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14/03/23 Briefing

Updated: Mar 15, 2023

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


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