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14/02/22 Briefing

The S&P 500 futures trade roughly in-line with fair value after Russian Minister of Foreign Affairs Sergei Lavrov said there's a chance for an agreement on security issues. The S&P 500 futures were trading as low as 1.2% below fair value on continued fears of Russia invading Ukraine.

The news comes after there were no reported changes in diplomatic relations over the weekend and a White House statement indicating that President Biden warned Russian President Putin that the U.S. and its allies would respond decisively and impose swift and severe costs on Russia if it invades Ukraine.

The Treasury market has been a little bit more reserved. The 2-yr yield is up three basis points to 1.55%, and the 10-yr yield is unchanged at 1.96%. The U.S. Dollar Index is up 0.1% to 96.16. WTI crude futures are down 0.6% to $92.55/bbl. Natural gas futures are up 3.8% to $4.09/MMBtu.

Separately, shares of Splunk (SPLK 124.47, +9.96, +8.7%) are up 9% in pre-market action after The Wall Street Journal reported that Cisco (CSCO 53.55, -0.35, -0.7%) is aiming to purchase the company for $20 billion.

In U.S. Corporate news:

  • Splunk (SPLK 124.47, +9.96): +8.7% after The Wall Street Journal reported that Cisco (CSCO 53.55, -0.35, -0.7%) is aiming to purchase the company for $20 billion.

  • Micron (MU 90.30, +0.54): +0.6% after the stock was upgraded to Outperform from Neutral at Wedbush.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly lower note. Japan's Nikkei: -2.2% Hong Kong's Hang Seng: -1.4% China's Shanghai Composite: -1.0% India's Sensex: -3.0% South Korea's Kospi: -1.6% Australia's ASX All Ordinaries: +0.3%.

  • In economic data:

  • India's January WPI Inflation 12.96% yr/yr (expected 12.7%; last 13.56%). WPI Fuel 32.27% yr/yr (last 32.30%), WPI Food 10.33% yr/yr (last 9.56%), and WPI Manufacturing 9.42% yr/yr (last 10.62%)

  • New Zealand's January FPI 2.7% m/m (last 0.6%)


  • In news:

  • The Bank of Japan offered to buy an unlimited amount of 10-yr JGBs at 0.25% but there were no willing sellers.

  • South Korea will hold a presidential election in three weekswith the opposition candidate holding a three-point lead over the incumbent.

  • Protests against compulsory coronavirus shots continued in Australia and New Zealand.



  • Major European indices trade sharply lower. STOXX Europe 600: -2.7% Germany's DAX: -3.4% U.K.'s FTSE 100: -2.0% France's CAC 40: -3.6% Italy's FTSE MIB: -3.3% Spain's IBEX 35: -3.2%.

  • In economic data:

  • Swiss January PPI 0.6% m/m (last -0.1%); 5.4% yr/yr (last 5.1%)


  • In news:

  • Investor sentiment has been dampened by continued media hype surrounding Ukraine.

  • The country's government was forced to put up nearly $600 mln to insure flights passing through Ukraine's airspace after global insurers suspended coverage. Greek Prime Minister Mitsotakis said that he expects his country's debt to regain investment grade status early next year.

  • The Bank of Italy is maintaining its domestic growth forecast for 2022 at 4.0%.

  • Germany's finance minister said that the government will not be a Commerzbank shareholder in the long term.



U.S. equity futures:

  • S&P 500 Futures: -7 @ 4,411

  • DJIA Futures: -45 @ 34,693

  • Nasdaq 100 Futures: -28 @ 14,226

Overseas:

  • Europe: DAX -3.4%, FTSE -2.0%, CAC -3.6%

  • Asia: Nikkei -2.2%, Hang Seng -1.4%, Shanghai Composite -1.0%

Commodities:

  • Crude Oil -0.72 @ 92.30

  • Nat Gas +0.139 @ 4.079

  • Gold +13.95 @ 1856.05

  • Silver +0.308 @ 23.677

  • Copper -0.0205 @ 4.4855

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Hawaiian Electric (HE) beats on top and bottom lines

  • Kelly Services (KELYA) beats by $0.36, misses on revs; agrees to change relationship with Persol Holdings in APAC region

  • Roivant Sciences (ROIV) reports Q3 results

  • Scorpio Tankers (STNG) beats by $0.05, reports revs in-line

  • TreeHouse Foods (THS) beats by $0.01, beats on revs; guides FY22 revs above consensus


  • General News:

  • Russian Minister of Foreign Affairs Sergei Lavrov says there is a chance for agreement on security issues

  • State Department says "Do not travel to Ukraine due to the increased threats of Russian military action and COVID-19; those in Ukraine should depart immediately via commercial or private means; Department of State ordered the departure of most U.S. direct hire employees from Embassy Kyiv"

  • White House issues readout of President Biden's call with President Zelenskyy of Ukraine; issues readout of President Biden's Call with President Vladimir Putin of Russia

  • UK issues G7 Finance Ministers' statement on Ukraine

  • Russia could retaliate to future US sanctions by blocking access to semiconductor manufacturing components, according to Reuters

  • San Francisco Fed President Mary Daly (not a voting member) supports taking accommodation out of economy, but she says "abrupt and aggressive" action can be destabilizing, according to CBS News

  • 3M (MMM) legal problems could impact growth, according to Bloomberg

  • Ambassador Bridge in Canada has been cleared of protesters and is now open, but protests continue in Ottawa, according to the New York Times

  • Supreme Court denies request from teachers to block New York City's vaccination mandate, according to the New York Times

  • ACM Research (ACMR) receives multiple purchase orders for Ultra C wb Wet Bench Tools

  • Aecom Tech-led (ACM) joint venture awarded contract with FEMA to improve community resilience

  • Apollo Global Management (APO) to invest in Aldar through landmark $1.4 bln transaction

  • AstraZeneca (AZN) wins $855 mln US Army contract modification for Evusheld, to treat COVID-19

  • Biohaven (BHVN) and Pfizer (PFE) announce positive topline results of pivotal trial of Rimegepant for the acute treatment of migraine in China and South Korea

  • Bio-Techne (TECH) announces publication of new data demonstrating exodx prostate test correlation with post-prostatectomy pathology outcomes

  • Blackstone (BX): Crown Resorts Limited announced that it has entered into a scheme implementation deed with a company on behalf of funds managed and advised by BX

  • Boeing (BA) will not speed up return of 787 deliveries, according to Bloomberg

  • Boston Omaha (BOMN) to change ticker symbol to "BOC" effective February 22

  • Bright Health Group (BHG) CEO Simeon Schindelman is stepping down

  • Centene (CNC) subsidiary Louisiana Healthcare Connections was selected by the Louisiana Department of Health to continue administering quality, integrated healthcare services to Medicaid enrollees across the state

  • Clene (CLNN) along with its wholly owned subsidiary Clene Nanomedicine provides clinical program update

  • Clever Leaves Holdings (CLVR) expands relationship with Cannatrek in Australia with a two-year $3.6 mln sales agreement

  • Coinbase Global (COIN) saw "more traffic than we've ever encountered" and it had to "throttle traffic for a few minutes" following Super Bowl ad

  • DoorDash (DASH) to increase fees for McDonalds (MCD) orders that are slow, according to the Wall Street Journal

  • EyePoint Pharmaceuticals (EYPT) Announces Updated Positive Interim Safety and Efficacy Data from Ongoing Phase 1 DAVIO Clinical Trial Evaluating EYP-1901 for the Treatment of Wet AMD

  • Fluidigm (FLDM) files preliminary proxy statement in connection with proposed strategic capital infusion from Casdin Capital and Viking Global Investors

  • General Electric (GE) Healthcare received approval from the European Medicines Agency (EMA) for additional imaging modalities for its stress agent Rapiscan

  • Gilead (GILD): Biktarvy demonstrates high efficacy and durable viral suppression at five years, in treatment-nave adults

  • IAMGOLD (IAG) and RCF reach agreement on changes to IAMGOLD Board of Directors

  • KBR (KBR) to support enhancement of PATRIOT missile system with $207 mln contract

  • Marathon Petroleum (MPC) has established a 2030 target to reduce absolute Scope 3 - Category 11 greenhouse gas (GHG) emissions by 15% below 2019 levels

  • MPLX LP (MPLX) established a new 2030 target to reduce methane emissions intensity by 75% below 2016 levels

  • Mesabi Trust (MSB) confirms Cliffs (CLF) announced plan to idle all operations at Northshore Mining Company from Spring to at least Fall 2022

  • Momentive Global (MNTV): Activist investor Legion Partners is seeking to nominate board members to thwart ZEN takeover, according to Bloomberg

  • Opthea Ltd (OPT): Opthea data for OPT-302 in patients with polypoidal choroidal vasculopathy Presented at Angiogenesis 2022

  • Pardes Biosciences (PRDS) presents interim clinical data from ongoing PBI-0451 phase 1 trial supporting the potential of PBI-0451 as a stand-alone oral regimen for COVID-19 at Conference on Retroviruses and Opportunistic Infections 2022

  • Raytheon (RTX): US probing hiring practices at Raytheon, according to Bloomberg

  • Raytheon Technologies (RTX) provided updates related DOJ grand jury investigation and related civil litigation

  • REGENXBIO (RGNX) Presents Positive Interim Data from Phase II ALTITUDE Trial of RGX-314 for the Treatment of Diabetic Retinopathy Using Suprachoroidal Delivery

  • Satellogic (SATL) adds General Joseph F. Dunford Jr., former Chairman of the Joint Chiefs of Staff, to its Board, completes $150 mln investment by Liberty Strategic Capital and announces share repurchase program

  • Senseonics (SENS) receives FDA approval Eversense E3 Continuous Glucose Monitoring System

  • Stellantis (STLA) recalling an estimated 19,808 plug-in hybrid minivans

  • Tesla (TSLA) sold nearly 60K China made EVs in January, according to Reuters

  • Vinci Partners (VINP) announced the partnership between Vinci Partners' Infrastructure strategy and consortium guas do Brasil

  • Volta (VLTA) aiming to install EV charging stations at Walgreens (WBA) locations, according to Engadget

  • Vulcan Materials (VMC) increases quarterly dividend by 7.5% to $0.40/share


  • M&A:

  • Aerojet Rocketdyne (AJRD): Lockheed Martin (LMT) terminates agreement to acquire Aerojet Rocketdyne

  • Allianz SE (ALIZY) announces share purchase agreements to acquire 72 percent of European Reliance; Launch of a voluntary tender offer for European Reliance shares outstanding

  • Amazon (AMZN) & Spotify (SPOT) considering bids for Audioboom, according to Sky News

  • BioDelivery Sciences (BDSI): Collegium (COLL) to acquire BioDelivery Sciences in an all-cash deal at a price of $5.60/share

  • Cisco (CSCO) aiming to purchase Splunk (SPLK) for $20 bln, according to the Wall Street Journal

  • MetLife (MET) is exploring the divestment of its US variable annuity book, according to Reuters

  • Northern Lights Acquisition Corp. (NLIT) and SHF, LLC dba Safe Harbor Financial enter into a business combination agreement

  • Oracle (ORCL) extends tender offer in connection with the acquisition of Cerner until March 16

  • Zions Bancorp's (ZION) Nevada State Bank agrees to acquire three branches from City National Bank; terms not indicated

  • Zurn Water Solutions (ZWS) and Elkay Manufacturing Company reached a definitive agreement to combine the businesses in an all-stock transaction


  • Syndicate:

  • BigCommerce (BIGC) files for Series 1 common stock offering, no amount given

  • CONSOL Energy (CEIX) files mixed securities shelf offering

  • Delta Air Lines (DAL) files for 10,425,433 share common stock offering by selling shareholder

  • Enochian Biosciences (ENOB) files for $100 mln common stock offering

  • Hut 8 Mining (HUT) enters at-the-market equity offering of up to $65 mln of common stock

  • QuantumScape (QS) files for 15,221,334 Class A share common stock offering by selling shareholders

  • Velodyne Lidar (VLDR) files for $300 mln mixed securities shelf offering; also files for 9,898,508 share common stock offering by selling shareholder


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • BDSI +50.5%, KELYA +4.3%, CEIX +3.5%, ZWS +3%, STNG +2.6%, VXX +1.6%, VMC +1.2%, ACMR +1.1%, MU +1.1%, FLDM +1%, MNTV +0.8%, LMT +0.6%


  • Gapping down:

  • ENOB -6.3%, HUT -5.2%, STLA -2.9%, KC -2.9%, VLDR -2.7%, DAL -1.6%, RIG -1.6%, QS -1.4%, SLB-1%, QQQ -0.9%, MRO -0.9%, BP -0.8%, BIGC -0.7%, SPY -0.7%, XOM -0.7%, IWM -0.6%, DIA -0.6%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Allstate (ALL) upgraded to Buy from Neutral at UBS; tgt raised to $149

  • Ascendis Pharma (ASND) upgraded to Outperform from Perform at Oppenheimer; tgt $170

  • Blackstone Secured Lending Fund (BXSL) upgraded to Mkt Perform from Underperform at Raymond James

  • Bloom Energy (BE) upgraded to Buy from Neutral at BofA Securities; tgt raised to $29

  • Comerica (CMA) upgraded to Buy from Hold at Jefferies; tgt raised to $114

  • Discover Financial Services (DFS) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $145

  • Goodyear Tire (GT) upgraded to Overweight from Neutral at JP Morgan; tgt lowered to $23

  • Micron (MU) upgraded to Outperform from Neutral at Wedbush; tgt raised to $120


  • Downgrades:

  • AGNC Investment (AGNC) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $13.75

  • Annaly Capital Mgmt (NLY) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $7.25

  • Cerence (CRNC) downgraded to In-line from Outperform at Evercore ISI; tgt lowered to $55

  • Genpact (G) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $51

  • IAA (IAA) downgraded to Neutral from Buy at Guggenheim

  • JPMorgan Chase (JPM) downgraded to Hold from Buy at Jefferies; tgt lowered to $155


  • Others:

  • Bicycle Therapeutics (BCYC) initiated with an Equal-Weight at Morgan Stanley; tgt $60

  • Blend Labs (BLND) initiated with a Mkt Perform at Keefe Bruyette; tgt $11.75

  • BriaCell Therapeutics (BCTX) initiated with a Buy at H.C. Wainwright; tgt $25

  • Caribou Biosciences (CRBU) initiated with a Buy at Brookline; tgt $19

  • DiDi Global (DIDI) initiated with an Outperform at Bernstein; tgt $6.20

  • Imago BioSciences (IMGO) initiated with a Buy at H.C. Wainwright; tgt $37

  • Intellia Therapeutics (NTLA) initiated with a Hold at Brookline

  • Lantronix (LTRX) initiated with a Buy at Canaccord Genuity; tgt $13


Upcoming Events:

  • Econ Data:

  • No economic data of note.


  • Earnings:

  • Monday (Feb 14)

  • Morning: KELYA STNG THS

  • Afternoon: AAP AMKR ANET CAR NTB CLR MEDP OMCL OTTR PRI SCI SRC TNET VNO ZD


  • Tuesday (Feb 15)

  • Morning: ALLE ARCH ABG BKI BWA CEVA ECL FIS FELE HSIC HUN IPGP IQV KRNT LDOS LGIH MAR QSR SABR TRP TRTN WCC ZTS

  • Afternoon: ACCO ADPT ABNB AKAM AYX ANGI AMK ATRC CF CINF CRK DENN DVN WIRE ESMT GXO IOSP IAC INVH LZB LSCC MASI MRC NMIH PACB QTWO REZI RBLX SEDG TX TOST UPST VIAC WELL WH WYNN ZI


  • Wednesday (Feb 16)

  • Morning: ALKS ALE AIMC AMCX ADI GOLD BCOR BPMC FUN CRL CHH CROX DRVN DNB DAVA GRMN GNRC HLT IS KHC NUS OC R SHOP SITE SAH SUN TTD VMC WAB WING WIX

  • Afternoon: TXG ALB ALSN ATUS AIG AWK AMPL AM AR AMAT APP ATCO SAM BFAM BCOV CAKE CSCO CDE CYH COMP CNDT CPRT CONE DASH EIG ET EQIX EVER ES FARO FSLY FSR FCPT GLBE LOPE HST HPP H INFN KGC KNBE MGY MRO MTTR NTR NVDA OIS OCDX PLMR PEGA PXD QS ROIC RGLD RPT STAG SNPS TRIP TROX TRUP TYL UFPI VMI VECO WCN


  • Thursday (Feb 17)

  • Morning: AAWW AN BAX BRC CBZ CIM COMM EPAM FVRR FOCS GEL THRM GPC GEO GPK HIMX IDA INSM ITGR IDCC IRDM IRWD LKQ MTRN MD NICE DNOW OGN PLTR PGTI POOL POR RCM RS RGEN SAFM SEE SWI SO SYNH TSEM TPH TRN USFD VC VNT WMT WST YETI

  • Afternoon: AL LNT AEE AEL AMN APPN ATR BJRI CMBM CWST CHUY CGNX ED DRH DLR DOMA DBX EXEL GLOB GMED KEYS KNSL LGND LTHM LTC MATX MERC LASR OEC PK QDEL RLGY RDFN RBA ROKU SHAK SWAV TSLX RUN SKT USM VTR WRE AUY


  • Friday (Feb 18)

  • Morning: ABR B BLMN DE PPL RRD




Asia & Europe detail:

Asia: Nikkei -2.2%, Hang Seng -1.4%, Shanghai Composite -1.0%

Equity indices in the Asia-Pacific region began the week on a mostly lower note. The Bank of Japan offered to buy an unlimited amount of 10-yr JGBs at 0.25% but there were no willing sellers. South Korea will hold a presidential election in three weekswith the opposition candidate holding a three-point lead over the incumbent. Protests against compulsory coronavirus shots continued in Australia and New Zealand.

  • In economic data:

  • India's January WPI Inflation 12.96% yr/yr (expected 12.7%; last 13.56%). WPI Fuel 32.27% yr/yr (last 32.30%), WPI Food 10.33% yr/yr (last 9.56%), and WPI Manufacturing 9.42% yr/yr (last 10.62%)

  • New Zealand's January FPI 2.7% m/m (last 0.6%)


---Equity Markets---

  • Japan's Nikkei: -2.2%

  • Hong Kong's Hang Seng: -1.4%

  • China's Shanghai Composite: -1.0%

  • India's Sensex: -3.0%

  • South Korea's Kospi: -1.6%

  • Australia's ASX All Ordinaries: +0.3%

---FX---

  • USD/JPY: -0.2% to 115.20

  • USD/CNH: -0.1% to 6.3596

  • USD/INR: +0.3% to 75.57

Europe: DAX -3.4%, FTSE -2.0%, CAC -3.6%

Major European indices trade sharply lower. Investor sentiment has been dampened by continued media hype surrounding Ukraine. The country's government was forced to put up nearly $600 mln to insure flights passing through Ukraine's airspace after global insurers suspended coverage. Greek Prime Minister Mitsotakis said that he expects his country's debt to regain investment grade status early next year. The Bank of Italy is maintaining its domestic growth forecast for 2022 at 4.0%. Germany's finance minister said that the government will not be a Commerzbank shareholder in the long term.

  • In economic data:

  • Swiss January PPI 0.6% m/m (last -0.1%); 5.4% yr/yr (last 5.1%)


---Equity Markets---

  • STOXX Europe 600: -2.7%

  • Germany's DAX: -3.4%

  • U.K.'s FTSE 100: -2.0%

  • France's CAC 40: -3.6%

  • Italy's FTSE MIB: -3.3%

  • Spain's IBEX 35: -3.2%

---FX---

  • EUR/USD: -0.3% to 1.1307

  • GBP/USD: -0.4% to 1.3507

  • USD/CHF: -0.2% to 0.9243


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