The S&P 500 futures are down 2 points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 2 points and are trading slightly below fair value. The Dow Jones Industrial Average futures are down 22 points and are trading 0.1% below fair value.
Stock futures are softer this morning. Participants are taking a wait-and-see approach after yesterday's nice start faded by the close. There is also a sense that mega cap stocks are overbought on a short term basis and are due for period of consolidation.
The Reserve Bank of Australia raised its cash rate by 25 bps to 4.10% against expectations for no change and indicated that more rates hikes may be needed.
China Securities Journal speculated that the PBOC will cut its reserve requirement ratio and other interest rates in the second half of the year.
Labor issues continue at some West Coast ports, according to CNBC.
Treasuries are little changed from yesterday's settlement levels. The 2-yr note yield is down one basis point to 4.47% and the 10-yr note yield is down one basis point to 3.67%.
Oil prices are declining, giving back all of yesterday's gains. WTI crude oil futures are down 2.4% to $70.44/bbl.
There is no U.S. economic data of note today.
In corporate news:
GitLab (GTLB 45.29, +9.89, +27.9%): beats by $0.08, beats on revs; guides Q2 EPS above consensus, revs above consensus; guides FY24 EPS above consensus, revs above consensus
J.M. Smucker (SJM 146.50, -2.46, -1.7%): beats by $0.23, beats on revs; guides FY24 EPS in-line, revs above consensus
FedEx (FDX 220.64, -1.10, -0.5%): Atlantic Equities initiated coverage with an Overweight rating
Apple (AAPL 178.81, -0.77, -0.4%): D.A. Davidson downgraded to Neutral from Buy
Sprinklr (CXM 14.06, +0.88, +6.7%): beats by $0.05, beats on revs; guides JulQ EPS above consensus, revs in-line; guides FY24 EPS above consensus, revs in-line
HealthEquity (HQY 62.32, +3.48, +5.9%): beats by $0.09, beats on revs; guides FY24 EPS and revs above consensus
Ciena (CIEN 49.09, +1.59, +3.4%): beats by $0.13, beats on revs
GE HealthCare (GEHC 78.00, -2.49, -3.1%): files for 25,000,000 shares of common stock by selling shareholder
Thor Industries (THO 8.51, +6.35, +8.0%): beats by $1.16, beats on revs; guides FY23 EPS above consensus, revs in-line
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note while markets in South Korea were closed for Memorial Day. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: -0.1%, China's Shanghai Composite: -1.2%, India's Sensex: UNCH, South Korea's Kospi: CLOSED, Australia's ASX All Ordinaries: -0.9%.
In economic data:
Japan's April Overall Wage Income 1.0% yr/yr (expected 0.5%; last 1.3%) and Overtime Pay -0.3% yr/yr (expected 1.4%; last 1.2%). April Household Spending -1.3% m/m (expected 1.5%; last -0.8%); -4.4% yr/yr (expected 0.4%; last -1.9%)
Australia's Q1 Current Account surplus AUD12.30 bln (expected AUD6.50 bln; last AUD11.70 bln). April Building Permits -8.1% m/m, as expected (last -1.0%) and Private House Approvals -3.8% m/m, as expected (last -3.7%)
New Zealand's May ANZ Commodity Price Index 0.3% m/m (expected -0.2%; last-1.7%)
In news:
China Securities Journal speculated that the reserve requirement ratio and other interest rates will be cut in the second half of the year.
Property stocks in Hong Kong drew continued support from reports about impending support measures from China's government.
Japan's Finance Minister Suzuki said that there is a continued aim to reach a primary balance in FY25, adding that reaching the primary surplus target will not be easy.
The Reserve Bank of Australia raised its cash rate by 25 bps to 4.10% against expectations for no change.
Major European indices trade in the red. STOXX Europe 600: -0.1%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -0.4%.
In economic data:
Eurozone's April Retail Sales 0.0% m/m (expected 0.2%; last -0.4%); -2.6% yr/yr (expected -3.1%; last -3.3%)
Germany's April Factory Orders -0.4% m/m (expected -2.2%; last -10.9%)
U.K.'s May Construction PMI 51.6 (expected 51.0; last 51.1)
Spain's April Industrial Production -0.9% yr/yr (expected 1.7%; last 4.1%)
In news:
There is an ongoing expectation that the European Central Bank will announce a 25-bps rate hike at this month's meeting.
ECB policymaker Knot said that second-round effects and pressures in wages are being seen and that services inflation is harder to bring down.
Italy's Stats agency raised its domestic growth forecast for 2023 to 1.2% from 0.4% while the 2024 forecast was set at 1.1%.
U.S. equity futures:
S&P 500 Futures: -1 @ 4,273
DJIA Futures: -9 @ 33,554
Nasdaq 100 Futures: UNCH @ 14,556
Overseas:
Europe: DAX -0.2%, FTSE -0.3%, CAC -0.2%
Asia: Nikkei +0.9%, Hang Seng -0.1%, Shanghai Composite -1.2%
Commodities:
Crude Oil -1.58 @ 70.57
Nat Gas -0.035 @ 2.21
Gold +6.15 @ 1980.45
Silver +0.147 @ 23.782
Copper -0.0065 @ 3.7615
Earnings/Guidance:
ABM Industries ( ABM ▾ 1.59% ) beats by $0.04, reports revs in-line; reaffirms FY23 EPS guidance
Alkermes ( ALKS ▾ 1.27% ) announces final award in Janssen Pharmaceutica (JNJ) arbitration; raises FY23 guidance
BorgWarner ( BWA ▴ 0.37% ) provides long-term targets at Investor Day
British American Tobacco ( BTI ▾ 0.06% ) provides trading update; maintains FY23 guidance
Ciena ( CIEN ▾ 2.77% ) beats by $0.13, beats on revs
Core & Main ( CNM ▴ 1.38% ) beats by $0.03, misses on revs; guides FY23 revs in-line
Exelon ( EXC ▾ 0.12% ) reaffirms prior target of 6-8% operating EPS CAGR from 2021-2025
Fastenal ( FAST ▴ 0.58% ) reports May sales increased 10.2% yr/yr to $649.1 mln
Ferguson plc ( FERG ▾ 0.21% ) beats by $0.04, reports revs in-line; provides FY23 guidance
G-III Apparel ( GIII ▾ 0.49% ) beats by $0.23, beats on revs; guides Q2 EPS below consensus, revs above consensus; guides FY24 EPS above consensus, revs above consensus
GitLab ( GTLB ▴ 2.90% ) beats by $0.08, beats on revs; guides Q2 EPS above consensus, revs above consensus; guides FY24 EPS above consensus, revs above consensus
HealthEquity ( HQY ▴ 2.34% ) beats by $0.09, beats on revs; guides FY24 EPS and revs above consensus
Hello Group ( MOMO ▾ 1.92% ) beats by RMB0.58, beats on revs; guides Q2 revs above consensus
IDT Corp ( IDT ▾ 3.18% ) reports 3Q23 EPS of $0.46 compared to $0.22 in year-earlier period, consolidated revenue decreased 9% yr/yr to $299 mln
Iris Energy ( IREN ▴ 1.40% ) reports May metrics; Average operating capacity increased by 39% to 5.5 EH/s
J.M. Smucker ( SJM ▴ 1.70% ) beats by $0.23, beats on revs; guides FY24 EPS in-line, revs above consensus
Nevro ( NVRO ▾ 4.15% ) lowers Q2 revenue guidance; also names new Chief Commercial Officer
Old Dominion ( ODFL ▾ 3.32% ) provides Q2 operating metrics; revenue per day during May fell 15.7% yr/yr reflecting continued softness in the domestic economy
Philip Morris International ( PM ▴ 0.46% ) reaffirms FY23 EPS outlook at Deutsche Bank Global Consumer Conference
Potbelly ( PBPB ▾ 1.22% ) reports period 5 same store sales of +13.7% versus +15.1% in period 4; reports period 5 average unit volumes of $26,240 vs. $26,070 in period 4
Sprinklr ( CXM ▾ 0.36% ) beats by $0.05, beats on revs; guides JulQ EPS above consensus, revs in-line; guides FY24 EPS above consensus, revs in-line
STAAR Surgical ( STAA ▾ 1.59% ) reaffirms FY23 guidance in slide presentation
Thor Industries ( THO ▾ 0.74% ) beats by $1.16, beats on revs; guides FY23 EPS above consensus, revs in-line
United Micro ( UMC ▴ 0.12% ) reports May sales declined 23.14% yr/yr to NT$18.8 bln
Welltower ( WELL ▴ 1.63% ) raises FY23 guidance
News:
A critical dam and hydroelectric power plant in Ukraine have been destroyed, according to the New York Times
Reserve Bank of Australia decided to increase the cash rate target by 25 basis points to 4.10%
Half of large multinational corporations plan to cut office space, according to Financial Times
West Coast ports labor issues continue, according to CNBC
SAG-AFTRA members approve strike authorization with 97.91% "yes" vote
3M ( MMM ▾ 0.85% ): Judge allows delay in 3M chemical trial, according to Reuters
Ascendis Pharma ( ASND ▴ 0.47% ) starts enrollment for Compassionate Use Program in Germany for TransCon PTH
Bit Digital ( BTBT ▾ 3.38% ) reports it produced 113.2 BTC in May
Brainstorm Cell Therapeutics ( BCLI ▾ 3.08% ) announces FDA Advisory Committee Meeting to review NurOwn Biologics License Application scheduled for September 27, 2023
Broadstone Net Lease ( BNL ▴ 0.43% ) provides business update; company invested $60.1 mln in four properties during Q2
Cboe Global Markets ( CBOE ▴ 2.00% ) Reports Trading Volume for May 2023
Cenovus Energy ( CVE ▴ 0.40% ) provides update on production impact of Alberta wildfires
Chemours ( CC ▾ 2.85% ) announced the resignation of CFO Sameer Ralhan effective June 19
Coherus ( CHRS ▴ 0.56% ) announces "positive" final overall survival results of JUPITER-02 phase 3 trial evaluating Toripalimab in Nasopharyngeal Carcinoma
Crescent Energy ( CRGY ▾ 1.94% ) to increase public float to 46% through conversion of class B private shares
Enovix ( ENVX ▾ 2.83% ) announces agreements with Elematec Corporation and Semicomtech to support pan-Asian shipping, distribution and market expansion
Erasca ( ERAS ▴ 8.82% ) Provides Update on Clinical Program for ERK Inhibitor ERAS-007 and Refines Pipeline
G-III Apparel ( GIII ▾ 0.49% ) and Xcel Brands (XELB) announce Halston master licensing partnership under new 25-year agreement
GlaxoSmithKline ( GSK ▴ 0.12% ) receives FDA file acceptance for Jemperli (dostarlimab) plus chemotherapy for the treatment of dMMR/MSI-H primary advanced or recurrent endometrial cancer
Grupo Aeroportuario del Pacifico ( PAC ▾ 0.30% ) reports April traffic increased 10.1% yr/yr
JP Morgan ( JPM ▴ 0.20% ) CEO Jamie Dimon will meet with Democrats to discuss economy and banking today, according to Bloomberg
LGI Homes ( LGIH ▾ 0.36% ) reports it closed 633 homes in May 2023
LiveWire Group ( LVWR ▴ 4.58% ) appoints Karim Donnez as CEO, effective Jun 12; succeeds CEO Jochen Zeitz who will remain as Chairman
Merck ( MRK ▴ 0.35% ) announced the FDA has approved a new indication for PREVYMIS for prevention of cytomegalovirus (CMV) disease in high-risk adult kidney transplant recipients
New Oriental Education & Technology ( EDU ▾ 1.18% ) extends share repurchase program
Precigen announces ( PGEN ▾ 5.95% ) "positive" phase 1 data for PRGN-3005 Autologous UltraCAR-T cells manufactured overnight for infusion next day to advanced stage platinum resistant ovarian cancer patients
Quotient ( QUOT ▴ 1.90% ) announces board refreshment plan
Raytheon Technologies ( RTX ▴ 0.26% ) awarded $2.02 bln U.S. Navy contract modification
RE/MAX Holdings ( RMAX ▾ 1.55% ) grows presence in South Pacific, sells master franchise rights in Republic of Fiji
Rivian Automotive ( RIVN ▾ 1.35% ) hiring Tesla (TSLA) cybertruck supply chain executive Mustapha El Akkari, according to The Information
Sapiens Int'l ( SPNS ▴ 0.83% ) announced that Penn National Insurance selected Sapiens ReinsurancePro solution as a part of its multiyear legacy modernization and automation initiative
Snap ( SNAP ▴ 0.50% ) hired a new SVP of engineering from Google, according to Reuters
Sundial Growers ( SNDL ▾ 2.41% ) appoints Alberto Paredero-Quiros as the company's new CFO
Teleflex ( TFX ▾ 0.63% ) announced that the Arrow EZ-IO Needle is the first and only Intraosseous needle to receive 510 clearance from the FDA for MR Conditional labeling
TeraWulf ( WULF ▾ 6.99% ) announces May 2023 production and operations updates
Tesla ( TSLA ▴ 4.07% ): Panasonic will boost battery output at its Gigafactory in Nevada, according to Nikkei
TScan Therapeutics ( TCRX ▾ 6.91% ) announces that the U.S. FDA has cleared its investigational new drug application for TSC-200-A0201, a TCR-T targeting human papillomavirus 16
TSMC ( TSM ▴ 2.86% ) executives expect better performance in the second half, according to Reuters
Ultragenyx ( RARE ▾ 0.40% ) and Mereo BioPharma Announce Positive Data from the Ongoing Phase 2/3 Orbit Study of Setrusumab (UX143) in Osteogenesis Imperfecta (OI)
Zentalis Pharma ( ZNTL ▾ 3.43% ) announced the monotherapy recommended Phase 2 dose for azenosertib, the Company's potentially first-in-class WEE1 inhibitor
Zura Bio ( ZURA ▴ 4.46% ) completes ~$80 mln financing with the focus on advancing ZB-106
M&A:
Bed Bath & Beyond ( BBBY 0.00% ) is in talks to sell Buybuy Baby to investment firm Go Global Retail; also fielding interest from Overstock.com (OSTK), according to the Wall Street Journal
Blue Ocean Acquisition Corp ( BOCN ▴ 0.09% ): TNL Mediagene to become publicly listed company on Nasdaq through merger with Blue Ocean Acquisition Corp
CBIZ ( CBZ ▾ 0.38% ) acquires information security consulting firm, Pivot Point Security, of Hamilton, NJ, effective June 1, 2023; financial terms were not disclosed
enCore Energy Corp. ( EU ▾ 1.15% ) enters definitive agreement for the sale of the Marquez-Juan Tafoya Uranium Project
Metals Acquisition Corp. ( MTAL ▴ 0.87% ) shareholders approve proposed business combination to acquire the CSA Mine and proposed merger with Metals Acquisition Limited
Ryman Hospitality ( RHP ▴ 0.46% ) to acquire JW Marriott San Antonio Hill Country Resort for $800 mln from Blackstone Real Estate Income Trust
Spectrum Brands ( SPB ▾ 1.27% ) receives clearance from Mexican compeition authority to sell its Hardware and Home Improvement (HHI) segment to ASSA ABLOY for $4.3 bln in cash; to close on or prior to June 30
Syndicate:
Astronics ( ATRO ▾ 0.54% ) files $150 mln mixed shelf securities offering
Atour Lifestyle Hldgs. Ltd. ( ATAT ▴ 2.20% ) prices secondary offering of 4.8 mln ADS by entities affiliated with Legend Capital; additional details not disclosed
Blue Bird ( BLBD ▾ 3.69% )announces launch of secondary public offering of 5 mln shares by affiliates of Coliseum Capital Management LLC and American Securities LLC
Cadre Holdings ( CDRE ▴ 0.35% ) prices secondary offering of 1.5 mln shares of common stock at $19.00 per share
Celestica ( CLS ▴ 1.32% ) prices secondary offering 12.0 mln subordinate voting shares at $12.40 per SVS
Corebridge Financial ( CRBG ▾ 1.36% ) files for 65,000,000 shares of common stock by selling shareholder
GE HealthCare ( GEHC ▾ 0.86% ) files for 25,000,000 shares of common stock by selling shareholder
Mobileye Global ( MBLY ▾ 0.07% ) files for 35,000,000 shares of common stock by selling shareholder Intel (INTC)
Reneo Pharmaceuticals ( RPHM ▴ 1.02% ) files for 625,000 shares of common stock by selling shareholders
Rollins ( ROL ▾ 0.75% ) files $1.5 bln mixed shelf securities offering; also files for 249,014,176 shares of common stock by selling shareholders
Ryman Hospitality ( RHP ▴ 0.46% ) files common stock offering
Skyward Specialty Insurance Group ( SKWD ▾ 1.06% ) files for 3,850,000 shares of common stock by selling shareholders
Twist Bioscience ( TWST ▴ 1.05% ) files mixed shelf securities offering
IPOs:
Expected to Price: No IPOs expected.
Gapping Up/Down
Gapping up:
ZURA +27.7%, GTLB +25.8%, CHRS +6.2%, BTBT +6.1%, HQY +6.1%, MOMO +5.7%, LVWR +5.5%, RARE +4.7%, BCLI +3.7%, CXM +3.5%, IDT +1.9%, UMC +1.8%, RMAX +1.5%, QUOT +1.3%, OCUL +1.1%, BTI +0.9%, SPB +0.8%, ATRO +0.7%
Gapping down:
CDRE -12.7%, NVRO -7%, BLBD -6.8%, MBLY -5.8%, CRBG -4.2%, CLS -4.1%, ATAT -3.3%, CRGY -2.4%, PGEN -2.2%, WULF -2.1%, SKWD -2%, GEHC -1.7%, RHP -1.2%, ODFL -1%, TSLA -0.8%, EXC -0.7%
Analyst Research (see Upgrades/Downgrades calendar for full list):
Upgrades
Community Bank (CBU) upgraded to Outperform from Mkt Perform at Raymond James; tgt $55
McCormick (MKC) upgraded to Buy from Underperform at BofA Securities; tgt raised to $100
Molson Coors Brewing (TAP) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $68
Oscar Health (OSCR) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $8.75
The Cigna Group (CI) upgraded to Buy from Neutral at BofA Securities; tgt $320
Vale S.A. (VALE) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $15
Downgrades:
AMC Networks (AMCX) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $12
Apple (AAPL) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $185
NBT Bancorp (NBTB) downgraded to Outperform from Strong Buy at Raymond James; tgt lowered to $38
Others:
Agenus (AGEN) initiated with an Outperform at Robert W. Baird; tgt raised to $80
Turning Point Brands (TPB) initiated with a Buy at The Benchmark Company; tgt $28
Econ Data:
No economic data of note.
Earnings:
Monday (Jun 5)
Morning: SAIC
Afternoon: GTLB CXM
Tuesday (Jun 6)
Morning: ABM ASO CIEN CNM CBRL GIII MOMO SJM THO
Afternoon: CVGW CASY BASE PLAY SFIX YEXT
Wednesday (Jun 7)
Morning: BF.B CPB LOVE OLLI UNFI
Afternoon: GME GEF HCP OXM SMTC SMAR CURV TCOM VRNT
Thursday (Jun 8)
Morning: DBI FCEL REVG SIG TTC
Afternoon: BRZE DOCU AVO MTN
Friday (Jun 9)
Morning: NIO
Asia & Europe detail:
Asia: Nikkei +0.9%, Hang Seng -0.1%, Shanghai Composite -1.2%
Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note while markets in South Korea were closed for Memorial Day. China Securities Journal speculated that the reserve requirement ratio and other interest rates will be cut in the second half of the year. Property stocks in Hong Kong drew continued support from reports about impending support measures from China's government. Japan's Finance Minister Suzuki said that there is a continued aim to reach a primary balance in FY25, adding that reaching the primary surplus target will not be easy. The Reserve Bank of Australia raised its cash rate by 25 bps to 4.10% against expectations for no change.
In economic data:
Japan's April Overall Wage Income 1.0% yr/yr (expected 0.5%; last 1.3%) and Overtime Pay -0.3% yr/yr (expected 1.4%; last 1.2%). April Household Spending -1.3% m/m (expected 1.5%; last -0.8%); -4.4% yr/yr (expected 0.4%; last -1.9%)
Australia's Q1 Current Account surplus AUD12.30 bln (expected AUD6.50 bln; last AUD11.70 bln). April Building Permits -8.1% m/m, as expected (last -1.0%) and Private House Approvals -3.8% m/m, as expected (last -3.7%)
New Zealand's May ANZ Commodity Price Index 0.3% m/m (expected -0.2%; last-1.7%)
---Equity Markets---
Japan's Nikkei: +0.9%
Hong Kong's Hang Seng: -0.1%
China's Shanghai Composite: -1.2%
India's Sensex: UNCH
South Korea's Kospi: CLOSED
Australia's ASX All Ordinaries: -0.9%
---FX---
USD/JPY: -0.1% to 139.36
USD/CNH: +0.2% to 7.1326
USD/INR: +0.1% to 82.56
Europe: DAX -0.2%, FTSE -0.3%, CAC -0.2%
Major European indices trade in the red. There is an ongoing expectation that the European Central Bank will announce a 25-bps rate hike at this month's meeting. ECB policymaker Knot said that second-round effects and pressures in wages are being seen and that services inflation is harder to bring down. Italy's Stats agency raised its domestic growth forecast for 2023 to 1.2% from 0.4% while the 2024 forecast was set at 1.1%.
In economic data:
Eurozone's April Retail Sales 0.0% m/m (expected 0.2%; last -0.4%); -2.6% yr/yr (expected -3.1%; last -3.3%)
Germany's April Factory Orders -0.4% m/m (expected -2.2%; last -10.9%)
U.K.'s May Construction PMI 51.6 (expected 51.0; last 51.1)
Spain's April Industrial Production -0.9% yr/yr (expected 1.7%; last 4.1%)
---Equity Markets---
STOXX Europe 600: -0.1%
Germany's DAX: -0.2%
U.K.'s FTSE 100: -0.3%
France's CAC 40: -0.2%
Italy's FTSE MIB: -0.4%
Spain's IBEX 35: -0.4%
---FX---
EUR/USD: -0.2% to 1.0693
GBP/USD: -0.1% to 1.2417
USD/CHF: +0.3% to 0.9075