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08/03/22 Briefing


The S&P 500 futures trade nine points, or 0.2%, above fair value as the futures market tries to stabilize from yesterday's sell-off. The positive bias has formed without there being a decisively negative headline on Russia's invasion of Ukraine.

Encouragingly, Russian forces have significantly slowed their advance ahead of a key diplomatic meeting on Thursday, according to Reuters, citing a Ukrainian presidential adviser. Commodity markets, to be fair, aren't behaving like things are getting better.

Nickel futures, for example, more than doubled to over $100,000 a metric ton in a short squeeze, forcing regulators to suspend trading at the London Metal Exchange (LME), according to CNBC. While that gain was pared some, the LME suspended trading for the rest of the day.

Oil prices remain elevated above $120 per barrel ($121.81, +2.41, +2.0%) amid news that the EU is planning to phase out purchases of Russian energy.

Treasury yields are selling off, driving yields higher amid the inflationary pressures. The 2-yr yield is up eight basis points to 1.62%, and the 10-yr yield is up 11 basis points to 1.86%. The U.S. Dollar Index is down 0.3% to 98.98.

On the data front, investors will receive the Trade Balance for January (Briefing.comconsensus -$87.5 billion) at 8:30 a.m. ETand Wholesale Inventories for January (Briefing.comconsensus 0.8%) at 10:00 a.m. ET. The NFIB Small Business Optimism Index for February decreased to 95.7 from 97.1 in January.

In U.S. Corporate news:

  • Mandiant (MNDT 21.80, -0.69): -3.1% after confirming an agreement to be acquired by Alphabet's (GOOG 2530.00, +2.43, +0.1%) Google for approximately $5.4 billion, or $23.00 per share, in cash. The deal is inclusive of Mandiant's net cash.

  • Dick's Sporting Goods (DKS 104.25, +4.75): +4.8% after beating top and bottom-line estimates and guiding FY23EPS above consensus.

  • Dell (DELL 50.68, +1.35): +2.7% after the stock was upgraded to Outperform from In-line at Evercore ISI.

  • Alaska Air (ALK 44.45, +0.76): +1.7% after the company provided an update on fuel costs following its 11% decline yesterday. The company expects first quarter economic fuel costs to be $2.60 to $2.65 per gallon versus prior expectation of $2.45 to $2.50 per gallon.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Japan's Nikkei: -1.7% Hong Kong's Hang Seng: -1.4% China's Shanghai Composite: -2.4% India's Sensex: +1.1% South Korea's Kospi: -1.1% Australia's ASX All Ordinaries: -0.9%.

  • In economic data:

  • Japan's January Overall wage income 0.9% (last -0.4%). January Current Account deficit JPY1.189 trln (expected deficit of JPY880 bln; last deficit of JPY371 bln). January Leading Index -1.0% m/m (last 0.9%) and Coincident Indicator -0.5% m/m (last 0.4%)

  • Australia's February NAB Business Confidence 13 (last 4)


  • In news:

  • Japan's Finance Minister continued speaking in favor of higher wages.

  • Qantas CEO said that corporate demand is only about 60% pre-COVID levels and that prices will need to be increased if fuel prices don't pull back.

  • China's Foreign Minister Yi said that Taiwan will eventually return to the embrace of its motherland.



  • Major European indices trade on a firmly higher note. STOXX Europe 600: +0.5% Germany's DAX: +1.7% U.K.'s FTSE 100: +0.7% France's CAC 40: +2.1% Italy's FTSE MIB: +3.1% Spain's IBEX 35: +3.5%.

  • In economic data:

  • Russia's Deputy Prime Minister said that Europe is pushing Russia toward an embargo on gas deliveries using Nord Stream 1.

  • EU leaders are expected to finalize an agreement later this week to phase out the use of Russian oil, gas, and coal. The EU may issue joint bonds to fund energy and defense.

  • Adidas is halting sales in Russia.



U.S. equity futures:

  • S&P 500 Futures: +4 @ 4,205

  • DJIA Futures: +26 @ 32,843

  • Nasdaq 100 Futures: -4 @ 13,315

Overseas:

  • Europe: DAX +1.7%, FTSE +0.7%, CAC +2.1%

  • Asia: Nikkei -1.7%, Hang Seng -1.4%, Shanghai Composite -2.4%

Commodities:

  • Crude Oil +2.63 @ 122.03

  • Nat Gas -0.277 @ 4.556

  • Gold +20.00 @ 2015.90

  • Silver +0.695 @ 26.415

  • Copper -0.0910 @ 4.6400

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • 908 Devices (MASS) beats by $0.04, beats on revs; guides FY22 revs in-line

  • Anthem (ANTM) reaffirms guidance ahead of investor meetings over next several weeks

  • AvidXchange (AVDX) reports Q4 (Dec) results, beats on revs; guides FY22 revs above consensus

  • Callaway Golf (ELY) reaffirms FY22 rev and adj. EBITDA guidance in slides

  • Clarus Corporation (CLAR) reports EPS in-line, beats on revs; guides FY22 revs above consensus

  • Dick's Sporting Goods (DKS) beats by $0.11, beats on revs, consolidated same store sales increased 5.9%; guides FY23 EPS above consensus

  • HighPeak Energy (HPK) reports Q4 results, beats on revs; provides 2022 development outlook

  • Intrepid Potash (IPI) reports Q4 results, beats single analyst revenue estimate

  • MercadoLibre (MELI) discloses company source code was subject of unauthorized access

  • Nuvei Corporation (NVEI) beats by $0.02, beats on revs; guides Q1 and FY22 revs in-line

  • Olaplex (OLPX) reports EPS in-line, beats on revs; guides FY22 revs above consensus

  • Petco Health and Wellness (WOOF) beats by $0.03, beats on revs; guides FY23 EPS above consensus, revs above consensus

  • PROCEPT BioRobotics (PRCT) misses by $0.03; beats on revs; sees FY22 revs above consensus

  • Rover Group (ROVR) reports Q4 (Dec) results, beats on revs; guides Q1 revs below consensus; guides FY22revs below consensus; announces CFO succession plan

  • Stevanato Group S.p.A. (STVN) beats by $0.01, beats on revs; guides FY22EPS below consensus, revs above consensus

  • The Oncology Institute (TOI) promotes Dr. Matt Miller to COO, effective March 15

  • thredUP (TDUP) misses by $0.02, beats on revs; guides Q1 revs below consensus; guides FY22revs in-line


  • General News:

  • EU leaders planning to phase out purchases of Russian energy, according to Reuters

  • European Union is considering a massive joint sale of bonds to finance energy and defense projects, according to reports

  • Ukrainian city of Sumy evacuated, according to Reuters

  • There's an unprecedented price spike in nickel

  • ADMA Biologics (ADMA) receives FDA approval for fifth ADMA BioCenters plasma collection facility

  • AEGON N.V. (AEG) provides update on Russian and Belarusian investments following invasion of Ukraine

  • Alaska Air (ALK) provides fuel costs impacts

  • Amazon (AMZN) nearing new TV show concept, according to Deadline

  • APA Corp. (APA) subsidiary expands partnership with LongPath Technologies for methane emissions monitoring in Permian Basin

  • Axonics Modulation's (AXNX) recharge-free sacral neuromodulation implantable neurostimulator receives FDA approval

  • Booking Holdings (BKNG) provides update on geographical exposure and recent trends; suspended the booking of travel services in Russia and Belarus

  • CBRE Group (CBRE) to discontinue most business in Russia

  • ChampionX (CHX) approves $250 mln share repurchase program

  • Consolidated Comms (CNSL): Searchlight affirms 34.6% active holding; to evaluate the possibility of a further investment in or full acquisition

  • Deutsche Bank (DB) publishes 2022 SREP requirements

  • Dollar Tree (DLTR) reconstitutes Board; names new Executive Board Chair

  • Estee Lauder (EL) to suspend all commercial activity in Russia, including closing every store we own and operate, as well as our brand sites and shipments to any of our retailers in Russia

  • Genmab (GMAB): FDA granted GMAB and partner AbbVie (ABBV) orphan drug designation for epcoritamab (DuoBody-CD3xCD20) in follicular lymphoma

  • IBM (IBM) suspends all business in Russia

  • Inventiva (IVA) announces that its IND application for the Phase II combination trial with lanifibranor and empagliflozin in patients with NASH and T2D has been accepted by the FDA

  • Kaman (KAMN) subsidiary receives follow-on award from Lockheed Martin's (LMT) Sikorsky for HH-60W CRH cockpit

  • Maverix Metals (MMX) has acquired a package of three royalties on gold projects located in Nevada from an indirect, wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, for a $5 mln cash payment

  • Nevro (NVRO) reports positive Noridian medicare coverage update for treatment of painful diabetic neuropathy

  • Orange (ORAN) and MASMOVIL enter into exclusive discussions to combine their operations in Spain

  • Patterson-UTI (PTEN) announces strategic investment in geothermal technology company, Criterion Energy Partners

  • Procter & Gamble (PG) discontinues all new capital investments in Russia

  • Rockwell Automation (ROK) suspends operations and sales in Russia and Belarus, effective immediately

  • Samsung (SSNLF) confirms data breach by same hacking group that attacked Nvidia (NVDA)

  • Shell plc (SHEL) intends to withdraw from Russian oil and gas

  • Sonoco Products (SON) to increase paperboard prices in EMEA

  • Vale S.A. (VALE) announces that heavy rains caused a landslide on railway; impact on production will be minimal

  • Verisk Analytics (VRSK) announces an agreement with Ford Motor Company (F)

  • Viemed Healthcare (VMD) authorizes share repurchase program

  • Visa (V), Mastercard (MA) are looking at increasing large merchant fees, according to the Wall Street Journal

  • Voyager Therapeutics (VYGR) agrees to licensing option with Novartis (NVS); Voyager receives $54 million upfront

  • Xos (XOS) has delivered three vehicles to UniFirst as part of an initial rollout of vehicles purchased by the workwear and textile service company


  • M&A:

  • AZZ (AZZ) agrees to acquire Sequa Corporation's Precoat Metals business for $1.28 bln; raises FY22 (Feb) revenue and earnings guidance

  • Brown & Brown (BRO) agrees to acquire Global Risk Partners' insurance operations; financial terms not disclosed

  • Construction Partners (ROAD) announces acquisition of Southern Asphalt; terms not disclosed

  • Core & Main (CNM) agrees to acquire substantially all of the assets of Dodson Engineered Products; financial terms not disclosed

  • Mandiant (MNDT): Google (GOOG/GOOGL) to acquire Mandiant for $23.00 per share, in an all-cash transaction valued at approx. $5.4 bln, inclusive of Mandiant's net cash


  • Syndicate:

  • InvenTrust Properties (IVT) files mixed securities shelf offering

  • Travere Therapeutics (TVTX) to offer $250 million aggregate principal amount of convertible senior notes due 2029

  • Valaris (VAL) files for 14,495,079 share common stock offering by selling shareholders


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • VYGR +14.5%, CLAR +11.1%, MASS +6.8%, HPK +6%, AZZ +5%, AVDX +4%, ALK +3.3%, AAL +3.1%, DAL+2.7%, USO +2.4%, JETS +2.4%, SAVE +2.4%, BP+2.1%, UAL +2.1%, AXNX +1.6%, XLE +1.6%, APA+1.5%, HAL +1.5%, ORAN +1.4%, PSX +1.3%, XOM+1.1%, SLB +1%, LUV +1%, IPI +0.6%, OIH +0.5%, SHEL +0.5%


  • Gapping down:

  • ROVR -13.1%, TDUP -7.9%, ROAD -2.2%, MNDT-1.9%, BRO -1.7%, VAL -1.3%, ADMA -1.2%, IVT-0.8%, CNM -0.5%, CBRE -0.5%, NVRO -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Bank of America (BAC) upgraded to Neutral from Underperform at Robert W. Baird; tgt $42

  • Callon Petroleum (CPE) upgraded to Buy from Hold at Truist; tgt raised to $100

  • Cara Therapeutics (CARA) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $20

  • Consolidated Comms (CNSL) upgraded to Neutral from Sell at Citigroup; tgt raised to $5

  • Dell (DELL) upgraded to Outperform from In-line at Evercore ISI; tgt $60

  • DISH Network (DISH) upgraded to Buy from Neutral at UBS; tgt $44

  • Equinor (EQNR) upgraded to Buy from Neutral at BofA Securities

  • Fastenal (FAST) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $58

  • H&E Equipment (HEES) upgraded to Buy from Neutral at UBS; tgt raised to $48

  • Millicom International Cellular (TIGO) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt $32.90

  • Okta (OKTA) upgraded to Buy from Neutral at Mizuho; tgt $225


  • Downgrades:

  • Alector (ALEC) downgraded to Hold from Buy at Stifel; tgt lowered to $18

  • Biogen (BIIB) downgraded to Hold from Buy at Stifel; tgt lowered to $223

  • BlackRock (BLK) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $725

  • Cedar Realty Trust (CDR) downgraded to Mkt Perform from Outperform at Raymond James

  • DT Midstream (DTM) downgraded to Neutral from Outperform at Credit Suisse; tgt raised to $58

  • Lazard (LAZ) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt $40

  • Occidental Petro (OXY) downgraded to Neutral from Buy at BofA Securities; tgt raised to $80

  • Passage BIO (PASG) downgraded to Neutral from Overweight at JP Morgan


  • Others:

  • Archaea Energy (LFG) initiated with a Buy at Stifel; tgt $37

  • ArcLight Clean Transition Corp. II (ACTD) initiated with a Buy at Stifel; tgt $24

  • Fulcrum Therapeutics (FULC) initiated with an Outperform at Oppenheimer; tgt $33

  • Kohl's (KSS) resumed with a Neutral at BofA Securities; tgt $60

  • Moody's (MCO) initiated with an Outperform at Robert W. Baird; tgt $363

  • Natera (NTRA) initiated with a Buy at Goldman; tgt $90

  • Nkarta (NKTX) initiated with a Buy at H.C. Wainwright; tgt $25

  • Revolve Group (RVLV) initiated with a Buy at Stifel; tgt $51


Upcoming Events:

  • Econ Data:

  • 06:00 ET: NFIB Small Business Optimism for Feb (Briefing.comConsensus NA; Prior 97.1)

  • 08:30 ET: Trade Balance for Jan (Briefing.comConsensus -$87.5B; Prior -$80.7B)

  • 10:00 ET: Wholesale Inventories for Jan (Briefing.comConsensus 0.8%; Prior 2.2%)


  • Earnings:

  • Monday (Mar 7)

  • Morning: CIEN SQSP

  • Afternoon: MASS AVDX ROVR TDUP


  • Tuesday (Mar 8)

  • Morning: DM DKS OLPX WOOF STVN

  • Afternoon: ABM BMBL CASY CRCT DV FIGS GWRE MDB SFIX SUMO WTI YEXT


  • Wednesday (Mar 9)

  • Morning: CPB DSEY EBIX KFY OTLY REVG PLCE THO UNFI VRA VERX

  • Afternoon: ASAN CVGW BASE CRWD FNV BEKE MQ


  • Thursday (Mar 10)

  • Morning: BZUN CLVT DCBO AG GCO JD LTH PTLO THRY UP

  • Afternoon: AOUT BLNK CMTL DOCU LOCO LZ LFST MLNK AVO FIZZ ORCL RRGB RIVN SHLS ULTA WPM ZUMZ


  • Friday (Mar 11)

  • Morning: GENI PLXP

  • Afternoon: BLDP




Asia & Europe detail:

Asia: Nikkei -1.7%, Hang Seng -1.4%, Shanghai Composite -2.4%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Japan's Finance Minister continued speaking in favor of higher wages. Qantas CEO said that corporate demand is only about 60% pre-COVID levels and that prices will need to be increased if fuel prices don't pull back. China's Foreign Minister Yi said that Taiwan will eventually return to the embrace of its motherland.

  • In economic data:

  • Japan's January Overall wage income 0.9% (last -0.4%). January Current Account deficit JPY1.189 trln (expected deficit of JPY880 bln; last deficit of JPY371 bln). January Leading Index -1.0% m/m (last 0.9%) and Coincident Indicator -0.5% m/m (last 0.4%)

  • Australia's February NAB Business Confidence 13 (last 4)


---Equity Markets---

  • Japan's Nikkei: -1.7%

  • Hong Kong's Hang Seng: -1.4%

  • China's Shanghai Composite: -2.4%

  • India's Sensex: +1.1%

  • South Korea's Kospi: -1.1%

  • Australia's ASX All Ordinaries: -0.9%

---FX---

  • USD/JPY: +0.3% to 115.63

  • USD/CNH: -0.1% to 6.3190

  • USD/INR: +0.1% to 76.96

Europe: DAX +1.7%, FTSE +0.7%, CAC +2.1%

Major European indices trade on a firmly higher note. Russia's Deputy Prime Minister said that Europe is pushing Russia toward an embargo on gas deliveries using Nord Stream 1. Meanwhile, EU leaders are expected to finalize an agreement later this week to phase out the use of Russian oil, gas, and coal. The EU may issue joint bonds to fund energy and defense. Adidas is halting sales in Russia.

  • In economic data:

  • Eurozone's Q4 GDP 0.3% qtr/qtr, as expected (last 2.2%); 4.6% yr/yr, as expected (last 3.9%). Q4 Employment Change 0.5% qtr/qtr, as expected (last 0.9%); 2.2% yr/yr (expected 2.1%; last 2.1%)

  • Germany's January Industrial Production 2.7% m/m (expected 0.5%; last 1.1%)

  • Italy's January Retail Sales -0.5% m/m (expected 1.1%; last 0.8%); 8.4% yr/yr (last 9.8%)

  • Spain's January Industrial Production 1.7% yr/yr (expected 2.3%; last 1.3%)


---Equity Markets---

  • STOXX Europe 600: +0.5%

  • Germany's DAX: +1.7%

  • U.K.'s FTSE 100: +0.7%

  • France's CAC 40: +2.1%

  • Italy's FTSE MIB: +3.1%

  • Spain's IBEX 35: +3.5%

---FX---

  • EUR/USD: +0.5% to 1.0910

  • GBP/USD: +0.1% to 1.3121

  • USD/CHF: UNCH at 0.9257

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