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07/03/22 Briefing

The S&P 500 futures trade 26 points, or 0.6%, below fair value after WTI crude futures hit $130 per barrel last night. Futures have cut their losses, though, as oil prices for the April contract now trade at $120.42/bbl (+$4.74, +4.1%).

The initial pop in oil was driven by a confirmation from Secretary of State Blinken that there are active talks to potentially ban imports of Russian oil and a report from Reuters indicating that an Iran nuclear deal could be delayed.

Besides the retracement

in oil, which are trading under $100 per barrel for contracts at the end of the year, the futures market has welcomed news that ceasefire talks will continue today in addition to positive-sounding corporate news.

Specifically, Uber (UBER 31.01, +1.18, +4.0%) raised its Q1 Adjusted EBITDA guidance range, Oasis Petroleum (OAS 153.70, +9.21, +6.4%) and Whiting Petroleum (WLL 88.00, +4.57, +5.5%) agreed to a $6.0 billion merger of equals, and Bed Bath & Beyond (BBBY 27.31, +11.13, +68.8%) has popped 70% on news of turnaround interest from Ryan Cohen.

Treasury yields are trading higher, as risk sentiment lightens up. The 2-yr yield is up four basis points to 1.53% after touching 1.42% overnight, and the 10-yr yield is up five basis points to 1.77% after dipping below 1.70% overnight. The U.S. Dollar Index is up 0.3% to 98.91.

Today's economic data will be limited to Consumer Credit for January (Briefing.comconsensus $25.0 billion) at 3:00 p.m. ET.

In U.S. Corporate news:

  • Bed Bath & Beyond (BBBY 27.31, +11.13): +68.8% on news that Chewy co-founder Ryan Cohen has pushed for changes after acquiring a 9.8% stake in the company, according to The Wall Street Journal.

  • Occidental Petroleum (OXY 61.23, +5.08): +9.1% amid the higher oil prices and a report from The Wall Street Journal indicating that Carl Icahn has divested his stake in the company.

  • Uber (UBER 31.01, +1.18): +4.0% after raising its Q1 Adjusted EBITDA expectations to between $130 million and $150 million (from $100 million to $130 million).

  • Oasis Petroleum (OAS 153.70, +9.21): +6.4% after agreeing to merge with Whiting Petroleum (WLL 88.00, +4.57, +5.5%) in a $6.0 billion merger of equals transaction.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a lower note as sentiment remained pressured by ongoing fighting in Ukraine and rising commodity prices. Japan's Nikkei: -2.9% Hong Kong's Hang Seng: -3.9% China's Shanghai Composite: -2.2% India's Sensex: -2.7% South Korea's Kospi: -2.3% Australia's ASX All Ordinaries: -1.0%.

  • In economic data:

  • China's February trade surplus $115.95 bln (expected surplus of $99.50 bln; last surplus of $94.46 bln). February Imports 15.5% yr/yr (expected 16.5%; last 19.5%) and Exports 16.3% yr/yr (expected 15.0%; last 20.9%). February FX Reserves $3.214 trln (expected CNY3.225 trln; last CNY3.222 trln)

  • Australia's February AIG Services Index 60.0 (last 56.2) and February ANZ Job Advertisements 8.4% m/m (last -0.7%)


  • In news:

  • China's National People's Congress set a 5.5% growth target for 2022, its lowest in 30 years.

  • National Development and Reform Commission vice chair said that reaching the target will require "strenuous effort."

  • Top Chinese officials are increasing focus on strengthening the domestic supply of food.



  • Major European indices trade in the red as sentiment remains pressured by fighting in Ukraine and rising commodity prices. STOXX Europe 600: -1.4% Germany's DAX: -1.3% U.K.'s FTSE 100: -0.6% France's CAC 40: -0.9% Italy's FTSE MIB: -0.3% Spain's IBEX 35: -0.6%.

  • In economic data:

  • Eurozone's March Sentix Investor Confidence -7.0 (expected 5.3; last 16.6)

  • Germany's January Factory Orders 1.8% m/m (expected 1.0%; last 3.0%). January Retail Sales 2.0% m/m (expected 1.8%; last -4.6%); 10.3% yr/yr (expected 9.8%; last 0.8%)

  • U.K.'s February Halifax House Price Index 0.5% m/m (expected 1.0%; last 0.2%); 10.8% yr/yr (last 9.7%)

  • Swiss February Unemployment Rate 2.2% (expected 2.3%; last 2.3%)


  • In news:

  • Heating gas prices in Europe have continued ring to fresh highs while Brent oil has eclipsed $125/bbl.

  • Another round of case-fire talks is expected to be held today.

  • Spain's economy minister said that a way to cap energy prices is being studied.

  • European Commission President von der Leyen said officials are working on more sanctions on Russia.



U.S. equity futures:

  • S&P 500 Futures: -30 @ 4,299

  • DJIA Futures: -269 @ 33,351

  • Nasdaq 100 Futures: -108 @ 13,730

Overseas:

  • Europe: DAX -1.3%, FTSE -0.6%, CAC -0.9%

  • Asia: Nikkei -2.9%, Hang Seng -3.9%, Shanghai Composite -2.2%

Commodities:

  • Crude Oil +5.73 @ 121.41

  • Nat Gas +0083 @ 5.099

  • Gold +23.10 @ 1989.70

  • Silver +0.186 @ 25.975

  • Copper +0.0495 @ 4.9870

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Alpha Metallurgical Resources (AMR) beats on top and bottom lines

  • AvalonBay (AVB) provides Q1 operating update

  • Bluebirdbio (BLUE) misses by $0.38, misses on revs

  • Ciena (CIEN) beats by $0.02, reports revs in-line

  • Eagle Pharma (EGRX) reports Q4 results; on track to support submission of new drug application in second quarter of 2022 for Landiolol, a beta-1 adrenergic blocker

  • EverCommerce (EVCM) now expects Q4 revenue and adjusted EBITDA to be above guidance of $129.5-131 mln ($130 mln estimate) and $27-28 mln, respectively, that was provided on its third quarter earnings call

  • Huntsman (HUN) sees Q1 adjusted EBITDA at or above previous stated guidance

  • Plexus (PLXS) reaffirms Q2 GAAP EPS and revenue guidance

  • Squarespace (SQSP) reports Q4 (Dec) results, revs in-line; guides Q1 revs below consensus; guides FY22 revs below consensus

  • Uber (UBER) updates Q1 2022 outlook previously provided on the Q4 2021 earnings call - raises Q1 Adjusted EBITDA expectations

  • Vermilion Energy (VET) reports Q4 results


  • General News:

  • Another round of cease-fire talks between Russia and Ukraine expected, according to the Wall Street Journal

  • Secretary of State Antony Blinken on Sunday confirmed active talks with key allies to potentially ban imports of Russian oil

  • Nancy Pelosi proposes ban on Russian oil imports and for support Ukraine

  • Crude oil boosted by speculation about a ban on Russian imports and Iran deal delays, according to Reuters

  • More sanctions on Russia being considered, according to Bloomberg

  • UK injects $100 mln into Ukraine's economy; Builds upon recent UK backing of 220 mln overall aid support to Ukraine

  • Aecom Tech (ACM) is immediately exiting its business operations in Russia; financial contribution to AECOM from its business related to Russia is not material

  • Afya (AFYA): Bertelsmann explores increasing stake in Afya

  • Agenus (AGEN) and Targovax ASA announce that they have entered into a clinical collaboration and supply agreement to combine Targovax's TG mutant KRAS cancer vaccines with Agenuss clinically validated and FDA approved QS-21STIMULON adjuvant

  • American Express (AXP) halts operations in Russia, according to Bloomberg

  • Americold Realty Trust (COLD) COO Carlos Rodriguez to step down; co eliminates COO position

  • Applied Materials (AMAT) appoints Brice Hill as CFO

  • Bed Bath & Beyond Inc. (BBBY) Comments on Letter from RC Ventures

  • Boeing (BA) and Ethiopian Airlines sign Memorandum of Understanding for five new 777-8 Freighter

  • Boeing (BA) halts relationship with Russian titanium supplier, according to the Wall Street Journal

  • Brighthouse Financial (BHF) COO Conor Murphy will be stepping down, effective March 18

  • Bristol-Myers (BMY) receives FDA approval for Opdivo with chemotherapy as neoadjuvant treatment for certain adult patients with resectable non-small cell lung cancer

  • Chewy (CHWY) co-founder to push for changes after acquiring stake in Bed Bath & Beyond (BBBY), according to the Wall Street Journal

  • Danone (DANOY) halts investment in Russia, according to Bloomberg

  • Electric Last Mile Solutions (ELMS) approves 24% workforce reduction

  • Facebook (FB) trials payments to creators, according to Business Insider

  • General Motors (GM) ordered to fix SUV headlights, according to Reuters

  • Globus Medical (GMED) expands share repurchase authorization by $200 mln in addition to current $95.3 mln remaining under existing program

  • GOL Linhas Aereas Inteligentes S.A. (GOL) reports Feb metrics; total supply (ASK) increased 35.8%

  • Harpoon Therapeutics (HARP) announces that the U.S. Food and Drug Administration has granted Orphan Drug Designation for HPN328 for the treatment of small cell lung cancer

  • HUTCHMED (HCM) receives $15 mln milestone from AstraZeneca (AZN) for initiating start-up activities for a global Phase III study of ORPATHYS

  • INDUS Realty Trust (INDT) to sell its remaining office/flex buildings and fully exit its legacy investment in office properties

  • Interface (TILE) appoints Laurel M. Hurd as President and Chief Executive Officer, effective April 18, 2022

  • Intl Game Tech. PLC (IGT) subsidiaries signed new contract with La Lotera Nacional, Mexico's national lottery, to provide industry-leading lottery solutions and sports betting services until Sept. 30, 2024

  • Invitation Homes (INVH) enters into a $300 mln joint venture with Rockpoint Group

  • Iridium Communications' (IRDM) Board authorizes $300 mln share repurchase program

  • KBR (KBR) announced the General Accounting Office (GAO) decision to uphold the award of the US Transportation Commands Global Household Goods Contract

  • Kinnate BioPharma (KNTE) announced the presentation of findings from a collaborative study with Tempus investigating the prevalence of Class II and Class III alterations among patients with BRAF-mutated solid tumors

  • Legend Biotech (LEGN) and Janssen Pharmaceuticals (JNJ) enter into interim product supply agreement

  • Levi Strauss (LEVI) is temporarily suspending commercial operations in Russia, including any new investments

  • Lockheed Martin (LMT) wins a $869 mln contract modification to a previously awarded US Navy contract

  • Mastercard (MA) Statement on Suspension of Russian Operations

  • Merck (MRK) reports KEYTRUDA demonstrated significant improvement in Distant Metastasis-Free Survival compared to placebo in Phase 3 KEYNOTE-716 Trial

  • National Health (NHI) reaches MoU with Welltower (WELL) regarding Legacy Holiday Properties

  • Netflix (NFLX) halts operations in Russia, according to Variety

  • Novavax (NVAX) expects authorization of COVID vaccine soon, according to the Wall Street Journal

  • Occidental Petroleum (OXY): Carl Icahn divests Occidental Petroleum stake, according to the Wall Street Journal

  • OptiNose (OPTN) announced that the ReOpen1 clinical trial met both of its co-primary endpoints

  • Phillips 66 (PSX): EC clears creation of a joint venture by Phillips 66 and H2 Energy Europe

  • Repare Therapeutics (RPTX) announces the presentation of monotherapy dose selection and safety data from its Phase 1/2 TRESR clinical trial of RP-3500 at the 2022 ESMO Targeted Anticancer Therapies Congress

  • Silgan Holdings (SLGN) to repurchase up to an aggregate of $300 mln of its common stcok through December 31, 2026

  • SunCoke Energy (SXC) appointed Mark W. Marinko as the company's Senior Vice President and Chief Financial Officer, effective March 7, 2022

  • Sunstone Hotel (SHO) announces certain executive appointments; Bryan Giglia named CEO, among others

  • Teucrium Wheat (WEAT) may suspend creations in WEAT

  • Tritium DCFC (DCFC) announces the appointment of Glen Casey as the Company's new Chief Operating Officer

  • Visa (V) suspends all operations in Russia

  • Welltower (WELL) provides business update; Welltower and StoryPoint Senior Living announce deepening of strategic partnership

  • WeWork (WE) issues statement regarding potential equity investment; has "no plans to issue additional equity at this time"

  • Zymergen (ZY) advances molecules for prominent malaria and COVID-19 drug targets for further testing


  • M&A:

  • GoodRx (GDRX) to acquire vitaCare Prescription Services from TherapeuticsMD (TXMD) for $150 mln in cash

  • Johnson & Johnson (JNJ) looking at acquiring two Chinese biotech names, according to Financial Times

  • Limelight Networks (LLNW) acquires Yahoo's Edgecast for $300 mln

  • Pine Technology Acquisition Corp. (PTOC) and The Tomorrow Companies Inc. have agreed to terminate the previously announced agreement and plan of merger due to market conditions and will not complete their previously announced business combination

  • SPX FLOW (FLOW): EC clears acquisition of SPX Flow by Lone Star

  • Vectrus (VEC) to merge with Vertex

  • Whiting Petroleum (WLL) and Oasis (OAS) confirm plans to combine in $6.0 bln merger of equals transaction


  • Syndicate:

  • ESS Inc. (GWH) files for 130,044,756 share common stock offering by selling shareholders

  • Danaos (DAC) files mixed securities shelf offering

  • Eos Energy (EOSE) files for $300 mln mixed securities shelf offering

  • First Business Financial (FBIZ) files for $75 mln mixed securities shelf offering

  • JPMorgan Chase (JPM) files for $150 bln mixed securities shelf offering

  • NexPoint Real Estate Finance (NREF) files for $500 mln mixed securities shelf offering

  • Redwood Trust (RWT) files mixed securities shelf offering

  • Roku (ROKU) files mixed securities shelf offering

  • TPI Composites (TPIC) files for $200 mln mixed securities shelf offering; also files for 4,666,667 share common stock offering by selling shareholders

  • Veris Residential (VRE) files for 773,931 share common stock offering by selling shareholders


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • BBBY +61.7%, WEAT +13.1%, AU +11.3%, WLL+10.8%, VET +8.6%, WE +7.1%, GFI +6.8%, USO+5.6%, OIH +5.2%, VXX +4.8%, GOLD +3.9%, HAL+3.7%, XLE +3.3%, SLB +3%, PSX +2.7%, AUY +2.7%, NEM +2.6%, BHP +2.4%, LMT +2.2%, XOM +2.1%, BP+2.1%, RIO +1.8%, DAC +1.8%, GLD +1.2%, AVB+1.1%, TBT +1%


  • Gapping down:

  • SQSP -14.3%, BLUE -11%, TPTX -9.3%, MA -3.2%, GWH -2.8%, V -2.4%, ROKU -2.3%, IWM -1.8%, QQQ-1.5%, SPY -1.4%, DIA -1.4%, RWT -0.8%, TPIC-0.8%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Ball Corp (BLL) upgraded to Buy from Neutral at BofA Securities; tgt raised to $108

  • Intellia Therapeutics (NTLA) upgraded to Buy from Hold; tgt $91

  • Lloyds Banking (LYG) upgraded to Neutral from Underperform at BofA Securities

  • NextEra Energy (NEE) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $87

  • Nutrien (NTR) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $112

  • Oil States (OIS) upgraded to Overweight from Neutral at Piper Sandler; tgt $8

  • Palantir Technologies (PLTR) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt lowered to $16

  • Youdao (DAO) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $15


  • Downgrades:

  • Bluebirdbio (BLUE) downgraded to Underweight from Equal Weight at Barclays; tgt $4

  • Citigroup (C) downgraded to Hold from Buy at Jefferies; tgt lowered to $60

  • Coherus BioSciences (CHRS) downgraded to Neutral from Overweight at JP Morgan; tgt $15

  • Empire State Realty Trust (ESRT) downgraded to Underperform from Market Perform at BMO Capital Markets; tgt lowered to $8

  • Mosaic (MOS) downgraded to Hold from Buy at HSBC Securities; tgt $57

  • Philip Morris International (PM) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $110


  • Others:

  • NVIDIA (NVDA) resumed with a Neutral at Goldman; tgt $245

  • Paramount Group (PGRE) added to 'Tactical Underperform' list at Evercore ISI; tgt $11

  • Portage Biotech (PRTG) initiated with a Buy at H.C. Wainwright; tgt $32


Upcoming Events:

  • Econ Data:

  • 15:00 ET: Consumer Credit for Jan. (Briefing.comConsensus $25.0B; Prior $18.9B)


  • Earnings:

  • Monday (Mar 7)

  • Morning: CIEN SQSP

  • Afternoon: MASS AVDX ROVR TDUP


  • Tuesday (Mar 8)

  • Morning: DM DKS OLPX WOOF STVN

  • Afternoon: ABM BMBL CASY CRCT DV FIGS GWRE MDB SFIX SUMO WTI YEXT


  • Wednesday (Mar 9)

  • Morning: CPB DSEY EBIX KFY OTLY REVG PLCE THO UNFI VRA VERX

  • Afternoon: ASAN CVGW BASE CRWD FNV BEKE MQ


  • Thursday (Mar 10)

  • Morning: BZUN CLVT DCBO AG GCO JD LTH PTLO THRY UP

  • Afternoon: AOUT BLNK CMTL DOCU LOCO LZ LFST MLNK AVO FIZZ ORCL RRGB RIVN SHLS ULTA WPM ZUMZ


  • Friday (Mar 11)

  • Morning: GENI PLXP

  • Afternoon: BLDP




Asia & Europe detail:

Asia: Nikkei -2.9%, Hang Seng -3.9%, Shanghai Composite -2.2%

Equity indices in the Asia-Pacific region began the week on a lower note as sentiment remained pressured by ongoing fighting in Ukraine and rising commodity prices. China's National People's Congress set a 5.5% growth target for 2022, its lowest in 30 years. National Development and Reform Commission vice chair said that reaching the target will require "strenuous effort." Top Chinese officials are increasing focus on strengthening the domestic supply of food.

  • In economic data:

  • China's February trade surplus $115.95 bln (expected surplus of $99.50 bln; last surplus of $94.46 bln). February Imports 15.5% yr/yr (expected 16.5%; last 19.5%) and Exports 16.3% yr/yr (expected 15.0%; last 20.9%). February FX Reserves $3.214 trln (expected CNY3.225 trln; last CNY3.222 trln)

  • Australia's February AIG Services Index 60.0 (last 56.2) and February ANZ Job Advertisements 8.4% m/m (last -0.7%)


---Equity Markets---

  • Japan's Nikkei: -2.9%

  • Hong Kong's Hang Seng: -3.9%

  • China's Shanghai Composite: -2.2%

  • India's Sensex: -2.7%

  • South Korea's Kospi: -2.3%

  • Australia's ASX All Ordinaries: -1.0%

---FX---

  • USD/JPY: +0.3% to 115.17

  • USD/CNH: UNCH at 6.3219

  • USD/INR: +0.9% to 77.01

Europe: DAX -1.3%, FTSE -0.6%, CAC -0.9%

Major European indices trade in the red as sentiment remains pressured by fighting in Ukraine and rising commodity prices. Heating gas prices in Europe have continued ring to fresh highs while Brent oil has eclipsed $125/bbl. Another round of case-fire talks is expected to be held today. Spain's economy minister said that a way to cap energy prices is being studied. European Commission President von der Leyen said officials are working on more sanctions on Russia.

  • In economic data:

  • Eurozone's March Sentix Investor Confidence -7.0 (expected 5.3; last 16.6)

  • Germany's January Factory Orders 1.8% m/m (expected 1.0%; last 3.0%). January Retail Sales 2.0% m/m (expected 1.8%; last -4.6%); 10.3% yr/yr (expected 9.8%; last 0.8%)

  • U.K.'s February Halifax House Price Index 0.5% m/m (expected 1.0%; last 0.2%); 10.8% yr/yr (last 9.7%)

  • Swiss February Unemployment Rate 2.2% (expected 2.3%; last 2.3%)


---Equity Markets---

  • STOXX Europe 600: -1.4%

  • Germany's DAX: -1.3%

  • U.K.'s FTSE 100: -0.6%

  • France's CAC 40: -0.9%

  • Italy's FTSE MIB: -0.3%

  • Spain's IBEX 35: -0.6%

---FX---

  • EUR/USD: -0.4% to 1.0877

  • GBP/USD: -0.2% to 1.3200

  • USD/CHF: +0.9% to 0.9246

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