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07/08/23 Briefing


The S&P 500 futures are up 12 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 63 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 61 points and are trading 0.2% above fair value.

The equity market is attempting to rebound from Friday's afternoon selloff, which was broad based and lacking a news catalyst. Early buying efforts are modest in scope, though, as interest rate angst continues to hang over the market.

On a related note, Fed Governor Bowman (FOMC voter) said additional rate hikes are likely to be needed while New York Fed President Williams (FOMC voter) suggested the Fed might be close to the peak rate but that it is uncertain how long the Fed will have to leave rates in restrictive territory.

The July Consumer Price Index, which will be released on Thursday before the open, will certainly factor as a trading catalyst this week.

Currently, the 2-yr note yield is up four basis points to 4.82% and the 10-yr note yield is up four basis points to 4.10%. The U.S. Dollar Index is up 0.2% to 102.26.

In corporate news:

  • ADTRAN (ADTN 8.00, -1.05, -11.6%): sees Q3 revs below consensus

  • Berkshire Hathaway (BRK.B 355.67, +5.68, +1.6%): reports Q2 results

  • Campbell Soup (CPB 44.39, -0.76, -1.7%): to acquire SOVO for $23/share; expects deal to be accretive to adj. EPS by year two

  • Elanco Animal Health (ELAN 12.32, +0.67, +5.8%): beats by $0.13, beats on revs; guides FY23 EPS above consensus, revs above consensus

  • SAGE Therapeutics (SAGE 18.36, -17.74, -49.1%): misses by $0.13, misses on revs; is evaluating resource allocation, including pipeline prioritization and a workforce reorganization, with a goal of extending its cash runway and anticipates operating expenses will decrease in 2024

  • Tabula Rasa HealthCare (TRHC 10.25, +2.42, +30.9%): to be acquired by Nautic Partners for $10.50 in cash per share and will combine with ExactCare Pharmacy

  • Tyson Foods (TSN 52.54, -3.92, -6.9%): misses by $0.11, misses on revs; guides FY23 revs in-line

  • Yellow Corporation (YELL 1.91, -1.66, -46.5%): files voluntary Chapter 11 petitions

Reviewing reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly lower note. Japan's Nikkei +0.3%, Hon Kong's Hang Seng -0.1%, China's Shanghai Composite -0.6%, India's Sensex +0.4%, South Korea's KOSPI -0.9%, and Australia's All Ordinaries -0.2%.

  • In economic data:

  • China's July FX Reserves $3.20 trln, as expected (last $3.19 trln)

  • Japan's June Leading Index -0.2% m/m (last 1.1%) and Coincident Indicator 0.9% m/m (last 0.1%)

  • Hong Kong's July FX Reserves $421.6 bln (expected $414.6 bln; last $417.3 bln)

  • Singapore's July FX Reserves $340.8 bln (expected $338.8 bln; last $331.2 bln)

  • Australia's July ANZ job advertisements 0.4% m/m (expected 0.1%; last -2.7%)


  • In news:

  • Japan's National Personnel Authority recommended the largest salary increase for public workers in 26 years.

  • The Bank of Japan released its summary of opinions for July, noting that yield curve control policy will be conducted with greater flexibility.

  • China Securities Journal expects July data to show yr/yr loan growth.

  • Goldman Sachs noted that foreign purchases of Japanese equities have eclipsed purchases of Chinese equities for the first time in six years.



  • Major European indices trade in the red. STOXX Europe 600: -0.3%, Germany's DAX: -0.4%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -0.6%.

  • In economic data:

  • Eurozone's August Sentix Investor Confidence -18.9 (expected -23.4; last -22.5)

  • Germany's June Industrial Production -1.5% m/m (expected -0.5%; last -0.1%); -1.8% yr/yr (last 0.1%)

  • U.K.'s July Halifax House Price Index -0.3% m/m (expected 0.0%; last -0.1%); -2.4% yr/yr (expected -3.8%; last -2.6%)

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


  • In news:

  • City of London is lobbying the Bank of England to delay the implementation of new global banking capital rules by six months in order to avoid a regulatory mismatch with other jurisdictions.

  • The EU's Foreign Minister Borrell agreed with China's Foreign Minister Yi to hold an EU-China summit later this year.

  • Siemens Energy lowered its guidance for the year and announced a review of its wind business.



U.S. equity futures:

  • S&P 500 Futures: +13 @ 4,491

  • DJIA Futures: +63 @ 35,129

  • Nasdaq 100 Futures: +68 @ 15,342

Overseas:

  • Europe: DAX -0.4%, FTSE -0.5%, CAC -0.2%

  • Asia: Nikkei +0.3%, Hang Seng -0.1%, Shanghai Composite

Commodities:

  • Crude Oil -0.70 @ 82.12

  • Nat Gas +0.058 @ 2.635

  • Gold -5.35 @ 1970.75

  • Silver -0.213 @ 23.503

  • Copper -0.0152 @ 3.8523


Earnings/Guidance:

  • Aclaris Therapeutics ( ACRS 0.00% ) beats by $0.03, reports revs in-line

  • ADTRAN ( ADTN 0.00% ) reports EPS in-line, misses on revs; sees Q3 revs below consensus

  • Berkshire Hathaway (BRK.A) reports Q2 results

  • BioNTech ( BNTX 0.00% ) beats by 0.04, misses on revs

  • Clear Channel Outdoor ( CCO 1.20% ) reports revs in line and provides upside on strategic alternatives

  • Delek US Holdings ( DLK ) beats by $0.26, beats on revs

  • Elanco Animal Health ( ELAN 0.51% ) beats by $0.13, beats on revs; guides FY23 EPS above consensus, revs above consensus

  • Freshpet ( FRPT 0.00% ) beats by $0.05, reports revs in-line; reaffirms FY23 revs guidance

  • Genius Sports ( GENI 1.23% ) reports EPS in-line, beats on revs; guides Q3 revs above consensus; guides Q4 (Dec) revs above consensus

  • Gogo ( GOGO 0.00% ) beats by $0.05, reports revs in-line; lowers FY23 revs below consensus

  • Henry Schein ( HSIC 0.00% ) beats by $0.03, reports revs in-line; reaffirms FY23 EPS guidance, revs guidance

  • Hon Hai Precision ( HNHPF ) reports July -1.23% yr/yr to NT 469.2 bln

  • KKR ( KKR 1.60% ) reports Q2 (Jun) results, beats on revs

  • Kosmos Energy ( KOS 1.39% ) misses on top and bottom lines

  • SAGE Therapeutics ( SAGE 0.00% ) misses by $0.13, misses on revs

  • Sovos Brands ( SOVO 0.00% ) beats by $0.04, beats on revs (shares halted, Campbell Soup (CPB) to acquire SOVO for $23/share

  • TreeHouse Foods ( THS 0.13% ) reports EPS in-line, beats on revs; guides Q3 revs above consensus; guides FY23 revs above consensus

  • Tyson Foods ( TSN 0.34% ) misses by $0.11, misses on revs; guides FY23 revs in-line

  • Viatris ( VTRS 0.00% ) reports Q2 (Jun) results, beats on revs; reaffirms FY23 revs guidance

News:

  • Federal Reserve Governor Michelle Bowman (voting FOMC member) believes Fed might have to increase interest rates further, according to Bloomberg

  • NY Fed President John Williams (voting FOMC member) in interview sees interest rates coming down as inflation cools, according to New York Times

  • Russia says that Ukraine attacked a Russian oil tanker off the Crimean Peninsula, according to the New York Times

  • US regional banks are still relying on government financing, according to Financial Times

  • Hollywood writers and studios failed to restart negotiations, according to Bloomberg

  • "Barbie" makes $1 billion at global box office, according to CNN

  • Texas power grid held up during large amount of days with temperatures above 100 degrees, according to Bloomberg

  • Amarin ( AMRN 0.00% ): Scottish Medicines Consortium Accepts VAZKEPA (icosapent ethyl) to Help Reduce Cardiovascular Risk for Patients in Scotland

  • Apple ( AAPL 0.00% ) iPhone 15 will likely go on sale on September 22, according to Bloomberg

  • Astellas Pharma ( ALPMY ) Iveric Bio unit announced the FDA approved IZERVAY for the treatment of geographic atrophy secondary to age-related macular degeneration on August 4, 2023

  • Axsome Therapeutics ( AXSM 0.00% ): receives notice from Hikma Pharma that Hikma has submitted an ANDA seeking approval for a generic version of Sunosi

  • Biogen ( BIIB 0.00% ) receives FDA approval for ZURZUVAE

  • Boeing ( BA 0.00% ) awarded $146 mln US Navy order against a previously issued basic ordering agreement

  • Collegium Pharmaceutical ( COLL 0.00% ) has entered into an Accelerated Share Repurchase agreement with Jefferies to repurchase $50 mln of the Company's common stock

  • Copart ( CPRT 0.00% ) announces that it has approved a two-for-one split of its common stock

  • Credit Suisse ( CS 1.08% ) aiming to eliminate 80% of Hong Kong investment banking positions, according to Reuters

  • Daimler Truck Holding AG ( DTRUY ) announces death of their Chief Financial Officer Jochen Goetz

  • DMC Global ( BOOM 0.00% ) appoints Michael Kuta as president, chief executive officer and director, effective immediately

  • Dr. Reddy's ( RDY 0.38% ) confirms the FDA concluded the API manufacturing facility inspection is "closed"

  • Eli Lilly ( LLY 0.07% ): Nektar Therapeutics (NKTR) announced that efficacy data previously generated by Eli Lilly & Company for rezpegaldesleukin (REZPEG) that were presented at the September 2022 EADV Congress were incorrectly calculated by Lilly

  • Equity Bancshares ( EQBK 0.99% ) announced Friday night the promotion of Chris Navratil to CFO and announced Eric Newell's decision to resign from his position as CFO

  • Fiesta Restaurant Group ( FRGI 0.00% ): Authentic Restaurant Brands aiming to purchase Fiesta Restaurant Group, according to the Wall Street Journal

  • Focus Financial ( FOCS 0.00% ) COO to transition to senior advisor position

  • Ginkgo Bioworks ( DNA 0.00% ) announces a new collaboration with Merck (MRK) focused on improving biologic manufacturing

  • Graham ( GHM 0.71% ) announces strategic investment by customer to expand production capabilities in Batavia

  • Grupo Aeroportuario del Pacifico ( PAC 1.48% ) releases preliminary passenger traffic figures for July; total terminal passengers increased 11.1% yr/yr

  • Icahn Enterprises ( IEP 0.00% ) discloses SEC requested info on June 21

  • Intercontinental Exchange ( ICE 1.72% ) and Black Knight (BKI) announce that, amid progress toward a potential resolution, they have jointly stipulated, along with the Federal Trade Commission, to dismiss the preliminary injunction proceeding in the United States District Court seeking to block the close of ICE's previously announced acquisition of Black Knight

  • Lucid ( LCID 0.00% ) cuts prices of Air sedan, according to Reuters

  • Manpower ( MAN 2.11% ) authorizes new share repurchase program up to 5.0 mln shares

  • NatWest ( NWG 0.99% ) looking for CEO successors, according to Financial Times

  • Nikola Corporation ( NKLA 0.00% ) amended and restated equity distribution agreement with Citigroup

  • NuScale ( SMR 4.08% ) Power appoints Robert Ramsey Hamady as Chief Financial Officer; elevates Clayton Scott to Chief Commercial Officer

  • Tesla ( TSLA 0.00% ) CEO Elon Musk tweets "I'm getting an MRI of my neck & upper back tomorrow. May require surgery before the fight can happen. Will know this week"

  • Textron ( TXT 1.13% ) awarded a $241 mln US Navy contract for the procurement of LCAC 100 Class material

  • UBS ( UBS 1.02% ) nearing investment banking restructuring, according to Reuters

  • Viatris ( VTRS 0.00% ) and Mapi Pharma announce FDA acceptance of new drug application filing for GA depot for the treatment of relapsing forms of multiple sclerosis

  • Worthington ( WOR 2.24% ) provides plan to separate into two independent, publicly traded companies

  • Yellow Corporation ( YELL 0.00% ) files voluntary Chapter 11 petitions

M&A:

  • Camping World ( CWH 3.47% ) Set to Acquire RV Arizona Consignment Specialists

  • Ikena Oncology ( IKNA 0.00% ) acquires Pionyr Immunotherapeutics in all-stock deal

  • KKR ( KKR 1.60% ): OHB SE announces KKR tender offer for the company

  • PDC Energy ( PDCE 0.00% ) disclosed on Friday updates from its Special meeting; Chevron (CVX) merger agreement closing date is anticipated to be next week

  • Sequans Communications ( SQNS 1.43% ) to be acquired by Renesas Electronics (RNECF) for $3.03 per ADS

  • Silvercorp Metals ( SVM 0.35% ) acquires OreCorp

  • Sovos Brands ( SOVO 0.00% ): Campbell Soup (CPB) to acquire SOVO for $23/share; expects deal to be accretive to adj. EPS by year two

  • Tabula Rasa HealthCare ( TRHC 0.00% ) to be acquired by Nautic Partners for $10.50 in cash per share and will combine with ExactCare Pharmacy

  • Vertiv ( VRT 3.51% ) announces the commencement of an underwritten secondary offering of up to 20,000,000 shares of Vertiv's Class A common stock by VPE Holdings

Syndicate:

  • Bright Health Group ( BHG 1.20% ) entered into a credit facility with an investment partnership of New Enterprise Associates with $60 million of credit capacity on August 4, 2023

  • First Majestic Silver ( AG 2.36% ) files for $500 mln mixed securities shelf offering

  • Gilead Sciences ( GILD 0.00% ) files mixed securities shelf offering

  • Gracell Biotechnologies ( GRCL 0.00% ) announces up to $150 mln private placement financing joined by a syndicate of premier healthcare investors

  • HEICO ( HEI 0.73% ) files for 1,054,606 share Class A common stock offering by selling shareholders

  • Longboard Pharmaceuticals ( LBPH 0.00% ) files $100 mln mixed shelf securities offering

  • Macerich files ( MAC 0.16% ) mixed shelf securities offering

  • Northern Trust ( NTRS 0.00% ) files mixed securities shelf offering

  • One Liberty Properties ( OLP 0.65% ) files $245,936,398 mixed shelf securities offering

  • Realty Income ( O 0.65% ) entered into a sales agreement for the offer and sale of up to 120,000,000 shares of common stock from time to time

  • REGENXBIO ( RGNX 0.00% ) files for 257,466 share common stock offering by selling shareholder

  • TechnipFMC ( FTI 0.33% ) files mixed shelf securities offering

IPOs:

  • Expected to Price:

  • No IPOs expected.


Gapping Up/Down

  • Gapping up:

  • SQNS +13.1%, NKLA +9.2%, ELAN +5.4%, LBPH +3.1%, SVM +1.7%, BRK.B +1.7%, HSIC +1.2%, ACHR +1.1%, AXSM +0.9%, TXT +0.9%, CPRT +0.7%, MAN +0.5%, MMS +0.5%


  • Gapping down:

  • YELL -26.3%, ADTN -7.3%, IEP -2.9%, FRPT -2.4%, BNTX -2.3%, TNP -2%, SAGE -2%, FTI -1.2%, MAC -1.1%, GILD -0.6%


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

  • Upgrades

  • Camping World (CWH) upgraded to Buy from Hold at Truist; tgt raised to $35

  • DaVita (DVA) upgraded to Buy from Neutral at UBS; tgt raised to $142

  • Laureate Education (LAUR) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $17

  • PG&E (PCG) upgraded to Buy from Neutral at UBS; tgt raised to $21

  • United Airlines (UAL) upgraded to Buy from Neutral at Redburn; tgt $80

  • Wayfair (W) upgraded to Buy from Neutral at UBS; tgt raised to $110


  • Downgrades:

  • American Airlines (AAL) downgraded to Neutral from Buy at Redburn

  • FirstEnergy (FE) downgraded to Neutral from Buy at UBS; tgt lowered to $40


  • Others:

  • A.O. Smith (AOS) initiated with a Neutral at Seaport Research Partners

  • Ametek (AME) initiated with a Buy at Seaport Research Partners; tgt $195

  • Fortive (FTV) initiated with a Buy at Seaport Research Partners; tgt $92

  • nVent Electric (NVT) initiated with a Neutral at Seaport Research Partners

  • Pentair (PNR) initiated with a Buy at Seaport Research Partners; tgt $88

  • Southwest Air (LUV) downgraded to Sell from Neutral at Redburn; tgt $27


Econ Data:

  • 15:00 ET: Consumer Credit for June (Briefing.com Consensus $13.0B; Prior $7.3B)

Earnings:

  • Monday (Aug 7)

  • Morning: ACRS RCUS BNTX DK ELAN FRPT GENI GOGO HSIC KKR THS TSN VTRS

  • Afternoon: ACVA ADTN ACM AYX AEL ARWR BRBR BYND CBT WHD CSWC CE CHGG COMP CXW CTRA WTRG EVCM FGEN FIVN FSK HLIO HPK HIMS ICUI INGN IFF JRVR JELD KMPR KD LCID MTW MNKD MRVI MED MRC NSA OKE PLTR PARA PAY PWSC PRAA PRI PRIM RNG SWAV SWKS SRC TDC VECO


  • Tuesday (Aug 8)

  • Morning: MASS AHCO ADT ALE ARMK ATKR GOLD BSY TECH BLUE BR CPRI CLBT CRNC CHH DDOG DUK DEA EHTH LLY EMBC EXK ENR NPO EVBG EXPD FOXA GLBE GFS HAE HR HLMN HNI HZNP INGR IRWD J SWIM LCII LI MAC MPW NYT NXST NOVT NVAX OLPX OGN PAYO PRGO PLTK RDNT QSR SEE SEAS MCRB SMRT SQSP STER TGLS TWKS TPG TDG UAA UPS WMG WOW ZTS

  • Afternoon: ME TWOU EGHT ACCO AGTI AKAM BIRD AMC AMPL ANGI ARRY AXON AZEK AZTA BW BBAI BL BLNK BHF BMBL CDRE CDNA CELH CPNG CRCT CTOS CUTR DAR DHT APPS DIOD BOOM DOCS DUOL BROS EBS EDR ESE EXFY FATE FNF FLT FLYW FNV GO HALO HCAT HL HRT HNST TWNK HBM IAC ICHR IOSP PODD IPAR NVTA IOVA IRBT JXN JAMF KLIC LZ LGND LNW LPSN LAZR LYFT MQ MASI DOOR MTTR MRTX MODN NHI LPRO OSCR PETQ PRA PUBM QGEN QDEL RXT RPD RLAY RVNC RVMD RIVN STR SLF SMCI SUPN TTWO TALO TTGT TOST MODG TWLO USPH UPST VVX VCYT VTLE VZIO VTEX VUZI WES ZIP


  • Wednesday (Aug 9)

  • Morning: DIBS DDD ATMU AVNS BLDP BERY BCO CAE CEVA CRL DCPH EBIX EVRI FA GEO GDRX INSW IONS JACK KRNT LFST LL NOMD ODP OGE OLK PENN REYN RBLX SHCR SSYS SLVM TBLA SKIN VVV VERX VSH WRBY WEN WE XMTR

  • Afternoon: ALRM AOSL APP AVTA AVID BBDC CACI CERT CLNE CDE CPA CYRX LAW ENS G HROW ILMN INFN JAZZ LGF.A RAMP MGNI MFC OEC ONL PAAS PAR PLUG PTRA PRPL QNST RPAY SONO SOVO STKL TASK TTEK TTD VRRM VSAT DIS WYNN XENE


  • Thursday (Aug 10)

  • Morning: AQN BABA AIT AZUL CYBR HBI HIMX HLLY IMCR KELYA DNUT NABL EYE PRMW RL SIX USFD UTZ WKME WWW YETI

  • Afternoon: ATGE ARLO RCEL FLO INDI NWSA ONTO SVV VTYX VIAV WPM YMAB


  • Friday (Aug 11)

  • Morning: SPB


Asia & Europe detail:

Asia: Nikkei +0.3%, Hang Seng -0.1%, Shanghai Composite

Equity indices in the Asia-Pacific region began the week on a mostly lower note. Japan's National Personnel Authority recommended the largest salary increase for public workers in 26 years. The Bank of Japan released its summary of opinions for July, noting that yield curve control policy will be conducted with greater flexibility. China Securities Journal expects July data to show yr/yr loan growth. Goldman Sachs noted that foreign purchases of Japanese equities have eclipsed purchases of Chinese equities for the first time in six years.

  • In economic data:

  • China's July FX Reserves $3.20 trln, as expected (last $3.19 trln)

  • Japan's June Leading Index -0.2% m/m (last 1.1%) and Coincident Indicator 0.9% m/m (last 0.1%)

  • Hong Kong's July FX Reserves $421.6 bln (expected $414.6 bln; last $417.3 bln)

  • Singapore's July FX Reserves $340.8 bln (expected $338.8 bln; last $331.2 bln)

  • Australia's July ANZ job advertisements 0.4% m/m (expected 0.1%; last -2.7%)


---Equity Markets---

  • Japan's Nikkei: +0.3%

  • Hong Kong's Hang Seng: -0.1%

  • China's Shanghai Composite: -0.6%

  • India's Sensex: +0.4%

  • South Korea's Kospi: -0.9%

  • Australia's ASX All Ordinaries: -0.2%

---FX---

  • USD/JPY: +0.5% to 142.37

  • USD/CNH: +0.2% to 7.2007

  • USD/INR: +0.1% to 82.71

Europe: DAX -0.4%, FTSE -0.5%, CAC -0.2%

Major European indices trade in the red. City of London is lobbying the Bank of England to delay the implementation of new global banking capital rules by six months in order to avoid a regulatory mismatch with other jurisdictions. The EU's Foreign Minister Borrell agreed with China's Foreign Minister Yi to hold an EU-China summit later this year. Siemens Energy lowered its guidance for the year and announced a review of its wind business.

  • In economic data:

  • Eurozone's August Sentix Investor Confidence -18.9 (expected -23.4; last -22.5)

  • Germany's June Industrial Production -1.5% m/m (expected -0.5%; last -0.1%); -1.8% yr/yr (last 0.1%)

  • U.K.'s July Halifax House Price Index -0.3% m/m (expected 0.0%; last -0.1%); -2.4% yr/yr (expected -3.8%; last -2.6%)

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


---Equity Markets---

  • STOXX Europe 600: -0.3%

  • Germany's DAX: -0.4%

  • U.K.'s FTSE 100: -0.5%

  • France's CAC 40: -0.2%

  • Italy's FTSE MIB: -0.4%

  • Spain's IBEX 35: -0.6%

---FX---

  • EUR/USD: -0.2% to 1.0983

  • GBP/USD: -0.1% to 1.2731

  • USD/CHF: +0.5% to 0.8770

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