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13/02/22 Briefing


The S&P 500 futures trade 21 points, or 0.5%, above fair value as the Q1 earnings reporting season begins in earnest following a rough patch in the market.

JPMorgan Chase (JPM 130.00, -1.54, -1.2%) is continuing that rough patch after missing EPS estimates, while BlackRock (BLK 719.00, +2.17, +0.3%) and First Republic Bank (FRC 155.73, +0.68, +0.4%) are up modestly in pre-market action after beating EPS estimates.

On the economy, JPMorgan CEO Jamie Dimon remained optimistic from a short-term perspective, but he cautioned that he sees significant geopolitical and economic challenges ahead due to high inflation, supply chain issues, and the war in Ukraine.

Delta Air Lines' (DAL 40.97, +2.35, +6.1%) CEO corroborated Mr. Dimon's short-term optimism with an observation that March 2022's historic bookings quarter is continuing into April. DAL shares are up 6% after the company beat top and bottom-line estimates.

In economic data, investors will receive the Producer Price Index for March (Briefing.comconsensus 1.2%) at 8:30 a.m. ET. Earlier, the weekly MBA Mortgage Applications Index decreased 1.3% following a 6.3% decline in the prior week.

U.S. Treasuries trade little changed. The 2-yr yield is unchanged at 2.39%, and the 10-yr yield is unchanged at 2.73%. The U.S. Dollar Index is roughly unchanged at 100.27. WTI crude futures are up 1.7%, or $1.73, to $102.33/bbl.

In U.S. Corporate news:

  • JPMorgan Chase (JPM 130.00, -1.54): -1.2% after missing EPS estimates. The provision for credit losses was $1.5 billion, reflecting a net reserve build of $902 million. CEO Jamie Dimon said, "we remain optimistic on the economy, at least for the short term but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine."

  • BlackRock (BLK 719.00, +2.17): +0.3% after beating EPS estimates on below-consensus revenue.

  • First Republic Bank (FRC 155.73, +0.68): +0.4% after beating EPS estimates. The bank also announced an increase of $0.05 in its quarterly cash dividend to $0.27 per share.

  • Delta Air Lines (DAL 40.97, +2.35): +6.1% after beating top and bottom-line estimates. The company guided Q3 (Sep) revenue below consensus.

  • Fastenal (FAST 59.20, +1.51): +2.6% after beating EPS estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Nikkei: +1.9% Hong Kong's Hang Seng: +0.3% China's Shanghai Composite: -0.8% India's Sensex: -0.4% South Korea's Kospi: +1.9% Australia's ASX All Ordinaries: +0.5%.

  • In economic data:

  • China's March trade surplus $47.38 bln (expected surplus of $22.40 bln; last surplus of $115.95 bln). March Imports -0.1% yr/yr (expected 8.0%; last 15.5%) and Exports 14.7% yr/yr (expected 13.0%; last 16.3%)

  • Japan's February Core Machinery Orders -9.8% m/m (expected -1.5%; last -2.0%); 4.3% yr/yr (expected 14.5%; last 5.1%). April Reuters Tankan Index 11 (last 8)

  • South Korea's March Unemployment Rate 2.7% (last 2.7%)

  • Australia's Westpac Consumer Sentiment -0.9% (last -4.2%)

  • New Zealand's March FPI 0.7% m/m (last -0.1%)


  • In news:

  • Japan's Prime Minister Kishida said that the supply of power will be "tight" in the summer and winter. A

  • former Bank of Japan governor warned that recent weakness in the yen will benefit large companies and will not be welcomed by small companies or households.

  • The Reserve Bank of New Zealand raised its official cash rate by 50 bps to 1.50% against expectations for a 25 bps hike.



  • Major European indices trade near their flat lines while Germany's DAX (-0.8%) underperforms. STOXX Europe 600: -0.1% Germany's DAX: -0.8% U.K.'s FTSE 100: +0.1% France's CAC 40: -0.3% Italy's FTSE MIB: -0.3% Spain's IBEX 35: +0.3%.

  • In economic data:

  • U.K.'s March CPI 1.1% m/m (expected 0.7%; last 0.8%); 7.0% yr/yr (expected 6.7%; last 6.2%). March Core CPI 0.9% m/m (expected 0.5%; last 0.8%); 5.7% yr/yr (expected 5.4%; last 5.2%). March Input PPI 5.2% m/m (expected 2.5%; last 1.8%) and Output PPI 2.0% m/m (expected 1.2%; last 0.9%)

  • Italy's February Industrial Production 4.0% m/m (expected 1.4%; last -3.4%); 3.3% yr/yr (expected 0.7%; prior -2.7%)

  • Spain's March CPI 3.0% m/m, as expected (last 0.8%); 9.8% yr/yr, as expected (last 7.6%)


  • In news:

  • U.K.'s inflation remained above target for the eighth consecutive month, accelerating to the fastest rate since 1992.

  • Finland lowered its 2022 growth forecast to 1.5% from 2.9%.

  • Hungary's finance minister said that this year's growth pace is uncertain but the country's economy remains on an upward trajectory.



U.S. equity futures:

  • S&P 500 Futures: +14 @ 4,411

  • DJIA Futures: +96 @ 34,317

  • Nasdaq 100 Futures: +62 @ 14,002

Overseas:

  • Europe: DAX -0.8%, FTSE +0.1%, CAC -0.3%

  • Asia: Nikkei +1.9%, Hang Seng +0.3%, Shanghai Composite -0.8%

Commodities:

  • Crude Oil +1.15 @ 101.75

  • Nat Gas +0.114 @ 6.794

  • Gold +2.30 @ 1978.40

  • Silver +0.172 @ 25.907

  • Copper -0.0182 @ 4.6913

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Ashland (ASH) provides upbeat preliminary MarQ results; reiterates FY22 outlook due to uncertainty surrounding the war in Ukraine and government-mandated lockdowns in China

  • Bed Bath & Beyond (BBBY) misses by $0.95, misses on revs

  • BlackRock (BLK) beats by $0.65, misses on revs

  • Delta Air Lines (DAL) beats by $0.02, beats on revs; guides Q3 (Sep) revs below consensus

  • Fastenal (FAST) beats by $0.02, reports revs in-line

  • First Republic Bank (FRC) beats by $0.11, reports revs in-line; raises dividend

  • GlaxoSmithKline (GSK) reaffirms its full-year 2022 guidance, the medium-term outlook for 2021-2026 of more than 5% sales and 10% adjusted operating profit CAGR at CER, and long-term sales ambition

  • Halozyme Therapeutics (HALO) reaffirms FY22 guidance following acquisition of ATRS

  • Hillman Solutions (HLMN) guides Q1 revenue above consensus

  • JPMorgan Chase (JPM) misses by $0.07, reports revs in-line

  • MaxCyte (MXCT) announces preliminary Q1 revenue, expects 69% growth yr/yr to $11.0 mln; CFO Amanda Murphy to depart, effective April 15; Ron Holtz, senior VP and Chief Accounting Officer named interim CFO

  • NanoString Technologies (NSTG) lowers Q1 product and service revenue guidance

  • Nutanix (NTNX) names Rukmini Sivaraman CFO, effective May 1; reaffirms AprQ and FY22 guidance

  • Osisko Gold Royalties (OR) provides preliminary deliveries update for Q1

  • PVH (PVH) announces execution of the PVH+ Plan; reaffirms Q1 and FY23 guidance; provides longer term guidance


  • General News:

  • Saint Louis Fed President James Bullard (voting FOMC member) in interview says "it is a fantasy" to believe Fed can control inflation without increasing rates to a level where they would adversely impact economy, according to Financial Times

  • Senator Joe Manchin (D-WV) says Fed should get more aggressive on inflation and White House should reverse restrictions on oil and gas production, according to Bloomberg

  • President Biden says Russian President Putin is carrying out "genocide" in Ukraine

  • Richmond Fed President Tom Barkin (not a voting FOMC member) says "the best short-term path for us is to move rapidly to the neutral range and then test whether pandemic-era inflation pressures are easing"

  • 84% of Americans plan to cut back on spending because of inflation, according to Bloomberg

  • IEA cuts oil demand forecast amid China lockdowns; estimate for global oil demand has been lowered by 260 kb/d for the year versus last month's report

  • Alphabet (GOOG) announces plans to invest approximately $9.5 billion in our U.S. offices and data centers in 2022

  • AMC Entertainment (AMC) finalizes deal with Bow Tie Cinemas to purchase and operate seven locations in Connecticut, upstate New York, and Maryland

  • Amryt Pharma plc (AMYT) announces positive long-term safety and efficacy data for Mycapssa (oral octreotide) from the 2nd Year of OPTIMAL open label extension study in acromegaly patients

  • Bayer (BAYRY) receives approval for precision oncology treatment Vitrakvi in China

  • BriaCell (BCTX) Presents Development Details of Bria-OTS Platform Technology at the American Association for Cancer Research (AACR) Annual Meeting 2022

  • Cable ONE (CABO) appoints Todd Koetie as its next CFO, succeeding Steven Cochran, effective July 1, 2022

  • CBIZ (CBZ) announces passing of Chairman

  • Cirrus Logic (CRUS) appoints Venk Nathamuni CFO, effective April 18

  • Clean Energy Fuels (CLNE) announces new fueling contracts, infrastructure expansions, and RNG production projects

  • Ebix (EBIX) announced that the Supreme Court of Delaware has upheld the ruling of the Delaware Chancery Court that had ruled against India-based travel agency platform Yatra

  • Endeavour Silver (EXK) Continues to Intersect High-Grade Silver-Gold Mineralization and Extend the El Curso Orebody Along Strike and at Depth at its Guanacevi Mine

  • Energy Fuels (UUUU) Hits Critical Mineral 'Trifecta' in Rare Earths, Uranium & Vanadium; Now Performing Commercial-Scale Partial Rare Earth Separation

  • Erasca (ERAS) Presents Compelling Preclinical Data Supporting Clinical Development of Potentially Best-In-Class Programs ERAS-007, ERAS-601, and ERAS-3490 at 2022 AACR Annual Meeting

  • GoldMining Inc. (GLDG) files Early Warning Report

  • Gritstone (GRTS) Presentations at AACR Further Support Expertise in Neoantigen Vaccine Design and Delivery

  • HarborOne Bancorp (HONE) approves a new share repurchase program to buyback up to 2,526,134 shares (approx. 5% of market cap)

  • Ikena Oncology (IKNA) announces the appointment of Jotin Marango to Chief Financial Officer and Head of Corporate Development

  • InterActiveCorp (IAC) and Angi Inc. (ANGI) report monthly metrics for March

  • Linde plc (LIN) announces it is expanding its La Porte, Texas, facility, effectively doubling the facility's merchant liquid production capacity

  • Maxeon Solar (MAXN) appoints Donald Colvin to succeed Kevin Kennedy as its new chairman of the board of directors, effective immediately

  • Microsoft (MSFT) cloud business tactics could be an antitrust issue, according to Financial Times

  • New Found Gold Corp. (NFGC) makes new discovery between keats and golden joint intersecting 43.9 g/t au over 3.85m

  • Nordic American Tanker (NAT) provides Suezmaxes rate update

  • Novavax (NVAX) receives Conditional Marketing Authorization from Swissmedic for its COVID-19 Vaccine

  • ORIC Pharmaceuticals (ORIC) Presents Promising Preclinical Data on Three Programs at the 2022 American Association for Cancer Research (AACR) Annual Meeting

  • Park Hotels & Resorts (PK) provides update on operating trends

  • PayPal (PYPL) announces the departure of CFO John Rainey; Gabrielle Rabinovitch will serve as interim CFO

  • Peloton (PTON): Activist Blackwells Capital plans to pursue legal actions if PTON doesn't take series of actions, including inviting bids, according to Financial Times

  • Phillips 66 (PSX) CEO Greg Garland to step down on July 1; he will be replaced by COO Mark Lashier who will then become CEO

  • Procter & Gamble (PG) increases quarterly dividend by 5% to $0.9133/sh, new yield is 2.3%

  • SomaLogic (SLGC) announces journal publication of landmark proteomics study

  • Sony (SONY): Following improvements made by Sony and Nintendo (NTDOY) to their gaming subscription practices the CMA has now closed its investigation into the online gaming sector

  • Squarespace (SQSP) CFO Marcela Martin announces her intention to resign, effective July 31

  • Stellantis (STLA) consolidates financial services in China

  • T Mobile (TMUS): Deutsche Telecom (DTEGY) aiming to purchase additional shares of T Mobile for $2.4 bln, according to Reuters

  • TreeHouse Foods (THS) names JANA partner Scott Ostfeld to Board of Directors; co and JANA entered into an appointment agreement

  • Turning Point Therapeutics (TPTX) Announces Positive Topline Data by Blinded Independent Central Review for Repotrectinib Across All ROS1-Positive NSCLC Cohorts of Phase 1/2 TRIDENT-1 Study

  • Twitter (TWTR): Cathie Wood has been selling Twitter amid Elon Musk news, according to CNBC

  • Twitter (TWTR): Elon Musk was sued for delaying Twitter stake disclosure, according to Bloomberg

  • Univar Solutions (UNVR) announces new distribution agreement with Ashland (ASH)

  • Victory Capital (VCTR) reports assets under management of $178.1 bln as of March 31

  • Walmart (WMT) appoints John Rainey as CFO, who joins company from PayPal where he serves as CFO and Executive Vice President, Global Customer Operations


  • M&A:

  • Antares Pharma (ATRS) to be acquired by Halozyme (HALO) for $5.60 per share

  • Compass Minerals (CMP) receives maximum earnout payment from sale of South America specialty plant nutrition business

  • CTS Corp (CTS) announces definitive agreement to acquire Meggitt A/S for Danish Krone 525 mln in cash

  • FEMSA's (FMX) subsidiary Envoy Solutions agrees to acquire Sigma Supply of North America; financial details not disclosed

  • Noble Corporation (NE) and Maersk Drilling provide update on ongoing merger control process

  • Sierra Oncology (SRRA) acquired by GSK for $55 per share

  • Trimble (TRMB) to divest four businesses to The Jordan Company


  • Syndicate:

  • Affimed Therapeutics (AFMD) prices offering of 22.5 mln shares of common stock at $4.00 per share

  • Crinetics Pharmaceuticals (CRNX) prices offering of 5,625,563 shares of its common stock at $22.22 per share

  • Hillman Solutions Corp. (HLMN) announced the upsize and pricing of the previously announced underwritten public offering of shares of the Company's common stock by certain stockholders of the Company

  • Liquidia Technologies (LQDA) prices offering of 9,803,922 shares of its common stock at $5.10


  • IPOs:

  • Expected to Price:

  • Applied Blockchain (Nasdaq: APLD): The developer of next-generation data centers is expected to price its 3.2 mln share IPO between $16.50-$20.50.

  • Excelerate Energy (NYSE: EE): The provider of flexible liquefied natural gas solutions to emerging markets is expected to price its 16.0 mln share IPO between $21-$24.



Gapping Up/Down

  • Gapping up:

  • ATRS +47.9%, SRRA +36.3%, NTNX +5.5%, SLGC+5.3%, AFMD +5.3%, NVAX +2.4%, ASH +1.9%, SB+1.3%, ERAS +1.1%, PSX +1%, GSK +1%, AMC+0.6%, HONE +0.6%


  • Gapping down:

  • NSTG -32.6%, LQDA -14.5%, HLMN -9.4%, ALPN-8.6%, CRNX -5%, MXCT -3.3%, OR -2.9%, TPTX-2.4%, PYPL -2.2%, ANGI -2.2%, SQSP -1.9%, BCTX-1.9%, GRTS -1.4%, HALO -0.8%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Booz Allen Hamilton (BAH) upgraded to Buy from Neutral at Goldman; tgt raised to $102

  • J.B. Hunt Transport (JBHT) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $230

  • Humana (HUM) upgraded to Buy from Neutral at UBS; tgt raised to $520


  • Downgrades:

  • Adecco S.A. (AHEXY) downgraded to Hold from Buy at Deutsche Bank

  • Bicycle Therapeutics (BCYC) downgraded to Neutral from Buy at B. Riley Securities; tgt lowered to $33

  • CACI Intl (CACI) downgraded to Neutral from Buy at Goldman; tgt raised to $336

  • CarMax (KMX) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $110

  • Ferguson plc (FERG) downgraded to Hold from Buy at Deutsche Bank

  • Hammerson (HMSNF) downgraded to Underweight from Neutral at JP Morgan

  • Hecla Mining (HL) downgraded to Neutral from Buy at ROTH Capital; tgt raised to $6.50

  • Home Point Capital (HMPT) downgraded to Mkt Perform from Mkt Outperform at JMP Securities

  • Integra (IART) downgraded to Hold from Buy at Truist; tgt lowered to $71

  • Medtronic (MDT) downgraded to Hold from Buy at Truist; tgt lowered to $121

  • Randstad (RANJY) downgraded to Hold from Buy at Deutsche Bank

  • Reynolds Consumer Products (REYN) downgraded to Hold from Buy at Stifel; tgt lowered to $31

  • Sony (SONY) downgraded to Outperform from Buy at CLSA

  • Thor Industries (THO) downgraded to Underperform from Neutral at Exane BNP Paribas; tgt $65


  • Others:

  • Addus HomeCare (ADUS) initiated with a Buy at BofA Securities; tgt $110

  • Alector (ALEC) initiated with a Sell at Goldman; tgt $9

  • Amicus Therapeutics (FOLD) resumed with a Neutral at Goldman; tgt $11

  • Boston Scientific (BSX) assumed with a Buy at Truist; tgt $52

  • Camping World (CWH) initiated with a Neutral at DA Davidson; tgt $29

  • Dutch Bros (BROS) initiated with a Buy at Gordon Haskett; tgt $64

  • Edgewise Therapeutics (EWTX) initiated with an Outperform at RBC Capital Mkts; tgt $31

  • Edwards Lifesciences (EW) initiated with a Buy at Truist; tgt $145

  • Flywire (FLYW) initiated with an Outperform at SMBC Nikko; tgt $40

  • Globus Medical (GMED) assumed with a Buy at Truist; tgt raised to $91

  • Inspire Medical Systems (INSP) initiated with a Buy at Truist; tgt $315

  • Intuitive Surgical (ISRG) initiated with a Buy at Truist; tgt $360

  • Lantheus Holdings (LNTH) initiated with a Buy at Truist; tgt $77

  • LCI Industries (LCII) initiated with a Buy at DA Davidson; tgt $130

  • LXP Industrial Trust (LXP) resumed with an In-line at Evercore ISI; tgt $15

  • nCino (NCNO) initiated with an Equal-Weight at Morgan Stanley; tgt $60

  • Nevro (NVRO) assumed with a Hold at Truist; tgt raised to $80

  • NuVasive (NUVA) assumed with a Buy at Truist; tgt raised to $65

  • SeaSpine (SPNE) assumed with a Buy at Truist; tgt $20

  • Stryker (SYK) initiated with a Hold at Truist; tgt $296

  • Teleflex (TFX) initiated with a Hold at Truist; tgt $370

  • Tricida (TCDA) initiated with a Buy at Goldman; tgt $25

  • Warner Bros. Discovery (WBD) initiated with a Buy at BofA Securities; tgt $45

  • Winnebago (WGO) initiated with a Buy at DA Davidson; tgt $70

  • Zimmer Biomet (ZBH) downgraded to Hold from Buy at Truist; tgt raised to $142


Upcoming Events:

  • Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for April 9 (Briefing.comConsensus NA; Prior -6.3%)

  • 08:30 ET: PPI for Mar (Briefing.comConsensus 1.2%; Prior 0.8%)

  • 08:30 ET: Core PPI for Mar (Briefing.comConsensus 0.5%; Prior 0.2%)

  • 10:30 ET: EIA Crude Oil Inventories for April 9 (Briefing.comConsensus NA; Prior +2.42M)


  • Earnings:

  • Tuesday (Apr 12)

  • Morning: ACI KMX


  • Wednesday (Apr 13)

  • Morning: BBBY BLK DAL FAST FRC JPM SJR

  • Afternoon: WAFD


  • Thursday (Apr 14)

  • Morning: ALLY C ERIC GS MS PNC PGR RAD STT TSM USB UNH WFC



Asia & Europe detail:

Asia: Nikkei +1.9%, Hang Seng +0.3%, Shanghai Composite -0.8%

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Prime Minister Kishida said that the supply of power will be "tight" in the summer and winter. A former Bank of Japan governor warned that recent weakness in the yen will benefit large companies and will not be welcomed by small companies or households. The Reserve Bank of New Zealand raised its official cash rate by 50 bps to 1.50% against expectations for a 25 bps hike.

  • In economic data:

  • China's March trade surplus $47.38 bln (expected surplus of $22.40 bln; last surplus of $115.95 bln). March Imports -0.1% yr/yr (expected 8.0%; last 15.5%) and Exports 14.7% yr/yr (expected 13.0%; last 16.3%)

  • Japan's February Core Machinery Orders -9.8% m/m (expected -1.5%; last -2.0%); 4.3% yr/yr (expected 14.5%; last 5.1%). April Reuters Tankan Index 11 (last 8)

  • South Korea's March Unemployment Rate 2.7% (last 2.7%)

  • Australia's Westpac Consumer Sentiment -0.9% (last -4.2%)

  • New Zealand's March FPI 0.7% m/m (last -0.1%)


---Equity Markets---

  • Japan's Nikkei: +1.9%

  • Hong Kong's Hang Seng: +0.3%

  • China's Shanghai Composite: -0.8%

  • India's Sensex: -0.4%

  • South Korea's Kospi: +1.9%

  • Australia's ASX All Ordinaries: +0.5%

---FX---

  • USD/JPY: +0.5% to 126.04

  • USD/CNH: UNCH at 6.3750

  • USD/INR: UNCH at 76.13

Europe: DAX -0.8%, FTSE +0.1%, CAC -0.3%

Major European indices trade near their flat lines while Germany's DAX (-0.8%) underperforms. U.K.'s inflation remained above target for the eighth consecutive month, accelerating to the fastest rate since 1992. Finland lowered its 2022 growth forecast to 1.5% from 2.9%. Hungary's finance minister said that this year's growth pace is uncertain but the country's economy remains on an upward trajectory.

  • In economic data:

  • U.K.'s March CPI 1.1% m/m (expected 0.7%; last 0.8%); 7.0% yr/yr (expected 6.7%; last 6.2%). March Core CPI 0.9% m/m (expected 0.5%; last 0.8%); 5.7% yr/yr (expected 5.4%; last 5.2%). March Input PPI 5.2% m/m (expected 2.5%; last 1.8%) and Output PPI 2.0% m/m (expected 1.2%; last 0.9%)

  • Italy's February Industrial Production 4.0% m/m (expected 1.4%; last -3.4%); 3.3% yr/yr (expected 0.7%; prior -2.7%)

  • Spain's March CPI 3.0% m/m, as expected (last 0.8%); 9.8% yr/yr, as expected (last 7.6%)


---Equity Markets---

  • STOXX Europe 600: -0.1%

  • Germany's DAX: -0.8%

  • U.K.'s FTSE 100: +0.1%

  • France's CAC 40: -0.3%

  • Italy's FTSE MIB: -0.3%

  • Spain's IBEX 35: +0.3%

---FX---

  • EUR/USD: +0.1% to 1.0839

  • GBP/USD: +0.1% to 1.3014

  • USD/CHF: +0.1% to 0.9333

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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