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16/03/22 Briefing


The S&P 500 futures trade 60 points, or 1.4%, above fair value in a continuation of yesterday's rebound rally ahead of key economic data and the Fed's policy decision. The latest Russia-Ukraine headlines might be fueling the gains, even as Russia continues to launch missiles at Kyiv.

Briefly, Ukraine President Zelensky said peace talks were sounding more realistic, and Russia's foreign minister said some parts of a peace deal model are close to an agreement. Mr. Zelensky, however, acknowledged that the two sides are not close to deal while CNBC reminded viewers that Russia's words should be taken with a grain of salt.

Still, the market appears to be relishing the idea of a ceasefire agreement with talks continuing today and foreign equities sporting big gains. On a related note, President Zelensky is scheduled to speak to the U.S. Congress at 9:00 a.m. ET.

As for today's data, investors will receive Retail Sales for February (Briefing.comconsensus 0.4%) and Import/Export Prices for February at 8:30 a.m. ET, followed by the NAHB Housing Market Index for March (Briefing.comconsensus 81) and Business Inventories for January at 10:00 a.m. ET.

The FOMC will publish its policy statement and updated economic projections at 2:00 p.m. ET, and Fed Chair Powell will discuss the Fed's thinking at 2:30 p.m. ET. The Fed is widely expected to raise the fed funds rate by 25 basis points, so investors will listen to Mr. Powell for any hints on future rate hikes and the balance-sheet reduction process.

U.S. Treasuries are holding tight near their flat lines. The 2-yr yield is unchanged at 1.86%, and the 10-yr yield is up one basis point to 2.17%. The U.S. Dollar Index is down 0.6% to 98.51. WTI crude futures are down 0.3% to $96.16/bbl amid news that Russia has softened demands in Iran nuclear deal talks, according to The Wall Street Journal.

In U.S. Corporate news:

  • Smartsheet (SMAR 40.98, -2.51): -5.8% after guiding EPS for Q1 and FY23 below consensus, overshadowing its better-than-expected quarterly results and upbeat revenue guidance for Q1 and FY23.

  • SentinelOne (S 29.50, -1.39): -4.5% despite beating top and bottom-line estimates and guiding Q1 revenue above consensus.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region registered big gains on Wednesday, but none more so than the Chinese markets (which had registered huge losses over the previous two sessions). Japan's Nikkei: +1.6% Hong Kong's Hang Seng: +9.1% China's Shanghai Composite: +3.5% India's Sensex: +1.9% South Korea's Kospi: +1.4% Australia's ASX All Ordinaries: +1.1%.

  • In economic data:

  • Japan's February Exports +19.1% yr/yr (+21.0% expected; prior +9.6%) and Imports +34.0% yr/yr (+28.0% expected; prior +38.7%); March Reuters Tankan Index 8.0 (prior 6.0)

  • China's February House Prices +2.0% yr/yr (prior +2.3%); January Industrial Production -0.8% m/m (-1.3% expected; prior -1.3%)

  • South Korea's February Unemployment Rate 2.7% (prior 3.6%)


  • In news:

  • Hong Kong's Hang Seng Index soared 9.1% and China's Shanghai Composite surged 3.5%. Those power moves came on the heels of Wall Street's positive showing on Tuesday and state media reports touting efforts to stabilize equity markets, including reports of progress with U.S. regulators on a cooperation plan for Chinese stocks listed in the U.S., a push to end the crackdown on Internet platform companies, and providing some stability for the real estate sector.

  • This news vastly overshadowed the festering concerns about an economic slowdown related to lockdowns to stop the spread of COVID in China.



  • Major European indices are sitting on big gains, bolstered by Wall Street's positive showing on Tuesday and a Reuters report highlighting a view from Russian Foreign Minister Lavrov suggesting some elements of a compromise deal with Ukraine could be close. STOXX Europe 600: +2.7% Germany's DAX: +3.2% U.K.'s FTSE 100: +1.3% France's CAC 40: +3.5% Italy's FTSE MIB: +3.2% Spain's IBEX 35: +2.2%.

  • In economic data:

  • Germany's January Current Account Balance EUR11.0 bln (prior EUR24.6 bln)

  • Italy's February CPI +0.9% m/m (+0.9% expected; prior +1.6%) and +5.7% yr/yr (+5.7% expected; prior +4.8%)


  • In news:

  • Ukraine President Zelenskyy, who will address Congress at 9:00 a.m. ET, said the talks were sounding more realistic and has reportedly acknowledged that joining NATO doesn't look likely for Ukraine. In any case, market participants are favoring the notion of progress in the talks, evidenced by the rally in equity markets.

  • Lots of attention being paid to whether Russia will make good on interest payment due today in U.S. dollars.



U.S. equity futures:

  • S&P 500 Futures: +54 @ 4,317

  • DJIA Futures: +388 @ 33,926

  • Nasdaq 100 Futures: +241 @ 13,700

Overseas:

  • Europe: DAX +3.2%, FTSE +1.3%, CAC +3.5%

  • Asia: Nikkei +1.6%, Hang Seng +9.1%, Shanghai +3.5%

Commodities:

  • Crude Oil -0.22 @ 96.22

  • Nat Gas +0.086 @ 4.654

  • Gold -2.15 @ 1927.55

  • Silver -0.065 @ 25.093

  • Copper +0.0990 @ 4.6120

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Bird Global (BRDS) reports Q4 (Dec) results; beats on revs; guides Q1 revs below consensus; guides FY22 revs below consensus

  • Bit Digital (BTBT) reports Bitcoin production and mining operations update for Q4

  • Caleres (CAL) beats by $0.23, reports revs in-line; guides FY23 EPS below consensus, revs below consensus; authorizes an incremental 7 mln shares to its stock buyback program

  • DouYu (DOYU) reports Q4 (Dec) results, beats on revs

  • Dream Finders Homes (DFH) beats by $0.02, beats on revs

  • Energy Fuels (UUUU) beats by $0.20; misses on revs

  • Floor & Decor (FND) provides long-term financial targets; New warehouse format store growth of 20% through 2024

  • GoHealth (GOCO) reports Q4 (Dec) results, misses on revs; guides FY22 revs below consensus

  • HollySys (HOLI) beats by $0.10, grows revs 10.7% yr/yr

  • Jabil (JBL) beats by $0.21, beats on revs; guides Q3 EPS in-line, revs above consensus; guides FY22 EPS above consensus, revs above consensus

  • SentinelOne (S) beats by $0.01, beats on revs; guides Q1 revs above consensus

  • Smartsheet (SMAR) beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs above consensus; guides FY23 EPS below consensus, revs above consensus


  • General News:

  • Ceasefire talks ended Tuesday without agreement but will continue today. Ukraine President Zelensky said talks were sounding "more realistic", but he also said two sides are not close to deal, according to the New York Times

  • Russia's Lavrov says some parts of peace deal model are close to agreement, according to Reuters

  • Russia continues to launch missiles at Kyiv as the city is now under 35 hour curfew, according to the Wall Street Journal

  • Russia has softened demands in Iran nuclear deal talks, according to the Wall Street Journal

  • China will support overseas share listings of ADRs, according to Bloomberg

  • Adagene (ADAG) receives FDA clearance to proceed with Phase 1b/2 Trial of Anti-CTLA-4 ADG126 SAFEbody in combination therapy with Anti-PD-1 antibody pembrolizumab

  • AeroVironment (AVAV) shares higher by 8% pre-market following report that President Biden could provide Ukraine with Switchblades drones, according to NBC News

  • Amicus Therapeutics (FOLD) announced additional positive results from a global Phase 1/2 clinical study (ATB200-02) to investigate AT-GAA in adult patients with Pompe disease

  • Apellis (APLS) Announces Pegcetacoplan Showed Continuous and Clinically Meaningful Effects at Month 18 in Phase 3 DERBY and OAKS Studies for Geographic Atrophy

  • Apple (AAPL): Foxconn (FXCNY) restarts production at Shenzhen technology hub, according toBloomberg

  • Banc of California (BANC) announces $75 mln stock repurchase authorization

  • Bilibili (BILI) to pursue voluntary conversion to dual-primary listing on the main board of The Stock Exchange of Hong Kong

  • Biogen (BIIB): Long-term phase 3 data show ADUHELM continues to reduce underlying pathologies of alzheimer's disease in patients treated for more than two years

  • BioNTech (BNTX) and Pfizer (PFE) submit for Emergency Use Authorization of an additional booster dose of their COVID-19 vaccine for older adults

  • CarLotz (LOTZ) appoints Lev Peker to CEO, effective April 18

  • CarParts.com(PRTS) announces CEO and CFO promotions

  • Delta (DAL) CEO Ed Bastian says coronavirus crisis on travel is over, according to Bloomberg

  • Denali Therapeutics (DNLI) appoints Alexander Schuth as Chief Operating and Financial Officer

  • Equity Commonwealth (EQC) announces additional $150 mln share repurchase authorization

  • Esperion Therapeutics (ESPR) discloses departure of CFO Richard B. Bartram, effective April 8

  • Fidelity National (FNF) announces a planned transaction to distribute 15% ownership of F&G to FNF shareholders; F&G shares to be publicly listed through a partial spin-off

  • Horizon Technology Finance (HRZN) leads $10 mln venture loan facility to Aerobiotix

  • Immunic (IMUX) announces promotion of Glenn Whaley, CPA to Chief Financial Officer

  • Iovance Biotherapeutics (IOVA): FDA allows IND to proceed for IOV-4001

  • Johnson & Johnson (JNJ) coronavirus vaccine appears to be working as well as others as far as preventing severe illness, according to the New York Times

  • Maxeon Solar (MAXN) announces that Cypress Creek Renewables places multi-year order for approximately 315 MW of Performance line solar panels

  • New Fortress Energy (NFE) announces the execution of two 20-year sale and purchase agreements with Venture Global LNG

  • NortonLifeLock (NLOK): UK CMA finds NortonLifeLock purchase of Avast could reduce competition

  • Orthofix (OFIX) announces the U.S. Food and Drug Administration 510(k) clearance and the first patient cases with the TrueLok EVO Ring Fixation System

  • Protagonist Therapeutics (PTGX) receives $25 mln milestone payment from Janssen Biotech for dosing of third patient in Phase 2b clinical trial of PN-235

  • Prothena (PRTA) Presents New Data for Alzheimer's and Parkinson's Disease Programs at AD/PD 2022

  • Roche Hldg's (RHHBY) Genentech reports new data for Evrysdi demonstrating long-term efficacy and safety in a broad population of people with spinal muscular atrophy

  • RumbleOn (RMBL) files to delay its 10-K; anticipates it will disclose a material weakness

  • Sanofi (SNY) and Seagen (SGEN) announced an exclusive collaboration agreement to design, develop, and commercialize antibody-drug conjugates for up to three cancer targets

  • Spotify (SPOT) announces partnership with FC Barcelona to bring music and football together

  • Tesla (TSLA) suspends work at Shanghai factory for two days because of coronavirus surge, according to Reuters

  • Univar Solutions (UNVR) announces distribution agreement with Particle Dynamics

  • Viatris (VTRS) confirms FDA approval for generic Symbicort

  • Volkswagen (VWAGY) might produce electric truck, according to the Wall Street Journal


  • M&A:

  • Affiliated Managers (AMG) to sell its minority interest in BPEA to EQT

  • Atlas Technical Consultants (ATCX) acquires TranSmart Technologies; terms of the deal not disclosed

  • Booz Allen Hamilton (BAH) to acquire EverWatch, a provider of advanced solutions to the defense and intelligence communities

  • Herc Holdings (HRI) announces agreement to acquire Cloverdale Equipment; terms not disclosed

  • Shift (SFT) agrees to acquire dealer marketplace assets of Fair Technologies in cash and stock transaction


  • Syndicate:

  • Adicet Bio (ACET) files for $500 mln mixed securities shelf offering

  • aTyr Pharma (LIFE) files for $200 mln mixed securities shelf offering

  • Endeavour Silver (EXK) announces agreement for US$40 mln bought deal financing

  • First Merchants (FRME) files mixed securities shelf offering

  • Lazard (LAZ) files mixed securities shelf offering


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • BILI +30.2%, JD +21.2%, LX +21.1%, DOYU +20.4%, BABA +19.5%, WB +18.8%, BIDU +15.7%, FFIE+12.1%, BTBT +11.9%, IOVA +8.7%, ASHR +8.5%, FF+5.3%, HOLI +4.7%, CAL +4.4%, UUUU +3.4%, HRZN+3.2%, BNTX +2.6%, SRG +2.6%, SPOT +2.4%, FCX+1.9%, RIO +1.9%, BANC +0.8%


  • Gapping down:

  • BRDS -13.1%, GOCO -12.5%, NLOK -6.7%, EXK-5.4%, PRTA -5%, SMAR -2.6%, PAAS -1.9%, PRTS-1.8%, SFT -1.6%, IAG -1.6%, S -1.3%, RYAN -1.3%, GOLD -1%, IAA -0.6%, LAZ -0.6%, ACET -0.6%, UNVR -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • ACADIA Pharmaceuticals (ACAD) upgraded to Buy from Hold at Canaccord Genuity; tgt raised to $31

  • Host Hotels (HST) upgraded to Outperform from Mkt Perform at Raymond James; tgt $21

  • Magna (MGA) upgraded to Mkt Perform from Underperform at Raymond James; tgt $68


  • Downgrades:

  • SoFi Technologies (SOFI) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $10


  • Others:

  • Cepton (CPTN) initiated with a Buy at Craig Hallum; tgt $19

  • Constellation Energy (CEG) initiated with an Overweight at Morgan Stanley; tgt $63

  • Expeditors Intl (EXPD) initiated with a Hold at The Benchmark Company

  • Inhibrx (INBX) initiated with an Outperform at SMBC Nikko; tgt $40

  • Jounce Therapeutics (JNCE) initiated with an Outperform at SMBC Nikko; tgt $17


Upcoming Events:

  • Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for March 12 (Briefing.comConsensus NA; Prior 8.5%)

  • 08:30 ET: Retail Sales for Feb. (Briefing.comConsensus 0.4%; Prior 3.8%)

  • 08:30 ET: Retail Sales ex-auto for Feb. (Briefing.comConsensus 0.8%; Prior 3.3%)

  • 08:30 ET: Export Prices for Feb. (Briefing.comConsensus NA; Prior 2.9%)

  • 08:30 ET: Export Prices ex-ag for Feb. (Briefing.comConsensus NA; Prior 2.9%)

  • 08:30 ET: Import Prices for Feb. (Briefing.comConsensus NA; Prior 2.0%)

  • 08:30 ET: Import Prices ex-oil for Feb. (Briefing.comConsensus NA; Prior 1.4%)

  • 10:00 ET: Business Inventories for Jan. (Briefing.comConsensus NA; Prior 2.1%)

  • 10:00 ET: NAHB Housing Market Index for March (Briefing.comConsensus 81; Prior 82)

  • 10:30 ET: EIA Crude Oil Inventories for March 12 (Briefing.comConsensus NA; Prior -1.860M)

  • 14:00 ET: FOMC Rate Decision for March (Briefing.comConsensus 0.375%; Prior 0.00-0.25%)


  • 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 +1.6%, Hang Seng +9.1%, Shanghai +3.5%

Equity indices in the Asia-Pacific region registered big gains on Wednesday, but none more so than the Chinese markets (which had registered huge losses over the previous two sessions). Hong Kong's Hang Seng Index soared 9.1% and China's Shanghai Composite surged 3.5%. Those power moves came on the heels of Wall Street's positive showing on Tuesday and state media reports touting efforts to stabilize equity markets, including reports of progress with U.S. regulators on a cooperation plan for Chinese stocks listed in the U.S., a push to end the crackdown on Internet platform companies, and providing some stability for the real estate sector. Stocks like Alibaba and Tencent rose more than 20.0%. This news vastly overshadowed the festering concerns about an economic slowdown related to lockdowns to stop the spread of COVID in China.

  • In economic data:

  • Japan's February Exports +19.1% yr/yr (+21.0% expected; prior +9.6%) and Imports +34.0% yr/yr (+28.0% expected; prior +38.7%); March Reuters Tankan Index 8.0 (prior 6.0)

  • China's February House Prices +2.0% yr/yr (prior +2.3%); January Industrial Production -0.8% m/m (-1.3% expected; prior -1.3%)

  • South Korea's February Unemployment Rate 2.7% (prior 3.6%)


---Equity Markets---

  • Japan's Nikkei: +1.6%

  • Hong Kong's Hang Seng: +9.1%

  • China's Shanghai Composite: +3.5%

  • India's Sensex: +1.9%

  • South Korea's Kospi: +1.4%

  • Australia's ASX All Ordinaries: +1.1%

---FX---

  • USD/JPY: unch at 118.28

  • USD/CNH: -0.2% to 6.3704

  • USD/INR: -0.1% to 76.201

Europe: DAX +3.2%, FTSE +1.3%, CAC +3.5%

Major European indices are sitting on big gains, bolstered by Wall Street's positive showing on Tuesday and a Reuters report highlighting a view from Russian Foreign Minister Lavrov suggesting some elements of a compromise deal with Ukraine could be close. Ukraine President Zelenskyy, who will address Congress at 9:00 a.m. ET, said the talks were sounding more realistic and has reportedly acknowledged that joining NATO doesn't look likely for Ukraine. In any case, market participants are favoring the notion of progress in the talks, evidenced by the rally in equity markets. Separately, lots of attention being paid to whether Russia will make good on interest payment due today in U.S. dollars.

  • In economic data:

  • Germany's January Current Account Balance EUR11.0 bln (prior EUR24.6 bln)

  • Italy's February CPI +0.9% m/m (+0.9% expected; prior +1.6%) and +5.7% yr/yr (+5.7% expected; prior +4.8%)


---Equity Markets---

  • STOXX Europe 600: +2.7%

  • Germany's DAX: +3.2%

  • U.K.'s FTSE 100: +1.3%

  • France's CAC 40: +3.5%

  • Italy's FTSE MIB: +3.2%

  • Spain's IBEX 35: +2.2%

---FX---

  • EUR/USD: +0.5% to 1.1005

  • GBP/USD: +0.4% to 1.3082

  • USD/CHF: -0.1% to 0.9402

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