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09/03/23 Briefing

The S&P 500 futures are down 12 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 66 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 34 points and are trading 0.1% below fair value.

Equity futures are slightly negative as investors weigh concerns about rising rates creating added competition for stocks. Market participants are also anxiously awaiting the February Employment Situation Report tomorrow and may be looking to reduce risk ahead of the release.

Treasury yields are not moving a lot this morning, but investors are cognizant of the big moves short-term rates have made recently. The 2-yr note yield is down two basis points to 5.04% and the 10-yr note yield is up two basis points to 4.00%.

Market participants will receive the following economic data today:

  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 198,000; prior 190,000) and Continuing Claims (prior 1.655 mln)

  • 10:30 ET: Weekly natural gas inventories (prior -81 bcf)

In corporate news:

  • Etsy (ETSY 105.50, -7.68, -6.8%): downgraded to Underperform from Buy at Jefferies

  • Hilton (HLT 148.30, +0.86, +0.6%): upgraded to Overweight from Equal Weight at Barclays

  • SVB Financial Group (SIVB 187.50, -80.33, -30.0%): announces proposed offering of $1.25 billion of its common stock and $500 million of depositary shares

  • Silvergate Capital (SI 2.4500, -2.46, -50.1%): to wind down operations and voluntarily liquidate Silvergate Bank

  • MongoDB (MDB 203.97, -24.73, -10.8%): beats by $0.50, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus

  • Eli Lilly (LLY 309.05, -3.49, -1.1%): announced that solanezumab did not slow the progression of cognitive decline due to Alzheimer's disease (AD) pathology when initiated in individuals with amyloid plaque but no clinical symptoms of the disease, known as the preclinical stage of AD

  • American Express (AXP 176.97, +2.14, +1.2%): increases quarterly cash dividend 15% to $0.60/share from $0.52/share and approves share repurchase program for up to 120 mln shares

  • Uber (UBER 34.53, +0.52, +1.5%): considering spinning off its Freight Logistics arm in a sale or as a separate publicly traded company, according to Bloomberg

  • ASML 0.58% (ASML 610.89, -8.51, -1.4%): the Netherlands is aiming to expand export control restrictions on advanced semiconductor making equipment, according to CNBC

  • Credit Suisse (CS 2.7600, -0.14, -4.8%) delayed the release of its annual report due to an inquiry from the SEC

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: -0.2%, India's Sensex: -0.9%, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: +0.1%.

  • In economic data:

  • China's February CPI -0.5% m/m (expected 0.2%; last 0.8%); 1.0% yr/yr (expected 1.9%; last 2.1%). February PPI -1.4% yr/yr (expected -1.3%; last -0.8%)

  • Japan's Q4 GDP 0.0% qtr/qtr (expected 0.2%; last -0.3%); 0.1% yr/yr (expected 0.8%; last -1.1%). Q4 GDP Capital Expenditure -0.5% qtr/qtr (expected -0.4%; last 1.5%) and GDP Private Consumption 0.3% qtr/qtr (expected 0.5%; last 0.0%). February Machine Tool Orders -10.7% yr/yr (last -9.7%)

  • Australia's final January Building Approvals -27.6% m/m, as expected (last 15.3%) and Private House Approvals -13.8% m/m, as expected (last -2.1%)

  • New Zealand's February Electronic Card Retail Sales 0.0% m/m (last 2.6%); 11.7% yr/yr (last 2.7%)


  • In news:

  • China reported an unexpected drop in its February CPI, which moderated the yr/yr growth rate to its slowest pace in nearly a year.

  • Australia is continuing its work on improving trade relations with China.

  • Japan reported no growth in its revised reading for Q4, which follows a 0.2% contraction in Q3.

  • South Korea's President Yoon will visit Japan at the end of next week.



  • Major European indices trade in the red. STOXX Europe 600: -0.5%, Germany's DAX: -0.5%, U.K.'s FTSE 100: -0.7%, France's CAC 40: -0.4%, Italy's FTSE MIB: -0.9%, Spain's IBEX 35: -0.6%.

  • In economic data:

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


  • In news:

  • A monthly survey conducted by the Bank of France projects Q1 French growth of just 0.1%.

  • European Central Bank policymaker Villeroy de Galhau repeated that inflation in France and the eurozone remains too high.

  • Credit Suisse delayed the release of its annual report due to an inquiry from the SEC.



U.S. equity futures:

  • S&P 500 Futures: -13 @ 3,979

  • DJIA Futures: -41 @ 32,758

  • Nasdaq 100 Futures: -66 @ 12,149

Overseas:

  • Europe: DAX -0.5% FTSE -0.7%, CAC -0.4%

  • Asia: Nikkei +0.6%, Hang Seng -0.6%, Shanghai Composite -0.2%

Commodities:

  • Crude Oil +0.03 @ 76.69

  • Nat Gas +0.072 @ 2.623

  • Gold +3.35 @ 1821.95

  • Silver +0.001 @ 20.152

  • Copper -0.0060 @ 4.021

Earnings/Guidance:

  • ANI Pharma ( ANIP 5.35% ) reports upside quarterly results; Consolidation of manufacturing network on track

  • Arhaus ( ARHS 7.81% ) beats on top and bottom lines; guides FY23 revs below consensus

  • Asana ( ASAN 9.54% ) beats by $0.12, beats on revs; guides Q1 EPS above consensus, revs in-line; guides FY24 EPS above consensus, revs in-line

  • ASE Technology ( ASX 1.37% ) reports February revs declined 8.8% yr/yr to NT$39.99 bln

  • BioXcel Therapeutics ( BTAI 15.88% ) misses by $0.54, misses on revs

  • BJ's Wholesale ( BJ 1.68% ) beats by $0.11, beats on revs; guides FY24 EPS above consensus

  • Build-A-Bear Workshop ( BBW 1.32% ) beats single estimate on top and bottom lines

  • Crane ( CR 5.84% ) reaffirms post-separation FY23 earnings guidance; reaffirms previously set target to become independent company on April 3

  • Docebo ( DCBO 3.62% ) beats by $0.08, reports revs in-line; guides Q1 revs in-line

  • Earthstone Energy ( ESTE 1.75% ) misses by $0.07, beats on revs; reaffirms 2023 guidance

  • European Wax Center ( EWCZ 4.04% ) reports Q4 (Dec) results, issues guidance

  • Evolus ( EOLS 5.94% ) misses by $0.09, reports revs in-line; guides FY23 revs in-line

  • FuelCell Energy ( FCEL 7.74% ) beats by $0.02, beats on revs

  • General Electric ( GE 0.61% ) reaffirms FY23 EPS at Investor Conference

  • Genesco ( GCO 1.31% ) beats by $0.06, reports revs in-line; guides FY24 EPS below consensus, revs below consensus

  • Holley Inc. ( HLLY 6.86% ) misses by $0.08, reports revs in-line; guides FY23 revs below consensus

  • Hudson Technologies ( HDSN 1.28% ) reports Q4 EPS of $0.11 vs $0.07 S&P Capital IQ Consensus; revs +25.6% yr/yr to $47.444 mln vs $37.4 mln S&P Capital IQ Consensus

  • JD.com ( JD 2.90% ) beats by RMB1.32, reports revs in-line

  • LSI Industries ( LYTS 14.42% ) provides FY23 and FY28 guidance; expects 60+% revenue growth by FY28

  • Methode Electronics ( MEI 1.74% ) misses on top and bottom lines; lower FY23 guidance

  • Mirum Pharmaceuticals ( MIRM 5.19% ) reports Q4 (Dec) results, beats on revs

  • MongoDB ( MDB 7.39% ) beats by $0.50, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus

  • Noodles & Co ( NDLS 2.96% ) reports EPS in-line, revs in-line; guides Q1 revs in-line; guides FY23 EPS below consensus

  • Paysafe ( PSFE 8.99% ) beats by $0.55, beats on revs; guides Q1 revs above consensus; guides FY23 revs above consensus

  • SVB Financial Group ( SIVB 44.08% ) lowers Q1 and FY23 expectations for several metrics

  • SmartRent ( SMRT 10.51% ) reports Q4 results, misses on revs; guides Q1 revs above consensus; guides FY23 revs below consensus

  • Sovos Brands ( SOVO 2.86% ) beats by $0.03, beats on revs; guides FY23 revs above consensus

  • The Duckhorn Portfolio ( NAPA 1.53% ) beats by $0.01, beats on revs; guides FY23 EPS above consensus, revs in-line

  • Vermilion Energy ( VET 1.72% ) beats on top and bottom lines

News:

  • Biden administration seeking 25% tax on billionaires and higher capital gains tax, according to Bloomberg

  • Growing support for U.S. nominee to lead World Bank, according to Reuters

  • Former Treasury official Eberly being considered for Fed Vice Chair, according to the Wall Street Journal

  • Alnylam Pharma ( ALNY 1.77% ) and Medison Pharma expand on existing partnership

  • American Express ( AXP 3.73% ) increases quarterly cash dividend 15% to $0.60/share from $0.52/share and approves share repurchase program for up to 120 mln shares

  • Apogee Enterprises ( APOG 3.27% ) names Matt Osberg as CFO, effective April 28, 2023

  • Apple ( AAPL 1.39% ) intensifies focus on India, according to Bloomberg

  • Apple ( AAPL 1.39% ) reshuffling its international operations to place greater emphasis on India, according to Bloomberg

  • AstraZeneca ( AZN 0.14% ) reports Tagrisso demonstrated strong overall survival benefit in the ADAURA Phase III trial

  • AstraZeneca ( AZN 0.14% ) reports Imfinzi significantly improved event-free survival in AEGEAN Phase III trial

  • AstraZeneca ( AZN 0.14% ): IMFINZI significantly improved event-free survival in AEGEAN Phase III trial for patients with resectable non-small cell lung cancer

  • Brookdale Senior Living ( BKD 6.94% ) reports February 2023 occupancy: weighted average occupancy increased 300 bps yr/yr to 76.3%; Q1-to-date weighted average occupancy fell 70 bps compared to Q4

  • Build-A-Bear Workshop ( BBW 1.32% ) declares a special cash dividend of $1.50/share, payable on April 6, 2023, to all stockholders of record as of March 23, 2023

  • Caesarstone ( CSTE 0.20% ) names Yosef (Yos) Shiran as new Chief Executive Officer effective March 16, 2023

  • Canadian Natrl Res ( CNQ 1.62% ) to make a Normal Course Issuer Bid for up to 10% of the public float

  • Coinbase Global ( COIN 8.00% ) confirmed has no client or corporate cash at Silvergate (SI)

  • Credit Suisse ( CS 3.97% ) delays release of annual report, according to Reuters

  • European Wax Center ( EWCZ 4.04% ) appoints Stacie Shirley to Chief Financial Officer effective March 27, 2023

  • Foghorn Therapeutics ( FHTX 0.76% ) provides a corporate update including the Company's 2023 strategic priorities and 2022 key achievements in conjunction with its 10-K filing for the year ending December 31, 2022

  • Genius Sports' ( GENI 12.14% ) Second Spectrum and the National Basketball Association announced a multi-year partnership expansion naming Second Spectrum an Official NBA League Pass Augmentation Provider

  • Helen of Troy ( HELE 1.85% ) CFO Matt Osberg to resign, effective April 27; names former CFO Brian Grass as interim CFO

  • Herc Holdings ( HRI 6.46% ) CFO to resign

  • JPMorgan Chase ( JPM 2.56% ) suing former executive, according to Bloomberg

  • Kadant ( KAI 2.84% ) increases quarterly cash dividend to $0.29/share from $0.26/share

  • Lilly ( LLY 0.58% ) Provides Update on A4 Study of Solanezumab for Preclinical Alzheimer's Disease

  • Meta Platforms ( META 1.20% ) Oversight Board announces two new cases and upholds Meta's decision in the "Sri Lanka pharmaceuticals" case

  • Microsoft ( MSFT 1.48% ) has crossed 100 mln Daily Active Users of Bing

  • Moody's ( MCO 3.38% ) announces that Vincent Forlenza will be appointed Chairman of its Board of Directors on April 18, 2023

  • Norfolk Southern ( NSC 1.29% ) CEO delivers testimony before the U.S. Senate Committee on Environment & Public Works

  • Peloton ( PTON 7.54% ) hit with a U.S. import ban over its streaming technology, according to Reuters

  • Perimeter Solutions ( PRM 2.88% ) appointed Haitham Khouri to serve as the Chief Executive Officer of the Company effective immediately

  • QuidelOrtho ( QDEL 3.59% ) Receives De Novo FDA Authorization for Sofia 2 SARS Antigen+ FIA

  • Silgan Holdings ( SLGN 1.36% ) elects Kimberly Ulmer as CFO

  • Silvergate Capital ( SI 11.27% ) to wind down operations and voluntarily liquidate Silvergate Bank

  • Spotify ( SPOT 1.83% ) launches Spotify for Podcasters

  • Stagwell ( STGW 3.08% ) launches public offering of 16,000,000 shares of its common stock by selling shareholders

  • Triumph Group ( TGI 5.35% ) announces agreement for logistics support in Asia

  • Uber ( UBER 3.74% ) is considering spinning off its Freight Logistics arm in a sale or as a separate publicly traded company, according to Bloomberg

  • Viavi ( VIAV 1.34% ) announced that its TM500 and TeraVM validation solutions have been selected by Auray

  • Wabash Natl ( WNC 4.70% ) CFO entered into a pre-arranged stock trading plan

M&A:

  • Clear Channel Outdoor's ( CCO 8.82% ) Switzerland business receives regulatory approval

  • Gilat Satellite ( GILT 3.80% ) signs definitive agreement to acquire DataPath, a market leader in trusted communications for the US DoD, military and government sectors

  • MacroGenics ( MGNX 13.78% ) to sell its royalty interest on TZIELD to DRI Healthcare Trust for up to $200 mln

Syndicate:

  • AerCap ( AER 1.55% ) prices secondary offering of 23.0 mln shares at $58.50 per share

  • Brookfield Infrastructure ( BIP 1.96% ) files for 125,700,792 non-voting limited partnership units by selling unitholder; relates to class A exchangeable subordinate voting shares

  • Clearwater Analytics ( CWAN 8.20% ) prices secondary offering of common stock priced at $15.00 per share

  • Evolus ( EOLS 5.94% ) files for $250 mln mixed securities shelf offering

  • Hanesbrands ( HBI 4.67% ) completes refinancing of 2024 maturities; closes $900 million Term Loan B financing

  • ONE Gas ( OGS 2.15% ) prices offering of 2.0 mln shares of common stock for gross proceeds of $153.8 mln

  • Sonendo ( SONX 9.73% ) files for $100 mln mixed securities shelf offering

  • SVB Financial Group ( SIVB 44.08% ) announces proposed offering of $1.25 billion of its common stock and $500 million of depositary shares

IPOs:

  • Priced to Trade:

  • Atlas Energy Solutions (NYSE: AESI): The provider of frac sand and logistics services in the Permian Basis priced its 18.0 M share IPO at $18, below the $20-$23 expected range.


Gapping Up/Down

  • Gapping up:

  • ASAN +21%, BBW +11.5%, SOVO +9.4%, NAPA +6.7%, VET +6%, MGNX +5.6%, HDSN +5.6%, BJ +5%, MIRM +4.9%, SONX +4.5%, EOLS +2.1%, PTRA +2%, LYTS +1.9%, AXP +1.2%, AZN +1.2%, UBER +0.9%, JD +0.8%


  • Gapping down:

  • SI -46.4%, SIVB -29.1%, MDB -11.3%, SBNY -9.1%, CWAN -6.8%, CS -5.9%, HELE -5.8%, STGW -5%, KRO -5%, VSEC -3.8%, ESTE -3.2%, COIN -3%, ONL -3%, NDLS -2.5%, TNL -2.2%, PTON -2.1%, AER -1.6%, SPOT -1.5%


Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • Asana (ASAN) upgraded to Buy from Neutral at DA Davidson; tgt raised to $21

  • Exact Sciences (EXAS) upgraded to Buy from Neutral at Citigroup; tgt raised to $90

  • Hilton (HLT) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $168


  • Downgrades:

  • ABM Industries (ABM) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $51

  • Etsy (ETSY) downgraded to Underperform from Buy at Jefferies; tgt lowered to $85

  • Fortune Brands Innovations (FBIN) downgraded to Underperform from Neutral at Credit Suisse; tgt $48

  • Gaming and Leisure Properties (GLPI) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets

  • Guardant Health (GH) downgraded to Neutral from Buy at Citigroup; tgt lowered to $33

  • Hyatt Hotels (H) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $125

  • loanDepot (LDI) downgraded to Mkt Perform from Outperform at William Blair

  • Ternium S.A. (TX) downgraded to Market Perform from Outperform at Itau BBA; tgt raised to $49


  • Others:

  • BigCommerce (BIGC) initiated with a Neutral at DA Davidson; tgt $11

  • CymaBay Therapeutics (CBAY) initiated with a Buy at BTIG Research; tgt $15

  • MoonLake Immunotherapeutics (MLTX) initiated with a Buy at BTIG Research; tgt $36

  • Nurix Therapeutics (NRIX) initiated with an Overweight at Barclays; tgt $20

  • Sysco (SYY) resumed with a Buy at BofA Securities; tgt $90

  • VTEX (VTEX) initiated with a Buy at DA Davidson; tgt $5


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Initial Claims for Mar 4 (Briefing.com Consensus 198K; Prior 190K)

  • 08:30 ET: Continuing Claims for Feb 25 (Briefing.com Consensus NA; Prior 1655K)

  • 10:30 ET: EIA Natural Gas Inventories for Mar 4 (Briefing.com Consensus NA; Prior -81 bcf)


  • Earnings:

  • Monday (Mar 6)

  • Morning: AZUL CIEN RIDE

  • Afternoon: AVAV CVGW DOMO GWRE NTNX TCOM WW


  • Tuesday (Mar 7)

  • Morning: MASS DKS DOLE SWIM SE MCRB SQSP THO

  • Afternoon: AGTI ARLO CASY BASE CRCT CRWD SFIX WTI YEXT


  • Wednesday (Mar 8)

  • Morning: ABM BF.B CPB IMXI KFY LTH LFST REVG COCO UNFI VERX VRDN

  • Afternoon: ASAN ESTE EOLS MDB NDLS ONL SMRT SOVO


  • Thursday (Mar 9)

  • Morning: BJ GCO HLLY JD PSFE TTC

  • Afternoon: BIRD AOUT DOCU LOCO GPS HCP HRT AVO ORCL SWBI ULTA MTN WPM ZUMZ


  • Friday (Mar 10)

  • Morning: BKE GENI



Asia & Europe detail:

Asia: Nikkei +0.6%, Hang Seng -0.6%, Shanghai Composite -0.2%

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. China reported an unexpected drop in its February CPI, which moderated the yr/yr growth rate to its slowest pace in nearly a year. Australia is continuing its work on improving trade relations with China. Japan reported no growth in its revised reading for Q4, which follows a 0.2% contraction in Q3. South Korea's President Yoon will visit Japan at the end of next week.

  • In economic data:

  • China's February CPI -0.5% m/m (expected 0.2%; last 0.8%); 1.0% yr/yr (expected 1.9%; last 2.1%). February PPI -1.4% yr/yr (expected -1.3%; last -0.8%)

  • Japan's Q4 GDP 0.0% qtr/qtr (expected 0.2%; last -0.3%); 0.1% yr/yr (expected 0.8%; last -1.1%). Q4 GDP Capital Expenditure -0.5% qtr/qtr (expected -0.4%; last 1.5%) and GDP Private Consumption 0.3% qtr/qtr (expected 0.5%; last 0.0%). February Machine Tool Orders -10.7% yr/yr (last -9.7%)

  • Australia's final January Building Approvals -27.6% m/m, as expected (last 15.3%) and Private House Approvals -13.8% m/m, as expected (last -2.1%)

  • New Zealand's February Electronic Card Retail Sales 0.0% m/m (last 2.6%); 11.7% yr/yr (last 2.7%)


---Equity Markets---

  • Japan's Nikkei: +0.6%

  • Hong Kong's Hang Seng: -0.6%

  • China's Shanghai Composite: -0.2%

  • India's Sensex: -0.9%

  • South Korea's Kospi: -0.5%

  • Australia's ASX All Ordinaries: +0.1%

---FX---

  • USD/JPY: -0.8% to 136.26

  • USD/CNH: +0.1% to 6.9709

  • USD/INR: +0.1% to 81.98

Europe: DAX -0.5% FTSE -0.7%, CAC -0.4%

Major European indices trade in the red. A monthly survey conducted by the Bank of France projects Q1 French growth of just 0.1%. European Central Bank policymaker Villeroy de Galhau repeated that inflation in France and the eurozone remains too high. Credit Suisse delayed the release of its annual report due to an inquiry from the SEC.

  • In economic data:

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


---Equity Markets---

  • STOXX Europe 600: -0.5%

  • Germany's DAX: -0.5%

  • U.K.'s FTSE 100: -0.7%

  • France's CAC 40: -0.4%

  • Italy's FTSE MIB: -0.9%

  • Spain's IBEX 35: -0.6%

---FX---

  • EUR/USD: +0.2% to 1.0565

  • GBP/USD: +0.4% to 1.1891

  • USD/CHF: -0.4% to 0.9381


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