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14/04/22 Briefing


The S&P 500 futures trade roughly in-line with fair value in a busy news morning before the market closes for Good Friday tomorrow.

Starting with earnings news, UnitedHealth (UNH 539.80, +2.80, +0.5%), Morgan Stanley (MS 85.30, +1.17, +1.6%), and Goldman Sachs (GS 328.68, +6.71, +2.1%) each beat top and bottom-line estimates, while Wells Fargo (WFC46.88, -1.66, -3.4%) trades lower by 3% after missing revenue estimates.

Twitter (TWTR 49.09, +3.22, +7.0%), meanwhile, is up 7% after Elon Musk offered to acquire the company for $54.20 per share in cash. Twitter said it will carefully review the proposal, which is Mr. Musk's "best and final offer."

Elsewhere, the European Central Bank made no changes to interest rates, as expected, and said incoming data since its last meeting reinforced expectations for net asset purchases under the APP should be concluded in the third quarter.

In economic data, Retail Sales for March (Briefing.comconsensus 0.6%), weekly Initial Claims (Briefing.comconsensus 175,000), and Import and Export Prices for March will be released at 8:30 a.m. ET, followed by the preliminary University of Michigan Index of Consumer Sentiment for April (Briefing.comconsensus 58.8) and Business Inventories for February (Briefing.comconsensus 1.3%) at 10:00 a.m. ET.

U.S. Treasuries are up for the third straight day, pushing yields slightly lower. The 2-yr yield is down one basis point to 2.33%, and the 10-yr yield is down two basis points to 2.67%. The U.S. Dollar Index is down 0.2% to 99.68. WTI crude futures are down 1.2%, or $1.25, to $103.04/bbl.

In U.S. Corporate news:

  • UnitedHealth (UNH 539.80, +2.80): +0.5% after beating top and bottom-line estimates and slightly raising its FY22 EPS guidance.

  • Wells Fargo (WFC 46.88, -1.66): -3.4% after beating EPS estimates on below-consensus revenue.

  • Morgan Stanley (MS 85.30, +1.17): +1.6% after beating top and bottom-line estimates.

  • Goldman Sachs (GS 328.68, +6.71): +2.1% after beating top and bottom-line estimates.

  • Twitter (TWTR 49.09, +3.22): +7.0% after Elon Musk offered to buy 100% of the company for $54.20 per share in cash. Twitter said it will carefully review the proposal.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note while India's Sensex was closed for a holiday. Japan's Nikkei: +1.2% Hong Kong's Hang Seng: +0.7% China's Shanghai Composite: +1.2% India's Sensex: CLOSED South Korea's Kospi: UNCH Australia's ASX All Ordinaries: +0.7%.

  • In economic data:

  • China's March FDI 25.6% (last 37.9%)

  • South Korea's March Import Price Index 35.5% yr/yr (last 30.7%) and Export Price Index 22.8% yr/yr (last 20.5%)

  • Singapore's Q1 GDP 0.4% qtr/qtr (expected 2.0%; last 2.3%); 3.4% yr/yr (expected 3.8%; last 6.1%)

  • Australia's March Employment Change 17,900 (expected 40,000; last 77,400) and full employment change 20,500 (last 121,900). March Unemployment Rate 4.0% (expected 3.9%; last 4.0%) and March Participation Rate 66.4% (expected 66.5%; last 66.4%)

  • New Zealand's March Business NZ PMI 53.8 (last 53.6)


  • In news:

  • Some policymakers in Japan are arguing in favor of building bigger budget reserves and diversifying procurement channels for raw metals.

  • Some of Hong Kong's coronavirus restrictions will be lifted on April 21.

  • Australia reported a smaller than expected increase in employment.

  • The Bank of Korea raised its base rate by 25 bps to 1.50% against expectations for no change while the Monetary Authority of Singapore tightened policy for the third time in the past six months.



  • Major European indices trade in the green. STOXX Europe 600: +0.3% (-0.6% week-to-date) Germany's DAX: +0.4% (-0.5% week-to-date) U.K.'s FTSE 100: UNCH (-1.2% week-to-date) France's CAC 40: +0.5% (+0.4% week-to-date) Italy's FTSE MIB: +0.2% (-0.2% week-to-date) Spain's IBEX 35: +0.3% (+0.4% week-to-date).

  • In economic data:

  • Germany's March WPI 6.9% m/m (last 1.7%); 22.6% yr/yr (last 16.6%)

  • Swiss March PPI 0.8% m/m (expected 1.1%; last 0.4%); 6.1% yr/yr (last 5.8%)


  • In news:

  • Volkswagen reported an improvement in Q1 profit.

  • The European Central Bank (ECB) made no changes to interest rates, as expected, and said incoming data since its last meeting reinforced expectations for net asset purchases under the APP should be concluded in the third quarter.

  • ECB President Lagarde could set the stage for tightening later in the year during her press conference at 8:30 ET.

  • Regional markets will be closed for Good Friday tomorrow.



U.S. equity futures:

  • S&P 500 Futures: -6 @ 4,440

  • DJIA Futures: +62 @ 34,647

  • Nasdaq 100 Futures: -14 @ 14,204

Overseas:

  • Europe: DAX +0.4%, FTSE UNCH, CAC +0.5%

  • Asia: Nikkei +1.2%, Hang Seng +0.7%, Shanghai Composite +1.2%

Commodities:

  • Crude Oil -1.22 @ 103.03

  • Nat Gas +0.069 @ 7.066

  • Gold -6.10 @ 1978.60

  • Silver -0.207 @ 25.823

  • Copper +0.0015 @ 4.7135

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Ally Financial (ALLY) beats by $0.10, reports revs in-line

  • B2Gold (BTG) reports Q1 gold production 5% above budget

  • Cambium Networks (CMBM) lowers its Q1 revenue expectations due to China lockdowns; expects some recovery during Q2

  • Eldorado Gold (ELD) announces first quarter 2022 preliminary production; maintains full year production guidance

  • Ericsson (ERIC) reports Q1 (Mar) results, beats on revs

  • Goldman Sachs (GS) beats by $1.78, beats on revs

  • Morgan Stanley (MS) beats by $0.30, beats on revs

  • PNC (PNC) beats by $0.51, reports revs in-line; reaffirms FY22 revenue guidance

  • Rent the Runway (RENT) beats by $0.02, beats on revs; guides AprQ revs in-line; guides FY23 revs below consensus

  • Rite Aid (RAD) misses by $1.06, beats on revs; guides FY23 EPS above consensus, revs in-line

  • Silvercorp Metals (SVM) reports op results; reiterates its Fiscal 2023 production guidance

  • State Street (STT) beats by $0.09, beats on revs

  • Supernus Pharma (SUPN) reports final audited results for Q4; reiterates FY22 guidance

  • Taiwan Semi (TSM) beats by NT$0.65, beats on revs; guides Q2 revs above consensus

  • UnitedHealth (UNH) beats by $0.13, beats on revs; slightly raises FY22 EPS guidance

  • U.S. Bancorp (USB) beats by $0.05, reports revs in-line

  • Wash. Federal (WAFD) reports EPS in-line, revs in-line

  • Wells Fargo (WFC) beats by $0.08, misses on revs


  • General News:

  • Larry Summers believes a US recession is more likely than a soft landing from the Fed, according to Bloomberg

  • Russia says it will move nuclear weapons near the Baltic Sea if Finland and Sweden join NATO. Russian ship in Black Sea was damaged after Ukraine missile strike, according to Bloomberg

  • ECB releases monetary policy decisions; leaves rates unchanged

  • White House releases economic report of President Biden

  • Activision (ATVI): Top attorneys leave positions amid Activision worker lawsuit, according to the Wall Street Journal

  • Adagio Therapeutics (ADGI) announces positive preliminary clinical results from its Phase 2/3 clinical trials of adintrevimab and is providing an update on the anticipated timing for its Emergency Use Authorization request for adintrevimab for the prevention and treatment of COVID-19

  • Alibaba (BABA): Key China watchdog group among agencies involved in Ant Group investigation, according to Bloomberg

  • Amazon (AMZN) CEO Andy Jassy issues letter to shareholders

  • Amneal Pharmaceuticals (AMRX) announces that FDA approves its BLA for bevacizumab-maly

  • Argan (AGX) increases existing share repurchase program to $75 mln from $50 mln

  • Copa Holdings (CPA) reports March traffic down 6.8% compared to March 2019

  • Costco (COST) increases its quarterly dividend 13.9% to $0.90/share

  • Dow (DOW) approves new share buyback program to repurchase up to $3.0 bln; is additive to the current program which has approx. $775 mln of authorization remaining

  • Editas Medicine (EDIT) appointed Dr. Gilmore O'Neill, M.B., M.M.Sc., as President and Chief Executive Officer

  • Evelo Biosciences (EVLO) provides updated guidance on advancing clinical inflammation programs

  • Flowserve (FLS) awarded contract to provide equipment for open-source carbon capture and storage initiative in Norway

  • Genmab (GMAB) and AbbVie Announce Topline Results for Epcoritamab (DuoBody-CD3xCD20) From Phase 1/2 Trial in Patients with Relapsed/Refractory Large B-cell Lymphoma

  • GFL Environmental (GFL) reached an agreement with the Canadian Competition Bureau to address Terrapure Environmental concerns

  • INmune Bio (INMB) doses first patient in Phase 2 trial of XPro1595

  • JPMorgan Chase (JPM) unveils plans for new global headquarters building in New York City

  • Merck (MRK) announces FDA has granted breakthrough therapy designation for V116, the company's investigational 21-valent pneumococcal conjugate vaccine, for the prevention of invasive pneumococcal disease and pneumococcal pneumonia in adults

  • Meta Platforms (FB): National Payments Corporation of India has approved an additional 60 million users on UPI for WhatsApp

  • New Found Gold Corp (NFGC) appoints Collin Kettell as CEO

  • Novartis' (NVS) unit Sandoz launches generic brimonidine tartrate/timolol maleate eyedrop in US

  • Pfizer (PFE) and BioNTech (BNTX) announce data demonstrating high immune response following a booster dose of their COVID-19 vaccine in children 5 through 11 years of age

  • Protagonist Therapeutics (PTGX) in filing discloses receipt of letter from FDA indicating intent to rescind Breakthrough Therapy Designation for rusfertide

  • Rayonier Advanced Materials (RYAM) comments on letter from Chatham Asset Management

  • RH (RH) entered into individual privately negotiated transactions with certain holders of its convertible notes

  • Simply Good Foods (SMPL) approves the addition of $50 mln to existing stock repurchase program; as of April 13, 2022, an aggregate of $76.2 mln is available under repurchase authorization

  • Sanofi (SNY) reports Phase 1/2 study results of rilzabrutinib published in The NEJM

  • Starbucks (SBUX) aiming to expand worker benefits, excluding union workers, according to the Wall Street Journal

  • Stellantis (STLA) and Qualcomm (QCOM) announce multi-year technology collaboration to utilize the latest Snapdragon Digital Chassis advancements across Stellantis' 14 automotive brands beginning in 2024

  • Tencent (TCEHY) aiming to block unapproved games, according to Reuters

  • Twitter (TWTR) confirms receipt of unsolicited, non-binding proposal from Elon Musk; will carefully review the proposal

  • Valneva SE (VALN) receives conditional marketing authorization from UK MHRA for its inactivated COVID-19 vaccine


  • M&A:

  • ANSYS (ANSS) agrees to acquire cloud simulation provider OnScale; financial details not disclosed

  • ArcelorMittal (MT) acquires majority stake in voestalpine's state-of-the-art HBI facility in Texas

  • Aviat Networks (AVNW) announces intent to acquire Redline Communications in all-cash transaction

  • Cushman & Wakefield (CWK) announces acquisition of Sheffield Property and Sheffield Asset Management; terms not disclosed

  • Genuine Parts (GPC) announces acquisition of Lausan Group; terms not disclosed

  • Rollins' (ROL) Orkin acquired Norfolk, UK-based NBC Environment; financial terms not disclosed

  • Twitter (TWTR): Elon Musk offers to buy 100% of Twitter for $54.20 per share in cash


  • Syndicate:

  • OncoCyte (OCX) prices offering of common stock and warrants


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • SMPL +4.3%, AGX +3.6%, CWK +2.4%, RYAM +2.4%, ANSS +2.1%, INMB +1.6%, TSM +1.4%, MT +1.1%, UNH +1.1%, COST +0.7%, BTG +0.6%, ELD +0.5%


  • Gapping down:

  • PTGX -28.1%, CMBM -12.2%, OCX -11.8%, ERIC-5.8%, EGO -3.4%, GMAB -2.8%, RENT -1.6%, GPC-1.1%, ABBV -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • CDW (CDW) upgraded to Buy from Hold at Stifel; tgt raised to $210

  • CoreCivic (CXW) upgraded to Outperform from Neutral at Wedbush; tgt $17

  • Corteva (CTVA) upgraded to Buy from Hold at Loop Capital; tgt $69

  • Delta Air Lines (DAL) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $60

  • Royalty Pharma (RPRX) upgraded to Overweight from Neutral at JP Morgan; tgt $50


  • Downgrades:

  • Apellis Pharmaceuticals (APLS) downgraded to Sell from Neutral at ROTH Capital; tgt $40

  • Bed Bath & Beyond (BBBY) downgraded to Market Perform from Outperform at Telsey Advisory Group; tgt lowered to $15

  • Covenant Logistics (CVLG) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $21

  • Enjoy Technology (ENJY) downgraded to Neutral from Buy at BTIG Research

  • Seagate Tech (STX) downgraded to Negative from Neutral at Susquehanna; tgt lowered to $65


  • Others:

  • Aeva (AEVA) initiated with an Outperform at Credit Suisse; tgt $6

  • Alpha Tau (DRTS) initiated with an Overweight at Cantor Fitzgerald; tgt $20

  • American Homes 4 Rent (AMH) initiated with an Outperform at BMO Capital Markets; tgt $46

  • dLocal Limited (DLO) initiated with an Overweight at Piper Sandler; tgt $34

  • Earthstone Energy (ESTE) initiated with an Equal-Weight at Stephens; tgt $15

  • Enphase Energy (ENPH) initiated with an Overweight at Stephens; tgt $280

  • Kimbell Royalty Partners (KRP) initiated with an Overweight at Stephens; tgt $22

  • R1 RCM (RCM) initiated with a Neutral at Guggenheim

  • SolarEdge Technologies (SEDG) initiated with an Overweight at Stephens; tgt $490

  • Talos Energy (TALO) initiated with an Overweight at Stephens; tgt $28


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Import Price Index for Mar (Briefing.comConsensus NA; Prior 1.4%)

  • 08:30 ET: Import Prices ex-oil for Mar (Briefing.comConsensus NA; Prior NA)

  • 08:30 ET: Export Price Index for Mar (Briefing.comConsensus NA; Prior 3.0%)

  • 08:30 ET: Export Prices ex-ag. for Mar (Briefing.comConsensus NA; Prior NA)

  • 08:30 ET: Retail Sales for Mar (Briefing.comConsensus 0.6%; Prior 0.3%)

  • 08:30 ET: Retail Sales ex-auto for Mar (Briefing.comConsensus 0.9%; Prior 0.2%)

  • 08:30 ET: Initial Claims for Apr 9 (Briefing.comConsensus 175K; Prior 166K)

  • 08:30 ET: Continuing Claims for Apr 2 (Briefing.comConsensus NA; Prior 1523K)

  • 10:00 ET: Business Inventories for Feb (Briefing.comConsensus 1.3%; Prior -0.2%)

  • 10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for Apr (Briefing.comConsensus 58.8; Prior 59.4)

  • 10:30 ET: EIA Natural Gas Inventories for Apr 9 (Briefing.comConsensus NA; Prior -33 bcf)


  • Earnings:

  • Tuesday (Apr 12)

  • Morning: ACI KMX


  • Wednesday (Apr 13)

  • Morning: BBBY BLK DAL FAST FRC JPM SJR

  • Afternoon: WAFD


  • Thursday (Apr 14)

  • Morning: ALLY C ERIC GS MS PNC PGR RAD STT TSM USB UNH WFC



Asia & Europe detail:

Asia: Nikkei +1.2%, Hang Seng +0.7%, Shanghai Composite +1.2%

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note while India's Sensex was closed for a holiday. Some policymakers in Japan are arguing in favor of building bigger budget reserves and diversifying procurement channels for raw metals. Some of Hong Kong's coronavirus restrictions will be lifted on April 21.Australia reported a smaller than expected increase in employment. The Bank of Korea raised its base rate by 25 bps to 1.50% against expectations for no change while the Monetary Authority of Singapore tightened policy for the third time in the past six months.

  • In economic data:

  • China's March FDI 25.6% (last 37.9%)

  • South Korea's March Import Price Index 35.5% yr/yr (last 30.7%) and Export Price Index 22.8% yr/yr (last 20.5%)

  • Singapore's Q1 GDP 0.4% qtr/qtr (expected 2.0%; last 2.3%); 3.4% yr/yr (expected 3.8%; last 6.1%)

  • Australia's March Employment Change 17,900 (expected 40,000; last 77,400) and full employment change 20,500 (last 121,900). March Unemployment Rate 4.0% (expected 3.9%; last 4.0%) and March Participation Rate 66.4% (expected 66.5%; last 66.4%)

  • New Zealand's March Business NZ PMI 53.8 (last 53.6)


---Equity Markets---

  • Japan's Nikkei: +1.2%

  • Hong Kong's Hang Seng: +0.7%

  • China's Shanghai Composite: +1.2%

  • India's Sensex: CLOSED

  • South Korea's Kospi: UNCH

  • Australia's ASX All Ordinaries: +0.7%

---FX---

  • USD/JPY: -0.3% to 125.27

  • USD/CNH: +0.1% to 6.3812

  • USD/INR: UNCH at 76.11

Europe: DAX +0.4%, FTSE UNCH, CAC +0.5%

Major European indices trade in the green. Volkswagen reported an improvement in Q1 profit. The European Central Bank will release its latest policy statement in about 15 minutes. The Statement is not expected to call for any immediate changes to the interest rate corridor, but ECB President Lagarde could set the stage for tightening later in the year during her press conference at 8:30 ET. Regional markets will be closed for Good Friday tomorrow.

  • In economic data:

  • Germany's March WPI 6.9% m/m (last 1.7%); 22.6% yr/yr (last 16.6%)

  • Swiss March PPI 0.8% m/m (expected 1.1%; last 0.4%); 6.1% yr/yr (last 5.8%)


---Equity Markets---

  • STOXX Europe 600: +0.3% (-0.6% week-to-date)

  • Germany's DAX: +0.4% (-0.5% week-to-date)

  • U.K.'s FTSE 100: UNCH (-1.2% week-to-date)

  • France's CAC 40: +0.5% (+0.4% week-to-date)

  • Italy's FTSE MIB: +0.2% (-0.2% week-to-date)

  • Spain's IBEX 35: +0.3% (+0.4% week-to-date)

---FX---

  • EUR/USD: +0.1% to 1.0905

  • GBP/USD: +0.2% to 1.3137

  • USD/CHF: +0.2% to 0.9357

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The S&P 500 futures are up 3 points and are trading % above fair value. The Nasdaq 100 futures are up 9 points and are trading roughly in-line with fair value. The Dow Jones Industrial Average futures