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11/12/23 Briefing

Updated: Dec 12, 2023


The S&P 500 futures are down 2 points and are trading 0.1% below fair value, the Nasdaq 100 futures are down 26 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 20 points and are trading 0.1% below fair value.

Pre-open action has been muted as market participants look ahead to some market-moving events this week, including Tuesday's November Consumer Price Index and Wednesday's FOMC rate decision. Market participants are also in a consolidation mindset following big gains since late October. 

There is no U.S. economic data of note today.

Treasury yields are moving higher. The 2-yr note yield is up three basis points to 4.77% and the 10-yr note yield is up three basis points to 4.28% ahead of today's $50 billion 3-yr Treasury note and $37 billion 10-yr Treasury note reopening with results at 11:30 a.m. ET and 1:00 p.m. ET, respectively.

In corporate news:

  • The Cigna Group (CI 293.01, +34.21, +13.2%): announces significant increase to share repurchase program of $10 billion; will consider bolt-on acquisitions; ends talks to acquire Humana; reaffirms FY23 outlook

  • Macy's (M 20.15, +2.76, +15.9%): Investor group offers to purchase Macy's for $5.8 bln, according to the WSJ

  • Boeing (BA 244.35, -0.35, -0.1%): names Stephanie Pope as executive vice president and chief operating officer, effective January 1, 2024

  • Sea Limited (SE 35.25, -4.79, -12.0%):  down in pre-market following Bloomberg report suggesting TikTok will invest $1.5 bln in a joint venture with GoTo Group

  • Occidental Petro (OXY 56.11, -0.36, -0.6%): enters into purchase agreement to acquire Midland-based oil and gas producer CrownRock for approximately $12.0 bln

  • AbbVie (ABBV 151.32, +2.04, +1.4%): upgraded to Buy from Neutral at Goldman

  • Best Buy (BBY 74.66, +1.59, +2.2%): upgraded to Buy from Hold at Jefferies

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: +1.5%, Hong Kong's Hang Seng: -0.8%, China's Shanghai Composite: +0.7%, India's Sensex: +0.2%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: +0.1%.

  • In economic data:

  • China's November CPI -0.5% m/m (expected -0.1%; last -0.1%); -0.5% yr/yr (expected -0.1%; last -0.2%). November PPI -3.0% yr/yr (expected -2.8%; last -2.6%)

  • Japan's Q4 BSI Large Manufacturing Conditions 5.7 (expected 5.6; last 5.4). November Machine Tool Orders -13.6% yr/yr (last -20.6%)

  • In news:

  • Equities in China and Hong Kong underperformed after China's CPI for November showed a 0.5% yr/yr decrease, a pace not seen in three years.

  • In Japan, there was an effort to moderate the comments that Bank of Japan Governor Ueda made about raising rates.

  • Australia will triple fees for foreigners looking to buy homes.

  • Japan's Prime Minister Kishida is expected to replace his chief cabinet secretary, industry minister, and party policy chief.

  • South Korea's exports through the first ten days of December were up 3.3% yr/yr.

  • Major European indices are mixed with the U.K.'s FTSE (-0.5%) showing relative weakness. STOXX Europe 600: UNCH, Germany's DAX: +0.1%, U.K.'s FTSE 100: -0.5%, France's CAC 40: +0.3%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: -0.2%.

  • In economic data:

  • U.K.'s Rightmove December House Price Index -1.9% m/m (last -1.7%); -1.1% yr/yr (last -1.3%)

  • In news:

  • Germany's government is looking for ways to plug a EUR17 bln budget gap that resulted from an unfavorable court ruling.

  • More than a million public sector workers in Germany reached a deal to have their wages rise by more than 11% over the next two years.

  • Russian President Putin will seek reelection in March.

 

U.S. equity futures:

  • S&P 500 Futures -4 @ 4,601

  • DJIA Futures: -14 @ 36,234

  • Nasdaq 100 Futures: -28 @ 16,057

Overseas:

  • Europe: DAX +0.1%, FTSE -0.5%, CAC +0.3%

  • Asia: Nikkei +1.5%, Hang Seng -0.8%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil -0.14 @ 71.09

  • Nat Gas -0.199 @ 2.382

  • Gold -3.25 @ 2011.25

  • Silver -0.034 @ 23.242

  • Copper -0.0342 @ 3.7963

Earnings/Guidance:

  • ASE Technology (

  • Chunghwa Telecom (

  • Pembina Pipeline (

  • The Cigna Group (

News:

  • Israel warns it "can no longer accept" Hezbollah forces on its northern border, according to Financial Times

  • US vetoes United Nations resolution calling for an immediate cease fire in the Gaza Strip, according to the New York Times

  • President Biden will host Ukrainian President Volodymyr Zelensky on Tuesday as talks on further Ukraine aid remain stalled in Congress, CNN

  • Congress will vote this week on $900 bln defense bill, according to the Wall Street Journal

  • Donald Trump leads President Biden by 4 points nationally as 66% of voters rate the economy as poor or not good. Mr. Trump's lead expands to six points when third party candidates are included, according to the Wall Street Journal

  • BOJ sources do not see need to end negative rates this month, according to Bloomberg

  • China aiming to lower trading rates for mutual funds, according to Reuters

  • New York State and chipmakers will invest $10 bln in semiconductor research facility, according to the Wall Street Journal

  • Federal Appeals Court blocks portions of New York gun law, according to CNN

  • The Biden administration sells tank shells to Israel, according to the New York Times

  • Tucker Carlson will launch his own streaming service for $9/month, according to the Wall Street Journal

  • Adaptive Biotechnologies (

  • Affirm (

  • Agios (

  • Allogene Therapeutics (

  • American Electric (

  • Apellis Pharmaceuticals (

  • Arcellx (

  • AstraZeneca (

  • Autolus Therapeutics (

  • Aveanna (

  • Axsome Therapeutics (

  • Barrick's (

  • Barrick (

  • Biomea Fusion (

  • Bluebirdbio (

  • Blueprint Medicines' (

  • Boeing (

  • Boeing (

  • Braskem SA (

  • Bristol Myers Squibb (

  • Bristol Myers Squibb (

  • Centessa Pharmaceuticals (

  • Cogent Biosciences (

  • Commercial Vehicle Group (

  • FREYR Battery (

  • Genmab (

  • GlaxoSmithKline (

  • GlobalFoundries (

  • Harmony Gold (

  • Hut 8 Mining (

  • ImmunoGen (

  • Incyte (

  • Innate Pharma (

  • Keros Therapeutics (

  • Kontoor Brands (

  • Kymera Therapeutics (

  • Madison Square Garden Entertainment (

  • Manchester United (

  • Manulife Financial (

  • Merck (

  • Microsoft (

  • Netflix (

  • Novartis AG (

  • Novartis (

  • Nvidia (

  • Ocwen Fincl (

  • Orchard Therapeutics (

  • Pfizer (

  • Pharvaris (

  • PNM Resources (

  • Poseida Therapeutics (

  • Rallybio (

  • Regeneron Pharma (

  • Regeneron Pharma (

  • Roche Hldg (

  • Roche Hldg (

  • Sanofi (

  • Schrdinger (SDGR) Presents Data Supporting Advancement of SGR-1505 and SGR-2921 at American Society of Hematology 2023 Annual Meeting

  • Seagen (

  • Sea Limited (

  • Silicon Labs (

  • Southwest (

  • Stantec (

  • Syndax (

  • Target (

  • Tencent (

  • Tesla (

  • Textron (

  • The Cigna Group (

  • TScan Therapeutics (

  • W.R. Berkley (

M&A:

  • Cigna (

  • H&E Equipment (

  • Macy's (

  • Occidental Petro (

  • Paramount Global (

  • Penske Auto (

  • Tencent (

  • Waste Connections' (

Syndicate:

  • Community Health (

  • Hannon Armstrong Sust. Infr. (

  • Harpoon Therapeutics (

  • OmniAb (

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up:

  • PSTX +25%, CI +11.7%, MOR +5.8%, BLUE +5.6%, NKTX +5.5%, CRVS +5.2%, SNDX +3.6%, IPSC +3.4%, AUTL +2.5%, RLYB +2.4%, ALLO +0.8%, GMAB +0.6%

  • Gapping down:

  • BMEA -12%, COGT -6%, ADPT -5.7%, TCRX -3.2%

 

Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • ABB Ltd (ABBNY) upgraded to Buy from Neutral at Citigroup

  • AbbVie (ABBV) upgraded to Buy from Neutral at Goldman

  • Avantor (AVTR) upgraded to Outperform from Market Perform at TD Cowen; tgt raised to $28

  • Best Buy (BBY) upgraded to Buy from Hold at Jefferies; tgt raised to $89

  • The Cigna Group (CI) upgraded to Buy from Hold at Jefferies; tgt raised to $341

  • Devon Energy (DVN) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $52

  • dLocal Limited (DLO) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $18

  • Domino's Pizza (DPZ) upgraded to Buy from Hold at The Benchmark Company; tgt $455

  • Equitable Holdings (EQH) upgraded to Buy from Hold at Jefferies; tgt raised to $37

  • Fortrea (FTRE) upgraded to Buy from Neutral at Citigroup; tgt raised to $40

  • Orsted A/S (DNNGY) upgraded to Equal Weight from Underweight at Barclays

  • Downgrades:

  • Agilon Health (AGL) downgraded to Neutral from Buy at Goldman; tgt $14

  • Agree Realty (ADC) downgraded to Neutral from Buy at Mizuho; tgt lowered to $61

  • Align Tech (ALGN) downgraded to Sell from Neutral at Goldman; tgt $197

  • Conagra (CAG) downgraded to In-line from Outperform at Evercore ISI

  • CRISPR Therapeutics (CRSP) downgraded to Underperform from Market Perform at TD Cowen; tgt $30

  • CubeSmart (CUBE) downgraded to In-line from Outperform at Evercore ISI; tgt raised to $43

  • Domino's Pizza (DPZ) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $400

  • EOG Resources (EOG) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt $134

  • Equity Residential (EQR) downgraded to Neutral from Buy at Mizuho; tgt lowered to $58

  • Others:

  • Broadcom (AVGO) resumed with a Buy at Citigroup; tgt $1100

  • Danone (DANOY) resumed with a Buy at Jefferies

Econ Data:

  • No economic data.

Earnings:

  • Monday (Dec 11)

  • Afternoon: CASY ORCL

  • Wednesday (Dec 13)

  • Morning: ABM CGNT PLAB REVG

  • Afternoon:  ADBE NDSN

  • Thursday (Dec 14)

  • Morning: JBL

  • Afternoon: COST LEN

  • Friday (Dec 15)

  • Morning: DRI

 

Asia & Europe detail:

Asia: Nikkei +1.5%, Hang Seng -0.8%, Shanghai Composite +0.7%

Equity indices in the Asia-Pacific region began the week on a mostly higher note. Equities in China and Hong Kong underperformed after China's CPI for November showed a 0.5% yr/yr decrease, a pace not seen in three years. In Japan, there was an effort to moderate the comments that Bank of Japan Governor Ueda made about raising rates. Australia will triple fees for foreigners looking to buy homes. Japan's Prime Minister Kishida is expected to replace his chief cabinet secretary, industry minister, and party policy chief. South Korea's exports through the first ten days of December were up 3.3% yr/yr.

  • In economic data:

  • China's November CPI -0.5% m/m (expected -0.1%; last -0.1%); -0.5% yr/yr (expected -0.1%; last -0.2%). November PPI -3.0% yr/yr (expected -2.8%; last -2.6%)

  • Japan's Q4 BSI Large Manufacturing Conditions 5.7 (expected 5.6; last 5.4). November Machine Tool Orders -13.6% yr/yr (last -20.6%)

---Equity Markets---

  • Japan's Nikkei: +1.5%

  • Hong Kong's Hang Seng: -0.8%

  • China's Shanghai Composite: +0.7%

  • India's Sensex: +0.2%

  • South Korea's Kospi: +0.3%

  • Australia's ASX All Ordinaries: +0.1%

---FX---

  • USD/JPY: +0.9% to 146.13

  • USD/CNH: +0.1% to 7.1888

  • USD/INR: UNCH at 83.37

 

Europe: DAX +0.1%, FTSE -0.5%, CAC +0.3%

Major European indices are mixed with the U.K.'s FTSE (-0.5%) showing relative weakness. Germany's government is looking for ways to plug a EUR17 bln budget gap that resulted from an unfavorable court ruling. More than a million public sector workers in Germany reached a deal to have their wages rise by more than 11% over the next two years. Russian President Putin will seek reelection in March.

  • In economic data:

  • U.K.'s Rightmove December House Price Index -1.9% m/m (last -1.7%); -1.1% yr/yr (last -1.3%)

---Equity Markets--- 

  • STOXX Europe 600: UNCH

  • Germany's DAX: +0.1%

  • U.K.'s FTSE 100: -0.5%

  • France's CAC 40: +0.3%

  • Italy's FTSE MIB: UNCH

  • Spain's IBEX 35: -0.2%

---FX---

  • EUR/USD: UNCH at 1.0765

  • GBP/USD: +0.3% to 1.2587

  • USD/CHF: UNCH at 0.8800

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