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13/09/22 Briefing


The S&P 500 futures are up 29 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 89 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 211 points and are trading 0.4% above fair value.

Equity futures have a positive disposition thanks to carryover upside momentum and optimism that the August CPI release will support the peak inflation narrative, feeding a view the Fed might cut rates next year.

The BofA Global Fund Manager Survey, according to Reuters, showed the highest cash levels since 2001 and record low exposure to global equities, which is acting as a contrarian support factor. 

A railroad worker strike could begin Friday as two of the largest railroad unions have yet to reach an agreement to avoid a strike; however, it is thought the government will intervene to prevent any outsized economic impact from a possible strike. 

Treasury yields are pulling back this morning with the 2-yr note yield down four basis points to 3.52% and the 10-yr note yield down four basis points to 3.31%.

Energy complex futures are moving higher. WTI crude oil futures are up 1.4% to $88.98/bbl. Natural gas futures are up 1.2% to $8.35/mmbtu.

The closely-watched August CPI (Briefing.comconsensus -0.1%; prior 0.0%) and core CPI (Briefing.comconsensus +0.3%; prior +0.3%) are out at 8:30 a.m. ET

In corporate news:

  • Akero Therapeutics (AKRO 23.47, +11.20, +91.28%): In Akero Therapeutics' Phase 2b HARMONY Study, Both the 50mg and 28mg EFX Doses Achieved Statistical Significance on Primary and Secondary Histology Endpoints after 24 Weeks

  • Peloton (PTON 11.18, +0.13, +1.18%): announces leadership changes, including resignation of Executive Chair John Foley, who co-founded the company; appoints Karen Boone as Chairperson of the Board, who previously served as President and CFO of Restoration Hardware

  • Planet Labs (PL 6.07, +0.65, +11.99%): misses by $0.04, beats on revs; guides Q3 revs in-line; guides FY23 revs above consensus

  • Rent the Runway (RENT 3.7300, -1.20, -24.34%): beats by $0.07, beats on revs; guides Q3 revs below consensus; guides FY23 revs below consensus; announces restructuring plan to reduce costs, including a 24% workforce reduction

  • Oracle (ORCL 78.42, +1.34, +1.74%): misses by $0.04, reports revs in-line; guides Q2 (Nov) adjusted EPS below consensus, revs below consensus largely due to FX headwinds; announces that MySQL HeatWave is now available on AWS

  • Catalyst Pharma (CPRX 16.30, +1.15, +7.59%): will replace Mantech International Corp. (MANT) in the S&P SmallCap 600 effective prior to the opening of trading on September 15

  • Braze (BRZE 41.49, -2.09, -4.80%): beats by $0.04, beats on revs; guides Q3 EPS below consensus, revs in-line; guides FY23 EPS above consensus, revs in-line

  • Twitter (TWTR 41.71, +0.30, +0.72%): Twitter shareholders approve sale to Elon Musk

  • AppLovin (APP 29.27, +0.76, +2.67%): confirms that it does not intend to submit another proposal to combine with Unity Software and has withdrawn its initial proposal

  • Eastman Chemical (EMN 93.94, -0.93, -0.98%): sees Q3 EPS well below consensus 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note with South Korea's KOSPI (+2.7%) outperforming after Monday'sclosure. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.1%, India's Sensex: +0.8%, South Korea's Kospi: +2.7%, Australia's ASX All Ordinaries: +0.6%.

  • In economic data:

  • Japan's August PPI 0.2% m/m (expected 0.4%; last 0.7%); 9.0% yr/yr (expected 8.9%; last 9.0%). Q3 BSI Large Manufacturing Conditions 1.7 (expected -8.1; last -9.9)

  • Australia's September Westpac Consumer Sentiment 3.9% (last -3.0%). August NAB Business Confidence 10 (last 8) and NAB Business Survey 20 (last 20)

  • New Zealand's August FPI 1.1% m/m (last 2.1%)

  • In news:

  • China reportedly tightened coronavirus restrictions in two cities.

  • Japan's defense minister is expected to meet with the U.S. Secretary of Defense tomorrow.

  • Japan may implement a national travel incentive program in the coming weeks.

  • Major European indices trade in the green. STOXX Europe 600: +0.5%, Germany's DAX: +0.8%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.4%.

  • In economic data:

  • Eurozone's September ZEW Economic Sentiment -60.7 (expected -58.3; last -54.9)

  • Germany's August CPI 0.3% m/m, as expected (last 0.9%); 7.9% yr/yr, as expected (last 7.5%). September ZEW Economic Sentiment -61.9 (expected -60.0; last -55.3) and ZEW Current Conditions -60.5 (expected -52.2; last -47.6)

  • U.K.'s July three-month employment change 40,000 (expected 128,000; last 160,000) and July Unemployment Rate 3.6% (expected 3.8%; last 3.8%). July average earnings index + bonus 5.5% yr/yr (expected 5.4%; last 5.2%)

  • Italy's Q2 Unemployment Rate 8.1%, as expected (last 8.6%)

  • Spain's August CPI 0.3% m/m (expected 0.1%; last -0.3%); 10.5% yr/yr (expected 10.4%; last 10.8%)

  • Swiss August PPI -0.1% m/m (expected 0.1%; last -0.1%); 5.5% yr/yr (last 6.3%)

  • In news:

  • There are growing doubts that EU officials will agree to cap the price of Russian gas. The bloc's energy officials are scheduled to hold another emergency meeting on September 30.

  • The leader of the Federation of German Industries said that a "massive" recession is expected in Germany.

  • The U.K.'s unemployment rate reached its lowest level in nearly 50 years in July.

 

U.S. equity futures:

  • S&P 500 Futures: +28 @ 4,138

  • DJIA Futures: +203 @ 32,585

  • Nasdaq 100 Futures: +85 @ 12,825

Overseas:

  • Europe: DAX +0.8%, FTSE +0.5%, CAC +0.7%

  • Asia: Nikkei +0.3%, Hang Seng -0.2%, Shanghai Composite +0.1%

Commodities:

  • Crude Oil +1.25 @ 89.03

  • Nat Gas  +0.115 @ 8.364

  • Gold +0.90 @ 1741.50

  • Silver +0.028  @ 19.832

  • Copper +0.0550 @ 3.6655

U.S. Summary:

  • Earnings/Guidance:

  • Braze (BRZE) beats by $0.04, beats on revs; guides Q3 EPS below consensus, revs in-line; guides FY23 EPS above consensus, revs in-line

  • Cardinal Health (CAH) reaffirms FY23 EPS guidance ahead of investor conference

  • Cheniere Energy (LNG) announces its 20/20 Vision long-term plan targeting over $20 bln of available cash through 2026 and over $20/share of run-rate distributable cash flow; increases FY22 guidance

  • Cigna (CI) officials expect to reaffirm projected full year 2022 consolidated adjusted income from operations on a per share basis of at least $22.90 per share

  • Core & Main (CNM) beats by $0.18, beats on revs; raises FY22 Adjusted EBITDA outlook

  • CVS Health (CVS) will reaffirm the previously announced full year 2022 guidance

  • Eastman Chemical (EMN) sees Q3 EPS well below consensus

  • Geo Group (GEO) provides FY22 guidance ahead of today's Investor Presentation

  • Oracle (ORCL) misses by $0.04, reports revs in-line; guides Q2 (Nov) adjusted EPS below consensus, revs below consensus largely due to FX headwinds

  • Owens & Minor (OMI) reaffirms guidance in presentation

  • Performance Food Group (PFGC) reaffirms FY23 outlook ahead of investor meetings

  • Planet Labs (PL) misses by $0.04, beats on revs; guides Q3 revs in-line; guides FY23 revs above consensus

  • Regal Rexnord (RRX) reaffirms FY22 guidance; introduces three year financial targets

  • Rent the Runway (RENT) beats by $0.07, beats on revs; guides Q3 revs below consensus; guides FY23 revs below consensus; announces restructuring plan to reduce costs, including a 24% workforce reduction

  • Syneos Health (SYNH) anticipates TTM Book-to-Bill for Q3 to be in the range of 1.05x-1.15x

  • Viavi (VIAV) reaffirms Q1 guidance at its Analyst Day; announces $300 mln common stock repurchase program

  • General News:

  • EU officials unlikely to agree to limit price of Russian gas, according to The Guardian

  • Amtrak will cancel trips due to a potential freight rail strike later this week, according to Reuters

  • British unemployment reaches lowest level in almost 50 years, according to Reuters

  • EC launches a call for proposals launched under the Connecting Europe Facility (CEF) for Transport programme which makes available over 5 billion for European transport infrastructure projects

  • Aehr Test Systems (AEHR) received a purchase order from a new customer for a FOX-NP multi-wafer test and burn-in system, multiple WaferPak Contactors and a FOX WaferPak Aligner

  • Akero Therapeutics (AKRO): In Akero Therapeutics' Phase 2b HARMONY Study, Both the 50mg and 28mg EFX Doses Achieved Statistical Significance on Primary and Secondary Histology Endpoints after 24 Weeks

  • Akouos (AKUS): FDA clears IND application to initiate a Phase 1/2, first in human, pediatric clinical trial of AK-OTOF, a gene therapy used to treat patients with otoferlin gene (OTOF)-mediated hearing loss

  • AllianceBernstein (AB) reports August AUM decreased to $667 bln from $689 bln at the end of July

  • Annovis Bio (ANVS) Announces Publication of Patents Covering the Treatment of Amyloid Lateral Sclerosis, Huntington's Disease and Prion Diseases

  • Artisan Partners Asset Mgmt (APAM) reported that its preliminary assets under management ("AUM") as of August 31, 2022 totaled $132.7 billion; Artisan Funds and Artisan Global Funds accounted for $63.5 billion of total firm AUM

  • AT&T (T) provides updates at Goldman Sachs Communicopia + Technology Conference

  • Atea (AVIR) to Advance Global Phase 3 Registrational Study of Bemnifosbuvir in High-Risk Non-Hospitalized Patients with COVID-19

  • AVITA Medical (RCEL) achieves positive topline pivotal trial results for treatment of stable vitiligo using the RECELL System

  • Canadian Solar's (CSIQ) subsidiary, CSI Solar Co., to launch the EP Cube all-in-one residential energy storage solution on September 21

  • Cardiff Oncology (CRDF) Announces Plans for a Randomized Trial in Metastatic Colorectal Cancer (mCRC), Durability of Responses in Ongoing Phase 1b/2 Trial in mCRC and Additional Business Updates

  • Cohen & Steers (CNS) report preliminary assets under management of $89.8 bln as of August 31, 2022, a decrease of $4.2 bln from assets under management at July 31

  • Colonnade Acquisition Corp. II (CLAA) merger partner Plastiq announced Plastiq Short-Term Financing to provide Small and Mid-Sized Businesses (SMBs) with the working capital they need to drive continued growth

  • Cyxtera Technologies (CYXT) Board of Directors unanimously approved Cyxtera's conversion to a real estate investment trust for federal income tax purposes with a target to complete the conversion by January 1, 2023

  • Esco Tech (ESE) CEO Vic Richey will retire, effective December 31, will continue as Executive Chairman; current President of ESCO's Utility Solutions Group, Bryan Sayler, selected as new CEO beginning January 1, 2023

  • Franklin Resources (BEN) reports preliminary month-end assets under management (AUM) of $1,387.6 billion at August 31, 2022, compared to $1,429.7 billion at July 31

  • General Motors (GM): Cruise unit will offer driverless rides in Phoenix and Austin this year, according to Reuters

  • Gorilla Technology Group (GRRR) appoints Executive Chairman Jay Chandan as CEO following retirement of founder Dr. Spincer Koh

  • Invesco (IVZ) reports August AUM down 2.3% from July

  • Lazard (LAZ) reported preliminary assets under management (AUM) as of August 31, 2022 totaled ~$217.0 bln vs $225.1 bln prior month

  • Lumen Technologies (LUMN) appoints Kate Johnson as President and CEO; Jeff Storey to retire

  • Lyra Therapeutics (LYRA) Advances Phase 2 BEACON Clinical Trial of LYR-220 in Post-Surgical Chronic Rhinosinusitis Patients to Randomized Stage of Study

  • MiMedx Group (MDXG) receives reimbursement approval from Japanese Ministry of Health for EPIFIX

  • Navient (NAVI) plans to address the possible range of impacts on the Company from anticipated loan consolidation activity related to the Student Debt Relief Plan

  • New Found (NFGC) Intercepts 152.1 g/t Au Over 3.85m & 12.98 g/t Au Over 14.95m at Lotto Main Vein, Confirms Continuity of High-Grade Over 220m Strike

  • NuScale Power (SMR) announces that it signs a task order with KGHM to initiate deployment of first small modular reactor in Poland

  • NVIDIA (NVDA) and TSMC (TSM) developing silicon photonics solutions, according to Digitimes

  • Oracle (ORCL) announces that MySQL HeatWave is now available on AWS

  • Peloton (PTON) announces leadership changes, including resignation of Executive Chair John Foley, who co-founded the company; appoints Karen Boone as Chairperson of the Board, who previously served as President and CFO of Restoration Hardware

  • Pinduoduo (PDD) sister company Temu launches global online marketplace in US

  • PyroGenesis Canada (PYR) has been chosen by an advanced materials and chemicals trading house in the Southern hemisphere to provide the Company's SPARC refrigerant waste destruction system

  • Robinhood Markets (HOOD) reports monthly operating data for August 2022; Assets Under Custody decreased 5% from end of July 2022

  • Rocket Lab USA (RKLB) preparing to launch its 30th Electron rocket and 150th satellite to space during a dedicated mission for Japanese Earth-imaging company Synspective on September 14

  • The Shyft Group (SHYF) announced the first pre-order for its all-electric Class 3, 4 and 5 walk-in delivery vans from Randy Marion Automotive Group

  • Uber (UBER) to pay $100 mln fine in New Jersey, according to the New York Times

  • UBS AG (UBS) provides update on its 2022 capital returns to shareholders; raises dividend

  • Vale S.A. (VALE) presents initiatives to achieve the full potential of Base Metals business and informs about estimates updates

  • Virtus Investment Partners (VRTS) reports preliminary assets under management of $157.8 bln as of August 31, 2022, down 3.1% from July 31, 2022

  • VMware (VMW) settles with SEC regarding previously disclosed investigation related to backlog disclosures

  • WalkMe Ltd. (WKME) announces that CFO Andrew Casey is departing to pursue another opportunity

  • Weatherford (WFRD) receives a five-year framework agreement from Abu Dhabi National Oil Company to provide directional drilling and logging-while-drilling services valued at over $400 mln

  • Workhorse Group (WKHS) granted patent for land vehicles incorporating impact management systems

  • Xos (XOS) unveiled a suite of Advanced Driver Assistance System (ADAS) features that will be implemented into all Xos stepvans moving forward as a standard feature

  • Zymeworks (ZYME) Reports Preliminary Phase 1 Trial Results for Zanidatamab Zovodotin (ZW49) at European Society for Medical Oncology Annual Congress

  • M&A:

  • Antero Midstream (AM) to acquire Marcellus Shale gas gathering and compression assets from CEQP for $205 mln

  • AppLovin (APP) confirms that it does not intend to submit another proposal to combine with Unity Software and has withdrawn its initial proposal

  • Aptiv (APTV) announces definitive agreement to acquire 85% stake in Intercable Automotive Solutions; transaction expected to be accretive to EPS in 2023

  • Ingersoll-Rand (IR) acquires Pedro Gil and closes on acquisition of Westwood Technical

  • KKR (KKR) ends pursuit of Ramsay Healthcare, according to Financial Review

  • Lantronix (LTRX) announces acquisition of Uplogix for approximately $8 mln; expects acquisition to be accretive to non-GAAP EPS in first six months of acquisition

  • Tremor (TRMR) announces closing of strategic Amobee acquisition; reiterates expectation to achieve run-rate operating cost synergies

  • Transglobe Energy (TGA): Horizon calls upon all TransGlobe Energy Corporation shareholders to vote against the proposed transaction with Vaalco Energy (EGY)

  • Twitter (TWYR) shareholders are poised to approve Elon Musk's $44 bln takeover deal, according to the Wall Street Journal

  • Zendesk (ZEN) reiterates consortium acquisition provides superior, immediate and certain value to all Zendesk stockholders

  • Syndicate

  • Crestwood Equity Partners (CEQP) prices secondary offering of 11.4 mln common units by certain subsidiaries of Chord Energy (CHRD) for gross proceeds of $306.7 mln

  • Driven Brands (DRVN) files for share common stock offering by selling shareholders

  • Energy Recovery (ERII) files mixed securities shelf offering

  • First Watch Restaurant Group (FWRG) files for 4,500,000 share common stock offering by selling shareholders

  • Relay Therapeutics (RLAY) prices offering of 11,320,755 shares of its common stock at $26.50 per share

  • Revance Therapeutics (RVNC) prices offering of 8 mln shares of common stock at $25.00 per share

  • Sarepta Therapeutics (SRPT) announces offering of $1.0 bln of convertible senior notes that will mature on September 15, 2027

  • IPOs:

  •  Expected to Price:

  • Corebridge Financial (NYSE: CRBG): The spin-off of AIG (AIG), which is one of the largest providers of retirement solutions and insurance products in the United States, is expected to price its 80.0 M share IPO between $21-$24.

Gapping Up/Down

  • Gapping up:

  • AKRO +53.3%, PL +12%, RCEL +7.4%, CPRX +6.9%, LNG +3.3%, ORCL +2%, IAC +1.9%, UBS +1.2%, RKLB +1%, SMR +0.9%, ZYME +0.8%, AB +0.6%, HOOD +0.6%, GM +0.5%

  • Gapping down:

  • RENT -23.1%, CRDF -17.4%, RVNC -8.3%, DRVN-8.3%, BRZE -5.8%, RLAY -4.5%, FWRG -3.5%, MDXG -2.8%, SRPT -2.5%, ESE -2.5%, CEQP -1.4%, PTON -1.3%, VCTR -1.3%, U -1%, WKME -0.6%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Aegon N.V. (AEG) upgraded to Buy from Hold at Societe Generale

  • Downgrades:

  • Adobe (ADBE) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt raised to $435

  • AnaptysBio (ANAB) downgraded to Hold from Buy at Truist; tgt lowered to $28

  • Others:

  • Appian (APPN) initiated with an Overweight at KeyBanc Capital Markets; tgt $60

  • Bandwidth (BAND) initiated with an Overweight at KeyBanc Capital Markets; tgt $21

  • Box (BOX) initiated with an Overweight at KeyBanc Capital Markets; tgt $34

  • Dropbox (DBX) initiated with an Overweight at KeyBanc Capital Markets; tgt $30

  • Endava (DAVA) initiated with a Sector Weight at KeyBanc Capital Markets

  • EPAM Systems (EPAM) initiated with an Overweight at KeyBanc Capital Markets; tgt $510

  • Five9 (FIVN) initiated with an Overweight at KeyBanc Capital Markets; tgt $124

  • Globant (GLOB) initiated with an Overweight at KeyBanc Capital Markets; tgt $291

  • Kaltura (KLTR) initiated with a Sector Weight at KeyBanc Capital Markets

  • LivePerson (LPSN) initiated with an Overweight at KeyBanc Capital Markets; tgt $16

  • ON24, Inc. (ONTF) initiated with a Sector Weight at KeyBanc Capital Markets

  • Pegasystems (PEGA) initiated with a Sector Weight at KeyBanc Capital Markets

  • RingCentral (RNG) initiated with an Overweight at KeyBanc Capital Markets; tgt $59

  • Twilio (TWLO) initiated with an Overweight at KeyBanc Capital Markets; tgt $96

  • Zoom Video (ZM) initiated with a Sector Weight at KeyBanc Capital Markets

Upcoming Events:

  • Econ Data:

  • 06:00 ET: NFIB Small Business Optimism for Aug (Briefing.comConsensus NA; Prior 89.9)

  • 08:30 ET: CPI for Aug (Briefing.comConsensus -0.1%; Prior 0.0%)

  • 08:30 ET: Core CPI for Aug (Briefing.comConsensus 0.3%; Prior 0.3%)

  • 14:00 ET: Treasury Budget for Aug (Briefing.comConsensus NA; Prior -$211.1B)


Asia & Europe detail:

Asia: Nikkei +0.3%, Hang Seng -0.2%, Shanghai Composite +0.1%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note with South Korea's KOSPI (+2.7%) outperforming after Monday'sclosure. China reportedly tightened coronavirus restrictions in two cities. Japan's defense minister is expected to meet with the U.S. Secretary of Defense tomorrow. Japan may implement a national travel incentive program in the coming weeks.

  • In economic data:

  • Japan's August PPI 0.2% m/m (expected 0.4%; last 0.7%); 9.0% yr/yr (expected 8.9%; last 9.0%). Q3 BSI Large Manufacturing Conditions 1.7 (expected -8.1; last -9.9)

  • Australia's September Westpac Consumer Sentiment 3.9% (last -3.0%). August NAB Business Confidence 10 (last 8) and NAB Business Survey 20 (last 20)

  • New Zealand's August FPI 1.1% m/m (last 2.1%)

---Equity Markets---

  • Japan's Nikkei: +0.3%

  • Hong Kong's Hang Seng: -0.2%

  • China's Shanghai Composite: +0.1%

  • India's Sensex: +0.8%

  • South Korea's Kospi: +2.7%

  • Australia's ASX All Ordinaries: +0.6%

---FX---

  • USD/JPY: -0.5% to 142.07

  • USD/CNH: +0.2% to 6.9268

  • USD/INR: -0.2% to 79.14

Europe: DAX +0.8%, FTSE +0.5%, CAC +0.7%

Major European indices trade in the green. There are growing doubts that EU officials will agree to cap the price of Russian gas. The bloc's energy officials are scheduled to hold another emergency meeting on September 30.The leader of the Federation of German Industries said that a "massive" recession is expected in Germany. The U.K.'s unemployment rate reached its lowest level in nearly 50 years in July.

  • In economic data:

  • Eurozone's September ZEW Economic Sentiment -60.7 (expected -58.3; last -54.9)

  • Germany's August CPI 0.3% m/m, as expected (last 0.9%); 7.9% yr/yr, as expected (last 7.5%). September ZEW Economic Sentiment -61.9 (expected -60.0; last -55.3) and ZEW Current Conditions -60.5 (expected -52.2; last -47.6)

  • U.K.'s July three-month employment change 40,000 (expected 128,000; last 160,000) and July Unemployment Rate 3.6% (expected 3.8%; last 3.8%). July average earnings index + bonus 5.5% yr/yr (expected 5.4%; last 5.2%)

  • Italy's Q2 Unemployment Rate 8.1%, as expected (last 8.6%)

  • Spain's August CPI 0.3% m/m (expected 0.1%; last -0.3%); 10.5% yr/yr (expected 10.4%; last 10.8%)

  • Swiss August PPI -0.1% m/m (expected 0.1%; last -0.1%); 5.5% yr/yr (last 6.3%)

---Equity Markets---

  • STOXX Europe 600: +0.5%

  • Germany's DAX: +0.8%

  • U.K.'s FTSE 100: +0.5%

  • France's CAC 40: +0.7%

  • Italy's FTSE MIB: +0.9%

  • Spain's IBEX 35: +0.4%

---FX---

  • EUR/USD: +0.6% to 1.0180

  • GBP/USD: +0.5% to 1.1732

  • USD/CHF: -0.6% to 0.9483


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