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11/03/22 Briefing

The S&P 500 futures trade 61 points, or 1.4%, above fair value after reports indicated that Russian President Putin claims that discussions with Ukraine have taken a positive turn.

Details have been scant, so the positive-sounding headline first reported by IFX is what the market is basing its optimism on. On a related note, President Biden is scheduled to speak at 10:15 a.m. ETto announce actions that continue to hold Russia accountable for its invasion of Ukraine.

Crude futures are higher ($106.87, +0.85, +0.9%) but are off overnight highs, which were driven by news that the U.S. and Iran could not revive a nuclear deal due to Russian qualms and key issues remaining unsolved.

The 10-yr yield is unchanged at 2.01% after trading at 1.97% overnight. The 2-yr yield is up one basis point to 1.73% after touching 1.69% overnight. The U.S. Dollar Index is down 0.1% to 98.41.

DocuSign (DOCU 77.70, -16.18, -17.2%) and Rivian (RIVN 37.80, -3.36, -8.2%), meanwhile, are the latest growth stocks that continue to fall from grace following their disappointing guidance and quarterly results, respectively. Oracle (ORCL 75.25, -1.40, -1.8%) is down 2% after missing EPS estimates.

Separately, investors will receive the preliminary University of Michigan Index of Consumer Sentiment for March (Briefing.comconsensus 62.5) at 10:00 a.m. ET. Investors will receive no other data.

In U.S. Corporate news:

  • Oracle (ORCL 75.25, -1.40): -1.8% after missing EPS estimates, even as the company guided fiscal Q4 EPS and revenue above consensus.

  • DocuSign (DOCU 77.70, -16.18): -17.2% after guiding revenue for fiscal Q1 and FY23 below consensus, outweighing the company's revenue beat and share buyback authorization of up to $200 million.

  • Rivian (RIVN 37.80, -3.36): -8.2% after missing top and bottom-line estimates. The company guided for FY22 production of 25,000 vehicles.

  • Ulta Beauty (ULTA 387.50, +8.13): +2.1% after beating revenue estimates and authorizing a new $2.0 billion share repurchase program.

  • Chevron (CVX 166.70, -4.12): -2.4% after the stock was downgraded to Underweight from Neutral at JP Morgan.

  • Applied Materials (AMAT 129.25, +4.28): +3.4% after announcing a new $6 billion share repurchase authorization and increasing its cash dividend by 8.3%.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mixed note. Japan's Nikkei: -2.1% (-3.2% for the week) Hong Kong's Hang Seng: -1.6% (-6.2% for the week) China's Shanghai Composite: +0.4% (-4.0% for the week) India's Sensex: +0.2% (+2.2% for the week) South Korea's Kospi: -0.7% (-1.9% for the week) Australia's ASX All Ordinaries: -1.0% (-0.8% for the week).

  • In economic data:

  • China's February new loans CNY1.23 trln (expected CNY1.485 trln; last CNY3.98 trln), February Outstanding Loan Growth 11.4% yr/yr (expected 11.5%; last 11.5%), and February total social financing CNY1.19 trln (expected CNY2.215 trln; last CNY6.17 trln)

  • Japan's January Household Spending -1.2% m/m (expected -3.0%; last 0.2%); 6.9% yr/yr (expected 3.6%; last -0.2%). Q1 BSI Large Manufacturing Conditions -7.6 (expected 8.2; last 7.9)

  • South Korea's January Current Account surplus $1.81 bln (last surplus of $6.06 bln)

  • New Zealand's February Business NZ PMI 53.6 (last 52.3) and February FPI -0.1% m/m (last 2.7%)


  • In news:

  • Standard & Poor's said that the risk of corporate defaults in China remains elevated this year.

  • South Korea's exports through the first ten days of March were up 14.9% yr/yr with chip exports growing 28.5%.

  • South Korea reported its 21st consecutive monthly Current Account surplus.

  • Japan's Finance Minister Suzuki said that additional economic stimulus is not being considered at this time.



  • Major European indices are looking for a higher finish to the week. STOXX Europe 600: +2.0% (+3.2% week-to-date) Germany's DAX: +3.6% (+6.3% week-to-date) U.K.'s FTSE 100: +1.6% (+3.2% week-to-date) France's CAC 40: +2.6% (+5.1% week-to-date) Italy's FTSE MIB: +2.7% (+4.6% week-to-date) Spain's IBEX 35: +2.2% (+6.9% week-to-date).

  • In economic data:

  • Germany's February CPI 0.9% m/m, as expected (last 0.4%); 5.1% yr/yr, as expected (last 4.9%)

  • U.K.'s January GDP 0.8% m/m (expected 0.2%; last -0.2%); 10.0% yr/yr (expected 9.3%; last 6.0%). January Construction Output 1.1% m/m (expected 0.5%; last 2.0%); 9.9% yr/yr (expected 9.2%; last 7.4%). January Industrial Production 0.7% m/m (expected 0.1%; last 0.3%); 2.3% yr/yr (expected 1.9%; last 0.4%). January Manufacturing Production 0.8% m/m (expected 0.2%; last 0.2%); 3.6% yr/yr (expected 3.1%; last 1.3%). January trade deficit GBP26.50 bln (expected deficit of GBP12.60 bln; last deficit of GBP12.35 bln)

  • Spain's February CPI 0.8% m/m (expected 0.6%; last -0.4%); 7.6% yr/yr (expected 7.4%; last 6.1%). February Consumer Confidence 89.8 (last 89.3)


  • In news:

  • EU Commission President Von der Leyen is reportedly planning to present a plan in mid-May for eliminating dependence on energy from Russia by 2027.

  • Dutch Prime Minister Rutte said that reviewing Ukraine's bid for EU accession may take years.

  • European Central Bank policymaker Centeno said that monetary policy must shift to a more neutral position, but it should be done at a gradual rate.



U.S. equity futures:

  • S&P 500 Futures: +51 @ 4,311

  • DJIA Futures: +346 @ 33,521

  • Nasdaq 100 Futures: +207 @ 13,798

Overseas:

  • Europe: DAX +3.6%, FTSE +1.6%, CAC +2.6%

  • Asia: Nikkei -2.1%, Hang Seng -1.6%, Shanghai Composite +0.4%

Commodities:

  • Crude Oil +0.67 @ 106.69

  • Nat Gas +0.078 @ 4.709

  • Gold -31.15 @ 1969.25

  • Silver -0.481 @ 25.775

  • Copper -0.0008 @ 4.6517

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Alto Ingredients (ALTO) beats by $0.18, beats on revs

  • American Outdoor Brands (AOUT) beats by $0.06, misses on revs; guides FY22 EPS below consensus, revs below consensus; also announces acquisition of Grilla Grills for $27 mln

  • Blink Charging (BLNK) reports Q4 results, beats on revs

  • Comtech Telecom (CMTL) beats by $0.11, misses on revs

  • DocuSign (DOCU) reports EPS in-line, beats on revs; guides AprQ revs below consensus; guides FY23 revs below consensus; authorizes up to $200 mln for share repurchases

  • El Pollo Loco (LOCO) beats by $0.05, reports revs in-line

  • Futu Holdings (FUTU) reports Q4 results; beats on revs; authorized a new share repurchase program

  • Genius Sports (GENI) misses by $0.10, beats on revs; guides FY22 revs above consensus

  • Gold Resource (GORO) reports FY21 results; provides outlook for FY22

  • Hippo (HIPO) misses by $0.04, beats on revs; guides FY22 revs above consensus

  • LegalZoom.com(LZ) beats by $0.02, misses on revs; guides AprQ revs below consensus; guides FY22 revs below consensus; authorizes $150 mln for share repurchases

  • LifeStance Health Group (LFST) reports Q4 revs in-line; guides Q1 revs mostly below consensus; guides FY22 revs in-line

  • MeridianLink (MLNK) misses by $0.03, beats on revs; guides Q1 revs above consensus; guides FY22 revs above consensus

  • Mission Produce (AVO) misses by $0.23, misses on revs, cites operational challenges associated with its ERP system conversion

  • National Beverage (FIZZ) misses by $0.02, beats on revs

  • Oracle (ORCL) misses by $0.05, reports revs in-line; sees MayQ EPS and revs above consensus; noted it will push its top-line growth into double-digits next year

  • PLx Pharma (PLXP) misses by $0.02, misses on revs

  • Red Robin Gourmet (RRGB) misses by $0.42, misses on revs, comps +40.1%

  • Rivian Automotive (RIVN) misses by $0.46, misses on revs; guides for FY22 production of 25,000 vehicles

  • Shoals Technologies (SHLS) misses by $0.02, beats on revs; guides Q1 revs in-line; guides FY22 revs below consensus

  • The Duckhorn Portfolio (NAPA) beats by $0.02, beats on revs, guides FY22 EPS inline, revs above consensus

  • Tilly's (TLYS) misses by $0.03, reports revs in-line, comps of +12.5%; guides AprQ EPS below two analyst estimate, revs below two analyst estimate, comps of -10% to -13%

  • Ulta Beauty (ULTA) reports Q4 (Jan) results, beats on revs, comps of +21.4%; guides FY23 revs in-line, expects comps of +3-4%; authorizes a new $2.0 bln share repurchase program

  • WeWork (WE) reports Q4 results; revs rise 9% sequentially; provides outlook

  • Wheaton Precious Metals (WPM) misses by $0.02, misses on revs; provides production guidance

  • Zumiez (ZUMZ) misses by $0.10, misses on revs; guides Q1 EPS below estimate, revs below estimate


  • General News:

  • Russian President Putin claims that the discussions have taken a positive turn with Ukraine

  • Russia suspended from Bank for International Settlements

  • Treasury Secretary Yellen says sanctions against Russia have been devastating in terms of economic impact

  • U.S. Senate passed $1.5 trillion omnibus bill with $13.6 billion in supplemental appropriations to address the crisis in Ukraine

  • EU disburses 300 million in emergency Macro-Financial Assistance to Ukraine

  • Iran nuclear talks end without a deal after Russia demands for guarantees that would prevent U.S. sanctions, according to the Wall Street Journal

  • N. Korea reportedly developing new long-range missile systems, CNBC citing senior US administration official

  • G7 planning to remove Russia's "most favored nation" status, according to Reuters

  • High uncertainty surrounding Ukraine's wheat crop, according to Reuters

  • UK Foreign Secretary Liz Truss has sanctioned 386 members of the Duma for their support for the Ukrainian breakaway regions of Luhansk and Donetsk

  • AbbVie (ABBV) collaborates with Gedeon Richter in neuropsychiatric diseases

  • Alphabet (GOOG): European Commission opens investigation into possible anticompetitive conduct by Google and Meta (FB), in online display advertising; UK CMA also launches investigation into Google and Meta over ad tech concerns

  • Applied Materials (AMAT) authorizes new $6 bln share repurchase; increases cash dividend by 8.3%

  • Avadel (AVDL) Announces New Positive Data for Once-at-Bedtime FT218 for Narcolepsy and Once-Nightly Dosing Preference Among Patients and Clinicians at World Sleep 2022

  • Barnes Group (B) CEO Patrick J. Dempsey to take temporary leave of absence

  • Bayer AG (BAYRY) submits application for additional indication of Nubeqa in Japan

  • BeiGene (BGNE): China National Medical Products Administration approves nti-PD-1 antibody, tislelizumab, for the treatment of adult patients with microsatellite instability-high or mismatch repair deficient solid tumors

  • Boeing (BA) continues plans with suppliers to ramp up 787 capacity, according to Reuters

  • Brady (BRC) announces CEO leadership transition

  • Castle Biosciences (CSTL) announces new data further demonstrating the performance of DecisionDx-Melanoma and i31-SLNB to provide improved risk prediction of sentinel lymph node positivity, compared to using T-stage factors alone, in patients with cutaneous melanoma

  • Colgate-Palmolive (CL) authorizes new $5 bln share repurchase program; increases quarterly common stock cash dividend to $0.47/share from $0.45/share

  • Copa Holdings (CPA) reports traffic down 13% compared to Feb 2019

  • Dada (DADA) announces up to $70 million share repurchase program

  • Didi Global (DIDI) halting plans for Hong Kong IPO, according to Bloomberg

  • El Pollo Loco (LOCO) appoints Laurance 'Larry' Roberts as CEO, effective immediately

  • Homology Medicines (FIXX) closes deal with Oxford Biomedica plc (OXBDF)

  • KnowBe4 (KNBE) names Bob Reich as its new CFO

  • McCormick (MKC) announces suspension of operations in Russia

  • Park Hotels & Resorts (PK) reinstates dividend

  • Peloton (PTON) names Andrew Rendich as Chief Supply Chain Officer

  • PG&E (PCG) and Ford (F) collaborate on bidirectional electric vehicle charging technology in customers' homes

  • Qualcomm (QCOM): Court grants QCOM's motion to block Parkervision's (PRKR) presentation of key evidence in patent infringement case

  • SeaWorld Entertainment's (SEAS) Board approved a replenishment of $228.2 mln to the company's previously authorized share repurchase program, bringing the total amount authorized for future share repurchases back up to $250.0 mln

  • Shoals Technologies (SHLS) announces opening of new manufacturing facility to support growth opportunities

  • Victory Capital (VCTR) reports assets under management of $176.0 bln as of February 28

  • WM Technology (MAPS) appoints Anthony Bay as Chairman of the Board, effective immediately

  • Yum China (YUMC) provides update on its status under the Holding Foreign Companies Accountable Act


  • M&A:

  • CGI Group (GIB) enters into an agreement for the acquisition of Umanis, a data, digital and business solutions firm in France

  • Colliers (CIGI) unit acquires KFW Engineers & Surveying; terms not disclosed

  • Lazydays Holdings (LAZY): B Riley discloses proposal to acquire LAZY

  • MAG Silver (MAG) to acquire Gatling Exploration

  • MeridianLink (MLNK) agrees to acquire StreetShares; terms not disclosed

  • Pearson Plc (PSO): Apollo (APO) confirms it is in the preliminary stages of evaluating a possible cash offer by certain of Apollo's affiliated funds for Pearson


  • Syndicate:

  • Cross Country (CCRN) files for 5 mln share common stock offering

  • Gritstone bio (GRTS) files for $250 mln mixed securities shelf offering

  • Inari (NARI) prices offering of 2.0 mln shares of common stock at $81.00 per share

  • IronNet (IRNT) files for 48,503,325 share common stock offering by selling shareholder

  • Sequans Communications (SQNS) launches public offering of ADSs; amount not indicated


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • PSO +21.7%, LAZY +14.2%, ALTO +13.9%, FUTU+7.9%, LOCO +7.3%, ANGI +4.2%, GORO +3.9%, MAPS +3.3%, SEAS +3.3%, PTON +1.9%, ULTA+1.7%, DADA +1.4%, RILY +1.3%, NAPA +1.3%, WPC+0.7%


  • Gapping down:

  • TLYS -25.2%, DOCU -18.2%, ZUMZ -14.3%, AVO-12.5%, RIVN -10.7%, AOUT -9%, CMTL -8.9%, SQNS-8.5%, LZ -7.2%, RRGB -6.6%, ISPO -5.4%, BLNK-5.3%, SHLS -5.2%, CCRN -3.4%, ORCL -3.2%, IRNT-2.7%, HCM -2.7%, FIZZ -1.8%, WPM -1.2%, VCTR-0.8%, YUMC -0.8%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Baozun (BZUN) upgraded to Neutral from Underperform at Credit Suisse; tgt $8.30

  • Booz Allen Hamilton (BAH) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $90

  • Exelon (EXC) upgraded to Buy from Neutral at Mizuho; tgt raised to $46

  • Gaotu Techedu (GOTU) upgraded to Underperform from Sell at CLSA

  • Mister Car Wash (MCW) upgraded to Buy from Hold at Stifel; tgt $20

  • Parsons (PSN) upgraded to Neutral from Underperform at BofA Securities; tgt $39

  • Shoals Technologies (SHLS) upgraded to Buy from Neutral at Guggenheim; tgt $22

  • Texas Roadhouse (TXRH) upgraded to Buy from Hold at Stifel; tgt $95


  • Downgrades:

  • CareTrust REIT (CTRE) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt $20

  • Chevron (CVX) downgraded to Underweight from Neutral at JP Morgan; tgt $169

  • DTE Energy (DTE) downgraded to Neutral from Buy at UBS; tgt lowered to $133

  • Oracle (ORCL) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $70

  • Tilly's (TLYS) downgraded to Mkt Perform from Outperform at William Blair


  • Others:

  • AGCO Corp (AGCO) initiated with an Overweight at Wells Fargo; tgt $175

  • Airbnb (ABNB) initiated with a Hold at Deutsche Bank; tgt $150

  • Amazon (AMZN) initiated with a Buy at Deutsche Bank; tgt $4100

  • The Beauty Health Company (SKIN) initiated with an Overweight at JP Morgan; tgt $24

  • Caterpillar (CAT) initiated with an Equal Weight at Wells Fargo; tgt $231

  • Centerspace (CSR) initiated with a Sector Perform at RBC Capital Mkts; tgt $105

  • Deere (DE) initiated with an Overweight at Wells Fargo; tgt $455

  • H&E Equipment (HEES) initiated with an Overweight at Wells Fargo; tgt $55

  • Herc Holdings (HRI) initiated with an Overweight at Wells Fargo; tgt $205

  • Nkarta (NKTX) initiated with an Outperform at Raymond James; tgt $17

  • Nuvei Corporation (NVEI) initiated with an Overweight at JP Morgan; tgt $65

  • Oshkosh (OSK) initiated with an Equal Weight at Wells Fargo; tgt $117

  • RBC Bearings (ROLL) initiated with an Overweight at Wells Fargo; tgt $235

  • United Rentals (URI) initiated with an Overweight at Wells Fargo; tgt $425


Upcoming Events:

  • Econ Data:

  • 10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for March (Briefing.comConsensus 62.5; Prior 62.8)


  • Earnings:

  • Monday (Mar 7)

  • Morning: CIEN SQSP

  • Afternoon: MASS AVDX ROVR TDUP


  • Tuesday (Mar 8)

  • Morning: DM DKS OLPX WOOF STVN

  • Afternoon: ABM BMBL CASY CRCT DV FIGS GWRE MDB SFIX SUMO WTI YEXT


  • Wednesday (Mar 9)

  • Morning: CPB DSEY EBIX KFY OTLY REVG PLCE THO UNFI VRA VERX

  • Afternoon: ASAN CVGW BASE CRWD FNV BEKE MQ


  • Thursday (Mar 10)

  • Morning: BZUN CLVT DCBO AG GCO JD LTH PTLO THRY UP

  • Afternoon: AOUT BLNK CMTL DOCU LOCO LZ LFST MLNK AVO FIZZ ORCL RRGB RIVN SHLS ULTA WPM ZUMZ


  • Friday (Mar 11)

  • Morning: GENI PLXP

  • Afternoon: BLDP




Asia & Europe detail:

Asia: Nikkei -2.1%, Hang Seng -1.6%, Shanghai Composite +0.4%

Equity indices in the Asia-Pacific region ended the week on a mixed note. Standard & Poor's said that the risk of corporate defaults in China remains elevated this year. South Korea's exports through the first ten days of March were up 14.9% yr/yr with chip exports growing 28.5%. South Korea reported its 21st consecutive monthly Current Account surplus. Japan's Finance Minister Suzuki said that additional economic stimulus is not being considered at this time.

  • In economic data:

  • China's February new loans CNY1.23 trln (expected CNY1.485 trln; last CNY3.98 trln), February Outstanding Loan Growth 11.4% yr/yr (expected 11.5%; last 11.5%), and February total social financing CNY1.19 trln (expected CNY2.215 trln; last CNY6.17 trln)

  • Japan's January Household Spending -1.2% m/m (expected -3.0%; last 0.2%); 6.9% yr/yr (expected 3.6%; last -0.2%). Q1 BSI Large Manufacturing Conditions -7.6 (expected 8.2; last 7.9)

  • South Korea's January Current Account surplus $1.81 bln (last surplus of $6.06 bln)

  • New Zealand's February Business NZ PMI 53.6 (last 52.3) and February FPI -0.1% m/m (last 2.7%)


---Equity Markets---

  • Japan's Nikkei: -2.1% (-3.2% for the week)

  • Hong Kong's Hang Seng: -1.6% (-6.2% for the week)

  • China's Shanghai Composite: +0.4% (-4.0% for the week)

  • India's Sensex: +0.2% (+2.2% for the week)

  • South Korea's Kospi: -0.7% (-1.9% for the week)

  • Australia's ASX All Ordinaries: -1.0% (-0.8% for the week)

---FX---

  • USD/JPY: +0.7% to 116.89

  • USD/CNH: +0.3% to 6.3430

  • USD/INR: UNCH at 76.33

Europe: DAX +3.6%, FTSE +1.6%, CAC +2.6%

Major European indices are looking for a higher finish to the week. EU Commission President Von der Leyen is reportedly planning to present a plan in mid-May for eliminating dependence on energy from Russia by 2027. Dutch Prime Minister Rutte said that reviewing Ukraine's bid for EU accession may take years. European Central Bank policymaker Centeno said that monetary policy must shift to a more neutral position, but it should be done at a gradual rate.

  • In economic data:

  • Germany's February CPI 0.9% m/m, as expected (last 0.4%); 5.1% yr/yr, as expected (last 4.9%)

  • U.K.'s January GDP 0.8% m/m (expected 0.2%; last -0.2%); 10.0% yr/yr (expected 9.3%; last 6.0%). January Construction Output 1.1% m/m (expected 0.5%; last 2.0%); 9.9% yr/yr (expected 9.2%; last 7.4%). January Industrial Production 0.7% m/m (expected 0.1%; last 0.3%); 2.3% yr/yr (expected 1.9%; last 0.4%). January Manufacturing Production 0.8% m/m (expected 0.2%; last 0.2%); 3.6% yr/yr (expected 3.1%; last 1.3%). January trade deficit GBP26.50 bln (expected deficit of GBP12.60 bln; last deficit of GBP12.35 bln)

  • Spain's February CPI 0.8% m/m (expected 0.6%; last -0.4%); 7.6% yr/yr (expected 7.4%; last 6.1%). February Consumer Confidence 89.8 (last 89.3)


---Equity Markets---

  • STOXX Europe 600: +2.0% (+3.2% week-to-date)

  • Germany's DAX: +3.6% (+6.3% week-to-date)

  • U.K.'s FTSE 100: +1.6% (+3.2% week-to-date)

  • France's CAC 40: +2.6% (+5.1% week-to-date)

  • Italy's FTSE MIB: +2.7% (+4.6% week-to-date)

  • Spain's IBEX 35: +2.2% (+6.9% week-to-date)

---FX---

  • EUR/USD: +0.3% to 1.1022

  • GBP/USD: +0.3% to 1.3117

  • USD/CHF: +0.3% to 0.9


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