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09/12/21 Briefing

The S&P 500 futures trade 15 points, or 0.3%, below fair value after three straight days of gains. Over the past three sessions, index gains have ranged between 3.4% (Dow Jones Industrial Average) and 5.2% (Russell 2000).

Accordingly, there seems to be some profit-taking interest in order ahead of tomorrow's release of the CPI report for November, which could sway the Fed into announcing a faster tapering plan next week. The Omicron variant also remains a matter of concern after the UK tightened its coronavirus restrictions last night.

In corporate news, Italy fined Amazon.com(AMZN 3507.00, -16.16, -0.5%) the equivalent of $1.3 billion for alleged abuse of its dominant position. CVS Health (CVS 95.14, +2.04, +2.2%) raised its FY21 EPS/revenue guidance, announced a 10% increase to its yearly dividend, and authorized a $10 billion share repurchase program.

On the data front, investors will receive the weekly Initial Claims (Briefing.comconsensus 228,000) and Continuing Claims report at 8:30 a.m. ETand Wholesale Inventories for October (Briefing.comconsensus 2.2%) at 10:00 a.m. ET.

U.S. Treasuries have edged higher, pushing yields slightly lower. The 2-yr yield is down one basis point to at 0.67%, and the 10-yr yield is down two basis points to 1.49%. The U.S. Dollar Index is up 0.3% to 96.14. WTI crude futures are down 0.9% to $71.75/bbl.

In U.S. Corporate news:

  • Amazon.com(AMZN 3507.00, -16.16): -0.5% after Italy fined the company EUR1.128 billion for alleged abuse of its dominant position. Amazon plans to appeal the fine, according to CNBC.

  • CVS Health (CVS 95.14, +2.04): +2.2% after raising its FY21 EPS/revenue guidance, announcing a 10% increase to its yearly dividend, and authorizing a $10 billion share repurchase program.

  • GameStop (GME 165.50, -8.15): -4.7% after missing EPS estimates on above-consensus revenue.

  • Hormel Foods (HRL 43.00, +0.21): +0.5% after beating top and bottom-line estimates.

  • RH (RH 635.00, +58.04): +10.1% after beating top and bottom-line estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: -0.5% Hong Kong's Hang Seng: +1.1% China's Shanghai Composite: +1.0% India's Sensex: +0.3% South Korea's Kospi: +0.9% Australia's ASX All Ordinaries: -0.2%.

  • In economic data:

  • China's November CPI 0.4% m/m (expected 0.3%; last 0.7%); 2.3% yr/yr (expected 2.5%; last 1.5%). November PPI 12.9% yr/yr (expected 12.4%; last 13.5%). November new loans CNY1.27 trln (expected CNY1.555 trln; last CNY826.20 bln) and November total social financing CNY2.61 trln (expected CNY2.70 trln; last CNY1.59 trln). November M2 Money Stock 8.5% yr/yr (expected 8.7%; last 8.7%)

  • Japan's Q4 BSI Large Manufacturing Conditions 7.9 (expected 5.3; last 7.0). November M2 Money Stock 4.0% yr/yr (expected 4.1%; last 4.2%) and November Machine Tool Orders 64.0% yr/yr (last 81.5%)

  • New Zealand's Q3 Manufacturing Sales Volume -6.4% qtr/qtr (expected 4.2%; last -0.1%)


  • In news:

  • China's CPI increased at its fastest pace since mid-2020 in the November reading.

  • China Securities Journal speculated that China's CPI may accelerate in 2022 while producer price growth could slow due to a higher base.

  • Bank of Korea Governor Lee will hold a briefing on inflation next week.

  • A Reserve Bank of Australia policymaker said that labor participation is holding back wage growth.

  • The Japanese government is expected to present its tax plan tomorrow.



  • Major European indices trade on a mostly lower note while Italy's MIB (+0.5%) outperforms. STOXX Europe 600: -0.1% Germany's DAX: -0.1% U.K.'s FTSE 100: -0.2% France's CAC 40: -0.1% Italy's FTSE MIB: +0.5% Spain's IBEX 35: -0.6%.

  • In economic data:

  • Germany's October trade surplus EUR12.50 bln (expected EUR13.40 bln; last EUR12.90 bln). October Imports 5.0% m/m (expected 0.4%; last 0.4%) and Exports 4.1% m/m (expected 0.9%; last -0.7%). October Current Account surplus EUR15.40 bln (last EUR19.60 bln)


  • In news:

  • The U.K. is tightening its coronavirus restrictions again.

  • European Central Bank policymaker Schnabel said that benefits of the bond buying program have been fading. The ECB is reportedly planning a temporary increase in its quantitative easing program once pandemic purchases end.

  • Germany's deputy finance minister said that strict budget rules will be adhered to after the pandemic.



U.S. equity futures:

  • S&P 500 Futures: -16 @ 4,685

  • DJIA Futures: -132 @ 35,623

  • Nasdaq 100 Futures: -58 @ 16,336

Overseas:

  • Europe: DAX -0.1%, FTSE -0.2%, CAC -0.1%

  • Asia: Nikkei -0.5%, Hang Seng +1.1%, Shanghai Composite +1.0%

Commodities:

  • Crude Oil -0.88 @ 71.48

  • Nat Gas -0.044 @ 3.771

  • Gold -8.20 @ 1777.30

  • Silver -0.237 @ 22.195

  • Copper -0.0547 @ 4.3388

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • ASE Technology (ASX) reports November revenues of +19.5% yr/yr to 60.52 bln

  • Ciena (CIEN) reports EPS in-line, beats on revs; Board authorizes share repurchase up to $1.0 bln

  • CVS Health (CVS) raises FY21 EPS/revenue guidance; sees FY22 EPS in line; sees FY22 revs above consensus; will increase its yearly dividend by 10%; authorized a $10 billion share repurchase program

  • Fluence (FLNC) reports Q4 (Sep) results, misses on revs; guides FY22 revs in-line

  • GameStop (GME) misses by $0.87, beats on revs

  • Greif (GEF) beats by $0.44, beats on revs; mid-point of FY22 EPS guidance above consensus

  • Hormel Foods (HRL) beats by $0.01, beats on revs; guides FY22 EPS in-line, revs in-line

  • Nuvei Corporation (NVEI) reaffirms Q4 revenue guidance and long-term growth targets

  • Oxford Industries (OXM) beats by $0.90, beats on revs; guides Q4 EPS in-line, revs above consensus; increases share repurchase authorization to $150 mln

  • Perion Network (PERI) raises FY21 and FY22 revenue guidance due to continued acceleration in its business momentum

  • Phreesia (PHR) misses by $0.22, beats on revs; guides FY22 revs above consensus

  • Rent the Runway (RENT) reports Q3 (Oct) results; revs jumped 66% yr/yr to $59 mln topping estimates; guides JanQ revs in-line

  • RH (RH) beats by $0.44, beats on revs; guides FY22 revs in-line

  • RingCentral (RNG) reaffirms FY21 revenue guidance; also announces that COO is stepping down and appoints new Interim CFO

  • Sportsman's Warehouse (SPWH) misses by $0.03, beats on revs, comps fell -1.5%

  • The Duckhorn Portfolio (NAPA) beats by $0.05, beats on revs, reaffirms FY22 EPS and net sales guidance

  • Torrid (CURV) beats by $0.03, misses on revs, comps +14%; guides Q4 revs in-line; announces $100 mln share repurchase authorization

  • Udemy (UDMY) reports EPS in-line, beats on revs; guides Q4 revs above consensus; guides FY21 revs above consensus

  • UiPath (PATH) beats by $0.04, beats on revs; guides JanQ revs in-line


  • General News:

  • New non-peer reviewed study out of Japan shows Omicron is four times as transmissible as Delta, according to Bloomberg

  • FDA will study boosters for 16 and 17 year olds without advisory committee, according to Bloomberg

  • Senate votes 52-48 to block President Biden's vaccine mandate on private employers, but House is not expected to bring this up for a vote, according to the New York Times

  • White House aiming to tighten enforcement of Iran sanctions, according to the Wall Street Journal

  • Fitch downgrades Evergrande and subsidiaries, Hengda and Tianji, to restricted default

  • Achilles Therapeutics (ACHL) presents positive data at ESMO I-O Congress 2021 on high-dose manufacturing process for precision t cell therapies targeting clonal neoantigens

  • ADMA Biologics (ADMA) announced that the European Patent Office has issued European Patent No. 3375789, to the Company

  • Affimed Therapeutics (AFMD) to host virtual investor call today to discuss treatment of CD30-positive lymphoma patients with cord blood-derived natural killer cells pre-complexed with innate cell engager AFM13

  • Amazon (AMZN): Italy fined Amazon EUR 1.128 billion for alleged abuse of dominant position

  • Amazon (AMZN) to retire Alexa.comon May 1, 2022

  • Apple (AAPL) car project lost 3 more key engineers, according to Bloomberg

  • ArcelorMittal (MT) expands partnership with carbon capture and re-use specialist LanzaTech through $30 mln investment

  • AstraZeneca (AZN) confirms that EVUSHELD (formerly AZD7442) long-acting antibody combination authorized for emergency use in the US for pre-exposure prophylaxis (prevention) of COVID-19

  • Aurinia Pharma (AUPH) announces "positive" topline results from the AURORA 2 continuation study of LUPKYNIS (voclosporin) for the treatment of adults with active lupus nephritis

  • Boeing (BA) awarded $370 mln Navy contract

  • Brainsway (BWAY) announces publication of deep TMS trial results for reduction of heavy drinking in alcohol-dependent subjects

  • Cadence Bank (CADE) authorizes share repurchase program for up to 10 mln shares of common stock

  • Carrier Global (CARR) increases quarterly cash dividend to $0.15/share from $0.12/share

  • Cohen & Steers (CNS) reports preliminary assets under management as of November 30 of $100.2 bln

  • Compugen (CGEN) presents preliminary translational data from patient biopsies demonstrating immune activation in the tumor microenvironment (TME) after treatment with COM701 as a monotherapy and in combination with nivolumab

  • Ecopetrol (EC) Board of Directors approved the 2022 organic investment plan for an estimated amount of $4.8 -5.8 bln

  • Full House Resorts (FLL) announces that American Place gaming and entertainment destination proposal selected by Illinois Gaming Board

  • GameStop (GME) received request from the Staff of the SEC for the voluntary production of documents and information concerning trading activity in securities; SEC issued a subpoena

  • IBEX Ltd. (IBEX) announces that its board of directors has authorized the repurchase of up to $20 million of the Company's common stock

  • Innate Pharma (IPHA) to present data from the Phase 2 expansion cohort exploring the triplet combination of monalizumab, cetuximab and durvalumab in the first-line treatment of patients with head and neck squamous cell cancer

  • Intercept Pharma (ICPT) has formally notified the European Medicines Agency of its decision to withdraw its Marketing Authorization Application for obeticholic acid for the treatment of liver fibrosis due to nonalcoholic steatohepatitis

  • Johnson Controls (JCI) increases its quarterly dividend 26% to $0.34/share

  • Laboratory Corp (LH) announces initiatives to enhance shareholder value; targeting a dividend payout ratio of between 15-20% of adjusted earnings; authorized $2.5 bln stock share repurchase program

  • Landstar System (LSTR) increases number of shares of common stock authorized under repurchase program to 3.0 mln; also declares special one-time cash dividend of $2.00/share

  • Lyft (LYFT) employees will not return to offices until 2023, according to Bloomberg

  • Mirion Technologies' (MIR) Sun Nuclear announced today that Allegheny Health Network selected Sun Nuclear as its radiation therapy Quality Assurance (QA) solutions partner

  • Molecular Partners (MOLN) highlights upcoming oncology portfolio presentations in December

  • Navitas Semiconductor (NVTS) announces opening of new Design Center focused on enabling GaN-based data centers

  • Ocugen (OCGN) announces that the U.S. Food and Drug Administration has accepted the company's Investigational New Drug application to initiate a first-in-human clinical trial of OCU400

  • Reata Pharmaceuticals (RETA) announces outcome of FDA Advisory Committee Meeting of bardoxolone for the treatment of patients with chronic kidney disease caused by alport syndrome

  • Regeneron Pharma (REGN) and Sanofi (SNY) announce publication of Phase 3 Dupixent results in NEJM

  • Seagen (SGEN) announces updated results from pivotal HER2CLIMB trial evaluating TUKYSA in patients with HER2-positive breast cancer with brain metastases

  • SQZ Biotechnologies (SQZ) announces lead cell therapy candidate induced radiographic, symptomatic and immune response as monotherapy in post-checkpoint HPV+ solid tumor patient

  • Starbucks (SBUX) union vote will take place in Buffalo, NY, according to the Wall Street Journal

  • Torrid (CURV) announces planned retirement of CFO George Wehlitz, effective at the end of Q1 of FY22

  • Toyota (TM) suspended production at two plants amid chip shortages, according to Reuters

  • Triterras Fintech (TRIT) provides update on independent audit of financials

  • uniQure (QURE) and CSL Behring announce that etranacogene dezaparvovec achieved the pre-specified primary endpoint of non-inferiority in annualized bleeding rate 18-months following administration compared to baseline Factor IX prophylactic therapy in the pivotal Phase III HOPE-B gene therapy trial

  • U.S. Steel (X), Norfolk Southern (NSC) and Greenbrier (GBX) collaborate on new, sustainable high-strength steel railcar

  • Valaris (VAL) appoints Anton Dibowitz President and Chief Executive Officer

  • Ziff Davis (ZD) announces the appointment of Bret Richter as Chief Financial Officer

  • Zymeworks (ZYME): Zanidatamab data presented at the San Antonio Breast Cancer Symposium demonstrate encouraging antitumor activity in heavily pretreated patients with HER-2-positive breast cancer


  • M&A:

  • Alerus Financial (ALRS) announces acquisition of Metro Phoenix Bank

  • Becton Dickinson (BDX) has acquired Tissuemed, privately held firm developing self-adhesive surgical sealant films; terms were not disclosed

  • Camping World (CWH) to acquire Lloyd Bridges Traveland RV dealerships in Chelsea, MI

  • Criteo (CRTO) to acquire IPONWEB for $380 million in a combination of cash and CRTO treasury shares

  • Farfetch (FTCH) acquired resale platform LUXCLUSIF for an undisclosed sum

  • Kinross Gold (KGC) announces acquisition of Great Bear Resources; Kinross has agreed to an upfront payment of approximately US$1.4 billion

  • Lee Enterprises (LEE) Board of Directors unanimously rejects unsolicited proposal from Alden (for $24.00 per share in cash)

  • Northwest Natural (NWN) subsidiary agrees to purchase water and wastewater utilities of Far West Water & Sewer

  • PNM Resources (PNM): New Mexico Public Regulation Commission rejects agreement reached with parties in PNM / AVANGRID (AGR) merger

  • Thomson Reuters (TRI) received a binding offer from Karnov Group to purchase Editorial Aranzadi SAU

  • XP (XP) acquires minority stake in real estate financing startup Direto


  • Syndicate:

  • AEye (LIDR) announces stock purchase agreement with Tumim Stone Capital for up to $125 mln

  • Agree Realty (ADC) priced its public offering of 5,000,000 shares of its common stock at a public offering price of $68.15/share

  • fuboTV (FUBO) files for 5,690,669 share common stock offering by selling shareholders

  • Lucid Motors USA (LCID) announces private offering of $1.75 bln aggregate principal amount of convertible notes due 2026

  • Perion Network (PERI) files mixed securities shelf offering

  • Relmada Therapeutics (RLMD) announces public offering of $100 mln of shares of its common stock


  • IPOs:

  • Expected to Price:

  • HashiCorp (Nasdaq: HCP): The cloud computing company providing a standardized approach to automating the critical processes involved in delivering applications in the cloud is expected to price its 15.3 M between $68-$72.


  • Priced to Open:

  • Nu Holdings (NYSE: NU): The digital banking platform priced its 289.2 M share IPO at $9, the high end of the $8-$9 expected range.



Gapping Up/Down

  • Gapping up:

  • RH +10.4%, DCRC +7.6%, AUPH +7.1%, NVEI +7%, ARC +4.1%, NVTS +3.8%, OXM +3.4%, GEF +3.2%, FLL +3.1%, FUBO +2.9%, AFMD +2.5%, CVS +2.4%, UDMY +1.8%, ZYME +1.7%,


  • Gapping down:

  • RETA -41.2%, CURV -27.9%, TRIT -17%, RENT-11.3%, LIDR -10.1%, PHR -7.1%, LCID -5.9%, KGC-5.1%, GME -4.1%, ADC -3.8%, PERI -3.2%, RLMD-2.9%, PNM -2.8%, RNG -2.3%, NAPA -2.2%,



Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Brookfield Renewable Corp. (BEPC) upgraded to Overweight from Neutral at JP Morgan; tgt $52

  • Brookfield Renewable Partners (BEP) upgraded to Overweight from Neutral at JP Morgan; tgt $46

  • EngageSmart (ESMT) upgraded to Buy from Neutral at Citigroup; tgt lowered to $31

  • Inogen (INGN) upgraded to Buy from Hold at Needham; tgt $47

  • Instructure (INST) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $31

  • JFrog (FROG) upgraded to Buy from Hold at Stifel; tgt $45

  • LGI Homes (LGIH) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $160


  • Downgrades:

  • Air Products (APD) downgraded to Peer Perform from Outperform at Wolfe Research; tgt lowered to $331

  • Allison Transmission (ALSN) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $30

  • Allstate (ALL) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $105

  • Altice USA (ATUS) downgraded to Neutral from Overweight at JP Morgan; tgt $20

  • Canadian Natrl Res (CNQ) downgraded to Neutral from Overweight at JP Morgan

  • Charter Comm (CHTR) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt $740

  • Cincinnati Fincl (CINF) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $130

  • CVR Energy (CVI) downgraded to Underweight from Neutral at JP Morgan; tgt $19

  • Diageo plc (DEO) downgraded to Underperform from Sector Perform at RBC Capital Mkts

  • Enviva Partners (EVA) downgraded to Neutral from Overweight at JP Morgan; tgt $77


  • Others:

  • AbbVie (ABBV) resumed with an Overweight at Wells Fargo; tgt $165

  • Amgen (AMGN) resumed with an Equal Weight at Wells Fargo; tgt $210

  • Apollo Endosurgery (APEN) initiated with a Buy at Stifel; tgt $12

  • AppLovin (APP) resumed with a Buy at Citigroup; tgt $112

  • Benson Hill (BHIL) initiated with an Outperform at Oppenheimer; tgt $9

  • Bicycle Therapeutics (BCYC) initiated with a Buy at Needham; tgt $85

  • Biogen (BIIB) resumed with an Equal Weight at Wells Fargo; tgt $250

  • Bristol-Myers (BMY) resumed with an Equal Weight at Wells Fargo; tgt $58

  • EVgo Inc. (EVGO) initiated with an Overweight at JP Morgan; tgt $20

  • Forward Air (FWRD) initiated with a Positive at Susquehanna; tgt $132

  • fuboTV (FUBO) initiated with an Overweight at JP Morgan; tgt $28

  • Gilead Sciences (GILD) resumed with an Equal Weight at Wells Fargo; tgt $72

  • Green Plains (GPRE) initiated with an Outperform at Oppenheimer; tgt $46

  • Jamf Holding (JAMF) resumed with a Buy at Goldman; tgt $38

  • Janus International Group (JBI) initiated with a Buy at Stifel; tgt $17


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Initial Claims for Dec. 4 (Briefing.comConsensus 228K; Prior 222K)

  • 08:30 ET: Continuing Claims for Nov 27 (Briefing.comConsensus NA; Prior 1.956M)

  • 10:00 ET: Wholesale Inventories for Oct (Briefing.comConsensus 2.2%; Prior 1.4%)

  • 10:30 ET: EIA Natural Gas Inventories for Dec. 4 (Briefing.comConsensus NA; Prior -59 bcf)


  • Earnings:

  • Monday (Dec 6)

  • Morning: SAIC

  • Afternoon: COUP HQY MDB SUMO


  • Tuesday (Dec 7)

  • Morning: AZO CONN DBI

  • Afternoon: AVAV CASY CHPT BASE PLAY PD S SFIX TOL


  • Wednesday (Dec 8)

  • Morning: BF.B CPB KFY LOVE PLAB THO UNFI VRA

  • Afternoon: GME GEF OXM PHR RH SPWH CURV PATH


  • Thursday (Dec 9)

  • Morning: CIEN HRL

  • Afternoon: AOUT AVGO CHWY COST LESL LULU MESA ORCL MTN


  • Friday (Dec 10)

  • Morning: ASO




Asia & Europe detail:

Asia: Nikkei -0.5%, Hang Seng +1.1%, Shanghai Composite +1.0%

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. China's CPI increased at its fastest pace since mid-2020 in the November reading. China Securities Journal speculated that China's CPI may accelerate in 2022 while producer price growth could slow due to a higher base. Bank of Korea Governor Lee will hold a briefing on inflation next week. A Reserve Bank of Australia policymaker said that labor participation is holding back wage growth. The Japanese government is expected to present its tax plan tomorrow.

  • In economic data:

  • China's November CPI 0.4% m/m (expected 0.3%; last 0.7%); 2.3% yr/yr (expected 2.5%; last 1.5%). November PPI 12.9% yr/yr (expected 12.4%; last 13.5%). November new loans CNY1.27 trln (expected CNY1.555 trln; last CNY826.20 bln) and November total social financing CNY2.61 trln (expected CNY2.70 trln; last CNY1.59 trln). November M2 Money Stock 8.5% yr/yr (expected 8.7%; last 8.7%)

  • Japan's Q4 BSI Large Manufacturing Conditions 7.9 (expected 5.3; last 7.0). November M2 Money Stock 4.0% yr/yr (expected 4.1%; last 4.2%) and November Machine Tool Orders 64.0% yr/yr (last 81.5%)

  • New Zealand's Q3 Manufacturing Sales Volume -6.4% qtr/qtr (expected 4.2%; last -0.1%)


---Equity Markets---

  • Japan's Nikkei: -0.5%

  • Hong Kong's Hang Seng: +1.1%

  • China's Shanghai Composite: +1.0%

  • India's Sensex: +0.3%

  • South Korea's Kospi: +0.9%

  • Australia's ASX All Ordinaries: -0.2%

---FX---

  • USD/JPY: -0.1% to 113.49

  • USD/CNH: +0.6% to 6.3779

  • USD/INR: +0.4% to 75.62

Europe: DAX -0.1%, FTSE -0.2%, CAC -0.1%

Major European indices trade on a mostly lower note while Italy's MIB (+0.5%) outperforms. The U.K. is tightening its coronavirus restrictions again. European Central Bank policymaker Schnabel said that benefits of the bond buying program have been fading. The ECB is reportedly planning a temporary increase in its quantitative easing program once pandemic purchases end. Germany's deputy finance minister said that strict budget rules will be adhered to after the pandemic.

  • In economic data:

  • Germany's October trade surplus EUR12.50 bln (expected EUR13.40 bln; last EUR12.90 bln). October Imports 5.0% m/m (expected 0.4%; last 0.4%) and Exports 4.1% m/m (expected 0.9%; last -0.7%). October Current Account surplus EUR15.40 bln (last EUR19.60 bln)


---Equity Markets---

  • STOXX Europe 600: -0.1%

  • Germany's DAX: -0.1%

  • U.K.'s FTSE 100: -0.2%

  • France's CAC 40: -0.1%

  • Italy's FTSE MIB: +0.5%

  • Spain's IBEX 35: -0.6%

---FX---

  • EUR/USD: -0.3% to 1.1310

  • GBP/USD: -0.2% to 1.3182

  • USD/CHF: +0.3% to 0.9226

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