Search

16/05/22 Briefing

Updated: May 19

The S&P 500 futures trade ten points, or 0.2%, below fair value to start the week, cooling off from a strong session last Friday. Lingering growth concerns might be restraining follow-through buying interest this morning.

Growth concerns have been reinforced by China reporting weaker-than-expected retail sales, industrial production, and fixed asset management data for April; India reportedly banning wheat exports over the weekend, threatening to exacerbate food shortages and rising commodity prices; and the EC lowering its 2022 growth outlook for the eurozone to 2.7% from 4.0%.

Shanghai, to be fair, will reportedly conduct a phased reopening of businesses, starting Monday. Oil prices, though, are down 1.2% to $109.11/bbl while wheat futures are up 4.3% to $12.28/bushel.

The 10-yr yield, which is sensitive to growth expectations, is currently down two basis points to 2.92%. The 2-yr yield is up one basis point to 2.60%. The U.S. Dollar Index is down 0.1% to 104.44.

Today's economic data will be limited to the Empire State Manufacturing Survey for May (Briefing.comconsensus 15.0) at 8:30 a.m. ETand Net Long-term TIC Flows for March at 4:00 p.m. ET.

In U.S. Corporate news:

  • Spirit Airlines (SAVE 19.60, +2.62): +15.4% after starting a hostile all-cash takeover bid for the company, according to CNBC. JetBlue urged Spirit shareholders to reject the Frontier transaction at their upcoming special meeting.

  • Wix.com(WIX 63.58, -7.61): -10.7% after missing EPS estimates and guiding Q2 and FY22 revenue below consensus.

  • Warby Parker (WRBY 17.00, -0.44): -2.5% after missing EPS estimates and reaffirming its in-line FY22 revenue guidance.

  • Nucor (NUE 123.01, -0.78): -0.6% after agreeing to acquire C.H.I. Overhead Doors from KKR (KKR 51.00, -0.57, -1.1%). The transaction is worth $3.0 billion.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: +0.5%, Hong Kong's Hang Seng: +0.3%, China's Shanghai Composite: -0.3%, India's Sensex: +0.3%, South Korea's Kospi: -0.3%, Australia's ASX All Ordinaries: +0.3%.

  • In economic data:

  • China's April Retail Sales -11.1% yr/yr (expected -6.1%; last -3.5%), April Industrial Production -2.9% yr/yr (expected 0.4%; last 5.0%), April Fixed Asset Investment 6.8% yr/yr (expected 7.0%; last 9.3%), and April Unemployment Rate 6.1% (last 5.8%)

  • Japan's April PPI 1.2% m/m (expected 0.8%; last 0.9%); 10.0% yr/yr (expected 9.4%; last 9.7%). April Machine Tool Orders 25.0% yr/yr (last 30.2%)

  • South Korea's April trade deficit $2.50 bln (last deficit of $2.66 bln). April Imports 18.6% yr/yr (last 18.6%) and Exports 12.9% (last 12.6%)


  • In the news:

  • China reported weaker than expected economic figures for April, reflecting the impact of strict coronavirus restrictions.

  • Shanghai's vice mayor reportedly indicated that businesses in his city are reopening gradually.

  • Japan's PPI was up 10.0% yr/yr in April, representing the sharpest growth rate since late 1980.

  • South Korea's President Yoon acknowledged the impact of inflation and higher interest rates when speaking about the government's planned extra budget of KRW59.4 trln.



  • Major European indices trade near their flat lines while Germany's DAX (-0.6%) underperforms. STOXX Europe 600: -0.1%, Germany's DAX: -0.6%, U.K.'s FTSE 100: UNCH, France's CAC 40: -0.3%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +0.2%.

  • In economic data:

  • Eurozone's March trade deficit EUR16.40 bln (last deficit of EUR8.80 bln)

  • Germany's April WPI 2.1% m/m (last 6.9%); 23.8% yr/yr (last 22.6%)


  • In the news:

  • Finland's president officially applied for NATO accession while Sweden's government is expected to do the same despite reports of opposition from Turkey.

  • The EU Commission's spring forecast lowered the 2022 growth outlook for the eurozone to 2.7% from 4.0% and raised the inflation forecast to 6.1% from 3.5%.

  • European Central Bank policymaker De Cos said that the next ECB meeting is likely to produce a decision to end asset purchases in July, followed by a rate hike.



U.S. equity futures:

  • S&P 500 Futures: -13 @ 4,011

  • DJIA Futures: -52 @ 32,145

  • Nasdaq 100 Futures: -60 @ 12,328

Overseas:

  • Europe: DAX -0.6%, FTSE UNCH, CAC -0.3%

  • Asia: Nikkei +0.5%, Hang Seng +0.3%, Shanghai Composite -0.3%

Commodities:

  • Crude Oil -0.94 @ 107.69

  • Nat Gas +0.194 @ 7.857

  • Gold -9.33 @ 1798.87

  • Silver +0.122 @ 21.123

  • Copper -0.0002 @ 4.1748

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Boston Omaha (BOC) reports Q1 EPS of $0.55, may not be comparable to ($0.05) single analyst estimate; revs +23.4% yr/yr to $16.293 mln vs $14.7 mln S&P Capital IQ two analyst estimate

  • Carvana (CVNA) in slide presentation says "We expect our focus on profitable growth, SG&A leverage, and a return to >$4,000 total GPU to lead to significant positive EBITDA for the full year 2023"

  • Clear Secure (YOU) beats by $0.05, beats on revs; guides Q2 revs above consensus

  • Compugen (CGEN) beats by $0.01

  • Faraday Future Intelligent Electric (FFIE) reports FY21 results

  • Monday.com(MNDY) beats by $0.05, beats on revs; guides Q2 revs above consensus; guides FY22 revs above consensus

  • Nutex Health (NUTX) reports Q1 results for pre-merger Clinigence Holdings

  • Tower Semi (TSEM) misses by $0.02, beats on revs

  • Warby Parker (WRBY) misses by $0.26, reports revs in-line; reaffirms FY22 revs guidance

  • Wix.com(WIX) misses by $0.11, reports revs in-line; guides Q2 revs below consensus; guides FY22 revs below consensus


  • General News:

  • Shanghai will conduct phased reopening of businesses, according to the Wall Street Journal

  • Finland and Sweden apply for NATO membership. Turkey will not block those countries from entering alliance, according to the New York Times

  • Ukraine launches counteroffensive against Russia near Donbas region as Republicans travel to Ukraine. Russia stops electricity exports to Finland, according to the New York Times

  • Goldman Sachs (GS) Senior Chairman Lloyd Blankfein says companies should prepare for US recession, according to Bloomberg

  • Treasury Secretary Janet Yellen will attempt to get EU approval for global minimum tax, but tax deal is deadlocked in Congress, according to the Wall Street Journal

  • Germany aiming to ban Russian oil imports by end of year regardless of EU approval, according to Bloomberg

  • Several people died after shooting in Buffalo, NY

  • President Biden announces new actions to ease the burden of housing costs

  • White House provides details on the US-EU trade and technology council meeting in Paris

  • Abbott Labs (ABT) tweets "A comprehensive investigation by Abbott, FDA and CDC found no evidence that our formulas caused infant illnesses" after White House "mistakenly said that our formulas were tainted and killed two infants"

  • Aecom Tech (ACM) announced it has been awarded a contract by NJ TRANSIT to provide engineering services for its Bus Garage Modernization Program

  • Aerojet Rocketdyne (AJRD): Independent investigation finds lichtenstein engaged in pattern of misconduct - Lichtenstein's Own designees formally rebuke him for improper actions

  • AstraZeneca (AZN) Proteros expands oncology collaboration and license agreement with AstraZeneca

  • AstraZeneca (AZN) reports PT027 Phase III trial results published in the New England Journal of Medicine and presented at ATS 2022 International Conference

  • Beachbody (BODY) appointed Marc Suidan as the Company's Chief Financial Officer, effective as of May 10, 2022

  • Bristol-Myers (BMY) provides update on CheckMate -901 trial evaluating opdivo (nivolumab) plus yervoy (ipilimumab) as first-line treatment for patients with unresectable or metastatic urothelial carcinoma

  • Capital One (COF) reports April card metrics

  • Citigroup (C) and Unicredit mulling asset swaps with Russian financial firms, according to Financial Times

  • Coinbase (COIN): Cathie Wood continues to purchase Coinbase, according to Bloomberg

  • CoreCivic (CXW) approved a share repurchase program authorizing the Company to repurchase up to $150 million of the Company's common stock

  • Credit Suisse (CS) close to settlement agreement with WV mining company, according to Financial Times

  • Eli Lilly (LLY) receives FDA approval for Mounjaro injection

  • F45 Training Holdings (FXLV) receives $150 mln financing facility to accelerate franchise expansion in the US

  • GameStop (GME) has appointed Nir Patel to the role of Chief Operating Officer, effective May 31, 2022

  • JPMorgan Chase (JPM) reports April card metrics

  • Kraft Heinz (KHC): The Commodity Futures Trading Commission (CFTC) settles enforcement action against KHC and Mondelez Int'l (MDLZ)

  • Life Time (LTH) has now closed on sale-leaseback transactions involving four of its owned properties totaling $175 million

  • Lockheed Martin (LMT) awarded a $398 mln US Navy fee modification to a previously awarded contract

  • McDonald's (MCD) to exit from Russia

  • NeoGenomics (NEO) appoints Lynn Tetrault interim CEO

  • Petrobras (PBR) provides Sergipe-Alagoas Basin update

  • Petrobras (PBR) clarifies it is not discussing changes in its pricing policy with the Ministry of Mines and Energy

  • Photronics (PLAB) announceds that Dr. Frank Lee has been named CEO and will join the company's Board of Directors

  • Plains All American Pipeline (PAA) will pay $230 mln to settle lawsuit related to California oil spill, according to the Wall Street Journal

  • RadNet (RDNT) receives FDA clearance for Mammography and Prostate AI Tools

  • Regencell Bioscience (RGC) announces over $5 million ordinary share purchases by CEO

  • Republic First (FRBK) appoints Harry Madonna as Interim Chairman

  • Rocket Pharmaceuticals (RCKT) presents "positive" clinical data from danon disease, fanconi anemia and pyruvate kinase deficiency programs

  • S&P Global (SPGI) entered into supplemental confirmations to repurchase an aggregate of $1.5 billion of common stock

  • Sanofi (SNY) reports Sarclisa combination provides unprecedented median progression free survival in patients with relapsed multiple myeloma receiving a proteasome inhibitor therapy

  • scPharmaceuticals (SCPH) announces FDA acceptance of FUROSCIX new drug application

  • Seagen (SGEN) announces resignation of President, Chairman & CEO Clay Siegall

  • Travere Therapeutics (TVTX): FDA accepts Priority Review of NDA under Subpart H for accelerated approval of sparsentan for the treatment of IgA nephropathy

  • Turtle Beach (HEAR) announces agreement with The Donerail Group to refresh its Board of Directors and provides additional detail regarding ongoing, robust alternatives process

  • Twitter (TWTR): Elon Musk says to find out about fake accounts his team "will do a random sample of 100 followers"

  • Twitter (TWTR): Elon Musk tweets "Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100"

  • U.S. Bancorp (USB) provides update on core regional banking franchise of MUFG Union Bank acquisition

  • Vivint Smart Home (VVNT) announces the departure of Dale R. Gerard and the appointment of Dana Russell as Chief Financial Officer

  • Vulcan Materials (VMC) confirms that the Mexican govt has suspended the 3-year customs permit

  • Wingstop (WING) announced an agreement for the development rights for South Korea, contributing to its robust international expansion pipeline

  • Zentalis Pharma (ZNTL) appointed Dave Johnson as Chairman of the Board


  • M&A:

  • Carlyle Group (CG) in discussions to acquire Mantech International (MANT), according to Bloomberg

  • Chardan NexTech Acquisition 2 Corp. (CNTQ): Dragonfly Energy to become publicly traded via SPAC deal with CNTQ; will trade under ticker "DFLI"

  • Chimerix (CMRX) announces sale of TEMBEXA to Emergent BioSolutions (EBS) for up to $337.5 mln plus royalties

  • Digital World Acquisition Corp (DWAC) and Trump Media & Technology Group announce filling of a registration statement in connection with their proposed business combination

  • Executive Network Partnering Corporation (ENPC) and Grey Rock Investment Partners announce business combination to form publicly traded granite ridge resources

  • JetBlue (JBLU) Urges Spirit Shareholders to Protect Their Interests and 'Vote No' on Frontier Transaction at Upcoming Spirit Special Meeting

  • KemPharm (KMPH) announces strategic acquisition of Arimoclomol from Orphazyme

  • MDC Holdings (MDC) decides not to proceed with previously announced deal to acquire homebuilding assets of The Jones Company of Tennessee

  • Nucor (NUE) to acquire C.H.I. Overhead Doors from KKR (KKR), will be immediately accretive to earnings in first year; transaction valued at $3.0 bln

  • Rattler Midstream (RTLR): Diamondback Energy (FANG) agrees to acquire publicly held units of Rattler Midstream

  • Rekor Systems (REKR) to acquire Southern Traffic Services

  • XPO Logistics (XPO) considering a sale of its Freight-Forwarding unit, according to Bloomberg


  • Syndicate:

  • ALX Oncology (ALXO) files for $450 mln mixed securities shelf offering

  • Array Tech (ARRY) files for 13,894,800 share common stock offering by selling shareholders

  • Deluxe (DLX) files mixed securities shelf offering

  • NuStar Energy (NS) files mixed securities shelf offering

  • SilverBow Resources (SBOW) files for 1.3 mln share common stock offering by selling shareholder

  • Starwood Property Trust (STWD) files mixed securities shelf offering; entered into $500 mln common stock sales agreement

  • Zentalis Pharma (ZNTL) announce sthe pricing of an underwritten offering of 10,330,000 shares of its common stock at an offering price of $19.38/share, for total gross proceeds of ~$200.2 mln


  • IPOs:

  • Priced to Trade:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • CMRX +16.7%, RTLR +15.8%, SAVE +10.4%, CVNA+8.8%, STRY +4.9%, KMPH +4.9%, RCKT +4.5%, FFIE+3.7%, BOC +1.6%, FRBK +1.5%, JHG +1%, YOU+0.8%


  • Gapping down:

  • WIX -10.7%, NUTX -8.7%, ARRY -5.1%, COIN -3%, NWL -1.1%, JBLU -0.8%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Alibaba (BABA) upgraded to Overweight from Underweight at JP Morgan; tgt raised to $130

  • Baidu (BIDU) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $125

  • Baozun (BZUN) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $8

  • Bilibili (BILI) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $19

  • Cigna (CI) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $304

  • Citizens Financial Group (CFG) upgraded to Buy from Neutral at UBS; tgt raised to $54

  • Dada (DADA) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $10

  • Dingdong Ltd (DDL) upgraded to Overweight from Underweight at JP Morgan; tgt raised to $7

  • Duke Realty (DRE) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt lowered to $65

  • HF Sinclair (DINO) upgraded to Buy from Neutral at Goldman; tgt raised to $56

  • Hyatt Hotels (H) upgraded to Hold from Sell at Berenberg; tgt raised to $85

  • Inter Parfums (IPAR) upgraded to Buy from Neutral at Citigroup; tgt $99

  • iQIYI (IQ) upgraded to Overweight from Underweight at JP Morgan; tgt raised to $8

  • JD.com(JD) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $58

  • KE Holdings (BEKE) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $13.50

  • NetEase (NTES) upgraded to Overweight from Underweight at JP Morgan; tgt raised to $120

  • Netflix (NFLX) upgraded to Outperform from Neutral at Wedbush; tgt $280

  • Pinduoduo (PDD) upgraded to Overweight from Underweight at JP Morgan; tgt raised to $55

  • Rocket Companies (RKT) upgraded to Mkt Perform from Underperform at Keefe Bruyette; tgt lowered to $7

  • Shake Shack (SHAK) upgraded to Buy from Neutral at Northcoast; tgt $70

  • Signify Health (SGFY) upgraded to Outperform from Neutral at Robert W. Baird; tgt lowered to $16

  • SoFi Technologies (SOFI) upgraded to Overweight from Neutral at Piper Sandler; tgt lowered to $10

  • Tencent (TCEHY) upgraded to Overweight from Underweight at JP Morgan

  • Zhihu (ZH) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $1.50


  • Downgrades:

  • Adidas AG (ADDYY) downgraded to Neutral from Outperform at Exane BNP Paribas

  • Bandwidth (BAND) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $25

  • Dime Community (DCOM) downgraded to Equal-Weight from Overweight at Stephens; tgt lowered to $34.50

  • FIGS, Inc. (FIGS) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $12

  • FirstEnergy (FE) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $44

  • Humacyte (HUMA) downgraded to Underweight from Overweight at Piper Sandler; tgt lowered to $4

  • InnovAge (INNV) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $5

  • Marathon Petroleum (MPC) downgraded to Neutral from Buy at Goldman; tgt raised to $102

  • Nielsen (NLSN) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $28

  • RingCentral (RNG) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $80

  • Shift (SFT) downgraded to Hold from Buy at The Benchmark Company

  • Twilio (TWLO) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $120


  • Others:

  • DraftKings (DKNG) resumed with a Buy at Jefferies; tgt $33

  • NovoCure (NVCR) initiated with a Buy at H.C. Wainwright; tgt $115

  • Petco Health and Wellness (WOOF) initiated with an Equal-Weight at Morgan Stanley; tgt $21

  • RH (RH) initiated with an Equal-Weight at Morgan Stanley; tgt $400


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Empire State Manufacturing for May (Briefing.comConsensus 15.0; Prior 24.6)

  • 16:00 ET: Net LT TIC Flows for May (Briefing.comConsensus NA; Prior $141.7B)


  • Earnings:

  • Monday (May 16)

  • Morning: YOU CGEN MNDY TSEM WRBY WEBR WIX

  • Afternoon: CCSI GAN GLBE SHLS SSYS TTWO TME


  • Tuesday (May 17)

  • Morning: AER HD HUYA IHS JD ONON RSKD SE WMT

  • Afternoon: AGYS DLO DOCS KEYS NXGN


  • Wednesday (May 18)

  • Morning: ADI DOYU DT LOW TGT TJX TGI

  • Afternoon: BBWI CSCO CPRT GDS SNPS


  • Thursday (May 19)

  • Morning: WMS BJ CAE GOOS EXP KSS LSPD MNRO VIPS

  • Afternoon: AINV AMAT DECK FLO GLOB PANW ROST VFC


  • Friday (May 20)

  • Morning: BAH DE FL



Asia & Europe detail:

Asia: Nikkei +0.5%, Hang Seng +0.3%, Shanghai Composite -0.3%

Equity indices in the Asia-Pacific region began the week on a mostly higher note. China reported weaker than expected economic figures for April, reflecting the impact of strict coronavirus restrictions. Shanghai's vice mayor reportedly indicated that businesses in his city are reopening gradually. Japan's PPI was up 10.0% yr/yr in April, representing the sharpest growth rate since late 1980. South Korea's President Yoon acknowledged the impact of inflation and higher interest rates when speaking about the government's planned extra budget of KRW59.4 trln.

  • In economic data:

  • China's April Retail Sales -11.1% yr/yr (expected -6.1%; last -3.5%), April Industrial Production -2.9% yr/yr (expected 0.4%; last 5.0%), April Fixed Asset Investment 6.8% yr/yr (expected 7.0%; last 9.3%), and April Unemployment Rate 6.1% (last 5.8%)

  • Japan's April PPI 1.2% m/m (expected 0.8%; last 0.9%); 10.0% yr/yr (expected 9.4%; last 9.7%). April Machine Tool Orders 25.0% yr/yr (last 30.2%)

  • South Korea's April trade deficit $2.50 bln (last deficit of $2.66 bln). April Imports 18.6% yr/yr (last 18.6%) and Exports 12.9% (last 12.6%)


---Equity Markets---

  • Japan's Nikkei: +0.5%

  • Hong Kong's Hang Seng: +0.3%

  • China's Shanghai Composite: -0.3%

  • India's Sensex: +0.3%

  • South Korea's Kospi: -0.3%

  • Australia's ASX All Ordinaries: +0.3%

---FX---

  • USD/JPY: +0.1% to 129.33

  • USD/CNH: +0.2% to 6.8052

  • USD/INR: +0.4% to 77.80

Europe: DAX -0.6%, FTSE UNCH, CAC -0.3%

Major European indices trade near their flat lines while Germany's DAX (-0.6%) underperforms. Finland's president officially applied for NATO accession while Sweden's government is expected to do the same despite reports of opposition from Turkey. The EU Commission's spring forecast lowered the 2022 growth outlook for the eurozone to 2.7% from 4.0% and raised the inflation forecast to 6.1% from 3.5%. European Central Bank policymaker De Cos said that the next ECB meeting is likely to produce a decision to end asset purchases in July, followed by a rate hike.

  • In economic data:

  • Eurozone's March trade deficit EUR16.40 bln (last deficit of EUR8.80 bln)

  • Germany's April WPI 2.1% m/m (last 6.9%); 23.8% yr/yr (last 22.6%)


---Equity Markets---

  • STOXX Europe 600: -0.1%

  • Germany's DAX: -0.6%

  • U.K.'s FTSE 100: UNCH

  • France's CAC 40: -0.3%

  • Italy's FTSE MIB: +0.2%

  • Spain's IBEX 35: +0.2%

---FX---

  • EUR/USD: -0.8% to 1.0430

  • GBP/USD: -0.3% to 1.2212

  • USD/CHF: +0.3% to 0.9963


0 views0 comments

Recent Posts

See All

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