The S&P 500 futures are up 28 points and are trading 0.6% above fair value. The Nasdaq 100 futures are up 81 points and are trading 0.6% above fair value. The Dow Jones Industrial Average futures are up 202 points and are trading 1.0% above fair value.
A sentiment-driven rebound effort has taken root in the equity futures market with the bank stocks showing big gains this morning and panic buying in the Treasury market abating. The 2-yr note yield is up 20 basis points to 4.23% and the 10-yr note yield is up 11 basis points to 3.62%.
The closely watched Consumer Price Index is coming out at 8:30 a.m. ET, which will help inform Fed's next interest rate move. On a related note, the CME FedWatch Tool now reflects a 67.2% probability of a 25 basis points rate hike and a 32.8% probability of no rate hike at the March FOMC meeting.
Other data released today was limited to the February NFIB Small Business Optimism (actual 90.9; prior 90.3).
WTI crude oil futures are down 1.7% to $73.56/bbl and natural gas futures are down 0.7% to $2.71/mmbtu.
In corporate news:
First Republic Bank (FRC 44.61, +13.40, +42.9%) and PacWest (PACW 13.18, +3.43, +35.2%): big rebound after sharp declines in recent sessions
Western Alliance Bancorp (WAL 34.47, +8.35, +32.0%): Wells Fargo reiterated its Overweight rating
Uber (UBER 32.77, +1.95, +6.3%) and Lyft (LYFT 32.77, +1.95, +6.3%): California Court of Appeal upheld Prop 22 Decision that "protects the independence drivers value and gives them new, historic benefits"
United Airlines (UAL 46.58, -2.25, -4.6%): guides Q1 earnings well below consensus; related to potential new collective bargaining agreement; expects Q1 CASM-ex to be flat to positive 1%; reiterates FY23 CASM-ex outlook of approx. flat yr/yr; reiterates FY23 EPS
Delta Airlines (DAL 35.91, +0.23, +0.6%): reaffirming its outlook, previously provided on January 13, 2023, for the March quarter
GitLab (GTLB 31.54, -13.06, -29.3%): beats by $0.11, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus
Honeywell (HON 193.85, +0.75, +0.4%): names Vimal Kapur as CEO effective June 1, 2023
Bunge Limited (BG 99.55, +8.16, +8.9%): will replace Signature Bank (SBNY) in the S&P 500 effective prior to the opening of trading on Wednesday, March 15.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a lower note with banks seeing more pressure. Japan's Nikkei: -2.2%, Hong Kong's Hang Seng: -2.3%, China's Shanghai Composite: -0.7%, India's Sensex: -0.6%, South Korea's Kospi: -2.6%, Australia's ASX All Ordinaries: -1.5%.
In economic data:
South Korea's February Import Price Index -0.5% yr/yr (last 1.9%) and Export Price Index 2.7% yr/yr (last -1.2%)
India's February WPI Inflation 3.85% yr/yr (expected 4.00%; last 4.73%)
Australia's February NAB Business Confidence -4 (expected 0; last 6) and NAB Business Survey 17 (expected 21; last 18)
In news:
Japan's Finance Minister Suzuki said that financial markets in Japan are stable while South Korea's Finance Minister Choo said that the Bank of Korea will take steps to stabilize markets if needed.
China is lifting restrictions on imports of Australian coal.
President Biden confirmed that Australia will acquire nuclear-powered submarines.
Fitch affirmed South Korea's AA- rating with a Stable outlook.
Major European indices trade on a mostly higher note. STOXX Europe 600: +0.2%, Germany's DAX: +0.8%, U.K.'s FTSE 100: UNCH, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.9%.
In economic data:
U.K.'s January Average Earnings Index + Bonus 5.7% yr/yr, as expected (last 6.0%), January three-month employment change 65,000 (expected 52,000; last 74,000), and January Unemployment Rate 3.7% (expected 3.8%; last 3.7%)
Italy's January Industrial Production -0.7% m/m (expected -0.1%; last 1.2%); 1.4% yr/yr (expected 2.9%; last -0.9%)
Spain's February CPI 0.9% m/m (expected 1.0%; last -0.2%); 6.0% yr/yr (expected 6.1%; last 5.9%)
Swiss February CPI -0.2% m/m (expected 0.5%; last 0.7%); 2.7% yr/yr (last 3.3%)
In news:
Credit Suisse released its delayed quarterly report, noting that "material weaknesses" were found in its reporting process for the past two years.
There are growing expectations that the European Central Bank will forego a 50-bps rate hike in favor of a 25-bps increase at this month's meeting.
British Prime Minister Sunak will visit the White House in June.
U.S. equity futures:
S&P 500 Futures: +25 @ 3,881
DJIA Futures: +162 @ 31,984
Nasdaq 100 Futures: +69 @ 11,992
Overseas:
Europe: DAX +0.8%, FTSE UNCH, CAC +0.6%
Asia: Nikkei -2.2%, Hang Seng -2.3%, Shanghai Composite -0.7%
Commodities:
Crude Oil -1.24 @ 73.56
Nat Gas -0.026 @ 2.58
Gold -7.35 @ 1909.15
Silver -0.185 @ 21.738
Copper -0.0142 @ 4.0393
Earnings/Guidance:
Alaska Air (ALK) reaffirms Q1 revs
Amylyx Pharmaceuticals (AMLX) beats handily on Q4 revs; says commercial launch is off to a strong start
Avid Bioservices (CDMO) beats by $0.05, beats on revs; reaffirms FY23 revenue guidance
Caleres (CAL) reports EPS in-line, revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY24 EPS in-line, revs in-line
CRISPR Therapeutics (CRSP) announces the hiring and appointment of Raju Prasad as CFO, effective March 14, 2023
Delta Air Lines (DAL) is reaffirming its outlook, previously provided on January 13, 2023, for the March quarter
DocGo (DCGO) reports Q4 results, beat on revs, guides FY23revs above consensus
Geo Group (GEO) sees FY23EPS in-line with consensus
Getty Images (GETY) misses by $0.09 (two ests), misses on revs; guides FY23revs below consensus
GitLab (GTLB) beats by $0.11, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24EPS above consensus, revs below consensus
JetBlue Airways (JBLU) raises Q1 revenue guidance, reaffirms FY23outlook
Southwest Air (LUV) provides updated guidance; narrows Q1 operating revenue guidance to +21-23% from +20-24% (Capital IQ consensus +22%); reaffirms Q1 ASM guidance of +10% yr/yr; sees FY23ASM of +15-16% vs. prior guidance of +16-17%; will share an overview of the prioritized actions being implemented to strengthen the airline's operational resiliency
Spirit Airlines (SAVE) provides Q1 guidance; sees TRASM % change y/y of +23.5-24.5%
Turtle Beach (HEAR) misses by $0.11, misses on revs; guides FY23below consensus; extends share repurchase program for an additional two years, through April 9, 2025; authorized to acquire up to $25 mln
United Airlines (UAL) guides Q1 earnings well below consensus; related to potential new collective bargaining agreement; expects Q1 CASM-ex to be flat to positive 1%; reiterates FY23CASM-ex outlook of approx. flat yr/yr; reiterates FY23EPS
Verisk Analytics (VRSK) provides 2025 financial targets
News:
Citadel founder Ken Griffin says US should not have intervened to protect all Silicon Valley Bank (SIVB) depositors, according to Financial Times
Large banks gain new deposits amid regional financial issues, according to Financial Times
Russia will extend grain deal with Ukraine for 60 days, according to the New York Times
Albany Intl's (AIN) President and CEO notified the company about his intention to retire; company retained executive search firm to begin search for his replacement
Altus Power (AMPS) confirms no exposure to SBV (SIVB), Signature Bank or First Republic Bank
Amedisys (AMED) announces that it has named Richard Ashworth as President and Chief Executive Officer, effective April 10, 2023
Archer Aviation (ACHR) confirms it currently maintains only a small amount of cash with SVB (SIVB), in the single digit millions of U.S. dollars, representing less than 2% of the Company's total cash, cash equivalents and short-term investments
AssetMark (AMK) issues its February AMK Report; platform assets increased 5.4% yr/yr to $94.3 bln, net flows down 22.2% to $540 mln
AST SpaceMobile (ASTS) signs non-binding MoU with Saudi Telcom Company
Atea Pharmaceuticals (AVIR) reports new data showcasing favorable profile of Bemnifosbuvir for treatment of COVID-19 and Hepatitis C presented at 2023 International Conference on Antiviral Research
Autolus Therapeutics (AUTL) announces that Dr. Lucinda Crabtree has provided notice of her resignation as Chief Financial Officer of the Company to pursue a new opportunity
Boeing (BA): Two airlines in Saudi Arabia expects to purchase 80 Dreamliners from Boeing, according to the Wall Street Journal
Caledonia Mining (CMCL) files technical report on Blanket Mine
Comerica (CMA): Moody's places Comerica Incorporated's ratings on review for downgrade
Credit Suisse (CS) in 2022 annual report filed this morning says that it "concluded that this material weakness could result in misstatements of account balances or disclosures that would result in a material misstatement to the annual financial statements"
DocGo (DCGO) awarded multiple new single and multi-year contract wins and expansions since the start of the year valued at over $180 mln over next three years
Enanta Pharmaceuticals (ENTA) to present new data for eDP-235, its 3CL protease inhibitor, in development as an oral, once-daily treatment for COVID-19, at the 36th International Conference on Antiviral Research
First Republic Bank (FRC): Moody's places First Republic Bank's ratings under review for downgrade
FiscalNote Holdings (NOTE) reports it does not hold any cash deposits or securities at Silicon Valley Bank (SIVB) or Signature Bank (SBNY)
Five Below (FIVE) CFO Kenneth Bull promoted to COO; will conduct search for a new CFO
GlaxoSmithKline (GSK) reports pivotal phase III data for 5-in-1 Meningococcal ABCWY vaccine candidate
GlaxoSmithKline (GSK) receives acceptance from China National Medical Products Administration for Nucala
Honeywell (HON) names Vimal Kapur as CEO effective June 1, 2023
Horizon Technology Finance (HRZN) does not maintain any deposit or other accounts or credit facilities with Silicon Valley Bank (SIVB) or Signature Bank (SBNY)
Hudson Pacific Properties (HPP) does not have any bank accounts with SIVB, any loans to or from SIVB, or any other amounts due to or due from SIVB
HYZON Motors (HYZN) names Parker Meeks as CEO, effective immediately
Immutep (IMMP) announces initiation of Phase II/III trial for eftilagimod alpha plus paclitaxel in metastatic breast cancer
Innoviva (INVA) announces FDA Advisory Committee meeting to review Sulbactam-Durlobactam
L3Harris (LHX) selected by NASA to develop the imager for NOAA's Geostationary Extended Observations satellite program
Lyft (LYFT) says "pleased that the court upheld the democratic will of the voters and the fundamentals of Prop 22. Prop 22 protects the independence drivers value and gives them new, historic benefits"
ODP Corporation (ODP) agrees to repurchase 2 million shares of common stock of the Company from HG Vora Special Opportunities Master Fund, Ltd., at a price per share equal to $44.55, for a total purchase price of ~$89.1 million
Main Street Capital (MAIN) does not have any lending, cash depository, treasury management or other direct business relationship with SIVB
Meta Platforms (META) will wind down NFTs across its platforms, according to Reuters
Meta Platforms (META) will begin second round of job cuts this week, according to Financial Times
OneSpan (OSPN) reports its does not hold any cash or cash equivalents with Silicon Valley Bank (SIVB) or Signature Bank (SBNY)
Paramount Global (PARA): Sean Combs looking to buy BET, according to Variety
PennantPark Floating Rate Capital (PFLT) does not hold cash deposits or securities at SVB (SIVB) or Signature (SBNY), does not maintain any financing arrangements with SVB or Signature and does not otherwise have any direct business relationship with SVB or Signature
Progress Software (PRGS) discloses update regarding Silicon Valley Bank (SIVB)
Reneo Pharmaceuticals (RPHM) Achieves Target Enrollment in the Pivotal STRIDE Study of Mavodelpar (REN001) in Primary Mitochondrial Myopathies
Ribbon Communications (RBBN) reports that it does not expect the closing of Silicon Valley Bank to have a significant impact on its operations
Rite Aid (RAD): United States files complaint alleging that Rite Aid dispensed controlled substances in violation of the false claims act and the controlled substances act
Robinhood Markets (HOOD) reports monthly operating data for February; notional trading volumes up for equities and options, lower for crypto compared to January
Rocket Companies (RKT) provides disclosures in relation to market events, including the recent closures of regional banks
Signature Bank (SBNY): Moody's downgrades Signature Bank (subordinate debt to C from Baa2) and will withdraw ratings
Signature Bank (SBNY): Fitch Ratings downgrades and withdraws Signature Bank's ratings
SVB Financial Group (SIVB): Federal Reserve Board announces that Michael Barr is leading a review of supervision, regulation of SIVB, in light of its failure
SVB Financial Group (SIVB): Regulators planning on another SIVB auction, according to the Wall Street Journal
SVB Financial Group (SIVB) discloses update regarding strategic alternatives
Terns Pharmaceuticals (TERN) does not expect any disruptions to its operations, including payroll, due to the recently announced bank closures, such as the failure of Silicon Valley Bank ()
UMB Financial Corporation (UMBF): Moody's places UMB Financial Corporation's ratings under review for downgrade (UMB Bank, N.A. long-term deposits Aa3)
Volkswagen (VWAGY) provides update; laying basis for profitable growth in key markets
Western Alliance Bancorp (WAL): Moody's places Western Alliance's ratings on review for downgrade
Zions Bancorp (ZION): Moody's places Zions Bancorporation, N.A.'s ratings under review for downgrade (long-term deposits A1)
ZoomInfo (ZI) announces $100 million share repurchase program
M&A:
Americold Realty Trust (COLD) announces investment into RSA Cold Chain in Dubai
Apollo (APO) interested in assets at Silicon Valley Bank (SIVB), according to Bloomberg
Cvent (CVT) has entered into a definitive agreement to be acquired by an affiliate of private equity funds managed by Blackstone (BX) in a transaction valued at an enterprise value of ~$4.6 bln
Momentive Global (MNTV) to be acquired by Symphony Technology Group for $1.5 bln
Parsons (PSN) entered into a definitive agreement to acquire IPKeys Power Partners, Inc
Univar Solutions (UNVR): Apollo (APO) will soon announce agreement to purchase UNVR at $36.15/share, according to the Wall Street Journal
Syndicate:
Amylyx Pharmaceuticals (AMLX) files mixed securities shelf offering
NextEra Energy Partners (NEP) files for $500 mln common unit offering
Northrop Grumman (NOC) files mixed securities shelf offering
IPOs:
Expected to Price:
No IPOs expected.
Gapping Up/Down
Gapping up:
PACW +31.2%, FRC +22.1%, WAL +21.4%, MNTV+17.9%, AMLX +16.8%, DCGO +14.9%, HYZN +14%, CDMO +13.6%, CMA +11.9%, ZION +11.4%, BG+7.5%, UBER +7.1%, ASTS +6.4%, LYFT +6.4%, DASH+6%, FIVE +2.2%, RBBN +1.9%, HOOD +1.8%, COLD+1.7%, NEP +1%, AMCX +0.9%, GSK +0.8%
Gapping down:
SIVB -62.8%, GTLB -31.5%, HEAR -14.5%, GETY-6.9%, UAL -6%, CS -4.3%, CRSP -3.3%, INVA -2.6%, DAL -1%, ZI -1%, AAL -0.9%, ALK -0.9%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Avid Bioservices (CDMO) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $20
Eni S.p.A. (E) upgraded to Buy from Hold at HSBC Securities
Intellia Therapeutics (NTLA) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $57
Match Group (MTCH) upgraded to Overweight from Equal Weight at Barclays; tgt $52
MPLX LP (MPLX) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $41
Pinnacle West (PNW) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $80
Portland Gen Elec (POR) upgraded to Buy from Neutral at BofA Securities; tgt raised to $52
Roku (ROKU) upgraded to Peer Perform from Underperform at Wolfe Research
Tricon Residential (TCN) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $9.25
TrueCar (TRUE) upgraded to Buy from Hold at Needham; tgt $3.50
Unum Group (UNM) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $52
Vermilion Energy (VET) upgraded to Overweight from Neutral at JP Morgan
Downgrades:
Crestwood Equity Partners (CEQP) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $28
Hancock Whitney (HWC) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $50
Hancock Whitney (HWC) downgraded to Neutral from Buy at Janney; tgt $44.50
Lufax (LU) downgraded to Underperform from Neutral at Macquarie; tgt $1.50
nCino (NCNO) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $22
Ovintiv (OVV) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $53
Others:
Academy Sports + Outdoors (ASO) initiated with a Buy at Jefferies; tgt $73
Arcellx (ACLX) initiated with a Buy at Stifel; tgt $43
Cipher Mining (CIFR) initiated with a Buy at Cantor Fitzgerald; tgt $3
Community Bank (CBU) initiated with a Buy at Janney; tgt $66
Dick's Sporting Goods (DKS) initiated with a Hold at Jefferies; tgt $155
Durect (DRRX) initiated with a Buy at Jones Trading; tgt $37
Estee Lauder (EL) initiated with an Outperform at TD Cowen; tgt $28
Hibbett (HIBB) initiated with a Hold at Jefferies; tgt $69
Lilium GmbH (LILM) initiated with a Neutral at Citigroup; tgt $1
LSB Industries (LXU) initiated with a Buy at Deutsche Bank; tgt $16
Trevi Therapeutics (TRVI) initiated with a Buy at Jones Trading; tgt $7
Econ Data:
06:00 ET: NFIB Small Business Optimism for Feb (Briefing.comConsensus NA; Prior 90.3)
08:30 ET: CPI for Feb (Briefing.comConsensus 0.4%; Prior 0.5%)
08:30 ET: Core CPI for Feb (Briefing.comConsensus 0.4%; Prior 0.4%)
Earnings:
Monday (Mar 13)
Afternoon: GTLB
Tuesday (Mar 14)
Morning: CAL IHS SGHC
Afternoon: CTOS GES LEN S SMAR STNE
Wednesday (Mar 15)
Morning: EBIX GDS OTLY PACK
Afternoon: ADBE AMRS ARRY CDRE FIVE FNV PD TPC PATH ZTO
Thursday (Mar 16)
Morning: ASO DBI DG GIII MOMO HNST JBL BEKE SIG TITN WSM
Afternoon: BLND FDX PLBY PRPL COOK
Friday (Mar 17)
Morning: AQN BLDP
Asia & Europe detail:
Asia: Nikkei -2.2%, Hang Seng -2.3%, Shanghai Composite -0.7%
Equity indices in the Asia-Pacific region ended Tuesday on a lower note with banks seeing more pressure. Japan's Finance Minister Suzuki said that financial markets in Japan are stable while South Korea's Finance Minister Choo said that the Bank of Korea will take steps to stabilize markets if needed. China is lifting restrictions on imports of Australian coal. President Biden confirmed that Australia will acquire nuclear-powered submarines. Fitch affirmed South Korea's AA- rating with a Stable outlook.
In economic data:
South Korea's February Import Price Index -0.5% yr/yr (last 1.9%) and Export Price Index 2.7% yr/yr (last -1.2%)
India's February WPI Inflation 3.85% yr/yr (expected 4.00%; last 4.73%)
Australia's February NAB Business Confidence -4 (expected 0; last 6) and NAB Business Survey 17 (expected 21; last 18)
---Equity Markets---
Japan's Nikkei: -2.2%
Hong Kong's Hang Seng: -2.3%
China's Shanghai Composite: -0.7%
India's Sensex: -0.6%
South Korea's Kospi: -2.6%
Australia's ASX All Ordinaries: -1.5%
---FX---
USD/JPY: +0.6% to 134.01
USD/CNH: +0.4% to 6.8757
USD/INR: +0.1% to 82.46
Europe: DAX +0.8%, FTSE UNCH, CAC +0.6%
Major European indices trade on a mostly higher note. Credit Suisse released its delayed quarterly report, noting that "material weaknesses" were found in its reporting process for the past two years. There are growing expectations that the European Central Bank will forego a 50-bps rate hike in favor of a 25-bps increase at this month's meeting. British Prime Minister Sunak will visit the White House in June.
In economic data:
U.K.'s January Average Earnings Index + Bonus 5.7% yr/yr, as expected (last 6.0%), January three-month employment change 65,000 (expected 52,000; last 74,000), and January Unemployment Rate 3.7% (expected 3.8%; last 3.7%)
Italy's January Industrial Production -0.7% m/m (expected -0.1%; last 1.2%); 1.4% yr/yr (expected 2.9%; last -0.9%)
Spain's February CPI 0.9% m/m (expected 1.0%; last -0.2%); 6.0% yr/yr (expected 6.1%; last 5.9%)
Swiss February CPI -0.2% m/m (expected 0.5%; last 0.7%); 2.7% yr/yr (last 3.3%)
---Equity Markets---
STOXX Europe 600: +0.2%
Germany's DAX: +0.8%
U.K.'s FTSE 100: UNCH
France's CAC 40: +0.6%
Italy's FTSE MIB: +0.4%
Spain's IBEX 35: +0.9%
---FX---
EUR/USD: -0.1% to 1.0718
GBP/USD: -0.2% to 1.2159
USD/CHF: UNCH at 0.9115
Comments