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16/06/23 Briefing

Updated: Jun 18, 2023

The S&P 500 futures are up 2 points and are trading slightly above fair value. The Nasdaq 100 futures are up 32 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are down 2 points and are trading slightly below fair value.

Stock futures are mixed, yet somewhat flattish on this quarterly options expiration day. Buyers haven't been actively involved, but more importantly sellers have not been too active either after a big run recently. The Nasdaq 100 futures are outperforming partially thanks to a nice gain in Adobe (ADBE) after its earnings report, which has continued to drive an AI buzz.

The Bank of Japan left its interest on excess reserves at -0.10% and reiterated intentions to patiently continue with monetary easing.

Economic data today is limited to the preliminary University of Michigan Consumer Sentiment Survey for June (Briefing.comconsensus 60.2; prior 59.2) at 10:00 a.m. ET.

Treasuries are mixed. The 2-yr note yield is up six basis points to 4.70% and the 10-yr note yield is unchanged at 3.74%. 

In corporate news:

  • Adobe (ADBE 514.03, +23.12, +4.7%): beats by $0.12, reports revs in-line; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line

  • Micron (MU 70.65, +1.86, +2.7%): to invest $600 million in China expansion, according to WSJ; near $1 bln India investment, according to Bloomberg

  • Disney (DIS 92.80, -0.14, -0.2%): CFO Christine McCarthy to step down, taking family medical leave of absence; Disney Parks CFO Kevin Lansberry assuming role of Interim CFO, effective July 1

  • Goldman Sachs (GS 338.51, -1.23, -0.4%): Board is reevaluating CEO David Solomon, according to NY Post

  • Nucor (NUE 151.78, +0.60, +0.4%): guides Q2 earnings above consensus; expects steel mills segment earnings to improve due to margin expansion

  • Cabot (CBT 70.19, -4.43, -5.9%): provides update on demand landscape: sales volumes are down in Performance Chemicals and Reinforcement Materials segments; withdraws FY23EPS outlook

  • Humana (HUM 463.38, -0.47, -0.1%): reaffirms FY23guidance; The Company will also reaffirm its full year Insurance segment benefit expense ratio guidance of 86.3 to 87.3 percent, although the Company now expects to be at the top end of this full year range

  • Virgin Galactic (SPCE 5.6800, +1.62, +39.9%): starts commercial spaceline operations; first spaceflight planned to fly between June 27-30; second spaceflight to occur in early August, with monthly spaceflights thereafter

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a higher note. Japan's Nikkei: +0.7% (+4.5% for the week), Hong Kong's Hang Seng: +1.1% (+3.4% for the week), China's Shanghai Composite: +0.6% (+1.3% for the week), India's Sensex: +0.7% (+1.2% for the week), South Korea's Kospi: +0.7% (-0.6% for the week), Australia's ASX All Ordinaries: +1.1% (+1.9% for the week).

  • In economic data:

  • Singapore's May trade surplus $5.491 bln (expected $5.982 bln; last $4.762 bln). May non-oil exports -14.6% m/m (expected -0.8%; last 2.6%); -14.7% yr/yr (expected -9.1%; last -9.8%)

  • New Zealand's May Business PMI 48.9 (expected 50.2; last 49.1)

  • In news:

  • There were ongoing expectations that China's State Council will announce stimulus measures imminently and there was speculation about a reserve requirement ratio cut.

  • Westpac expects the Reserve Bank of Australia to reach a terminal rate of 4.60% in August.

  • The Bank of Japan left its interest on excess reserves at -0.10% and reiterated intentions to patiently continue with monetary easing.

  • Major European indices trade in positive territory. STOXX Europe 600: +0.5% (+1.5% week-to-date), Germany's DAX: +0.4% (+2.6% week-to-date), U.K.'s FTSE 100: +0.4% (+1.2% week-to-date), France's CAC 40: +1.0% (+2.1% week-to-date), Italy's FTSE MIB: +0.4% (+2.6% week-to-date), Spain's IBEX 35: +0.6% (+1.9% week-to-date).

  • In economic data:

  • Eurozone's May CPI 0.0% m/m, as expected (last 0.6%); 6.1% yr/yr, as expected (last 7.0%). May Core CPI 0.2% m/m, as expected (last 1.0%); 5.3% yr/yr, as expected (last 5.6%). Q1 wages 4.6% yr/yr (expected 3.3%; last 5.0%) and Q1 Labor Cost Index 5.0% yr/yr (expected 3.3%; last 5.6%)

  • Italy's May CPI 0.3% m/m, as expected (last 0.4%); 7.6% yr/yr, as expected (last 8.2%). April EU trade deficit EUR920 mln (last deficit of EUR830 mln)

  • In news:

  • Several European Central Bank policymakers made hawkish comments, solidifying expectations for another 25-bps hike in July. Officials are reportedly split about the need for a follow-up hike in September.

  • French Finance Minister Le Maire said that EU members are looking to reform fiscal rules by the end of 2023.

 

U.S. equity futures:

  • S&P 500 Futures: +3 @ 4,429

  • DJIA Futures: +6 @ 34,414

  • Nasdaq 100 Futures: +34 @ 15,220

Overseas:

  • Europe: DAX +0.4%, FTSE +0.4%, CAC +1.0%

  • Asia: Nikkei +0.7%, Hang Seng +1.1%, Shanghai Composite +0.6%

Commodities:

  • Crude Oil +0.00 @ 70.62

  • Nat Gas +0.017 @ 2.55

  • Gold +7.65 @ 1978.35

  • Silver +0.230 @ 24.177

  • Copper -0.0060 @ 3.895


 

Earnings/Guidance:

  • Adobe (ADBE) beats by $0.12, reports revs in-line; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line

  • Cabot (CBT) provides update on demand landscape: sales volumes are down in Performance Chemicals and Reinforcement Materials segments; withdraws FY23 EPS outlook

  • Humana (HUM) reaffirms FY23 guidance

  • Nucor (NUE) guides Q2 earnings above consensus; expects steel mills segment earnings to improve due to margin expansion

News:

  • US gas prices are lower this year for summer driving season, according to the Wall Street Journal

  • Tech and media companies are in discussions over artificial intelligence news content deals, according toFinancial Times

  • Bank of Japan announces monetary policy decision

  • Anheuser-Busch InBev (BUD) CEO Brendon Whitworth announces three actions to move business forward: investing in frontline employees, providing financial assistance to independent wholesalers, launching summer ads reinforcing the Bud Light brand

  • ArcBest (ARCB) provided new labor contract updates

  • AT&T (T) will close flagship San Francisco, according to SF Gate

  • Autolus Therapeutics (AUTL) presents positive results from AUTO4 in relapsed/refractory TRBC1-positive peripheral t-cell lymphoma

  • Avita Medical (RCEL ) announces appointment of David O'Toole as CFO, effective June 15, 2023

  • Beyond Air (XAIR) Licenses Commercial Rights to Selective Neuronal Nitric Oxide Synthase (nNOS) Inhibitors for the Treatment of Autism Spectrum Disorder from Hebrew University of Jerusalem

  • BlackRock's (BLK) iShares unit files for the formation of a spot Bitcoin ETF, sending Bitcoin prices higher, according to CoinDesk

  • Bristol-Myers (BMY) receives FDA approval for addition of positive data from Phase 3 VALOR-HCM Study to CAMZYOS (mavacamten) Label

  • Bristol-Myers (BMY): Tessa Therapeutics reports positive results from CD30 CAR-T Combination Study with Nivolumab in 2nd line Hodgkin Lymphoma

  • Cano Health (CANO): Concerned Shareholders of Cano Health Obtain Clear Referendum for Change at 2023 Annual Meeting

  • Cherry Hill Mortgage (CHMI) lowered dividend to $0.15 per share on common stock for the second quarter of 2023, prior $0.27 per share

  • CNA Financial (CNA) disclosed that, in connection with certain organizational changes, Gerald S. Haase, Executive Vice President and Chief Operations Officer is separating from the co with an expected effective date in the third quarter of 2023

  • Coterra Energy (CTRA) CFO Scott C. Schroeder retiring; Shane E. Young appointed CFO

  • dLocal Limited (DLO) reports that it had positive engagement with representatives of Argentine government and that it intends to invest further in the country

  • Enovix (ENVX) achieves Q2 forecast of 18,000 units manufactured out of its Fab1 location with 2+ weeks remaining in qtr

  • Eventbrite (EB) disclosed that the combined revenue from the Company's Boost and Ads products is at an $11 million annualized run rate at a meeting with investors

  • Ferguson plc (FERG) provides update for its share repurchase program

  • Galapagos NV (GLPG) appoints Thad Huston as CFO and COO, effective July 1

  • General Dynamics (GD) unit receives $383 mln U.S. Navy Training support services contract

  • GlaxoSmithKline (GSK) receives extension of FDA review period for momelotinib

  • Goldman Sachs (GS) Board is reevaluating CEO David Solomon, according to New York Post

  • Goodyear Tire's (GT) radial tire to be one of the approved fitments for the new Airbus A321XLR when it enters service in 2024

  • Honda Motor (HMC) discloses notice of events after the reporting period regarding product warranty expenses

  • HUTCHMED (HCM) and Takeda Announce Publication of Phase III FRESCO-2 Results in The Lancet

  • Innate Pharma (IPHA) Highlights Increased Lacutamab Clinical Activity From Interim Results of Phase 2 TELLOMAK Study With Updated Olsen Criteria

  • Lexicon (LXRX) Announces FDA Approval of INPEFA (sotagliflozin) for Treatment of Heart Failure

  • Manulife Financial (MFC) announces CFO change

  • Merck (MRK) reports KEYTRUDA plus Trastuzumab and chemotherapy met primary endpoint of progression-free survival as first-line treatment in patients with HER2-Positive advanced gastric or gastroesophageal junction adenocarcinoma

  • Mercury (MRCY) introduces ROCK 4 mission computer, allowing air- and ground-based platforms to be upgraded with new sensors and mission applications

  • Micron (MU) near $1 bln India investment, according to Bloomberg

  • Micron (MU) to invest $600 million in China expansion, according to the Wall Street Journal

  • MicroVision (MVIS) entered into $45 mln at-the-market issuance sales agreement with Craig-Hallum Capital Group on June 16

  • MindMed (MNMD): FCM last night denounced MindMed's "manipulation of corporate machinery to protect incumbent Board of Directors"

  • Nexstar (NXST) announces shareholder approval to declassify the Board of Directors

  • Nikola Corporation (NKLA) founder Trevor Milton wants leadership change at the company, according to Bloomberg

  • Novavax (NVAX) Prepared to Deliver Protein-based Monovalent XBB COVID Vaccine Consistent with FDA VRBPAC Recommendation for the Fall

  • Oracle (ORCL) laying off hundreds, rescinding job offers, and cutting open positions in its Cerner Health unit, according to Business Insider

  • Origin Materials (ORGN) announces CFO Nate Whaley will leave the company

  • Petrobras (PBR) provides clarity regarding media updates in connection with Braskem (BAK)

  • Pfizer (PFE): FDA's independent panel of advisors recommend updated COVID shots for the fall and winter target XBB variant, according to CNBC

  • Portland Gen Elec (POR) appoints Joseph Trpik as CFO

  • QIAGEN's (QGEN) QuantiFERON-TB Gold Plus shows unique clinical value with CD8 technology in new meta-analysis of tuberculosis screening

  • Reata Pharmaceuticals (RETA) receives FDA Filing Acceptance of SKYCLARYS NDA prior approval supplement

  • Roche Hldg (RHHBY) receives FDA approval for Genentech's Columvi

  • RumbleOn (RMBL) CEO Marshall Chesrown provided the Board of Directors of the Company notice of his resignation as CEO effective on June 15, 2023

  • SeaWorld (SEAS) launches orca free park in UAE, according to ABC News

  • Spotify (SPOT) ends partnership with Archewell Audio, according to the New York Times

  • SSR Mining (SSRM) announces new normal course issuer bid

  • Stellantis (STLA) will offer electric vehicles at under 25,000 early next year, according to Bloomberg

  • Talos (TALO) Energy appoints Sergio Maiworm Jr as CFO and SVP, effective as of July 1, 2023

  • Townsquare Media (TSQ) announced that it has repurchased, and subsequently retired, 1.5 million shares of class C common stock held by MSG National Properties, LLC for $9.70/share

  • TuSimple Holdings (TSP) becomes first to successfully operate driver out, fully autonomous semi-truck on open public roads in China

  • UPS (UPS): Teamsters are expected to authorize nationwide UPS strike this summer, according to TheHill

  • Virgin Galactic (SPCE) starts commercial spaceline operations; first spaceflight planned to fly between June 27-30; second spaceflight to occur in early August, with monthly spaceflights thereafter

  • Walt Disney (DIS) CFO Christine McCarthy to step down, taking family medical leave of absence; Disney Parks CFO Kevin Lansberry assuming role of Interim CFO, effective July 1

M&A:

  • DraftKings (DKNG) submits superior proposal to acquire PointsBet's U.S. Business

  • Eneti (NETI) and Cadeler A/S sign business combination agreement to create a leading offshore wind turbine and foundation installation company

  • iRobot (IRBT): Amazon's (AMZN) purchase of Roomba maker IRBT cleared by UK CMA

  • Metals Acquisition (MTAL) and Glencore (GLNCY) closed the purchase and sale of Glencore's 100% interest in Cobar Management, the owner of the CSA copper mine in New South Wales, Australia

  • Millicom International Cellular (TIGO) announces that discussions with Apollo Global Management (APO) regarding potential acquisition of the company have been terminated; company confirmed it was in talks with APO to be acquired in January

  • CNX Resources (CNX) to sell non-operated producing oil and gas assets in the Appalachian basin to third party for $125 mln in cash

  • Sandstorm Gold (SAND) completed Antamina transaction with Horizon Copper and provides asset updates

  • Squarespace (SQSP) to acquire assets associated with the Google (GOOG) Domains business; to close in 3Q23

  • Surface Oncology (SURF): Coherus BioSciences (CHRS) to acquire SURF; SURF to be eligible for milestone agreements, expected to close in 3Q23

Syndicate:

  • Clearwater Analytics (CWAN) prices secondary offering of 10.0 mln shares of common stock at $16.05 per share

  • Oatly Group AB (OTLY) files for 22,424,755 ADSs by selling shareholders

  • Verastem (VSTM) announces proposed public offering of common stock and pre-funded warrants

IPOs:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • SPCE +38.7%, NETI +10.9%, LXRX +8.6%, ENVX +7%, SQSP +5.6%, TSP +5.6%, IPHA +3.4%, ADBE +3.2%, DLO +3%, NVAX +3%, COIN +2.4%, XAIR +1.8%, MARA +1.4%, QGEN +1.3%, WPC +1.1%, STLA +0.9%, NUE +0.9%, SSRM +0.7%, ORCL +0.6%, PFE +0.5%, GSK +0.5%

  • Gapping down:

  • VSTM -9.4%, CBT -6.9%, TIGO -6.8%, CWAN -5.1%, CANO -3.1%, GT -1%, DIS -0.7%, GOOG -0.6%, APO-0.5%, RETA -0.5%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Abcam (ABCM) upgraded to Buy from Neutral at BofA Securities; tgt $25

  • West Pharm (WST) upgraded to Buy from Neutral at BofA Securities; tgt raised to $405

  • Downgrades:

  • Evotec SE (EVO) downgraded to Neutral from Buy at BofA Securities; tgt $13

  • Others:

  • GigaCloud Technology Inc. (GCT) initiated with a Buy at ROTH MKM; tgt $13

  • Lightspeed (LSPD) assumed with a Buy at BTIG Research; tgt $20

  • Olo Inc. (OLO) initiated with a Neutral at BTIG Research

  • PAR Technology (PAR) assumed with a Neutral at BTIG Research

  • Shift4 Payments (FOUR) initiated with a Buy at BTIG Research; tgt $83

  • Toast (TOST) initiated with a Neutral at BTIG Research

Econ Data:

  • 10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for June (Briefing.comConsensus 60.2; Prior 59.2)

Earnings:

  • Monday (Jun 12)

  • Afternoon: ORCL

  • Tuesday (Jun 13)

  • None

  • Wednesday (Jun 14)

  • Afternoon: LEN

  • Thursday (Jun 15)

  • Morning: JBL KR

  • Afternoon:  ADBE

  • Friday (Jun 16)  

  • None

Asia & Europe detail:

Asia: Nikkei +0.7%, Hang Seng +1.1%, Shanghai Composite +0.6%

Equity indices in the Asia-Pacific region ended the week on a higher note. There were ongoing expectations that China's State Council will announce stimulus measures imminently and there was speculation about a reserve requirement ratio cut. Westpac expects the Reserve Bank of Australia to reach a terminal rate of 4.60% in August. The Bank of Japan left its interest on excess reserves at -0.10% and reiterated intentions to patiently continue with monetary easing.

  • In economic data:

  • Singapore's May trade surplus $5.491 bln (expected $5.982 bln; last $4.762 bln). May non-oil exports -14.6% m/m (expected -0.8%; last 2.6%); -14.7% yr/yr (expected -9.1%; last -9.8%)

  • New Zealand's May Business PMI 48.9 (expected 50.2; last 49.1)

---Equity Markets---

  • Japan's Nikkei: +0.7% (+4.5% for the week)

  • Hong Kong's Hang Seng: +1.1% (+3.4% for the week)

  • China's Shanghai Composite: +0.6% (+1.3% for the week)

  • India's Sensex: +0.7% (+1.2% for the week)

  • South Korea's Kospi: +0.7% (-0.6% for the week)

  • Australia's ASX All Ordinaries: +1.1% (+1.9% for the week)

---FX---

  • USD/JPY: +0.5% to 140.91

  • USD/CNH: -0.1% to 7.1157

  • USD/INR: UNCH at 81.88

 

Europe: DAX +0.4%, FTSE +0.4%, CAC +1.0%

Major European indices trade in positive territory. Several European Central Bank policymakers made hawkish comments, solidifying expectations for another 25-bps hike in July. Officials are reportedly split about the need for a follow-up hike in September. French Finance Minister Le Maire said that EU members are looking to reform fiscal rules by the end of 2023.

  • In economic data:

  • Eurozone's May CPI 0.0% m/m, as expected (last 0.6%); 6.1% yr/yr, as expected (last 7.0%). May Core CPI 0.2% m/m, as expected (last 1.0%); 5.3% yr/yr, as expected (last 5.6%). Q1 wages 4.6% yr/yr (expected 3.3%; last 5.0%) and Q1 Labor Cost Index 5.0% yr/yr (expected 3.3%; last 5.6%)

  • Italy's May CPI 0.3% m/m, as expected (last 0.4%); 7.6% yr/yr, as expected (last 8.2%). April EU trade deficit EUR920 mln (last deficit of EUR830 mln)

---Equity Markets---

  • STOXX Europe 600: +0.5% (+1.5% week-to-date)

  • Germany's DAX: +0.4% (+2.6% week-to-date)

  • U.K.'s FTSE 100: +0.4% (+1.2% week-to-date)

  • France's CAC 40: +1.0% (+2.1% week-to-date)

  • Italy's FTSE MIB: +0.4% (+2.6% week-to-date)

  • Spain's IBEX 35: +0.6% (+1.9% week-to-date)

---FX---

  • EUR/USD: +0.1% to 1.0953

  • GBP/USD: +0.1% to 1.2796

  • USD/CHF: +0.1% to 0.8916

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