MORNING NEWS CALL Powered by Re uters

U.S. Edition 'lllurodoy. 18,. 2021

TOP NEWS • Minutes highlight a Fed split over labor market, bond-buying taper Federal Reserve officials felt their employment benchmark for decreasing support for the economy "could be reached this year," but appeared to disagree on other key aspects of where monetary policy should turn next in the transition from the pandemic crisis, according to minutes from last month's policy meeting.

• to buy Dutch asset manager NNIP for around $2 billion Goldman Sachs said it will buy Dutch insurer NN Group's asset management arm for around $1.98 billion in the biggest acquisition by the U.S. company since David Solomon became chief executive in 2018.

• U.S. states rush to meet deadline to join $26 billion opioid settlement U.S. states are racing to meet a deadline to commit to a $26 billion opioid settlement with three drug distributors and the drugmaker Johnson & Johnson, as some grapple with local resistance and concerns the amount isn't big enough to address the damage done by an epidemic of addiction.

• Estee Lauder tops quarterly sales estimates as demand for makeup rebounds Estee Lauder beat market estimates for quarterly sales, as the cosmetics maker benefited from a rebound in demand for makeup products after Americans started venturing out following the easing of coronavirus restrictions.

• Three U.S. senators urge more Taiwanese help on automotive chip shortage A trio of Democratic U.S. senators has asked the Taiwanese government for more help to address an ongoing chip shortage that has left numerous American auto production lines standing idle at times, according to a letter reviewed by .

BEFORE THE BELL U.S. stock index futures and European equities fell, as minutes from the Fed's July meeting showed tapering of its massive stimulus is possible this year. Japan's Nikkei closed lower following a report that Toyota plans to slash its global output, while Chinese shares ended down, dragged by consumer staples and financial stocks. The dollar rose, while gold prices were little changed. Oil dropped to its lowest in about three months, pressured by concerns about weaker demand as COVID-19 cases rise globally. U.S. jobless claims data is scheduled for release later in the day. REFINITIV" DATA IS .JUST I ~ 1 TH: 3EGINNlt--G '- MORNING NEWS CALL - U.S. EDITION Au ust 19, 2021

STOCKS TO WATCH

Results • Cisco Systems Inc: The company's first-quarter profit forecast fell short of estimates on Wednesday, with the network gear maker warning that supply chain issues would continue to drive up component costs and delivery backlogs. It expects first-quarter revenue to grow 7.5% to 9.5% year-over-year, while Wall Street expects it to rise about 7.6%. However, Cisco edged past fourth-quarter revenue and profit estimates, helped by more people using its videoconferencing platform Webex, virtual private network AnyConnect and cybersecurity products as offices adapt to hybrid work.

• Estee Lauder Companies Inc: The company beat market estimates for quarterly sales, as the cosmetics maker benefited from a rebound in demand for makeup products after Americans started venturing out following the easing of coronavirus restrictions. Sales in its makeup division surged 76% on a reported basis to $960 million in the fourth quarter, marking a return to growth for the first time in more than a year. Net sales rose to $3.94 billion in the fourth quarter, from $2.43 billion a year earlier. Analysts had expected net sales of $3.75 billion, according to IBES data from Refinitiv.

• Nvidia Corp: The company on Wednesday said talks with regulators to clear its $40 billion proposed acquisition of British semiconductor technology firm Arm are taking longer than expected. The disclosure came as Nvidia forecast third-quarter revenue above Wall Street expectations on Wednesday as it benefits from a boom in demand. The company estimated current-quarter revenue at $6.80 billion, plus or minus 2%. Analysts on average had expected $6.53 billion, according to IBES data from Refinitiv. Nvidia also beat expectations for second-quarter revenue with a 68% rise to $6.51 billion. The company said second-quarter adjusted profit was $1.04 per share, versus estimates of $1.01 per share, according to Refinitiv data.

• Robinhood Markets Inc: The company expects retail investors to become less active in the third quarter, after frantic trading in crypto currencies helped more than double its revenue, the online brokerage said in its first earnings report as a public company. Robinhood posted net revenue of $565 million for the second quarter compared with $244 million a year earlier. That 131% gain is above the mean analyst estimate of $521.8 million, according to Refinitiv IBES. Monthly active users increased 109% to 21.3 million, compared to 10.2 million in the second quarter of 2020, while assets under custody increased 205% to $102 billion, compared with $33 billion a year before.

• Tapestry Inc: The Coach handbag maker beat quarterly sales estimates, as a vaccine-aided reopening of economies boosted demand for designer apparel and purses. Net sales rose to $1.62 billion in the fourth quarter from $714.8 million a year earlier, topping analysts' average estimate of $1.56 billion, according to IBES data from Refinitiv. The luxury brand plans to return over $750 million to shareholders in fiscal year 2022 by reinstating its dividend and share buyback program.

Deals Of The Day • Goldman Sachs Group Inc: The company said it will buy Dutch insurer NN Group's asset management arm for $1.98 billion in the biggest acquisition by the U.S. company since David Solomon became chief executive in 2018. The deal is part of Solomon’s strategy to make the bank’s revenue stream less reliant on earnings from trading and advising on deals. NNIP, or NN Investment Partners, has $335 billion in assets under management, and the acquisition will double the total that Goldman Sachs manages in Europe to more than $600 billion. As part of the deal, NN Group has committed to leave its $190 billion portfolio of insurance assets under NNIP management after it joins Goldman.

In Other News • Alphabet Inc: A Moscow court fined Google 6 million roubles for failing to delete content that Russia deems illegal, the second such penalty to be imposed on the U.S. tech giant in less than a week. Amid a wider standoff with Big Tech, Russia has hit Google and other companies with a series of small fines in the past year, some

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DATA IS JUST 2 THE BEGINNING ~ MORNING NEWS CALL - U.S. EDITION Au ust 19, 2021 concerning banned content and others for failing to localise user data on Russian territory. The Tagansky District Court in Moscow said Google had been handed three administrative fines of 2 million roubles each. Google confirmed the fines, but offered no further comment.

• AmerisourceBergen Corp, Cardinal Health Inc, Johnson & Johnson & McKesson Corp: U.S. states are racing to meet a deadline to commit to a $26 billion opioid settlement with three drug distributors and the drugmaker Johnson & Johnson, as some grapple with local resistance and concerns the amount isn't big enough to address the damage done by an epidemic of addiction. Fourteen state attorneys general unveiled the proposed settlement with McKesson, AmerisourceBergen, Cardinal Health and J&J on July 21, kicking off a months-long process for states, counties and cities to sign on. By Saturday, states must decide whether to join settlements that call for the distributors to pay $21 billion and J&J to pay $5 billion, money meant to help fund treatment and other services. The settlement's complex formula envisions at least 44 states participating, but ultimately the companies decide whether a "critical mass" have joined and whether to finalize the deal.

• Apple Inc: More than 90 policy and rights groups around the world published an open letter urging Apple to abandon plans for scanning children’s messages for nudity and the phones of adults for images of child sex abuse. "Though these capabilities are intended to protect children and to reduce the spread of child sexual abuse material, we are concerned that they will be used to censor protected speech, threaten the privacy and security of people around the world, and have disastrous consequences for many children," the groups wrote in the letter, which was first reported by Reuters.

• Baidu Inc: the company has raised $1 billion in a two-tranche U.S. dollar sustainability bond, negotiating better- than-expected terms amid strong demand and despite concerns about China's regulatory clampdown on the tech sector. Its 5.5-year tranche bond raised $300 million and the 10-year tranche secured $700 million, a company statement said. It was the first major debt fundraising by a Chinese tech firm since the latest onslaught of regulatory actions that began in July, and its success should give other issuers confidence there is still significant global investor interest in Chinese deals, bankers said.

• ConocoPhillips: A federal judge on Wednesday reversed the U.S. government's approval of the company' planned $6 billion Willow oil development in Alaska, citing problems with its environmental analysis, according to court documents. In her order, Alaska District Court Judge Sharon Gleason said she was vacating the U.S. Bureau of Land Management's approval of the development in part because the agency failed to include greenhouse gas emissions from foreign oil consumption in its environmental analysis. It also "failed to adequately analyze a reasonable range of alternatives" for the project, she wrote. ConocoPhillips spokesperson Dennis Nuss said the company would review the decision and evaluate its options for the project.

• Mastercard Inc: A London court on Wednesday approved a 10 billion pound-plus class action against the global payments processor that claimants said could entitle 46 million British adults to roughly 300 pounds each if it is successful. The Competition Appeal Tribunal (CAT) had been expected to certify Britain's first mass consumer class action, brought by former financial ombudsman Walter Merricks, after the UK Supreme Court overruled objections to it in December. The decision to finally authorise the five-year case as a collective action establishes a standard for a string of other proposed class actions that have been stalled in its wake.

• Netflix Inc: The U.S. Securities and Exchange Commission (SEC) said on Wednesday it has charged three former engineers at the company with trading on non-public information around the company's subscriber growth that generated over $3 million in total profit. The SEC's complaint, filed in federal court in Seattle, charges the streaming service's ex-staffers with violating antifraud provisions and trying to evade detection by using encrypted messaging applications. It also found that the staffers exchanged the information with relatives and friends so as to receive cash kickbacks in advance of several consecutive Netflix quarterly earnings, the SEC said. The defendants may also pay fines, the SEC said.

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• Tesla Inc: The company said it will join hands with Japanese companies to build an energy storage facility using its rechargeable battery in Hokkaido in northern Japan to help stabilise the power system in the wake of rising renewable energy use. The company will collaborate with Japanese power retailer and aggregator Global Engineering and engineering firm Ene-Vision to build the energy storage facility connected to the grid with 6,095 kilowatts hour (kWh) capacity that could power about 500 homes. Tesla will supply its Megapack battery technology for the project, which is due to start operating in summer 2022.

• Toyota Motor Corp: The company will slash global production for September by 40% from its previous plan, the company said, becoming the last major automaker to cut output due to critical shortages of semiconductors. A Toyota executive said the September cuts included 14 factories in Japan and overseas plants, and that it was reducing its planned global production that month by around 360,000 vehicles. The carmaker had already halted assembly lines at some Japanese factories between late July and early August, including its Tahara plant, due to a surge in infections in Vietnam which had constrained the supply of parts, the Nikkei reported earlier.

PREVIEW Musk's 'AI Day' confronts tough questions about Tesla's technology At Tesla's "Autonomy Day" event in April 2019, Chief Executive Elon Musk said that by mid-2020 Tesla would have over a million self-driving vehicles where riders "could go to sleep" during a trip. Tesla has not achieved that goal and on Thursday Musk is staging another event, called "AI Day," to promote his electric car company as the place to work for the engineers he needs to make good on his promises for autonomous vehicles.

ANALYSTS' RECOMMENDATION • Lowe's Companies Inc: Piper Sandler raises target price to $225 from $220, citing the company's upbeat second-quarter earnings, saying Lowe's continues to ramp investments to position itself better for longer-term growth and market share gains.

• Nvidia Corp: JPMorgan raises target price to $220 from $215, as the company delivered solid second-quarter performance driven by data center acceleration and strong gaming demand.

• Synopsys Inc: JPMorgan raises target price to $350 from $305, based on the company's strong third-quarter earnings and the preliminary comments for the long-term outlook.

• Target Corp: Raymond James raises target price to $285 from $252, reflecting the company's impressive second-quarter results.

• TJX Companies Inc: Wells Fargo raises target price to $80 from $75, following a robust second-quarter and the company's optimistic view around the next financial year's margin drivers.

ECONOMIC EVENTS (All timings in U.S. Eastern Time) 0830 (approx.) Initial jobless claims: Expected 363,000; Prior 375,000 0830 (approx.) Jobless claims 4-week average: Prior 396,250 0830 (approx.) Continued jobless claims: Expected 2.800 mln; Prior 2.866 mln 0830 (approx.) Philly Fed Business Index for Aug: Expected 23.0; Prior 21.9 0830 (approx.) Philly Fed 6M Index for Aug: Prior 48.60 0830 (approx.) Philly Fed Capex Index for Aug: Prior 41.20 0830 (approx.) Philly Fed Employment for Aug: Prior 29.20 0830 (approx.) Philly Fed Prices Paid for Aug: Prior 69.70 0830 (approx.) Philly Fed New Orders for Aug: Prior 17.00 1000 (approx.) Leading index change mm for July: Expected 0.8%; Prior 0.7%

COMPANIES REPORTING RESULTS Applied Materials Inc: Expected Q3 earnings of $1.77 per share Ross Stores Inc: Expected Q2 earnings of 98 cents per share

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CORPORATE EVENTS (All timings in U.S. Eastern Time) 0800 Bilibili Inc: Q2 earnings conference call 0800 Macy's Inc: Q2 earnings conference call 0800 Tapestry Inc: Q4 earnings conference call 0830 BJ's Wholesale Club Holdings Inc: Q2 earnings conference call 0830 Petco Health and Wellness Company Inc: Q2 earnings conference call 0830 Stevanato Group SpA: Q2 earnings conference call 0900 Bath & Body Works Inc: Q2 earnings conference call 0900 Kohls Corp: Q2 earnings conference call 0900 Performance Food Group Co: Q4 earnings conference call 0930 Estee Lauder Companies Inc: Q4 earnings conference call 0930 Victoria's Secret & Co: Q2 earnings conference call 1000 Kansas City Southern: Shareholders Meeting 1200 Amerco: Annual Shareholders Meeting 1400 Celsius Holdings Inc: Annual Shareholders Meeting 1615 Ross Stores Inc: Q2 earnings conference call 1630 Applied Materials Inc: Q3 earnings conference call 1630 Farfetch Ltd: Q2 earnings conference call

EX-DIVIDENDS Bath & Body Works Inc: Amount $0.15 Cognex Corp: Amount $0.06 Cognizant Technology Solutions Corp: Amount $0.24 Cummins Inc: Amount $1.45 Evergy Inc: Amount $0.53 Hershey Co: Amount $0.90 Microchip Technology Inc: Amount $0.43 Moody's Corp: Amount $0.62 Otis Worldwide Corp: Amount $0.24 Primerica Inc: Amount $0.47 Raytheon Technologies Corp: Amount $0.51 Royalty Pharma PLC: Amount $0.17 Sherwin-Williams Co: Amount $0.55 Snap-On Inc: Amount $1.23 Tetra Tech Inc: Amount $0.20 Timken Co: Amount $0.30 Walgreens Boots Alliance Inc: Amount $0.47

(All analysts' estimates are according to I/B/E/S Refinitiv data)

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PICTURE OF THE DAY

Clouds pass over middle Manhattan and the Empire State Building as Tropical Storm Henri passes through , as seen from Weehawken's Hamilton Park in New Jersey, August 18. REUTERS/Eduardo Munoz

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(Compiled by Nidhi C Sai and Yoganand KN in Bengaluru) Refinitiv , New York, NY 10036 To subscribe for The Morning Newscall newsletter click here Please visit: Refinitiv for more information. For questions or comments about this report, contact: [email protected] Privacy statement

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