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13/01/22 Briefing

Updated: Feb 15

The S&P 500 futures trade 12 points, or 0.3%, above fair value following an indecisive session yesterday, as investors await more inflation data and the latest report on jobless claims.

Specifically, the Producer Price Index for December (Briefing.comconsensus 0.4%) and the weekly Initial Claims (Briefing.comconsensus 202,000) and Continuing Claims report will both be released at 8:30 a.m. ET. The projected 0.4% increase in producer prices would be the lowest m/m increase in one year.

Separately, Fed Vice Chair nominee Lael Brainard will appear before the Senate Banking Committee at 10:00 a.m. ET. In her prepared remarks, she said keeping inflation in check while sustaining an inclusive recovery is the Fed's most important task.

In earnings news, Delta Air Lines (DAL 41.41, +0.80, +2.0%), KB Home (KBH 45.70, +3.32, +7.8%), and Taiwan Semi (TSM 137.80, +5.57, +4.2%) each beat EPS estimates. TSM also guided Q1 revenue above consensus, which might be having a halo effect on the broader semiconductor space in pre-market action.

U.S. Treasury yields have edged higher, more so on the shorter-end of the curve. The 2-yr yield is up three basis points to 0.92%, and the 10-yr yield is up one basis point to 1.74%. The U.S. Dollar Index is down 0.1% to 94.80. WTI crude futures are down 0.6% to $82.13/bbl.

In U.S. Corporate news:

  • Delta Air Lines (DAL 41.41, +0.80): +2.0% after beating top and bottom-line estimates. The stock was subsequently upgraded to Positive from Neutral at Susquehanna.

  • KB Home (KBH 45.70, +3.32): +7.8% after beating EPS estimates on below-consensus revenue. The company anticipates housing market conditions will continue to be favorable.

  • Coinbase (COIN 239.90, +5.20): +2.2% after announcing an acquisition of CFTC-regulated derivatives exchange FairX.

  • Boeing (BA 223.24, +5.79): +2.7% on reports indicating that the 737 MAX could resume flying in China this month.

  • iShares Semiconductor ETF (SOXX 539.00, +3.86): +0.7% after Taiwan Semi (TSM 137.80, +5.57, +4.2%) beat EPS estimates and guided Q1 revenue above consensus.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei: -1.0% Hong Kong's Hang Seng: +0.1% China's Shanghai Composite: -1.2% India's Sensex: +0.1% South Korea's Kospi: -0.4% Australia's ASX All Ordinaries: +0.5%.

  • In economic data:

  • China's December FDI 14.9% YTD (last 15.9%)

  • Japan's December Machine Tool Orders 40.5% yr/yr (last 64.0%)

  • South Korea's December Import Price Index 29.7% yr/yr (last 35.0%) and Export Price Index 23.5% yr/yr (last 25.5%)

  • New Zealand's November Building Consents 0.6% m/m (last -2.1%)


  • In news:

  • The Japanese government reportedly expects that a primary surplus will be reached in FY26, a year ahead of the previous target.

  • South Korea's President Moon proposed using excess tax revenue to support small merchants.

  • China Securities Journal speculated that China's inflation will rise in 2022 but will also be manageable.

  • China State Council plans to facilitate the development of the digital economy through the next three years.



  • Major European indices trade in mixed fashion. STOXX Europe 600: -0.1% Germany's DAX: UNCH U.K.'s FTSE 100: UNCH France's CAC 40: -0.6% Italy's FTSE MIB: +0.2% Spain's IBEX 35: +0.3%.

  • In economic data:

  • Italy's November Industrial Production 1.9% m/m (expected 0.5%; last -0.5%); 6.3% yr/yr (expected 3.7%; last 1.9%)


  • In news:

  • There were more British politicians calling for Prime Minister Johnson's resignation.

  • U.K.'s trade secretary said that the aim is to double trade with India by 2030.

  • The Bank of England's quarterly survey on liabilities and credit conditions showed that the availability of secured credit to households increased between September and November.

  • Availability of unsecured credit improved in Q4 and is expected to improve again in Q1.

  • The Federation of German Industries expects Germany's 2022 GDP to expand 3.5%.



U.S. equity futures:

  • S&P 500 Futures: +3 @ 4,730

  • DJIA Futures: +52 @ 36,342

  • Nasdaq 100 Futures: +12 @ 15,920

Overseas:

  • Europe: DAX UNCH, FTSE UNCH, CAC -0.6%

  • Asia: Nikkei -1.0%, Hang Seng +0.1%, Shanghai Composite -1.2%

Commodities:

  • Crude Oil -0.56 @ 82.08

  • Nat Gas -0.207 @ 4.650

  • Gold -2.95 @ 1824.35

  • Silver +0.040 @ 23.247

  • Copper -0.0185 @ 4.5580

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Amyris (AMRS) at conference sees Q4 revs above consensus

  • Babylon (BBLN) reaffirms FY21 guidance; raises FY22 outlook

  • Concrete Pumping (BBCP) guides OctQ and FY22 revs above consensus

  • Delta Air Lines (DAL) beats by $0.07, beats on revs

  • E2open (ETWO) reports Q3 (Nov) results, misses on revs; guides FY22 revs above consensus

  • Elastic (ESTC) issues upside Q3 guidance as it expects to exceed its prior outlook for revenue, non-GAAP operating margin, and non-GAAP net loss per share

  • Equinox Gold (EQX) reports Q4 production, achieving FY21 guidance

  • Hecla Mining (HL) achieves 2021 production guidance

  • KB Home (KBH) beats by $0.14, misses on revs; expects FY22 housing revs of $7.2-7.6 bln, sees Q1 housing revenues of $1.43-1.53 bln

  • Taiwan Semi (TSM) beats by NT 0.19, reports revs in-line; guides Q1 revs above consensus

  • Yamana Gold (AUY) Q4 production exceeds guidance


  • General News:

  • Federal government lost $100 bln due to decision to pause student loan payments, according to the Wall Street Journal

  • House will pass voting rights bills today, but the Senate Democrats currently do not have enough votes to change filibuster rules, which means these bills can not pass the Senate, according to Politico

  • Senate Banking Committee releases opening remarks for Federal Housing Finance Agency Director nominee Sandra Thompson; releases open remarks from Fed Vice Chair nominee Lael Brainard

  • Adagio Therapeutics (ADGI) Summarizes ADG20 Neutralizing Activity Against SARS-CoV-2 Variants and Outlines Initiatives to Address Omicron

  • Apple (AAPL): Investors are optimistic about upcoming Apple virtual reality devices, according to the Wall Street Journal

  • AstraZeneca (AZN) to present new data at ASCO GI and GU

  • AstraZeneca (AZN) reports new Vaxzevria data further support its use as third dose booster

  • Boeing (BA) 737 Max could resume flying in China this month, according to CNBC

  • BridgeBio Pharma (BBIO) collaborates with Amgen (AMGN) to Study BBP-398

  • Canadian Nat'l (CNI) Rail submits notice of intent to file responsive application with the Surface Transportation Board

  • DaVita (DVA): FTC approves final order imposing strict limits on future mergers by dialysis service provider DaVita

  • Elastic (ESTC) appoints Ashutosh Kulkarni to CEO and nominates him to Board of Directors

  • Endo (ENDO) Announces Publication of New AVEED (testosterone undecanoate) Data in Peer-Reviewed Journal of Clinical Pharmacology; Data Evaluates Dosing Flexibility in Men With Hypogonadism

  • Fluor (FLR) wins a position on the Multiple Award Schedule MAS contract

  • GlaxoSmithKline (GSK): Department of Defense confirms award of $945 mln Army contract for sotrovimab

  • Gritstone bio (GRTS) announced that the first patient has been enrolled for inclusion in the Phase 2/3 GRANITE-CRC-1L trial

  • Honda Motor (HMC) decided to conduct a company split

  • Horizon Technology Finance (HRZN) provides portfolio update for Q4; originated $118 mln in new loans

  • Huntsman (HUN) highlights recent strategic actions to enhance shareholder value

  • Imperial Oil (IMO) to market its interests in XTO Energy Canada

  • Integra (IART) entered into $125 mln accelerated share repurchase agreement

  • InterActiveCorp and Angi Inc. (ANGI) report performance metrics for December 2021

  • JinkoSolar (JKS) prices IPO on Shanghai Stock Exchange

  • Lennar (LEN) increases annual dividend 33% to $1.50/share

  • Markforged Holding (MKFG): David Benhaim, Co-Founder and CTO, is stepping down from his role as CTO, effective today

  • Moderna (MRNA) expects vaccine data for 2-5 year olds in March, according to Reuters

  • nCino (NCNO) selected by CIBC to provide its nCino Bank Operating System

  • New Found Gold Corp. (NFGC) Intercepts 56.69 g/t Au Over 2.45m at the New Keats Footwall Zone Discovery

  • NRx Pharmaceuticals (NRXP) files counterclaim against its former collaboration partner, Relief Therapeutics

  • O-I Glass (OI) subsidiary Paddock Enterprises, LLC files Chapter 11

  • Planet Labs (PL) to launch its Flock 4x on SpaceX's Falcon 9 Transporter-3 SSO on January 13

  • Precigen (PGEN) provides pipeline and corporate updates at the 40th Annual J.P. Morgan Healthcare Conference

  • Puma Biotech. (PBYI) announces inclusion of NERLYNX in two NCCN Clinical Practice Guideline updates for the treatment of breast cancer

  • Radware (RDWR) appoints Guy Avidan as CFO

  • Robinhood (HOOD) not planning to spend large amounts of money on crypto assets, according to the Wall Street Journal

  • Silvercorp (SVM) Intersected 1.64 Metres True Width Grading 24.66 Grams Per Tonne Gold, 56 Grams Per Tonne Silver, 3.28% Lead, And 2.12% Zinc From Vein H16 At The HPG Mine

  • Veris Residential (VRE) CFO David Smetana to step down by year-end

  • Victory Capital (VCTR) reports AUM of $183.7 billion as of December 31, 2021, +14% M/M

  • Visa (V) and Mastercard (MA) offering central banks ways to test applications for digital currencies, according to Bloomberg

  • Western Copper (WRN) appoints Ken Engquist as Chief Operating Officer effective January 15, 2022


  • M&A:

  • Blackstone (BX): Crown Resorts receives revised Blackstone (BX) acquisition proposal

  • Coinbase Global (COIN) announces acquisition of CFTC-regulated derivatives exchange FairX

  • Decarbonization Plus Acquisition Corporation II (DCRN) announces stockholder approval of business combination with Tritium

  • Grubhub (GRUB): Just Eat Takeaway.comN.V investors are open to sale of Grubhub, according to Bloomberg

  • SSR Mining (SSRM) announces the sale of its Pitarrilla project for total consideration of up to $127 mln


  • Syndicate:

  • Ares Capital (ARCC) prices offering of 10 mln shares of common stock; further details not disclosed

  • RMR Group (RMR) files for $500 mln mixed securities shelf offering

  • Vaxcyte (PCVX) prices offering of common stock and pre-funded warrants


  • IPOs:

  • Priced to Trade:

  • TPG, Inc. (Nasdaq: TPG): The leading global alternative asset manager priced its 33.9 M share IPO at $29.50, within the $29-$32 expected price range.



Gapping Up/Down

  • Gapping up:

  • ADGI +17.8%, PBYI +8.8%, KBH +6.5%, TSM +4.4%, BBCP +3.9%, LEN +3.2%, ETWO +2.9%, COIN +2.3%, PL +2.2%, DAL +2.1%, AMRS +1.5%, HRZN +1%, PGEN +0.6%, JKS +0.6%


  • Gapping down:

  • PCVX -8%, HCI -4.4%, ARCC -3.4%, ESTC -3%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Bandwidth (BAND) upgraded to Overweight from Neutral at Piper Sandler; tgt $102

  • Bumble Inc. (BMBL) upgraded to Buy from Neutral at Goldman; tgt lowered to $54

  • Chegg (CHGG) upgraded to Overweight from Neutral at Piper Sandler; tgt lowered to $43

  • Delta Air Lines (DAL) upgraded to Positive from Neutral at Susquehanna; tgt raised to $50

  • Enphase Energy (ENPH) upgraded to Buy from Neutral at Guggenheim; tgt $213

  • Gaming and Leisure Properties (GLPI) upgraded to Buy from Hold at Truist; tgt lowered to $51

  • Home Depot (HD) upgraded to Buy from Hold at Truist; tgt raised to $448

  • United Airlines (UAL) upgraded to Positive from Neutral at Susquehanna; tgt raised to $60

  • WEC Energy Group (WEC) upgraded to Neutral from Sell at Goldman; tgt $99

  • Xenia Hotels (XHR) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $21


  • Downgrades:

  • 2U (TWOU) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $23

  • Biogen (BIIB) downgraded to Neutral from Buy at Guggenheim; tgt lowered to $202

  • CenterPoint (CNP) downgraded to Neutral from Buy at Goldman; tgt lowered to $30

  • CF Industries (CF) downgraded to Hold from Buy at Berenberg; tgt raised to $77

  • Dominion Energy (D) downgraded to Sell from Neutral at Goldman; tgt $72

  • Qorvo (QRVO) downgraded to Perform from Outperform at Oppenheimer

  • Snap (SNAP) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $45

  • Spirit Airlines (SAVE) downgraded to Neutral from Positive at Susquehanna; tgt lowered to $25


  • Others:

  • Advance Auto (AAP) initiated with a Buy at Truist; tgt $273

  • AutoZone (AZO) initiated with a Buy at Truist; tgt $2329

  • Best Buy (BBY) initiated with a Hold at Truist; tgt $108

  • Bumble Inc. (BMBL) initiated with a Neutral at Piper Sandler; tgt $35

  • Coastal Financial (CCB) initiated with a Strong Buy at Raymond James; tgt $69

  • Costco (COST) initiated with a Buy at Truist; tgt $606

  • Dollar General (DG) initiated with a Hold at Truist; tgt $28

  • Dollar Tree (DLTR) initiated with a Buy at Truist; tgt $162

  • Fifth Third (FITB) initiated with a Buy at UBS; tgt $56

  • First Watch Restaurant Group (FWRG) initiated with an Outperform at Raymond James; tgt $24

  • Five Below (FIVE) initiated with a Buy at Truist; tgt $214

  • Genuine Parts (GPC) initiated with a Hold at Truist; tgt $142

  • Hertz Global (HTZ) initiated with an Outperform at Oppenheimer; tgt $31

  • Lowe's (LOW) assumed with a Buy at Truist; tgt $293

  • O'Reilly Auto (ORLY) initiated with a Buy at Truist; tgt $796

  • Ollie's Bargain Outlet (OLLI) initiated with a Hold at Truist; tgt $50

  • Target (TGT) initiated with a Buy at Truist; tgt $270

  • Tractor Supply (TSCO) initiated with a Buy at Truist; tgt $270

  • Upwork (UPWK) initiated with an Overweight at Piper Sandler; tgt $40

  • Walmart (WMT) initiated with a Hold at Truist; tgt $153


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Initial Claims for Jan 8 (Briefing.comConsensus 202K; Prior 207K)

  • 08:30 ET: Continuing Claims for Jan 1 (Briefing.comConsensus NA; Prior 1.754M)

  • 08:30 ET: PPI for Dec (Briefing.comConsensus 0.4%; Prior 0.8%)

  • 08:30 ET: Core PPI for Dec (Briefing.comConsensus 0.4%; Prior 0.7%)

  • 10:30 ET: EIA Natural Gas Inventories for Jan 8 (Briefing.comConsensus NA; Prior -31 bcf)


  • Earnings:

  • Monday (Jan 10)

  • Morning: AZZ CMC TLRY

  • Afternoon: ACCD


  • Tuesday (Jan 11)

  • Morning: ACI SNX


  • Wednesday (Jan 12)

  • Morning: JEF SJR

  • Afternoon: KBH


  • Thursday (Jan 13)

  • Morning: DAL TSM

  • Afternoon: WAFD


  • Friday (Jan 14)

  • Morning: BLK C FRC JPM WFC




Asia & Europe detail:

Asia: Nikkei -1.0%, Hang Seng +0.1%, Shanghai Composite -1.2%

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. The Japanese government reportedly expects that a primary surplus will be reached in FY26, a year ahead of the previous target. South Korea's President Moon proposed using excess tax revenue to support small merchants. China Securities Journal speculated that China's inflation will rise in 2022 but will also be manageable. China State Council plans to facilitate the development of the digital economy through the next three years.

  • In economic data:

  • China's December FDI 14.9% YTD (last 15.9%)

  • Japan's December Machine Tool Orders 40.5% yr/yr (last 64.0%)

  • South Korea's December Import Price Index 29.7% yr/yr (last 35.0%) and Export Price Index 23.5% yr/yr (last 25.5%)

  • New Zealand's November Building Consents 0.6% m/m (last -2.1%)


---Equity Markets---

  • Japan's Nikkei: -1.0%

  • Hong Kong's Hang Seng: +0.1%

  • China's Shanghai Composite: -1.2%

  • India's Sensex: +0.1%

  • South Korea's Kospi: -0.4%

  • Australia's ASX All Ordinaries: +0.5%

---FX---

  • USD/JPY: -0.1% to 114.48

  • USD/CNH: +0.1% to 6.3624

  • USD/INR: +0.2% to 73.93

Europe: DAX UNCH, FTSE UNCH, CAC -0.6%

Major European indices trade in mixed fashion. There were more British politicians calling for Prime Minister Johnson's resignation. U.K.'s trade secretary said that the aim is to double trade with India by 2030. The Bank of England's quarterly survey on liabilities and credit conditions showed that the availability of secured credit to households increased between September and November. Availability of unsecured credit improved in Q4 and is expected to improve again in Q1. The Federation of German Industries expects Germany's 2022 GDP to expand 3.5%.

  • In economic data:

  • Italy's November Industrial Production 1.9% m/m (expected 0.5%; last -0.5%); 6.3% yr/yr (expected 3.7%; last 1.9%)


---Equity Markets---

  • STOXX Europe 600: -0.1%

  • Germany's DAX: UNCH

  • U.K.'s FTSE 100: UNCH

  • France's CAC 40: -0.6%

  • Italy's FTSE MIB: +0.2%

  • Spain's IBEX 35: +0.3%

---FX---

  • EUR/USD: +0.2% to 1.1464

  • GBP/USD: +0.2% to 1.3728

  • USD/CHF: -0.3% to 0.9110


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The S&P 500 futures are up 3 points and are trading % above fair value. The Nasdaq 100 futures are up 9 points and are trading roughly in-line with fair value. The Dow Jones Industrial Average futures