The stock market is looking for a continuation of yesterday's advance as futures on the S&P 500 trade 62 points above fair value while Nasdaq futures trade nearly 300 points above fair value.
The early strength in futures comes after a steady overnight rally that produced highs during the past hour. European equities also trade on a firmly higher note after Asian markets registered gains overnight, helped by news of another reserve requirement ratio cut from the People's Bank of China.
Crude oil has also continued its rebound, rising $2.120 or 3.2%, to $71.70/bbl.
Treasuries, meanwhile, are slightly lower with the 10-yr yield up one basis point at 1.44%.
The market will receive a handful of economic reports today with October Trade Balance (Briefing.comconsensus -$66.80 bln; prior -$80.90 bln), revised Q3 Productivity (Briefing.comconsensus -4.9%; prior -5.0%), and revised Q3 Unit Labor Costs (Briefing.comconsensus 8.2%; prior 8.3%) set to be released at 8:30 ET, followed by October Consumer Credit (prior $29.90 bln) at 15:00 ET.
President Biden is expected to speak with Russian President Putin at 10:00 ETabout the U.S. intelligence community's concern about potential escalation of the conflict in East Ukraine.
In US. corporate news:
ACADIA Pharmaceutical (ACAD 22.73, +3.33): +17.2% after announcing positive results from a Phase III drug trial.
Bright Health Group (BHG 4.35, +0.57): +15.1% after reaffirming its revenue guidance for FY21 and issuing above-consensus FY22 revenue guidance.
Intel (INTC 55.19, +4.20): +8.2% after The Wall Street Journal reported that the company plans a public listing of its Mobileye unit next year.
Merck (MRK 72.19, -1.23): -1.7% after pausing enrollment for one of its clinical studies.
Reviewing overnight developments:
Asian markets ended higher. Japan's Nikkei +2.1%, Hong Kong's Hang Seng +2.7%, and China's Shanghai Composite +0.2%
In economic data:
China's November Trade Surplus $71.7B (expected $82.8B; last $84.5B); November Exports +22.0% (expected +19.0%; last +27.1%) and Imports +31.7% (expected +19.8%; last +20.6%)
Japan's October Household Spending +3.4% m/m (expected +3.6%; last +5.0%) and -0.6% yr/yr (expected -0.6%; last -0.6%); October Leading Index +1.9% m/m (last -0.4%)
Australia's November AIG Services Index 49.6 (last 47.6); Q3 House Price Index +5.0% qtr/qtr (expected +5.0%; last +6.7%)
In news:
The People's Bank of China will cut the required reserve ratio for banks by 50 bps on December 15
The Reserve Bank of Australia left its cash rate target unchanged at 0.10%, as expected, saying it doesn't think Omicron will derail the economy and that it will review its QE plan in February
Major European indices trade in the green. Germany's DAX +2.0%, France's CAC +2.3%, and the U.K.'s FTSE +1.2%
In economic data:
Eurozone's final Q3 GDP +2.2% qtr/qtr (expected +2.2%; last +2.1%) and +3.9% yr/yr (expected +3.7%; last +14.2%); Q3 Employment Change +0.9% qtr/qtr (expected +0.9%; last +0.7%) and +2.1% yr/yr (expected +2.0%; last +1.8%); December ZEW Economic Sentiment 26.8 (last 25.9)
Germany's December ZEW Economic Sentiment 29.9 (expected 25.1; last 31.7); October Industrial Production +2.8% (expected +0.8%; last -0.5%)
UK's November Halifax House Price Index +1.0% m/m (expected +0.8%; last +1.0%) and +8.2% yr/yr (last +8.2%)
France's October Trade Balance -EUR7.5B (expected -EUR6.9B; last -EUR6.9B)
Spain's Consumer Confidence 84.6 (last 97.3)
Switzerland's November Unemployment Rate 2.5% (expected 2.6%; last 2.7%)
In news:
The European Central Bank warned that banks' asset quality could deteriorate, and downside risks to the economy could be seen, with a progressive withdrawal of stimulus
U.S. equity futures:
S&P 500 Futures: +60 @ 4,652
DJIA Futures: +361 @ 35,588
Nasdaq 100 Futures: +284 @ 16,130
Overseas:
Europe: DAX +2.1%, FTSE +1.2%, CAC +2.3%
Asia: Nikkei +2.1%, Hang Seng +2.7%, Shanghai Composite +0.2%
Commodities:
Crude Oil +2.18 @ 71.67
Nat Gas +0.043 @ 3.700
Gold +4.45 @ 1783.95
Silver +0.194 @ 22.457
Copper +0.0320 @ 4.3695
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
ABB Ltd (ABB) provides long term targets at Capital Markets day
AT&T (T) sees 2022 postpaid phone ARPU remaining stable with 2021 levels
AutoZone (AZO) beats by $4.61, beats on revs; Q1 comps +13.6%
Bright Health Group (BHG) reaffirms FY21 revenue guidance; sees FY22 revs above consensus
Broadridge Financial (BR) reaffirms FY22 revenue guidance in slide presentation
Conn's (CONN) reports EPS in-line, beats on revs; Q3 comps +20.6%
Core & Main (CNM) beats by $0.09, beats on revs; provides FY21 adjusted EBTIDA guidance
Coupa Software (COUP) beats by $0.29, beats on revs; guides JanQ EPS above consensus, revs above consensus
Designer Brands (DBI) beats by $0.30, misses on revs; guides Q4 EPS above consensus; Q3 comps +40.8%
Enbridge (ENB) reaffirms FY21 EBITDA guidance of $13.9 billion to $14.3 billion; sees FY22 adjusted EBITDA Of $15.0 to $15.6 billion
GitLab (GTLB) reports Q3 results, revenue increased 58% yr/yr
HealthEquity (HQY) reports EPS in-line, misses on revs; guides FY22 EPS below consensus, revs below consensus
Kinder Morgan (KMI) gives FY22 forecast; expects $1.09 of net income attributable to KMI/share, share repurchases of up to $750 mln
MiMedx Group (MDXG) raises FY21 guidance
MongoDB (MDB) beats by $0.27, beats on revs; guides JanQ EPS above consensus, revs above consensus
Stellantis (STLA) targets ~20 billion in incremental annual revenues by 2030 driven by software-enabled vehicles
Sumo Logic (SUMO) beats by $0.02, beats on revs; guides JanQ EPS below consensus, revs in-line
Synovus (SNV) sees FY21 loans at high end of prior 2-4% guidance range
Timken (TKR) sees FY21 guidance
VEON (VEON) announced a new medium-term financial ambition, including a 10-14% CAGR local currency revenue and EBITDA growth over the next three years
General News:
Initial data from South Africa shows that Omicron causes less severe disease compared to other variants despite high transmissibility, but more data is needed to confirm all this, according to the New York Times
Senate Republicans reject idea to attach debt ceiling increase to national defense authorization act, but both sides are still discussing alternatives to raise debt ceiling ahead of December 15deadline, according to Politico
President Biden will warn Russian President Putin that if Russia invade Ukraine, US and allies could cut Russia off from the international financial system, according to the New York Times
ACADIA Pharmaceuticals (ACAD) announces "positive" top-line results from Phase 3 Lavender trial
Aecom Tech (ACM) to develop first phase of innovative Humber Zero carbon capture project - will be working with VPI and Phillips 66 (PSX)
American Airlines (AAL) announces leadership succession plan - Robert Isom to become CEO on March 31, 2022; Doug Parker to continue as chairman
Apple's (AAPL) treatment of Roblox (RBLX) is under scrutiny amid antitrust investigation, according to The Information
Babylon (BBLN) and Palantir Technologies (PLTR) outline the substantial progress they have made in a new partnership designed to deliver a revolution in the use of data to improve clinical delivery and care for Babylon's members in the US healthcare marketplace
Black Hills Corp (BKH) provides regulatory update prior to investor meetings
British American Tobacco (BTI) says new categories will contribute to profit growth for the first time as their losses start to reduce, a key step on its pathway to profitability by 2025
CareTrust REIT (CTRE) follow-up: CareTrust weighing potential strategic options, including a prospective sale, according to Bloomberg
Clene (CLNN): Clene Nanomedicine's RESCUE-ALS Phase 2 results selected for late-breaking presentation at 32nd International Symposium on ALS/MND
Digital World Acquisition Corp (DWAC): Congressman Devin G. Nunes selected as CEO of Trump Media & Technology Group, effective January 2022
Eastman Chemical (EMN) announces $500 million accelerated share repurchase
Energous (WATT) received its first regulatory approval in Asia for RF-based power transfer at any distance
GlaxoSmithKline (GSK) & Medicago announce positive Phase 3 efficacy and safety results for adjuvanted plant-based COVID-19 vaccine candidate
Grupo Aeroportuario Del Sureste (ASR) reports November traffic of 4.9 mln passengers, up 7.2% vs November 2019
Hillenbrand (HI) authorizes new share repurchase program of up to $300 mln
IDEAYA Biosciences (IDYA) provided a clinical data update for the Phase 1/2 trial evaluating darovasertib and crizotinib synthetic lethal combination in metastatic uveal melanoma (MUM) patients
Intel (INTC) plans public listing of shares of its self-driving car business, Mobileye, according to the Wall Street Journal
Johnson & Johnson's (JNJ) Janssen announces respiratory syncytial virus adult vaccine candidate maintains high efficacy regardless of lower respiratory tract disease severity
LHC Group (LHCG) approves share repurchase program for up to $250 mln of common stock
Marriott Vacations' (VAC) Interval International announces new affiliation agreement with Disney Vacation Club
Mastercard (MA) announced a series of changes in the leadership of its international operations
MeiraGTx (MGTX) announces positive preliminary data from the AQUAx phase 1 clinical trial of AAV-hAQP1 for the treatment of grade 2/3 radiation-induced xerostomia
Merck (MRK) pauses enrollment for IMPOWER 22 and IMPOWER 24 Phase 3 clinical studies evaluating islatravir for pre-exposure prophylaxis in people at high risk of HIV-1 infection
Microsoft (MSFT): EU aiming to take a more extensive look at Microsoft deal for Nuance Communications (NUAN), according to Reuters
Newpark Resources (NR) announces non-binding memorandum of understanding for JV in Saudi Arabia
Pentair (PNR) announces 5% rate increase to its quarterly cash dividend
Plymouth Industrial REIT (PLYM) announces succession plan for CFO position; Anthony Saladino, current Chief Accounting Officer, named successor
Prometheus Biosciences (RXDX) reports "positive" topline results from its Phase 1 trial of PRA023 in healthy volunteers
Raymond James (RJF) President John Carson to retire effective December 31, 2021; Paul Allison, Chairman and CEO of company's Canadian subsidiary Raymond James Ltd, to step down, effective December 31, 2021; will transition to RJL Exec. Chairman
Samsung Electronics (SSNLF) announces new leadership; Jong-Hee Han to lead the newly merged SET Division, Kyehyun Kyung to head the Device Solutions Division
Silicon Motion (SIMO) announces new $200 mln share repurchase program; reiterates Q4 guidance
Spire Global (SPIR) awarded a contract under the European Space Agency's Navigation Innovation and Support Programme (NAVISP) Element 2 Program funded by UK Space Agency
Sumo Logic (SUMO) appoints Stewart Grierson as CFO, effective December 13
Taysha Gene Therapies (TSHA) presents late-breaking abstract and poster for TSHA-105 for the treatment of epilepsy caused by SLCA13A5 deficiency
Tesla (TSLA) granted US patent for "QOS manager for system on a chip communications"
Univar Solutions (UNVR) announces new distribution agreement with Tata Chemicals
Vir Biotechnology (VIR) preclinical studies demonstrate sotrovimab retains activity against the full combination of mutations in the spike protein of the omicron SARS-CoV-2 Variant
Yamana Gold (AUY) receives permit to increase throughput at Jacobina mine
M&A:
Ameresco (AMRC) acquired Plug Smart, an Ohio-based energy services company that specializes in the development and implementation of budget neutral capital improvement projects
CGI Group (GIB) subsidiary agrees to acquire Melbourne-based Unico; terms not disclosed
Commercial Metals (CMC) entered into a definitive agreement to acquire TAC Acquisition Corp for $550 mln
FirstCash (FCFS) announced that it has amended its previously announced definitive agreement to acquire American First Finance; total consideration payable to the seller at closing remains unchanged
Gaming and Leisure Properties (GLPI) enters into agreements to acquire property assets of Live! Casino & Hotel Maryland, Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh; announces public offering of 7.7 mln common shares
GoHealth (GOCO) appoints Vance Johnston as CFO, effective December 7, 2021
Hill-Rom (HRC): EU Commission clears acquisition of Hill-Rom by Baxter (BAX)
Mimecast (MIME) to become a private company through transaction with Permira valued at ~$5.8 bln or $80/share
Oaktree Acquisition Corp. II (OACB) and Alvotech announce merger agreement to create a leading publicly-traded global biopharmaceutical company
Syndicate:
Blue Owl Capital (OWL) announces that NBSH Blue Investments II, LLC intends to offer 26.7 mln shares of common stock in a public offering
Bright Health Group (BHG) announces $750 mln capital raise
Patrick Industries (PATK) announces proposed offering of $225 mln convertible senior notes due 2028
Silvergate Capital (SI) pricing of an underwritten public offering of 3,310,344 shares of Class A common stock at a price to the public of $145.00/share
IPOs:
Expected to Price:
Chicago Atlantic Real Estate Finance (Nasdaq: REFI): The commercial real estate finance company dedicated to making loans to operators and property owners in cannabis industry is expected to price its 6.3 M share IPO between $16-$18.
HashiCorp (Nasdaq: HCP): The cloud computing company providing a standardized approach to automating the critical processes involved in delivering applications in the cloud is expected to price its 15.3 M between $68-$72.
Nu Holdings (NYSE: NU): The digital banking platform is expected to price its 289.2 M share IPO between $8-$9.
Gapping Up/Down
Gapping up:
ACAD +15.5%, BHG +12.4%, KULR +12%, VIR+11.3%, SPIR +10.1%, TSHA +10%, INTC +9.2%, SCYX +8.3%, DWAC +5.6%, TSLA +3.8%, BB +3%,
Gapping down:
SI -4.9%, GLPI -3.6%, OWL -2.1%, MRK -1.3%,
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Bumble Inc. (BMBL) upgraded to Overweight from Neutral at JP Morgan; tgt $55
CarMax (KMX) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $160
Cerence (CRNC) upgraded to Outperform from Mkt Perform at Raymond James; tgt $100
Commscope (COMM) upgraded to Buy from Hold at Jefferies; tgt raised to $15
CVR Energy (CVI) upgraded to Neutral from Underperform at Credit Suisse
Digital Turbine (APPS) upgraded to Outperform from Neutral at Macquarie; tgt $80
Global Blood Therapeutics (GBT) upgraded to Outperform from Mkt Perform at William Blair
ironSource (IS) upgraded to Outperform from Neutral at Macquarie; tgt $14
Jack In The Box (JACK) upgraded to Buy from Hold at Deutsche Bank; tgt lowered to $108
Juniper Networks (JNPR) upgraded to Buy from Hold at Jefferies; tgt raised to $42
Murphy Oil (MUR) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $37
Downgrades:
Air Products (APD) downgraded to In-line from Outperform at Evercore ISI
AstraZeneca (AZN) downgraded to Hold from Buy at Jefferies
CNX Resources (CNX) downgraded to Neutral from Overweight at JP Morgan; tgt $18
Helmerich & Payne (HP) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $27
Jackson Financial (JXN) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt $38
Linde plc (LIN) downgraded to In-line from Outperform at Evercore ISI
Magnolia Oil & Gas (MGY) downgraded to Neutral from Overweight at JP Morgan; tgt $24
Merck (MRK) downgraded to Neutral from Buy at Guggenheim
Others:
Algoma Steel Group (ASTL) initiated with an Outperform at BMO Capital Markets
Arvinas (ARVN) initiated with an Outperform at Cowen
Camden Property (CPT) initiated with a Buy at Stifel; tgt $192
Canopy Growth (CGC) initiated with an Underweight at Wells Fargo; tgt $8
Chart Industries (GTLS) initiated with a Buy at The Benchmark Company; tgt $206
CI&T Inc (CINT) initiated with an Outperform at Itau BBA; tgt $22
CNH Industrial (CNHI) initiated with an Outperform at Bernstein (yesterday)
Columbus McKinnon (CMCO) initiated with an Overweight at JP Morgan; tgt $64
CRISPR Therapeutics (CRSP) initiated with a Market Perform at Cowen
Embark Technology (EMBK) initiated with a Buy at Citigroup; tgt $11
Equity Residential (EQR) initiated with a Hold at Stifel; tgt $93
Essex Property (ESS) initiated with a Buy at Stifel; tgt $390
Fate Therapeutics (FATE) initiated with an Outperform at Cowen
Fluence (FLNC) initiated with an Outperform at Robert W. Baird; tgt $44
F45 Training Holdings (FXLV) initiated with a Buy at Jefferies; tgt $23
GrowGeneration (GRWG) initiated with an Equal Weight at Wells Fargo; tgt $18
Hydrofarm Holdings (HYFM) initiated with an Equal Weight at Wells Fargo; tgt $33
Iovance Biotherapeutics (IOVA) resumed with an Outperform at Cowen
Janus International Group (JBI) initiated with a Neutral at UBS; tgt $14
Journey Medical (DERM) initiated with a Buy at B. Riley Securities; tgt $14
Moderna (MRNA) initiated with a Market Perform at Cowen
Upcoming Events:
Econ Data:
08:30 ET: Trade Balance for Oct (Briefing.comConsensus -$66.8B; Prior -$80.9B)
08:30 ET: Productivity-Rev. for Oct (Briefing.comConsensus -4.9%; Prior -5.0%)
08:30 ET: Unit Labor Costs - Rev for Q3 (Briefing.comConsensus 8.2%; Prior 8.3%)
15:00 ET: Consumer Credit for Oct (Briefing.comConsensus NA; Prior $29.9B)
Earnings:
Monday (Dec 6)
Morning: SAIC
Afternoon: COUP HQY MDB SUMO
Tuesday (Dec 7)
Morning: AZO CONN DBI
Afternoon: AVAV CASY CHPT BASE PLAY PD S SFIX TOL
Wednesday (Dec 8)
Morning: BF.B CPB KFY LOVE PLAB THO UNFI VRA
Afternoon: GME GEF OXM PHR RH SPWH CURV PATH
Thursday (Dec 9)
Morning: CIEN HRL
Afternoon: AOUT AVGO CHWY COST LESL LULU MESA ORCL MTN
Friday (Dec 10)
Morning: ASO
Asia & Europe detail:
Asia: Nikkei +2.1%, Hang Seng +2.7%, Shanghai Composite +0.2%
Equity indices in the Asia-Pacific region had a strong showing on Tuesday, drafting off the late-Monday decision by the PBOC to cut the required reserve ratio for banks by 50 bps, and the optimism about the Omicron variant that drove big gains in the U.S. market on Monday. Notably, China's Shanghai Composite was the weakest performer of the major indices despite better than expected trade data for November. There was a deceleration in exports, however, and imports were said to have been boosted by large coal purchases, so the positive surprises weren't as cheery as the headline numbers suggested. The RBA left its cash rate target unchanged at 0.10%, as expected, saying it doesn't think Omicron will derail the economy and that it will review its QE plan in February.
In economic data:
China's November Trade Surplus $71.7B (expected $82.8B; last $84.5B); November Exports +22.0% (expected +19.0%; last +27.1%) and Imports +31.7% (expected +19.8%; last +20.6%)
Japan's October Household Spending +3.4% m/m (expected +3.6%; last +5.0%) and -0.6% yr/yr (expected -0.6%; last -0.6%); October Leading Index +1.9% m/m (last -0.4%)
Australia's November AIG Services Index 49.6 (last 47.6); Q3 House Price Index +5.0% qtr/qtr (expected +5.0%; last +6.7%)
---Equity Markets---
Japan's Nikkei: +2.1%
Hong Kong's Hang Seng: +2.7%
China's Shanghai Composite: +0.2%
India's Sensex: +1.6%
South Korea's Kospi: +0.6%
Australia's ASX All Ordinaries: +1.0%
---FX---
USD/JPY: +0.1% to 113.54
USD/CNH: flat at 6.3710
USD/INR: +0.1% to 75.434
Europe: DAX +2.1%, FTSE +1.2%, CAC +2.3%
Major European indices are in rally mode, following form with other global markets as investors express hope that the Omicron variant won't be as bad as feared from a health and economic standpoint. That perspective overshadowed an ECB observation that banks' asset quality could deteriorate, and downside risks to the economy could be seen, with a progressive withdrawal of stimulus. The eurozone's final Q3 GDP report was revised slightly higher. Germany's industrial production in October was stronger than expected and economic sentiment in December was also better than expected, although lower than the prior month. Lots of attention today on the 10:00 a.m. ETvideo summit between President Biden and President Putin, with the former expected to warn the latter against invading Ukraine. EUR/USD -0.3% to 1.1253.
In economic data:
Eurozone's final Q3 GDP +2.2% qtr/qtr (expected +2.2%; last +2.1%) and +3.9% yr/yr (expected +3.7%; last +14.2%); Q3 Employment Change +0.9% qtr/qtr (expected +0.9%; last +0.7%) and +2.1% yr/yr (expected +2.0%; last +1.8%); December ZEW Economic Sentiment 26.8 (last 25.9)
Germany's December ZEW Economic Sentiment 29.9 (expected 25.1; last 31.7); October Industrial Production +2.8% (expected +0.8%; last -0.5%)
UK's November Halifax House Price Index +1.0% m/m (expected +0.8%; last +1.0%) and +8.2% yr/yr (last +8.2%)
France's October Trade Balance -EUR7.5B (expected -EUR6.9B; last -EUR6.9B)
Spain's Consumer Confidence 84.6 (last 97.3)
Switzerland's November Unemployment Rate 2.5% (expected 2.6%; last 2.7%)
---Equity Markets---
STOXX Europe 600: +1.9%
Germany's DAX: +2.1%
U.K.'s FTSE 100: +1.2%
France's CAC 40: +2.3%
Italy's FTSE MIB: +1.8%
Spain's IBEX 35: +0.9%
---FX---
EUR/USD: -0.3% to 1.1253
GBP/USD: -0.1% to 1.3248
USD/CHF: -0.1% to 0.9247
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