Coming up Strengthened As U.S

MARKET RECAP at 4 pm ET

Stocks rose, and the dollar Coming Up strengthened as U.S. President Trump predicted that the U.S. and China A report from the commerce would reach a trade deal. The yield department is expected to show curve inverted further, ahead of two- consumer confidence index dropped year notes auction tomorrow. Oil prices to 129.5 in August from 135.7 in July. edged lower, after France's president lifted hopes for a deal between the U.S. LIVECHAT - U.S. RATES VIEW and Iran. Gold retreated from a 6-year Gennadiy Goldberg, senior U.S. rates peak as safe haven demand waned. strategist at TD Securities, reviews credit markets and tells the GMF what to look out for next. (0900 ET/1300 REUTERS/Mark Makela GMT) To join the conversation, click STOCKS Close Chng %Chng Yr-high Yr-low DJIA 25898.83 269.93 1.05 27398.68 21712.53 here

Nasdaq 7853.74 101.97 1.32 8339.64 6457.13 S&P 500 2878.38 31.27 1.10 3027.98 2443.96 Toronto 16098.79 61.21 0.38 16672.71 13776.88 KEY ECONOMIC EVENTS FTSE 7094.98 -33.20 -0.47 7727.49 6599.48 Events ET Poll Prior Eurofirst 1460.84 1.40 0.10 1554.34 1308.86 Nikkei 20261.04 -449.87 -2.17 22362.92 19241.37 Monthly home price mm for Jun 0900 -- 0.1% Hang Seng 25680.33 -499.00 -1.91 30280.12 24896.87 Monthly home price yy for Jun 0900 -- 5% Monthly Home Price Index for Jun 0900 -- 275 TREASURIES Yield Price Caseshiller 20 mm SA for Jun 0900 0.2% 0.1% 10-year 1.5401 -4 /32 Caseshiller 20 mm NSA for Jun 0900 -- 0.6% 2-year 1.5432 -1 /32 Caseshiller 20 yy for Jun 0900 2.4% 2.4% 5-year 1.4237 -2 /32 Consumer Confidence for Aug 1000 129.5 135.7 30-year 2.0408 -13 /32 Rich Fed Composite Index for Aug 1000 -- -12 FOREX Last % Chng Rich Fed, Services Index for Aug 1000 -- 11

Euro/Dollar 1.1095 -0.44 Dollar/Yen 106.14 0.71 Sterling/Dollar 1.2218 -0.48 S&P 500 Price $ Chng % Chng Dollar/CAD 1.3257 -0.16 GAINERS TR/HKEX RMB 90.80 -0.02 TechnipFMC PLC 24.01 0.91 3.94 DISH Network Corp 32.26 1.22 3.93 COMMODITIES ($) Price Chng % chng CenturyLink Inc 11.61 0.40 3.52 LOSERS Front Month Crude /barrel 53.81 -0.36 -0.66 Philip Morris International Inc 77.75 -3.47 -4.27 Spot gold (NY/oz) 1528.58 2.47 0.16 L Brands Inc 16.92 -0.61 -3.48 Copper U.S. (front month/lb) 0.0254 0.0001 0.30 Gap Inc 16.38 -0.55 -3.22 CRB Index Total Return 177.71 0.34 0.19

Market Monitor

Stocks rose, following a sharp sell- off in the prior session, after U.S. President Donald Trump predicted a trade deal with China, cooling investor concerns after a ramp-up in rhetoric derailed markets last week. "If there is one thing we have learned over the last year or so is things can change very quickly," said Mike Loewengart, vice president, investment strategy at E*Trade Financial Corp. "The sentiment is optimism on account of the hopes that there will be some progress on the trade front, coupled with some encouraging economic metrics that reinforced the strength." Shares of tariff-sensitive companies rose in response. Apple's 1.9% gain boosted technology stocks by 1.39% to 1369.95. The Philadelphia Semiconductor index rose 0.86% to Traders watch monitors displaying a media conference with U.S. President Donald Trump live at 1458.88. Dish Network shares rose the G7 summit on the trading floor at the New York Stock Exchange (NYSE) in New York City, 3.93% after brokerage upgrade. The U.S., August 26. REUTERS/Andrew Kelly Dow Jones Industrial Average rose 1.05%, to 25,898.83, the S&P 500 The dollar strengthened, recovering their trade war. "Now the market is gained 1.10% to 2,878.38 and the from overnight losses after the United pondering the possibility that we'll see Nasdaq Composite added 1.32%, to States and China sought to ease trade a flood or Iranian oil come onto the 7,853.74. war tensions. "It has been a bit of a market if there's progress made," said roller coaster. We had the dollar Phil Flynn, an analyst at Price Futures The yield curve inverted further with opening up quite weak in Asia last Group in Chicago. "We have to be yields on shorter-dated yields rising night. Then a number of things have admittedly cautious because we've more than longer-dated ones, as happened to reverse that including heard of deals one minute only to be upcoming supply of shorter-maturity dollar/CNH pushing higher," said tweeted down the next minute." Brent Treasury debt outweighed the easing Daniel Katzive, head of foreign crude lost 0.79% to $58.87 a barrel. of trade tensions between China and exchange strategy for North America at U.S. crude futures fell 0.66% to the United States. The U.S. Treasury BNP Paribas. In a sign that some calm $53.81 a barrel. Department will sell $113 billion in fixed had returned to markets, the dollar -rate debt supply this week, starting rose 0.72% against the Japanese yen Gold erased early gains, slipping from with a $40 billion auction of two-year to 106.15 yen. The dollar index was a six-year high touched during the notes on Tuesday. Benchmark notes last up 0.44% at 98.07. session, as some of the safe-haven fell 4/32 yielding 1.54%. 2-year notes demand waned. Spot gold was last were down 1/32 to yield 1.54%. The Oil prices edged lower on the outlook 0.1% up at $1,527.70 per ounce, inversion between two-year and 10- for increased supply of Iranian crude paring gains to shed more than $20 year yields deepened to -1.7 basis after France's president lifted hopes for from earlier in the session when the points and was last -0.5 basis points. a deal between Washington and metal had jumped to its highest level 30-year bonds fell 13/32 yielding Tehran, but losses were limited by since April 2013 at $1,554.56. Gold 2.04%. growing hopes that the United States futures were 0.04% higher at and China could make a deal to end $1,538.20 per ounce.

Top News

Amgen to buy Celgene psoriasis Celgene's Otezla growth story drug Otezla for $13.4 billion Amgen will buy Celgene's psoriasis drug Otezla for $13.4 billion in cash, clearing the way for Bristol-Myers Squibb to go ahead with its $74 billion deal for Celgene by the end of the year. Amgen is paying a hefty price for the drug, analysts and investors said. Bristol-Myers said in June that it would sell Otezla to allay concerns raised by the Federal Trade Commission because of a competing treatment that it is developing. Otezla brought in sales Click on the chart for a detailed and interactive graphic of $1.61 billion last year. Amgen said it expected the drug's sales to grow at least in the low-double digits over the companies such as Facebook, Google company was forced to restate three next five years. Amgen said it expects and Amazon. They are currently able to years of results. Basilio had been the deal to produce tax benefits with a book profit in low-tax countries such as Heinz's finance chief when it merged present cash value of $2.2 billion, Ireland and Luxembourg, no matter with Kraft in 2015 and remained in the reducing the actual deal total to $11.2 where the revenue originates. role in the unified company until billion. Bristol-Myers said most of the October 2017, when Kraft Heinz's proceeds from the sale will go to pay KFC partners with Beyond Meat to second largest shareholder 3G Capital down debt from the Celgene deal. It test plant-based nuggets, wings persuaded the board to embark on also increased a previously planned $5 Yum Brands said will be testing changes centering around heavy cost- billion accelerated share buyback to $7 Beyond Meat's plant-based chicken cutting. Under 31-year old Knopf, who billion. nuggets and boneless wings at an would return to his role as a partner at Atlanta KFC restaurant, the latest fast- 3G Capital, Kraft Heinz has this year Macron defuses French digital tax food chain trying new options to attract written down $15.4 billion in the value row, Trump coy on wine threat vegan diners. The quick-service of two marquee brands, slashed France and the United States reached restaurant will roll out its vegan menu dividends and withdrawn its financial a deal to end a standoff over a French items nationally based on the customer outlook. tax on big internet companies, though feedback from the Atlanta test, Yum U.S. President Donald Trump declined said. Beyond Meat has already Constellation expects $54.8 million to say whether his threat of a retaliatory partnered with sandwich chain in quarterly losses from Canopy wine tax was off the table as a result. Subway, Del Taco Restaurant, Carl's investment The compromise struck between Jr, Dunkin' Brands and Restaurant Constellation Brands expects to record French Finance Minister Bruno Le Brand International's Tim Hortons. KFC a loss of about $54.8 million in its Maire, U.S. Treasury Secretary Steven will be serving the six or 12-piece current quarter from its billion-dollar Mnuchin and Donald Trump's White combo plant-based nugget meals for investment in weed producer Canopy House economic adviser Larry Kudlow $6.49 and $8.49 and boneless wings Growth, the Corona brewer disclosed foresees France repaying companies for $6 and $12. in a regulatory filing. The brewer's the difference between the French tax estimate comes after Canopy's Chief and a planned mechanism being drawn Kraft Heinz brings back former CFO Executive Officer Mark Zekulin earlier up by the OECD. France's 3% levy after accounting missteps this month told investors it needs applies to revenue from digital services Kraft Heinz's newly-appointed chief another three to five years to turn in a earned by firms with more than 25 executive officer replaced finance chief profit. Canopy has not been able to million euros in French revenue and David Knopf in what he said was a turn in a profit even as it records 750 million euros worldwide. U.S. strategic decision, naming the more soaring sales, as the company invests officials complain it unfairly targets U.S. "seasoned" Paulo Basilio, after the on new equipments, product research

and marketing. Constellation reported a now also mulling another price hike in Pitney Bowes to sell software loss of $1.30 per share in the first December after China's commerce solutions unit for $700 million to cut quarter compared with a profit of $3.77 ministry last week announced it would debt a year ago, mainly due to a 20 cents reinstitute tariffs of 25% on vehicles Mail management company Pitney per share loss related to Canopy. and 5% on auto parts which it Bowes said it would sell its software suspended in December, in the latest solutions unit to enterprise solutions PDC Energy to buy SRC for $971 tit-for-tat escalation of the trade war. provider Syncsort for $700 million in an million in cash push all-cash deal, as it looks to cut its debt. Oil and gas producer PDC Energy "We have several tranches of debt that agreed to buy smaller rival SRC are maturing over the next two years Energy in a $971.3 million all-stock and we will use the majority of the net deal, in an attempt to boost its cash proceeds from this transaction to pay flow and create the second largest down that debt and we will refinance producer in Colorado's DJ basin. PDC the remainder," said Stan Sutula, also raised its share buyback program executive vice president and chief to $525 million from $200 million and financial officer. Pitney cut its 2019 plans to use almost half of its estimated adjusted earnings forecast in the range free cash flow of about $800 million to REUTERS/Charles Platiau of 65 cents to 75 cents from 90 cents to buy back shares till the end of 2021. $1.05 estimated earlier, and revised its The merged entity will hold 182,000 net Oil services firm TechnipFMC to full-year revenue forecast to 1%-2% acres in the Wattenberg field in the DJ split into two publicly traded from 1%-3%. basin, along with PDC's 36,000 net companies acres in the Permian Delaware basin. Franco-American oil services firm Nvidia, VMware release cloud PDC is expected to exit 2019 with TechnipFMC said it would spin off its software to court business about 200,000 barrels of oil equivalent engineering and construction customers - Reuters News per day in production. The offer, under operations into a separate company, Chip supplier Nvidia said it was which SRC shareholders will get 0.158 leaving it as a technology-focused teaming up with VMware and PDC shares for each share held, equipment supplier to oil and gas Amazon.com's cloud division to court implies a price of $3.99 per SRC share companies. TechnipFMC, which had a large businesses looking to host or a 3.9% discount to the company's market capitalization of $10.31 billion, artificial intelligence programs in close on Friday. said the new Paris-based company will Amazon's cloud. Many mainstream deal with onshore and offshore oil and businesses use software made by Tesla to raise prices in China on gas projects. The split is expected to VMware to help shuffle computing work Aug. 30, may increase again in be final in the first half of 2020. "The back and forth between their own data December -sources strategic rationale is compelling," Chief centers and cloud data centers owned U.S. electric vehicle maker Tesla will Executive Doug Pferdehirt told by Amazon Web Services, depending raise prices in China on Friday, earlier investors during a conference call. on where the cost is best. But that has than planned, and is considering "When you over-integrate, the been difficult to do with computer increasing prices again in December customer sometimes sees you as programs that rely on Nvidia chips for a should Chinese tariffs on U.S.-made being greedy. That doesn't work very speed boost. The companies said cars take effect, people familiar with well. We're a humble company, and Nvidia intends to release a new piece the matter said. Reuters reported this like to integrate where it makes clear, of software called vComputeServer to month that Tesla was considering to lift commercial sense," he said. Pferdehirt address the issue and let their joint prices in China from September after will remain CEO for the upstream- customers move Nvida-aided the yuan weakened significantly focused company, which will focus on computing work around more easily. against the U.S. dollar. One person told capital intensive subsea technologies The companies did not say when the Reuters that the automaker was and services. The Houston-based software would be released. bringing forward these plans to Aug. company will have a workforce of about 30. Both people said the automaker is 22,000 people.

Revellers take part in the Notting Hill Carnival in London, Britain August 26. REUTERS/Toby Melville

Insight and Analysis

Central bankers face political apart and raising the specter of a broad dismal performers during Wall Street’s shocks, and hope to avoid the worst global downturn. Worse, it’s a record bull run and now face a shaky Global central bank chiefs know their downturn none of the central bankers global economy, doubts about fossil job is to keep the economy out of the seemed confident about how to fight - fuel investments and general market ditch. What became clear at the U.S. coming not from a business- or skepticism. Energy has been the worst Federal Reserve’s central banking financial-cycle meltdown that they have performing of the 11 S&P 500 sectors conference in Jackson Hole, Wyoming, a playbook to combat, but from political this year, the worst performer since over the past couple of days is that not choices that threaten to crater business U.S. President Donald Trump’s 2016 only do other people hold the wheel, confidence. election and the worst performer since some seem intent on steering toward the U.S. bull stock market began more trouble. Even as central bankers and No ready spark seen for lagging U.S. than a decade ago. This year, the economists referred to the deep energy shares energy sector has even failed to keep connections that now tie the world’s There may be little relief on the horizon pace with oil prices, despite their economies together, a U.S.-driven for investors in U.S. energy companies, traditional tendency to move in the trade war seemed to be driving them whose shares moved from darlings to same direction.

CANADA

MARKET MONITOR Coming Up Canada's main stock index rose, REUTERS/Chris Wattie lender's provisions for loan losses, powered by gains in energy shares. which drove the profit miss in the The Toronto Stock Exchange's S&P/ previous quarter. Company executives TSX composite index ended 0.38% will discuss the results on a conference higher at 16,098.79. The energy call with analysts. sector rose 0.22% to 120.36.

Bank of Montreal, Canada's fourth The U.S. dollar was 0.2% lower largest lender, is expected post a rise against its Canadian counterpart at in adjusted third-quarter profit. C$1.3252. Investors will look for commentary Bank of Nova Scotia, the third largest around net interest margins, a key Canadian lender by market value, is measure of profitability for banks, and expected to post a rise in third-quarter the interest rate outlook. profit. Investors will keep an eye on the

TSE's S&P/TSX composite Price C$ chng % chng

GAINERS Bombardier Inc 1.67 0.09 5.70 Shopify Inc 524.34 15.93 3.13 Gran Tierra Energy Inc 1.66 0.04 2.47 LOSERS CannTrust Holdings Inc 2.37 -0.11 -4.44 Cascades Inc 10.97 -0.48 -4.19 Nexgen Energy Ltd 1.53 -0.06 -3.77

Top News

REUTERS/Dan Riedlhuber fixed contracts on its Mainline pipeline Canadian crude exports to the United system, arguing the changes would be States, and currently allocates capacity an abuse of Enbridge's market power. on a monthly basis. It is a crucial Suncor Energy, Canada's second- conduit for producers at a time when largest oil producer, and Shell Canada, pipeline capacity is so constrained the a subsidiary of Royal Dutch Shell wrote Alberta government last week to the National Energy Board on Friday extended mandatory production opposing Enbridge's plans. They join curtailments. Enbridge launched a two- MEG Energy and the Explorers and month open season to solicit bids from Producers Association of Canada shippers for contracted space on 90% Suncor and Shell urge Canadian (EPAC) in a growing chorus of dissent of the Mainline's capacity. Suncor and regulator to review contentious against Enbridge's proposal to Shell asked the NEB, which will Enbridge pipeline plan introduce long-term fixed-volume ultimately approve or reject Enbridge's Two major oil companies have asked contracts on North America's largest application, to review the terms on offer Canada's energy regulator to urgently pipeline system. The 2.85-million-barrel before the open season closes on Oct. review Enbridge's proposal to switch to -per-day Mainline carries the bulk of 2.

WEALTH NEWS

MODEST BUSINESS INVESTMENT RISE U.S. Durable Goods U.S. business investment appears to struggle in third quarter New orders for key U.S.-made capital goods rose modestly in July while shipments fell by the most in nearly three years, pointing to continued weakness in business investment and a slowdown in economic growth early in the third quarter. Orders for non-defense capital goods excluding aircraft increased 0.4% last month, the government said, driven by strong demand for electrical equipment, appliances and components. Data for June was revised down to show these so-called core capital goods orders advancing 0.9% instead of surging 1.5% as previously reported. Overall orders for durable goods increased 2.1% in July.

TRUMP SOFTENS TRADE STANCE Trump says China trade deal coming, Beijing calls for resolution of dispute U.S. President Donald Trump predicted a trade deal with China after positive gestures by Beijing, calming global markets that have been roiled by new tariffs from the world’s two largest economies.

USA-JAPAN TRADE Trump not considering U.S. tariffs on Japanese autos 'at this moment' U.S. President Donald Trump said the United States would not imminently impose new tariffs on autos imported from Japan as the largest and third-largest economies continue their trade negotiations.

LIFELINE FOR EU CARMAKERS Trump sees possible U.S.-EU trade deal that would avert car tariffs U.S. President Donald Trump said he thinks the United States will be able to reach a fair trade agreement with the European Union without imposing threatened tariffs on car imports, offering a potential lifeline to German carmakers.

BIOFUEL CREDITS Biofuel credit surplus could blunt RIN price impact from Trump moves: sources A big surplus of U.S. biofuel blending credits would likely blunt potential price increases in the market if the Trump administration follows through on its proposal to boost blending volumes mandates, four industry sources said.

EU DATA COLLECTION German cartel office to take Facebook case to High Court Germany’s cartel office said it would appeal a regional court decision to suspend restrictions it had placed on Facebook’s data collection practices to the country’s highest court.

TAKING AXEL SPRINGER PRIVATE KKR becomes Axel Springer's biggest shareholder KKR has become the biggest shareholder of German media group Axel Springer, paying 2.9 billion euros for a 43.54% stake, the U.S. private equity firm said.

ON THE RADAR Events ET Poll Prior Thu: Corporate profits preliminary for Q2 0830 -- -4.1% GDP 2nd estimate for Q2 0830 2% 2.1% GDP sales preliminary for Q2 0830 2.9% 3% GDP cons spending preliminary for Q2 0830 -- 4.3% GDP deflator preliminary for Q2 0830 2.4% 2.5% Core PCE prices preliminary for Q2 0830 1.8% 1.8% PCE prices preliminary for Q2 0830 2.3% 2.3% Advance goods trade balance for Jul 0830 -- -74.16 bln Wholesale inventories advance for Jul 0830 -- 0% Retail inventories ex-auto advance for Jul 0830 -- -0.1% Initial jobless claims 0830 215,000 209,000 Jobless claims 4-week average 0830 -- 214,500 Continued jobless claims 0830 1.680 mln 1.674 mln Pending Homes Index for Jul 1000 -- 108.3 Pending sales change mm for Jul 1000 0.0% 2.8%

Fri: Personal income mm for Jul 0830 0.3% 0.4% Personal consumption real mm for Jul 0830 -- 0.2% Consumption, adjusted mm for Jul 0830 0.5% 0.3% Core PCE price index mm for Jul 0830 0.2% 0.2% Core PCE price index yy for Jul 0830 1.6% 1.6% PCE price index mm for Jul 0830 -- 0.1% PCE price index yy for Jul 0830 -- 1.4% Chicago PMI for Aug 0945 47.5 44.4 U Mich Sentiment Final for Aug 1000 92.1 92.1 U Mich Conditions Final for Aug 1000 -- 107.4 U Mich 5-year inflation final for Aug 1000 -- 2.6%

KEY RESULTS

Company Name* Quarter ET Smart Estimates EPS Estimates** Year Ago Rev Estimates (mln)

Autodesk Q2 AMC $0.62 $0.61 $0.19 $786.98 Hewlett Packard Enterprise Q3 AMC $0.40 $0.40 $0.44 $7,260.90 J M Smucker Q1 07:00 $1.75 $1.74 $1.78 $1,873.65

*Includes companies on S&P 500 index. **Estimates may be updated or revised; release times based on company guidance or past practice.

I/B/E/S EPS and revenue estimates, and StarMine Smart Estimates, provided by Refinitiv.

The Day Ahead - North America is compiled by Nayyar Rasheed and Yoganand KN in Bengaluru.

For questions or comments about this report, email us at: [email protected].

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