The S&P 500 futures are up 20 points and are trading 0.6% above fair value. The Nasdaq 100 futures are up 77 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 123 points and are trading 0.4% above fair value.
There is a slightly positive bias in front of the November Producer Price Index (PPI) at 8:30 a.m. ET this morning amid some possible speculation that the PPI number will be favorable, setting a positive tone for the November Consumer Price Index next Tuesday. Gains for the mega cap stocks in premarket action have also proved to be a supportive element. On a related note, Goldman Sachs named Microsoft (MSFT) a top pick for 2023.
China's Consumer Price Index reflected disinflation in November (+1.6% year-over-year versus +2.1% prior).
The IMF and the World Bank expressed concerns about the global economic outlook, according to Bloomberg.
Arizona Senator Kyrsten Sinema announced she's leaving the Democratic party and registering as an independent.
UK passport control staff and railroad workers are planning a series of walkouts over December, according to CNBC.
Treasury yields are moving lower. The 2-yr note yield is down five basis points to 4.27% and the 10-yr note yield is down one basis point to 3.48%.
In corporate news:
Microsoft (MSFT 248.31, +0.91, +0.4%): named a top pick for 2023 by Goldman Sachs
Netflix (NFLX 318.75, +8.49, +2.7%): upgraded to Overweight from Equal Weight at Wells Fargo
Costco (COST 479.00, -2.42, -0.5%): misses by $0.06, misses on revs
Vail Resorts (MTN 255.46, +4.25, +1.7%): misses by $0.11, beats on revs; reaffirms FY23 net income guidance and resort reported EBITDA guidance
Broadcom (AVGO 553.00, +21.92, +4.1%): beats by $0.16, reports revs in-line; guides JanQ revs above consensus; will resume authorized share repurchases for remaining $13 bln; increasing quarterly dividend 12% to $4.60/share
RH ▴ 1.65% (RH 270.10, +3.72, +1.4%): beats by $0.97, beats on revs; raises low end of FY23 revenue growth guidance range, raises adj. operating margin guidance
Vale S.A. (VALE 16.75, +0.32, +2.0%): upgraded to Overweight from Equal Weight at Morgan Stanley
DocuSign (DOCU 48.63, +4.88, +11.2%): beats by $0.15, beats on revs, beats on billings; guides Q4 revs slightly below consensus; Billings rose 17% yr/yr to $659.4 mln vs $584-594 mln prior guidance.
lululemon athletica (LULU 349.15, -25.36, -6.8%): beats by $0.04, beats on revs, comps of +22%; guides Q4 EPS in-line, revs in-line; expects to double net revs to $12.5 bln by 2026
Bath & Body Works (BBWI 43.91, +1.76, +4.2%): Third Point discloses 6.02% stake per 13D filing
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the week on a higher note. Japan's Nikkei: +1.2% (+0.4% for the week), Hong Kong's Hang Seng: +2.3% (+6.6% for the week), China's Shanghai Composite: +0.3% (+1.6% for the week), India's Sensex: +0.3% (-0.5% for the week), South Korea's Kospi: +0.8% (-1.9% for the week), Australia's ASX All Ordinaries: +0.5% (-1.3% for the week).
In economic data:
China's November CPI -0.2% m/m, as expected (last 0.1%); 1.6% yr/yr, as expected (last 2.1%). November PPI -1.3% yr/yr (expected -1.4%; last -1.3%)
South Korea's October Current Account surplus $880 mln (last surplus of $1.58 bln)
New Zealand's November Electronic Card Retail Sales 0.3% m/m (last 1.0%); 7.1% yr/yr (last 16.6%). Q3 Manufacturing Sales Volume 3.1% qtr/qtr (last -4.9%)
In news:
There was more speculation that the Chinese government will announce additional measures aimed at boosting the property sector.
Japan's Finance Minister Suzuki said that defense spending will need to reach JPY4 trln per annum.
China's Premier Li acknowledged the rising risk of a global recession, but also said that the Chinese economy is in stable state after reversing a decline in Q3.
Major European indices trade near their flat lines while Italy's MIB (-0.5%) underperforms amid relative weakness in bank stocks. STOXX Europe 600: +0.4% (-1.4% week-to-date), Germany's DAX: +0.4% (-1.4% week-to-date), U.K.'s FTSE 100: -0.1% (-1.2% week-to-date), France's CAC 40: +0.1% (-1.4% week-to-date), Italy's FTSE MIB: -0.5% (-2.2% week-to-date), Spain's IBEX 35: +0.2% (-1.7% week-to-date).
In economic data:
Spain's October Industrial Production 2.5% yr/yr (expected 2.8%; last 3.6%)
In news:
The British government is expected to announce significant changes to financial regulations, including a loosening of rules on banks.
Credit Suisse completed a CHF4 bln capital raise.
Expectations for a 50-bps rate hike from the ECB on December 15 are being solidified.
U.S. equity futures:
S&P 500 Futures: 21 @ 3,985
DJIA Futures: +127 @ 33,908
Nasdaq 100 Futures: +78 @ 11,716
Overseas:
Europe: DAX +0.4%, FTSE -0.1%, CAC +0.1%
Asia: Nikkei +1.2%, Hang Seng +2.3%, Shanghai Composite +0.3%
Commodities:
Crude Oil +0.45 @ 71.91
Nat Gas -0.004 @ 5.958
Gold +11.00 @ 1812.50
Silver +0.062 @ 23.308
Copper -0.0058 @ 3.8777
Earnings/Guidance:
ASE Technology ( ASX ▴ 1.20% ) reports November revs declined 0.7% yr/yr to NT$60.52 bln
Broadcom ( AVGO ▴ 2.43% ) beats by $0.16, reports revs in-line; guides JanQ revs above consensus; will resume authorized share repurchases for remaining $13 bln; increasing quarterly dividend 12% to $4.60/share
Chewy ( CHWY ▴ 1.79% ) reports Q3 (Oct) results, beats on revs; guides JanQ revs above consensus; raises FY23 revenue guidance
ChipMOS TECHNOLOGIES ( IMOS ▴ 0.60% ) reports November revs declined 30.3% yr/yr to $50.4 mln
Comtech Telecom ( CMTL ▴ 6.07% ) reports Q1 (Oct) results, beats on revs; guides Q2 revs above consensus
Cooper ( COO ▴ 1.54% ) misses by $0.36, beats on revs; guides FY23 EPS below consensus, revs in-line
Costco ( COST ▾ 0.11% ) misses by $0.06, misses on revs
DocuSign ( DOCU ▴ 3.97% ) beats by $0.15, beats on revs, beats on billings; guides Q4 revs slightly below consensus
Domo ( DOMO ▴ 2.48% ) beats by $0.13, beats on revs; guides Q4 EPS above consensus, revs below consensus
Li Auto ( LI ▴ 6.68% ) misses by RMB0.64, misses on revs; guides Q4 revs in-line; announces management changes
lululemon athletica ( LULU ▴ 0.59% ) beats by $0.04, beats on revs, comps of +22%; guides Q4 EPS in-line, revs in-line; expects to double net revs to $12.5 bln by 2026
Manchester United ( MANU ▾ 1.27% ) reports Q1 (Sep) results, beats on revs; guides FY23 revs in-line
National Beverage ( FIZZ ▾ 0.77% ) beats two analyst estimate by $0.05, beats on revs
Phreesia ( PHR ▴ 2.53% ) beats by $0.11, beats on revs; guides FY23 revs in-line
RH ( RH ▴ 1.65% ) beats by $0.97, beats on revs; raises low end of FY23 revenue growth guidance range, raises adj. operating margin guidance
Taiwan Semiconductor Manufacturing ( TSM ▴ 1.97% ) reports November revenues increased 44.6% yr/yr to ~NT$222.7 bln
Torrid ( CURV ▴ 8.93% ) misses by $0.04, misses on revs; guides Q4 revs below consensus
Vail Resorts ( MTN ▴ 1.74% ) misses by $0.11, beats on revs; reaffirms FY23 net income guidance and resort reported EBITDA guidance
News:
US will soon impose human rights sanctions on Russia & China, according to the Wall Street Journal
Senator Kyrsten Sinema will leave the Democratic party and register as an independent. Her move is not likely to change the balance of power in the Senate, according to CNN
EU and Chile strengthen a comprehensive political and trade partnership
SEC asks companies to provide disclosure of any significant crypto asset market developments
Sam Bankman-Fried missed deadline to respond to Senate committee who wanted him to testify, Bloomberg
Keystone Pipeline was shutdown after oil spill, according to Reuters
Alnylam ( ALNY ▴ 2.89% ) Submits Supplemental New Drug Application (sNDA) to U.S. Food and Drug Administration (FDA) for ONPATTRO (patisiran) for the Treatment of the Cardiomyopathy of ATTR Amyloidosis
Alphabet ( GOOG ▾ 1.26% ): Australian Federal Court has dismissed the ACCC's case, finding that Google did not mislead Australian consumers when it published an on-screen notification to Australian users, and changed its privacy policy to expand the scope of its use and collection of personal data
Apple ( AAPL ▴ 1.21% ) workers in Australia plan to strike on Christmas, according to Reuters
Arcosa ( ACA ▴ 1.68% ) renews $50 mln share repurchase authorization
AstraZeneca ( AZN ▴ 0.46% ) reports datopotamab deruxtecan showed encouraging and durable efficacy in patients with heavily pretreated HR Positive, HER2 low or negative metastatic breast cancer
Autolus Therapeutics ( AUTL ▾ 0.33% ) announces pivotal Phase 2 FELIX clinical trial has met primary endpoint at interim analysis
AXIS Capital ( AXS ▴ 0.91% ) authorizes the repurchase of up to $100 mln of common stock; increases quarterly dividend $0.01 to $0.44/share
Banco Santander ( SAN ▾ 0.68% ): UK FCA fines Santander UK GBP 107.7 million for repeated anti-money laundering failures
Bath & Body Works ( BBWI ▾ 2.00% ): Third Point discloses 6.02% stake per 13D filing
Biogen ( BIIB ▾ 1.04% ): FDA accepts Biogen biologics license application for BIIB800, a biosimilar candidate referencing ACTEMRA
Boeing ( BA ▴ 1.46% ): United Airlines (UAL) and Boeing will soon announce major 787 order, according to Reuters
Braemar Hotels & Resorts ( BHR ▾ 2.82% ) increases its quarterly dividend 400% to $0.05/share; authorizes stock repurchase program of up to $25 mln
Bristol-Myers ( BMY ▾ 0.08% ) increases quarterly dividend 5.6% to $0.57/share from $0.54/share
Brookdale Senior Living ( BKD 0.00% ) reports that November's weighted average occupancy increased 350 basis points year-over-year; Fourth quarter-to-date weighted average occupancy increased 70 basis points compared to the full third quarter
Chimerix ( CMRX ▴ 1.38% ) Announces Successful Launch of ONC201 Phase 3 ACTION Study at Society for Neuro-Oncology Conference and Provides Operational Update
CNO Financial ( CNO ▴ 0.13% ) promotes Jean Linnenbringer to COO, effective January 1, 2023
Douglas Emmett ( DEI ▴ 1.12% ) cuts dividend to $0.19 per share from $0.28 per share; authorizes $300 mln share repurchase
Ecolab ( ECL ▴ 0.81% ) increases its quarterly dividend 4% to $0.53/share, translates to annual dividend of $2.12/share
Edison ( EIX ▴ 0.05% ) increases quarterly dividend 5.4% to $0.7375/share from $0.7/share
Endeavour Silver ( EXK ▾ 0.88% ) Announces Initial Mineral Resource Estimate and Filing of NI43-101 Technical Report on the Pitarrilla Project in Durango State, Mexico
Erasca ( ERAS ▴ 4.43% ) announces exclusive worldwide license for Pan-RAF inhibitor naporafenib
Exelixis ( EXEL ▴ 1.04% ) Provides Update on Phase 3 CONTACT-01 Trial Evaluating Cabozantinib in Combination with Atezolizumab in Patients with Metastatic Non-Small Cell Lung Cancer Previously Treated with Immunotherapy and Chemotherapy
General Motors ( GM ▴ 0.63% ): Workers at General Motors battery plant vote to form a union, according to the Wall Street Journal
Goldman Sachs ( GS ▾ 0.51% ) to move additional senior bankers to Dubai, according to Bloomberg
Guardant Health ( GH ▾ 1.80% ) enters into collaboration with AstraZeneca for Guardant360 CDx blood test
ICF International ( ICFI ▾ 0.77% ) selected by the U.S. Air Force for $25 mln environmental services contract
ImmunoGen ( IMGN ▾ 0.38% ) announces clinical collaboration with Gilead (GILD) to evaluate pivekimab sunirine in combination with magrolimab in relapsed/refractory acute myeloid leukemia
Intercept Pharma ( ICPT ▴ 1.73% ): New Study Published in The American Journal of Pathology Suggests Obeticholic Acid (OCA) May Improve Cognitive Impairment Associated with Cholestatic Liver Disease
Krispy Kreme, Inc. ( DNUT ▴ 1.46% ) announces appointment of Jeremiah Ashukian as Executive Vice President and Chief Financial Officer, effective January 9, 2023
Legato Merger Corp. II ( LGTO ▴ 0.05% ): Southland Holdings subsidiary awarded $70 mln contract for Denver International Airport's West Gates Pong Expansion
Lockheed Martin ( LMT ▴ 0.87% ) awarded $2.22 bln U.S. Navy contract modification
Medtronic ( MDT ▴ 1.14% ) increases quarterly dividend 8% to $0.68/share
Motorola Solutions ( MSI ▴ 1.12% ) announced that more than 2,500 VB400 body-worn cameras are being deployed to the Lithuanian National Police and Border Guard Service
Myriad Genetics ( MYGN ▾ 0.61% ) Patient Outcomes Study Shows RiskScore Leads to More Accurate Breast Cancer Risk Prediction than Standard-of-Care Risk Model
Nerdy ( NRDY ▾ 1.49% ) completes workforce reductions of approximately 17% of its total workforce
NuScale Power ( SMR ▴ 0.83% ) announced that Karin Feldman will assume the role of interim Chief Operating Officer/Chief Nuclear Officer effective January 6, 2023
PENN Entertainment ( PENN ▾ 1.02% ) authorizes new $750 mln share repurchase program; expires December 31, 2025 and is in addition to existing $750 mln program authorized in February 2022
Pfizer ( PFE ▴ 3.07% ) and BioNTech (BNTX) receive U.S. FDA fast track designation for single-dose MRNA-based vaccine candidate against COVID-19 and influenza
Raytheon Technologies ( RTX ▴ 0.45% ) subsidiary awarded contract to develop next-gen spacesuits for the International Space Station
TE Connectivity ( TEL ▴ 0.47% ) to increase the company's quarterly dividend to $0.59 per share from $0.56 per share
Tesla ( TSLA ▾ 0.34% ) will suspend Shanghai Model Y output during last week of 2022, according to Reuters
Territorial Bancorp ( TBNK ▴ 0.39% ) declares special dividend of $0.10/share, payable on Dec 29
TotalEnergies SE ( TTE ▴ 0.86% ) decides to withdraw its directors from Novatek and will no longer equity account for its stake in Novatek; will record a $3.7 bln impairment in Q4
Trinity Industries ( TRN 0.00% ) increases quarterly dividend 13% to $0.26/share; announces new $250 mln share repurchase authorization
Triton International ( TRTN ▴ 2.04% ) approves an increase in the size of its existing share repurchase authorization to $400 mln
Utz Brands ( UTZ ▾ 1.55% ) increases quarterly dividend 5.6% to $0.228/share from $0.216/share
Vaalco Energy ( EGY ▾ 3.66% ) provides operational update
Veritiv ( VRTV ▴ 1.05% ) announces that Eric Guerin will succeed Steve Smith as CEO when he retires on March 1, 2023
Wal Mart ( WMT ▾ 0.22% ) aiming to offer buy now pay later loans, according to
Waste Mgmt ( WM ▴ 0.48% ) increases dividend 7.7% to $2.80/share from $2.60/share and announces a new share repurchase authorization for up to $1.5 bln
Zoetis ( ZTS ▴ 2.28% ) increases quarterly dividend 15% to $0.375/share; annual yield of 1.0%
M&A:
Crescent Point Energy ( CPG ▾ 1.63% ) acquires Kaybob Duvernay assets and increases base dividend by 25%
Figure Acquisition Corp. I ( FACA ▴ 0.18% ) announces intention to combine business with large warehouse lender and bank holding company
Quest Diagnostics ( DGX ▴ 1.01% ) to acquire Northern Light Health's outreach laboratory business and manage nine of its hospital laboratories; financial details not disclosed
RH ( RH ▴ 1.65% ) acquires Dmitriy & Co and Jeup, Inc; financial details not disclosed
Syndicate:
AmerisourceBergen ( ABC ▴ 0.10% ): Walgreens Boots Alliance (WBA) sells shares of AmerisourceBergen Corporation for $1.0 billion of proceeds
Autolus Therapeutics ( AUTL ▾ 0.33% ) prices offering of 75.0 mln ADSs at $2.00 per ADS
Chart Industries ( GTLS ▾ 12.45% ) prices offering of 5,923,670 shares of common stock at $118.17 per share
Erasca ( ERAS ▴ 4.43% ) prices underwritten offering of 15,384,616 shares at $6.50/share
Prometheus Biosciences ( RXDX ▴ 22.35% ) prices offering of 4,545,455 shares of its common stock at $110 per share
Replimune ( REPL ▴ 4.20% ) prices offering of 5,374,486 shares of its common stock at $23.50 per share
IPOs:
Expect to Price:
No IPOs expected.
Gapping Up/Down
Gapping up:
DOCU +12.2%, CMTL +7.7%, BHR +5.8%, PHR +5%, BBWI +4.6%, AVGO +4%, MANU +3%, MYGN +2.6%, FG +2.4%, ECL +2%, DNUT +2%, MTN +1.7%, WPC +1.6%, PENN +1.5%, EXK +1.5%, GH +1.4%, TRN +1.4%, RH +1.1%, DEI +1%, TSM +1%, ZTS +0.8%, UTZ +0.7%, TRTN +0.7%, MDT +0.6%, CMRX +0.5%, EIX +0.5%
Gapping down:
AUTL -27.4%, LULU -7.1%, CURV -6.3%, ICPT -4.4%, ALNY -4.1%, LI -4.1%, ASX -3.1%, EXEL -2.1%, RXDX -1.9%, COO -1.9%, NRDY -1.5%, TTE -1.1%, ABC -1.1%, WBA -0.9%, REPL -0.8%
Analyst Research (see Upgrades/Downgrades calendar for full list):
Upgrades
DocuSign (DOCU) upgraded to Neutral from Underweight at Piper Sandler; tgt lowered to $50
Downgrades:
Alcoa (AA) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $56
Others:
AgileThought (AGIL) initiated with a Buy at Canaccord Genuity; tgt $7
Aris Water Solutions (ARIS) initiated with a Buy at Citigroup; tgt $20
Cheniere Energy (LNG) initiated with a Buy at Citigroup; tgt $205
Cheniere Energy Partners (CQP) initiated with a Sell at Citigroup; tgt $47
CleanSpark (CLSK) initiated with an Overweight at Cantor Fitzgerald; tgt $5
Crestwood Equity Partners (CEQP) initiated with a Buy at Citigroup; tgt $32
Delek Logistics Partners (DKL) initiated with a Neutral at Citigroup; tgt $48
DT Midstream (DTM) initiated with a Sell at Citigroup; tgt $54
Energy Transfer (ET) initiated with a Buy at Citigroup; tgt $16
EnLink Midstream (ENLC) initiated with a Neutral at Citigroup; tgt $13
Enterprise Products (EPD) initiated with a Buy at Citigroup; tgt $31
Equitrans Midstream (ETRN) initiated with a Neutral at Citigroup; tgt $8
Hess Midstream Partners (HESM) initiated with a Buy at Citigroup; tgt $34
Holly Energy Partners (HEP) initiated with a Neutral at Citigroup; tgt $19
Kinder Morgan (KMI) initiated with a Neutral at Citigroup; tgt $19
Magellan Midstream (MMP) initiated with a Buy at Citigroup; tgt $56
MPLX LP (MPLX) initiated with a Neutral at Citigroup; tgt $33.50
ONEOK (OKE) initiated with a Neutral at Citigroup; tgt $67
Plains All American (PAA) initiated with a Buy at Citigroup; tgt $14
Plains GP (PAGP) initiated with a Buy at Citigroup; tgt $14
Sunoco LP (SUN) initiated with a Neutral at Citigroup; tgt $44
Upcoming Events:
Econ Data:
08:30 ET: PPI for Nov (Briefing.com Consensus 0.2%; Prior 0.2%)
08:30 ET: Core PPI for Nov (Briefing.com Consensus 0.2%; Prior 0.0%)
10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for Dec (Briefing.com Consensus 57.0; Prior 56.8)
10:00 ET: Wholesale Inventories for Oct (Briefing.com Consensus NA; Prior 0.6%)
Earnings:
Monday (Dec 5)
Morning: SAIC
Afternoon: GTLB SUMO
Tuesday (Dec 6)
Morning: AZO CONN BASE SIG
Afternoon: AVAV CASY PLAY GWRE MDB S SWBI CXM SFIX TOL ZUO
Wednesday (Dec 7)
Morning: ASO BF.B CPB LOVE OLLI THO UNFI
Afternoon: AI DSGX GME GEF HCP OXM SPWH VRNT
Thursday (Dec 8)
Morning: CIEN GMS MOMO KFY MANU
Afternoon: AVGO CHWY COO COST DOCU DOMO LULU PHR RH CURV MTN
Friday (Dec 9)
Morning: LI
Asia & Europe detail:
Asia: Nikkei +1.2%, Hang Seng +2.3%, Shanghai Composite +0.3%
Equity indices in the Asia-Pacific region ended the week on a higher note. There was more speculation that the Chinese government will announce additional measures aimed at boosting the property sector. Japan's Finance Minister Suzuki said that defense spending will need to reach JPY4 trln per annum. China's Premier Li acknowledged the rising risk of a global recession, but also said that the Chinese economy is in stable state after reversing a decline in Q3.
In economic data:
China's November CPI -0.2% m/m, as expected (last 0.1%); 1.6% yr/yr, as expected (last 2.1%). November PPI -1.3% yr/yr (expected -1.4%; last -1.3%)
South Korea's October Current Account surplus $880 mln (last surplus of $1.58 bln)
New Zealand's November Electronic Card Retail Sales 0.3% m/m (last 1.0%); 7.1% yr/yr (last 16.6%). Q3 Manufacturing Sales Volume 3.1% qtr/qtr (last -4.9%)
---Equity Markets---
Japan's Nikkei: +1.2% (+0.4% for the week)
Hong Kong's Hang Seng: +2.3% (+6.6% for the week)
China's Shanghai Composite: +0.3% (+1.6% for the week)
India's Sensex: +0.3% (-0.5% for the week)
South Korea's Kospi: +0.8% (-1.9% for the week)
Australia's ASX All Ordinaries: +0.5% (-1.3% for the week)
---FX---
USD/JPY: -0.7% to 135.76
USD/CNH: -0.1% to 6.9517
USD/INR: UNCH at 82.29
Europe: DAX +0.4%, FTSE -0.1%, CAC +0.1%
Major European indices trade near their flat lines while Italy's MIB (-0.5%) underperforms amid relative weakness in bank stocks. The British government is expected to announce significant changes to financial regulations, including a loosening of rules on banks. Credit Suisse completed a CHF4 bln capital raise. Expectations for a 50-bps rate hike from the ECB on December 15 are being solidified.
In economic data:
Spain's October Industrial Production 2.5% yr/yr (expected 2.8%; last 3.6%)
---Equity Markets---
STOXX Europe 600: +0.4% (-1.4% week-to-date)
Germany's DAX: +0.4% (-1.4% week-to-date)
U.K.'s FTSE 100: -0.1% (-1.2% week-to-date)
France's CAC 40: +0.1% (-1.4% week-to-date)
Italy's FTSE MIB: -0.5% (-2.2% week-to-date)
Spain's IBEX 35: +0.2% (-1.7% week-to-date)
---FX---
EUR/USD: UNCH at 1.0556
GBP/USD: +0.3% to 1.2271
USD/CHF: -0.4% to 0.9327