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08/06/22 Briefing


The S&P 500 futures are down 14 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 25 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 123 points and are trading 0.3% below fair value.

The futures for the major indices are off their lows of the morning, but still trading with a cautious-minded disposition for various reasons that include a continued rise in crude oil futures ($120.65, +1.24, +1.0%), a Q2 profit warning from Credit Suisse (CS), a 10-yr note yield back above 3.00% (currently +5 bps to 3.02%), and another dour mortgage applications report, which featured a 7% wk/wk decline in purchase applications.

General growth concerns remain a prominent headwind, and they were exacerbated today by reports pointing to the OECD slashing its 2022 global GDP view to 3.0% from 4.5%, the Atlanta Fed's GDPNow model estimate for Q2 being cut to 0.9% from 1.3%, and the Reserve Bank of India raising its key policy rate by a larger-than-expected 50 basis points to 4.90% (a 40 bps increase was expected).

In corporate news:

  • Affirm (AFRM 23.30, -1.05, -4.3%): Wedbush initiates with Underperform rating; price target $15

  • Spirit Airlines (SAVE 22.35, -0.32, -1.4%): postpones special meeting of stockholders related to Frontier (ULCC) buyout proposal until June 30as company wants to continue discussions with stockholders, Frontier, and JetBlue (JBLU)

  • Credit Suisse (CS 6.55, -0.39, -5.6%): warns that it will likely post a loss in the second quarter

  • Novavax (NVAX 52.45, +4.91, +10.3%): receives positive vote from US FDA advisory committee recommending emergency use authorization of its COVID-19 vaccine for people 18 years and older

  • Thor Industries (THO 81.60, +5.37, +7.0%): beats by $1.47, beats on revs

  • DocuSign (DOCU 91.74, +4.00, +4.6%): expands its strategic partnership with Microsoft (MSFT) to accelerate anywhere work

  • Ollie's Bargain Outlet (OLLI 47.21, -3.78, -7.4%): misses by $0.11, misses on revs; guides Q2 EPS in-line, revs above consensus; guides FY23 EPS below consensus, revs below consensus

  • Scotts Miracle-Gro (SMG 88.69, -13.49, -13.2%): Sees FY22 (Sep) EPS of $4.50-5.00, which is well below the current consensus estimate

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Jaoan's Nikkei +1.0%; Hong Kong's Hang Seng +2.2%; China's Shanghai Composite +0.7%; India's Sensex -0.4%; South Korea's KOSPI unchanged; and Australia's All Ordinaries +0.4%.

  • In economic data:

  • Japan's Q1 GDP -0.1% qtr/qtr (expected -0.3%; last -0.2%); -0.5% yr/yr (expected -1.0%; last -1.0%). Q1 GDP Capital Expenditure -0.7% qtr/qtr (expected 0.3%; last 0.5%). May Bank Lending 0.7% yr/yr (last 0.9%) and May Economy Watchers Current Index 54.0 (last 50.4). April adjusted Current Account surplus JPY510 bln (last surplus of JPY1.56 trln)

  • South Korea's Q1 GDP 0.6% qtr/qtr (last 1.2%); 3.0% yr/yr (last 4.2%)


  • In news:

  • Taiwan Semiconductor Manufacturing Company expects to spend up to $40 bln on capital expenditures in 2023.

  • Australia's Prime Minister Albanese said that the recent rate hike is a blow for families and that new policies to deal with inflation will be considered.

  • Australia will also look to expand trade with Indonesia and India.

  • The Reserve Bank of India raised its policy repurchase rate by 50 bps to 4.90% against expectations for a 40-bps hike.



  • Major European indices trade on a lower note while Spain's IBEX (unch) outperforms slightly. STOXX Europe 600 -0.7%; Germany's DAX -0.5%; UK's FTSE 100 -0.4%; France's CAC 40 -0.6%; Italy's FTSE MIB -0.4%; and Spain's IBEX 35 unchanged.

  • In economic data:

  • Eurozone's Q1 GDP 0.6% qtr/qtr (expected 0.3%; last 0.2%); 5.4% yr/yr (expected 5.1%; last 4.7%). Q1 Employment Change 0.6% qtr/qtr (expected 0.5%; last 0.4%); 2.9% yr/yr (expected 2.6%; last 2.1%)

  • Germany's April Industrial Production 0.7% m/m (expected 1.0%; last -3.7%)

  • U.K.'s May Construction PMI 56.4 (expected 56.6; last 58.2). May Halifax House Price Index 1.0% m/m (expected 0.8%; last 1.2%); 10.5% yr/yr (last 10.8%)

  • France's April trade deficit EUR12.20 bln, as expected (last deficit of EUR12.70 bln)

  • Italy's April Retail Sales 0.0% m/m (last -0.6%); 8.4% yr/yr (last 5.6%)

  • Swiss May Unemployment Rate 2.2%, as expected (last 2.2%)


  • In news:

  • There are growing concerns over the recent rise in Greek and Italian yields relative to Germany's yields.

  • British Prime Minister Johnson is reportedly facing pressure from members of his party to lower taxes.

  • French Finance Minister Le Maire repeated that he expects inflation to begin easing early next year.

  • The European Central Bank will release its latest policy statement tomorrow.



U.S. equity futures:

  • S&P 500 Futures: -13 @ 4,147

  • DJIA Futures: -128 @ 33,052

  • Nasdaq 100 Futures: -28 @ 12,684

Overseas:

  • Europe: DAX -0.5%, FTSE -0.4%, CAC -0.6%

  • Asia: Nikkei +1.0%, Hang Seng +2.2%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil +1.15 @ 121.36

  • Nat Gas -0.028 @ 9.265

  • Gold +0.80 @ 1852.90

  • Silver -0.161 @ 22.267

  • Copper -0.0175 @ 4.4180

U.S. Summary:

  • Earnings:

  • Campbell Soup (CPB) beats by $0.09, beats on revs; reaffirms FY22 EPS guidance, raises FY22 revs above consensus

  • Casey's General (CASY) beats by $0.03, reports revs in-line, inside comps +5.2%; expects FY23 inside comps up +4-6%; increases quarterly dividend 9% to $0.38/share

  • Gran Tierra Energy (GTE) provides operational and financial update

  • Guidewire Software (GWRE) beats by $0.02, beats on revs; guides Q4 revs in-line

  • Kingsoft Cloud (KC) beats by RMB1.65, reports revs in-line; guides Q2 revs below consensus

  • Lovesac (LOVE) beats by $0.32, beats on revs

  • Manitowoc (MTW) provides long term guidance in investor slides

  • O-I Glass (OI) raises its Q2 adjusted EPS guidance as glass container shipments are up approx. 1% QTD through May

  • Ollie's Bargain Outlet (OLLI) misses by $0.11, misses on revs; guides Q2 EPS in-line, revs above consensus; guides FY23 EPS below consensus, revs below consensus

  • Orion Engineered Carbons (OEC) discusses its growth strategy and financial targets

  • Scotts Miracle-Gro (SMG) lowers outlook

  • Smartsheet (SMAR) beats by $0.01, beats on revs; guides Q2 EPS below consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • Thor Industries (THO) beats by $1.47, beats on revs

  • Torrid (CURV) beats by $0.03, beats on revs; guides Q2 revs in-line; guides FY23 revs in-line

  • Verint Systems (VRNT) beats by $0.05, beats on revs; reaffirms FY23 EPS guidance, revs guidance


  • General News:

  • World Bank says "stagflation risk rises amid sharp slowdown in growth"

  • Commercial real estate is showing signs of slowing with April property sales down 16%, according to the Wall Street Journal

  • Politics in Sweden are complicating application for NATO membership, according to the New York Times

  • Senate Minority Leader Mitch McConnell has privately said he is open to raising age to 21 for gun purchases, but that is not likely to be included in final legislation, according to CNN

  • White House announces action on COVID-?19 pandemic response and improving health systems and health security in the americas

  • Automakers support California emission requirements, according to Reuters

  • Some Buy Now Pay Later loans are declining in value, according to Bloomberg

  • Affirm (AFRM) CEO says he is not concerned about competition from Apple (AAPL), according to Bloomberg

  • Aldeyra Therapeutics (ALDX) achieves primary endpoint in phase 3 tranquility-2 trial in dry eye disease and intends to submit new drug application for symptoms and three sign endpoints of dry eye disease

  • Anavex's (AVXL) Publication Supports Clinical Biomarker for ANAVEX2-73 in Fragile X Syndrome

  • AstraZeneca (AZN) reports Evusheld significantly prevented COVID-19 disease progression or death in TACKLE Phase III treatment trial

  • Ball Corp (BLL) recommends rejection of below-market mini-tender offer by TRC Capital

  • BioCryst Pharma (BCRX) announces the U.S. Food and Drug Administration has granted Fast Track designation for BCX9250 for the prevention of heterotopic ossification in patients with fibrodysplasia ossificans progressiva

  • Bird Global (BRDS) aiming to eliminate 23% of workforce, according to Tech Crunch

  • Capital Product Partners L.P. (CPLP) Announces the Acquisition of One LNG Carrier, the Acquisition of Three 13,278 TEU Container Vessels and the Sale of Two 8,266 TEU Container Vessels

  • CF Industries (CF) unit, CF Fertilisers UK, to restructure operations to enable continued supply to customers in the UK

  • Credit Suisse (CS) provides Q2 trading update

  • DBV Technologies (DBVT) Announces Positive Topline Results from Phase 3 EPITOPE Trial of Viaskin Peanut in Peanut-Allergic Toddlers

  • Descartes Systems (DSGX) announces TSX acceptance of Normal Course Issuer Bid

  • DocuSign (DOCU) expands its strategic partnership with Microsoft (MSFT) to accelerate anywhere work

  • Fisker (FSR) announces that reservations for its all-electric Fisker Ocean SUV surpassed 50,000

  • Goodyear Tire (GT) is recalling over 170,000 tires produced between 1996-2003, according to the NHTSA

  • Great Lakes Dredge & Dock (GLDD) announces exercise of option to build second 6,500-cubic-yard Trailing Suction Hopper Dredge

  • Hasbro (HAS) will likely defeat activist board challenge, according to Reuters

  • Immunocore (IMCR): The UK Medicines and Healthcare products Regulatory Agency (MHRA), Australian Therapeutic Goods Administration (TGA) and Health Canada approve KIMMTRAK (tebentafusp) for the treatment of unresectable or metastatic uveal melanoma

  • Immunovant (IMVT) Achieves Alignment with FDA on Plans for Phase 3 Clinical Trials of Batoclimab in Thyroid Eye Disease and Reports Financial Results for the Fourth Quarter and Fiscal Year Ended March 31, 2022

  • International Seaways (INSW) increases quarterly cash dividend to $0.12/share from $0.06/share; completes transaction to sell 50% stake in FSO vessels to Euronav

  • KalVista Pharmaceuticals (KALV) presents promising preclinical data for oral factor XIIa inhibitor program

  • LumiraDx (LMDX) announced that it has achieved CE Mark for two new Fast Lab Solutions molecular tests, including Dual-Target SARS-CoV-2 STAR Complete and SARS-CoV-2 & Flu A/B RNA STAR Complete

  • MediciNova (MNOV) announces positive top-line results from phase 2 clinical trial of MN-166 (ibudilast) in hospitalized COVID-19 patients at risk for acute respiratory distress syndrome

  • Moderna (MRNA) announces omicron-containing bivalent booster candidate MRNA-1273.214 demonstrates superior antibody response against Omicron; booster dose of mRNA-1273.214 increased neutralizing geometric mean titers against Omicron approximately 8-fold above baseline levels

  • Nevro (NVRO): clinical data presented at American Diabetes Association 82nd Scientific Sessions reinforce significant and durable benefits of Nevro's HFX 10 kHz Therapy

  • Novavax (NVAX) receives positive vote from US FDA advisory committee recommending emergency use authorization of its COVID-19 vaccine for people 18 years and olde

  • OneConnect Financial (OCFT) upsizes its share repurchase program

  • Passage BIO (PASG) announces that the U.S. Food and Drug Administration has cleared its Investigational New Drug application for PBML04

  • Paycom Software (PAYC) increases and extends stock repurchase plan

  • Pennant Group (PNTG) appoints current President Brent Guerisoli to succeed Daniel Walker as CEO, effective August 1; Mr. Walker will continue to serve as chairman of Pennant's Board of Directors

  • Precision BioSciences (DTIL) announces its latest program updates across its allogeneic CAR T pipeline

  • Regeneron Pharma (REGN) and Sanofi (SNY) announce FDA approval of Dupixent for children with moderate-to-severe atopic dermatitis

  • Rigel (RIGL) Announces Top-line Results from FORWARD Phase 3 Clinical Trial of Fostamatinib in Patients with Warm Autoimmune Hemolytic Anemia

  • Spirit Airlines (SAVE) postpones special meeting of stockholders until June 30, 2022

  • Syms Corp. (SYM) debuts on Nasdaq under ticker 'SYM'

  • Talaris Therapeutics (TALS) Presents Additional Phase 2 Data and Analyses at American Transplant Congress 2022

  • Teradyne (TER) appoints Greg Smith as President, effective July 1

  • Tesla (TSLA): BYD Co might sell batteries to Tesla, according to Bloomberg

  • Tiziana Life Sciences (TLSA) Announces Positive Clinical Results in the Second Patient with Secondary Progressive Multiple Sclerosis (SPMS) Following Three Months of Dosing with Intranasal Foralumab

  • TSMC (TSM) sales are expected to grow by 30% this year, according to Bloomberg

  • Vir Biotechnology (VIR) Announces Multiple Abstracts Highlighting New Hepatitis B Data Accepted for Presentation at the International Liver Congress 2022

  • Virtu Financial (VIRT) build a cryptocurrency trading platform with Fidelity and Charles Schwab, according to Bloomberg

  • Western Digital (WDC) provides update on review of strategic alternatives

  • West Fraser (WFG) increases quarterly dividend to $0.30/share from $0.25/share


  • M&A:

  • American Water Works (AWK) subsidiary acquires Village of Hardin water and wastewater systems

  • Azenta (AZTA) announces agreement to acquire Barkey Holding GmbH; total cash purchase price for the acquisition will be approximately EUR 80 million

  • Core & Main (CNM) agrees to acquire Earthsavers Erosion Control; terms not disclosed

  • Didi (DIDI) in discussions to purchase Sinomach Automobile, according to Reuters

  • Northern Oil & Gas (NOG) announces Williston Basin bolt-on acquisition for $170 mln

  • Roku (ROKU) insiders are discussing possibility that Netflix (NFLX) could acquire ROKU, according to Business Insider

  • Stifel Financial (SF) signs agreement to acquire ACXIT Capital Partners; terms of deal not disclosed


  • Syndicate:

  • Consensus Cloud Solutions (CCSI) files for 2 mln share common stock offering by selling shareholders

  • Eiger BioPharmaceuticals (EIGR) enters into $75 mln term loan agreement with Innovatus

  • Genius Sports (GENI) files for 150,104,209 ordinary share offering by selling shareholders

  • Wintrust Fin (WTFC) prices offering of 3.0 mln shares of common stock at $86.00 per share


  • IPOs:

  • Priced to Trade:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • DBVT +17.6%, NVAX +17.4%, CURV +7.4%, DOCU+4.6%, WDC +3.7%, LMDX +2.6%, OCFT +2.3%, AWK+2%, GENI +1.4%, EIGR +1.3%, CPLP +0.9%, VIRT+0.9%, VRNT +0.6%


  • Gapping down:

  • SMAR -7%, CCSI -6.2%, CS -5.9%, CDRE -4.6%, WTFC -4%, TER -2.8%, OI -2.7%, EURN -2.4%, GWRE -2.1%, CF -1.3%, GT -0.7%, PNTG -0.6%, CASY -0.6%, SNY -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • No upgrades of note.


  • Downgrades:

  • Altria (MO) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $50

  • Canopy Growth (CGC) downgraded to Underperform from Market Perform at BMO Capital Markets

  • Cazoo (CZOO) downgraded to Neutral from Buy at Citigroup; tgt $1.50

  • Chart Industries (GTLS) downgraded to Equal Weight from Overweight at Barclays; tgt $189

  • Dutch Bros (BROS) downgraded to Neutral from Overweight at JP Morgan; tgt $40

  • Moody's (MCO) downgraded to Neutral from Overweight at Atlantic Equities

  • Target (TGT) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $165


  • Others:

  • Affirm (AFRM) initiated with an Underperform at Wedbush; tgt $15

  • Ares Management (ARES) initiated with a Mkt Perform at JMP Securities

  • Ballard Power (BLDP) resumed with an Underweight at Piper Sandler; tgt $5

  • Bloom Energy (BE) resumed with a Neutral at Piper Sandler; tgt $20

  • Blue Owl Capital (OWL) initiated with a Mkt Outperform at JMP Securities; tgt $18

  • Canaan (CAN) initiated with a Buy at The Benchmark Company; tgt $9

  • Carlyle Group (CG) initiated with a Mkt Outperform at JMP Securities; tgt $60

  • IonQ (IONQ) initiated with a Buy at Needham; tgt $9

  • IVERIC bio (ISEE) initiated with a Buy at BofA Securities; tgt $18

  • Plug Power (PLUG) resumed with a Neutral at Piper Sandler; tgt $18

  • Rigetti Computing (RGTI) initiated with a Buy at Needham; tgt $11

  • TPG Inc. (TPG) initiated with a Mkt Perform at JMP Securities

  • Weatherford (WFRD) initiated with a Buy at Goldman; tgt $43


Upcoming Events:

  • Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for June 4 (Briefing.comConsensus NA; Prior -2.3%)

  • 10:00 ET: Wholesale Inventories for Apr (Briefing.comConsensus 2.1%; Prior 2.3%)

  • 10:30 ET: EIA Crude Oil Inventories for June 4 (Briefing.comConsensus NA; Prior -5.07M)


  • Earnings:

  • Monday (Jun 6)

  • Morning: SAIC

  • Afternoon: COUP GTLB


  • Tuesday (Jun 7)

  • Morning: ASO CBRL PLAY GIII MOMO SJM REVG UNFI

  • Afternoon: CASY GWRE SMAR CURV VRNT


  • Wednesday (Jun 8)

  • Morning: BF.B CPB KC LOVE OLLI THO VRA

  • Afternoon: ABM BASE FIVE GEF AVO OXM YEXT


  • Thursday (Jun 9)

  • Morning: BILI FCEL NIO SIG

  • Afternoon: CMTL DOCU SFIX MTN


  • Friday (Jun 10)

  • None



Asia & Europe detail:

Asia: Nikkei +1.0%, Hang Seng +2.2%, Shanghai Composite +0.7%

Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Taiwan Semiconductor Manufacturing Company expects to spend up to $40 bln on capital expenditures in 2023. Australia's Prime Minister Albanese said that the recent rate hike is a blow for families and that new policies to deal with inflation will be considered. Australia will also look to expand trade with Indonesia and India. The Reserve Bank of India raised its policy repurchase rate by 50 bps to 4.90% against expectations for a 40-bps hike.

  • In economic data:

  • Japan's Q1 GDP -0.1% qtr/qtr (expected -0.3%; last -0.2%); -0.5% yr/yr (expected -1.0%; last -1.0%). Q1 GDP Capital Expenditure -0.7% qtr/qtr (expected 0.3%; last 0.5%). May Bank Lending 0.7% yr/yr (last 0.9%) and May Economy Watchers Current Index 54.0 (last 50.4). April adjusted Current Account surplus JPY510 bln (last surplus of JPY1.56 trln)

  • South Korea's Q1 GDP 0.6% qtr/qtr (last 1.2%); 3.0% yr/yr (last 4.2%)


---Equity Markets---

  • Japan's Nikkei: +1.0%

  • Hong Kong's Hang Seng: +2.2%

  • China's Shanghai Composite: +0.7%

  • India's Sensex: -0.4%

  • South Korea's Kospi: UNCH

  • Australia's ASX All Ordinaries: +0.4%

---FX---

  • USD/JPY: +1.1% to 134.10

  • USD/CNH: +0.5% to 6.6947

  • USD/INR: UNCH at 77.68

Europe: DAX -0.5%, FTSE -0.4%, CAC -0.6%

Major European indices trade on a lower note while Spain's IBEX (unch) outperforms slightly. There are growing concerns over the recent rise in Greek and Italian yields relative to Germany's yields. British Prime Minister Johnson is reportedly facing pressure from members of his party to lower taxes. French Finance Minister Le Maire repeated that he expects inflation to begin easing early next year. The European Central Bank will release its latest policy statement tomorrow.

  • In economic data:

  • Eurozone's Q1 GDP 0.6% qtr/qtr (expected 0.3%; last 0.2%); 5.4% yr/yr (expected 5.1%; last 4.7%). Q1 Employment Change 0.6% qtr/qtr (expected 0.5%; last 0.4%); 2.9% yr/yr (expected 2.6%; last 2.1%)

  • Germany's April Industrial Production 0.7% m/m (expected 1.0%; last -3.7%)

  • U.K.'s May Construction PMI 56.4 (expected 56.6; last 58.2). May Halifax House Price Index 1.0% m/m (expected 0.8%; last 1.2%); 10.5% yr/yr (last 10.8%)

  • France's April trade deficit EUR12.20 bln, as expected (last deficit of EUR12.70 bln)

  • Italy's April Retail Sales 0.0% m/m (last -0.6%); 8.4% yr/yr (last 5.6%)

  • Swiss May Unemployment Rate 2.2%, as expected (last 2.2%)


---Equity Markets---

  • STOXX Europe 600: -0.7%

  • Germany's DAX: -0.5%

  • U.K.'s FTSE 100: -0.4%

  • France's CAC 40: -0.6%

  • Italy's FTSE MIB: -0.4%

  • Spain's IBEX 35: UNCH

---FX---

  • EUR/USD: +0.3% to 1.0731

  • GBP/USD: -0.3% to 1.2549

  • USD/CHF: +0.4% to 0.9760

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