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01/12/22 Briefing

The S&P 500 futures are up 2 points and are trading roughly in line with fair value. The Nasdaq 100 futures are down 1 point and are trading slightly below fair value. The Dow Jones Industrial Average futures are down 21 points and are trading 0.2% below fair value.

Market participants are taking a pause this morning, waiting to see if there's follow through from yesterday's rally. Equity futures are mixed and little changed in front of key economic releases today, including the weekly initial jobless claims and continuing claims, the November ISM Manufacturing Index, and the Personal Spending and Income Report, which contains the PCE Price Index.

China will ease some of its coronavirus protocols, including allowing isolation at home and reduction in mass testing, according to Reuters.

Treasury yields still declining. The 2-yr note yield is down seven basis points to 4.31% and the 10-yr note yield is down 11 basis points to 3.59%.

The U.S. Dollar Index is down 0.6% to 105.40.

In corporate news:

  • Salesforce (CRM 148.46, -11.79, -7.4%): beats by $0.18, reports revs in-line; guides Q4 EPS in-line, revs below consensus; announces that Bret Taylor will step down as Vice Chair and Co-CEO, effective January 31, 2023; Marc Benioff will be Chair and CEO of the company

  • Splunk (SPLK 83.74, +6.06, +7.8%): beats by $0.58, beats on revs; guides Q4 revs in-line; slightly lowers FY23 Cloud ARR guidance

  • Box (BOX 27.44, -0.01, -0.04%): beats by $0.01, reports revs in-line; guides Q4 EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Snowflake (SNOW 136.28, -6.62, -4.6%): beats by $0.06, beats on revs; Sees Q4 Product revenue between $535-540 mln, up 49-50% yr/yr

  • Okta (OKTA 62.39, +9.07, +17.0%): beats by $0.24, beats on revs; guides Q4 EPS above consensus, revs in-line

  • Five Below (FIVE 176.00, +15.14, +9.4%): beats by $0.14, beats on revs, comps better than expected; guides Q4 EPS above consensus, revs above consensus

  • Elastic (ESTC 52.19, -9.00, -14.7%): beats by $0.10, beats on revs; guides Q3 EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus; also announces workforce reduction

  • Synopsys (SNPS 365.00, +25.46, +7.5%): beats by $0.07, reports revs in-line; guides Q1 EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • Dollar General (DG 241.99, -13.69, -5.4%): misses by $0.22, reports revs in-line; guides Q4 EPS below consensus; reaffirms FY23 revs guidance

  • G-III Apparel (GIII 15.82, -5.81, -26.9%): misses by $0.49, reports revs in-line; guides FY23 EPS below consensus, reaffirms FY23 revs guidance; also extends license agreements for Calvin Klein and Tommy Hilfiger

  • General Electric (GE 86.20, +0.23, +0.3%): Board of Directors approves previously announced spin-off of its healthcare business; GE Healthcare expected to begin trading on Nasdaq on January 4, 2023, under the ticker 'GEHC'

  • Costco (COST 524.24, -15.01, -2.9%): reports November adjusted comparable sales growth of 5.3%

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a higher note. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: +0.5%, India's Sensex: +0.3%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: +1.0%.

  • In economic data:

  • China's November Caixin Manufacturing PMI 49.4 (expected 48.9; last 49.2)

  • Japan's final November Manufacturing PMI 49.0 (expected 49.4; last 49.4) and Q3 Capital Spending 9.8% yr/yr (expected 6.4%; last 4.6%). November Household Confidence 28.6 (expected 30.3; last 29.9)

  • South Korea's Q3 GDP 0.3% qtr/qtr, as expected (last 0.7%); 3.1% yr/yr, as expected (last 2.9%). November trade deficit $7.01 bln (expected deficit of $4.42 bln; last deficit of $6.70 bln). November Imports 2.7% yr/yr (expected 0.2%; last 9.9%) and Exports -14.0% yr/yr (expected -11.0%; last -5.7%). November Manufacturing PMI 49.0 (last 48.2)

  • Hong Kong's October Retail Sales 3.9% yr/yr (last -1.4%)

  • Australia's November Manufacturing PMI 51.3 (expected 51.5; last 52.7). Q3 Private New Capital Expenditure -0.6% qtr/qtr (expected 1.5%; last 0.0%)

  • India's November Manufacturing PMI 55.7 (expected 55.0; last 55.3)


  • In news:

  • Tokyo will reportedly raise its coronavirus alert level.

  • Japan reported its first contractionary reading of the Manufacturing PMI in 22 months while South Korea's Manufacturing PMI remained in contraction for the fifth month in a row.

  • Japan's Chief Cabinet Secretary Matsuno said that increasing military cooperation between China and Russia is being monitored.



  • Major European indices trade in the green. STOXX Europe 600: +0.9%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.9%.

  • In economic data:

  • Eurozone's October Unemployment Rate 6.5% (expected 6.6%; last 6.6%). November Manufacturing PMI 47.1 (expected 47.3; last 46.4)

  • Germany's October Retail Sales -2.8% m/m (expected -0.6%; last 1.2%); -5.0% yr/yr (expected -2.8%; last -0.9%). November Manufacturing PMI 46.2 (expected 46.7; last 45.1)

  • U.K.'s November Nationwide HPI -1.4% m/m (expected -0.3%; last -0.9%); 4.4% yr/yr (expected 5.8%; last 7.2%). November Manufacturing PMI 46.5 (expected 46.2; last 46.2)

  • France's November Manufacturing PMI 48.3 (expected 49.1; last 47.2)

  • Italy's November Manufacturing PMI 48.4 (expected 47.0; last 46.5). November Unemployment Rate 7.8% (expected 8.0%; last 7.9%)

  • Spain's November Manufacturing PMI 45.7 (expected 45.6; last 44.7)

  • Swiss October Retail Sales -2.5% yr/yr (expected 3.5%; last 2.6%). November CPI 0.0% m/m (expected 0.1%; last 0.1%); 3.0% yr/yr, as expected (last 3.0%). November procure.ch PMI 53.9 (expected 54.0; last 54.9)


  • In news:

  • Final November Manufacturing PMI readings from Germany, France, Spain, Italy, and the U.K. improved from their final October levels, but all remained in contractionary territory.

  • Germany's ifo Institute noted rising demand for service staff.

  • Ambulance drivers in the U.K. voted in favor of a strike.



U.S. equity futures:

  • S&P 500 Futures: +1 @ 4,081

  • DJIA Futures: -43 @ 34,548

  • Nasdaq 100 Futures: UNCH @ 12,030

Overseas:

  • Europe: DAX +0.7%, FTSE +0.1%, CAC +0.2%

  • Asia: Nikkei +0.9%, Hang Seng +0.8%, Shanghai Composite +0.5%

Commodities:

  • Crude Oil +1.01 @ 81.56

  • Nat Gas +0.107 @ 7.037

  • Gold +38.60 @ 1798.50

  • Silver +0.626 @ 22.407

  • Copper +0.0180 @ 3.756

Earnings/Guidance:

  • Bank of Montreal ( BMO 0.01% ) misses by CAD0.03, beats on revs; raises dividend

  • Big Lots ( BIG 12.41% ) misses by $0.05, reports revs in-line

  • Black Hills Corp ( BKH 1.03% ) reaffirms FY22 and FY23 guidance

  • Box ( BOX 3.24% ) beats by $0.01, reports revs in-line; guides Q4 EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Buckle ( BKE 0.31% ) reports November comparable store net sales decreased 0.3% yr/yr

  • CIBC ( CM 5.27% ) misses by CAD 0.33, misses on revs

  • Costco ( COST 7.32% ) reports November adjusted comparable sales growth of 5.3%

  • Credo Technology Group ( CRDO 1.08% ) misses by $0.01, beats on revs; guides Q3 revs in-line

  • Designer Brands ( DBI 19.87% ) misses by $0.05, misses on revs; guides FY23 EPS below consensus

  • Dollar General ( DG 8.73% ) misses by $0.22, reports revs in-line; guides Q4 EPS below consensus; reaffirms FY23 revs guidance

  • Elastic ( ESTC 7.88% ) beats by $0.10, beats on revs; guides Q3 EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus; also announces workforce reduction

  • G-III Apparel ( GIII 41.93% ) misses by $0.49, reports revs in-line; guides FY23 EPS below consensus, reaffirms FY23 revs guidance; also extends license agreements for Calvin Klein and Tommy Hilfiger

  • Humana ( HUM 0.02% ) reaffirms FY22/FY23 EPS guidance

  • Kroger ( KR 1.18% ) beats by $0.06, reports revs in-line; raises FY23 EPS in-line

  • La-Z-Boy ( LZB 4.13% ) beats by $0.20, beats on revs; also increases dividend by 10%

  • Li Auto ( LI 3.05% ) reports November deliveries increased 11.5% yr/yr

  • nCino ( NCNO 1.23% ) beats by $0.01, beats on revs; guides Q4 EPS in-line, revs slightly below consensus

  • NIO ( NIO 4.77% ) reports November deliveries increased 30.3% yr/yr

  • Nutanix ( NTNX 4.39% ) beats by $0.15, beats on revs; guides Q2 revs above consensus; reaffirms FY23 revs guidance

  • ONE Gas ( OGS 12.50% ) issues downside FY23 EPS guidance, also updates its five-year outlook

  • Patterson Companies ( PDCO 0.53% ) beats by $0.06, misses on revs; reaffirms FY23 EPS guidance

  • Pure Storage ( PSTG 2.74% ) beats by $0.06, reports revs in-line; guides Q4 revs in-line

  • PVH ( PVH 11.19% ) beats by $0.42, beats on revs; guides Q4 EPS in-line, revs in-line; also extends most of its license agreements with GIII for Calvin Klein and TOMMY HILFIGER

  • Salesforce ( CRM 9.58% ) beats by $0.18, reports revs in-line; guides Q4 EPS in-line, revs below consensus

  • SecureWorks ( SCWX 5.99% ) beats by $0.05, misses on revs; guides Q4 EPS in-line, revs in-line

  • Semtech ( SMTC 2.24% ) beats by $0.02, beats on revs; guides Q4 EPS below consensus, revs below consensus

  • Snowflake ( SNOW 3.77% ) beats by $0.06, beats on revs

  • Splunk ( SPLK 13.74% ) beats by $0.58, beats on revs; guides Q4 revs in-line; slightly lowers FY23 Cloud ARR guidance

  • Synopsys ( SNPS 5.50% ) beats by $0.07, reports revs in-line; guides Q1 EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • Tecnoglass ( TGLS 2.64% ) raises FY22 revenue guidance to $705-715 mln from $680-700 mln vs. $694.3 mln Capital IQ consensus

  • Toronto-Dominion Bank ( TD 2.32% ) beats by $0.12, beats on revs

  • Victoria's Secret ( VSCO 7.48% ) beats by $0.06, reports revs in-line; guides Q4 EPS in-line

  • XPeng ( XPEV 9.25% ) reports November deliveries of 5,811 vehicles; year-to-date deliveries up 33% yr/yr

  • Yext ( YEXT 17.82% ) beats by $0.03, reports revs in-line; guides Q4 EPS above consensus, revs in-line

News:

  • China will ease some coronavirus protocols including allowing isolation at home and reduction in mass testing, according to Reuters

  • Senate leadership pledged to move forward with bill to avert rail strike, but it's unclear how quickly vote can occur, according to the New York Times

  • EU asks members to set price cap of $60/barrel for Russian oil, according to the Wall Street Journal

  • Macau Gaming Inspection and Coordination Bureau reported November 2022 gross revs -56% yr/yr to HKD 3.0 bln versus -10.7% in October of 2022

  • FTX founder Sam Bankman-Fried claimed that "management failures" led to FTX collapse, according to the New York Times

  • 5th US Circuit Court of Appeals in Louisiana rejected President Biden's request to restore student loan forgiveness program, according to Bloomberg

  • AbbVie ( ABBV 0.70% ) announces provincial reimbursement for RINVOQ for the treatment of rheumatoid arthritis and psoriatic arthritis in Alberta, New Brunswick, Ontario, Quebec and Saskatchewan

  • Aerojet Rocketdyne ( AJRD 0.70% ) awarded a $240 mln modification to a previously awarded Missile Defense Agency contract for Medium Range Ballistic Missiles

  • Altice USA ( ATUS 7.24% ) concludes its review of strategic alternatives for Suddenlink business - unanimously determined that the company continues to operate Suddenlink

  • Amazon ( AMZN 0.26% ): Warner Bros. Discovery's tv production arm is partnering with Amazon Studios to create new animated projects based on DC Comics' IP, according to TheVerge

  • Amazon ( AMZN 0.26% ) hardware teams were first to get jobs eliminated, according to Financial Times

  • Amwell ( AMWL 0.96% ) entered into a Master Services Agreement with Elevance Health (ELV) as of January 1, 2023

  • Apple ( AAPL 0.55% ): Elon Musk tweets "Good conversation. Among other things, we resolved the misunderstanding about Twitter potentially being removed from the App Store. Tim was clear that Apple never considered doing so"

  • Aurinia ( AUPH 0.97% ) Announces the Great Britain Marketing Authorization of LUPKYNIS (voclosporin) for the Treatment of Lupus Nephritis

  • Babcock & Wilcox Enterprises ( BW 7.89% ) announced today that it has entered into an agreement with Chart Industries (GTLS) to collaborate on the further deployment of B&W's BrightLoopTM hydrogen generation technology

  • Boeing ( BA 0.78% ) awarded Options 7, 8 and 9 to its US Air Force contract in an estimated amount of $235 mln

  • Brady ( BRC 0.46% ) will modify its organizational structure under new regional operating segments effective February 1, 2023

  • Citius Pharmaceuticals ( CTXR 0.85% ) receives FDA acceptance for BLA of denileukin diftitox

  • General Electric's ( GE 0.08% ) Board of Directors approves previously announced spin-off of its healthcare business; GE Healthcare expected to begin trading on Nasdaq on January 4, 2023, under the ticker 'GEHC'

  • Imago BioSciences ( IMGO 0.03% ) Announces First Participant Dosed in Investigator-Sponsored Phase 1 Study of Bomedemstat in Combination with Venetoclax in Relapsed/Refractory Acute Myeloid Leukemia

  • Innoviva ( INVA 0.84% ) Announces FDA Acceptance and Priority Review of New Drug Application for Sulbactam-Durlobactam

  • Johnson & Johnson ( JNJ 0.80% ) elects CEO Joaquin Duato to assume additional position of Chairman of the Board

  • Lilly ( LLY 0.97% ) Shares Positive Donanemab Data in First Active Comparator Study in Early Symptomatic Alzheimer's Disease

  • nCino ( NCNO 1.23% ) announces that the Bank of New Zealand has selected the nCino Bank Operating System as a key technology platform

  • Netflix ( NFLX 3.06% ) to allow subscribers to preview content, according to the Wall Street Journal

  • NexGen ( NXE 1.05% ) Receives Review Comments on Rook I Project Environmental Impact Statement

  • NuScale Power ( SMR 0.37% ) signs research collaboration agreement for clean hydrogen production

  • Oncolytics Biotech ( ONCY 9.09% ) receives FDA Fast Track designation for the treatment of advanced/metastatic pancreatic cancer

  • Petrobras ( PBR 0.38% ) provides Petros plan update

  • Pfizer ( PFE 1.26% ) and Valneva (VALN) reports six-month antibody persistence data in children and adults for Lyme Disease vaccine candidate

  • Rallybio ( RLYB 2.26% ) and AbCellera (ABCL) announce strategic alliance to discover, develop, and commercialize novel antibody-based therapeutics for rare diseases

  • Raytheon Technologies ( RTX 0.70% ) awarded a $1.22 bln US Army contract for National Advanced Surface-to-Air Missile Systems

  • Regeneron ( REGN 0.73% ) ESMO IO Presentations Highlight Potential of Fianlimab and Libtayo (cemiplimab) in Multiple Solid Tumor Types

  • Saia ( SAIA 3.34% ) provides shipment and tonnage data for first two months of Q4; In October, final LTL shipments per workday declined 4.4%

  • Salesforce ( CRM 9.58% ) announces that Bret Taylor will step down as Vice Chair and Co-CEO, effective January 31, 2023; Marc Benioff will be Chair and CEO of the company

  • Sempra Energy ( SRE 1.14% ) unit entered into a long-term sale and purchase agreement with INEOS, for the supply of liquefied natural gas from Phase 1 of its Port Arthur LNG project under development

  • Shoals Technologies ( SHLS 16.05% ) announces that Jason Whitaker intends to step down from his role as CEO for health reasons in early 2023

  • Sony ( SONY 0.83% ): As part of its browsers and cloud gaming market investigation, the UK CMA intends to carry out research with consumers and web developers

  • Sturm Ruger ( RGR 8.45% ) declares special dividend of $5.00/share, payable on January 5, 2023

  • Tesla ( TSLA 0.52% ) is planning a massive ramp up in Model Y production from Gigafactory Texas in Q1, according to Electrek

  • TSMC ( TSM 0.01% ) aiming to make more advanced chips, according to

  • WW ( WW 2.54% ) CFO Amy O'Keefe to leave her position on December 2, 2022; Heather Stark to assume role of interim Principal Financial Officer

M&A:

  • Arco Platform ( ARCE 21.68% ) receives Non-Binding Going Private Proposal for $11.00 per share in cash

  • Bentley Systems ( BSY 0.88% ) says its Cohesive unit has acquired Vetasi, a consultancy specializing in EAM, with a strong focus on IBM Maximo

  • Byline Bancorp ( BY 0.31% ) and Inland Bankcorp enter into definitive agreement in which Inland Bancorp will combine with Byline in a cash and stock transaction valued at approximately $165 million

  • Hewlett Packard Enterprise ( HPE 1.07% ) was interested in acquiring Nutanix (NTNX), according to Bloomberg

  • Iris Acquisition Corp ( IRAA 0.00% ): Liminatus Pharma LLC and Iris Acquisition Corp to combine; plan to operate under Liminatus Pharma

  • Orthofix ( OFIX 5.53% ) receives takeover bid from private equity funds to acquire co for $23/sh in cash; co previously agreed to merge with SPNE; unable to conclude that new offer is likely to lead to a superior proposal

  • TotalEnergies SE ( TTE 0.35% ) sells its interest in the Dunga Oil Field

  • U.S. Physical Therapy ( USPH 1.55% ) acquires thirteen-clinic physical therapy practice

Syndicate:

  • American Equity Investment Life ( AEL 0.67% ) files for 15,886,163 share common stock offering by selling shareholders

  • Aura Biosciences ( AURA 19.89% ) prices offering of 6.7 mln shares of common stock at $12.00 per share

  • CTO Realty Growth ( CTO 7.96% ) announces that it has commenced an underwritten public offering of 2.5 mln shares of its common stock for $96 mln

  • Diamondback Energy ( FANG 0.52% ) files for 5,920,818 share common stock offering by selling shareholders

  • Intellia Therapeutics ( NTLA 9.58% ) prices offering of 6,550,219 shares of common stock at $45.80 per share

  • IVERIC bio ( ISEE 1.69% ) prices offering of 13.35 mln shares of common stock at $22.50 per share

  • Lemonade ( LMND 0.65% ) files for 412,969 share common stock offering by selling shareholders, relates to warrants

  • NJ Resources ( NJR 0.48% ) files for share common stock offering, no amount given

  • Scilex Holding ( SCLX 4.53% ) files for 28,078,672 share common stock offering by selling shareholder

  • Shoals Technologies ( SHLS 16.05% ) files mixed securities shelf offering

IPOs:

  • Expect to Price:

  • No IPOs expected.


Gapping Up/Down

  • Gapping up:

  • OKTA +13.9%, FIVE +8.7%, SPLK +8.1%, PVH +7.9%, RGR +7.4%, NTNX +5.7%, SNPS +5.1%, OFIX +5%, RLYB +4.9%, PSTG +4.2%, AUPH +2.3%, INVA +2.1%, ARCE +1.2%, ABCL +1.1%, RTX +0.8%, GE +0.8%, EDAP +0.7%, YEXT +0.6%


  • Gapping down:

  • GIII -25.6%, ESTC -14.5%, BIG -14.1%, SHLS -10.4%, XPEV -8.5%, NTLA -8.2%, SSL -7.2%, CRM -6.5%, FREY -6.4%, SNOW -5.2%, LI -5.1%, CTO -4.6%, OGS -4%, NIO -3.5%, COST -3.3%, VSCO -2.3%, LZB -1.9%, BMO -1.9%, ISEE -1.8%, LMND -1.8%, SAIA -1.8%, SMTC -1.6%, WBD -0.9%, TSLA -0.7%, AMZN -0.5%, SPNE -0.5%, NCNO -0.5%, CM -0.5%



Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • BioXcel Therapeutics (BTAI) upgraded to Neutral from Sell at Goldman; tgt $16


  • Downgrades:

  • Ally Financial (ALLY) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $19

  • B&G Foods (BGS) downgraded to Underweight from Equal Weight at Consumer Edge Research; tgt $9

  • Capital One (COF) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $90


  • Others:

  • Aclaris Therapeutics (ACRS) initiated with a Buy at Goldman; tgt $25

  • ADT (ADT) resumed with a Buy at Citigroup; tgt $11

  • Altimmune (ALT) initiated with a Buy at Goldman; tgt $20

  • Day One Biopharmaceuticals (DAWN) initiated with a Buy at BofA Securities; tgt $34


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Initial Claims for Nov 26 (Briefing.com Consensus 238K; Prior 240K)

  • 08:30 ET: Continuing Claims for Nov 19 (Briefing.com Consensus NA; Prior 1551K)

  • 08:30 ET: Personal Income for Oct (Briefing.com Consensus 0.4%; Prior 0.4%)

  • 08:30 ET: Personal Spending for Oct (Briefing.com Consensus 0.8%; Prior 0.6%)

  • 08:30 ET: PCE Prices for Oct (Briefing.com Consensus 0.4%; Prior 0.3%)

  • 08:30 ET: PCE Prices - Core for Oct (Briefing.com Consensus 0.2%; Prior 0.5%)

  • 10:00 ET: ISM Manufacturing Index for Nov (Briefing.com Consensus 49.8%; Prior 50.2%)

  • 10:00 ET: Construction Spending for Oct (Briefing.com Consensus -0.2%; Prior 0.2%)

  • 10:30 ET: EIA Natural Gas Inventories for Nov 26 (Briefing.com Consensus NA; Prior -80 bcf)


  • Earnings:

  • Monday (Nov 28)

  • Morning: None of note

  • Afternoon: ARWR, AZEK


  • Tuesday (Nov 29)

  • Morning: BNS, BZUN, BILI, CRNC, HIBB, SJR

  • Afternoon: CMP, CRWD, HPE, INTU, NTAP, WDAY


  • Wednesday (Nov 30)

  • Morning: DCI, FRO, HRL, BEKE, LESL, WOOF, RY, SFL, TITN

  • Afternoon: BOX, CRDO, ESTC, FIVE, LZB, NCNO, NTNX, OKTA, PSTG, PVH, CRM, SMTC, SNOW, SPLK, SNPS, VSCO, YEXT


  • Thursday (Dec 01)

  • Morning: BMO, BIG, CM, DBI, DG, KR, PDCO, SCWX, TD

  • Afternoon: AMBA, AOUT, ASAN, CHPT, MRVL, PD, SMAR, PATH, ULTA, VEEV, ZS, ZUMZ


  • Friday (Dec 02)

  • Morning: CBRL, GCO

  • Afternoon: None of note



Asia & Europe detail:

Asia: Nikkei +0.9%, Hang Seng +0.8%, Shanghai Composite +0.5%

Equity indices in the Asia-Pacific region ended Thursday on a higher note. Tokyo will reportedly raise its coronavirus alert level. Japan reported its first contractionary reading of the Manufacturing PMI in 22 months while South Korea's Manufacturing PMI remained in contraction for the fifth month in a row. Japan's Chief Cabinet Secretary Matsuno said that increasing military cooperation between China and Russia is being monitored.

  • In economic data:

  • China's November Caixin Manufacturing PMI 49.0 (expected 49.4; last 49.4)

  • Japan's final November Manufacturing PMI 49.0 (expected 49.4; last 49.4) and Q3 Capital Spending 9.8% yr/yr (expected 6.4%; last 4.6%). November Household Confidence 28.6 (expected 30.3; last 29.9)

  • South Korea's Q3 GDP 0.3% qtr/qtr, as expected (last 0.7%); 3.1% yr/yr, as expected (last 2.9%). November trade deficit $7.01 bln (expected deficit of $4.42 bln; last deficit of $6.70 bln). November Imports 2.7% yr/yr (expected 0.2%; last 9.9%) and Exports -14.0% yr/yr (expected -11.0%; last -5.7%). November Manufacturing PMI 49.0 (last 48.2)

  • Hong Kong's October Retail Sales 3.9% yr/yr (last -1.4%)

  • Australia's November Manufacturing PMI 51.3 (expected 51.5; last 52.7). Q3 Private New Capital Expenditure -0.6% qtr/qtr (expected 1.5%; last 0.0%)

  • India's November Manufacturing PMI 55.7 (expected 55.0; last 55.3)


---Equity Markets---

  • Japan's Nikkei: +0.9%

  • Hong Kong's Hang Seng: +0.8%

  • China's Shanghai Composite: +0.5%

  • India's Sensex: +0.3%

  • South Korea's Kospi: +0.3%

  • Australia's ASX All Ordinaries: +1.0%

---FX---

  • USD/JPY: -1.3% to 136.28

  • USD/CNH: +0.4% to 7.0737

  • USD/INR: -0.2% to 81.22

Europe: DAX +0.7%, FTSE +0.1%, CAC +0.2%

Major European indices trade in the green. Final November Manufacturing PMI readings from Germany, France, Spain, Italy, and the U.K. improved from their final October levels, but all remained in contractionary territory. Germany's ifo Institute noted rising demand for service staff. Ambulance drivers in the U.K. voted in favor of a strike.

  • In economic data:

  • Eurozone's October Unemployment Rate 6.5% (expected 6.6%; last 6.6%). November Manufacturing PMI 47.1 (expected 47.3; last 46.4)

  • Germany's October Retail Sales -2.8% m/m (expected -0.6%; last 1.2%); -5.0% yr/yr (expected -2.8%; last -0.9%). November Manufacturing PMI 46.2 (expected 46.7; last 45.1)

  • U.K.'s November Nationwide HPI -1.4% m/m (expected -0.3%; last -0.9%); 4.4% yr/yr (expected 5.8%; last 7.2%). November Manufacturing PMI 46.5 (expected 46.2; last 46.2)

  • France's November Manufacturing PMI 48.3 (expected 49.1; last 47.2)

  • Italy's November Manufacturing PMI 48.4 (expected 47.0; last 46.5). November Unemployment Rate 7.8% (expected 8.0%; last 7.9%)

  • Spain's November Manufacturing PMI 45.7 (expected 45.6; last 44.7)

  • Swiss October Retail Sales -2.5% yr/yr (expected 3.5%; last 2.6%). November CPI 0.0% m/m (expected 0.1%; last 0.1%); 3.0% yr/yr, as expected (last 3.0%). November procure.ch PMI 53.9 (expected 54.0; last 54.9)


---Equity Markets---

  • STOXX Europe 600: +0.9%

  • Germany's DAX: +0.7%

  • U.K.'s FTSE 100: +0.1%

  • France's CAC 40: +0.2%

  • Italy's FTSE MIB: +0.4%

  • Spain's IBEX 35: +0.9%

---FX---

  • EUR/USD: +0.4% to 1.0442

  • GBP/USD: +1.1% to 1.2183

  • USD/CHF: -0.2% to 0.9440


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