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14/04/23 Briefing

The S&P 500 futures are down 2 points and are trading in line with fair value. The Nasdaq 100 futures are down 63 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are up 30 points and are trading 0.1% above fair value.

Futures tied to the Dow Jones Industrial Average outperform thanks to gains in JPMorgan (JPM) and UnitedHealth (UNH), which are helping to offset weakness in Boeing (BA). Meanwhile, losses in the mega space have weighed down the broader market despite some underlying strength from bank stocks following this morning's earnings reports.

JPMorgan, Wells Fargo, and PNC Financial all reported better than expected Q1 earnings. Citigroup will be releasing its results shortly.

Investors are also in wait-and-see mode in front of several data releases, including:

  • 8:30 ET: March Retail Sales (Briefing.com consensus -0.4%; prior -0.4%), Retail Sales ex-auto (Briefing.com consensus -0.4%; prior -0.1%), March Import Prices (prior -0.1%), Import Prices ex-oil (prior 0.4%), Export Prices (prior 0.2%), and Export Prices ex-agriculture (prior 0.1%)

  • 9:15 ET: March Industrial Production (Briefing.com consensus 0.2%; prior 0.0%) and Capacity Utilization (Briefing.com consensus 79.0%; prior 78.0%)

  • 10:00 ET: February Business Inventories (Briefing.com consensus 0.3%; prior -0.1%) and preliminary April University of Michigan Consumer Sentiment survey (Briefing.com consensus 62.7; prior 62.0)

In other news, House Speaker Kevin McCarthy will introduce a plan next week to raise the debt ceiling for one year with spending cuts, according to Bloomberg.

Treasury yields are little changed from yesterday's settlement levels. The 2-yr note yield is unchanged at 3.99% and the 10-yr note yield is up one basis point to 3.46%. The U.S. Dollar Index is flat at 100.99.

WTI crude oil futures are up 0.4% to $82.47/bbl and natural gas futures are down 0.1% to $2.01/mmbtu.

In corporate news:

  • JPMorgan Chase (JPM 136.70, +7.71, +6.0%): beats by $0.73, beats on revs

  • Wells Fargo (WFC 40.85, +1.19, +3.0%): beats by $0.09, beats on revs

  • PNC 1.43% (PNC 125.00, +3.59, +3.0%): beats by $0.34, reports revs in-line; guides Q2 revs below consensus; guides FY23 revs below consensus

  • Boeing (BA 200.26, -13.33, -6.2%): expects reduced 737 Max deliveries and production because of a parts problem, according to CNBC

  • UnitedHealth (UNH 531.00, +4.77, +0.9%): beats by $0.18, beats on revs; raises FY23 EPS in-line

  • V.F. Corp (VFC 23.05, +1.23, +5.6%): upgraded to Buy from Sell at JPMorgan

  • Lucid Group (LCID 7.72, -0.53, -6.4%): announces Q1 production and delivery totals

  • Catalent (CTLT 53.00, -10.31, -16.3%): expects productivity issues and higher-than-expected costs experienced at three of its facilities will materially and adversely impact the Company's financial results; also names Ricky Hopson as interim CFO

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a higher note while markets in India were closed for a holiday. Japan's Nikkei: +1.2% (+3.5% for the week), Hong Kong's Hang Seng: +0.5% (+0.5% for the week), China's Shanghai Composite: +0.6% (+0.3% for the week), India's Sensex: CLOSED (+1.0% for the week), South Korea's Kospi: +0.4% (+3.3% for the week), Australia's ASX All Ordinaries: +0.5% (+2.0% for the week).

  • In economic data:

  • South Korea's February M2 Money Supply 4.4% yr/yr (expected 5.9%; last 5.1%)

  • Singapore's Q1 GDP -0.7% qtr/qtr (expected -0.2%; last 0.1%); 0.1% yr/yr (expected 0.6%; last 2.1%)

  • New Zealand's March Business NZ PMI 48.1 (expected 51.0; last 51.7)


  • In news:

  • Reports from China suggest that special bond issuance will remain strong in Q2.

  • Chinese banks have reportedly been urged to lower deposit rates by the country's interest rate body.

  • China's Ministry of Finance indicated that the feasibility of a free trade agreement with Russia is being studied.

  • Singapore's Monetary Authority made no policy changes for the first time in the past six meetings, but also indicated that "the prevailing slope of policy band" will be maintained.



  • Major European indices are looking for a higher finish to the week. STOXX Europe 600: +0.4% (+1.6% week-to-date), Germany's DAX: +0.4% (+1.2% week-to-date), U.K.'s FTSE 100: +0.6% (+1.9% week-to-date), France's CAC 40: +0.4% (+2.6% week-to-date), Italy's FTSE MIB: +0.7% (+2.3% week-to-date), Spain's IBEX 35: +0.5% (+0.5% week-to-date).

  • In economic data:

  • Germany's March WPI 0.2% m/m (expected 2.5%; last 0.1%); 2.0% yr/yr (expected 4.4%; last 8.9%)

  • France's March CPI 0.7% m/m (expected 0.8%; last 1.1%); 5.7% yr/yr (expected 5.6%; last 6.3%)

  • Spain's March CPI 0.4% m/m, as expected (last 0.9%); 3.3% yr/yr, as expected (last 6.0%)

  • Swiss March PPI 0.2% m/m, as expected (last -0.2%); 2.1% yr/yr (expected 2.9%; last 2.7%)


  • In news:

  • Consumer names in France are seeing continued strength after Hermes followed yesterday's strong results from LVMH with a solid quarter of its own.

  • European Central Bank policymaker Nagel said that the tightening cycle will continue since core inflation remains very high while policymakers Holzmann and Kazaks spoke about the potential for a 50-bps hike in May.



U.S. equity futures:

  • S&P 500 Futures: -2 @ 4,144

  • DJIA Futures: +31 @ 34,061

  • Nasdaq 100 Futures: -68 @ 13,041

Overseas:

  • Europe: DAX +0.4%, FTSE +0.6%, CAC +0.4%

  • Asia: Nikkei +1.2%, Hang Seng +0.5%, Shanghai Composite +0.6%

Commodities:

  • Crude Oil +0.31 @ 82.47

  • Nat Gas -0.002 @ 2.005

  • Gold -8.30 @ 2047.00

  • Silver +0.185 @ 26.11

  • Copper +0.0242 @ 4.1482


Earnings/Guidance:

  • Abcam ( ABCM 0.15% ) announced that it sees Q1 revenues more than GBP 100 mln (no ests); reaffirms guidance for FY23 and FY24

  • BlackRock ( BLK 0.71% ) beats by $0.20, reports revs in-line

  • Buenaventura ( BVN 2.21% ) Announces First Quarter 2023 Results for Production and Volume Sold per Metal

  • DHT ( DHT 0.94% ) provides Q1 update: estimates time charter equivalent earnings at $49.1K/day; through Q2, 35% of available VLCC days booked at average rate of $75.5K/day while 55% booked at $52.2K/day

  • EQT Corp. ( EQT 0.67% ) expects to report a total gain on derivatives for the three months ended March 31, 2023 of $825 mln

  • Hartford Financial ( HIG 0.01% ) issues downside Q1 EPS guidance

  • JPMorgan Chase ( JPM 0.39% ) beats by $0.73, beats on revs

  • Lucid Group ( LCID 1.48% ) announces Q1 production and delivery totals

  • National Grid ( NGG 0.43% ) provides FY23 update; states performance in-line co's expectations

  • Nurix Therapeutics ( NRIX 12.43% ) beats by $0.12, beats on revs; provides corporate update

  • Omnicom ( OMC 0.88% ) reaffirms FY23 guidance

  • PNC ( PNC 1.43% ) beats by $0.34, reports revs in-line; guides Q2 revs below consensus; guides FY23 revs below consensus

  • QuidelOrtho ( QDEL 0.57% ) guides Q1 revenue well above consensus

  • Silvercorp Metals ( SVM 2.98% ) reports production figures for FY23 (Mar); reiterates FY24 production guidance

  • Tabula Rasa HealthCare ( TRHC 2.11% ) raises Q1 revenue guidance above consensus; also announces appointment of Brian Adams as President and Chief Executive Officer

  • UnitedHealth ( UNH 0.97% ) beats by $0.18, beats on revs; raises FY23 EPS in-line

  • Vertex Energy ( VTNR 2.66% ) provides operational update for Q1 of 2023

  • Wells Fargo ( WFC 1.20% ) beats by $0.09, beats on revs; expects 2023 net interest income is expected to be approximately 10% higher yr/yr (unchanged from prior guidance)

News:

  • House Speaker Kevin McCarthy will introduce plan next week to raise the debt ceiling for one year with spending cuts, according to Bloomberg

  • Atlanta Fed President Raphael Bostic (not a voting FOMC member) says he expects one more rate hike and then hold rates at that level, according to Reuters

  • President Biden's plan to increase EV sales through emission regulations are likely to face legal and logistical challenges, according to the New York Times

  • Alvotech ( ALVO 1.16% ) receives complete response letter for AVT02 Biologics License Application

  • Anika Therapeutics ( ANIK 0.04% ) enters into cooperation agreement with Caligan Partners LP; authorizes $20 mln repurchase program, $5 mln of which will be effected through an accelerated repurchase program; forms capital allocation committee

  • AstraZeneca ( AZN 1.37% ): ECCMID data reinforces AstraZeneca's commitment to transform protection for the most vulnerable by advancing science in vaccines and immune therapies

  • Avita Medical ( RCEL 0.57% ) provides update on automation device

  • Banco Bilbao Vizcaya Argentaria ( BBVA 0.97% ), Banco Santander (SAN), Bank of America (BAC) mostly unchanged on report that the three firms want to back Mexico's deal to purchase power plants from Iberdrola for $6.0 bln, according to Bloomberg

  • Boeing ( BA 0.59% ) expects reduced 737 Max deliveries and production because of a parts problem, according to CNBC

  • Brady ( BRC 0.55% ) CFO to step down; names Ann Thornton as new CFO

  • Broadwind Energy ( BWEN 0.55% ) receives new $8 mln order for mobile pressure reducing systems and accessories

  • Bruker ( BRKR 3.32% ) introduces new mycobacteria and fungi IVD solutions for MALDI Biotyper, and a novel liquidarray gastrointestinal syndromic panel

  • Catalent ( CTLT 1.46% ) expects productivity issues and higher-than-expected costs experienced at three of its facilities will materially and adversely impact the Company's financial results; also names Ricky Hopson as interim CFO

  • Charles Schwab ( SCHW 0.83% ): GQG Partners sold $1.4 bln stake in Charles Schwab last month, according to Financial Times

  • Chart Industries ( GTLS 1.30% ) expands existing Memorandum of Understanding with Wolf Carbon Solutions U.S., an affiliate of Wolf Midstream

  • ClearPoint Neuro ( CLPT 11.01% ) announces successful registration of its Neuro Navigation portfolio with the Brazilian regulatory body ANVISA

  • Copa Holdings ( CPA 2.44% ) reports March traffic; ASM grew 4.6% vs March 2019 to 2,224.6 mm; load factor improved to 87.2% from 83.3% in March 2019

  • Credit Suisse ( CS 3.26% ) hires Blackrock (BLK) to sell portfolio of structured bonds, according to Bloomberg

  • Eli Lilly ( LLY 1.65% ): U.S. Food and Drug Administration Issues Complete Response Letter for Mirikizumab

  • Enzo Biochem ( ENZ 2.76% ) disclosed last night that it experienced a ransomware attack that impacted certain information technology systems

  • Exelixis ( EXEL 0.77% ) Advances Board Refreshment Plan

  • Getty Images ( GETY 0.32% ): Trillium Capital requests seat on Getty Images Board of Directors

  • Ginkgo Bioworks ( DNA 3.13% ) and the Government of the Democratic Republic of the Congo announce plans to develop and implement new biosecurity capabilities in the region

  • ICF International ( ICFI 1.04% ) awarded contract to provide environmental compliance services with a ceiling value of $18 mln by the LA County Metro Transportation Authority

  • MagnaChip Semi ( MX 0.33% ) entered into an Agreement with Jackson Square Advisors, GT Investments II Corp and Gilbert Nathan

  • Maxar Technologies ( MAXR 0.31% ) receives Stage II contract extension from National Reconnaissance Office for commercial radio frequency remote sensing

  • Petrobras ( PBR 1.19% ) obtained authorization to resume production from the facilities of the Fazenda Blsamo field, continuing the clearance works at the Bahia Terra Cluster

  • Purple Innovation ( PRPL 0.90% ) announces cooperative framework with Coliseum Capital; appoints Adam Gray to serve as Board Chair

  • Rocket Lab USA ( RKLB 3.79% ) announces a new class of star tracker, the ST-16HV, is now available for commercial use

  • Targa Resources ( TRGP 0.66% ) raises quarterly dividend by 43% to $0.50 per share

  • Tesla ( TSLA 2.97% ) will not attend Shanghai Autoshow, according to Reuters

  • Tesla ( TSLA 2.97% ) lowers Model 3 price Europe and other areas, according to Reuters

  • Wells Fargo ( WFC 1.20% ) facing US regulatory scrutiny, according to the New York Post

M&A:

  • Canadian Pacific ( CP 1.06% ) and Kansas City Southern (KSU) combined to create Canadian Pacific Kansas City (CP)

  • Consolidated Comms ( CNSL 38.77% ) announces receipt of 'take private' proposal from Searchlight Capital and British Columbia Investment Management

  • Walmart ( WMT 0.10% ) to sell menswear brand Bonobos to Express and WHP Global for $75 mln

Syndicate:

  • Gladstone Land ( LAND 0.18% ) entered into separate Amended and Restated Equity Distribution Agreements with Virtu Americas and Ladenburg Thalmann for up to $500 mln in common stock

  • Wheaton Precious Metals ( WPM 2.88% ) in F-10 filing: files $2.0 bln mixed shelf securities offering

IPOs:

  • Expected to Price:

  • No IPOs expected.


Gapping Up/Down

  • Gapping up:

  • TRHC +13%, PRPL +7.1%, BWEN +6%, CLPT +4.5%, LU +4%, RCEL +3.1%, QDEL +3.1%, ANIK +2%, DHT +1.8%, CPA +1.7%, SAN +0.8%, TFPM +0.7%, BLK +0.6%


  • Gapping down:

  • ALVO -7.2%, LCID -7%, TEVA -5%, WING -4.3%, ENZ -2.3%, HIG -1.6%, BMEA -1.1%, WFC -1%, WAFD -0.7%, NGG -0.5%


Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • Casey's General (CASY) upgraded to Buy from Neutral at Northcoast; tgt raised to $270


  • Downgrades:

  • Check Point Software (CHKP) downgraded to Mkt Perform from Outperform at Raymond James

  • Rivian Automotive (RIVN) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $15

  • Steris (STE) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $197


  • Others:

  • Archer-Daniels (ADM) resumed with an Outperform at BMO Capital Markets; tgt $100

  • Beyond Meat (BYND) resumed with a Market Perform at BMO Capital Markets; tgt $16

  • Bunge (BG) resumed with an Outperform at BMO Capital Markets; tgt $120

  • Darling Ingredients (DAR) resumed with an Outperform at BMO Capital Markets; tgt $80

  • Green Plains (GPRE) resumed with a Market Perform at BMO Capital Markets; tgt $33

  • Ingredion (INGR) resumed with a Market Perform at BMO Capital Markets; tgt $115

  • Pilgrim's Pride (PPC) resumed with a Market Perform at BMO Capital Markets; tgt $26

  • Tyson Foods (TSN) resumed with a Market Perform at BMO Capital Markets; tgt $66


Econ Data:

  • 08:30 ET: Retail Sales for Mar (Briefing.com Consensus -0.4%; Prior -0.4%)

  • 08:30 ET: Retail Sales ex-auto for Mar (Briefing.com Consensus -0.4%; Prior -0.1%)

  • 08:30 ET: Import Prices for Mar (Briefing.com Consensus NA; Prior -0.1%)

  • 08:30 ET: Import Prices ex-oil for Mar (Briefing.com Consensus NA; Prior 0.4%)

  • 08:30 ET: Export Prices for Mar (Briefing.com Consensus NA; Prior 0.2%)

  • 08:30 ET: Export Prices ex-ag. for Mar (Briefing.com Consensus NA; Prior 0.1%)

  • 09:15 ET: Industrial Production for Mar (Briefing.com Consensus 0.2%; Prior 0.0%)

  • 09:15 ET: Capacity Utilization for Mar (Briefing.com Consensus 79.0%; Prior 78.0%)

  • 10:00 ET: Business Inventories for Feb (Briefing.com Consensus 0.3%; Prior -0.1%)

  • 10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for Apr (Briefing.com Consensus 62.7; Prior 62.0)

Earnings:

  • Monday (Apr 10)

  • Morning: GBX

  • Afternoon: PSMT, TLRY


  • Tuesday (Apr 11)

  • Morning: ACI, KMX

  • Afternoon: Nothing of note


  • Wednesday (Apr 12)

  • Morning: APOG

  • Afternoon: SPWH


  • Thursday (Apr 13)

  • Morning: DAL, FAST, PGR

  • Afternoon: WAFD


  • Friday (Apr 14)

  • Morning: BLK, C, JPM, PNC, UNH, WFC

  • Afternoon: Nothing of note


Asia & Europe detail:

Asia: Nikkei +1.2%, Hang Seng +0.5%, Shanghai Composite +0.6%

Equity indices in the Asia-Pacific region ended the week on a higher note while markets in India were closed for a holiday. Reports from China suggest that special bond issuance will remain strong in Q2. Chinese banks have reportedly been urged to lower deposit rates by the country's interest rate body. China's Ministry of Finance indicated that the feasibility of a free trade agreement with Russia is being studied. Singapore's Monetary Authority made no policy changes for the first time in the past six meetings, but also indicated that "the prevailing slope of policy band" will be maintained.

  • In economic data:

  • South Korea's February M2 Money Supply 4.4% yr/yr (expected 5.9%; last 5.1%)

  • Singapore's Q1 GDP -0.7% qtr/qtr (expected -0.2%; last 0.1%); 0.1% yr/yr (expected 0.6%; last 2.1%)

  • New Zealand's March Business NZ PMI 48.1 (expected 51.0; last 51.7)


---Equity Markets---

  • Japan's Nikkei: +1.2% (+3.5% for the week)

  • Hong Kong's Hang Seng: +0.5% (+0.5% for the week)

  • China's Shanghai Composite: +0.6% (+0.3% for the week)

  • India's Sensex: CLOSED (+1.0% for the week)

  • South Korea's Kospi: +0.4% (+3.3% for the week)

  • Australia's ASX All Ordinaries: +0.5% (+2.0% for the week)

---FX---

  • USD/JPY: -0.1% to 132.50

  • USD/CNH: -0.3% to 6.8509

  • USD/INR: UNCH at 81.65

Europe: DAX +0.4%, FTSE +0.6%, CAC +0.4%

Major European indices are looking for a higher finish to the week. Consumer names in France are seeing continued strength after Hermes followed yesterday's strong results from LVMH with a solid quarter of its own. European Central Bank policymaker Nagel said that the tightening cycle will continue since core inflation remains very high while policymakers Holzmann and Kazaks spoke about the potential for a 50-bps hike in May.

  • In economic data:

  • Germany's March WPI 0.2% m/m (expected 2.5%; last 0.1%); 2.0% yr/yr (expected 4.4%; last 8.9%)

  • France's March CPI 0.7% m/m (expected 0.8%; last 1.1%); 5.7% yr/yr (expected 5.6%; last 6.3%)

  • Spain's March CPI 0.4% m/m, as expected (last 0.9%); 3.3% yr/yr, as expected (last 6.0%)

  • Swiss March PPI 0.2% m/m, as expected (last -0.2%); 2.1% yr/yr (expected 2.9%; last 2.7%)


---Equity Markets---

  • STOXX Europe 600: +0.4% (+1.6% week-to-date)

  • Germany's DAX: +0.4% (+1.2% week-to-date)

  • U.K.'s FTSE 100: +0.6% (+1.9% week-to-date)

  • France's CAC 40: +0.4% (+2.6% week-to-date)

  • Italy's FTSE MIB: +0.7% (+2.3% week-to-date)

  • Spain's IBEX 35: +0.5% (+0.5% week-to-date)

---FX---

  • EUR/USD: UNCH at 1.1049

  • GBP/USD: -0.2% to 1.2498

  • USD/CHF: UNCH at 0.8890


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