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07/03/23 Briefing

Updated: Mar 11, 2023

The S&P 500 futures are up 5 points and are trading 0.1% above fair value. The Nasdaq 100 futures are up 26 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 9 points and are trading 0.1% above fair value.

Equity futures are mixed and little changed ahead of Fed Chair Powell's semiannual monetary policy testimony before the Senate Banking Committee at 10:00 a.m. ET. A move lower in Treasury yields has been mildly supportive of the equity futures market this morning. The 2-yr note yield is down three basis points to 4.87% and the 10-yr note yield is down four basis points to 3.94%.

The Reserve Bank of Australia increased its cash rate by 25 bps to 3.60%, as expected.

China reported a larger than expected trade surplus for February even though both imports (-10.2% yr/yr) and exports (-6.8% yr/yr) decreased for the first time since May 2020.

Energy complex futures are mixed. WTI crude oil futures are down 0.6% to $80.01/bbl and natural gas futures are up 2.1% to $2.79/mmbtu. 

In corporate news:

  • Meta Platforms (META 187.45, +2.55, +1.4%): More layoffs expected at Meta Platforms, according to Bloomberg

  • Dick's Sporting Goods (DKS 138.30, +6.16, +4.7%): beats by $0.04, beats on revs; raises quarterly dividend 105%

  • Nutanix (NTNX 27.10, -1.67, -5.8%): reports Q2 results; beats on revs; guides AprQ revs above consensus; guides FY23 revs above consensus; to delay 10-Q, not reporting EPS today

  • Guidewire Software (GWRE 72.30, +0.78, +1.1%): misses by $0.19, beats on revs; guides Q3 revs in-line; guides FY23 revs above consensus

  • Juniper Networks (JNPR 31.63, +0.30, +1.0%): Goldman Sachs initiated coverage with Buy rating and price target of $39

  • Thor Industries (THO 82.52, -10.06, -10.9%): misses by $0.64, misses on revs; lowers FY23 EPS below consensus, revs below consensus

  • Cara Therapeutics (CARA 7.10, -2.92, -29.1%): misses by $0.21, misses on revs

  • Rivian (RIVN 15.85, -1.28, -7.5%): intends to offer $1.3 bln of green convertible senior notes due 2029

  • Squarespace (SQSP 27.70, +3.66, +15.2%): reports Q4 (Dec) results, beats on revs; guides Q1 revs above consensus; guides FY23 revs above consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mixed note while India's markets were closed for Holi. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: -0.3%, China's Shanghai Composite: -1.1%, India's Sensex: CLOSED, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +0.5%.

    • In economic data:

      • China's February trade surplus $116.88 bln (expected surplus of $81.80 bln; last surplus of $78.01 bln). February Imports -10.2% yr/yr (expected -5.5%; last -7.5%) and Exports -6.8% yr/yr (expected -9.4%; last -9.9%)

      • Japan's January Average Cash Earnings 0.8% yr/yr (expected 1.9%; last 4.1%)

      • South Korea's Q4 GDP -0.4% qtr/qtr, as expected (last 0.3%); 1.3% yr/yr (expected 1.4%; last 1.3%)

      • Australia's January Retail Sales 1.9% m/m, as expected (last -4.0%). January trade surplus AUD11.69 bln (expected surplus of AUD 12.50 bln; last surplus of AUD12.24 bln). January Imports 5.0% m/m (last 1.0%) and Exports 1.0% (last -1.0%)

    • In news:

      • China reported a larger than expected trade surplus for February even though both imports and exports decreased for the first time since May 2020.

      • China Securities Daily speculated that the People's Bank of China could cut its reserve requirement ratio soon.

      • South Korea will halt its WTO complaint against Japan and will seek to relax export curbs imposed in 2019.

      • The Reserve Bank of Australia increased its cash rate by 25 bps to 3.60%, as expected.

  • Major European indices trade near their flat lines. STOXX Europe 600: UNCH, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.1%.

    • In economic data:

      • Germany's January Factory Orders 1.0% m/m (expected -0.9%; last 3.4%)

      • U.K.'s February Halifax House Price Index 1.1% m/m (expected -0.3%; last 0.2%); 2.1% yr/yr (last 2.1%)

      • Spain's January Industrial Production -0.4% yr/yr (expected -0.6%; last 0.7%)

      • Swiss February Unemployment Rate 1.9%, as expected (last 1.9%)

    • In news:

      • European Central Bank policymaker de Cos said that CPI will remain high in the short-term, but he also expects that Spain's GDP outlook will be revised higher while the CPI forecast will be revised lower.

      • Bank of England policymaker Mann expressed a concern over persistent core inflation.

      • There is a growing number of labor strikes in France over the government's pension reform plan.

 

U.S. equity futures:

  • S&P 500 Futures: +4 @ 4,053

  • DJIA Futures: +9 @ 33,440

  • Nasdaq 100 Futures: +30 @ 12,332

Overseas:

  • Europe: DAX +0.1%, FTSE +0.3%, CAC +0.1%

  • Asia: Nikkei +0.3%, Hang Seng -0.3%, Shanghai Composite -1.1%

Commodities:

  • Crude Oil -0.40 @ 80.06

  • Nat Gas +0.055 @ 2.627

  • Gold -10.15 @ 1844.45

  • Silver -0.143 @ 20.992

  • Copper -0.0518 @ 4.0367

 

Earnings/Guidance:

  • 908 Devices (MASS) misses by $0.07, beats on revs; guides FY23 revs in-line

  • AeroVironment (AVAV) misses by $0.10, beats on revs; guides FY23 EPS below consensus, revs in-line

  • BlackBerry (BB) sees Q4 revs below consensus

  • Calavo Growers (CVGW) misses by $0.26, misses on revs

  • Cara Therapeutics (CARA) misses by $0.21, misses on revs

  • Coherus BioSciences (CHRS) reports Q4 (Dec) results, misses on revs; provides business updates

  • Dick's Sporting Goods (DKS) beats by $0.04, beats on revs; raises quarterly dividend 105%

  • Dole plc (DOLE) beats by $0.04, beats on revs

  • Domo (DOMO) beats by $0.07, beats on revs; guides AprQ EPS below consensus, revs in-line; guides FY24 EPS above consensus, revs below consensus

  • Enfusion (ENFN) reports Q4 with upside sales and in-line guidance

  • Ferguson plc (FERG) misses by $0.04; beats on revs; reaffirms outlook

  • Guidewire Software (GWRE) misses by $0.19, beats on revs; guides Q3 revs in-line; guides FY23 revs above consensus

  • HighPeak Energy (HPK) reports Q4 (Dec) results, beats on revs (two ests)

  • KeyCorp (KEY) in slides: reduces FY23 net interest income guidance to up +1-4% yr/yr from up +6-9%

  • Latham Group (SWIM) misses by $0.09, beats on revs; guides Q1 revs below consensus; guides FY23 revs in-line

  • MRC Global (MRC) in slide presentation says expects 2023 annual sales growth of "double-digit %" vs $3.363 bln last year

  • Nutanix (NTNX) reports Q2 results; beats on revs; guides AprQ revs above consensus; guides FY23 revs above consensus; to delay 10-Q, not reporting EPS today

  • Pactiv Evergreen (PTVE) beats on top and bottom lines

  • Scholar Rock (SRRK) beats by $0.11, beats on revs

  • Sea Limited (SE) beats by $1.27, beats on revs

  • Seres Therapeutics (MCRB) misses by $0.08, misses on revs

  • Squarespace (SQSP) reports Q4 (Dec) results, beats on revs; guides Q1 revs above consensus; guides FY23 revs above consensus

  • Thor Industries (THO) misses by $0.64, misses on revs; lowers FY23 EPS below consensus, revs below consensus

  • Trip.comGroup (TCOM) reports Q4 (Dec) results, beats on revs; China business remained resilient with international business showing strong recovery momentum

  • Vivid Seats (SEAT) reports Q4 results; beats on revs; sees FY23 revs in-line

  • WW (WW) reports Q4 (Dec) results, revs in-line; guides Q1 revs below consensus; acquiring Sequence for $106 mln in cash and equity

News:

  • Continued focus on rail regulations after derailments in Ohio, New York Times

  • White House releases Medicare budget fact sheet

  • Akamai Technologies (AKAM) Releases New Service and Tools to Stop Advanced Threats and Drive Zero Trust Adoption

  • Amarin (AMRN) announces that all seven independent non-Sarissa board members to depart to avoid further proxy contests

  • Atlassian (TEAM) announced the rebalancing of resources resulting in the elimination of certain roles impacting about 500 full-time employees, or approximately 5% of the Company's current workforce

  • BioMarin Pharmaceutical (BMRN) provides update on FDA review of ROCTAVIAN

  • B. Riley Financial (RILY) Board of Directors authorized an updated share repurchase program for share repurchases of up to $50 million through October 2023

  • Canadian Solar (CSIQ) announces commercial operation of three solar projects in Japan Totaling 42 MWp

  • Carriage Services (CSV) appoints Kian Granmayeh as CFO, effective March 13, 2023

  • Con Edison (ED) enters accelerated share repurchase agreements with two dealers to repurchase $1 bln of its common shares

  • Domo (DOMO) names David Jolley as CFO and Domo Founder Josh James as CEO; John Mellor steps down as CEO

  • Globalstar (GSAT) signs collaboration agreement with Qualcomm

  • Hut 8 Mining (HUT) reports 156 Bitcoin mined in February

  • Incyte (INCY) and Caris Life Sciences enter into broad precision medicine partnership to advance Incyte's oncology pipeline

  • Ionis Pharma (IONS): FDA accepts NDA for eplontersen, an investigational antisense medicine for the treatment of people living with hereditary transthyretin-mediated amyloid polyneuropathy (ATTRv-PN)

  • Lulu's Fashion Lounge (LVLU) announces that Vice President of Finance, Tiffany Smith, has been appointed CFO, effective immediately

  • Meta Platforms (META): More layoffs expected at Meta Platforms, according to Bloomberg

  • Mr. Cooper Group (COOP) appoints Kurt Johnson to CFO

  • Nevro (NVRO) has now initiated the U.S. full market launch of its HFX iQ spinal cord stimulation (SCS) system, following the completion of a successful limited market release

  • New Found Gold Corp. (NFGC) Commences Industry-leading 3D Seismic Survey at Its Queenwsay Gold Project

  • Parsons (PSN) awarded contract to provide Contra Costa Water District Capital Project Management Services for Phase 2 of the Los Vaqueros Reservoir Expansion

  • Petrobras (PBR) signs with Equinor (EQNR) a letter of intent, expanding on the cooperation between the companies

  • Ritchie Bros. (RBA): Starboard affirmed 5.9% active stake last night

  • Ritchie Bros. (RBA) sells CA$72+ million of equipment & vehicles in Edmonton, AB

  • Salesforce (CRM): Elliott Management nominates directors for Salesforce board, according to Reuters

  • Sanofi (SNY) and Regeneron Pharmaceuticals (REGN) report Dupixent accepted for FDA review

  • SEMRush (SEMR) appoints Brian Mulroy as incoming CFO, effective April 2023

  • STMicroelectronics (STM) releases New STM32H5 MCU series from STMicroelectronics boosts performance and security for next-generation smart applications

  • Tellurian (TELL) names CFO Kian Granmayeh effective March 10

  • Tyson (TSN) facing employee lawsuit over lack of coronavirus measures, according to MarketWatch

  • ViewRay (VRAY) announced the Czech Ministry of Health has approved the purchase of ViewRay's MRIdian system

  • Walmart (WMT) was informed that John Furner, EVP, President and Chief Executive Officer, Walmart U.S., entered into a stock trading plan designed to comply with Rule 10b5-1

M&A:

  • Criteo (CRTO) acquires Brandcrush to accelerate offline retail media solutions

  • DXC Technology (DXC) terminates discussions with a financial sponsor regarding a potential acquisition

  • Intercontinental Exchange (ICE): FTC expected to challenge Intercontinental Exchange's acquisition of Black Knight (BKI), according to Bloomberg

  • ShockWave Medical (SWAV): Neovasc (NVCN) Shareholders Approved Acquisition by Shockwave Medical

  • WPP plc (WPP) acquires German healthcare specialist 3K Communication

  • WW (WW) buying digital health company Sequence, which offers telehealth visits with doctors, according to the Wall Street Journal

Syndicate:

  • BlackSky Technology (BKSY) has entered into definitive agreements with a syndicate of new and existing institutional investors for the issuance and sale of 16,403,677 shares of the Company's Class A common stock and warrants to purchase up to an additional 16,403,677 shares of common stock in a private placement offering

  • BridgeBio Pharma (BBIO) announces proposed public offering of $150 million of shares of its common stock

  • Goldman Sachs (GS) BDC prices offering of 6.5 mln shares of common stock for gross proceeds of ~$99.1 mln

  • Hamilton Lane (HLNE) prices offering of 671,737 shares of Class A common stock for gross proceeds of ~$51.7 mln

  • Liberty Media (LSXMA) intends to offer $500 mln aggregate principal amount of convertible senior notes

  • Rivian Automotive (RIVN) intends to offer $1.3 bln of green convertible senior notes due 2029

  • Sylvamo (SLVM) files for 6,312,454 share common stock offering by selling shareholders

  • Tidewater (TDW) acquires 37 platform supply vessels from Solstad Offshore

  • Vuzix (VUZI) files for 2,843,754 share common stock offering by selling shareholders

IPOs:

  • Expected to Price:

    • Atlas Energy Solutions (NYSE: AESI): The provider of frac sand and logistics services in the Permian Basis is expected to price its 18.0 M share IPO between $20-$23.

Gapping Up/Down

  • Gapping up:

    • WW +11.9%, SQSP +4%, AMRN +3.8%, TCOM +3.1%, TDW +2.3%, HPK +1.7%, DXC +1.6%, TEAM +1.2%, GWRE +1.1%, VRNA +1.1%, SNY +1%, GSAT +0.9%, TELL +0.7%, BBIO +0.5%, DOLE +0.5%

  • Gapping down:

    • CARA -30.4%, CVGW -12.2%, NTNX -8%, ZYXI -6.5%, GSBD -5.5%, RIVN -5.3%, DOMO -4.1%, LVLU -3.2%, KEY -3%, CDNA -2.7%, BB -2.5%, PSN -1.5%, HLNE-1.1%, AVAV -0.7%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

    • Costco (COST) upgraded to Buy from Neutral at Northcoast; tgt $560

    • Mercantile Bank (MBWM) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $40

  • Downgrades:

    • Artisan Partners Asset Mgmt (APAM) downgraded to Sell from Neutral at Goldman; tgt lowered to $27

    • Gossamer Bio (GOSS) downgraded to Mkt Perform from Outperform at Raymond James

    • Joby Aviation (JOBY) downgraded to Sell from Hold at Deutsche Bank; tgt lowered to $4

    • KT (Korean Telco) (KT) downgraded to Neutral from Buy at BofA Securities

    • Lightspeed (LSPD) downgraded to Market Perform from Outperform at MoffettNathanson; tgt lowered to $17

  • Others:

    • Arista Networks (ANET) initiated with a Buy at Goldman

    • Bluebirdbio (BLUE) initiated with an Outperform at Robert W. Baird; tgt $10

    • Hesai Group (HSAI) initiated with an Outperform at Credit Suisse; tgt $28

    • Juniper Networks (JNPR) initiated with a Buy at Goldman

Upcoming Events:

  • Econ Data:

    • 10:00 ET: Wholesale Inventories for Jan (Briefing.comConsensus -0.4%; Prior 0.1%)

    • 15:00 ET: Consumer Credit for Jan (Briefing.comConsensus $22.9B; Prior $11.6B)

  • Earnings:

    • Monday (Mar 6)

      • Morning:  AZUL CIEN RIDE

      • Afternoon: AVAV CVGW DOMO GWRE NTNX TCOM WW

    • Tuesday (Mar 7)

      • Morning: MASS DKS DOLE SWIM SE MCRB SQSP THO

      • Afternoon:  AGTI ARLO CASY BASE CRCT CRWD SFIX WTI YEXT

    • Wednesday (Mar 8)

      • Morning:  ABM BF.B CPB IMXI KFY LTH LFST REVG COCO UNFI VERX VRDN

      • Afternoon:  ASAN ESTE EOLS MDB NDLS ONL SMRT SOVO

    • Thursday (Mar 9)

      • Morning: BJ GCO HLLY JD PSFE TTC

      • Afternoon:  BIRD AOUT DOCU LOCO GPS HCP HRT AVO ORCL SWBI ULTA MTN WPM ZUMZ

    • Friday (Mar 10) 

      • Morning:  BKE GENI

Asia & Europe detail:

Asia: Nikkei +0.3%, Hang Seng -0.3%, Shanghai Composite -1.1%

Equity indices in the Asia-Pacific region ended Tuesday on a mixed note while India's markets were closed for Holi. China reported a larger than expected trade surplus for February even though both imports and exports decreased for the first time since May 2020. China Securities Dailyspeculated that the People's Bank of China could cut its reserve requirement ratio soon. South Korea will halt its WTO complaint against Japan and will seek to relax export curbs imposed in 2019. The Reserve Bank of Australia increased its cash rate by 25 bps to 3.60%, as expected.

  • In economic data:

    • China's February trade surplus $116.88 bln (expected surplus of $81.80 bln; last surplus of $78.01 bln). February Imports -10.2% yr/yr (expected -5.5%; last -7.5%) and Exports -6.8% yr/yr (expected -9.4%; last -9.9%)

    • Japan's January Average Cash Earnings 0.8% yr/yr (expected 1.9%; last 4.1%)

    • South Korea's Q4 GDP -0.4% qtr/qtr, as expected (last 0.3%); 1.3% yr/yr (expected 1.4%; last 1.3%)

    • Australia's January Retail Sales 1.9% m/m, as expected (last -4.0%). January Imports 5.0% m/m (last 1.0%) and Exports 1.0% (last -1.0%)

---Equity Markets---

  • Japan's Nikkei: +0.3%

  • Hong Kong's Hang Seng: -0.3%

  • China's Shanghai Composite: -1.1%

  • India's Sensex: CLOSED

  • South Korea's Kospi: UNCH

  • Australia's ASX All Ordinaries: +0.5%

---FX---

  • USD/JPY: +0.1% to 136.09

  • USD/CNH: -0.1% to 6.9423

  • USD/INR: UNCH at 81.82

 

Europe: DAX +0.1%, FTSE +0.3%, CAC +0.1%

Major European indices trade near their flat lines. European Central Bank policymaker de Cos said that CPI will remain high in the short-term, but he also expects that Spain's GDP outlook will be revised higher while the CPI forecast will be revised lower. Bank of England policymaker Mann expressed a concern over persistent core inflation. There is a growing number of labor strikes in France over the government's pension reform plan.

  • In economic data:

    • Germany's January Factory Orders 1.0% m/m (expected -0.9%; last 3.4%)

    • U.K.'s February Halifax House Price Index 1.1% m/m (expected -0.3%; last 0.2%); 2.1% yr/yr (last 2.1%)

    • Spain's January Industrial Production -0.4% yr/yr (expected -0.6%; last 0.7%)

    • Swiss February Unemployment Rate 1.9%, as expected (last 1.9%)

---Equity Markets---

  • STOXX Europe 600: UNCH

  • Germany's DAX: +0.1%

  • U.K.'s FTSE 100: +0.3%

  • France's CAC 40: +0.1%

  • Italy's FTSE MIB: +0.1%

  • Spain's IBEX 35: -0.1%

---FX---

  • EUR/USD: -0.2% to 1.0660

  • GBP/USD: -0.3% to 1.1985

  • USD/CHF: +0.3% to 0.9336


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