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13/02/23 Briefing

Updated: Feb 17

The S&P 500 futures are up 12 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 75 points and are trading 0.6% above fair value. The Dow Jones Industrial Average futures are up 52 points and are trading 0.2% above fair value.

Equity futures indicate a higher open with the Nasdaq 100 futures outperforming thanks to upside leadership from the mega cap space. Moves are otherwise modest in scope as investors await key data releases next week, including the Consumer Price Index, Retail Sales, Industrial Production, Housing Starts, and Producer Price Index reports all from January.

The EU Commission's winter forecast called for 0.9% growth in the eurozone, versus 0.6% in the autumn forecast, while the outlook for 2024 remains unchanged at 1.5%.

Geopolitical angst is also in play this morning after the U.S. shot down three flying objects over Alaska, Canada, and Michigan over the last three days. This follows the Chinese spy balloon that was shot down last week.

The 2-yr Treasury note yield is up four basis points to 4.55% and the 10-yr note yield is unchanged at 3.74%. The U.S. Dollar Index is down 0.1% to 103.52.

Energy complex futures are trading mixed. WTI crude oil futures are down 0.1% to $79.68/bbl and natural gas futures are up 0.7% to $2.53/mmbtu.

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

In corporate news:

  • Zillow (ZG 44.44, +2.22, +5.3%): upgrade from In Line to Outperform at Evercore ISI

  • Check Point Software (CHKP 133.00, +5.84, +4.6%): beats by $0.09, reports revs in-line; announces $2.0 bln expansion of share repurchase program

  • TreeHouse Foods (THS 40.96, -7.37, -15.3%): misses by $0.01, misses on revs; guides FY23 revs below consensus

  • Fidelity Nat'l Info (FIS 70.00, -5.43, -7.2%): beats by $0.01, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus; confirms merchant business spin off

  • Monday.com (MNDY 145.50, +14.32, +10.9%): beats by $0.80, beats on revs; guides Q1 revs above consensus; guides FY23 revs above consensus

  • Teradata (TDC 35.80, +1.53, +4.5%): beats by $0.05, beats on revs; guides Q1 EPS above consensus; guides FY23 EPS above consensus, revs above consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly lower note. Japan's Nikkei: -0.9%, Hong Kong's Hang Seng: -0.1%, China's Shanghai Composite: +0.7%, India's Sensex: -0.4%, South Korea's Kospi: -0.7%, Australia's ASX All Ordinaries: -0.2%.

  • In economic data:

  • Singapore's Q4 GDP 0.3% qtr/qtr, as expected (last 0.8%); 2.1% yr/yr (expected 2.3%; last 4.0%)


  • In news:

  • Kazuo Ueda, who is expected to receive the nomination to lead the Bank of Japan, said that current monetary policy stance is appropriate and that easy policy needs to continue.

  • India is reportedly looking to triple its defense-related exports over the next two years.

  • Reserve Bank of Australia Governor Lowe will face parliamentary hearings on Wednesday and Friday.



  • Major European indices trade in the green. STOXX Europe 600: +0.4%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: +0.5%.

  • In economic data:

  • Swiss January CPI 0.6% m/m (expected 0.4%; last -0.2%); 3.3% yr/yr (expected 2.9%; last 2.8%)


  • In news:

  • The EU Commission's winter forecast called for 0.9% growth in the eurozone while the outlook for 2024 remains unchanged at 1.5%.

  • Inflation for 2023 is expected to decelerate to 5.6% and slow to 2.5% in 2024.

  • Bank of Italy Governor Visco said that additional rate hikes will be justified if there is a wage-price spiral, adding that he does not know where the terminal rate will be.

  • Moody's affirmed Germany's AAA rating with a Stable outlook.



U.S. equity futures:

  • S&P 500 Futures: +13 @ 4,104

  • DJIA Futures: +56 @ 33,965

  • Nasdaq 100 Futures: +76 @ 12,381

Overseas:

  • Europe: DAX +0.3%, FTSE +0.4%, CAC +0.7%

  • Asia: Nikkei -0.9%, Hang Seng -0.1%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil -0.01 @ 79.71

  • Nat Gas +0.017 @ 2.531

  • Gold -2.25 @ 1872.25

  • Silver -0.055 @ 22.02

  • Copper +0.0315 @ 4.048

Earnings/Guidance:

  • Bally's Corporation ( BALY 0.78% ) provides Q4 and FY23 upside revenue guidance

  • CEMEX S.A. ( CX 1.14% ) reports Q4 results; misses on revs

  • Check Point Software ( CHKP 0.10% ) beats by $0.09, reports revs in-line; announces $2.0 bln expansion of share repurchase program

  • Fidelity Nat'l Info ( FIS 0.00% ) beats by $0.01, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus

  • IAA ( IAA 0.60% ) reports prelim Q4 revs miss

  • Monday.com ( MNDY 6.24% ) beats by $0.80, beats on revs; guides Q1 revs above consensus; guides FY23 revs above consensus

  • Ritchie Bros. ( RBA 0.76% ) announces upside prelim Q4 revs

  • Sotera Health ( SHC 2.39% ) reaffirms FY22 revs in conjunction with incremental debt financing

  • Teradata ( TDC 2.28% ) beats by $0.05, beats on revs; guides Q1 EPS above consensus; guides FY23 EPS above consensus, revs above consensus

  • TreeHouse Foods ( THS 1.45% ) misses by $0.01, misses on revs; guides FY23 revs below consensus

News:

  • US shot down three flying objects over Alaska, Canada, and Michigan over the last three days. Objects have not been identified, but there is no evidence of extraterrestrial activity. This follows the Chinese spy balloon that was shot down last week, according to the New York Times

  • President Biden prepared to ask Congress for largest defense budget in history, according to Politico

  • The Biden administration will allow Medicaid money to be spent on food, according to the Wall Street Journal

  • French unions threatened to bring country "to a halt", according to Bloomberg

  • President Biden's budget that will be released in March is expected to focus on tax increases on corporations and wealthy to bring down deficit, according to Axios

  • EU commission issues Winter 2023 Economic Forecast: EU economy set to avoid recession, but headwinds persist

  • EU Commission sets out rules for renewable hydrogen

  • White House issues readout of call between President Biden and Prime Minister Trudeau of Canada

  • White House issues joint statement following the meeting between President Biden and President Lula of Brazil

  • US oil producers looking for M&A deals, according to Financial Times

  • Senate Majority Leader Chuck Schumer says US should "look at" banning TikTok, according to Bloomberg

  • 50 million people bet over $16 billion on Super Bowl 57, according to CNN

  • Alcon ( ALC 0.11% ) announces settlement of litigation related to femtosecond laser assisted cataract surgery devices

  • Amazon ( AMZN 0.64% ) eliminates 300 jobs at Zappos, according to the Wall Street Journal

  • American Homes 4 Rent ( AMH 0.18% ) increases quarterly dividend 22% to $0.22/share from $0.18/share

  • Apple ( AAPL 0.09% ) move into financial services delayed, according to Bloomberg

  • Axsome Therapeutics ( AXSM 0.00% ) received a Paragraph IV Certification Notice Letter from Teva (TEVA)

  • Bally's Corporation ( BALY 0.78% ) names Robeson Reeves As CEO

  • Banc of California ( BANC 0.87% ) increases quarterly cash dividend to $0.10 per share from $0.06 per share

  • Bed Bath & Beyond ( BBBY 9.62% ) aiming to wind down Canadian operations, according to Reuters

  • Clene ( CLNN 8.78% ) Reports New Data from the VISIONARY-MS Phase 2 Study in Multiple Sclerosis Demonstrating CNM-Au8 Treatment Improved Brain Neuronal Structural Integrity

  • Community Healthcare Trust ( CHCT 2.12% ) Chairman/CEO/President takes leave of absence

  • Eli Lilly ( LLY 0.97% ) and IABL collaborate to ensure patient access to high-quality affordable insulin in Bangladesh

  • Entegris ( ENTG 1.13% ) Purchase Agreement with Infineum USA L.P. was terminated

  • Fidelity National Information Services ( FIS 0.00% ) preparing breakup, according to Reuters

  • Fidelity Nat'l Info ( FIS 0.00% ) confirms spin off merchant business

  • Ford Motor ( F 5.63% ) plans to to build an EV battery plant in Michigan with Chinese partner, according to Bloomberg

  • Freeport-McMoRan ( FCX 1.35% ) provides update on PT Freeport Indonesia Operations

  • G1 Therapeutics ( GTHX 2.73% ) announces top line results from pivotal Phase 3 Trial; Early anti-tumor efficacy data favored placebo arm over the trilaciclib arm

  • Google ( GOOG 0.63% ) search executive warned against negatives regarding AI chat, according to Reuters

  • Gracell Biotechnologies ( GRCL 5.65% ) Announces China NMPA Clearance for IND Application for Phase 1/2 Clinical Trial of FasTCAR-T GC012F for Treatment of Relapsed/Refractory Multiple Myeloma

  • Hawaiian Electric ( HA 3.41% ) raises quarterly dividend to $0.36 per share from $0.35 per share

  • Hut 8 Mining ( HUT 8.20% ) issues production and operations update for January 2023

  • Ironwood Pharma ( IRWD 0.27% ) announces FDA filing acceptance and priority review of supplemental new drug application for lINZESS for functional constipation in children and adolescents ages 6-17 years-old

  • KBR ( KBR 1.30% ) increases quarterly cash dividend 12.5% to $0.135/share from $0.12/share

  • Kinder Morgan ( KMI 0.00% ) fuel leak impacts western fuel deliveries, according to ABC News

  • Kinross Gold ( KGC 1.41% ) announces robust initial mineral resource of 2.7 Moz. indicated and 2.3 Moz. inferred for Great Bear project

  • Marriott ( MAR 2.02% )appoints CEO Anthony Capuano as President and CEO, effective February 24

  • Meta ( META 2.12% ) mulling another round of job cuts, according to Financial Times

  • Neuronetics ( STIM 2.85% ) announces updated policy from NGS expanding access for patients to its NeuroStar Advanced Therapy for mental health TMS, effective April 1

  • Nikola ( NKLA 0.00% ) began work on hydrogen plants, according to the Wall Street Journal

  • Nissan Motor ( NSANY ) and Renault renew commitment to Indian operations through new investment and vehicles

  • Novavax ( NVAX 1.02% ) aiming to sell 1.5 mln COVID-19 shots to US government, according to the Wall Street Journal

  • Ocular Therapeutix ( OCUL 1.78% ) announces Interim 10-month Data from the Ongoing U.S. Phase 1 Clinical Trial Evaluating OTX-TKI for the Treatment of Wet AMD

  • Opthea Ltd. ( OPT 0.00% ): Opthea phase 2b trial results of OPT-302 in combination with Lucentis for wet AMD Published in the Journal Ophthalmology

  • Ouster ( OUST 1.29% ) and Velodyne (VLDR) complete merger of equals to accelerate Lidar adoption

  • PG&E ( PCG 0.00% ) announces Sumeet Singh will assume role of COO, effective March 1

  • REGENXBIO ( RGNX 0.09% ) Presents Interim Data from Phase II Bridging Study Evaluating the Clinical Performance of RGX-314 Using the NAVXpress Manufacturing Platform Process

  • Scilex Holding ( SCLX 5.26% ) acquires rights to FDA-approved ELYXYB in the U.S. and Canada

  • SOPHiA GENETICS SA ( SOPH 2.60% ) expands partnership with AstraZeneca (AZN) to include multimodal approaches for cancer drug development

  • Toyota ( TM 0.97% ) aiming to accelerate electric vehicle shift, according to the Wall Street Journal

  • Vodafone PLC ( VOD 0.81% ): EU Commission clears creation of a joint venture by Deutsche Telekom (DTEGY), Orange (ORAN), Telefnica (TEF) and Vodafone

  • Zentalis Pharma ( ZNTL 0.29% ) announces appointment of Iris Roth, PhD, as Chief Operating Officer

M&A:

  • B2Gold ( BTG 0.55% ) announces acquisition of Sabina Gold & Silver Corp

  • Berkshire Grey ( BGRY 13.74% ) confirms that it has received a non-binding indication of interest from SoftBank at $1.30 per share

  • Chevron ( CVX 2.10% ) aiming to sell Myanmar assets, according to Reuters

  • Citigroup ( C 0.26% ) nearing sale of Mexican bank, according to Financial Times

  • JetBlue Airways ( JBLU 2.00% ): DOJ likely to block pending $3.8 bln merger with Spirit Airlines (SAVE), according to Politico

Syndicate:

  • Cogent Biosciences ( COGT 3.80% ) files mixed securities shelf offering

IPOs:

  • Expected to Price: No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • OCUL +17.3%, OPT +11%, SOPH +8.7%, OUST +8.5%, BBAI +7.5%, CHKP +3.4%, AI +3.3%, VNET +3%, SOUN +2.5%, BGRY +2.4%, HE +2.1%, BANC +1.9%, AMH +1.4%, MSFT +1.2%, NVDA +1.2%, BZFD +1.2%, STIM +1.1%, KBR +1%, AMD +0.8%


  • Gapping down:

  • GTHX -39.1%, ALC -2%, COGT -1%, FCX -1%, KMI -0.9%



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

  • Upgrades

  • AllianceBernstein (AB) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $43.50

  • Fastly (FSLY) upgraded to Buy from Underperform at BofA Securities; tgt raised to $16

  • Five Below (FIVE) upgraded to Buy from Neutral at ROTH MKM; tgt raised to $240

  • Masco (MAS) upgraded to Hold from Sell at Deutsche Bank; tgt raised to $56

  • Newmont Goldcorp (NEM) upgraded to Outperform from Neutral at Exane BNP Paribas; tgt $60

  • Progressive (PGR) upgraded to Neutral from Underweight at Piper Sandler; tgt raised to $138

  • Ralph Lauren (RL) upgraded to Buy from Neutral at BofA Securities; tgt raised to $145

  • Verrica Pharmaceuticals (VRCA) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $11


  • Downgrades:

  • Advance Auto (AAP) downgraded to Neutral from Buy at ROTH MKM; tgt lowered to $140

  • Barrick (GOLD) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $19

  • Capri Holdings (CPRI) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $55

  • Credit Suisse (CS) downgraded to Reduce from Hold at Kepler

  • Deutsche Bank (DB) downgraded to Underperform from Neutral at BofA Securities

  • Heritage Insurance (HRTG) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $2.20

  • Rio Tinto (RIO) downgraded to Neutral from Outperform at Exane BNP Paribas

  • Saia (SAIA) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt raised to $230

  • Surmodics (SRDX) downgraded to Hold from Buy at Needham

  • United Fire Group (UFCS) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $25

  • XPO, Inc. (XPO) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $43


  • Others:

  • Arcellx (ACLX) initiated with a Buy at H.C. Wainwright; tgt $42

  • Okta (OKTA) initiated with an Underperform at BofA Securities; tgt $64

  • OmniAb (OABI) initiated with a Buy at H.C. Wainwright; tgt $11


Upcoming Events:

  • Econ Data:

  • No economic data of note.


  • Earnings:

  • Monday (Feb 13)

  • Morning: CHKP MNDY TDC THS

  • Afternoon: AMKR ANGI ACGL ANET CAR NTB BLKB BRX CDNS DENN ES FE IAC INST IRBT LSCC MEDP MKSI MRC OTTR PLTR SEDG VNO


  • Tuesday (Feb 14)

  • Morning: CAE CLF KO ECL DAVA ENTG EXC FELE GEO GFS HRI HWM INMD IPGP LCII LDOS MAR MIR BTU PKI QSR SAFE TRP TRU TRTN WCC ZTS

  • Afternoon: ADPT ABNB AKAM ANDE BL CRK CNDT DVN WIRE GDDY GXO HLF LTHM MGY NMIH OSUR SCI SU TX TRIP UDMY UPST


  • Wednesday (Feb 15)

  • Morning: ADI AVNT GOLD BIIB CLBT CEVA CHEF CIM CHH FIS GNRC HCSG HL IDCC KRNT KHC DNUT LAD MLM NVMI OC PSN RBLX R SABR SITE SAH SUN TMHC TTD TPG WAB WKME WAT

  • Afternoon: TXG ALB ALSN AMED AEE AIG AWK AMPL AM AR ATCO AVTA SAM CF CSCO CYH CPA ET EQT EQIX FARO FSLY FCPT HST INVH KGC MFC MRO MSA NEX NUS NTR PLMR PGRE PEGA QS QDEL RSG REZI ROIC RNG ROKU ROL RPT SGEN SHOP STAG SUM SPWR SNPS TNET TROX TRUP TWLO TYL UPWK VECO HCC WCN WELL WH ZD ZG


  • Thursday (Feb 16)

  • Morning: ALKS ALE ARCH ATHM BLMN BPMC CAMT CBZ FUN CVE CEG CROX DDOG DOCN DTM DNB ETR EPAM FOCS HAS HSIC H IDA ITGR IRDM IRWD KBR KELYA LH LXP MTRN NMRK DNOW OGN PARA PBF POOL POR RCM RS SAGE STNG SHAK SO SCL SYNH TOST TSEM USFD VC VNT VMC WSO WST WE ZBRA

  • Afternoon: AEM AL AEL COLD AMN APPN AMAT ATR BIO BJRI BFAM CWST CHUY CGNX COHU ED DLR DASH DKNG DBX ELME EIG FBIN GLOB LOPE HTGC HUBS INDI KNSL LTC MERC MNTV NVRO NWE OIS OEC PACB PCOR RMAX RDFN SWAV TSLX STEM TXRH RARE


  • Friday (Feb 17)

  • Morning: AMCX ABR AN B CNP CBRG DE MD PPL



Asia & Europe detail:

Asia: Nikkei -0.9%, Hang Seng -0.1%, Shanghai Composite +0.7%

Equity indices in the Asia-Pacific region began the week on a mostly lower note. Kazuo Ueda, who is expected to receive the nomination to lead the Bank of Japan, said that current monetary policy stance is appropriate and that easy policy needs to continue. India is reportedly looking to triple its defense-related exports over the next two years. Reserve Bank of Australia Governor Lowe will face parliamentary hearings on Wednesday and Friday.

  • In economic data:

  • Singapore's Q4 GDP 0.3% qtr/qtr, as expected (last 0.8%); 2.1% yr/yr (expected 2.3%; last 4.0%)


---Equity Markets---

  • Japan's Nikkei: -0.9%

  • Hong Kong's Hang Seng: -0.1%

  • China's Shanghai Composite: +0.7%

  • India's Sensex: -0.4%

  • South Korea's Kospi: -0.7%

  • Australia's ASX All Ordinaries: -0.2%

---FX---

  • USD/JPY: +1.0% to 132.60

  • USD/CNH: +0.2% to 6.8313

  • USD/INR: +0.2% to 82.66

Europe: DAX +0.3%, FTSE +0.4%, CAC +0.7%

Major European indices trade in the green. The EU Commission's winter forecast called for 0.9% growth in the eurozone while the outlook for 2024 remains unchanged at 1.5%. Inflation for 2023 is expected to decelerate to 5.6% and slow to 2.5% in 2024. Bank of Italy Governor Visco said that additional rate hikes will be justified if there is a wage-price spiral, adding that he does not know where the terminal rate will be. Moody's affirmed Germany's AAA rating with a Stable outlook.

  • In economic data:

  • Swiss January CPI 0.6% m/m (expected 0.4%; last -0.2%); 3.3% yr/yr (expected 2.9%; last 2.8%)


---Equity Markets---

  • STOXX Europe 600: +0.4%

  • Germany's DAX: +0.3%

  • U.K.'s FTSE 100: +0.4%

  • France's CAC 40: +0.7%

  • Italy's FTSE MIB: +0.5%

  • Spain's IBEX 35: +0.5%

---FX---

  • EUR/USD: +0.2% to 1.0692

  • GBP/USD: +0.3% to 1.2097

  • USD/CHF: -0.2% to 0.9215


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