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