The S&P 500 futures are down 22 points and are trading 0.6% below fair value. The Nasdaq 100 futures are down 6 points and are trading roughly in line with fair value. The Dow Jones Industrial Average futures are down 216 points and are trading 0.7% below fair value.
The futures for the major indices are indicating a lower open, following through with yesterday's losses. General growth concerns are still in play with the 2s10s spread remaining inverted and the euro falling towards parity.
Overseas news paints a picture of global growth concerns. Spain's Prime Minister Sanchez warned that economic growth in the coming months will be slower than expected. The Bank of Korea and Reserve Bank of New Zealand are expected to announce 50-bps rate hikes tomorrow.
Pressure on earnings will be in focus as Q2 results start coming in. PepsiCo (PEP 172.14, +1.67, +1.0%) reported better-than-expected earnings and revenue as well as reaffirming EPS guidance and raising organic revenue guidance for FY22.
WTI crude oil futures have fallen below the $100.00/bbl mark, down 4.6% to $99.15/bbl. Unleaded gasoline futures are also falling this morning, down 4.8% to $3.29/gal. Natural gas futures are up 4.0% to $6.57/mmbtu.
Another commodity making moves overnight is copper, down 2.7% to $3.34/lb.
In corporate news:
Capital One (COF 104.70, -2.47, -2.3%): Capital One was downgraded to Perform from Outperform at Oppenheimer and downgraded to Equal-Weight from Overweight at Morgan Stanley
Expeditors International of Washington (EXPD 96.17, -1.16, -1.2%): Expeditors Intl was downgraded to Underperform from Peer Perform at Wolfe Research
American Express (AXP 136.97, -3.61, -2.6%): American Express was downgraded to Equal-Weight from Overweight at Morgan Stanley
C.H. Robinson Worldwide (CHRW 96.40, -1.50, -1.5%): C.H. Robinson was downgraded to Peer Perform from Outperform at Wolfe Research
PepsiCo (PEP 172.14, +1.67, +1.0%): PepsiCo beats by $0.12, beats on revs; reaffirms FY22 EPS guidance; raises FY22 organic revs guidance
The Gap (GPS 8.26, -0.50, -5.7%): Gap was downgraded to Equal Weight from Overweight at Wells Fargo and CEO will step down; names new CEO for Old Navy unit; reaffirms Q2 rev outlook but expects increased promotional activity
PriceSmart (PSMT 69.60, -2.93, -4.0%): PriceSmart reports Q3 (May) results, beats on revs
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a lower note. Japan's Nikkei: -1.8%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: -1.0%, India's Sensex: -0.9%, South Korea's Kospi: -1.0%, Australia's ASX All Ordinaries: -0.1%.
In economic data:
Japan's June PPI 0.7% m/m (expected 0.5%; last 0.1%); 9.2% yr/yr (expected 8.8%; last 9.3%)
Australia's June Westpac Consumer Sentiment -3.0% (last -4.5%). June NAB Business Confidence 1 (last 6) and NAB Business Survey 13 (last 15)
New Zealand's May External Migration & Visitors 26.3% yr/yr (last 70.1%)
In news:
The Bank of Japan's quarterly economic assessment upgraded its view of seven out of nine regions.
Hyundai will reportedly build its first dedicated electric vehicle factory that aims to begin production in 2025.
China's insurance and banking regulator indicated that support for manufacturers will be increased.
The Bank of Korea and Reserve Bank of New Zealand are expected to announce 50-bps rate hikes tomorrow.
Major European indices trade in the red amid ongoing growth concerns. STOXX Europe 600: -0.6%, Germany's DAX: -0.7%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.8%, Spain's IBEX 35: -1.3%.
In economic data:
Germany's July ZEW Economic Sentiment -53.8 (expected -38.3; last -28.0) and ZEW Current Conditions -45.8 (expected -34.5; last -27.6)
In news:
Spain's Prime Minister Sanchez warned that economic growth in the coming months will be slower than expected.
Germany's ZEW Economic sentiment survey fell past its pandemic low.
The U.K.'s conservative party will begin electing a new leader tomorrow.
The EU's energy commissioner said that energy cuts in the summer could help avoid shortages in the winter.
U.S. equity futures:
S&P 500 Futures: -15 @ 3,840
DJIA Futures: -176 @ 30,978
Nasdaq 100 Futures: +7 @ 11,868
Overseas:
Europe: DAX -0.7%, FTSE -0.5%, CAC -0.2%
Asia: Nikkei -1.8%, Hang Seng -1.3%, Shanghai Composite -1.0%
Commodities:
Crude Oil -4.94 @ 99.15
Nat Gas +0.284 @ 6.710
Gold +1.50 @ 1733.20
Silver -0.372 @ 18.760
Copper -0.0945 @ 3.3360
U.S. Summary:
Earnings/Guidance:
American Airlines (AAL) updates guidance for Q2, sees revenue growth of about 12% vs. 2Q19 to $13.4 bln, slightly above the consensus estimate; sees pre-tax margin of about 5.0%
AngioDynamics (ANGO) reports EPS in-line, beats on revs; guides FY23 EPS below consensus, revs above consensus
Cohu (COHU) issues upside Q2 revenue guidance
E2open (ETWO) misses by $0.01, reports revs in-line; guides FY23 revs below consensus due to FX impacts
Gran Tierra Energy (GTE) reports Q2 production increased 25% yr/yr
Hecla Mining (HL) reports Q2 silver production increased 10% over Q1
PepsiCo (PEP) beats by $0.12, beats on revs; reaffirms FY22EPS guidance; raises FY22organic revs guidance
PriceSmart (PSMT) reports Q3 (May) results, beats on revs
VOXX Intl (VOXX) reports 1Q23 net loss per share of ($0.27), which may not compare to the ($0.11) two analyst estimate; revenue decreased 6.1% yr/yr to $128.8 mln vs. the $134.0 mln two analyst estimate
General News:
IEA chief warns about further worsening of energy market, according to Bloomberg
Box office sales nearing pre-pandemic levels, according to CNBC
White House released letter to the Speaker of the House of Representatives and the President of the Senate, on the continuation of the national emergency with respect to Hong Kong
Heathrow Airport will be implementing a departing passenger cap of 100k from today to 11 Sept
AerCap (AER) reports leased, purchased and sold 184 assets in the second quarter 2022
Aerojet Rocketdyne (AJRD) appoints Thomas A. Corcoran independent Chairman of the Board, effective immediately
Air Lease (AL) provides activity update for the second quarter of 2022 - No aircraft sales occurred during the quarter
Aldeyra Therapeutics (ALDX) achieved primary endpoints in dry eye disease chamber crossover clinical trial
Alphabet's (GOOG) Google filing counter suit against Match (MTCH), according to Bloomberg
AssetMark (AMK) reports performance highlights for June
Bellus Health (BLU) Announces Positive End-of-Phase 2 Meeting with the FDA and its CALM Phase 3 Program for BLU-5937 in Refractory Chronic Cough
Bicycle Therapeutics (BCYC) announces that Genentech, a member of the Roche Group, has exercised its second option to initiate a new program, expanding the exclusive strategic collaboration agreement with Bicycle to discover, develop and commercialize novel Bicycle-based immuno-oncology therapies
Brookdale Senior Living (BKD) reports that June month end occupancy increased by 40 bps from May
Canoo (GOEV) receives purchase order of 4,500 Canoo Electric Delivery Vehicles from Walmart (WMT)
Catalyst Pharma (CPRX) settled its ongoing patent infringement litigation with Jacobus Pharmaceutical Company and PANTHERx Rare
Citrix Systems (CTXS) provides update on approval process for the pending acquisition by affiliates of Vista Equity Partners and Evergreen Coast Capital
Clarivate (CLVT) CEO and Executive Chair Jerre Stead is retiring from his CEO role effective September 1, but will continue as non-Executive Chair; Jonathan Gear selected to succeed Mr. Stead as CEO
CME Group (CME) reports international ADV increased 21% yr/yr
Cohen & Steers (CNS) reports preliminary assets under management of $87.9 bln as of June 30, 2022, a decrease of $6.4 bln from May 31, 2022
Crown (CCK): EC fines the metal packaging producers Crown and Silgan (SLGN) 31.5 million in cartel settlement
Dave & Buster's (PLAY) announces new executive leadership team following acquisition of Main Event Entertainment, names new COO
Dave & Buster's (PLAY) entered into an amendment and restatement of the cooperation letter agreement with Hill Path Capital and James Chambers
Dollar General (DG) announced Todd Vasos's decision to retire from his position as CEO effective November 1, 2022
Energy Vault (NRGV) announces that management and senior officers of the Company entered into new time and performance based Lock-up Agreements extending the lock-up deadlines as defined by the original lock-up agreements entered into on February 11, 2022 in connection with the closing of Energy Vault's Business Combination
Fluor (FLR) awarded a new reimbursable contract by New Fortress Energy Inc.
GameStop (GME) launches non-custodial, Ethereum Layer 2-based NFT marketplace
Gap (GPS) CEO Sonia Syngal will step down; hires Walmart Canada exec as new CEO for Old Navy unit; reaffirms Q2 revenue outlook but expects increased promotional activity and expects Q2 adjusted operating margin to be zero to slightly negative
Gatos Silver (GATO) announces production results from Cerro Los Gatos mine; Silver production increased by 9% and lead and zinc production increased by 5% and 8%, respectively, for Q2
GlaxoSmithKline (GSK) expects to distribute over 50 mln doses of its influenza vaccine to the US market
Greenwich LifeSciences (GLSI) suspends share repurchase program; announced that the FDA has removed the clinical hold permitting the Flamingo-01 Phase III clinical trial to proceed
Innoviz Technologies (INVZ) and Joowon Industrial announced their cooperation to drive sales for Innoviz's LiDAR in the Korean market
Laboratory Corp (LH) forms strategic partnership with MD Anderson Cancer Center Foundation Spain
Leap Therapeutics (LPTX) and BeiGene (BGNE) announce the initiation of Part C of the ongoing DisTinGuish study to evaluate DKN-01, Leap's anti-SSEDickkopf 1 (DKK1) antibody, in combination with tislelizumab, BeiGene's anti-PD-1 antibody
Lordstown Motors (RIDE) announces executive appointments
Main Street Capital (MAIN) recently invested $19.5 mln in three existing lower middle market portfolio companies
MBIA (MBIA) receives initial distribution from Puerto Rico Highways and Transportation Authority
Mesoblast (MESO) reports Rexlemestrocel-L to be highlighted at Maxim's panel on late-stage advancements in heart failure therapeutics and management
Meta Platforms (META) firing underperforming employees, according to The Information
Moderna (MRNA) is developing two potential COVID-19 booster shots targeting different Omicron subvariants, according to the Wall Street Journal
NASDAQ (NDAQ) reports June 2022 metrics -- U.S. equity options volume was 228 mln contracts vs 252 mln prior month and 286 mln one year ago
Nova Measuring (NVMI) announces that a leading logic manufacturer recently selected Nova METRION for next-generation Integrated Circuit development
Novavax (NVAX) details modification to vaccine candidate for the SARS-CoV-2 virus contract
NuScale Power (SMR) signs license agreement with Paragon
Peloton (PTON) exits owned-manufacturing and expands partnership with Rexon
Pershing Square Tontine (PSTH) to redeem all shares for this SPAC because co will not consummate an initial business combination within the time period required
Petrobras (PBR) completed Drill Stem Test on 1-BRSA-1383A-RJS wildcat well (Alto de Cabo Frio Central Noroeste) in the pre-salt of the southern portion of the Campos Basin
Playtika (PLTK) detailed stockholders agreement, dated July 11, 2022, between Playtika Holding and Joffre Palace Holdings Limited
Rhythm Pharmaceuticals (RYTM) Announces Positive Interim Results from Phase 2 Clinical Trial Evaluating Setmelanotide in Hypothalamic Obesity
RxSight (RXST) received notification from the FDA that additional information will be required for the approval of its lower-cost-to-manufacture Light Delivery Device
Sigma Lithium (SGML) provides an update on construction at its wholly owned Grota do Cirillo project
Take-Two's (TTWO) Rockstar Games shelves plans to release Red Dead Redemption 2 or PS5 and Xbox Series X/S, according to Video Games Chronicle
Twitter (TWTR) responds to Elon Musk's decision to terminate deal; says termination is invalid
U.S. Silica (SLCA) completes $100 mln voluntary term loan principal repayment; debt was retired at a discount to par using excess cash on hand
Vista Outdoor (VSTO): Callaway Golf (ELY) initiates a long-term plan to integrate technology from Vista's Foresight Sports throughout its network of brands
Warner Bros. Discovery (WBD) talking with Amazon (AMZN) about restarting a HBO Max distribution agreement for its Prime Video, according to Bloomberg
Westport Fuel Systems (WPRT) awarded 38 million program to develop and supply liquefied petroleum gas systems for a global original equipment manufacturer
XPO Logistics (XPO) unveils RXO as company name for planned spin-off
M&A:
Carlyle Group (CG): Madison Dearborn Partners to acquire majority stake in Unison from Carlyle; Financial terms were not disclosed
FAST Acquisition Corp. II (FZT): Falcon's Beyond to merge with FZT in SPAC deal; deal valued at $1 bln, expected to close in 2H22
Fortress Transportation and Infrastructure (FTAI) approves spin-off of its infrastructure business
Group 1 Auto (GPI) acquires five franchises in Shreveport, Louisiana; dealerships expected to generate $110 million in annual revenues
Petrobras (PBR) finalized the sale of 51% of Petrobras Gs S.A. (Gaspetro) to Compass Gs e Energia; transaction was concluded for R$ 2.097 billion, fully paid on this date
Skyline Champion (SKY) to acquire the assets and assume operations of the Factory Expo Home Centers
Syndicate:
AeroClean Technologies (AERC) files for 3 mln share common stock offering by selling shareholder
Cano Health (CANO) files for $500 mln mixed securities shelf offering
IPOs:
Priced to Trade:
No IPOs expected.
Gapping Up/Down
Gapping up:
GOEV +22.8%, GLSI +10.3%, WPRT +6.9%, ALLG+4.1%, COHU +3.5%, CLVT +3%, CANO +2.9%, AJRD+2.3%, PLAY +2.2%, GTE +1.8%, GATO +1.5%, CPRX+1.2%, UNVR +1%, PEP +0.9%, VSTO +0.7%, GME+0.7%
Gapping down:
FULC -12.7%, GPS -7%, PLRX -5.7%, FLR -4.1%, PSMT -4%, VOXX -3%, BKD -2%, IIVI -1.7%, FTAI-1.5%, NVAX -1.3%, NDAQ -1%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
DCP Midstream (DCP) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt lowered to $40
Glaukos (GKOS) upgraded to Buy from Hold at Stifel; tgt raised to $60
Downgrades:
American Express (AXP) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $143
C.H. Robinson (CHRW) downgraded to Peer Perform from Outperform at Wolfe Research
Capital One (COF) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $126
Capital One (COF) downgraded to Perform from Outperform at Oppenheimer
Expeditors Intl (EXPD) downgraded to Underperform from Peer Perform at Wolfe Research
Gap (GPS) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $10
Others:
Alpha Metallurgical Resources (AMR) initiated with an Outperform at Cowen; tgt $215
Aon (AON) initiated with a Neutral at Goldman; tgt $301
Arthur J. Gallagher (AJG) initiated with a Buy at Goldman; tgt $198
Avid Tech (AVID) initiated with a Neutral at Rosenblatt; tgt $30
Braze (BRZE) initiated with a Buy at UBS; tgt $53
Brown & Brown (BRO) initiated with a Neutral at Goldman; tgt $67
Dyne Therapeutics (DYN) initiated with a Outperform at Raymond James; tgt $15
Elanco Animal Health (ELAN) initiated with a Neutral at Piper Sandler; tgt $22
Gladstone (GLAD) initiated with a Neutral at Janney
Upcoming Events:
Econ Data:
06:00 ET: NFIB Small Business Optimism for June (Briefing.comConsensus NA; Prior 93.1)
Earnings:
Monday (Jul 11)
Morning: AZZ GBX
Afternoon: PEP PSMT
Tuesday (Jul 12)
Morning: ANGO
Wednesday (Jul 13)
Morning: DAL FAST
Afternoon: WAFD
Thursday (Jul 14)
Morning: CTAS CAG ERIC FRC JPM MS TSM
Afternoon: AOUT
Friday (Jul 15)
Morning: BLK BK C PNC PGR STT USB UNH WFC
Asia & Europe detail:
Asia: Nikkei -1.8%, Hang Seng -1.3%, Shanghai Composite -1.0%
Equity indices in the Asia-Pacific region ended Tuesday on a lower note. The Bank of Japan's quarterly economic assessment upgraded its view of seven out of nine regions. Hyundai will reportedly build its first dedicated electric vehicle factory that aims to begin production in 2025. China's insurance and banking regulator indicated that support for manufacturers will be increased. The Bank of Korea and Reserve Bank of New Zealand are expected to announce 50-bps rate hikes tomorrow.
In economic data:
Japan's June PPI 0.7% m/m (expected 0.5%; last 0.1%); 9.2% yr/yr (expected 8.8%; last 9.3%)
Australia's June Westpac Consumer Sentiment -3.0% (last -4.5%). June NAB Business Confidence 1 (last 6) and NAB Business Survey 13 (last 15)
New Zealand's May External Migration & Visitors 26.3% yr/yr (last 70.1%)
---Equity Markets---
Japan's Nikkei: -1.8%
Hong Kong's Hang Seng: -1.3%
China's Shanghai Composite: -1.0%
India's Sensex: -0.9%
South Korea's Kospi: -1.0%
Australia's ASX All Ordinaries: -0.1%
---FX---
USD/JPY: -0.4% to 136.86
USD/CNH: +0.3% to 6.7403
USD/INR: +0.2% to 79.57
Europe: DAX -0.7%, FTSE -0.5%, CAC -0.2%
Major European indices trade in the red amid ongoing growth concerns. Spain's Prime Minister Sanchez warned that economic growth in the coming months will be slower than expected. Germany's ZEW Economic sentiment survey fell past its pandemic low. The U.K.'s conservative party will begin electing a new leader tomorrow. The EU's energy commissioner said that energy cuts in the summer could help avoid shortages in the winter.
In economic data:
Germany's July ZEW Economic Sentiment -53.8 (expected -38.3; last -28.0) and ZEW Current Conditions -45.8 (expected -34.5; last -27.6)
---Equity Markets---
STOXX Europe 600: -0.6%
Germany's DAX: -0.7%
U.K.'s FTSE 100: -0.5%
France's CAC 40: -0.2%
Italy's FTSE MIB: -0.8%
Spain's IBEX 35: -1.3%
---FX---
EUR/USD: +0.3% to 1.0063
GBP/USD: -0.1% to 1.1874
USD/CHF: +0.1% to 0.9831