The S&P 500 futures trade eight points, or 0.2%, below fair value following yesterday's growth-stock-driven decline, as investors digest the first round of Q4 bank earnings and await key economic data.
JPMorgan Chase (JPM 163.35, -4.88, -2.9%), Wells Fargo (WFC 57.15, +1.15, +2.1%), and BlackRock (BLK 852.00, -15.58, -1.8%) each beat EPS estimates, but the reactions have been mixed. JPM and BLK are down 2-3% in pre-market action while WFC is up 2%.
In economic data, prior to the open, investors will receive Retail Sales for December (Briefing.comconsensus 0.0%) and Import/Export Prices for December at 8:30 a.m. ET, followed by Industrial Production (Briefing.comconsensus 0.3%) and Capacity Utilization (Briefing.comconsensus 77.1%) for December at 9:15 a.m. ET.
After the open, the preliminary University of Michigan Index of Consumer Sentiment for January (Briefing.comconsensus 68.5) and Business Inventories for November (Briefing.comconsensus 1.0%) will be released at 10:00 a.m. ET.
Away from equities, Treasury yields are moving higher after a quiet day yesterday. The 2-yr yield is up three basis points to 0.92%, and the 10-yr yield is up three basis points to 1.74% -- still below its recent high of 1.81%. The U.S. Dollar Index is up 0.1% to 94.87. WTI crude is up 0.7% to $82.69/bbl.
In U.S. corporate news:
JPMorgan Chase (JPM 163.35, -4.88): -2.9% after beating EPS estimates on below-consensus revenue. The company had a credit costs net benefit of $1.3 billion.
Wells Fargo (WFC 57.15, +1.15): +2.1% after beating top and bottom-line estimates.
BlackRock (BLK 852.00, -15.58): -1.8% despite beating EPS estimates and growing assets under management to $10.01 trillion.
First Republic Bank (FRC 202.50, +1.98): +1.0% after beating top and bottom-line estimates.
Sherwin-Williams (SHW 306.90, -10.49): -3.3% after guiding Q4 EPS below consensus, citing raw-material availability and labor headwinds in December.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei: -1.3% (-1.2% for the week) Hong Kong's Hang Seng: -0.2% (+3.8% for the week) China's Shanghai Composite: -1.0% (-1.6% for the week) India's Sensex: UNCH (+2.5% for the week) South Korea's Kospi: -1.4% (-1.1% for the week) Australia's ASX All Ordinaries: -1.0% (-0.7% for the week).
In economic data:
China's December trade surplus $94.46 bln (expected surplus of $74.50 bln; last surplus of $71.72 bln). December Imports 19.5% yr/yr (expected 26.3%; last 31.7%) and Exports 20.9% yr/yr (expected 20.0%; last 22.0%)
Japan's December PPI -0.2% m/m (expected 0.3%; last 0.7%); 8.5% yr/yr (expected 8.8%; last 9.2%)
India's December WPI Inflation 13.56% yr/yr (expected 13.50%; last 14.23%). December trade deficit $21.68 bln (expected deficit of $22.00 bln; last deficit of $21.99 bln)
Australia's November Home Loans 7.6% m/m (last -4.1%)
In news:
China reported a larger than expected trade surplus for December.
Chinese press reported that China's infrastructure investment is expected to increase 8% yr/yr in 2022.
Policymakers at the Bank of Japan may reportedly guide for a rate hike before the 2.0% inflation target is reached.
Hopes for broad-based wage increases in Japan are diminishing.
South Korea is planning an extra budget of about KRW14 trln.
The Bank of Korea raised its base rate by 25 bps to 1.25%, as expected.
Major European indices trade in the red. STOXX Europe 600: -0.8% (-0.9% week-to-date) Germany's DAX: -0.9% (-0.3% week-to-date) U.K.'s FTSE 100: -0.2% (+0.9% week-to-date) France's CAC 40: -0.8% (-1.1% week-to-date) Italy's FTSE MIB: -1.1% (-0.3% week-to-date) Spain's IBEX 35: -0.4% (+0.4% week-to-date).
In economic data:
Eurozone's November trade deficit EUR1.50 bln (expected surplus of EUR7.60 bln; last surplus of EUR3.30 bln) Germany's 2021 GDP 2.7%, as expected (last -4.6%)
U.K.'s November Industrial Production 1.0% m/m (expected 0.2%; last -0.5%); 0.1% yr/yr (expected 0.5%; last 0.2%). November Manufacturing Production 1.1% m/m (expected 0.2%; last 0.1%); 0.4% yr/yr (expected -0.3%; last 1.1%). November Construction Output 3.5% m/m (expected 0.5%; last -1.7%); 6.8% yr/yr (expected 2.9%; last 4.3%). November GDP 0.9% m/m (last 0.2%)
France's December CPI 0.2% m/m, as expected (last 0.4%); 2.8% yr/yr, as expected (last 2.8%)
Spain's December CPI 1.2% m/m (expected 1.3%; last 0.3%); 6.5% yr/yr (expected 6.7%; last 5.5%)
In news:
Growth in the U.K. has recovered to pre-pandemic levels while growth in Germany remains about 2% below its pre-pandemic level.
The eurozone reported an unexpected trade deficit for November due to higher prices of oil and gas imports.
December inflation readings from France and Spain remained well above target.
U.S. equity futures:
S&P 500 Futures: -16 @ 4,643
DJIA Futures: -101 @ 36,012
Nasdaq 100 Futures: -94 @ 15,401
Overseas:
Europe: DAX -0.9%, FTSE -0.2%, CAC -0.8%
Asia: Nikkei -1.3%, Hang Seng -0.2%, Shanghai Composite -1.0%
Commodities:
Crude Oil +0.35 @ 82.47
Nat Gas -0.043 @ 4.227
Gold -0.15 @ 1821.25
Silver -0.179 @ 22.983
Copper -0.0428 @ 4.5032
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Babylon (BBLN) expects its revenues in January 2022 to be over $80 million monthly, driven by the securing of US value-based care agreements which will deliver an estimated 88,000 organic new members, bringing global managed lives to over 440,000
BlackRock (BLK) beats by $0.28, reports revs in-line
Boston Beer (SAM) lowers EPS guidance for 2021; shipment growth and gross margins will be below guidance
Eldorado Gold (EGO) announces Q4 preliminary gold production
First Republic Bank (FRC) beats by $0.09, beats on revs
JPMorgan Chase (JPM) beats by $0.32, misses on revs
PROS Holdings (PRO) guides Q4 EPS and revenue above consensus estimates
SAP SE (SAP) guides Q4 earnings and revs above consensus; expects FY22 cloud revenue to grow 23-26% yr/yr
Sherwin-Williams (SHW) sees Q4 EPS below consensus; revs in-line
Wash. Federal (WAFD) beats by $0.01
Wells Fargo (WFC) beats by $0.38, beats on revs
General News:
President Biden will nominate Sarah Bloom Raskin to be Fed Vice Chair of Supervision. He will also nominate Lisa Cook and Philip Jefferson as Fed governors, according to CNBC
Senate will vote Tuesday on voting rights, but vote is expected to fail because Democrats do not have enough votes to change filibuster rules due to opposition from moderate Democrats, according to CNN
San Francisco Fed President Mary Daly supports March rate increase, according to Reuters
NRF responds to Supreme Court decision on OSHA employer vaccine mandate; says Supreme Court's decision is a "significant victory for employers"
White House announces actions following passage of bipartisan infrastructure bill last year
House Select Committee subpoenas social media cos TWTR, GOOG, FB re Jan 6 investigation, according to CNBC
Macau aiming to give a maximum of 6 casino licenses, according to Bloomberg
Cruise ship COVID-19 safety guidance will soon be optional, according to CNN
Albemarle (ALB) signs joint development agreement with 6K to develop novel lithium battery materials through potentially disruptive manufacturing processes
Aspen Aerogels (ASPN) CFO John Fairbanks to retire, effective April 1, 2022
Bausch Health's (BHC) wholly-owned subsidiary, Bausch + Lomb Corporation, files registration statement with SEC for proposed IPO
Biogen (BIIB): S&P downgrades to 'BBB+' from 'A-' on declining sales and lower growth prospects, outlook stable
Canon (CAJ) aiming to shutdown China factory for cameras, according to Reuters
Cardiovascular Systems (CSII): significant progress made toward the commercialization of intravascular lithotripsy systems to treat calcific coronary and peripheral artery disease
Castle Biosciences (CSTL): Recently Published Data Confirm DecisionDx-SCC as a Significant and Independent Risk-Stratification Tool in Patients with Squamous Cell Carcinoma and One or More Risk Factors
Chubb (CB) appoints D. Spitzer as Treasurer, K. Harkin appointed as CFO of N. Am. Insurance
Continental Resources (CLR) promotes John Hart to CFO
Copa Holdings (CPA) reports monthly traffic statistics for December
Corvus Pharmaceuticals (CRVS) partner initiates Phase 1/1b clinical trial of ITK inhibitor CPI-818 in China
HYZON Motors (HYZN) CEO gave an interview with Bloomberg News in which he stated that the Company expects to deliver between 500 and 700 commercial vehicles in the 2022 fiscal year
Kaiser Alum (KALU) increases its quarterly dividend 7% to $0.77/share
LumiraDx (LMDX) analysis confirms its COVID-19 antigen test detects the omicron variant
MagnaChip Semi (MX) launches eleven new generation high-voltage 600V SJ MOSFETS with mass production to begin in March 2022
Mastercard (MA) CEO stated "relatively positive" spending trends thus far in 2022, according to CNBC
Meta Platforms (FB): UK "Competition legal expert" expects to file lawsuit against FB for $3.1 bln, according to Tech Crunch
OraSure (OSUR) says its InteliSwab COVID-19 rapid tests detect Omicron as effectively as previous variants
Planet Labs (PL) reports successful launch of its 4x Flock, consisting of 44 SuperDove satellites, into orbit on a SpaceX Falcon 9 rocket
Premier's (PINC) subsidiary Contigo Health announces new partnership with OhioHealthy Plans; not expected to materially impact PINC's FY22 results
RR Donnelley & Sons (RRD) believes systems intrusion incident has been contained
SAP SE (SAP) authorizes new share repurchase program up to 1 billion; planned to be executed between Feb 1 and Dec 31, 2022
TechnipFMC (FTI) awarded integrated EPCI contract by Equinor (EQNR)
Tesla (TSLA) delays production of Cybertruck until next year, according to Reuters
Volkswagen (VWAGY) impacted by China coronavirus shutdowns, according to Bloomberg
Winnebago (WGO) to reveal an all-electric concept motorhome at the Florida RV Super Show on Jan 18
M&A:
Century Casinos (CNTY) subsidiary agrees to sell land and building in Calgary for CAD 8.1 mln
Citigroup (C) divests Consumer Bank in Indonesia, Malaysia, Thailand and Vietnam to UOB Group
ODP Corporation (ODP) announces that its Board of Directors determined to delay the previously announced public company separation to evaluate a potential sale of the Company's consumer business
Zendesk (ZEN) issues letter to shareholders regarding proposed acquisition of Momentive Global (MNTV)
Syndicate:
Brigham Minerals (MNRL) files mixed securities shelf offering
Perella Weinberg Partners (PWP) commences public offering of 3,502,033 shares of Class A common stock
Runway Growth Finance (RWAY) files for $250 mln mixed securities shelf offering
Spirit Realty Capital (SRC) prices offering of 8.2 mln shares of common stock at $47.60 per share
IPOs:
Priced to Trade: No IPOs expected to price.
Gapping Up/Down
Gapping up:
MNRL +4.2%, PL +3.6%, HYZN +2.6%, PRO +1.3%, RRD +1.2%, SPCE +1.2%, OSUR +1%, BHC +0.9%, C+0.9%, EGO +0.8%, SAP +0.8%, WAFD +0.8%, WGO+0.7%, TWTR +0.5%
Gapping down:
SAM -6.9%, PWP -5.4%, CSTL -5.3%, SRC -4.3%, ASPN -2%, MNTV -1.1%, BIIB -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
ATI Physical Therapy (ATIP) upgraded to Buy from Hold at Jefferies; tgt $5
Canadian Nat'l Rail (CNI) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $137
Check Point Software (CHKP) upgraded to Outperform from Mkt Perform at Raymond James; tgt $140
Chipotle Mexican Grill (CMG) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt lowered to $1920
Five Below (FIVE) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $230
Mosaic (MOS) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $50
O'Reilly Auto (ORLY) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $785
ONEOK (OKE) upgraded to Neutral from Sell at Goldman; tgt raised to $68
Downgrades:
BJ's Wholesale (BJ) downgraded to Underweight from Overweight at JP Morgan; tgt lowered to $60
Brinker (EAT) downgraded to Hold from Buy at Gordon Haskett; tgt $41
Cerence (CRNC) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $77
Cheniere Energy Partners (CQP) downgraded to Neutral from Buy at Goldman; tgt $45
Cognizant Tech (CTSH) downgraded to Neutral from Buy at Citigroup; tgt raised to $95
Corning (GLW) downgraded to Hold from Buy at Deutsche Bank; tgt $41
Digital Realty Trust (DLR) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $172
Domino's Pizza (DPZ) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $535
Ford Motor (F) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt raised to $26
MorphoSys (MOR) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $14
Walt Disney (DIS) downgraded to Neutral from Buy at Guggenheim; tgt $165
Others:
AdTheorent (ADTH) initiated with an Outperform at Cowen; tgt $8
Camtek (CAMT) resumed with a Buy at Stifel; tgt $47
Custom Truck One Source (CTOS) initiated with an Outperform at Robert W. Baird; tgt $11
Dada (DADA) initiated with a Buy at Mizuho; tgt $25
Honeywell (HON) initiated with a Hold at Berenberg; tgt $230
Upcoming Events:
Econ Data:
08:30 ET: Retail Sales for Dec (Briefing.comConsensus 0.0%; Prior 0.3%)
08:30 ET: Retail Sales ex-auto for Dec (Briefing.comConsensus 0.2%; Prior 0.3%)
08:30 ET: Import Price Index for Dec (Briefing.comConsensus NA; Prior 0.7%)
08:30 ET: Import Prices ex-oil for Dec (Briefing.comConsensus NA; Prior 0.5%)
08:30 ET: Export Price Index for Dec (Briefing.comConsensus NA; Prior 1.0%)
08:30 ET: Export Prices ex-ag for Dec (Briefing.comConsensus NA; Prior 1.0%)
09:15 ET: Industrial Production for Dec (Briefing.comConsensus 0.3%; Prior 0.5%)
09:15 ET: Capacity Utilization for Dec (Briefing.comConsensus 77.1%; Prior 76.8%)
10:00 ET: Business Inventories for Nov (Briefing.comConsensus 1.0%; Prior 1.2%)
10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for Jan (Briefing.comConsensus 68.5; Prior 70.6)
Earnings:
Monday (Jan 10)
Morning: AZZ CMC TLRY
Afternoon: ACCD
Tuesday (Jan 11)
Morning: ACI SNX
Wednesday (Jan 12)
Morning: JEF SJR
Afternoon: KBH
Thursday (Jan 13)
Morning: DAL TSM
Afternoon: WAFD
Friday (Jan 14)
Morning: BLK C FRC JPM WFC
Asia & Europe detail:
Asia: Nikkei -1.3%, Hang Seng -0.2%, Shanghai Composite -1.0%
Equity indices in the Asia-Pacific region ended the week on a mostly lower note. China reported a larger than expected trade surplus for December. Chinese press reported that China's infrastructure investment is expected to increase 8% yr/yr in 2022. Policymakers at the Bank of Japan may reportedly guide for a rate hike before the 2.0% inflation target is reached. Hopes for broad-based wage increases in Japan are diminishing. South Korea is planning an extra budget of about KRW14 trln. The Bank of Korea raised its base rate by 25 bps to 1.25%, as expected.
In economic data:
China's December trade surplus $94.46 bln (expected surplus of $74.50 bln; last surplus of $71.72 bln). December Imports 19.5% yr/yr (expected 26.3%; last 31.7%) and Exports 20.9% yr/yr (expected 20.0%; last 22.0%)
Japan's December PPI -0.2% m/m (expected 0.3%; last 0.7%); 8.5% yr/yr (expected 8.8%; last 9.2%)
India's December WPI Inflation 13.56% yr/yr (expected 13.50%; last 14.23%). December trade deficit $21.68 bln (expected deficit of $22.00 bln; last deficit of $21.99 bln)
Australia's November Home Loans 7.6% m/m (last -4.1%)
---Equity Markets---
Japan's Nikkei: -1.3% (-1.2% for the week)
Hong Kong's Hang Seng: -0.2% (+3.8% for the week)
China's Shanghai Composite: -1.0% (-1.6% for the week)
India's Sensex: UNCH (+2.5% for the week)
South Korea's Kospi: -1.4% (-1.1% for the week)
Australia's ASX All Ordinaries: -1.0% (-0.7% for the week)
---FX---
USD/JPY: -0.2% to 113.90
USD/CNH: -0.1% to 6.3577
USD/INR: +0.3% to 74.12
Europe: DAX -0.9%, FTSE -0.2%, CAC -0.8%
Major European indices trade in the red. Growth in the U.K. has recovered to pre-pandemic levels while growth in Germany remains about 2% below its pre-pandemic level. The eurozone reported an unexpected trade deficit for November due to higher prices of oil and gas imports. December inflation readings from France and Spain remained well above target.
In economic data:
Eurozone's November trade deficit EUR1.50 bln (expected surplus of EUR7.60 bln; last surplus of EUR3.30 bln)
Germany's 2021 GDP 2.7%, as expected (last -4.6%)
U.K.'s November Industrial Production 1.0% m/m (expected 0.2%; last -0.5%); 0.1% yr/yr (expected 0.5%; last 0.2%). November Manufacturing Production 1.1% m/m (expected 0.2%; last 0.1%); 0.4% yr/yr (expected -0.3%; last 1.1%). November Construction Output 3.5% m/m (expected 0.5%; last -1.7%); 6.8% yr/yr (expected 2.9%; last 4.3%). November GDP 0.9% m/m (last 0.2%)
France's December CPI 0.2% m/m, as expected (last 0.4%); 2.8% yr/yr, as expected (last 2.8%)
Spain's December CPI 1.2% m/m (expected 1.3%; last 0.3%); 6.5% yr/yr (expected 6.7%; last 5.5%)
---Equity Markets---
STOXX Europe 600: -0.8% (-0.9% week-to-date)
Germany's DAX: -0.9% (-0.3% week-to-date)
U.K.'s FTSE 100: -0.2% (+0.9% week-to-date)
France's CAC 40: -0.8% (-1.1% week-to-date)
Italy's FTSE MIB: -1.1% (-0.3% week-to-date)
Spain's IBEX 35: -0.4% (+0.4% week-to-date)
---FX---
EUR/USD: -0.1% to 1.1441
GBP/USD: UNCH at 1.3708
USD/CHF: +0.1% to 0.9118