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13/12/22 Briefing

The S&P 500 futures are up 23 points and are trading 0.6% above fair value. The Nasdaq 100 futures are up 75 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 207 points and are trading 0.6% above fair value.

Equity futures are moving higher this morning, carrying over yesterday's positive bias amid hopeful anticipation that the November Consumer Price Index will provide some good news. 

China is working on a $143 billion monetary support plan for China's semiconductor industry, according to Reuters

Germany's Consumer Price Index for November was in line with expectations and showed a welcome deceleration on a year-over-year basis (10.0% versus 10.4% prior). 

Sam Bankman-Fried has been arrested in the Bahamas, which means he will not be testifying at today's House hearing on the collapse of FTX.

Treasury yields are inching lower. The 2-yr note yield is down two basis points to 4.37% and the 10-yr note yield is down three basis points to 3.58%.

The NFIB Small Business Optimism survey rose to 91.9 in November from 91.3 in October. 

In corporate news:

  • Oracle (ORCL 83.80, +2.52, +3.1%):  beats by $0.04, beats on revs; guides Q3 (Feb) EPS below consensus, guides Q3 revenue above consensus

  • Pinterest (PINS 24.27, +0.66, +2.8%): upgraded to Overweight from Neutral at Piper Sandler

  • Boeing (BA 190.49, +4.22, +2.3%): United (UAL) finalized its order to purchase 100 firm Boeing 787 aircraft scheduled to be delivered starting with eight aircraft in 2024

  • Moderna (MRNA 177.00, +11.87, +7.2%) and Merck (MRK 111.64, +2.67, +2.5%): announce investigational cancer vaccine, mRNA-4157/V940, has met primary efficacy endpoint

  • First Solar (FSLR 150.83, +0.55, +0.4%): Set to Join S&P 500 prior to the open on December 19

  • Mirati Therapeutics (MRTX 45.45, +4.04, +9.8%): receives FDA accelerated approval of KRAZATI

  • Eli Lilly (LLY 360.00, -7.25, -2.0%): reaffirms FY22 guidance; sees FY23 EPS and revs below consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's Nikkei: +0.4%, Hong Kong's Hang Seng: +0.7%, China's Shanghai Composite: -0.1%, India's Sensex: +0.7%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +0.3%.

  • In economic data:

  • Australia's November NAB Business Survey 20 (last 22) and Business Confidence -4 (last 0)

  • New Zealand's November FPI 0.0% m/m (last 0.8%)

  • In news:

  • Hong Kong lifted some more coronavirus restrictions for travelers while China's Ambassador to the U.S. said that more restrictions will be relaxed soon.

  • Japan is reportedly looking to issue $11.60 bln in construction bonds as part of its plan to increase military spending.

  • Japan will tighten curbs on exports of advanced technology products to China.

  • Major European indices trade in the green. STOXX Europe 600: +0.6%, Germany's DAX: +0.8%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.2%.

  • In economic data:

  • Eurozone's December ZEW Economic Sentiment -23.6 (expected -25.7; last -38.7)

  • Germany's December ZEW Economic Sentiment -23.3 (expected -26.4; last -36.7) and ZEW Current Conditions -61.4 (expected -57.0; last -64.5). November CPI -0.5% m/m, as expected (last 0.9%); 10.0% yr/yr, as expected (last 10.4%)

  • U.K.'s October three month employment change 27,000 (expected -17,000; last -52,000). October Average Earnings Index + Bonus 6.1% yr/yr (expected 6.2%; last 6.0%). October Unemployment Rate 3.7%, as expected (last 3.7%). November Claimant Count 30,500 (expected 3,500; last -6,400)

  • Italy's October Industrial Production -1.0% m/m (expected -0.4%; last -1.7%); -1.6% yr/yr (expected -0.1%; last -0.5%)

  • In news:

  • Germany's ZEW Economic Sentiment survey improved to its best level since turning negative in March. A temporary stabilization in energy markets was credited for the improved outlook.

  • Lufthansa raised its guidance due to a rebound in bookings.

  • Germany' Engineering Federation reiterated its forecast for 2022 production growth of 1.0% and a 2.0% decline in 2023.

  • Switzerland maintained its 2022 growth forecast at 2.0% but the outlook for 2023 was trimmed to 1.0% from 1.1%.

 

U.S. equity futures:

  • S&P 500 Futures: +24 @ 4,014

  • DJIA Futures: +200 @ 34,215

  • Nasdaq 100 Futures: +75 @ 11,782

Overseas:

  • Europe:  DAX +0.8%, FTSE +0.4%, CAC +0.7%

  • Asia: Nikkei +0.4%, Hang Seng +0.7%, Shanghai Composite -0.1%

Commodities:

  • Crude Oil +0.63 @ 73.62

  • Nat Gas +0.241 @ 6.828

  • Gold +7.55 @ 1799.85

  • Silver +0.214 @ 23.617

  • Copper +0.0502 @ 3.8507

 

Earnings/Guidance:

  • Alaska Air (ALK) sees Q4 revs in-line with consensus; provides FY23 outlook

  • Blue Bird (BLBD) reports Q4 (Oct) results, beats on revs; guides FY23 revs in-line; reiterates long-term outlook of profitable growth towards $2 bln in revs

  • Core & Main (CNM) beats by $0.10, beats on revs; raises outlook

  • Eli Lilly (LLY) reaffirms FY22 guidance; sees FY23 EPS and revs below consensus

  • Fluence (FLNC) reports Q4 (Sep) results, beats on revs; guides FY23 revs in-line

  • JetBlue Airways (JBLU) expects Q4 revenue per available seat mile at the low end of previous 15% to 19% range; underlying trends strong, saw negative impact from Hurricane Nicole

  • JOANN Inc. (JOAN) misses by $0.17, misses on revs

  • Oracle (ORCL) beats by $0.04, beats on revs;  guides to Q3 revs, including Cerner, of +17-19%; cloud growth of +43-47%; non-GAAP EPS of $1.17-1.21; FX headwinds clipping EPS by at least $0.06

  • Photronics (PLAB) beats by $0.12, reports revs in-line; guides Q1 EPS in-line, revs in-line

  • Spirit Airlines (SAVE) provides updated Q4 guidance metrics

News:

  • China postposed economic policy meeting due to COVID-19 case spike, according to Bloomberg

  • EU Commission welcomes agreement on minimum taxation of multinationals

  • US will announce new nuclear fusion breakthrough today, according to the Wall Street Journal

  • China is working on $143 bln in support for semiconductor industry, according to Reuters

  • Europe will soon reach agreement to tax imports based on greenhouse gases, according to the Wall Street Journal

  • SEC charges Samuel Bankman-Fried with defrauding investors in crypto asset trading platform FTX

  • House Financial Services Committee says FTX hearing will go ahead without Sam Bankman-Fried after his arrest

  • Bahamian authorities probe FTX local clients' withdraws during implosion, according to Bloomberg

  • 89bio's (ETNB) results of Phase 1b/2a Study of Pegozafermin for the treatment of NASH published in The Lancet Gastroenterology & Hepatology

  • Agilent (A) Resolution ctDx FIRST receives FDA approval as a liquid biopsy companion diagnostic test for advanced non-small cell lung cancer

  • Alexander & Baldwin (ALEX) promotes COO Lance Parker to President, effective January 1, 2023

  • AllianceBernstein (AB) reports November AUM increased to $658 bln, a 5% increase M/M driven by market appreciation, partially offset by firm-wide net outflows

  • American Airlines (AAL) announces that Devon May has been named Chief Financial Officer following a long-planned succession process

  • Amgen (AMGN) raises quarterly dividend by 10% to $2.13 per share

  • AptarGroup (ATR) to realign two of its business reporting segments in order to streamline operations, improve efficiencies, and enable stronger customer focus

  • Arbutus Biopharma (ABUS) completes enrollment in its phase 2a clinical trial combining AB-729 with NA therapy and peginterferon alfa-2a in patients with chronic hepatitis B virus infection

  • ARK Innovation (ARKK): Investors are losing faith in ARK Innovation, according to the Wall Street Journal

  • Azul S.A. (AZUL) reports November 2022 traffic

  • B2Gold (BTG) Announces Exploration Drilling Results from the Fekola Complex that Continues to Expand Gold Mineralization in Several Zones; Record Gold Production in October and November from the Fekola Complex; Re-affirms 2022 Total Gold Production Guidance of 990,000 to 1,050,000 Ounces

  • Bausch + Lomb (BLCO): FDA grants 510(k) clearance for Biotrue Hydration Boost Contact Lens Rehydrating drops

  • Boeing (BA) discovers cybersecurity incident that impacted certain systems of subsidiary

  • Boeing (BA): United (UAL) finalized its order to purchase 100 firm Boeing 787 aircraft scheduled to be delivered starting with eight aircraft in 2024

  • Calliditas Therapeutics AB (CALT) announces license agreement with Viatris (VTRS) to register and commercialize specialty therapy for IgA nephropathy in Japan

  • Cellectis (CLLS) Announces Positive Preliminary Clinical Data for UCART22 in ALL and UCART123 in AML

  • Coty (COTY) expands its future shareholder returns, alongside expected capital structure improvement

  • Cytokinetics (CYTK) announced that Nasdaq has halted the trading of the Company's common stock

  • Denbury (DEN) and Weyerhaeuser (WY) announce agreement for evaluation and potential development of CO2 sequestration site in Mississippi

  • EVgo Inc. (EVGO) and Lyft (LYFT) launch new partnership to accelerate rideshare electrification nationwide

  • Galapagos NV (GLPG) and and CellPoint present encouraging initial data at ASH 2022 for GLPG5101

  • Gladstone Commercial (GOOD) authorizes repurchase program for up to $20 mln of each of the Company's 6.625% Series E Cumulative Redeemable Preferred Stock and 6.00% Series G Cumulative Redeemable Preferred Stock.

  • Gogoro (GGR) confirms support for the Taiwan government's decision to extend its electric two-wheel vehicle subsidy program for four additional years

  • Gold Fields (GFI) CEO steps down; Martin Preece appointed interim CEO

  • Goldman Sachs (GS) will stop originating unsecured consumer loans, according to Reuters

  • Highwoods Prop (HIW) and The Bromley Companies have formed a 50/50 joint venture to construct Midtown East

  • Holley Inc. (HLLY) announces appointment of Jesse Weaver as CFO, who succeeds interim CFO Stephen Trussel

  • Intercontinental Hotels Group (IHG) appoints Michael Glover as CFO

  • Invesco (IVZ) reports preliminary November assets under management of $1,437.9 billion, an increase of 5.7% versus previous month-end

  • Jack In The Box (JACK) CFO to depart company for personal reasons

  • LL Flooring Holdings (LL) provides business update in advance of investor meetings; co plans to slow new store openings and recommence share repurchases in 2023 under its existing share repurchase program

  • Loxo Lilly (LLY) Presents Updated Pirtobrutinib Data from the Phase 1/2 BRUIN Clinical Trial at the 2022 American Society of Hematology Annual Meeting

  • MeiraGTx (MGTX) announces "positive" clinical data from the ongoing Phase 1 AQUAx study of AAV2-hAQP1 for the treatment of grade 2/3 radiation-induced xerostomia

  • Meta Platforms (META) is unplugging its Connectivity division, according to TechCrunch

  • Mirati Therapeutics (MRTX) receives FDA accelerated approval of KRAZATI

  • Mirum Pharmaceuticals (MIRM) receives EC approval for LIVMARLI

  • Moderna (MRNA) and Merck (MRK) announce investigational cancer vaccine, mRNA-4157/V940, has met primary efficacy endpoint

  • Modine Manufacturing (MOD) announced that bus manufacturer, New Flyer of America selected EVantage Battery Thermal Management System in New Flyer's zero-emission Xcelsior CHARGE NG heavy-duty transit bus model

  • Molecular Partners (MOLN) Presents New Preclinical Data Supporting its MP0533 DARPin T-Cell Engager for the Treatment of AML

  • New Fortress Energy (NFE) provides update to dividend policy, plan to return significant capital to shareholders

  • New York Mortgage Trust (NYMT) names Nicholas Mah as President, effective January 1, 2023

  • New York Times' (NYT) CFO, Roland Caputo, plans to retire next year; he will continue to serve as CFO until successor is identified

  • Nurix Therapeutics (NRIX) Presents Positive Clinical Results from its Novel BTK Degrader (NX-2127) at the 64th American Society of Hematology (ASH) Annual Meeting

  • Pentair (PNR) increases dividend 5% to $0.22/share from $0.21/share

  • Piedmont Lithium (PLL) issued last remaining permit to restart operations at the Quebec site

  • Planet Fitness (PLNT) appoints Edward Hymes as CFO and president, effective in Jan 2023

  • Precigen (PGEN) Announces Positive Phase 1 Dose Escalation Data for Autologous PRGN-3006 UltraCAR-T Manufactured Overnight for Next Day Infusion in Relapsed or Refractory Acute Myeloid Leukemia Patients

  • Puma Biotech. (PBYI) entered into a Securities Purchase Agreement with Alan H. Auerbach, the Company's President, Chief Executive Officer and Chairman of the Board

  • Qiagen (QGEN) receives FDA approval for companion diagnostic to Mirati Therapeutics' KRAZATI

  • QuidelOrtho (QDEL) separates Chairman and CEO roles; Douglas Bryant to continue as CEO

  • Raytheon Technologies (RTX) announces $6 bln share repurchase program

  • SSR Mining (SSRM) Announces Positive Exploration Results at Seabee

M&A:

  • Carriage Services (CSV) announces High Performance and Credit Profile Restoration Plan; to acquire Greenlawn Funeral Homes; targeting $390-400 mln in revs in FY24

  • Priveterra Acquisition Corp. (PMGM): AEON Biopharma enters SPAC combination agreement with PMGM; plans to list on Nasdaq under symbol "AEON", deal expected to close in 1H23

  • Takeda Pharma (TAK) to acquire Nimbus Therapeutics' tyrosine kinase 2 (TYK2) inhibitor NDI-034858 for $4 bln in upfront payment, plus $2 bln in sales milestones

  • Tandem Diabetes Care (TNDM) to acquire Insulin Patch Pump Developer, AMF Medical

  • TransUnion (TRU) announces agreement to sell G2, LCI and Fintellix to Stellex Capital Management for $176 million

  • Trimble (TRMB) to acquire Transporeon for 1.88 bln; expected to be immediately accretive to Pro Forma revenue growth and Non-GAAP operating margin

  • ZyVersa Therapeutics (ZVSA) and Larkspur Health Acquisition Corp (LSPR) close business combination; ZyVersa expected to begin trading on Nasdaq December 13

Syndicate:

  • Altisource Portfolio Solutions (ASPS) files $100 mln mixed securities shelf offering

  • Bank of Montreal (BMO) announces the issue and sale of common shares pursuant to a public offering and a concurrent private placement for gross proceeds totaling approximately C$3.15 bln

  • Lion Electric (LEV) announces the pricing of its previously announced marketed public offering of units in the United States and Canada

IPOs:

  • Expect to Price:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • MRTX +14.7%, FLNC +7%, PGEN +5.6%, CSV +5%, NRIX +4.9%, PLAB +3.6%, ORCL +3.2%, NYMT+3.1%, NFE +2.9%, IVZ +2.6%, ETNB +2.3%, HUT+2%, NYT +1.5%, GOOD +1.5%, FSLR +1.1%, A +1.1%, DEN +1%, AB +0.9%, SSRM +0.9%, PLL +0.9%, META+0.8%

  • Gapping down:

  • LEV -15.4%, IHG -5%, TRMB -3.9%, BLBD -3.6%, LLY -3.2%, GFI -3.2%, BMO -2.1%, JOAN -2.1%, TNDM -1%, MIRM -0.5%

 


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Equinix (EQIX) upgraded to Outperform from Market Perform at Cowen; tgt $811

  • Phreesia (PHR) upgraded to Buy from Neutral at Citigroup; tgt $40

  • Downgrades:

  • Affirm (AFRM) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $13

  • Robinhood Markets (HOOD) downgraded to Neutral from Buy at Citigroup; tgt lowered to $10

  • Others:

  • Angi Inc. (ANGI) initiated with a Buy at Citigroup; tgt $2.60

  • Beam Therapeutics (BEAM) initiated with a Buy at Citigroup; tgt $62

  • Criteo (CRTO) initiated with a Buy at Citigroup; tgt $36

  • eBay (EBAY) initiated with a Neutral at Citigroup; tgt $47

  • Etsy (ETSY) initiated with a Buy at Citigroup; tgt $161

  • GoDaddy (GDDY) initiated with a Buy at Citigroup; tgt $95

  • InterActiveCorp (IAC) initiated with a Buy at Citigroup; tgt $60

  • Original BARK Co. (BARK) initiated with a Buy at Citigroup; tgt $2

  • Outbrain Inc. (OB) initiated with a Neutral at Citigroup; tgt $4

  • Philip Morris International (PM) resumed with a Neutral at Citigroup; tgt $109

  • Redfin (RDFN) initiated with a Neutral at Citigroup; tgt $5

  • The Trade Desk (TTD) initiated with a Buy at Citigroup; tgt $60

  • VeriSign (VRSN) initiated with a Buy at Citigroup; tgt $243

  • Wayfair (W) initiated with a Buy at Citigroup; tgt $50

  • Wish (WISH) initiated with a Sell at Citigroup; tgt $0.50

  • Ziff Davis (ZD) initiated with a Neutral at Citigroup; tgt $100

Upcoming Events:

  • Econ Data:

  • 06:00 ET: NFIB Small Business Optimism for Nov (Briefing.comConsensus NA; Prior 91.3)

  • 08:30 ET: CPI for Nov (Briefing.comConsensus 0.3%; Prior 0.4%)

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

  • Earnings:

  • Monday (Dec 12)

  • Afternoon: COUP FLNC ORCL

  • Tuesday (Dec 13)

  • Morning: CNM PLAB

  • Afternoon:  ABM BRZE

  • Wednesday (Dec 14)

  • Morning:  REVG WEBR

  • Afternoon:  LEN NDSN TCOM

  • Thursday (Dec 15)

  • Morning: JBL

  • Friday (Dec 16) 

  • Morning:  ACN DRI WGO

Asia & Europe detail:

Asia: Nikkei +0.4%, Hang Seng +0.7%, Shanghai Composite -0.1%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Hong Kong lifted some more coronavirus restrictions for travelers while China's Ambassador to the U.S. said that more restrictions will be relaxed soon. Japan is reportedly looking to issue $11.60 bln in construction bonds as part of its plan to increase military spending. Japan will tighten curbs on exports of advanced technology products to China.

  • In economic data:

  • Australia's November NAB Business Survey 20 (last 22) and Business Confidence -4 (last 0)

  • New Zealand's November FPI 0.0% m/m (last 0.8%)

---Equity Markets---

  • Japan's Nikkei: +0.4%

  • Hong Kong's Hang Seng: +0.7%

  • China's Shanghai Composite: -0.1%

  • India's Sensex: +0.7%

  • South Korea's Kospi: UNCH

  • Australia's ASX All Ordinaries: +0.3%

---FX---

  • USD/JPY: -0.1% to 137.56

  • USD/CNH: -0.1% to 6.9854

  • USD/INR: +0.2% to 82.80

Europe: DAX +0.8%, FTSE +0.4%, CAC +0.7%

Major European indices trade in the green. Germany's ZEW Economic Sentiment survey improved to its best level since turning negative in March. A temporary stabilization in energy markets was credited for the improved outlook. Lufthansa raised its guidance due to a rebound in bookings. Germany' Engineering Federation reiterated its forecast for 2022 production growth of 1.0% and a 2.0% decline in 2023. Switzerland maintained its 2022 growth forecast at 2.0% but the outlook for 2023 was trimmed to 1.0% from 1.1%.

  • In economic data:

  • Eurozone's December ZEW Economic Sentiment -23.6 (expected -25.7; last -38.7)

  • Germany's December ZEW Economic Sentiment -23.3 (expected -26.4; last -36.7) and ZEW Current Conditions -61.4 (expected -57.0; last -64.5). November CPI -0.5% m/m, as expected (last 0.9%); 10.0% yr/yr, as expected (last 10.4%)

  • U.K.'s October three month employment change 27,000 (expected -17,000; last -52,000). October Average Earnings Index + Bonus 6.1% yr/yr (expected 6.2%; last 6.0%). October Unemployment Rate 3.7%, as expected (last 3.7%). November Claimant Count 30,500 (expected 3,500; last -6,400) 

  • Italy's October Industrial Production -1.0% m/m (expected -0.4%; last -1.7%); -1.6% yr/yr (expected -0.1%; last -0.5%)

---Equity Markets---

  • STOXX Europe 600: +0.6%

  • Germany's DAX: +0.8%

  • U.K.'s FTSE 100: +0.4%

  • France's CAC 40: +0.7%

  • Italy's FTSE MIB: +0.9%

  • Spain's IBEX 35: +0.2%

---FX---

  • EUR/USD: +0.1% to 1.0542

  • GBP/USD: +0.3% to 1.2301

  • USD/CHF: UNCH at 0.9361


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