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11/07/23 Briefing


The S&P 500 futures are up 8 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 38 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 40 points and are trading 0.1% above fair value.

The stock market is poised for a modestly higher open, carrying over upside momentum from yesterday's broad rally. Some of the mega caps are bouncing back from losses registered yesterday, boosting the broader market. 

Market participants remain in wait-and-see mode ahead of the June Consumer Price Index tomorrow at 8:30 a.m. ET

U.S. economic data today was limited to the NFIB Small Business Optimism Survey for June, which rose to 91.0 from 89.4 in May.

Separately, the People's Bank of China announced a continuation of policies aimed at maintaining a stable and healthy development of the real estate market until the end of 2024.

In corporate news:

  • Microsoft (MSFT 332.01, +0.18, +0.1%): to eliminate more jobs, according to CNBC

  • Uber (UBER 42.71, -0.07, -0.2%): CFO Nelson Chai plans to leave the company, according to Bloomberg

  • Iovance Biotherapeutics (IOVA 7.75, -1.04, -11.8%): prices offering of 20.0 mln shares of common stock at $7.50 per share

  • T-Mobile (TMUS 139.38, +1.04, +0.8%): Goldman Sachs named the stock a top pick and reiterated its Buy rating

  • Zillow (ZG 48.70, +2.10, +4.5%): upgraded to Overweight from Neutral at Piper Sandler

  • Amazon (AMZN 128.05, +0.92, +0.7%): Prime Day has begun; Amazon to challenge EU digital rules, according to FT

  • JPMorgan (JPM 146.80, +1.65, +1.1%): Jefferies upgraded to Buy from Hold

  • NVIDIA (NVDA 424.90, +3.10, +0.7%): KeyBanc upped price target to $550 from $500 and maintained Overweight rating

  • 3M (MMM 99.10, +1.91, +2.0%): upgraded to Neutral from Underperform at BofA Securities

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a higher note. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: +1.0%, China's Shanghai Composite: +0.6%, India's Sensex: +0.4%, South Korea's Kospi: +1.7%, Australia's ASX All Ordinaries: +1.5%.

  • In economic data:

  • China's June New Loans CNY3.05 trln (expected CNY2.337 trln; last CNY1.36 trln) and total social financing CNY4.22 trln (expected CNY3.00 trln; last CNY1.56 trln)

  • Australia's June NAB Business Survey 9 (expected 8; last 8) and NAB Business Confidence 0 (expected -1; last -3)

  • In news:

  • The People's Bank of China announced a continuation of policies aimed at maintaining a stable and healthy development of the real estate market until the end of 2024.

  • FT reported that China will announce rules for controlling content provided by artificial intelligence services.

  • The Reserve Bank of New Zealand will hold a policy meeting tonight, but the market does not expect the official cash rate to be changed from the current 5.50%.

  • Major European indices trade in positive territory while the U.K.'s FTSE (-0.1%) underperforms amid weakness in financials and select consumer names. STOXX Europe 600: +0.5%, Germany's DAX: +0.5%, U.K.'s FTSE 100: -0.1%, France's CAC 40: +1.0%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: +0.4%.

  • In economic data:

  • Eurozone's July ZEW Economic Sentiment -12.2 (expected -10.2; last -10.0)

  • Germany's July ZEW Economic Sentiment -14.7 (expected -10.5; last -8.5) and July ZEW Current Conditions -59.5 (expected -60.0; last -56.5). June CPI 0.3% m/m, as expected (last -0.1%); 6.4% yr/yr, as expected (last 6.1%)

  • U.K.'s May Average Earnings Index + Bonus 6.9% yr/yr (expected 6.8%; last 6.7%), May three-month employment change 102,000 (expected 125,000; last 250,000), and May Unemployment Rate 4.0% (expected 3.8%; last 3.8%). June claimant count change 25,700 (expected -8,600; last -22,500)

  • Italy's May Industrial Production 1.6% m/m (expected 0.7%; last -2.0%); -3.7% yr/yr (expected -4.5%; last -7.4%)

  • In news:

  • ZEW Economic Sentiment surveys for Germany and the eurozone weakened in their respective July readings with Germany's survey falling to a level not seen since December.

  • ZEW economists expect additional deterioration by the end of the year due to high short-term interest rates.

  • A couple of ECB policymakers spoke about persistently high inflation.

  • The NATO summit began in Lithuania today.

 

U.S. equity futures:

  • S&P 500 Futures: +9 @ 4,418

  • DJIA Futures: +43 @ 33,987

  • Nasdaq 100 Futures: +39 @ 15,085

Overseas:

  • Europe: DAX +0.5%, FTSE -0.1%, CAC +1.0%

  • Asia: Nikkei UNCH, Hang Seng +1.0%, Shanghai Composite +0.6%

Commodities:

  • Crude Oil +0.54 @ 73.53

  • Nat Gas +0.041 @ 2.71

  • Gold +10.85 @ 1941.85

  • Silver +0.013 @ 23.358

  • Copper +0.0043 @ 3.7888


 

Earnings/Guidance:

  • Air Lease (AL) provides Q2 updates; Aircraft sales for the quarter totaled approximately $600 mln

  • AirSculpt Technologies (AIRS) sees Q2 revs above consensus; reaffirms FY23 revs outlook

  • APi Group (APG) provides preliminary second quarter 2023 results

  • Associated Capital Group (AC) reports Q2 book value of $41.35 to $41.55 per share

  • Choice Hotels (CHH) provides business update; reaffirms FY23 outlook

  • E2open (ETWO) beats by $0.02, revs in-line; reaffirms FY24 rev outlook

  • Endeavour Silver (EXK) Reports Q2 2023 Production Results; In-Line with Annual Guidance

  • Freightos Limited (CRGO) announces plan for operational efficiency and cost reduction; reducing operating loss and raising FY23 Adjusted EBITDA outlook on lower forecasted revenue

  • Gatos Silver (GATO) Reports Q2 2023 Production Results

  • New Gold (NGD) Reports Strong Second Quarter Operational Results

  • PriceSmart (PSMT) beats by $0.09 (two ests), reports revs in-line (single est), comps of +5.8%; authorizes $75 mln for repurchases

  • Terreno Realty announced (TRNO) quarterly operating, investment and capital markets activity

  • WD-40 (WDFC) beats by $0.16, beats on revs; reaffirms FY23 EPS guidance, revs guidance; approves new 50 mln share buyback plan

News:

  • China signaled more economic support is coming, according to Bloomberg

  • President Biden issues statement on President Erdogan's commitment to advance Sweden's NATO accession process

  • 4D Molecular Therapeutics (FDMT) and Astellas (ALPMY) enter into license agreement to use 4DMT's proprietary intravitreal R100 Vector for rare ophthalmic targets

  • ADC Therapeutics (ADCT) announces voluntary pause of enrollment in the phase 2 LOTIS-9 clinical trial of ZYNLONTA and rituximab in unfit or frail previously untreated DLBCL patients

  • ADT (ADT) expects to incur additional impairment charges of $145-185 mln for its Solar reporting unit

  • Amazon (AMZN) Prime Day has begun

  • Amazon (AMZN) to challenge EU digital rules, according to Financial Times

  • AMD (AMD) and Intel (INTC) are trying to compete with Nvidia (NVDA) on artificial intelligence, according to the Wall Street Journal

  • Ameresco (AMRC) signs contract for a battery energy storage asset in partnership with United Power, an electric cooperative serving Colorado's northern Front Range

  • AssetMark (AMK) issues its June AMK Report; platform assets increased 22.8% yr/yr to $100.8 bln, net flows up 62.9% to $624 mln

  • BeiGene (BGNE) Switzerland and Novartis (NVS) entered into a mutual termination and release agreement; BeiGene Switzerland regained full, global rights to develop, manufacture and commercialize ociperlimab

  • Braskem SA (BAK): Petrobras (PBR) begins due diligence on Braskem

  • Bristol-Myers (BMY): Opdivo in combination with cisplatin-based chemotherapy shows overall survival and progression-free survival benefit for cisplatin-eligible patients with unresectable or metastatic urothelial carcinoma in the phase 3 checkmate -901 trial

  • Casella Waste (CWST) and Waga Energy sign commercial agreement to develop renewable natural gas facilities at three Casella landfills

  • Cheniere Energy (LNG): China secures more liquified natural gas deals, according to Nikkei

  • Coherent (COHR) believes export restriction of gallium and germanium from China will have minimal to no impact on sales

  • Digital World Acquisition Corp (DWAC) named Eric Swider as its permanent CEO, effective July 6; previously served as Interim CEO since March 19

  • Evotec SE (EVO) and Bristol Myers Squibb (BMY) enter licence agreement within neuroscience partnership

  • FEMSA (FMX) CEO Daniel Rodrguez Cofr will step down from his role due to medical reasons; Jos Antonio Fernndez Carbajal will assume the role of acting CEO on an interim basis

  • ICHOR Corporation (ICHR) promotes Greg Swyt to CFO, effective as of August 30, 2023

  • Innate Pharma (IPHA) reports first patient dosed in SAR'514 / IPH6401 Phase 1/2 Clinical Trial in Relapsed/Refractory Multiple Myeloma

  • Latch (LTCH) to reduce its U.S. and Taiwan-based workforce by approximately 59% by November 1, 2023

  • MDU Resources (MDU) pursuing tax-advantaged separation of construction services business

  • Meta Platforms (META): Third party estimates show Twitter's traffic is falling while 100 million people signed up with Threads, according to the Wall Street Journal

  • Microsoft (MSFT) to eliminate more jobs, according to CNBC

  • NanoString Technologies (NSTG): Delaware District Court permits NanoString's counterclaims that 10x Genomics and Harvard violated the antitrust laws

  • NASDAQ (NDAQ) reports June 2023 volumes; U.S. equity options volume up 0.4% from May to 270 mln contracts

  • Nutrien (NTR) announces potash production curtailments due to port of Vancouver strike

  • Payoneer (PAYO) to reduce its workforce by approximately 9%

  • Prothena (PRTA): BMY exercises option to obtain worldwide commercial rights for PRX005 and will pay Prothena $55 mln

  • PVH (PVH) details costs related to streamlining the organization; expects to take additional actions in Q3

  • Reata Pharmaceuticals (RETA) confirmed the closing and funding of the Tranche B Loan that occurred after the FDA's approval of the prior submission

  • REGENXBIO (RGNX) announces new interim data from the Phase II AAVIATE and ALTITUDE trials of ABBV-RGX-314 suprachoroidal delivery in wet AMD and diabetic retinopathy

  • Roche Hldg (RHHBY) receives EC approval for fixed-duration Columvi for people with relapsed or refractory diffuse large B-cell lymphoma

  • Silence Therapeutics (SLN) Achieves $4 million in research milestone payments from Hansoh Pharma collaboration

  • Uber (UBER) CFO Nelson Chai plans to leave the company, according to Bloomberg

  • Verastem (VSTM) promotes Dan Paterson to President and CEO

  • Viridian (VRDN) announces "positive" data from ongoing phase 1/2 trial evaluating VRDN-001 in patients with chronic Thyroid Eye Disease

  • Walker & Dunlop (WD) President and Board member, Howard Smith, announces retirement

M&A:

  • Dominion Energy (D) to sell its 50% noncontrolling limited partner interest in Cove Point LNG for $3.5 bln to Berkshire Hathaway Energy

  • Galata Acquisition Corp (GLTA) and Marti complete business combination

  • Laboratory Corp (LH) entered into an agreement with Legacy Health to acquire select assets of its outreach laboratory business; terms of the transactions were not disclosed

  • nVent Electric (NVT) acquired TEXA Industries; no financial terms disclosed

  • Ring Energy (REI) announces accretive all cash asset acquisition strategically expanding core operating area; provides Q3 and FY23 guidance metrics

  • Rockwell Medical (RMTI) acquires Hemodialysis Concentrates Business from Evoqua Water Technologies; raises FY23 revs guidance

  • Stratasys (SSYS) confirms that Nano Dimension (NNDM) increases offer price of its unsolicited partial tender offer to acquire Stratasys ordinary shares not already owned by Nano to $24.00 from $20.05 per share in cash

  • TopBuild (BLD) to acquire all of the assets of Best Insulation, a residential insulation installer

  • TransAlta (TAC) to acquire TransAlta Renewables Inc. to simplify structure and enhance strategic position

  • Whirlpool (WHR): The UK CMA is investigating the anticipated acquisition by Arelik of Whirlpool Corporation's EMEA major domestic appliances business

Syndicate:

  • Iovance Biotherapeutics (IOVA) prices offering of 20.0 mln shares of common stock at $7.50 per share

  • Ivanhoe Electric (IE) files mixed shelf securities offering

  • KB Home (KBH) files mixed shelf securities offering

IPOs:

  • Expected to Price:

  • Apogee Therapeutics (Nasdaq: APGE): The biotech company developing biologics for treatment of atopic dermatitis, COPD, and related inflammatory and immunology indications is expected to price its 15.6 M share IPO between $15-$17.

Gapping Up/Down

  • Gapping up:

  • ETWO +9.3%, FDMT +6.6%, WDFC +3.5%, SSYS+2.1%, JANX +2.1%, PAYO +2.1%, MDU +2%, ABUS+1.8%, NDAQ +1.6%, PVH +1%, AMRC +0.7%, BAK+0.7%, COHR +0.6%

  • Gapping down:

  • VRDN -11.8%, IOVA -11.4%, PSMT -4.1%, ADT -2.8%, TXG -2.7%, AIRS -2.7%, NSTG -2%, IPHA -1.9%, IE-1.3%, LTCH -0.8%, LPG -0.8%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • JPMorgan Chase (JPM) upgraded to Buy from Hold at Jefferies; tgt raised to $165

  • Rockwell Automation (ROK) upgraded to Peer Perform from Underperform at Wolfe Research

  • Vale S.A. (VALE) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $17

  • Downgrades:

  • Alcoa (AA) downgraded to Underperform from Peer Perform at Wolfe Research; tgt $25

  • Century Aluminum (CENX) downgraded to Underperform from Peer Perform at Wolfe Research; tgt $6

  • Eaton (ETN) downgraded to Peer Perform from Outperform at Wolfe Research

  • Hancock Whitney (HWC) downgraded to Hold from Buy at Jefferies; tgt lowered to $42

  • JetBlue Airways (JBLU) downgraded to Underperform from In-line at Evercore ISI; tgt $8

  • Teck Resources (TECK) downgraded to Peer Perform from Outperform at Wolfe Research

  • Truist (TFC) downgraded to Hold from Buy at Jefferies; tgt lowered to $32

  • Zions Bancorp (ZION) downgraded to Hold from Buy at Jefferies; tgt lowered to $30

  • Others:

  • Commercial Metals (CMC) initiated with a Buy at UBS; tgt $63

  • Gambling.comGroup Ltd. (GAMB) initiated with a Buy at ROTH MKM; tgt $13

  • Havertys (HVT) initiated with a Buy at The Benchmark Company; tgt $41

  • i3 Verticals (IIIV) initiated with a Buy at Berenberg; tgt $30

  • MicroStrategy (MSTR) assumed with a Buy at BTIG Research; tgt $490

  • Newell Brands (NWL) initiated with a Buy at Canaccord Genuity; tgt $13

  • Payoneer (PAYO) initiated with a Buy at Berenberg; tgt $7

Econ Data:

  • 06:00 ET: NFIB Small Business Optimism for June (Briefing.comConsensus NA; Prior 89.4)

Earnings:

  • Monday (July 10)

  • Morning: HELE

  • Afternoon: PSMT WDFC

  • Tuesday (July 11)

  • Morning: None

  • Afternoon: None

  • Wednesday (July 12)

  • Morning: ANGO

  • Afternoon: MLKN

  • Thursday (July 13)

  • Morning: CTAS CAG DAL FAST PEP PGR

  • Afternoon: WAFD

  • Friday (Jul 14) 

  • Morning: BLK C ERIC JPM STT UNH WFC

  • Afternoon: None

 

Asia & Europe detail:

Asia: Nikkei UNCH, Hang Seng +1.0%, Shanghai Composite +0.6%

Equity indices in the Asia-Pacific region ended Tuesday on a higher note. The People's Bank of China announced a continuation of policies aimed at maintaining a stable and healthy development of the real estate market until the end of 2024. FT reported that China will announce rules for controlling content provided by artificial intelligence services. The Reserve Bank of New Zealand will hold a policy meeting tonight, but the market does not expect the official cash rate to be changed from the current 5.50%.

  • In economic data:

  • China's June New Loans CNY3.05 trln (expected CNY2.337 trln; last CNY1.36 trln) and total social financing CNY4.22 trln (expected CNY3.00 trln; last CNY1.56 trln)

  • Australia's June NAB Business Survey 9 (expected 8; last 8) and NAB Business Confidence 0 (expected -1; last -3)

---Equity Markets---

  • Japan's Nikkei: UNCH

  • Hong Kong's Hang Seng: +1.0%

  • China's Shanghai Composite: +0.6%

  • India's Sensex: +0.4%

  • South Korea's Kospi: +1.7%

  • Australia's ASX All Ordinaries: +1.5%

---FX---

  • USD/JPY: -0.7% to 140.31

  • USD/CNH: -0.3% to 7.2052

  • USD/INR: -0.3% to 82.37

 

Europe: DAX +0.5%, FTSE -0.1%, CAC +1.0%

Major European indices trade in positive territory while the U.K.'s FTSE (-0.1%) underperforms amid weakness in financials and select consumer names. ZEW Economic Sentiment surveys for Germany and the eurozone weakened in their respective July readings with Germany's survey falling to a level not seen since December. ZEW economists expect additional deterioration by the end of the year due to high short-term interest rates. A couple of ECB policymakers spoke about persistently high inflation. The NATO summit began in Lithuania today.

  • In economic data:

  • Eurozone's July ZEW Economic Sentiment -12.2 (expected -10.2; last -10.0)

  • Germany's July ZEW Economic Sentiment -14.7 (expected -10.5; last -8.5) and July ZEW Current Conditions -59.5 (expected -60.0; last -56.5). June CPI 0.3% m/m, as expected (last -0.1%); 6.4% yr/yr, as expected (last 6.1%)

  • U.K.'s May Average Earnings Index + Bonus 6.9% yr/yr (expected 6.8%; last 6.7%), May three-month employment change 102,000 (expected 125,000; last 250,000), and May Unemployment Rate 4.0% (expected 3.8%; last 3.8%). June claimant count change 25,700 (expected -8,600; last -22,500)

  • Italy's May Industrial Production 1.6% m/m (expected 0.7%; last -2.0%); -3.7% yr/yr (expected -4.5%; last -7.4%)

---Equity Markets---

  • STOXX Europe 600: +0.5%

  • Germany's DAX: +0.5%

  • U.K.'s FTSE 100: -0.1%

  • France's CAC 40: +1.0%

  • Italy's FTSE MIB: +0.5%

  • Spain's IBEX 35: +0.4%

---FX---

  • EUR/USD: UNCH at 1.1003 

  • GBP/USD: +0.4% to 1.2913

  • USD/CHF: -0.4% to 0.8818

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