexibility.
    Japan’s June Leading Index -0.2% m/m (last 1.1%) and Coincident Indicator 0.9% m/m (last 0.1%)


    China Securities Journal expects July data to show yr/yr loan growth.
    China’s July FX Reserves $3.20 trln, as expected (last $3.19 trln)


    Goldman Sachs noted that foreign purchases of Japanese equities have eclipsed purchases of Chinese equities for the first time in six years.


    Hong Kong’s July FX Reserves $421.6 bln (expected $414.6 bln; last $417.3 bln)
    Singapore’s July FX Reserves $340.8 bln (expected $338.8 bln; last $331.2 bln)


    Australia’s July ANZ job advertisements 0.4% m/m (expected 0.1%; last -2.7%)


    Major European indices trade mostly in the red.

    —Equity Markets—

    STOXX Europe 600: -0.1%
    Germany’s DAX: -0.2%
    U.K.’s FTSE 100: -0.4%
    France’s CAC 40: +0.1%
    Italy’s FTSE MIB: -0.2%
    Spain’s IBEX 35: -0.3%


    City of London is lobbying the Bank of England to delay the implementation of new global banking capital rules by six months in order to avoid a regulatory mismatch with other jurisdictions.

    U.K.’s July Halifax House Price Index -0.3% m/m (expected 0.0%; last -0.1%); -2.4% yr/yr (expected -3.8%; last -2.6%)


    The EU’s Foreign Minister Borrell agreed with China’s Foreign Minister Yi to hold an EU-China summit later this year.
    Siemens Energy lowered its guidance for the year and announced a review of its wind business.
    Eurozone’s August Sentix Investor Confidence -18.9 (expected -23.4; last -22.5)

    Germany’s June Industrial Production -1.5% m/m (expected -0.5%; last -0.1%); -1.8% yr/yr (last 0.1%)

    Swiss July Unemployment Rate 1.9%, as expected (last 1.9%)


    U.S. Treasuries lower start reversing some of the gains recorded during Friday’s post-NFP rally. Overnight trade was light on top-tier data while the news flow has also been subdued.

    In Japan, the National Personnel Authority recommended the largest salary increase for public workers in 26 years.

    New York Fed President (FOMC voter) Williams told The New York Times that interest rates could come down in 2024 as inflation decelerates.

    Crude oil is giving back its gain from Friday while the U.S. Dollar Index is up 0.3% at 102.29.

    2-yr: +5 bps to 4.83%
    3-yr: +4 bps to 4.51%
    5-yr: +4 bps to 4.20%
    10-yr: +4 bps to 4.10%
    30-yr: +5 bps to 4.26%


    Dow 35,473.13 407.51 1.16%
    S&P 500 4,518.44 40.41 0.90%
    Nasdaq 13,994.40 85.16 0.61%
    VIX 15.77 -1.33 -7.78%
    Gold 1,971.10 -5.00 -0.25%
    Oil 82.50 -0.32 -0.39%

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