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07/11/22 Briefing

The S&P 500 futures are up 14 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 36 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 142 points and are trading 0.5% above fair value.

Equity futures are moving higher this morning after Friday'supbeat finish.

There is still a growing hope that China will loosen zero-covid related restrictions despite the spokesman for China's Health Commission saying that no changes are being made to the country's coronavirus protocols. 

The Biden administration privately asked Ukraine to show it is open to negotiations with Russia, according to the Washington Post.

Apple (AAPL) is trading down in premarket action following its production warning while Meta Platforms (META) trades up after The Wall Street Journal reported the company is planning large layoffs.

Treasury yields are mixed this morning. The 2-yr note yield is up two basis points to 4.69% while the 10-yr note yield is down two basis points to 4.13%.

The U.S. Dollar Index is pulling back, down 0.3% to 110.55. 

Economic data today is limited to the September Consumer Credit report (prior $23.80 bln) at 3:00 p.m. ET.

In corporate news:

  • Apple (AAPL 135.65 -2.73 -1.97%):  provides update on supply of iPhone 14 Pro and iPhone 14 Pro Max; expects lower iPhone 14 Pro and iPhone 14 Pro Max shipments than previously anticipated

  • Meta Platforms (META 93.38 +2.59 +2.85%):  planning large layoffs, according to WSJ.

  • BioNTech (BNTX 150.18 -4.13 -2.68%):  beats by 3.56, beats on revs; raises COVID-19 revs outlook

  • Wells Fargo (WFC 47.05 +0.31 +0.66%): is under pressure to pay $1 bln to CFPB, according to Bloomberg.

  • Costco (COST 479.00 -7.41 -1.52%):  downgraded to Equal Weight from Overweight at Wells Fargo

  • Palantir Technologies (PLTR 7.86 -0.07 -0.88%): misses by $0.01, reports revs in-line; guides Q4 revs below consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a higher note. Japan's Nikkei: +1.2%, Hong Kong's Hang Seng: +2.7%, China's Shanghai Composite: +0.2%, India's Sensex: +0.4%, South Korea's Kospi: +1.0%, Australia's ASX All Ordinaries: +0.6%.

  • In economic data:

  • China's October trade surplus $85.15 bln (expected surplus of $95.95 bln; last surplus of $84.78 bln). October Imports -0.7% yr/yr (expected 0.1%; last 0.3%) and Exports -0.3% yr/yr (expected 4.3%; last 5.7%)

  • In news:

  • There was more speculation about China loosening restrictions, but the spokesman for China's Health Commission said that no changes are being made to the country's coronavirus protocols.

  • The approval rating of Japan's cabinet office fell nine points to 36%, according to Yomiuri.

  • Yonhap reported that there are growing expectations for South Korea's 2023 GDP growth to be at 2.0% or below due to high rates, high inflation, and weak won.

  • Major European indices trade on a mostly higher note with Germany's DAX (+0.8%) showing relative strength. STOXX Europe 600: +0.5%, Germany's DAX: +0.8%, U.K.'s FTSE 100: -0.2%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.2%.

  • In economic data:

  • Eurozone's October Construction PMI 44.9 (last 45.3). November Sentix Investor Confidence -30.9 (expected -35.0; last -38.3)

  • Germany's September Industrial Production 0.6% m/m (expected 0.2%; last -1.2%). October Construction PMI 43.8 (last 41.8)

  • U.K.'s October Halifax House Price Index -0.4% m/m, as expected (last -0.1%); 8.3% yr/yr (last 9.8%)

  • France's October Construction PMI 44.3 (last 49.1)

  • Italy's October Construction PMI 48.1 (last 46.7)

  • In news:

  • The U.K. is reportedly planning to implement a road tax on electric vehicles and GBP35 bln in spending cuts.

  • The German government will reportedly spend GBP83.3 bln to finance next year's cap on energy prices.

  • Bank of France Governor Villeroy de Galhau said that ECB rate hikes need to continue since underlying inflation has not peaked.

 

U.S. equity futures:

  • S&P 500 Futures: +16 @ 3,787

  • DJIA Futures: +148 @ 32552

  • Nasdaq 100 Futures: +38 @ 10,985

Overseas:

  • Europe: DAX +0.8%, FTSE -0.2%, CAC +0.1%

  • Asia: Nikkei +1.2%, Hang Seng +2.7%, Shanghai Composite +0.2%

Commodities:

  • Crude Oil -0.84@ 91.74

  • Nat Gas  +0.695 @ 7.095

  • Gold +2.30 @ 1678.90

  • Silver -0.092  @ 20.692

  • Copper -0.0778 @ 3.6087

 

  • Earnings/Guidance:

  • Affiliated Managers (AMG) beats by $0.30, beats on revs

  • Amicus Therapeutics (FOLD) beats by $0.07

  • Beam Therapeutics (BEAM) reports Q3 (Sep) results, beats on revs

  • Berkshire Hathaway (BRK.B) reports Q3 results

  • BioNTech (BNTX) beats by 3.56, beats on revs; raises COVID-19 revs outlook

  • Bluebirdbio (BLUE) beats by $0.24, misses on revs

  • Cactus (WHD) beats by $0.04, reports revs in-line

  • Choice Hotels (CHH) misses by $0.13, beats on revs; provides FY22 EBITDA guidance

  • Cronos Group (CRON) misses by CAD0.02, misses on revs

  • Essential Utilities (WTTR) beats by $0.04, beats on revs; reaffirms FY22 EPS guidance

  • Franco-Nevada (FNV) misses by $0.03, misses on revs

  • Haemonetics (HAE) beats by $0.16, beats on revs; raises FY23 guidance

  • Helios Technologies (HLIO) misses by $0.07, misses on revs; lowers FY22 EPS below consensus, revs below consensus

  • HF Sinclair (DINO) beats by $0.36, beats on revs

  • Holly Energy Partners (HEP) misses by $0.19, beats on revs

  • IAA (IAA) misses by $0.05, beats on revs

  • Kosmos Energy (KOS) beats by $0.06

  • NiSource (NI) beats by $0.02; guides FY22 EPS in-line; guides FY23 EPS in-line

  • NRG Energy (NRG) misses by $0.79, beats on revs

  • Palantir Technologies (PLTR) misses by $0.01, reports revs in-line; guides Q4 revs below consensus

  • Ritchie Bros. (RBA) beats by $0.15, beats on revs

  • Shift4 Payments (FOUR) beats by $0.01, reports revs in-line; raises FY22 revs in-line

  • TreeHouse Foods (THS) reports Q3 (Sep) results, misses on revs; guides Q4 revs in-line

  • United Micro (UMC) reports October revs increased 27.1% yr/yr to NT$24.34 bln

  • Viatris (VTRS) reports Q3 (Sep) results, misses on revs; reaffirms FY22 revs guidance

  • News:

  • Republicans expected to gain control of House as party holds voter advantages on inflation and crime while Democrats hold advantage on issue of threats to democracy, according to the Washington Post

  • The Biden administration privately asks Ukraine to show it is open to negotiations with Russia, according to the Washington Post

  • China's National Health Commission reaffirmed zero coronavirus policy and says situation could become "more severe and complex" amid flu season, according to

  • President Biden will soon confront oil executives on prices, according to Bloomberg

  • Senator Joe Manchin (D-WV) was highly critical of President Biden's comments about shutting down all coal plants in America, according to Politico

  • Tropical system could impact Florida later this week, according to the Wall Street Journal

  • The Federal Reserve releases its Financial Stability Report for November 2022

  • AMGEN (AMGN) presents new Phase 2 data that show Olpasiran delivers significant reduction in LIPOPROTEIN(A) levels

  • Anavex (AVXL): FDA grants Orphan Drug Designation to ANAVEX2-73 (blarcamesine) for the treatment of Fragile X syndrome

  • Apple (AAPL) provides update on supply of iPhone 14 Pro and iPhone 14 Pro Max; expects lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated

  • AstraZeneca (AZN) presents data at ASN Kidney Week 2022 reinforcing urgent need for early screening of chronic kidney disease and the benefits of earlier treatment initiation for patients and healthcare systems

  • BrainStorm Cell Therapeutics (BCLI) Presents New Analyses from NurOwn's Phase 3 ALS Trial at the 21st Annual NEALS Meeting

  • Caledonia Mining (CMCL) provides updated mineral resources and technical report for Maligreen

  • Cameco (CCJ) signs uranium supply agreement with China Nuclear International Corporation

  • Cenovus Energy (CVE) approved the renewal of the company's normal course issuer bid to purchase up to 136,717,741 common shares during the 12-month period commencing November 9, 2022

  • Daqo New Energy (DQ) approves $700 mln share repurchase

  • Exxon (XOM) could lose $2 bln from sale of California oil assets, according to Reuters

  • FOX Corporation (FOX) issues statement on arbitration ruling

  • F-star Therapeutics (FSTX) Announces Publication of Phase 1 Dose-Escalation Trial of FS118 in Patients with Advanced Cancer and PD-L1 Resistance in Clinical Cancer Research

  • Galapagos NV (GLGP) outlines roadmap for pipeline and commercial growth during its R&D Day; expects Jyseleca net sales of 80-90 mln in 2022

  • GlaxoSmithKline (GSK) provides update on DREAMM-3 phase III trial for Blenrep in relapsed/refractory multiple myeloma; study did not meet primary endpoint

  • GOL Linhas Aereas Inteligentes S.A. (GOL) reports October traffic figures

  • Horizon Pharma (HZNP) reports data supporting the use of KRYSTEXXA (pegloticase) Injection with Methotrexate to Treat Uncontrolled Gout in People With Mild-to-Moderate Chronic Kidney Disease

  • Insulet (PODD) Issued Voluntary Medical Device Correction for Omnipod DASH Personal Diabetes Manager on October 17, 2022

  • Ionis (IONS) presents positive Phase 2 data in patients with IgA Nephropathy at American Society of Nephrology's Kidney Week 2022

  • iRhythm (IRTC) presents New Research Confirms that Zio by iRhythm Provides High Value From a Health Economic Perspective

  • Kamada (KMDA) Provides Update on Recent Progress Achieved in Ongoing Pivotal Phase 3 Clinical Trial of Inhaled AAT

  • KBR (KBR) was awarded a contract by Deepak Fertilizers and Petrochemicals Corporation to help three DFPCL plants achieve lower emissions and simultaneously increase production capacity

  • Lexicon Pharma (LXRX) reports new Analysis of SCORED Trial Demonstrates Sotagliflozin's Effect on Reducing Albuminuria in Patients With Type 2 Diabetes and Chronic Kidney Disease

  • Merck (MRK): Reductions in certain types of hpv-related cervical and non-cervical diseases in women and men observed with real-world use of Merck's GARDASIL in systematic literature review of 138 studies

  • Meta (META) planning large layoffs, according to the Wall Street Journal

  • Novartis AG's (NVS) Sandoz announces further investment in key manufacturing facility in Austria, to support increased global demand for essential antibiotics

  • Osisko Gold Royalties (OR) has entered into a binding agreement with SolGold plc with respect to a $50 mln royalty financing to support the advancement of SolGold's Cascabel copper-gold property in northeastern Ecuador

  • Petrobras (PBR): Former Petrobras executive urges Brazil to block dividend payment, according to Reuters

  • Rallybio (RLYB) reports "positive" topline results from its Phase 1 single ascending dose (SAD) study in healthy participants of RLYB116

  • Regeneron Pharma (REGN) reports Aflibercept 8 mg Late-breaking Data Presented at Retina Society in Diabetic Macular Edema and Wet Age-related Macular Degeneration

  • Silence Therapeutics (SLN) Presents New Analysis from SLN360 Phase 1 Single Dose Study in High Lipoprotein(a) at the American Heart Association (AHA) 2022 Annual Meeting

  • Trimble (TRMB) announces strategic collaboration to explore the use of autonomous construction surveying technology

  • TriNet Group (TNET) commenced a modified "Dutch auction" tender offer for cash up to $250 million in value of its common stock at a price per share not less than $63.00 and not greater than $72.00

  • Triumph Bancorp (TBK) commences a modified "Dutch Auction" tender offer to repurchase up to $100 million of its common stock

  • Twitter (TWTR): Elon Musk eliminated half of Twitter's staff, according to the New York Times

  • Vera Therapeutics (VERA) Presents New Analysis of Phase 2a JANUS Trial of Atacicept in IgA Nephropathy and Positive Final Phase 2 Results of MAU868 in Kidney Transplant Recipients with Reactivated BK Virus Infection at the American Society of Nephrology Kidney Week 2022 Annual Meeting

  • Verve Therapeutics (VERV) reports VERVE-101 Investigational New Drug Application placed on hold by U.S. Food and Drug Administration

  • Vir Biotechnology (VIR) Presents New Data Evaluating the Potential for VIR-2218 and VIR-3434 to Achieve a Functional Cure for Chronic Hepatitis B Virus (HBV) Infection

  • Wells Fargo (WFC) is under pressure to pay $1 bln to CFPB, according to Bloomberg

  • Zimmer Biomet (ZBH) Announces One-Year Data from mymobility Clinical Study at 2022 AAHKS Annual Meeting

  • M&A:

  • Activision (ATVI) insiders are concerned deal with Microsoft (MSFT) could collapse, according to the New York Post

  • Allegion (ALLE) to acquire assets of plano; expected to close in the first quarter of 2023; Terms of the plano transaction were not disclosed

  • Bowman Consulting Group (BWMN) announced the purchase of SEI Engineering

  • Castellum (CTM) to acquire an East-coast-based government contractor generating approximately $10 million in revenue

  • Fox (FOXA) holds 10 year option to purchase stake in FanDuel (DKNG), according to Reuters

  • Gold Fields (GFI) Board stands behind existing terms of transaction with Yamana Gold (AUY)

  • IAA (IAA): Ritchie Bros. (RBA) to acquire IAA in stock and cash transaction valued at ~$7.3 bln

  • Ouster (OUST) and Velodyne (VLDR) announce proposed merger of equals

  • Peabody Energy (BTU) & Coronado discontinue combination discussions

  • Philip Morris International (PM): PMHH Is Pleased to Complete Its Offer for Swedish Match and Become the Owner of 82.59% of the Shares; Extends the Offer Period; and Adjusts the Price for Future Tenders Due to the Scheduled Dividend

  • Walgreens (WBA) unit Village Practice Management wants to combine Summit Health, according to theWall Street Journal

  • Syndicate

  • Annexon (ANNX) files for 42,137,548 common stock offering by selling stockholders

  • CVRx, Inc. (CVRX) files $150 mln mixed securities shelf offering

  • Dragonfly Energy (DFLI) files for 38,132,989 common stock offering by selling stockholders; relates to warrants

  • FAT Brands (FAT) announced that it has withdrawn its previously announced proposed registered public offering of shares of its Class A Common Stock as a result of market conditions

  • LSB Industries (LXU) announces secondary offering of 14,350,000 shares of common stock by selling stockholder with the Company repurchasing 3,500,000 of the shares

  • ProPetro (PUMP) files for 10,116,888 common stock offering by selling stockholder

  • Rayonier (RYN) files mixed securities shelf offering

  • Select Energy Services (WTTR) files for 8,717,619 common stock offering by selling stockholders

  • Wynn Resorts (WYNN) files mixed securities shelf offering

  • IPOs:

  • Expect to Price:

  • Acrivon Therapeutics (Nasdaq: ACRV): The clinical stage biopharmaceutical company developing precision oncology medicines is expected to price its 5.9 M share IPO between $16-$18.

Gapping Up/Down

  • Gapping up:

  • LXRX +11.1%, IAA +7%, VLRS +5.6%, HAE +5.4%, TBK +3.5%, DQ +3.4%, CCJ +3%, KOS +2.9%, FOX+2.3%, UMC +1.4%, BRK.B +1.2%, GFI +1.1%, BCLI+0.9%, IWM +0.8%, CVE +0.6%, SPY +0.6%, QQQ+0.6%, DIA +0.6%

  • Gapping down:

  • VERV -14.2%, ICPT -3%, NI -3%, BNTX -2.5%, RBA-2.1%, GSK -1.7%, AAPL -1.3%, BEAM -0.7%

 


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • ACM Research (ACMR) upgraded to Hold from Underperform at Jefferies; tgt lowered to $7

  • Coterra Energy (CTRA) upgraded to Peer Perform from Underperform at Wolfe Research

  • DoorDash (DASH) upgraded to Outperform from Perform at Oppenheimer; tgt $70

  • Fluor (FLR) upgraded to Buy from Neutral at DA Davidson; tgt raised to $40

  • Downgrades:

  • Adient (ADNT) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $36

  • AvalonBay (AVB) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $160

  • Costco (COST) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $490

  • Estee Lauder (EL) downgraded to Hold from Buy at Berenberg; tgt lowered to $220

  • Galapagos NV (GLPG) downgraded to Mkt Perform from Outperform at Raymond James

  • GATX (GATX) downgraded to Neutral from Positive at Susquehanna

  • Huntsman (HUN) downgraded to Sector Perform from Sector Outperform at Scotiabank

  • IdaCorp (IDA) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $103

  • Others:

  • Datadog (DDOG) initiated with a Peer Perform at Wolfe Research

Upcoming Events:

  • Econ Data:

  • 15:00 ET: Consumer Credit for Sep (Briefing.comConsensus NA; Prior $23.8B)

  • Earnings

  • Monday (Nov 7)

  • Morning:  AMG BLDP BNTX WHD CHH CRON DK WTRG FNV HAE HLIO DINO HEP NI NRG PLTR RBA FOUR THS VTRS

  • Afternoon: ME TWOU AAON ACCO ATVI ADTN LNT AEL AMWL ASH BNFT BHF BWXT CBT CERT DHT FANG DOCN DIOD EHTH FN FGEN FIVN FLGT GRPN HIMS ICUI IFF LGND LPSN LYFT MTW DOOR MLNK MOS MWA NSTG NFE OSH PACB PRDO PRIM QTWO QGEN ROVR SANM SWAV SEDG TTWO TASK TDC TRIP UIS VECO VNOM WELL XNCR YMAB

  • Tuesday (Nov 8)

  • Morning: ACRS AHCO BSY BLDR CG CLVT CNHI CEG COTY CYXT DBD DD ELAN EXK EVBG EVRI EXPD FA GFS HAIN HSKA IGT RIDE LITE MNKD NEO NXST NWN NCLH NOVT PKI PRGO PLNT PLTK RCM RETA REYN SAGE SCSC SSP SQSP STVN SPWR SHO SKIN TAC TGI

  • Afternoon:  DDD ABCL AFRM AKAM ALRM BIRD AMC DOX AMRS ANGI ARLO ARRY AXON BLNK CARG CLNE CRCT DAR DV EBS ENV EOLS FNF FLYW GMED GDRX GO GXO HALO HCAT HRTX ICHR IOSP INO IAC NVTA JKHY LMND LFST RAMP LCID MASI MRTX MODN MRC NTRA NHI NEWR NWSA KIND NOG NLOK NVAX OXY OPK OSUR PLUG PRI PRA PUBM SEER SILK SRC SFM SUPN SG TWO UPST VSAT WTI DIS XENE ZD

Asia & Europe detail:

Asia: Nikkei +1.2%, Hang Seng +2.7%, Shanghai Composite +0.2%

Equity indices in the Asia-Pacific region began the week on a higher note. There was more speculation about China loosening restrictions, but the spokesman for China's Health Commission said that no changes are being made to the country's coronavirus protocols. The approval rating of Japan's cabinet office fell nine points to 36%, according to Yomiuri. Yonhap reported that there are growing expectations for South Korea's 2023 GDP growth to be at 2.0% or below due to high rates, high inflation, and weak won.

  • In economic data:

  • China's October trade surplus $85.15 bln (expected surplus of $95.95 bln; last surplus of $84.78 bln). October Imports -0.7% yr/yr (expected 0.1%; last 0.3%) and Exports -0.3% yr/yr (expected 4.3%; last 5.7%)

---Equity Markets---

  • Japan's Nikkei: +1.2%

  • Hong Kong's Hang Seng: +2.7%

  • China's Shanghai Composite: +0.2%

  • India's Sensex: +0.4%

  • South Korea's Kospi: +1.0%

  • Australia's ASX All Ordinaries: +0.6%

---FX---

  • USD/JPY: -0.1% to 146.52

  • USD/CNH: +0.8% to 7.2303

  • USD/INR: -0.1% to 81.92

Europe: DAX +0.8%, FTSE -0.2%, CAC +0.1%

Major European indices trade on a mostly higher note with Germany's DAX (+0.8%) showing relative strength. The U.K. is reportedly planning to implement a road tax on electric vehicles and GBP35 bln in spending cuts. The German government will reportedly spend GBP83.3 bln to finance next year's cap on energy prices. Bank of France Governor Villeroy de Galhau said that ECB rate hikes need to continue since underlying inflation has not peaked.

  • In economic data:

  • Eurozone's October Construction PMI 44.9 (last 45.3). November Sentix Investor Confidence -30.9 (expected -35.0; last -38.3)

  • Germany's September Industrial Production 0.6% m/m (expected 0.2%; last -1.2%). October Construction PMI 43.8 (last 41.8)

  • U.K.'s October Halifax House Price Index -0.4% m/m, as expected (last -0.1%); 8.3% yr/yr (last 9.8%)

  • France's October Construction PMI 44.3 (last 49.1)

  • Italy's October Construction PMI 48.1 (last 46.7)

---Equity Markets---

  • STOXX Europe 600: +0.5%

  • Germany's DAX: +0.8%

  • U.K.'s FTSE 100: -0.2%

  • France's CAC 40: +0.1%

  • Italy's FTSE MIB: +0.7%

  • Spain's IBEX 35: +0.2%

---FX---

  • EUR/USD: +0.1% to 0.9967

  • GBP/USD: +0.5% to 1.1427

  • USD/CHF: -0.4% to 0.9900


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