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15/03/22 Briefing


The S&P 500 futures have recouped overnight losses and trade eight points, or 0.2%, above fair value as oil prices fall to $95 per barrel ($95.02, -7.99, -7.9%).

Stocks in China weren't so lucky on Tuesday, plagued by COVID-19 lockdowns, de-listing concerns, and the potential for U.S. sanctions if found to be helping Russia's invasion. China's Shanghai Composite dropped 5.0% (-7.4% for the week), and Hong Kong's Hang Seng dropped 5.7% (-10.4% for the week).

The Chinese lockdowns are being cited as a factor driving oil prices lower due to reduced demand. European stocks, meanwhile, are trying to recover, but the Europe Stoxx 600 is still down 0.9% right now.

Back on the home front, the Fed will begin its two-policy meeting today while investors wait for the Producer Price Index for February (Briefing.comconsensus 1.0%) at 8:30 a.m. ET. The Empire State Manufacturing Survey for March (Briefing.comconsensus 9.0) will be released at the same time, followed by TIC Net Long-Term Transactions for January at 4:00 p.m. ET.

Separately, Coupa Software (COUP 63.00, -26.82, -29.9%) is the latest growth stock that's taken another plunge on disappointing guidance. COUP shares are down 30% in pre-market action.

U.S. Treasuries trade little changed in front of the inflation data. The 2-yr yield is down one basis point to 1.83%, and the 10-yr yield is down one basis point to 2.13%. The U.S. Dollar Index is down 0.2% amid relative strength in the euro, which is up 0.5% against the dollar to 1.0986.

In U.S. Corporate news:

  • Coupa Software (COUP 63.00, -26.82): -29.9% after guiding fiscal Q1 revenue below consensus and guiding FY23 EPS and revenue below consensus. The company noted that the pandemic has required multiple years of outsized new business growth in order to recover and get back on track.

  • lululemon athletica (LULU 285.14, -4.10): -1.4% after the stock was initiated with an Underperform rating at Bernstein. The same firm initiated Nike (NKE 117.5, -0.70, -0.1%) with an Outperform rating.

  • Zoom Video (ZM 97.17, +2.53): +2.7% after receiving an analyst upgrade to Buy from Hold at The Benchmark Company.

  • Vail Resorts (MTN 241.15, -0.85): -0.4% after missing top and bottom-line estimates and increasing the midpoint of its FY22 EBITDA guidance.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region were mostly lower on Tuesday, yet there was some significant fallout in Chinese markets. Japan's Nikkei: +0.2% Hong Kong's Hang Seng: -5.7% China's Shanghai Composite: -5.0% India's Sensex: -1.3% South Korea's Kospi: -0.9% Australia's ASX All Ordinaries: -0.9%.

  • In economic data:

  • China's Jan-Feb Retail Sales +6.7% yr/yr (+3.0% expected; prior +1.7%); Jan-Feb Industrial Production +7.5% yr/yr (+3.9% expected; prior +4.3%); Jan-Feb Fixed Asset Investment +12.2% yr/yr (+5.0% expected; prior +4.9%); February Unemployment Rate 5.5% (+5.15 expected; prior +5.1%)

  • South Korea's revised February Exports +20.6% yr/yr (prior +20.6%) and revised Imports +25.2% (prior +25.1%)

  • Australia's Q4 House Price Index +4.7% qtr/qtr (+3.9% expected; prior +5.0%)


  • In news:

  • The Hang Seng plunged another 5.7% (now down 10.4% for the week) and the Shanghai Composite plunged 5.0% (now down 7.4% for the week). The thrust of the selling was driven by myriad concerns, including growth worries tied to more Chinese cities being put in lockdown mode because of rising COVID cases, worries that China could face secondary sanctions if found to be helping Russia evade U.S. sanctions, continued de-listing concerns for Chinese securities, continued crackdown concerns as Tencent reportedly faces the possibility of a record fine for allegedly violating money laundering rules, and continued troubles for the property market.

  • The sell-off came in spite of much better than expected retail sales, industrial production, and fixed asset investment data, and the PBOC injecting CNY100 bln of liquidity into the financial system, demonstrating that the worries about a slowdown in growth due to COVID issues had more impact as a forward-looking market driver.

  • South Korea reported record-high COVID cases.



  • Major European indices are weaker but have bounced back some from lower levels. STOXX Europe 600: -0.9% Germany's DAX: -0.9% U.K.'s FTSE 100: -0.9% France's CAC 40: -1.0% Italy's FTSE MIB: -0.7% Spain's IBEX 35: -0.2%.

  • In economic data:

  • UK's February Claimant Count Change -48.1K (expected -28.0K; prior -67.3K); January Unemployment Rate 3.9% (expected 4.0%; prior 4.1%)

  • France's February CPI +0.8% m/m (expected +0.7%; prior +0.3%) and 3.6% yr/yr (expected 3.6%; prior 2.9%)

  • Germany's March ZEW Economic Sentiment -39.3 (expected 10.0; prior 54.3)

  • Eurozone's January Industrial Production 0.0% m/m (expected +0.1%; prior +1.3%) and -1.3% yr/yr (expected -0.5%; prior +2.0%)


  • In news:

  • The weakness is being attributed in large part to growth concerns tied to rising energy prices, plunging economic sentiment, as seen in Germany's March ZEW Economic Sentiment reading, a striking uptick in COVID cases, the ongoing uncertainty of the Russia-Ukraine situation, and potential tightening actions by central banks.

  • Additionally, worries about bank exposure to a potential Russian debt default, and weakening demand from China as it battles with a COVID case surge, have acted as further drags on investor sentiment.

  • A sharp drop in oil prices, which is related to the growth concerns, has provided a small measure of support but it hasn't been enough to offset the broader concerns.



U.S. equity futures:

  • S&P 500 Futures: -1 @ 4,172

  • DJIA Futures: -22 @ 32,923

  • Nasdaq 100 Futures: +15 @ 13,062

Overseas:

  • Europe: DAX -0.9%, FTSE -0.9%, CAC -1.0%

  • Asia: Nikkei +0.2%, Hang Seng -5.7%, Shanghai Composite -5.0%

Commodities:

  • Crude Oil -7.35 @ 95.66

  • Nat Gas -0.129 @ 4.529

  • Gold -31.90 @ 1928.90

  • Silver -0.443 @ 24.855

  • Copper -0.0445 @ 4.4785

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Calavo Growers (CVGW) misses by $0.07, beats on revs

  • Coupa Software (COUP) beats by $0.14, beats on revs; guides AprQ EPS in-line, revs below consensus; guides FY23EPS below consensus, revs below consensus

  • dLocal Limited (DLO) beats by $0.01, beats on revs; TPV grew 145% yr/yr

  • Dole plc (DOLE) beats by $0.04, beats on revs; guides FY22revs above consensus

  • Evolv Technologies Holdings (EVLV) reports Q4 net income of $0.02 (no estimates) compared to $(1.06) in prior year period, revenue increased 395% yr/yr to $23.7 mln

  • GitLab (GTLB) beats by $0.09, beats on revenue; guides Q1 EPS and revenue above consensus, guides FY23EPS and revenue above consensus

  • IHS Holding Limited (IHS) misses by $0.02; guides FY22revs below consensus

  • JetBlue Airways (JBLU) provides operational and financial update of its business

  • Noah Holdings (NOAH) reports preliminary results for Q4; Non-GAAP net income up 10.3%

  • Owens & Minor (OMI) reaffirms FY22EPS and revenue guidance in slide presentation

  • Southwest Air (LUV) provides Q1 investor update

  • TransUnion (TRU) reaffirms FY22guidance

  • United Airlines (UAL) in slide presentation sees Q1 revs above consensus

  • Vail Resorts (MTN) misses by $0.15, misses on revs; increases midpoint of FY22EBITDA guidance

  • Westport Fuel Systems (WPRT) beats by $0.05, reports revs in-line


  • General News:

  • Peace talks resume today as Russia's advances stall. Russia is relying on missiles to bombard cities as UK warns that Russia might be preparing a chemical or biological attack in Ukraine, according to the New York Times

  • 37 million people are now under COVID lockdown in China, according to CNN

  • China is aiming to avoid US sanctions over Russia's war in Ukraine as investors in China ADRs worry that China could get targeted with sanctions, according to Bloomberg

  • EU confirms fourth package of restrictive measures against Russia

  • The Biden administration reversed plans for Venezuela oil talks after political criticism, according to Financial Times

  • White House announces new initiative to improve supply chain data flow

  • Air Transport Services Group (ATSG) places second order with Boeing for the conversion of four 767-300 aircraft

  • AnaptysBio (ANAB) reports top-line data from Phase 2 ACORN trial; imsidolimab treatment did not demonstrate improvement over placebo in top-line primary or secondary endpoints

  • Anavex Life Sciences (AVXL) Announces Presentation of Phase 2 Clinical Biomarker Data from ANAVEX 2-73-PDD-001 Parkinson's Disease Dementia Study at AD/PD 2022 International Conference

  • Biogen (BIIB) amends collaboration agreements with Eisai for Alzheimer's disease treatments

  • BrightView (BV) announces agreement to repurchase remaining shares from MSD Partners

  • Capital One (COF) reports February card metrics

  • CareDx (CDNA) wins $44.9 mln in damages in false advertising trial against Natera (NTRA)

  • CarLotz (LOTZ) announces launch of mobile application

  • Century Communities (CCS) announces deal with robotics firm to use 3D printing to construct new homes

  • Circor (CIR) announces filing of form 12b-25 and discloses strategic review

  • Coherus BioSciences (CHRS) and Shanghai Junshi Biosciences Co. announce the presentation of positive results and biomarker analyses from the pivotal study 'CHOICE-01'

  • Coupa Software (COUP) achieves Moderate Authorization from the Federal Risk Authorization Management Program

  • Delta Air Lines (DAL) provides March quarter update

  • Discover Financial Services (DFS) reports February card metrics

  • Ecolab (ECL) announces a temporary global 8%-12% energy surcharge

  • Epizyme (EPZM) announces a clinical update as well as the appointment of Jerald Korn as Chief Operating Officer, reporting to President and Chief Executive Officer, Grant Bogle

  • Equifax (EFX) achieves FedRAMP Ready designation

  • Exelixis (EXEL) announces final overall survival results from Phase 3 COSMIC-312 trial

  • FB Financial (FBK) authorizes up to $100 mln for share repurchases

  • Grifols, S.A. (GRFS) unit, Araclon Biotech advances in its innovative vaccine and diagnostic test for Alzheimer's

  • Guardant Health (GH) receives regulatory approval for Guardant360 CDx from the Japanese Ministry of Health, Labour and Welfare

  • HealthStream (HSTM) expands its share repurchase program by $10 mln

  • Howard Hughes (HHC) announced that the company's Board of Directors has approved a $250 million share buyback program

  • Huntington Ingalls (HII) delivers Virginia-class submarine Montana to US Navy

  • IDEAYA Biosciences (IDYA) Reports IDE397 Interim Phase 1 Clinical Data

  • Janus International Group (JBI) improperly accounted for a portion of transaction bonuses associated with the Business Combination in June 2021 as a reduction in equity versus expense

  • JPMorgan Chase (JPM) reports February card metrics; will resume hiring of unvaccinated workers and remove mask mandate

  • Just Eat Takeaway (GRUB) increases driver pay, according to Bloomberg

  • KBR (KBR) receives $70 mln task order from U.S. Army

  • Laureate Education (LAUR) increases share repurchase program by $50 mln to $650 mln

  • MediaAlpha (MAX) approves share repurchase authorization for up to $5.0 mln of common stock

  • Merck (MRK) stop the Phase 3 KEYLYNK-010 trial investigating KEYTRUDA, Merck's anti-PD-1 therapy, in combination with LYNPARZA for the treatment of patients with metastatic castration-resistant prostate cancer

  • Northern Oil & Gas (NOG) provides updates on additional shareholder returns

  • Norwegian Cruise Line (NCLH) ship ran aground after leaving a port, according to Bloomberg

  • Olin (OLN) to temporarily curtail epoxy production at facility in Germany

  • Passage BIO (PASG) provides update on strategic priorities and extends cash runway

  • Paylocity (PCTY) promotes Toby Williams to Co-CEO, names Ryan Glenn as CFO, effective immediately

  • Piedmont Lithium (PLL) provides investor updates in presentation

  • SAGE Therapeutics (SAGE) announces presentation of encouraging results from the Phase 2 PARADIGM Study (Part A) of SAGE-718 in Patients with mild cognitive impairment due to Parkinson's disease

  • Sanofi (SNY) announces 300 million collaboration with Blackstone (BX) Life Sciences to advance an innovative treatment for multiple myeloma

  • Semler Scientific (SMLR) authorizes up to $20 mln for stock repurchases

  • Stantec (STN) was selected to provide planning, design, and conformance services for Trillium Health Partners' Mississauga Hospital project

  • SuRo Capital (SSSS) expands share repurchase program by $15 mln

  • Tesla (TSLA) hikes prices in US and China, according to Reuters

  • Tilly's (TLYS) authorizes a repurchase program for up to two million shares over the next 12 months

  • Travel + Leisure Co (TNL) announces launch of travelandleisurewine.comfeaturing multiple-estates in one wine club membership as well as an online bottle shop through a partnership with Vintage Wine Estates (VWE)

  • Volkswagan (VWAGY) could expand outside Europe, according to Financial Times

  • Volkswagen AG (VWAGY) provides updates on NEW AUTO strategy

  • Wingstop's (WING) Chairman and CEO Charlie Morrison resigns

  • Zai Lab (ZLAB) appoints Josh Smiley as COO


  • M&A:

  • Amazon (AMZN) could soon close MGM film studio acquisition, according to Reuters

  • AMC Entertainment (AMC) buying 22% of Hycroft Mining Holding Corporation (HYMC)

  • Atento (ATTO) exploring options including a sale, according to Bloomberg

  • HollySys (HOLI) shares higher by 9% pre-market following report of takeover interest from a company in China

  • IDT Corp (IDT) announces acquisition of Leaf Global Fintech; terms not disclosed

  • Plymouth Industrial REIT (PLYM) announces the acquisition of Madison International Realty's 80% interest in Plymouth MIR JV LLC, the joint venture formed in December 2020 to acquire a portfolio of industrial buildings in metropolitan Memphis, Tennessee

  • SentinelOne (S) acquires Attivo Networks for $616.5 mln

  • Southwest Gas (SWX) to review revised unsolicited tender offer from Icahn Enterprises (IEP)


  • Syndicate:

  • Huntington Banc (HBAN) files mixed securities shelf offering

  • Vor Biopharma (VOR) files for $350 mln mixed securities shelf offering


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • LOTZ +11.9%, GTLB +8.9%, SSSS +8.2%, WPRT+5.8%, ATSG +4.3%, SMLR +3.6%, DOLE +2.6%, KBR+2.3%, LAUR +1.3%, TLYS +1.3%, HSTM +1.3%, HBAN +1.3%, SNY +1.3%, GH +1.1%, TRU +1.1%, AVD +0.8%


  • Gapping down:

  • COUP -29.4%, EVLV -19.7%, ANAB -10.5%, DLO-4.8%, USO -4.3%, HAL -4.3%, SLB -4%, GOLD-3.7%, EXEL -3.4%, RIO -3.4%, XOM -3.4%, FSM-3%, XLE -3%, ATTO -2.9%, NLSN -2.9%, BHP -2.9%, NEM -2.8%, OLN -2.6%, PSX -2.6%, SAND -2.5%, PAAS -2.5%, BIIB -2.5%, CIR -2.4%, WING -2.2%, OIH -2.2%, BP -2%, SLV -1.9%, NTRA -1.8%, SHEL-1.4%, PCTY -1.3%, GLD -1.3%, S -1.2%, DAL -0.8%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Ascendis Pharma (ASND) upgraded to Buy from Neutral at BofA Securities; tgt raised to $161

  • GoodRx (GDRX) upgraded to Outperform from Neutral at Robert W. Baird; tgt $17

  • Grainger (GWW) upgraded to Overweight from Neutral at Atlantic Equities; tgt $580

  • Heartland Express (HTLD) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt $16

  • LiveRamp (RAMP) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt $48

  • Mosaic (MOS) upgraded to Buy from Neutral at Goldman; tgt $83

  • Northern Oil & Gas (NOG) upgraded to Buy from Accumulate at Johnson Rice; tgt $50

  • Realty Income (O) upgraded to Outperform from Peer Perform at Wolfe Research

  • UDR (UDR) upgraded to Outperform from Peer Perform at Wolfe Research

  • Wash. Federal (WAFD) upgraded to Buy from Neutral at DA Davidson; tgt $43

  • Zoom Video (ZM) upgraded to Buy from Hold at The Benchmark Company; tgt $124


  • Downgrades:

  • China Eastern Airlines (CEA) downgraded to Underperform from Neutral at Credit Suisse

  • China Southern Airlines (ZNH) downgraded to Neutral from Outperform at Credit Suisse

  • Coupa Software (COUP) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $70

  • Coupa Software (COUP) downgraded to Perform from Outperform at Oppenheimer

  • Evolv Technologies Holdings (EVLV) downgraded to Hold from Buy at Stifel; tgt lowered to $2

  • Hormel Foods (HRL) downgraded to Sell from Neutral at Goldman; tgt $44

  • Nektar Therapeutics (NKTR) downgraded to Market Perform from Outperform at Cowen

  • Nektar Therapeutics (NKTR) downgraded to Neutral from Buy at Mizuho; tgt lowered to $8

  • Prelude Therapeutics (PRLD) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $10


  • Others:

  • Air Lease (AL) initiated with a Buy at HSBC Securities; tgt $50

  • Burlington Stores (BURL) initiated with an Outperform at Bernstein; tgt $230

  • Capri Holdings (CPRI) initiated with a Mkt Perform at Bernstein; tgt $55

  • eBay (EBAY) initiated with a Buy at Deutsche Bank; tgt $64

  • F45 Training Holdings (FXLV) initiated with an In-line at Evercore ISI; tgt $15

  • Frontier Communications Parent (FYBR) initiated with a Buy at Truist; tgt $40

  • Horizon Pharma (HZNP) initiated with an Outperform at Oppenheimer; tgt $140

  • Legend Biotech (LEGN) initiated with an Overweight at Barclays; tgt $53

  • lululemon athletica (LULU) initiated with an Underperform at Bernstein; tgt $260

  • NIKE (NKE) initiated with an Outperform at Bernstein; tgt $160

  • Peloton (PTON) initiated with an Outperform at Bernstein; tgt $40

  • Planet Fitness (PLNT) initiated with an Outperform at Evercore ISI; tgt $130

  • Ross Stores (ROST) initiated with an Outperform at Bernstein; tgt $125

  • Stitch Fix (SFIX) initiated with a Mkt Perform at Bernstein; tgt $11

  • Tapestry (TPR) initiated with an Outperform at Bernstein; tgt $62

  • TJX (TJX) initiated with a Mkt Perform at Bernstein; tgt $68

  • Toast (TOST) initiated with an Outperform at Robert W. Baird; tgt $25

  • Xponential Fitness (XPOF) initiated with an Outperform at Evercore ISI; tgt $34

  • Zymeworks (ZYME) initiated with an Outperform at Evercore ISI; tgt $15


Upcoming Events:

  • Econ Data:

  • 08:30 ET: PPI for Feb. (Briefing.comConsensus 1.0%; Prior 1.0%)

  • 08:30 ET: Core PPI for Feb. (Briefing.comConsensus 0.6%; Prior 0.8%)

  • 08:30 ET: Empire State Manufacturing for March (Briefing.comConsensus 9.0; Prior 3.1)


  • Earnings:

  • Monday (Mar 14)

  • Afternoon: CVGW COUP DLO MTN WPRT


  • Tuesday (Mar 15)

  • Morning: DOLE IHS

  • Afternoon: CAL GOCO S SMAR


  • Wednesday (Mar 16)

  • Morning: DOYU JBL

  • Afternoon: BRLT GES LEN PD SMTC WSM ZTO


  • Thursday (Mar 17)

  • Morning: ACN CSIQ CMC DBI DG GIII SCWX SIG WRBY

  • Afternoon: FDX GME JOAN STNE CURV


  • Friday (Mar 18)

  • Morning: ONON




Asia & Europe detail:

Asia: Nikkei +0.2%, Hang Seng -5.7%, Shanghai Composite -5.0%

Equity indices in the Asia-Pacific region were mostly lower on Tuesday, yet there was some significant fallout in Chinese markets. The Hang Seng plunged another 5.7% (now down 10.4% for the week) and the Shanghai Composite plunged 5.0% (now down 7.4% for the week). The thrust of the selling was driven by myriad concerns, including growth worries tied to more Chinese cities being put in lockdown mode because of rising COVID cases, worries that China could face secondary sanctions if found to be helping Russia evade U.S. sanctions, continued de-listing concerns for Chinese securities, continued crackdown concerns as Tencent reportedly faces the possibility of a record fine for allegedly violating money laundering rules, and continued troubles for the property market. The sell-off came in spite of much better than expected retail sales, industrial production, and fixed asset investment data, and the PBOC injecting CNY100 bln of liquidity into the financial system, demonstrating that the worries about a slowdown in growth due to COVID issues had more impact as a forward-looking market driver. South Korea reported record-high COVID cases.

  • In economic data:

  • China's Jan-Feb Retail Sales +6.7% yr/yr (+3.0% expected; prior +1.7%); Jan-Feb Industrial Production +7.5% yr/yr (+3.9% expected; prior +4.3%); Jan-Feb Fixed Asset Investment +12.2% yr/yr (+5.0% expected; prior +4.9%); February Unemployment Rate 5.5% (+5.15 expected; prior +5.1%)

  • South Korea's revised February Exports +20.6% yr/yr (prior +20.6%) and revised Imports +25.2% (prior +25.1%)

  • Australia's Q4 House Price Index +4.7% qtr/qtr (+3.9% expected; prior +5.0%)


---Equity Markets---

  • Japan's Nikkei: +0.2%

  • Hong Kong's Hang Seng: -5.7%

  • China's Shanghai Composite: -5.0%

  • India's Sensex: -1.3%

  • South Korea's Kospi: -0.9%

  • Australia's ASX All Ordinaries: -0.9%

---FX---

  • USD/JPY: -0.2 % to 117.98

  • USD/CNH: +0.2% to 6.4052

  • USD/INR: unch at 76.504

Europe: DAX -0.9%, FTSE -0.9%, CAC -1.0%

Major European indices are weaker but have bounced back some from lower levels. The weakness is being attributed in large part to growth concerns tied to rising energy prices, plunging economic sentiment, as seen in Germany's March ZEW Economic Sentiment reading, a striking uptick in COVID cases, the ongoing uncertainty of the Russia-Ukraine situation, and potential tightening actions by central banks. Additionally, worries about bank exposure to a potential Russian debt default, and weakening demand from China as it battles with a COVID case surge, have acted as further drags on investor sentiment. A sharp drop in oil prices, which is related to the growth concerns, has provided a small measure of support but it hasn't been enough to offset the broader concerns. EUR/USD +0.5% to 1.0986.

  • In economic data:

  • UK's February Claimant Count Change -48.1K (expected -28.0K; prior -67.3K); January Unemployment Rate 3.9% (expected 4.0%; prior 4.1%)

  • France's February CPI +0.8% m/m (expected +0.7%; prior +0.3%) and 3.6% yr/yr (expected 3.6%; prior 2.9%)

  • Germany's March ZEW Economic Sentiment -39.3 (expected 10.0; prior 54.3)

  • Eurozone's January Industrial Production 0.0% m/m (expected +0.1%; prior +1.3%) and -1.3% yr/yr (expected -0.5%; prior +2.0%)


---Equity Markets---

  • STOXX Europe 600: -0.9%

  • Germany's DAX: -0.9%

  • U.K.'s FTSE 100: -0.9%

  • France's CAC 40: -1.0%

  • Italy's FTSE MIB: -0.7%

  • Spain's IBEX 35: -0.2%

---FX---

  • EUR/USD: +0.5% to 1.0986

  • GBP/USD: +0.3% to 1.3035

  • USD/CHF: unch at 0.9385

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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