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08/02/23 Briefing

The S&P 500 futures are down 19 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 42 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 140 points and are trading 0.3% below fair value.

Equity futures indicate a lower open driven by a sense that the market got overextended and is due for some consolidation.

Investors are still weighing Fed Chair Powell's comments from yesterday, where he pointed to emerging signs of disinflation but reiterated that more rate hikes will probably be appropriate.

The Reserve Bank of India raised its policy rate by 25 bps to 6.50%, as expected, and pointed to the prospect of additional rate hikes. 

The weekly MBA Mortgage Application Index rose 7.4% with refinancing applications increasing 18.0% and purchase applications rising 3.0%.

Other data releases today include:

  • 10:00 ET: December Wholesale Inventories (Briefing.comconsensus 0.5%; prior 1.0%)

  • 10:30 ET: Weekly crude oil inventories (prior 4.14 mln)

In corporate news:

  • Uber (UBER 37.63, +2.73, +7.8%): beats by $0.27, beats on revs

  • Fortinet (FTNT 59.35, +5.57, +10.4%):  beats by $0.05, reports revs in-line; guides Q1 EPS in-line, revs in-line; guides FY23 EPS in-line, revs above consensus

  • Lumen Technologies (LUMN 4.1800, -0.81, -16.2%): beats by $0.20, reports revs in-line; disappoints with FY23 free cash flow guidance of $0-200 million

  • Enphase Energy (ENPH 248.48, +20.02, +8.8%): beats by $0.25, beats on revs; guides Q1 revs in-line

  • Chipotle Mexican Grill (CMG 1642.50, -80.36, -4.7%): misses by $0.60, misses on revs; Q4 comps +5.6% vs guidance of mid to high-single digits; guides Q1 comps in high-single-digits

  • Oak Street Health (OSH 34.85, +1.17, +3.5%): CVS Health to acquire Oak Street Health (OSH) for $39/share in cash, for enterprise value of $10.6 bln

  • CVS Health (CVS 87.48, +1.50, +1.8%): beats by $0.06, beats on revs; reaffirms FY23 EPS guidance

  • Manchester United (MANU 24.67, +3.55, +16.8%): higher on report Qatari investors will bid for MANU within days, according to DailyMailUK

  • New Relic (NEWR 76.84, +12.26, +19.0%):  beats by $0.17, beats on revs; guides Q4 EPS above consensus, revs above consensus

  • Under Armour (UAA 13.16, +0.94, +7.7%): beats by $0.07, beats on revs; raises FY23 EPS guidance, reaffirms revenue growth guidance of a low single-digit percentage rate increase on a reported basis

  • Activision Blizzard (ATVI 72.00, -3.60, -4.8%): UK CMA says Microsoft (MSFT) deal for ATVI could harm gamers

  • Capri Holdings (CPRI 53.50, -12.86, -19.4%): misses by $0.40, misses on revs; guides Q4 EPS below consensus, revs below consensus; guides FY24 EPS below consensus, revs below consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: -0.1%, China's Shanghai Composite: -0.5%, India's Sensex: +0.6%, South Korea's Kospi: +1.3%, Australia's ASX All Ordinaries: +0.4%.

    • In economic data:

      • Japan's January Bank Lending 3.1% yr/yr (expected 2.5%; last 2.7%) and January Economy Watchers Current Index 48.5 (expected 48.4; last 48.7)

      • South Korea's December Current Account surplus $2.68 bln (last deficit of $220 mln)

    • In news:

      • Japan will reportedly end coronavirus tests for visitors from China.

      • Japan's Prime Minister Kishida said that the next Bank of Japan governor will have to closely coordinate with other central banks. Nominees will reportedly be presented to parliament next week.

      • Expectations for the terminal official cash rate from the Reserve Bank of Australia have increased to 3.85% from 3.60%.

      • The Reserve Bank of India raised its policy rate by 25 bps to 6.50%, as expected.

  • Major European indices trade in the green. STOXX Europe 600: +0.8%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.8%.

    • In economic data:

      • France's Q4 nonfarm payrolls 0.0% qtr/qtr (expected 0.2%; last 0.4%)

      • Italy's December Retail Sales -0.2% m/m (expected -0.8%; last 0.8%); 3.4% yr/yr (last 4.4%)

    • In news:

      • European Central Bank policymaker Schnabel said that inflation momentum remains elevated and repeated that the ECB expects to hike by 50 bps in March.

      • The U.K.'s National Institute of Economic and Social Research expects that inflation in the U.K. will remain above 3.0% until the end of 2024.

      • Volkswagen reported sales and earnings growth for 2022.

 

U.S. equity futures:

  • S&P 500 Futures: -17 @ 4,147

  • DJIA Futures: -114 @ 34,043

  • Nasdaq 100 Futures: -33 @ 12,695

Overseas:

  • Europe: DAX +0.7%, FTSE +0.7%, CAC +0.4%

  • Asia: Nikkei -0.3%, Hang Seng -0.1%, Shanghai Composite -0.5%

Commodities:

  • Crude Oil +0.62 @ 77.76

  • Nat Gas -0.043 @ 2.541

  • Gold +6.85 @ 1891.65

  • Silver +0.271 @ 22.448

  • Copper +0.0210 @ 4.1015

 

Earnings/Guidance:

  • Amcor (AMCR) reports Q2 EPS of $0.31 vs. $0.18 Capital IQ consensus; revs +4% yr/yr to $3.62 bln vs. $3.66 bln Capital IQ consensus

  • Assurant (AIZ) beats by $0.86, reports revs in-line

  • Atmos Energy (ATO) misses by $0.01, beats on revs; guides FY23 EPS in-line; declares dividend

  • Belden (BDC) beats by $0.09, beats on revs; guides Q1 EPS and revs above consensus; guides FY23 EPS and revs above consensus

  • Black Hills Corp (BKH) misses by $0.06, beats on revs; guides FY23 EPS below consensus

  • Blackstone Mortgage Trust (BXMT) beats by $0.15

  • Bunge (BG) beats by $0.03, misses on revs; guides FY23 EPS below consensus

  • Capri Holdings (CPRI) misses by $0.40, misses on revs; guides Q4 EPS below consensus, revs below consensus; guides FY24 EPS below consensus, revs below consensus

  • Carlisle Cos (CSL) beats by $0.29, reports revs in-line

  • CDW (CDW) beats by $0.02, misses on revs; authorized a $750 mln increase to the company's share repurchase program

  • Cerence (CRNC) beats by $0.27, beats on revs; guides Q2 revs below consensus; guides FY23 revs in-line

  • Chipotle Mexican Grill (CMG) misses by $0.60, misses on revs; Q4 comps +5.6% vs guidance of mid to high-single digits; guides Q1 comps in high-single-digits

  • CME Group (CME) beats by $0.04, reports revs in-line

  • CNO Financial (CNO) beats by $0.01, beats on revs

  • Coherent (COHR) beats by $0.02, reports revs in-line; guides Q3 EPS in-line, revs in-line; guides FY23 revs in-line

  • Compass Minerals (CMP) misses by $0.55, misses on revs; provides FY23 segment guidance

  • Costamare (CMRE) misses by $0.04; beats on revs

  • Coty (COTY) beats by $0.07, beats on revs; raises FY23 EPS guidance, reaffirms EPS growth guidance for FY24

  • Criteo (CRTO) misses by $0.12, beats on revs; guides Q1 revs below consensus

  • Crown (CCK) beats by $0.12, misses on revs; guides Q1 EPS below consensus; guides FY23 EPS below consensus

  • CVS Health (CVS) beats by $0.06, beats on revs; reaffirms FY23 EPS guidance

  • Dominion Energy (D) beats by $0.02, beats on revs; guides Q1 EPS below consensus

  • Douglas Emmett (DEI) misses by $0.01, misses on revs; guides FY23 FFO below consensus

  • EastGroup (EGP) beats by $0.05, beats on revs

  • Eaton (ETN) beats by $0.01, reports revs in-line; guides Q1 EPS in-line; guides FY23 EPS in-line

  • Edgewell Personal Care (EPC) beats by $0.10, reports revs in-line; guides FY23 EPS in-line, raises revenue guidance

  • Emerson (EMR) misses by $0.09, misses on revs; guides Q2 EPS in-line; guides FY23 EPS in-line

  • Enanta Pharmaceuticals (ENTA) beats by $0.21, beats on revs

  • Encompass Health (EHC) beats by $0.06, beats on revs; guides FY22 EPS in-line, revs above consensus

  • Enphase Energy (ENPH) beats by $0.25, beats on revs; guides Q1 revs in-line

  • Equinor (EQNR) reports Q4 results; sees production growth of 3% in FY23

  • Essex Property (ESS) beats by $0.04; guides FY23 FFO below consensus

  • Euronet (EEFT) beats by $0.15, misses on revs; guides Q1 EPS below consensus

  • Exelixis (EXEL) beats by $0.05, beats on revs; reaffirms FY23 revs guidance

  • FMC Corp (FMC) beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs in-line; guides FY23 EPS below consensus, revs above consensus

  • Fortinet (FTNT) beats by $0.05, reports revs in-line; guides Q1 EPS in-line, revs in-line; guides FY23 EPS in-line, revs above consensus

  • Freshworks (FRSH) beats by $0.05, beats on revs; guides Q1 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Green Plains (GPRE) misses by $0.42, beats on revs

  • Gulfport Energy (GPOR) provides Q4 updates - estimates its fourth quarter 2022 production was negatively impacted by approximately 2%

  • H & R Block (HRB) beats by $0.11, beats on revs; reaffirms FY23 EPS guidance, revs guidance

  • Healthpeak (PEAK) beats by $0.01, beats on revs; guides FY23 FFO below consensus

  • Highwoods Prop (HIW) reports FFO in-line, revs in-line

  • Horace Mann (HMN) misses by $0.01, reports revs in-line

  • ICHOR Corporation (ICHR) reports EPS in-line, revs in-line; guides Q1 EPS in-line, revs in-line

  • Illumina (ILMN) misses by $0.08, beats on revs; guides FY23 EPS in-line, revs in-line

  • Ingredion (INGR) beats by $0.20, misses on revs; guides FY23 EPS in-line

  • Inspire Medical Systems (INSP) beats by $0.64, reports revs in-line; guides FY23 revs in-line

  • Jack Henry (JKHY) misses by $0.01, misses on revs; guides FY23 EPS below consensus

  • Kyndryl (KD) misses by $0.16, beats on revs

  • LiveRamp (RAMP) beats by $0.01, reports revs in-line; guides MarQ revs in-line

  • Lumen Technologies (LUMN) beats by $0.20, reports revs in-line

  • MasterCraft (MCFT) beats by $0.19, beats on revs, issues upside EPS and revenue guidance for Q3 and FY23

  • Model N (MODN) beats by $0.01, beats on revs; guides Q2 EPS below consensus, revs in-line

  • NCR Corp (NCR) misses by $0.01, reports revs in-line; guides Q1 revs in-line; guides FY23 revs in-line

  • New Relic (NEWR) beats by $0.17, beats on revs; guides Q4 EPS above consensus, revs above consensus

  • New York Times (NYT) beats by $0.16, beats on revs; increases dividend by 22%; approves a new $250 mln Class A share repurchase program; increases goal of returning FCF to shareholders

  • Omnicom (OMC) beats by $0.10, beats on revs

  • Paycom Software (PAYC) beats by $0.24, beats on revs; guides Q1 revs above consensus; guides FY23 revs above consensus

  • Penske Auto (PAG) beats by $0.25, beats on revs

  • Performance Food Group (PFGC) beats by $0.08, reports revs in-line; guides Q3 revs below consensus; guides FY23 revs in-line

  • Perion Network (PERI) beats by $0.17, beats on revs; guides FY23 revs in-line

  • Prudential (PRU) misses by $0.09, authorizes repurchase of up to $1.0 billion of outstanding common stock

  • Qiagen (QGEN) beats by $0.06, beats on revs; guides FY23 EPS above consensus, revs in-line

  • Radware (RDWR) reports EPS in-line, revs in-line

  • Red Rock Resorts (RRR) beats by $0.97, reports revs in-line

  • Reynolds Consumer Products (REYN) misses by $0.04, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus

  • Silicon Motion (SIMO) misses by $0.43, misses on revs

  • SITE Centers (SITC) beats by $0.01, reports revs in-line; guides FY23 FFO in-line

  • SS&C Techs (SSNC) reports EPS in-line, revs in-line; guides Q1 EPS below consensus, revs in-line; guides FY23 EPS below consensus, revs in-line

  • Tenable (TENB) beats by $0.05, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Teva Pharma (TEVA) reports EPS in-line, revs in-line; guides FY23 EPS in-line, revs in-line

  • TotalEnergies SE (TTE) misses on top and bottom lines

  • Uber (UBER) beats by $0.27, beats on revs

  • Vishay (VSH) misses by $0.11, misses on revs; guides Q1 revs in-line

  • Vertex Pharma (VRTX) beats by $0.25, reports revs in-line

  • V.F. Corp (VFC) beats by $0.13, beats on revs; guides FY23 EPS in-line; expects low-single-digit percentage sales growth yr/yr in FY24

  • Viasat (VSAT) misses by $0.52, beats on revs

  • Voya Financial (VOYA) beats by $0.64

  • Werner Enterprises (WERN) beats by $0.07, reports revs in-line

  • Western Union (WU) misses by $0.03, beats on revs; reaffirms FY23 EPS guidance

  • Yum! Brands (YUM) beats by $0.05, global comps of +6%; increases quarterly dividend 6.1% to $0.605/share

  • Yum China (YUMC) reports EPS in-line, misses on revs; SSS -4% yr/yr, increases dividend

  • Zurn Elkay Water Solutions (ZWS) misses by $0.01, misses on revs; guides Q4 revs below consensus; guides FY23 revs in-line; also announces $500 mln share repurchase authorization

News:

  • US intelligence says last week's Chinese spy balloon was part of a vast surveillance program run by the People's Liberation Army, according to the Washington Post

  • President Biden in State of the Union calls for Congress to pass billionaire minimum tax & for quadrupling the tax on corporate stock buybacks; calls for more antitrust regulation in technology companies; calls for debt ceiling to be raised

  • 3M (MMM) increases quarterly dividend to $1.50/share from $1.49/share

  • ADMA Biologics (ADMA) receives FDA approval for its eighth plasma collection center, located in Hammond, LA

  • Alpha and Omega Semi (AOSL) has entered into a license agreement with a leading power semiconductor automotive supplier related to AOS's Silicon Carbide MOSFET and diode technology

  • Annovis Bio (ANVS) receives approval for European Union clinical trial sites for the Phase 3 Study of Buntanetap for the treatment of Parkinson's Disease

  • Apple (AAPL) expands testing of Buy Now Pay Later service, according to Bloomberg

  • Arconic (ARNC) reports $304 mln after-tax loss on sale of Russian operations

  • Atara Biotherapeutics (ATRA) and Pierre Fabre announce the transfer of the European Commission marketing authorization for EBVALLO for patients with relapsed or refractory Epstein-Barr virus positive post-transplant lymphoproliferative disease from Atara to Pierre Fabre

  • Becton Dickinson (BDX) has received Emergency Use Authorization from the U.S. FDA for a new molecular diagnostic combination test for SARS-CoV-2, Influenza A + B and Respiratory Syncytial Virus to help combat illness in the current and future respiratory virus seasons

  • Crane (CR) on track to complete previously announced separation into two independent businesses on April 3

  • Designer Brands (DBI) announces actions to strengthen its Owned Brands strategy

  • eBay (EBAY) reducing total employee base by about 4%; simplifying structure to make decisions more effectively

  • Genius Group (GNS) launches Genius AI Educator Suite, combining the AI capabilities of OpenAI's GPT-3 and upcoming GPT-4 with the AI capabilities of Salesforce's Einstein AI

  • Gentex (GNTX) provides SEC investigation updates; resolution does not involve a restatement of previously filed financial statements

  • Google (GOOG) aims to introduce AI search features, according to the Wall Street Journal

  • Grupo Aeroportuario Del Sureste (ASR) reports January 2023 traffic

  • Invesco's (IVZ) CEO Marty Flanagan to retire on June 30, 2023; Andrew Schlossberg to succeed as CEO

  • KKR Real Estate Finance Trust (KREF) increased share repurchase program on Feb. 3 to repurchase up to an aggregate of $100.0 mln of its common stock

  • Meta (META) wants some managers to transition to individual contributor jobs, according to Bloomberg

  • Microsoft (MSFT) plans to release ChatGPT technology for other companies to customize, according to CNBC

  • nCino (NCNO) announces a value added reseller agreement with Rich Data to enhance the lending process for its customers

  • New Relic (NEWR) announces that William Hill is standardizing on New Relic to advance its observability strategy

  • ON24, Inc. (ONTF): Indaba Issues Letter to ON24's Board of Directors Regarding the Need for a Meaningful Capital Return Program and Stronger Corporate Governance

  • Perion Network (PERI) names Tal Jacobson as CEO effective August 1, 2023

  • Primerica (PRI) increases quarterly divided to $0.65/share from $0.55/share

  • Warner Bros. Discovery (WBD) will keep Discovery+ as a stand alone streaming service, according to the Wall Street Journal

  • West Fraser (WFG) announces planned curtailment of operations at Cariboo Pulp & Paper in British Columbia beginning in mid-April for a month and then another month in Q3

  • Zoom Video (ZM) says it expects restructuring charges between $50-$68 mln from restructuring plans announced earlier, most of which it expects to occur in 1Q24; also cuts executives salaries by 20% for fiscal 2024

M&A:

  • Activision Blizzard (ATVI): UK CMA says Microsoft (MSFT) deal for ATVI could harm gamers

  • Acushnet (GOLF) has purchased the Club Glove brand from West Coast Trends; financial terms were not disclosed

  • CVS Health (CVS) to acquire Oak Street Health (OSH) for $39/share, for enterprise value of $10.6 bln; CVS reaffirms FY23 EPS guidance

  • Duck Creek Technologies (DCT) announces the expiration of the 30-day 'go-shop' period under the terms of the previously announced definitive merger agreement

  • Fanhua (FANH) to acquire 51% of the equity interests of Taiping; expected to be completed in the first quarter of 2023

  • Manchester United (MANU): Qatari investors will bid for MANU within days, according to DailyMailUK

  • MetLife (MET) to acquire Raven Capital Mgmt, a privately-owned alternative investment firm

  • Opiant Pharmaceuticals (OPNT) announces that the Committee on Foreign Investment in the United States approved the previously announced Merger Agreement for Opiant to be acquired by Indivior PLC (INVVY)

  • TH International (THCH) Board approves combination with Popeyes China

  • UniFirst (UNF) has signed an agreement to purchase Clean Uniform for $300 mln

  • Wolverine (WWW) has sold the Keds brand to Designer Brands (DBI); financial terms were not disclosed

Syndicate:

  • Aehr Test Systems (AEHR) enters At-The-Market offering of common stock of up to $25 million of shares of the Company's common stock

  • Anavex (AVXL) files prospectus related to issuance, sale of up to $150m in shares of common stock from time to time

  • Bed Bath & Beyond (BBBY) announces closing of public equity offering; provides strategic update

  • CureVac (CVAC) prices 27,027,028 common shares at a public offering price of $9.25 per share for gross proceeds of approximately $250 million

  • Dynatrace (DT) prices offering of 15 mln shares of common stock by selling stockholders; no additional details released

  • ePlus (PLUS) files mixed securities shelf offering

  • First Republic Bank (FRC) announces common stock offering of 2 mln stocks

  • Halliburton (HAL) files mixed securities shelf offering

  • Highwoods Prop (HIW) files mixed securities shelf offering

  • RxSight (RXST) announces $40 mln proposed public offering of common stock

  • Treace Medical Concepts (TMCI) has commenced an underwritten public offering of $100.0 mln of shares of its common stock; files mixed securities shelf offering

  • Xponential Fitness (XPOF) prices secondary offering of 5 mln shares of common stock at $24.50 per share

IPOs:

  • Expected to Price:

    • Enlight Renewable Energy (Nasdaq: ENLT): The developer of a renewable energy platform for solar energy, wind power and energy storage is expected to price its 14.0 mln share IPO at about $21.

    • Hesai Group (Nasdaq: HSAI): The global leader in three-dimensional light detection and ranging (LiDAR) solutions is expected to price its 9.0 M share IPO between $17-$19.

    • Mineralys Therapeutics (Nasdaq: MLYS): The clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone is expected to price its 10.0 M share IPO between $14-$16.

    • Nextracker (Nasdaq: NXT): The provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects is expected to price its 23.3 M share IPO between $20-$23.

Gapping Up/Down

  • Gapping up:

    • MANU +18.3%, NEWR +17.7%, FTNT +11.9%, ENPH+10.2%, EQNR +6.6%, KD +5.4%, PLUS +5.2%, OSH+4.8%, VOYA +4.8%, TENB +4.8%, HRB +4.4%, PANW+4%, WERN +3.8%, NCNO +3.5%, WFRD +3.4%, ITUB+3%, RAMP +2.8%, EPM +2.8%, CSL +2.5%, MSFT+2.1%, BBBY +1.7%, CVAC +1.7%, OMC +1.7%, INSP+1.4%, RXO +1.3%, GPOR +1.1%, ICHR +0.9%, WU+0.9%, CVS +0.8%, NCR +0.8%

  • Gapping down:

    • LUMN -12.8%, XPOF -12%, RXST -9.2%, TMCI -7.4%, JKHY -5.7%, BG -5.7%, CMG -5.1%, DT -4.6%, ATO-4.4%, EXEL -4.2%, BKH -4%, AMCR -3.8%, ILMN-3.6%, AVXL -3.1%, PRU -3.1%, YUMC -2.3%, NXGN-2.1%, GNTX -2%, CR -2%, VSAT -2%, PEAK -2%, TTE -2%, ARNC -1.9%, AOSL -1.5%, FRC -1.4%, ESS-1.4%, SSNC -1.3%, PAYC -1.3%, AEHR -1.1%, CMP-1.1%, HIW -1.1%, OPNT -1%, RRR -0.7%

 


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

    • American Airlines (AAL) upgraded to Buy from Neutral at Redburn; tgt $25

    • American Express (AXP) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $186

    • Delta Air Lines (DAL) upgraded to Buy from Neutral at Redburn; tgt $55

    • Enact Holdings (ACT) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $26.50

    • Royal Caribbean (RCL) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $78

    • TripAdvisor (TRIP) upgraded to Buy from Underperform at BofA Securities; tgt raised to $38

    • United Airlines (UAL) upgraded to Neutral from Sell at Redburn; tgt $55

    • Wayfair (W) upgraded to Equal Weight from Underweight at Barclays; tgt $70

  • Downgrades:

    • Adecoagro S.A. (AGRO) downgraded to Neutral from Overweight at JP Morgan; tgt $9

    • Adecoagro S.A. (AGRO) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $9

    • Black Hills Corp (BKH) downgraded to Sector Perform from Sector Outperform at Scotiabank; tgt $67

    • Discover Financial Services (DFS) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt $96

    • Duck Creek Technologies (DCT) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $19

    • Enbridge (ENB) downgraded to Underperform from Neutral at Credit Suisse

    • Hain Celestial (HAIN) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $21

    • Hain Celestial (HAIN) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $17

    • Kone Oyj (KNYJY) downgraded to Underperform from Neutral at Exane BNP Paribas

    • Life Storage (LSI) downgraded to Neutral from Buy at Citigroup; tgt $126

    • Nutrien (NTR) downgraded to Hold from Buy at TD Securities; tgt $91

    • Sherwin-Williams (SHW) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets

    • Southwest Air (LUV) downgraded to Neutral from Buy at Redburn; tgt $40

    • UroGen Pharma (URGN) downgraded to Hold from Buy at Jefferies; tgt lowered to $10

    • Volvo (VLVLY) downgraded to Hold from Buy at Jefferies

  • Others:

    • Advance Auto (AAP) initiated with an Underweight at Barclays; tgt $145

    • AutoZone (AZO) initiated with an Overweight at Barclays; tgt $2663

    • Best Buy (BBY) initiated with an Equal Weight at Barclays; tgt $88

    • BJ's Wholesale (BJ) initiated with an Equal Weight at Barclays; tgt $72

    • Brighthouse Financial (BHF) initiated with a Mkt Perform at Raymond James

    • Chesapeake Energy (CHK) initiated with a Neutral at Citigroup; tgt $90

    • Cisco (CSCO) added to Tactical Outperform list at Evercore ISI

    • Costco (COST) initiated with an Equal Weight at Barclays; tgt $510

    • Dollar General (DG) initiated with an Equal Weight at Barclays; tgt $237

    • Dollar Tree (DLTR) initiated with an Equal Weight at Barclays; tgt $145

    • Driven Brands (DRVN) initiated with an Overweight at Barclays; tgt $35

    • Equitable Holdings (EQH) initiated with a Mkt Perform at Raymond James

    • Evolv Technologies Holdings (EVLV) initiated with an Overweight at Cantor Fitzgerald; tgt $5.40

    • Five Below (FIVE) initiated with an Overweight at Barclays; tgt $219

    • Floor & Decor (FND) initiated with an Underweight at Barclays; tgt $88

    • Home Depot (HD) initiated with an Equal Weight at Barclays; tgt $323

    • Lowe's (LOW) initiated with an Equal Weight at Barclays; tgt $215

    • Nouveau Monde Graphite (NMG) initiated with a Buy at H.C. Wainwright; tgt $17

    • O'Reilly Auto (ORLY) initiated with an Equal Weight at Barclays; tgt $815

    • Overstock.com(OSTK) initiated with an Equal Weight at Barclays; tgt $23

    • Target (TGT) initiated with an Equal Weight at Barclays; tgt $163

    • Tractor Supply (TSCO) initiated with an Overweight at Barclays; tgt $254

    • United Rentals (URI) initiated with an Outperform at Credit Suisse; tgt $544

    • Walmart (WMT) initiated with an Overweight at Barclays; tgt $159

    • WillScot Mobile Mini (WSC) initiated with an Outperform at William Blair

Upcoming Events:

  • Econ Data:

    • 07:00 ET: MBA Mortgage Applications Index for Feb. 4 (Briefing.comConsensus NA; Prior -9.0%)

    • 10:00 ET: Wholesale Inventories for Dec (Briefing.comConsensus 0.5%; Prior 1.0%)

    • 10:30 ET: EIA Crude Oil Inventories for Feb. 4 (Briefing.comConsensus NA; Prior 4.14M)

  • Earnings:

    • Monday (Feb 6)

      • Morning:  AMG CNA CMI ENR IDXX NBIX ON TKR TSN

      • Afternoon: ATVI ACM AOSL BRBR CHGG CINF DIOD FN KMT KFRC LEG NOV PINS POWI RMBS SPG SSD SKY SWKS SAVE TTWO UDR VRNS ZI

    • Tuesday (Feb 7)

      • Morning: ADNT AGCO ARMK ARCC BP BV CG CARR CTLT CNC CTS DCPH DD FISV IT GPK HAE HAIN HLNE HTZ INCY J KKR LIN MAC MBUU MSGS NVT OMF PINC RCL SCSC SPR TDG VVV XYL

      • Afternoon:  AMCR AIZ ATO BKH CSL CMG CNO CCK DEI EGP EHC ENPH ESS EEFT EXEL FMC FTNT FRSH HRB PEAK HIW HMN ICHR ILMN INSP JKHY RAMP LUMN MODN NCR NEWR OMC PAYC PRU QGEN RRR RXO SIMO SSNC TENB VFC VRTX VSAT VOYA WERN WU YUMC ZWS

Asia & Europe detail:

Asia: Nikkei -0.3%, Hang Seng -0.1%, Shanghai Composite -0.5%

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan will reportedly end coronavirus tests for visitors from China. Japan's Prime Minister Kishida said that the next Bank of Japan governor will have to closely coordinate with other central banks. Nominees will reportedly be presented to parliament next week. Expectations for the terminal official cash rate from the Reserve Bank of Australia have increased to 3.85% from 3.60%. The Reserve Bank of India raised its policy rate by 25 bps to 6.50%, as expected.

  • In economic data:

    • Japan's January Bank Lending 3.1% yr/yr (expected 2.5%; last 2.7%) and January Economy Watchers Current Index 48.5 (expected 48.4; last 48.7)

    • South Korea's December Current Account surplus $2.68 bln (last deficit of $220 mln)

---Equity Markets---

  • Japan's Nikkei: -0.3%

  • Hong Kong's Hang Seng: -0.1%

  • China's Shanghai Composite: -0.5%

  • India's Sensex: +0.6%

  • South Korea's Kospi: +1.3%

  • Australia's ASX All Ordinaries: +0.4%

---FX---

  • USD/JPY: -0.2% to 130.81

  • USD/CNH: +0.2% to 6.7931

  • USD/INR: -0.3% to 82.52

 

Europe: DAX +0.7%, FTSE +0.7%, CAC +0.4%

Major European indices trade in the green. European Central Bank policymaker Schnabel said that inflation momentum remains elevated and repeated that the ECB expects to hike by 50 bps in March. The U.K.'s National Institute of Economic and Social Research expects that inflation in the U.K. will remain above 3.0% until the end of 2024. Volkswagen reported sales and earnings growth for 2022.

  • In economic data:

    • France's Q4 nonfarm payrolls 0.0% qtr/qtr (expected 0.2%; last 0.4%)

    • Italy's December Retail Sales -0.2% m/m (expected -0.8%; last 0.8%); 3.4% yr/yr (last 4.4%)

---Equity Markets---

  • STOXX Europe 600: +0.8%

  • Germany's DAX: +0.7%

  • U.K.'s FTSE 100: +0.7%

  • France's CAC 40: +0.4%

  • Italy's FTSE MIB: +0.7%

  • Spain's IBEX 35: +0.8%

---FX---

  • EUR/USD: +0.2% to 1.0745

  • GBP/USD: +0.5% to 1.2101

  • USD/CHF: -0.3% to 0.9190

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