08/06/23 Briefing

The S&P 500 futures are down 1 point and are trading in line with fair value. The Nasdaq 100 futures are down 12 points and are trading 0.1% below fair value. The Dow Jones Industrial Average futures are down 15 points and are trading slightly below fair value.

There's not a lot of conviction in premarket action, again. Market participants continue to play a waiting game ahead of the May Consumer Price Index and Fed decision next week.

Labor issues at West Coast ports are causing vessel buildup and are leading to a breakdown in the supply chain, according to CNBC.

The Reserve Bank of India left its key policy rates unchanged, as expected. 

Four large Chinese banks cut their yuan deposit rates and there was speculation that the People's Bank of China will lower its loan prime rate soon. 

Market participants will receive the weekly initial (Briefing.comconsensus 237,000; prior 232,000) and continuing (prior 1.795 million) jobless claims at 8:30 a.m. ET.

Other economic data today includes:

• 10:00 a.m. ET: April Wholesale Inventories (Briefing.comconsensus -0.2%; prior 0.0%)

• 10:30 a.m. ET: Weekly EIA Natural Gas Inventories (prior +110 bcf)

Treasury yields are moving somewhat higher. The 2-yr note yield is up two basis points to 4.56% and the 10-yr note yield is up three basis points to 3.81%.

In corporate news:

• GameStop (GME 20.38, -5.73, -22.0%): beats by $0.01, misses on revs; former CEO terminated, Ryan Cohen named as Executive Chairman 

• Greif (GEF 66.00, +1.78, +2.8%): beats by $0.45, misses on revs

• Smartsheet (SMAR 40.76, -8.24, -16.8%): beats by $0.10, beats on revs; guides Q2 EPS in-line, revs in-line; guides FY24 EPS above consensus, revs in-line

• HashiCorp (HCP 26.89, -7.88, -22.7%): beats by $0.07, beats on revs; guides JulQ EPS below consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus; cuts workforce by 8%

• Oxford Industries (OXM 101.90, -5.31, -5.0%): beats by $0.04, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; guides FY24 EPS below consensus, revs below consensus

• Semtech (SMTC 27.40, +4.67, +22.2%): beats by $0.10, reports revs in-line; guides Q2 EPS in-line, revs in-line

• Las Vegas Sands (LVS 57.45, -1.04, -1.8%) and Wynn Resorts (WYNN 101.02, -2.24, -2.2%): Jefferies downgraded to Hold from Buy

• Carrier Global (CARR 44.11, -1.49, -3.3%): downgraded to Equal Weight from Overweight at Morgan Stanley

• Amazon.com(AMZN 122.30, +1.07, +0.9%): Wells Fargo initiated coverage with an Overweight rating 

• Signet Jewelers (SIG 62.01, -7.51, -10.8%): beats by $0.29, beats on revs; guides Q2 revs below consensus; lowers FY24 guidance; Q1 comps -13.9%

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei: -0.9%, Hong Kong's Hang Seng: +0.3%, China's Shanghai Composite: +0.5%, India's Sensex: -0.5%, South Korea's Kospi: -0.2%, Australia's ASX All Ordinaries: -0.3%.

  • In economic data:

    • Japan's Q1 GDP 0.7% qtr/qtr (expected 0.4%; last 0.1%); 2.7% yr/yr (expected 1.6%; last 0.4%). Q1 GDP Private Consumption 0.5% qtr/qtr (expected 0.6%; last 0.2%). April Current Account surplus JPY1.895 trln (expected surplus of JPY2.947 trln; last surplus of JPY2.278 trln). May Economy Watchers Current Index 55.0 (expected 55.1; last 54.6)

    • Australia's April trade surplus AUD11.158 bln (expected AUD14.000 bln; last AUD14.822 bln). April Imports 2.0% m/m (last 4.0%) and Exports -5.0% m/m (last 4.1%)

    • New Zealand's Q1 Manufacturing Sales Volume -2.1% qtr/qtr (expected 3.9%; last -4.6%)

  • In news:

    • Chinese government officials spoke about the country's economy but did not indicate that additional support will be offered to the property market, as has been speculated in recent days.

    • UBS expects that the Reserve Bank of Australia will announce another 25-bps rate hike at the August meeting.

    • Four large Chinese banks cut their yuan deposit rates and there was speculation that the People's Bank of China will lower its loan prime rate in the coming weeks.

    • The Reserve Bank of India made no changes to its interest rates, as expected.

• Major European indices trade on a mostly higher note while the U.K.'s FTSE (-0.1%) lags. STOXX Europe 600: UNCH, Germany's DAX: +0.3%, U.K.'s FTSE 100: -0.1%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.3%.

  • In economic data:

    • Eurozone's Q1 GDP -0.1% qtr/qtr (expected 0.0%; last -0.1%); 1.0% yr/yr (expected 1.2%; last 1.8%). Q1 Employment Change 0.6% qtr/qtr, as expected (last 0.3%); 1.6% yr/yr (expected 1.7%; last 1.5%)

    • France's Q1 nonfarm payrolls 0.3% qtr/qtr (expected 0.2%; last 0.2%)

  • In news:

    • Eurozone's Q1 GDP was revised down to reflect the first contraction since mid-2021.

    • British Prime Minister Sunak will meet with President Biden at the White House today.

    • The U.K. will host a global artificial intelligence summit later this year.

U.S. equity futures:

• S&P 500 Futures: +1 @ 4,268

• DJIA Futures: -15 @ 33,650

• Nasdaq 100 Futures: -2 @ 14,301

Overseas:

• Europe: DAX +0.3%, FTSE -0.1%, CAC +0.4%

• Asia: Nikkei -0.9%, Hang Seng +0.3%, Shanghai Composite +0.5%

Commodities:

• Crude Oil +0.63 @ 73.16

• Nat Gas +0.023 @ 2.352

• Gold +2.85 @ 1961.25

• Silver +0.266 @ 23.795

• Copper -0.0125 @ 3.7435

Earnings/Guidance:

• BGC Partners (BGCP) reaffirms Q2 guidance at Piper Sandler Global Exchange & FinTech Conference

• Cactus (WHD) provides Q2 outlook in slide presentation

• Cardinal Health (CAH) provides updated outlook at Investor Day; approves new share repurchase plan

• Designer Brands (DBI) misses by $0.02, misses on revs; guides FY24 EPS below consensus, revs below consensus

• FuelCell Energy (FCEL) misses by $0.01, beats on revs

• GameStop (GME) beats by $0.01, misses on revs

• Greif (GEF) beats by $0.45, misses on revs

• HashiCorp (HCP) beats by $0.07, beats on revs; guides JulQ EPS below consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus; cuts workforce by 8%

• Mueller Water (MWA) reaffirms FY23 guidance in slide presentation

• Oxford Industries (OXM) beats by $0.04, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; guides FY24 EPS below consensus, revs below consensus

• REV Group (REVG) beats by $0.15, beats on revs; guides FY23 revs above consensus

• Semtech (SMTC) beats by $0.10, reports revs in-line; guides Q2 EPS in-line, revs in-line

• Signet Jewelers (SIG) beats by $0.29, beats on revs; guides Q2 revs below consensus; lowers FY24 guidance; Q1 comps -13.9%

• Smartsheet (SMAR) beats by $0.10, beats on revs; guides Q2 EPS in-line, revs in-line; guides FY24 EPS above consensus, revs in-line

• Torrid (CURV) misses by $0.02, misses on revs; guides Q2 revs below consensus

• Trip.comGroup (TCOM) beats by RMB1.25, beats on revs

• Valens Semiconductor (VLN) announces a plan to improve operational efficiency; lowers FY23 revs outlook

• Verint Systems (VRNT) beats by $0.06, reports revs in-line; guides FY24 EPS in-line, revs in-line

News:

• China asks large banks to lower deposit rates to increase growth, according to Bloomberg

• DOJ tells former President Trump's legal team that he is a target in a federal investigation into mishandling of classified documents, according to CNN

• New York officials warn that poor and dangerous air quality could last several days and said people should stay indoors, according to the New York Times

• Investors are pulling support for environmental and social proposals amid political pressure, according to Financial Times

• TikTok aiming to quadruple the size of its global e-commerce business, according to Bloomberg

• 4DMT (FDMT) presents "positive" interim data from Aerosolized 4D-710 Phase 1/2 AEROW clinical trial in patients with Cystic Fibrosis at the ECFS 46th annual meeting

• Aecom Tech (ACM) to manage delivery of Chemours green hydrogen facility expansion in France

• Affirm (AFRM) authorized the repurchase of up to $800 million in aggregate principal amount of its outstanding 0% Convertible Senior Notes due 2026

• Arvinas (ARVN) Announces Interim Data from the ARV-766 Phase 1/2 Dose Escalation and Expansion Trial Showing Promising Signals of Efficacy in Late-line mCRPC, Including in Patients with AR L702H Mutations

• Astellas Pharma (ALPMY) announced an exclusive license agreement to develop and commercialize KT430

• Autoliv (ALV) accelerates structural cost reductions; reiterates its full year 2023 indications

• Avita Medical (RCEL) receives FDA approval for RECELL for treatment of full-thickness skin defects

• Azul S.A. (AZUL) reports May traffic increased 8.3% yr/yr

• Bausch + Lomb (BLCO) announces new scientific data and analyses featuring consumer, vision care and pharmaceutical products will be presented during American Optometric Association's Optometry's Meeting

• Binance moved billions through Signature Bank (SBNY) and Silvergate Bank, according to the New York Times

• Blackrock (BLK) aiming to raise $7 billion for its 4th Global Renewable Power Fund, according to Reuters

• Bread Financial (BFH) signs credit agreement for a $1.275 bln lending facility; Supports continued growth and debt reduction plan while extending maturities

• Burning Rock's (BNR) precision oncology diagnostics product supports advancement in late-stage breast cancer treatment, with results published in the New England Journal of Medicine

• Cactus (WHD) authorizes $150 mln stock repurchase program

• Canadian Solar's (CSIQ) CSI Energy Storage Selected to Provide 40 MWh of Battery Energy Storage System to Unibal in the UK

• Clean Energy Fuels (CLNE) inks new fueling agreements with customers looking to reduce carbon emissions

• Ero Copper (ERO) announces update on nickel sulphide exploration program - intercepts 11.2 meters grading 1.86% nickel, including 5.0 meters grading 3.71% nickel

• GameStop (GME) elects Ryan Cohen as Executive Chairman, effective immediately; former CEO terminated

• Google (GOOG) aiming to consider in office attendance for performance reviews, according to the Wall Street Journal

• Gritstone bio (GRTS) announces that interim results from an ongoing Phase 1 study evaluating the company's self-amplifying mRNA vaccine as a boost against COVID-19 were published in Nature Communications

• Helmerich & Payne (HP) increases the maximum number of shares authorized to be repurchased in CY23 to 7.0 mln from 5.0 mln

• Innate Pharma (IPHA): SAR'579 / IPH6101 receives FDA Fast Track Designation in the US for the treatment of hematological malignancies

• Insulet (PODD) and Amgen (AMGN) agree to amend supply agreement dated November 21, 2013; terms of the original agreement is extended and certain definitions are amended

• Intl Game Tech. PLC (IGT) to explore strategic alternatives for its global gaming and playdigital segments to drive long-term sustainable value

• LianBio (LIAN) Completes Enrollment in Pivotal Phase 3 LIBRA Trial of TP-03 in Chinese Patients with Demodex Blepharitis

• Manchester United (MANU): Sheikh Jassim submits another bid for Manchester United, according to Sky Sports

• Merck's (MRK) FDA accepts application for Merck's KEYTRUDA plus chemotherapy as treatment for advanced or unresectable biliary tract cancer

• Meta Platforms (META) introduces WhatsApp Channels

• New Found Gold Corp. (NFGC) Intercepts 26 g/t Au Over 9.45m, Extends Iceberg Strike Length to 575m and to a Depth Of 160m

• NuScale Power (SMR) and Accelerant Solutions announced an agreement for the development and implementation of a NuScale Licensed Operator Training Program

• Perrigo (PRGO) announces the appointment of industry professional Patrick Lockwood-Taylor as its new President, Chief Executive Officer and member of the Board of Directors, effective June 30, 2023

• Petrobras (PBR) provides update on Potiguar Cluster

• Primoris Services (PRIM) announces it received several awards with combined value over $650 mln

• Renren (RENN) proposes name change to Moatable, new ticker symbol "MTBL"

• Repare Therapeutics (RPTX) reports proof of concept for Lunresertib (RP-6306) in Clinic, Initial Monotherapy data from phase 1 MYTHIC clinical trial and early insights from ongoing combination trials

• SciPlay (SCPL) has formed a special committee of independent directors co-chaired by Mr. Gerald Cohen and Ms. April Henry, and with Mr. Michael Marchetti and Mr. William Thompson serving as members

• SSR Mining (SSRM) announces planned Board chair succession

• Vista Outdoor (VSTO): American Outdoor Brands (AOUT) files complaint against VSTO alleging patent infringement regarding five of its patents

M&A:

• Avalon Acquisition Inc. (AVAC) receives stockholder approval for proposed business combination transaction with The Beneficient Company Group

• Avanos Medical (AVNS) enters into a definitive agreement to sell its Respiratory Health business to SunMed Group Holdings

• Bel Fuse (BELF.A) announced the divestment of their Stewart Czech business, part of the Connectivity Solutions segment

• Camping World (CWH) to acquire Halterman's RV in the greater Seattle market; deal expected to close in 3Q23, no other financial terms disclosed

• Digital World Acquisition Corp (DWAC) Board has approved an extension of the date by which the Company would be required to consummate a Business Combination from June 8, 2023 to September 8, 2023

• Floor & Decor (FND) subsidiary acquires Salesmaster Flooring Solutions; financial details not disclosed

• Franco-Nevada (FNV) acquires royalty on Marathon Gold's (MGDPF) Valentine Gold Project for $45 mln

• Stantec (STN) to acquire Environmental Systems Design, a building engineering design firm; terms of the transaction are not disclosed

Syndicate:

• Akoya Biosciences (AKYA) prices offering of 8.7 mln shares of common stock at $5.00 per share

• American Intl (AIG) announces pricing of secondary offering of Corebridge Financial (CRBG) common stock at $16.25 per share

• Atour Lifestyle Hldgs. Ltd. (ATAT) prices upsized offering by entities affiliated with Legend Capital of 5.76 mln ADSs at $14.80 per ADS (previously 4.8 mln)

• Blue Bird (BLBD) prices secondary offering of 4.5 mln shares of common stock at $20.00 per share

• Core & Main (CNM) announces secondary offering of 14 million shares of its Class A common and share repurchase program of 3,125,728 shares of its Class A common stock

• Fortive (FTV) files mixed shelf securities offering

• GE HealthCare (GEHC) prices offering of 25.0 mln shares of common stock at $78.00 per share

• Mobileye Global (MBLY) prices secondary offering of 38.5 mln shares of common stock at $42.00 per share

• Skyward Specialty Insurance Group (SKWD) prices secondary offering of 3.85 mln shares of common stock at $23.00 per share

• Sterling Check Corp. (STER) prices secondary offering of 8.0 mln shares of common stock at $12.25 per share

IPOs:

• Expected to Price: No IPOs expected.

Gapping Up/Down

• Gapping up:

  • SMTC +24.1%, FDMT +14.8%, EXPI +9.4%, PRVA+6.4%, RCEL +5.6%, IPHA +5.3%, UHT +5.2%, STER+5%, TCOM +4.5%, GEF +3.9%, AFRM +3.6%, HP +3.1%, AOUT +3.1%, VRNT +3%, ALV +1.9%, WHD+0.7%

• Gapping down:

  • HCP -20%, GME -18.6%, SMAR -17.9%, CURV -7.3%, OXM -5.3%, VTNR -3.8%, AKYA -2.9%, FND -2.3%, CNM -1.9%, BLBD -1.7%, GEHC -1.3%, VLN -0.9%, ATAT -0.9%, NGM -0.8%, RPTX -0.5%, MBLY -0.5%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

• Upgrades

  • Brown-Forman (BF.B) upgraded to In-line from Underperform at Evercore ISI; tgt raised to $68

  • Evotec SE (EVO) upgraded to Buy from Neutral at Citigroup

  • Marsh McLennan (MMC) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $199

• Downgrades:

  • Las Vegas Sands (LVS) downgraded to Hold from Buy at Jefferies; tgt lowered to $65

  • Wynn Resorts (WYNN) downgraded to Hold from Buy at Jefferies; tgt lowered to $114

• Others:

  • Airbnb (ABNB) initiated with an Underweight at Wells Fargo; tgt $99

  • Alphabet A (GOOGL) initiated with an Equal Weight at Wells Fargo; tgt $117

  • Amazon (AMZN) initiated with an Overweight at Wells Fargo; tgt $159

  • Booking Holdings (BKNG) initiated with an Underweight at Wells Fargo; tgt $2257

  • DoorDash (DASH) initiated with an Equal Weight at Wells Fargo; tgt $70

  • eBay (EBAY) initiated with an Equal Weight at Wells Fargo; tgt $45

  • Etsy (ETSY) initiated with an Underweight at Wells Fargo; tgt $70

  • Expedia Group (EXPE) initiated with an Underweight at Wells Fargo; tgt $93

  • Lyft (LYFT) initiated with an Equal Weight at Wells Fargo; tgt $9

  • Meta Platforms (META) initiated with an Equal Weight at Wells Fargo; tgt $276

  • Pinterest (PINS) initiated with an Equal Weight at Wells Fargo; tgt $23

  • Snap (SNAP) initiated with an Equal Weight at Wells Fargo; tgt $10

  • Uber (UBER) initiated with an Overweight at Wells Fargo; tgt $50

Econ Data:

• 08:30 ET: Initial Claims for June 3 (Briefing.comConsensus 237K; Prior 232K)

• 08:30 ET: Continuing Claims for May 27 (Briefing.comConsensus NA; Prior 1795K)

• 10:00 ET: Wholesale Inventories for Apr (Briefing.comConsensus -0.2%; Prior 0.0%)

• 10:30 ET: EIA Natural Gas Inventories for June 3 (Briefing.comConsensus NA; Prior +110 bcf)

Earnings:

• Monday (Jun 5)

  • Morning:  SAIC

  • Afternoon: GTLB CXM

• Tuesday (Jun 6)

  • Morning: ABM ASO CIEN CNM CBRL GIII MOMO SJM THO

  • Afternoon:  CVGW CASY BASE PLAY SFIX YEXT

• Wednesday (Jun 7)

  • Morning:  BF.B CPB LOVE OLLI UNFI

  • Afternoon:  GME GEF HCP OXM SMTC SMAR CURV TCOM VRNT

• Thursday (Jun 8)

  • Morning: DBI FCEL REVG SIG TTC

  • Afternoon:  BRZE DOCU AVO MTN

• Friday (Jun 9) 

  • Morning:  NIO

Asia & Europe detail:

Asia: Nikkei -0.9%, Hang Seng +0.3%, Shanghai Composite +0.5%

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Chinese government officials spoke about the country's economy but did not indicate that additional support will be offered to the property market, as has been speculated in recent days. UBS expects that the Reserve Bank of Australia will announce another 25-bps rate hike at the August meeting. Four large Chinese banks cut their yuan deposit rates and there was speculation that the People's Bank of China will lower its loan prime rate in the coming weeks. The Reserve Bank of India made no changes to its interest rates, as expected.

• In economic data:

  • Japan's Q1 GDP 0.7% qtr/qtr (expected 0.4%; last 0.1%); 2.7% yr/yr (expected 1.6%; last 0.4%). Q1 GDP Private Consumption 0.5% qtr/qtr (expected 0.6%; last 0.2%). April Current Account surplus JPY1.895 trln (expected surplus of JPY2.947 trln; last surplus of JPY2.278 trln). May Economy Watchers Current Index 55.0 (expected 55.1; last 54.6)

  • Australia's April trade surplus AUD11.158 bln (expected AUD14.000 bln; last AUD14.822 bln). April Imports 2.0% m/m (last 4.0%) and Exports -5.0% m/m (last 4.1%)

  • New Zealand's Q1 Manufacturing Sales Volume -2.1% qtr/qtr (expected 3.9%; last -4.6%)

---Equity Markets---

• Japan's Nikkei: -0.9%

• Hong Kong's Hang Seng: +0.3%

• China's Shanghai Composite: +0.5%

• India's Sensex: -0.5%

• South Korea's Kospi: -0.2%

• Australia's ASX All Ordinaries: -0.3%

---FX---

• USD/JPY: -0.3% to 139.75

• USD/CNH: -0.1% to 7.1406

• USD/INR: -0.1% to 82.52

Europe: DAX +0.3%, FTSE -0.1%, CAC +0.4%

Major European indices trade on a mostly higher note while the U.K.'s FTSE (-0.1%) lags. Eurozone's Q1 GDP was revised down to reflect the first contraction since mid-2021. British Prime Minister Sunak will meet with President Biden at the White House today. The U.K. will host a global artificial intelligence summit later this year.

• In economic data:

  • Eurozone's Q1 GDP -0.1% qtr/qtr (expected 0.0%; last -0.1%); 1.0% yr/yr (expected 1.2%; last 1.8%). Q1 Employment Change 0.6% qtr/qtr, as expected (last 0.3%); 1.6% yr/yr (expected 1.7%; last 1.5%)

  • France's Q1 nonfarm payrolls 0.3% qtr/qtr (expected 0.2%; last 0.2%)

---Equity Markets---

• STOXX Europe 600: UNCH

• Germany's DAX: +0.3%

• U.K.'s FTSE 100: -0.1%

• France's CAC 40: +0.4%

• Italy's FTSE MIB: +0.9%

• Spain's IBEX 35: +0.3%

---FX---

• EUR/USD: +0.3% to 1.0729 

• GBP/USD: +0.2% to 1.2464

• USD/CHF: UNCH at 0.9096