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11/04/22 Briefing


The S&P 500 futures trade 22 points, or 0.5%, below fair value as Treasury yields continue to push higher in front of a consequential week for economic data and earnings reports. The tech-heavy Nasdaq 100 futures underperform and trade 1.1% below fair value.

The 2-yr yield is currently up five basis points to 2.57%, and the 10-yr yield is up another four basis points to 2.76% after rising 34 basis points last week. The rapid rise in long-term rates has undercut the growth stocks within the Nasdaq for valuation reasons.

Other negative factors for sentiment include record-high COVID-19 cases in Shanghai that has kept residents in lockdown mode, uncertainty surrounding France's presidential election runoff on April 24, the Russia-Ukraine situation, and a recognition that the S&P 500 closed below its 200-day moving average (now 4494) last Friday.

Interestingly, WTI crude futures have slipped below $94 per barrel ($93.66, -4.60, -4.7%) amid the Shanghai lockdowns, the joint effort among IEA nations to release oil from strategic reserves, and some weakening price momentum.

There's no economic data of note scheduled for today, but investors will receive key CPI data for March on Tuesday, PPI data for March on Wednesday, and Retail Sales for March on Thursday. On a related note, China reported hotter than expected inflation figures for March on Monday.

As for earnings, JPMorgan Chase (JPM 133.79, +0.30, +0.2%) will kick off the Q1 earnings reporting season prior to Wednesday's open. As a reminder, the market will be closed on Good Friday.

In U.S. Corporate news:

  • AT&T (T 18.64, +0.42): +2.3% after The Wall Street Journal reported that the company is aiming to increase prices and reduce costs. On a related note, AT&T and Discovery closed the WarnerMedia transaction.

  • Twitter (TWTR 45.21, -1.02): -2.2% amid word from CEO Parag Agrawal that Elon Musk has decided against joining TWTR's Board of Directors. On a related note, Barron's issued a cautious view on the stock.

  • Sailpoint Technologies (SAIL 64.50, +14.91): +30.1% after confirming an agreement to be acquired by Thoma Bravo for $6.9 billion, or $65.25 per share, in cash.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a lower note. Japan's Nikkei: -0.6% Hong Kong's Hang Seng: -3.0% China's Shanghai Composite: -2.6% India's Sensex: -0.8% South Korea's Kospi: -0.3% Australia's ASX All Ordinaries: UNCH.

  • In economic data:

  • China's March CPI 0.0% m/m (expected -0.1%; last 0.6%); 1.5% yr/yr (expected 1.2%; last 0.9%). March PPI 8.3% yr/yr (expected 7.9%; last 8.8%). March new loans CNY3.13 trln (expected CNY2.675 trln; last CNY1.23 trln) and March total social financing CNY4.65 trln (expected CNY3.70 trln; last CNY1.19 trln)

  • New Zealand's March Electronic Card Retail Sales -1.3% m/m (last -7.8%); -0.5% yr/yr (last 1.1%)


  • In news:

  • China reported hotter than expected inflation figures for March but that did not stop speculation about the People's Bank of China lowering lending rates soon.

  • The coronavirus case count in Shanghai reportedly continued climbing.

  • Vehicle sales in China were down 11.0% yr/yr in March.

  • South Korea's exports through the first ten days of April were up 3.0% yr/yr with chip exports showing 14.2% yr/yr growth.

  • The Reserve Bank of Australia warned that housing prices could fall about 15% over the next two years as the cash rate is increased.

  • Australia will hold a federal election on May 21with Prime Minister Morrison's party currently trailing in the polls.



  • Major European indices trade on a mostly lower note while France's CAC (+0.8%) shows relative strength. STOXX Europe 600: -0.2% Germany's DAX: -0.4% U.K.'s FTSE 100: -0.4% France's CAC 40: +0.8% Italy's FTSE MIB: UNCH Spain's IBEX 35: UNCH.

  • In economic data:

  • U.K.'s February GDP 0.1% m/m (expected 0.3%; last 0.8%); 9.5% yr/yr, as expected (last 10.5%). February Industrial Production -0.6% m/m (expected 0.3%; last 0.7%); 1.6% yr/yr (expected 2.1%; last 3.0%). February Manufacturing Production -0.4% m/m (expected 0.3%; last 0.9%); 3.6% yr/yr (expected 3.0%; last 5.3%). February Construction Output -0.1% m/m (expected 0.4%; last 1.6%); 6.1% yr/yr (expected 6.8%; last 10.0%). February trade deficit GBP20.59 bln (expected deficit of GBP20.00 bln; last deficit of GBP23.90 bln)


  • In news:

  • A runoff election between incumbent French President Macron and challenger Marine Le Pen is scheduled for April 24.

  • S&P lowered Russia's rating to Selective Default after the country arranged to make bond payments in rubles.

  • Austria's central bank raised its 2022 CPI forecast to 5.6% from 5.3%, expecting the rate to peak at 7.3% this month.

  • The European Central Bank will release its latest policy statement on Thursday.



U.S. equity futures:

  • S&P 500 Futures: -27 @ 4,461

  • DJIA Futures: -118 @ 34,603

  • Nasdaq 100 Futures: -148 @ 14,179

Overseas:

  • Europe: DAX -0.4%, FTSE -0.4%, CAC +0.8%

  • Asia: Nikkei -0.6%, Hang Seng -3.0%, Shanghai Composite -2.6%

Commodities:

  • Crude Oil -4.76 @ 93.50

  • Nat Gas +0.077 @ 6.355

  • Gold +15.60 @ 1961.20

  • Silver +0.575 @ 25.398

  • Copper -0.0533 @ 4.6717

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Aerie Pharma (AERI) in slide presentation sees FY22 glaucoma net product revenues of $130-140 mln; sees FY22 net cash burn of $86-88 mln

  • ASE Technology (ASX) reports March revs increased 23.8% yr/yr; Q1 revs above consensus

  • Endeavour Silver (EXK) reported first quarter 2022 production of 1,314,955 silver ounces (oz) and 8,695 gold oz, for silver equivalent production of 2.0 million oz.

  • Fortuna Silver Mines (FSM) reports Q1 production of 103,098 Gold Equivalent Ounces

  • Lowe's (LOW) appoints Brandon Sink as CFO and Executive Vice President; also reaffirms FY23 guidance

  • Teck Resources (TECK) provides Q1 steelmaking coal sales and pricing update


  • General News:

  • President Biden signs bill to ban energy imports from Russia & end normal trade relations with Russia

  • Russia will soon likely conduct a major offensive in eastern Ukraine, according to the New York Times

  • French President Emmanuel Macron will face Marine Le Pen in second round of French election on April 24.Vote was 28.5% and 24.2% respectively, according to the New York Times

  • China is speeding up its buildup of nuclear weapons amid concerns of conflict with US, according to the Wall Street Journal

  • Coronavirus cases in Shanghai hit another record as residents under lockdown are angry because of food shortages, according to Financial Times

  • EU will debate this week how to lower dependence on Russian oil, according to the Wall Street Journal

  • Cleveland Fed President Loretta Mester says inflation will remain above 2% into 2023, according to CBS News

  • White House announced final rule to rein in the proliferation of 'ghost guns'

  • 2seventy bio (TSVT) presents new preclinical data on bbT369, an investigational dual-targeting gene-edited CAR T cell therapy, at the AACR Annual Meeting

  • Actinium Pharmaceuticals (ANTM) Presents Preclinical Data at AACR Showing HER3 Targeted Radiotherapy Combined with the CD47 Immunotherapy Magrolimab Increases the Anti-tumor Effect

  • Affimed (AFMD) Presents Updated Clinical Data from Phase 1/2 Study of AFM13 Precomplexed with Cord Blood-Derived NK Cells at AACR Annual Meeting

  • Amazon (AMZN) wants rerun of NYC union vote, according to the New York Post

  • AMERCO (UHAL) announces special cash dividend on its common stock of $0.50/share

  • Ameresco (AMRC) provides SCE project update

  • Amgen (AMGN) reports Lumakras (Sotorasib) CodeBreak 100 study shows two-year overall survival of 32.5% in patients with KRAS G12C-mutated advanced non-small cell lung cancer

  • Apple (AAPL): EU to send another antitrust charge to Apple related to case that Spotify (SPOT) brought to their attention over music streaming rights, according to Reuters

  • AstraZeneca (AZN): Japan cancelled 40 mln AZN COVID-19 vaccine dose purchase, according to Reuters

  • AT&T (T) aiming to increase prices and reduce costs, according to the Wall Street Journal

  • BeiGene (BGNE) reports data for BRUKINSA that demonstrates superior overall response rate versus Ibrutinib in final response analysis of ALPINE Trial

  • Bicycle Therapeutics (BCYC) announces interim Phase I results from the Phase I/II trial of BT8009

  • BioNTech (BNTX) Presents Positive Preliminary Phase 1/2 Data for First-in-Class CAR-T Program BNT211 at AACR

  • BioNTech (BNTX) and Matinas BioPharma (MTNB) announce exclusive research collaboration for mRNA formats and Matinas' proprietary LNC platform technology

  • BMW (BMWYY) expects chip shortages to last until 2023, according to Reuters

  • Cellectis (CLLS) presents preclinical data from its first allogeneic dual CAR T-cell product candidate UCART20x22 for patients with relapsed or refractory Non-Hodgkin Lymphoma at the American Association for Cancer Research (AACR) 2022 Annual Meeting

  • ChampionX (CHX) will enact a supply surcharge on products shipped to its Chemical Technologies customers

  • EHang (EH) received a pre-order for 100 units of EH216 AAVs from Prestige Aviation

  • Enjoy Technology (ENJY) CFO Fareed Khan decided to depart to pursue other opportunities; Cal Hoagland, an experienced CFO, will join Enjoy as Interim Chief Financial Officer

  • Entegris (ENTG) COO Todd Edlund to retire after nearly 30 years of service

  • Ericsson (ERIC) suspends business in Russia indefinitely and records provision in Q1 2022

  • Eton Pharmaceuticals (ETON) receives FDA approval of Cysteine Hydrochloride Injection

  • Exscientia (EXAI) Presents Three Posters Demonstrating Potential of Precision Medicine Platform in Drug Discovery at AACR

  • Fannie Mae (FNMA) Board Chair Sheila Bair plans to resign effective May 1, board elects Michael Heid to succeed her

  • GeoPark (GPRK) provides Q1 operations update

  • Gracell Biotechnologies (GRCL) to present data at AACR Annual Meeting 2022 showcasing early first-in-human results for GC502 in r/r B-ALL

  • HYZON Motors (HYZN) sells 18 trucks to Hylane GmbH

  • JetBlue (JBLU) and Alaska (ALK) lower summer schedules, according to the Wall Street Journal

  • Kinnate Biopharma (KNTE) highlights data from its lead RAF candidate, KIN-2787, and RAF clinico-genomics landscape studies at the American Association for Cancer Research Annual Meeting

  • MediciNova (MNOV) announces plans for a Phase 2 trial of MN-001 in NAFLD with type 2 diabetes mellitus and hypertriglyceridemia

  • Natera (NTRA) to present data from the BEATRICE and I-SPY2 trials in early-stage TNBC and HR+/HER2- breast cancer

  • NeoGenomics (NEO) expands its global strategic partnership initiatives with Biognosys AG on multiple next generation proteomics solutions supporting Biopharma R&D

  • NetEase (NTES): China approves first batch of new video game licenses since July, according toBloomberg

  • New Found Gold Corp. (NFGC) Intersects 21.12 g/t Au Over 7.20m, 79.81 g/t Au Over 3.00m & 119.45 g/t Over 2.40m at Keats Zone & Identifies New High-Grade Near Surface Mineralization

  • Nielsen (NLSN): The WindAcre Partnersh affirms increased active stake to 18.9% following the purchase of ~31.6 mln shares (transaction dates 4/6-4/8)

  • Nio (NIO) has suspended production amid supply chain issues, according to Reuters

  • NVIDIA (NVDA) board asks stockholders to approve a Charter amendment to increase the number of authorized shares from 4 bln to 8 bln shares

  • Pfizer (PFE) announced that David Denton will join the Company as CFO and Executive Vice President effective May 2, 2022

  • ProAssurance (PRA) announces that W. Stancil Starnes, Executive Chairman of the Board of Directors, will retire from the ProAssurance board at the end of his current term and is not standing for re-election

  • PyroGenesis (PYR) Canada CEO updates early warning report

  • Shopify (SHOP) plans 10:1 split of A and B shares, details "Founder share" aimed at making Tobi Ltke a 40% shareholder

  • Spectrum Pharma (SPPI) announces that the resubmitted Biologics License Application for eflapegrastim has been accepted for filing

  • SQZ Biotechnologies (SQZ) presents new eAPC preclinical data demonstrating that multiplexed mrna engineering of immune cells increases killer T cell activity in vivo

  • Surface Oncology (SURF) Presents New SRF388 Data at the American Association for Cancer Research (AACR) Annual Meeting 2022

  • Target (TGT) has a new landing page on resale site, ThredUp, according to CNBC

  • Teleflex (TFX) launches UroLift System in Japan

  • TotalEnergies SE (TTE): Launch of Cameron LNG expansion to increase liquefied natural gas production

  • Triumph Group (TGI) awarded multi-year contract from Raytheon Technologies (RTX) for Next Generation Jammer Mid-Band pod

  • Twitter (TWTR): Elon Musk says anyone who signs up with Twitter Blue subscription should get an authentication checkmark and no ads

  • Twitter (TWTR) CEO Parag Agrawal says Elon Musk has decided against joining TWTR's Board of Directors

  • Universal Stainless/Alloy (USAP) reports liquid metal spill in Bridgeville, PA melt shop

  • Vaalco Energy (EGY) provides drilling update of the Avouma 3H-ST development well

  • Veru's (VERU) Novel COVID-19 Drug Candidate Reduces Deaths by 55% in Hospitalized Patients in Interim Analysis of Phase 3 Study; Independent Data Monitoring Committee Halts Study Early for Overwhelming Efficacy

  • Wallbox (WBX) commences construction at its Arlington manufacturing facility, the company's first U.S.-based EV charger manufacturing facility

  • Wells Fargo (WFC) Response to New York City Mayor Adams and Comptroller Lander


  • M&A:

  • AT&T (T) and Discovery close WarnerMedia transaction

  • Cornerstone Building Brands (CNR) divest its Coil Coatings Business for $500 mln

  • Dow (DOW) takes minority stake in consortium constructing LNG import terminal in Germany

  • Goldman Sachs (GS) acquires NN Investment Partners from NN Group N.V. for EUR 1.7 bln

  • Intl Game Tech. PLC (IGT) acquires iSoftBet for 160 mln

  • SailPoint (SAIL) confirms agreement to be acquired by Thoma Bravo for $6.9 bln; stockholders to receive $65.25 per share in cash


  • Syndicate:

  • Adaptimmune Therapeutics (ADAP) files for $400 mln mixed securities shelf offering

  • Alexco Resources (AXU) prices offering of 7,473,495 common shares at a price of $1.75 per share

  • Allot Comms (ALLT) files for 12,785,917 share offering by selling shareholder

  • Crescent Energy (CRGY) files for $75 mln common stock offering

  • NRx Pharmaceuticals (NRXP) files for 7,824,727 share common stock offering by selling shareholders

  • Quest Resource Hldgs (QRHC) files for $125 mln mixed securities shelf offering

  • Zhihu (ZH) files for ordinary share offering, no amount given


  • IPOs:

  • Expected to Price:

  • Applied Blockchain (Nasdaq: APLD): The developer of next-generation data centers is expected to price its 3.2 mln share IPO between $16.50-$20.50.

  • Excelerate Energy (NYSE: EE): The provider of flexible liquefied natural gas solutions to emerging markets is expected to price its 16.0 mln share IPO between $21-$24.



Gapping Up/Down

  • Gapping up:

  • VERU +33.3%, SAIL +26.8%, AFMD +15.1%, SURF+4.3%, FSM +2.7%, GRCL +1.7%, NTR +1.6%, TSVT+1.2%, CF +1.2%, AMRC +1%


  • Gapping down:

  • T -23.2%, NIO -8.4%, XPEV -6.8%, LI -5.4%, NRXP-4.2%, ZH -3.9%, ADAP -3.7%, NVDA -2.6%, ALLT-2.1%, CRGY -1.9%, TWTR -1.8%, LOW -0.9%, ASX-0.9%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Cameco (CCJ) upgraded to Outperform from Sector Perform at RBC Capital Mkts

  • ChampionX (CHX) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $30

  • EPAM Systems (EPAM) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $390

  • Essent Group (ESNT) upgraded to Overweight from Neutral at JP Morgan; tgt $47


  • Downgrades:

  • BioCryst Pharma (BCRX) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $14

  • C4 Therapeutics (CCCC) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $15

  • CatchMark Timber Trust (CTT) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $10

  • Citizens Financial Group (CFG) downgraded to Neutral from Buy at Citigroup

  • Commscope (COMM) downgraded to Underperform from Mkt Perform at Raymond James


  • Others:

  • Accolade (ACCD) initiated with an Underweight at Wells Fargo; tgt $9

  • Alibaba (BABA) assumed with a Buy at Goldman; tgt $185

  • Allego Holding B.V. (ALLG) initiated with an Outperform at Cowen; tgt $19

  • Baidu (BIDU) assumed with a Buy at Goldman; tgt $240

  • Bilibili (BILI) assumed with a Neutral at Goldman; tgt $35

  • GoodRx (GDRX) initiated with an Equal Weight at Wells Fargo; tgt $20

  • HealthEquity (HQY) initiated with an Overweight at Wells Fargo; tgt $95

  • iQIYI (IQ) assumed with a Neutral at Goldman; tgt $6.20

  • Kanzhun Limited (BZ) assumed with a Neutral at Goldman; tgt $37.50

  • Kingsoft Cloud (KC) assumed with a Neutral at Goldman; tgt $9.50

  • NetEase (NTES) assumed with a Buy at Goldman; tgt $132

  • OneConnect Financial (OCFT) assumed with a Neutral at Goldman; tgt $2.20

  • Pinduoduo (PDD) assumed with a Buy at Goldman; tgt $95

  • Sea Limited (SE) assumed with a Buy at Goldman; tgt $196

  • Tencent Music (TME) assumed with a Sell at Goldman; tgt $5.60

  • Weibo (WB) assumed with a Neutral at Goldman; tgt $37.50

  • Zhihu (ZH) assumed with a Neutral at Goldman; tgt $4.70


Upcoming Events:

  • Econ Data:

  • No economic data of note.


  • Earnings:

  • Tuesday (Apr 12)

  • Morning: ACI KMX


  • Wednesday (Apr 13)

  • Morning: BBBY BLK DAL FAST FRC JPM SJR

  • Afternoon: WAFD


  • Thursday (Apr 14)

  • Morning: ALLY C ERIC GS MS PNC PGR RAD STT TSM USB UNH WFC



Asia & Europe detail:

Asia: Nikkei -0.6%, Hang Seng -3.0%, Shanghai Composite -2.6%

Equity indices in the Asia-Pacific region began the week on a lower note. China reported hotter than expected inflation figures for March but that did not stop speculation about the People's Bank of China lowering lending rates soon. The coronavirus case count in Shanghai reportedly continued climbing. Vehicle sales in China were down 11.0% yr/yr in March. South Korea's exports through the first ten days of April were up 3.0% yr/yr with chip exports showing 14.2% yr/yr growth. The Reserve Bank of Australia warned that housing prices could fall about 15% over the next two years as the cash rate is increased. Australia will hold a federal election on May 21with Prime Minister Morrison's party currently trailing in the polls.

  • In economic data:

  • China's March CPI 0.0% m/m (expected -0.1%; last 0.6%); 1.5% yr/yr (expected 1.2%; last 0.9%). March PPI 8.3% yr/yr (expected 7.9%; last 8.8%). March new loans CNY3.13 trln (expected CNY2.675 trln; last CNY1.23 trln) and March total social financing CNY4.65 trln (expected CNY3.70 trln; last CNY1.19 trln)

  • New Zealand's March Electronic Card Retail Sales -1.3% m/m (last -7.8%); -0.5% yr/yr (last 1.1%)


---Equity Markets---

  • Japan's Nikkei: -0.6%

  • Hong Kong's Hang Seng: -3.0%

  • China's Shanghai Composite: -2.6%

  • India's Sensex: -0.8%

  • South Korea's Kospi: -0.3%

  • Australia's ASX All Ordinaries: UNCH

---FX---

  • USD/JPY: +0.9% to 125.45

  • USD/CNH: +0.2% to 6.3805

  • USD/INR: UNCH at 75.92

Europe: DAX -0.4%, FTSE -0.4%, CAC +0.8%

Major European indices trade on a mostly lower note while France's CAC (+0.8%) shows relative strength. A runoff election between incumbent French President Macron and challenger Marine Le Pen is scheduled for April 24.S&P lowered Russia's rating to Selective Default after the country arranged to make bond payments in rubles. Austria's central bank raised its 2022 CPI forecast to 5.6% from 5.3%, expecting the rate to peak at 7.3% this month. The European Central Bank will release its latest policy statement on Thursday.

  • In economic data:

  • U.K.'s February GDP 0.1% m/m (expected 0.3%; last 0.8%); 9.5% yr/yr, as expected (last 10.5%). February Industrial Production -0.6% m/m (expected 0.3%; last 0.7%); 1.6% yr/yr (expected 2.1%; last 3.0%). February Manufacturing Production -0.4% m/m (expected 0.3%; last 0.9%); 3.6% yr/yr (expected 3.0%; last 5.3%). February Construction Output -0.1% m/m (expected 0.4%; last 1.6%); 6.1% yr/yr (expected 6.8%; last 10.0%). February trade deficit GBP20.59 bln (expected deficit of GBP20.00 bln; last deficit of GBP23.90 bln)


---Equity Markets---

  • STOXX Europe 600: -0.2%

  • Germany's DAX: -0.4%

  • U.K.'s FTSE 100: -0.4%

  • France's CAC 40: +0.8%

  • Italy's FTSE MIB: UNCH

  • Spain's IBEX 35: UNCH

---FX---

  • EUR/USD: +0.3% to 1.0903

  • GBP/USD: UNCH at 1.3030

  • USD/CHF: UNCH at 0.9342

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