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06/06/22 Briefing


The S&P 500 futures are up 45 points and are trading 1.1% above fair value; the Nasdaq 100 futures are up 186 points and are trading 1.5% above fair value; and the Dow Jones Industrial Average futures are up 284 points and are trading 0.9% above fair value.

There is a nice bid in the futures market to begin the week. Market participants have been heartened by news reports indicating COVID restrictions in China's largest cities are being rolled back. Also, there is a buzz around many Chinese-listed stocks following a report that Chinese regulators are ending their probe of Didi (DIDI). There is also some reporting that suggests the Biden Administration is considering lifting tariffs on some imported Chinese goods.

Separately, there is a nice rebound bid in Tesla (TSLA)after Elon Musk clarified that the company total headcount will increase, but that salaried positions should be fairly flat. That update has taken off some of the edge from his remark last Friday discussing employment at Tesla and his "super bad feeling" about the economy.

There is no economic data of note out of the U.S. today. The 10-yr note yield is unchanged at 2.96%. WTI crude futures, which topped $120.00/bbl overnight, are up 0.1% to $118.96/bbl.

In corporate news:

  • Tesla (TSLA 721.25, +17.70, +2.5%): Jumps after Elon Musk tweets, "Total headcount will increase, but salaried should be fairly flat"

  • Apple (AAPL 147.15, +1.77, +1.2%): Moving up in front of Worldwide Developers Conference today

  • Spirit Airlines (SAVE 21.80, +1.06, +5.1%): JetBlue (JBLU) raises bid to acquire airline to $31.50/sh cash

  • Amazon.com(AMZN 2447.00): 20-for-1 stock split takes effect today

  • Didi (DIDI 2.89, +1.04, +56.2%): Reports indicate Chinese regulators are ending their probe of the company

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly higher note while markets in South Korea and New Zealand were closed for holidays. Japan's Nikkei +0.6%; Hong Kong's Hang Seng +2.7%; China's Shanghai +1.3%; India's Sensex -0.2%; and Australia's All Ordinaries -0.5%.

  • In economic data:

  • China's May Caixin Services PMI 41.4 (last 36.2)

  • Hong Kong's May Manufacturing PMI 54.9 (last 51.7)

  • Australia's May MI Inflation Gauge 1.1% m/m (last -0.1%) and May ANZ Job Advertisements 0.4% m/m (last -2.0%)


  • In news:

  • Bank of Japan Governor Kuroda said that Japan is not in position to tighten monetary policy and that easing will continue persistently.

  • Beijing reportedly lifted more coronavirus restrictions.

  • China Securities Journal expects a rebound in new loans for May.

  • The Reserve Bank of Australia is expected to increase its cash rate by 25 bps tomorrow.



  • Major European indices trade on a firmly higher note while several smaller markets are closed for Whit Monday. STOXX Europe 600 +0.9%; Germany's DAX +1.0%; UK's FTSE 100 +1.2%; France's CAC 40 +1.1%; Italy's FTSE MIB +1.3%; Spain's IBEX 35 +1.0%.

  • There was no notable data

  • In news:

  • British Prime Minister Johnson will face a no-confidence vote around 13:00 ET.

  • The European Central Bank is expected to present its rate hike plans this week, but policymakers are reportedly also discussing a new bond-buying scheme to offset high borrowing costs for some member states.



U.S. equity futures:

  • S&P 500 Futures: +39 @ 4,147

  • DJIA Futures: +231 @ 33,131

  • Nasdaq 100 Futures: +163 @ 12,711

Overseas:

  • Europe: DAX +1.0%, FTSE +1.2%, CAC +1.1%

  • Asia: Nikkei +0.6%, Hang Seng +2.7%, Shanghai Composite +1.3%

Commodities:

  • Crude Oil +0.03 @ 118.90

  • Nat Gas +0.451 @ 8.982

  • Gold +6.90 @ 1857.10

  • Silver +0.464 @ 22.372

  • Copper -0.0420 @ 4.4300

U.S. Summary:

  • Earnings:

  • Aspen Aerogels (ASPN) provides FY22 business update

  • AvalonBay (AVB) reports Same Store Residential rental revenue of +13%

  • Essex Property (ESS) increases core FFO guidance for Q2 and FY22 in investor slides

  • Old Dominion (ODFL) provides update for Q2; Revenue per day increased 26.0% as compared to May 2021 due to a 2.3% increase in LTL tons per day and an increase in LTL revenue per hundredweight

  • Park Hotels & Resorts (PK) provides operating trends in Q2 update

  • Science Applications (SAIC) beats by $0.11, beats on revs; raises FY23 guidance; authorizes share repurchase program up to 8.8 million shares


  • General News:

  • Beijing will roll back coronavirus restrictions today, according to Bloomberg

  • UK Prime Minister Boris Johnson will have to face no confidence vote, according to the New York Times

  • Commerce Secretary Gina Raimondo says removing tariffs on some goods could bring down inflation. President Biden is considering this, according toBloomberg

  • Russian fires new missiles at Kyiv as Ukraine rejects France's idea to improve conditions for negotiatied settlement with Russia, according to the New York Times

  • Senate has ruled out assault weapons ban or universal background checks in gun control talks. Senators are discussing red flag laws and school security and lawmakers are optimistic agreement can be reached on those items, according to NBC News

  • Supreme Court will decide on cases this month related to EPA authority, gun rights, immigration, and other issues, according to the Wall Street Journal

  • US will soon pause solar tariffs for two years, according to the Wall Street Journal

  • Saudi Arabia aiming to increase oil prices in Asia, according to Reuters

  • Abbott (ABT) reopened baby formula plant, but shortages are expected to last for weeks, according to the Wall Street Journal

  • Abbott (ABT): Late-Breaking Data Demonstrate Abbott's FreeStyle Libre 3 System is Most Accurate 14-Day Continuous Glucose Monitor

  • Adicet Bio (ACET) Reports Emerging Data from ADI-001 Phase 1 Trial at the American Society of Clinical Oncology Annual Meeting

  • Amgen (AMGN) reports new head-to-head data show VECTIBIX demonstrated superior overall survival compared to BEVACIZUMAB in combination with chemotherapy in Japanese patients with wild-type ras colorectal cancer

  • Apple (AAPL) virtual reality headset is expected to ship this year, but software tools will be unveiled at WWDC today, according to the New York Times

  • Arcutis Biotherapeutics (ARQT) positive topline results from STRATUM pivotal phase 3 trial of roflumilast foam 0.3% in seborrheic dermatitis

  • AstraZeneca (AZN) reports ENHERTU (fam-trastuzumab deruxtecan-nxki) Reduced the Risk of Disease Progression or Death by 50% vs. Chemotherapy in Patients with HER2-Low Metastatic Breast Cancer with HR-Positive and HR-Negative Disease

  • AstraZeneca (AZN) reports CALQUENCE Plus Obinutuzumab Demonstrated Sustained Survival Benefit in 1st-line Chronic Lymphocytic Leukemia with 90% of Patients Surviving Five Years in ELEVATE-TN Trial

  • Atara Biotherapeutics (ATRA) Announces First Clinical Data from Ongoing Tab-cel European Multicenter Expanded Access Program (EAP) at the 2022 American Society of Clinical Oncology (ASCO) Annual Meeting and Update on Tab-cel EMA Regulatory Progress

  • Axsome Therapeutics (AXSM) Announces Results of the SUPPORT Survey of Patients with Major Depressive Disorder Presented at the American Society of Clinical Psychopharmacology Association (ASCP) 2022 Annual Meeting

  • Bausch + Lomb (BLCO) Announces Scientific Data on Latest Biotrue Products to be Presented at American Optometric Association's Optometry's Meeting

  • BioCryst Pharma (BCRX) announces Health Canada has authorized ORLADEYO (berotralstat) as prevention of recurrent hereditary angioedema (HAE) attacks

  • Biomea Fusion (BMEA) Presents Novel Preclinical Data at ADA 2022 Suggesting BMF-219's Potential as an Oral, Long-Acting Treatment for Type 2 Diabetes

  • BioNTech (BNTX) reports Positive Phase 1 Data from mRNA-based Individualized Neoantigen Specific Immunotherapy in Patients with Resected Pancreatic Cancer presented at ASCO

  • Bristol-Myers (BMY) withdraws sBLA for Reblozyl for anemia in adults with non-transfusion dependent (NTD) beta thalassemia

  • Bristol-Myers (BMY) announces five-year results from Part 1 of the Phase 3 CheckMate -227 trial

  • Bristol-Myers (BMY) announces three-year follow-up results from the Phase 3 CheckMate -9LA trial demonstrating durable survival benefits with Opdivo plus Yervoy with two cycles of chemotherapy compared to four cycles of chemotherapy in previously untreated patients with metastatic non-small cell lung cancer

  • Cara Therapeutics (CARA) CFO Thomas Reilly to resign on or about June 15

  • Centessa Pharmaceuticals (CNTA) Announces Poster Presentation of First Preclinical Data for LockBody Program at 2022 ASCO Annual Meeting

  • Didi (DIDI): China could remove ban on new Didi (DIDI) users this week, according to the Wall Street Journal

  • Digital Realty Trust (DLR) appoints Mary Hogan Preusse as Chairman

  • Eli Lilly (LLY) reports Jardiance decreased relative risk of hospitalization for heart failure by 50% versus DPP-4 inhibitors and by 30% versus GLP-1 receptor agonists in adults with type 2 diabetes in real-world evidence study

  • Energy Transfer (ET) signs LNG sale and purchase agreement with China Gas

  • Gilead Sciences (GILD) reports Tecartus Car T-cell Therapy Demonstrates Strong Overall Survival Rates and Continued Durable Responses in Long-Term Follow-Up of Two Pivotal Studies Including Longest Ever Follow-Up of a CAR T-cell Therapy in Mantle Cell Lymphoma

  • Gilead Sciences (GILD): Sub-analyses of Landmark ZUMA-7 Trial Reinforce Yescarta CAR T-cell Therapy Superiority Over Standard of Care (SOC) as Initial Treatment for Patients With Relapsed or Refractory Large B-cell Lymphoma

  • GlaxoSmithKline (GSK) receives FDA approval of Priorix for the prevention of measles, mumps and rubella in individuals 12 months of age and older

  • GOL Linhas Aereas Inteligentes S.A. (GOL) announces preliminary air traffic figures for May 2022

  • Grupo Aeroportuario del Pacifico (PAC) reports May traffic increased 15.3% vs 2019

  • HOOKIPA (HOOK) announces positive Phase 1 data and Phase 2 plans for HB-200program for the treatment of advanced head and neck cancers at ASCO

  • Hut 8 Mining (HUT) reports 7,078 self-mined Bitcoin in reserve after 309 were generated in May

  • Hyatt Hotels (H) reports system-wide RevPAR accelerated in May; future bookings continue to strengthen

  • Immunocore (IMCR) presents new data on KIMMTRAK (tebentafusp-tebn) in metastatic cutaneous (mCM) and uveal melanoma (mUM) at the 2022 American Society of Clinical Oncology (ASCO) Annual Meeting

  • Intercept Pharma (ICPT) provides update on NASH regulatory timeline

  • Kroger (KR): Carl Icahn will end proxy fight against Kroger, according to the Wall Street Journal

  • Legend Biotech (LEGN): Longer-Term Data from CARTITUDE Program Continue to Show Deep and Durable Responses with Ciltacabtagene Autoleucel Across Lines of Therapy in Patients with Multiple Myeloma

  • LGI Homes (LGIH) announces it closed 697 homes in May 2022; co has 91 active selling communities

  • Lilly's (LLY) AWARD-PEDS trial investigating use of Trulicity (dulaglutide) in youth and adolescents with type 2 diabetes showed superiority in A1C reduction vs placebo

  • Merck (MRK) reports Adjuvant Treatment With KEYTRUDA (pembrolizumab) Demonstrates Statistically Significant & Clinically Meaningful Improvement in Distant Metastasis-Free Survival in Patients With Resected Stage IIB or IIC Melanoma in Phase 3 KEYNOTE-716 Trial

  • Merus (MRUS) Presents Clinical Data on Zenocutuzumab (Zeno) in NRG1-fusion (NRG1+) Cancer at the 2022 American Society of Clinical Oncology (ASCO) Annual Meeting

  • New Found Gold Corp. (NFGC) intersects 9.12 g/t au over 8.20m & 42.6 g/t au over 11.75m starting 9m from surface & 55.1 g/t au over 5.10m at the keats main zone

  • Novartis AG (NVS) does not intend to exercise its option to obtain an exclusive license for AL102 for multiple myeloma from Ayala Pharma

  • Omnipod 5 (PODD) Automated Insulin Delivery System Significantly Improves Glycemic Outcomes Over 12 Months of Use in Children Aged 2 through 5.9Years

  • Pfizer (PFE) and CStone announce NMPA approval of sugemalimab in patients with unresectable stage III non-small cell lung cancer

  • Pfizer (PFE) Announces Overall Survival Results from Phase 3 PALOMA-2 Trial of IBRANCE (palbociclib) for the First-Line Treatment of ER+, HER2- Metastatic Breast Cancer

  • Quest Diagnostics (DGX) Presents Late Breaker Study Demonstrating Diabetes Prescription Cost Reductions Achieved for Participants in an Employer-Sponsored Health Program at the 82nd American Diabetes Association Scientific Sessions

  • Starbucks (SBUX) Board of Directors affirms CEO transition details; Board reiterates plans of driving toward naming new leader in Fall

  • Tesla (TSLA) CEO Elon Musk tweets "Total headcount will increase, but salaried should be fairly flat"

  • Tupperware (TUP) discloses it eliminated the position of Chief Operating Officer and, as a result of such position elimination, Cassandra Harris' employment with the Company was terminated on such date

  • Vera Therapeutics (VERA) Reports Positive Interim Phase 2 Data Showing MAU868 Has Significant BK Antiviral Activity in Kidney Transplant Patients

  • Veru (VERU) announces presentation of final positive phase 1b/2 clinical trial results for sabizabulin in metastatic castration resistant prostate cancer at the 2022 American Society of Clinical Oncology Annual Meeting

  • Western Copper (WRN) commences exploration and drilling program at casino

  • WW (WW) announces study results showing clinically significant improvements for people living with diabetes on customized program


  • M&A:

  • Becton Dickinson (BDX) and Frazier Healthcare Partners announce a definitive agreement for BD to acquire Parata Systems, an innovative provider of pharmacy automation solutions, for $1.525 bln

  • Canadian Solar (CSIQ) sells 70% Stake in 738 MWp Solar Projects to SPIC Brasil

  • Crestwood Equity Partners (CEQP) to acquire Sendero Midstream Partners for $600 mln

  • Descartes (DSGX) announced that it has acquired XPS Technologies, a provider of ecommerce multi-carrier parcel shipping solutions for up-front consideration of approximately $65.0 mln

  • Ginkgo Bioworks (DNA) has acquired certain assets from Bitome; financial terms were not disclosed

  • JetBlue Airways (JBLU) submits improved proposal to acquire Spirit Airlines (SAVE)

  • Rogers Comms (RCI) has asked dismissal of case against merger with Shaw, according to Bloomberg

  • StoneMor Partners L.P (STON) begins go-shop process in accordance with merger agreement, hires Duff & Phelps Securities to assist


  • Syndicate:

  • American Resources Corp. (AREC) files for $36.39 mln mixed securities shelf offering

  • Arcellx (ACLX) Presents Continued Robust Long-Term Responses from its CART-ddBCMA Phase 1 Expansion Trial in Patients with Relapsed or Refractory Multiple Myeloma at the 2022 ASCO Annual Meeting

  • Cboe Global Markets (CBOE) reports May trading volume statistics

  • EastGroup (EGP) files for 1,868,809 share common stock offering by selling shareholders

  • EPR Properties (EPR) files mixed securities shelf offering

  • Evolution Petroleum (EPM) files for $500 mln mixed securities shelf offering

  • JOANN Inc. (JOAN) files for $100 mln mixed securities shelf offering; also files for 27,850,793 share common stock offering by selling shareholders

  • MedAvail (MDVL) files for 56,470,579 share common stock offering by selling shareholders

  • Redwood Trust (RWT) announces offering of convertible senior notes due 2027

  • The Oncology Institute (TOI) files for 1,342,076 share common stock offering by selling shareholders

  • Vera Therapeutics (VERA) files for $400 mln mixed securities shelf offering


  • IPOs:

  • Priced to Trade:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • MRUS +5%, CARA +4.9%, TSLA +3.8%, PK +3.3%, TOI +3.1%, ACLX +2.4%, HOOK +2.4%, SHEL +1.9%, EPR +1.6%, SBUX +1.6%, LLY +1.4%, GSK +1.3%, ET +1.3%, BP +1.1%, BNTX +1%, GILD +0.7%, OXY+0.7%, COP +0.6%, XLE +0.5%, PSX +0.5%


  • Gapping down:

  • PBYI -2.1%, VERA -2%, STON -1.4%, JOAN -0.8%, AREC -0.6%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • American Express (AXP) upgraded to Buy from Hold at Edward Jones

  • American Software (AMSWA) upgraded to Buy from Neutral at B. Riley Securities; tgt $23

  • Ardagh Metal Packaging S.A. (AMBP) upgraded to Overweight from Equal Weight at Barclays; tgt $9

  • Aurora Cannabis (ACB) upgraded to Hold from Sell at Stifel

  • CAE (CAE) upgraded to Neutral from Underperform at BofA Securities

  • CrowdStrike (CRWD) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $215

  • lululemon athletica (LULU) upgraded to Mkt Perform from Underperform at Bernstein; tgt $300

  • ResMed (RMD) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $244

  • Spotify (SPOT) upgraded to Outperform from Mkt Perform at Raymond James; tgt $150


  • Downgrades:

  • Dun & Bradstreet (DNB) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt raised to $18

  • Edison (EIX) downgraded to Neutral from Buy at UBS; tgt lowered to $73


  • Others:

  • American Tower (AMT) resumed with a Buy at BofA Securities; tgt $315

  • Bausch + Lomb (BLCO) initiated with a Buy at Citigroup

  • DoorDash (DASH) initiated with a Mkt Perform at Raymond James

  • GoodRx (GDRX) resumed with a Buy at BofA Securities; tgt $11

  • Grab (GRAB) initiated with a Buy at China Renaissance; tgt $4.20

  • GXO Logistics (GXO) initiated with an Outperform at Cowen; tgt $64

  • Modiv (MDV) initiated with a Buy at Colliers Securities; tgt $22

  • Volaris Aviation (VLRS) initiated with an Overweight at JP Morgan; tgt $23


Upcoming Events:

  • Econ Data:

  • No economic data of note.


  • Earnings:

  • Monday (Jun 6)

  • Morning: SAIC

  • Afternoon: COUP GTLB


  • Tuesday (Jun 7)

  • Morning: ASO CBRL PLAY GIII MOMO SJM REVG UNFI

  • Afternoon: CASY GWRE SMAR CURV VRNT


  • Wednesday (Jun 8)

  • Morning: BF.B CPB KC LOVE OLLI THO VRA

  • Afternoon: ABM BASE FIVE GEF AVO OXM YEXT


  • Thursday (Jun 9)

  • Morning: BILI FCEL NIO SIG

  • Afternoon: CMTL DOCU SFIX MTN


  • Friday (Jun 10)

  • None



Asia & Europe detail:

Asia: Nikkei +0.6%, Hang Seng +2.7%, Shanghai Composite +1.3%

Equity indices in the Asia-Pacific region began the week on a mostly higher note while markets in South Korea and New Zealand were closed for holidays. Bank of Japan Governor Kuroda said that Japan is not in position to tighten monetary policy and that easing will continue persistently. Beijing reportedly lifted more coronavirus restrictions. China Securities Journal expects a rebound in new loans for May. The Reserve Bank of Australia is expected to increase its cash rate by 25 bps tomorrow.

  • In economic data:

  • China's May Caixin Services PMI 41.4 (last 36.2)

  • Hong Kong's May Manufacturing PMI 54.9 (last 51.7)

  • Australia's May MI Inflation Gauge 1.1% m/m (last -0.1%) and May ANZ Job Advertisements 0.4% m/m (last -2.0%)


---Equity Markets---

  • Japan's Nikkei: +0.6%

  • Hong Kong's Hang Seng: +2.7%

  • China's Shanghai Composite: +1.3%

  • India's Sensex: -0.2%

  • South Korea's Kospi: CLOSED

  • Australia's ASX All Ordinaries: -0.5%

---FX---

  • USD/JPY: -0.2% to 130.64

  • USD/CNH: +0.2% to 6.6387

  • USD/INR: UNCH at 77.61

Europe: DAX +1.0%, FTSE +1.2%, CAC +1.1%

Major European indices trade on a firmly higher note while several smaller markets are closed for Whit Monday. British Prime Minister Johnson will face a no-confidence vote around 13:00 ET. The European Central Bank is expected to present its rate hike plans this week, but policymakers are reportedly also discussing a new bond-buying scheme to offset high borrowing costs for some member states.

  • There was no notable data

---Equity Markets---

  • STOXX Europe 600: +0.9%

  • Germany's DAX: +1.0%

  • U.K.'s FTSE 100: +1.2%

  • France's CAC 40: +1.1%

  • Italy's FTSE MIB: +1.3%

  • Spain's IBEX 35: +1.0%

---FX---

  • EUR/USD: +0.1% to 1.0727

  • GBP/USD: +0.6% to 1.2555

  • USD/CHF: +0.1% to 0.9619

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The S&P 500 futures are up 3 points and are trading % above fair value. The Nasdaq 100 futures are up 9 points and are trading roughly in-line with fair value. The Dow Jones Industrial Average futures