17/04/23 Briefing

The S&P 500 futures are up 4 points and are trading slightly above fair value. The Nasdaq 100 futures are down 4 points and are trading in line with fair value. The Dow Jones Industrial Average futures are up 60 points and are trading 0.2% above fair value.

The equity futures market is mixed this morning as investors await a slate of earnings results this week.

Treasury yields are moving higher. The 2-yr note yield is up three basis points to 4.14% and the 10-yr note yield is up two basis points to 3.54%. The U.S. Dollar Index is up 0.1% to 101.67. 

Energy complex futures are mixed. WTI crude oil futures are down 0.5% to $82.10/bbl and natural gas futures are up 2.6% to $2.17/mmbtu. 

Market participants will receive the following economic data today:

• 8:30 a.m. ET: April Empire State Manufacturing survey (prior -24.6)

• 10:00 a.m. ET: April NAHB Housing Market Index (prior 44)

• 4:00 p.m. ET: February Net Long-Term TIC Flows (prior $31.90 bln)

In corporate news:

• Taiwan Semiconductor Manufacturing (TSM 87.89, +0.69, +0.8%): will soon lower FY23 CapEX to $28-32 bln, according to Bloomberg

• Merck (MRK 115.15, -0.16, -0.1%): Prometheus Biosciences (RXDX) to be acquired by Merck (MRK) for $200.00 per share

• M&T Bank (MTB 120.24, +3.65, +3.1%): beats by $0.05

• Uber (UBER 31.88, +0.40, +1.3%): named a top pick with a Buy rating at Jefferies

• Fox (FOX 30.76, +0.001, +0.03%): Delaware Superior Court Judge announced a one-day trail delay in Dominion Voting Systems defamation suit against Fox News, aimed at giving the parties more time to possibly reach a deal, according to Bloomberg

• Alphabet (GOOG 105.40, -4.06, -3.7%): Samsung considering replacing Google with Microsoft's Bing, according to NY Times 

• State Street (STT 73.02, -7.01, -8.8%): misses by $0.12, reports revs in-line

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly higher note with China's Shanghai Composite reaching its best level since late June. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: +1.7%, China's Shanghai Composite: +1.4%, India's Sensex: -0.9%, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: +0.2%.

  • In economic data:

    • China's March House Prices -0.8% yr/yr (last -1.2%)

    • India's March WPI Inflation 1.34% yr/yr (expected 1.87%; last 4.80%)

    • Singapore's March trade surplus $6.166 bln (expected surplus of $5.881 bln; last surplus of $6.687 bln). March non-oil exports 18.4% m/m (expected 1.7%; last -8.2%); -8.3% yr/yr (expected -20.8%; last -15.8%)

    • New Zealand's March FPI 0.8% m/m (expected 0.4%; last 1.5%)

  • In news:

    • The Chinese government is reportedly blocking Secretary of State Blinken's visit to Beijing due to displeasure about an FBI probe into the downed Chinese spy balloon.

    • Shanghai's auto show will begin tomorrow and run through April 27.

    • Finance ministers from Japan and South Korea will hold their first meeting in seven years.

• Major European indices trade near their flat lines. STOXX Europe 600: +0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.4%, France's CAC 40: UNCH, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: +0.3%.

  • In economic data:

    • Italy's March CPI -0.4% m/m (expected -0.3%; last 0.2%); 7.6% yr/yr (expected 7.7%; last 9.1%)

  • In news:

    • European Central Bank policymaker Centeno said that the ECB should slow or pause its rate hikes while policymaker Kazaks said that there is an option for a 25- or 50-bps rate hike at the May meeting.

    • ECB officials are reportedly looking to halt all reinvestments in the asset purchase program during the second half of 2023.

    • Poland, Slovakia, and Hungary will stop importing grain from Ukraine due to pressure on local prices.

U.S. equity futures:

• S&P 500 Futures: +5 @ 4,143

• DJIA Futures: +54 @ 33,941

• Nasdaq 100 Futures: -2 @ 13,078

Overseas:

• Europe: DAX +0.1%, FTSE +0.4%, CAC UNCH

• Asia: Nikkei +0.1%, Hang Seng +1.7%, Shanghai Composite +1.4%

Commodities:

• Crude Oil -0.51 @ 81.92

• Nat Gas +0.055 @ 2.168

• Gold +6.85 @ 2022.65

• Silver +0.107 @ 25.567

• Copper -0.0167 @ 4.0898

Earnings/Guidance:

• Amneal Pharmaceuticals (AMRX) sees Q1 revs above consensus; reaffirms FY23 outlook

• Garrett Motion (GTX) sees Q1 revs above consensus; raises FY23 guidance

• HIVE Blockchain Technologies Ltd. (HIVE) reports March production

• LivaNova (LIVN) CEO Damien McDonald resigns; co also guides Q1 revs above consensus

• M&T Bank (MTB) beats by $0.05

• State Street (STT) misses by $0.12, reports revs in-line

• Taiwan Semiconductor Manufacturing (TSM) will soon lower FY23 CapEX to $28-32 bln, according to Bloomberg

News:

• Leaked documents show Taiwan is highly vulnerable to attacks from China, according to the Washington Post

• The Biden administration is seeing limited damage from classified intelligence leak, according to ABC News

• G7 agreed to phase out unabated fossil fuels but did not agree on timeframe to exit coal, according to Bloomberg

• Banks are feeling pressure to pay depositors more interest, according to the Wall Street Journal

• 23andMe (ME) Announces Phase 1 Results from the First-in-Human Phase 1/2a Study of 23ME-00610, an Investigational Antibody Targeting CD200R1

• AbbVie (ABBV) receives EC approval for RINVOQ for the treatment of moderately to severely active Crohn's Disease

• AdvanSix (ASIX) Chair of the Board Michael Marberry to retire effective June 15; Todd Karran named as new Chair

• Agenus (AGEN) receives Fast Track Designation for Botensilimab and Balstilimab in colorectal cancer

• Algonquin Power & Utilities (AQN) and American Electric Power (AEP) terminate Kentucky power transaction; AQN reaffirms guidance

• Amarin (AMRN) announces that the Company's Board of Directors has appointed Aaron Berg, currently Amarin's Executive Vice President and President of the U.S. Business, as Interim President and Chief Executive Officer

• Amazon (AMZN) warehouse safety under scrutiny, according to CNBC

• Aon (AON) announces 10% increase to its quarterly cash dividend to $0.615/share

• Apple (AAPL) to introduce mixed reality and MacBook products in June, according to Bloomberg

• Apple's (AAPL) India sales reach $6 bln, according to Bloomberg

• argenx (ARGX) and Genmab (GMAB) enter partnership to advance antibody therapies in immunology and oncology

• AstraZeneca (AZN) reports IMFINZI-based treatment before and after surgery reduced the risk of disease recurrence, progression events or death by 32% in resectable non-small cell lung cancer in the AEGEAN Phase III trial

• Barclays (BCS) will eliminate 100 investment banking jobs, according to Sky News

• Bio-Techne (TECH) and Lunaphore announce strategic partnership to develop the first fully automated spatial multiomics workflow with same-slide hyperplex detection of protein and RNA biomarkers

• BP (BP) begins oil production in $9 bln offshore Gulf of Mexico platform, according to Financial Times

• BriaCell Therapeutics (BCTX) presents "positive" data demonstrating survival and clinical benefits in advanced metastatic breast cancer at the 2023 AACR

• Bristol-Myers (BMY): Regulatory applications accepted across three regions globally for Abecma for earlier use in adults with triple-class exposed relapsed and/or refractory multiple myeloma

• Cellectis (CLLS) Presents Preclinical Data on TALEN-edited MUC1 CAR T-cells to Enhance Efficacy in Targeting Triple Negative Breast Cancer at the American Association for Cancer Research (AACR) Annual Meeting

• Disney (DIS): Florida Governor Ron DeSantis plans new crackdown measures against Disney, according to the New York Post

• Fox (FOXA) preparing for $1.6 bln defamation trial, according to the Wall Street Journal

• General Motors (GM) will remove Apple (AAPL) CarPlay from EVs, according to the Wall Street Journal

• Genesis Energy, L.P. (GEL) promotes Ryan Sims to President and Kristen Jesulaitis to CFO

• Gilead Sciences (GILD) reports Veklury (Remdesivir) Efficacy and Safety Profile Further Demonstrated in Vulnerable Patient Populations

• Ginkgo Bioworks (DNA) and Syngenta (SYT) announced a research partnership focused on screening a targeted genetic library for novel trait discovery

• GlaxoSmithKline (GSK) reports Gepotidacin's positive phase III data shows potential to be the first in a new class of oral antibiotics for uncomplicated urinary tract infections in over 20 years

• Google (GOOG) is preparing search engine changes to compete with artificial intelligence, according to the New York Times

• Gritstone bio (GRTS) presents advances in neoantigen prediction and cancer vaccine immunogenicity at the 2023 AACR Annual Meeting

• Incyte (INCY) and MorphoSys (MOR) report Five-Year Results of L-MIND Study Showed Prolonged, Durable Responses in Relapsed or Refractory DLBCL Patients Treated with Monjuvi (tafasitamab-cxix)

• JPMorgan Chase (JPM) reports March card metrics

• KAR Auction Services (KAR) names Brad Lakhia as CFO

• Kura Oncology (KURA) reports preclinical data supporting the potential use of farnesyl transferase inhibitors (FTIs) to treat various types of solid tumors in combination with targeted therapies

• LivaNova (LIVN) announces that Damien McDonald has resigned as CEO; effective immediately, Chair of the Board William A. Kozy is appointed interim CEO

• Merck's (MRK) KEYTRUDA (pembrolizumab) Plus Chemotherapy Significantly Improved Overall Survival Compared to Chemotherapy Alone in Patients With Advanced or Unresectable Biliary Tract Cancer

• Morgan Stanley (MS) considering Andy Saperstein for CEO, according to Bloomberg

• O-I Glass (OI) broke ground on its greenfield glass plant in Bowling Green, KY, its first facility that's purpose-built to leverage its MAGMA technology

• Panasonic (PCRFY) considers building EV plant in Oklahoma, according to Reuters

• Primo Water (PRMW) agreed to a proposal of settlement offered by Legion Partners Holdings; All four of Legion's candidates will be permitted to stand for election

• Regeneron Pharma (REGN): Aflibercept 8 mg and EYLE injection presentations at ARVO provide new insights into the treatment of serious retinal diseases

• Regeneron Pharma (REGN) announced that Roy Vagelos will retire from his role as Chair of the Company's Board of Directors and will not stand for reelection at the Company's 2023 Annual Meeting of Shareholders

• Roche Hldg (RHHBY) unit Genentech's Tecentriq Plus Avastin Reduced the Risk of Cancer Returning in People With Certain Types of Adjuvant Liver Cancer in a Phase III Study

• Sundial Growers (SNDL) announces that the Alberta Securities Commission has granted an extension to existing management cease trade order granted on April 3, 2023 from April 14 to April 24, 2023

• Teck Resources (TECK) issues statement from Dr. Norman Keevil

• TikTok: Montana approved a statewide ban on TikTok, according to the Wall Street Journal

• Vaxcyte (PCVX) Reports Positive Data from Phase 2 Study of its 24-Valent Pneumococcal Conjugate Vaccine Candidate, VAX-24, in Adults Aged 65 and Older and Full Six-Month Safety Data from Adult Phase 1/2 and Phase 2 Studies

• Wal Mart (WMT) making merchandise leadership changes, according to the Wall Street Journal

M&A:

• Graf Acquisition Corp. IV (GRAF): NKGen Biotech become publicly traded company via business combination with Graf Acquisition Corp. IV

• Maxar Technologies (MAXR) receives majority of regulatory consents required for previously proposed acquisition by Advent International

• Prometheus Biosciences (RXDX) to be acquired by Merck (MRK) for $200.00 per share

• Sega Sammy (SGAMY) to acquire Rovio Entertainment Oyj ~ global expansion of the consumer business through enhancement of mobile gaming capabilities

• Stryker (SYK): UK CMA has cleared the anticipated acquisition by Stryker Corporation of Cerus Endovascular Limited

• Target Hospitality (TH) acquired strategic assets focused on increasing portfolio capacity in support of the United States government's critical humanitarian aid mission

• Teck (TECK) was approached by three companies regarding deal for metals operations, according to Bloomberg

• UBS AG (UBS) and Credit Suisse (CS): Federal Reserve approves UBS's acquisition of the U.S. subsidiaries of CS

• Vontier (VNT) announced the sale of its Global Traffic Technologies business to Miovision for $107 mln, representing a transaction value of approximately 10X 2022 EBITDA

• ZeroFox Holdings (ZFOX) to acquire LookingGlass, broadening global attack surface intelligence capabilities

Syndicate:

• Apollo Global Management (APO) files mixed securities shelf offering

• Avita Medical (RCEL) files for $200 mln mixed securities shelf offering

• Galectin Therapeutics (GALT) files mixed securities shelf offering

IPOs:

• Expected to Price:

  • No IPOs expected.

Gapping Up/Down

• Gapping up:

  • RXDX +69.7%, AMRX +8.8%, MTB +4%, LIVN +3.3%, CLLS +2.9%, MAXR +2.6%, ME +2.3%, ZFOX +2.2%, OCUL +2.1%, PEBO +2%, AMX +2%, ARGX +1.4%, TECK +1.3%, YY +1%, SGML +1%

• Gapping down:

  • ASIX -2%, GALT -2%, HIVE -1.2%, RCEL -1%, MRK-0.7%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

• Upgrades

  • HP Inc. (HPQ) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $35

  • Lumentum (LITE) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $60

  • Ollie's Bargain Outlet (OLLI) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $66

  • Sallie Mae (SLM) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $17

  • Taiwan Semiconductor Manufacturing (TSM) upgraded to Positive from Neutral at Susquehanna; tgt $126

• Downgrades:

  • Dell (DELL) downgraded to Neutral from Overweight at JP Morgan; tgt $47

  • Infosys (INFY) downgraded to Neutral from Outperform at Macquarie

  • Kaltura (KLTR) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $1.75

  • Meta Platforms (META) downgraded to Neutral from Buy at New Street; tgt $220

  • Ovintiv (OVV) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $40

  • PENN Entertainment (PENN) downgraded to Mkt Perform from Mkt Outperform at JMP Securities

  • Teradyne (TER) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $81

  • Texas Roadhouse (TXRH) downgraded to Mkt Perform from Outperform at Raymond James

  • ViewRay (VRAY) downgraded to Hold from Buy at Jefferies; tgt lowered to $1.25

  • Wolfspeed (WOLF) downgraded to Neutral from Overweight and placed on Negative Catalyst Watch at JP Morgan; tgt lowered to $65

• Others:

  • Corsair Gaming (CRSR) initiated with a Neutral at Goldman; tgt $20

  • Hilton Grand Vacations (HGV) initiated with a Neutral at BofA Securities; tgt $50

  • Replimune (REPL) assumed with an Overweight at Piper Sandler; tgt $44

  • STAAR Surgical (STAA) initiated with a Neutral at Piper Sandler; tgt $65

  • Stem (STEM) initiated with a Market Perform at BMO Capital Markets; tgt $3.50

  • Travel + Leisure Co (TNL) initiated with an Underperform at BofA Securities; tgt $42

  • Viridian Therapeutics (VRDN) initiated with an Overweight at Wells Fargo; tgt $46

Econ Data:

• 08:30 ET: Empire State Manufacturing for Apr (Briefing.comConsensus -19.0; Prior -24.6)

• 10:00 ET: NAHB Housing Market Index for Apr (Briefing.comConsensus 45; Prior 44)

• 16:00 ET: Net Long-Term TIC Flows for Feb (Briefing.comConsensus NA; Prior $31.9B)

Earnings:

• Monday (Apr 17)

  • Morning:  SCHW MTB STT

  • Afternoon: ELS JBHT PNFP

• Tuesday (Apr 18)

  • Morning: BAC BK CBSH ERIC GS JNJ LMT PLD

  • Afternoon:  FHN FULT HWC ISRG MRTN NFLX OMC UAL UCBI WAL

• Wednesday (Apr 19)

  • Morning:  ABT ALLY ASML BKR CFG ELV LAD MS NDAQ EDU SYF TRV USB

  • Afternoon:  AA BDN CALX CNS CCI DFS EFX FNB FFIV FR IBM KMI LRCX LVS LBRT NBHC REXR RLI SLG STLD TSLA WTFC ZION

• Thursday (Apr 20)

  • Morning: ALK AXP T AN BMI BANC BHLB BX CMA DHI EWBC FITB GPC HRI HOMB HBAN IRDM KEY MAN MMC NOK NUE PM POOL RAD SASR SNA SNV TSM TCBI TFC UNP VIRT WSO WBS

  • Afternoon:  ASB OZK CATY CSX FFBC GBCI HTH KNX PPG STX SEIC VMI WRB

• Friday (Apr 21) 

  • Morning:  ALV FCX HCA PG RF SAP SLB

Asia & Europe detail:

Asia: Nikkei +0.1%, Hang Seng +1.7%, Shanghai Composite +1.4%

Equity indices in the Asia-Pacific region began the week on a mostly higher note with China's Shanghai Composite reaching its best level since late June. The Chinese government is reportedly blocking Secretary of State Blinken's visit to Beijing due to displeasure about an FBI probe into the downed Chinese spy balloon. Shanghai's auto show will begin tomorrow and run through April 27.Finance ministers from Japan and South Korea will hold their first meeting in seven years.

• In economic data:

  • China's March House Prices -0.8% yr/yr (last -1.2%)

  • India's March WPI Inflation 1.34% yr/yr (expected 1.87%; last 4.80%)

  • Singapore's March trade surplus $6.166 bln (expected surplus of $5.881 bln; last surplus of $6.687 bln). March non-oil exports 18.4% m/m (expected 1.7%; last -8.2%); -8.3% yr/yr (expected -20.8%; last -15.8%)

  • New Zealand's March FPI 0.8% m/m (expected 0.4%; last 1.5%)

---Equity Markets--- 

• Japan's Nikkei: +0.1%

• Hong Kong's Hang Seng: +1.7%

• China's Shanghai Composite: +1.4%

• India's Sensex: -0.9%

• South Korea's Kospi: +0.2%

• Australia's ASX All Ordinaries: +0.2%

---FX---

• USD/JPY: +0.2% to 133.97

• USD/CNH: +0.1% to 6.8726

• USD/INR: +0.2% to 81.96

Europe: DAX +0.1%, FTSE +0.4%, CAC UNCH

Major European indices trade near their flat lines. European Central Bank policymaker Centeno said that the ECB should slow or pause its rate hikes while policymaker Kazaks said that there is an option for a 25- or 50-bps rate hike at the May meeting. ECB officials are reportedly looking to halt all reinvestments in the asset purchase program during the second half of 2023. Poland, Slovakia, and Hungary will stop importing grain from Ukraine due to pressure on local prices.

• In economic data:

  • Italy's March CPI -0.4% m/m (expected -0.3%; last 0.2%); 7.6% yr/yr (expected 7.7%; last 9.1%)

---Equity Markets---

• STOXX Europe 600: +0.1%

• Germany's DAX: +0.1%

• U.K.'s FTSE 100: +0.4%

• France's CAC 40: UNCH

• Italy's FTSE MIB: +0.1%

• Spain's IBEX 35: +0.3%

---FX---

• EUR/USD: -0.1% to 1.0982

• GBP/USD: UNCH at 1.2417 

• USD/CHF: +0.1% to 0.8940