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17/05/22 Briefing

Ram

The S&P 500 futures are up 67 points and trade 1.7% above fair value amid dip-buying activity, including in some of the beaten-down mega-caps. The tech-heavy Nasdaq 100 futures trade 1.9% above fair value.

Risk sentiment has also been supported by positive earnings results and guidance from Home Depot (HD 306.00, +10.01, +3.4%), an improved unit revenue outlook for Q2 from United Airlines (UAL 45.50, +1.96, +4.5%), and yesterday's news of Shanghai planning to relax COVID restrictions. Hong Kong is also planning to relax restrictions.

Walmart (WMT 138.28, -9.93, -6.7%), however, has dropped 7% in pre-market action on mixed earnings results/guidance in addition to an observation of changes in consumer behavior due to inflation.

Investors will get another update on the consumer through the Retail Sales report for April (Briefing.comconsensus 0.9%) at 8:30 a.m. ET. Also on the market's radar is Fed Chair Powell's conversation at a Wall Street Journal event at 2:00 p.m. ET.

Industrial Production (Briefing.comconsensus 0.5%) and Capacity Utilization (Briefing.comconsensus 78.6%) data for April will be released at 9:15 a.m. ET, followed by Business Inventories for March (Briefing.comconsensus 1.9%) and the NAHB Housing Market Index for May (Briefing.comconsensus 75) at 10:00 a.m. ET.

The Treasury market has softened up amid the rebound-minded bias in the futures market. The 2-yr yield is up four basis points to 2.62%, and the 10-yr yield is up four basis points to 2.92%. The U.S. Dollar Index is down 0.8% to 103.30. WTI crude futures are up 1.0% to $115.34/bbl.

In U.S. Corporate news:

  • Home Depot (HD 306.89, +10.01): +3.4% after beating top and bottom-line estimates and guiding FY23 EPS and revenue above consensus.

  • Walmart (WMT 138.28, -9.93): -6.7% after missing EPS estimates on above-consensus revenue, lowering its FY23 EPS guidance, and observing consumer "behavior changes" due to inflation. WMT guided Q2 revenue above consensus and raised its FY23 sales guidance.

  • United Airlines (UAL 45.50, +1.96): +4.5% after noting that the demand environment has continued to improve, resulting in a higher unit revenue outlook for Q2.

  • Twitter (TWTR 36.55, -0.84): -2.3% after Elon Musk said the TWTR deal "cannot move forward" until he gets information on percentage of fake accounts.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a higher note. Japan's Nikkei: +0.4% Hong Kong's Hang Seng: +3.3% China's Shanghai Composite: +0.7% India's Sensex: +2.5% South Korea's Kospi: +0.9% Australia's ASX All Ordinaries: +0.3%.

  • In economic data:

  • Japan's March Tertiary Industry Activity 1.3% m/m (expected 1.2%; last -1.8%)

  • India's April WPI Inflation 15.08% yr/yr (expected 14.48%; last 14.55%)

  • Singapore's April trade surplus SGD4.28 bln (last SGD4.191 bln). April non-oil exports -3.3% m/m (expected -1.3%; last -2.3%)


  • In news:

  • Japan will reportedly allow small groups of tourists to enter the country this month.

  • Korea Economic Research Institute reported that 43% of public companies fired some workers in 2021.

  • South Korea's finance minister said that there are no current plans for additional extra budgets.

  • The latest meeting minutes from the Reserve Bank of Australia showed that policymakers expect more rate hikes since the conditions for higher rates have been met.

  • Coronavirus restrictions in Hong Kong will be relaxed later this week.



  • Major European indices trade in the green. STOXX Europe 600: +1.5% Germany's DAX: +1.6% U.K.'s FTSE 100: +0.9% France's CAC 40: +1.4% Italy's FTSE MIB: +1.4% Spain's IBEX 35: +1.3%.

  • In economic data:

  • Eurozone's Q1 GDP 0.3% qtr/qtr (expected 0.2%; last 0.2%); 5.1% yr/yr (expected 5.0%; last 5.0%). Q1 Employment Change 0.5% qtr/qtr (last 0.4%)

  • U.K.'s March Average Earnings Index + Bonus 7.0% yr/yr (expected 5.4%; last 5.6%). April Claimant Count Change -56,900 (expected -42,500; last -81,600). March three-month employment change 83,000 (expected 5,000; last 10,000)

  • France's Q1 Unemployment Rate 7.3% (expected 7.4%; last 7.4%)

  • Italy's April CPI -0.1% m/m (expected 0.2%; last 1.0%); 6.0% yr/yr (expected 6.2%; last 6.5%)

  • Spain's March trade deficit EUR4.60 bln (last deficit of EUR4.30 bln)


  • In news:

  • European debt has been pressured after European Central Bank policymaker Knot said that markets should not rule out the potential for a 50 bps hike once the ECB begins raising rates in July.

  • Bank of England Governor Bailey said that the BoE has major concerns about second round effects from high inflation.

  • Germany's finance minister said that the Maastricht Treaty should not be loosened, but acknowledged that fiscal rules should be "more realistic and effective."



U.S. equity futures:

  • S&P 500 Futures: +62 @ 4,070

  • DJIA Futures: +389 @ 32,612

  • Nasdaq 100 Futures: +235 @ 12,478

Overseas:

  • Europe: DAX +1.6%, FTSE +0.9%, CAC +1.4%

  • Asia: Nikkei +0.4%, Hang Seng +3.3%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil +1.21 @ 113.03

  • Nat Gas +0.326 @ 8.282

  • Gold +19.96 @ 1833.96

  • Silver +0.319 @ 21.870

  • Copper +0.0800 @ 4.2715

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • AerCap (AER) beats by $0.67, misses on revs

  • Albireo Pharma (ALBO) reports Q1 (Mar) results, misses on revs

  • Allot Comms (ALLT) beats by $0.15; revs in-line; sees FY22 revs below consensus

  • BuzzFeed (BZFD) reports Q1 results, guides for Q2

  • Consensus Cloud Solutions (CCSI) beats by $0.06, reports revs in-line; reaffirms FY22 EPS guidance, revs guidance

  • F45 Training Holdings (FXLV) reports Q1 EPS of $0.03, may not compare to $0.13 consensus estimate, vs. $(1.26) year-ago quarter; revenue increased 175% yr/yr to $50.0 mln vs. $50.4 mln consensus estimate

  • GAN Limited (GAN) reports Q1 (Mar) results, beats on revs; reaffirms FY22 revs guidance

  • Global-E Online (GLBE) reports Q1 (Mar) results, beats on revs; guides Q2 revs below consensus; lowers FY22 revs guidance below consensus

  • Home Depot (HD) beats by $0.40, beats on revs; guides FY23 EPS above consensus, revs above consensus

  • HUYA (HUYA) beats by RMB0.07, beats on revs

  • IHS Holding Limited (IHS) reports EPS in-line, beats on revs; guides FY22 revs above consensus

  • IonQ (IONQ) beats by $0.04, reports revs in-line; guides Q2 revs above consensus; reaffirms FY22 revs guidance

  • Janus International Group (JBI) beats by $0.04; beats on revs; raises guidance

  • JD.com(JD) beats by RMB0.89, beats on revs

  • MAG Silver (MAG) reports Q1 (Mar) results

  • Microvast (MVST) reported Q1 earnings of $(0.29) per share, revenue growth of 146% yr/yr to $36.67 mln; reiterates FY22 revenue growth of +35-45% yr/yr

  • Nu Holdings (NU) reports Q1 earnings; revs grew 226% yr/yr to $877.2 mln, customers grew 61% yr/yr to 5.7 mln

  • On (ONON) beats by CHF0.09, beats on revs; guides FY22 revs above consensus

  • Riskified (RSKD) beats by $0.06, beats on revs; guides FY22 revs in-line

  • Rocket Lab USA (RKLB) reports Q1 (Mar) results, beats on revs; guides Q2 revs below consensus

  • Royalty Pharma (RPRX) gives select guidance ahead of Investor Day

  • Sea Limited (SE) beats by $0.42, beats on revs

  • Shoals Technologies (SHLS) misses by $0.02, misses on revs; guides FY22 revs in-line

  • Stratasys (SSYS) beats by $0.06, beats on revs; expects low to mid-teens percentage growth in Q2; reaffirms FY22 EPS guidance, guides FY22 revs above consensus

  • Take-Two (TTWO) reports MarQ results, beats on EPS, misses on net bookings; guides JunQ net bookings below consensus; guides FY23 net bookings below consensus

  • Tencent Music (TME) beats by RMB 0.01, reports revs in-line

  • United Airlines (UAL) provides an update on its Q2 outlook; notes that the demand environment has continued to improve resulting in a higher unit revenue outlook for Q2

  • Vimeo (VMEO) reports monthly metrics for April; total revenue increased 19% yr/yr

  • Vodafone PLC (VOD) reports in-line results; misses on revs; provides FY21 outlook

  • Walmart (WMT) misses by $0.18, beats on revs; guides Q2 EPS in-line, revs above consensus; Q1 comps +3%; lowers FY23 EPS guidance; raises FY23sales guidance; CFO seeing consumer "behavior changes" due to inflation


  • General News:

  • Ukrainian troops evacuate from Mariupol appearing to cede control of that city to Russia, according to Reuters

  • Turkish President Recep Tayyip Erdogan will not allow Finland and Sweden to join NATO, according to Bloomberg

  • Traders removed $7 bln in investments from Tether, according to Financial Times

  • White House announces Americans can order additional free at-home, rapid COVID-?19 Tests at COVIDTests.gov

  • Treasury Secretary Janet Yellen gives remarks at Brussels Economic Forum

  • Abbott Labs (ABT) enters into consent decree with FDA related to Sturgis, Michigan infant formula plant, could restart plant within two weeks once FDA confirms requirements have been met; also confirms FY22EPS guidance

  • AGCO Corp (AGCO) provides update on ransomware attack

  • Agios Pharma (AGIO) announces evolution of its research organization; to reduce up to 50 research roles

  • Beyond Air (XAIR) appoints Susan Howell Jones as CFO of Beyond Cancer business

  • Boeing (BA): China Southern Airlines (ZNH) removes Boeing 737 Max from its fleet plans, according to Bloomberg

  • BP (BP) & Linde (LIN) plan major CCS project to advance decarbonization efforts across Texas Gulf Coast

  • Brinker (EAT) CEO Wyman Roberts will retire, effective June 5; Kevin Hochman appointed as successor

  • CalAmp (CAMP) announced the election of Henry Maier as incoming Independent Chair of the CalAmp Board of Directors, effective as of the 2022 Annual Meeting of Stockholders

  • Coinbase Global (COIN) announces it is "slowing hiring so we can reprioritize our hiring needs against our highest-priority business goals"

  • Cytokinetics (CYTK) provides regulatory update related to New Drug Application for omecamtiv mecarbil; PDUFA target action date is November 30, 2022

  • Dada (DADA) reports Q1 results; beats on revs; sees Q2 revs in-line with expectations

  • Eneti (NETI) confirms Scorpio Holdings increased stake by 250K shares

  • Euroseas (ESEA) signs contract for construction of additional fuel efficient containerships

  • Gilead Sciences (GILD) announces lift of FDA hold on IND for lenacapavir for the treatment and prevention of HIV

  • Global Blood Therapeutics (GBT): FDA grants orphan drug approval for treatment of sickle cell disease

  • Heliogen (HLGN) to restate Full Year 2021 Financials

  • Incannex Healthcare (IXHL) completed a highly constructive pre-IND meeting with the FDA to discuss the development IHL-42X

  • Iris Energy (IREN) appoints Belinda Nucifora as CFO, effective today

  • Laboratory Corp (LH) launches first-of-its-kind at-home collection device for diabetes risk testing

  • Logitech Int'l SA (LOGI) increases yearly dividend 10% to CHF 0.96/share

  • Lordstown (RIDE) executive says the company's ability to stay in business depends on ability to raise capital, according to the Wall Street Journal

  • LSB Industries (LXU) authorizes a share repurchase program for up to $50 mln

  • Mirati Therapeutics (MRTX) announces appointment of Laurie Stelzer as CFO, effective May 16, 2022

  • Natural Gas Services (NGS) announced that Stephen C. Taylor, Chairman, President and Chief Executive Officer, will retire as President and Chief Executive Officer

  • Nestle (NSRGY) is moving baby formula supplies from US and Europe due to supply shortages, according to Reuters

  • New Pacific (NEWP) Intersects 595.7 m Interval Grading 1.25 g/t Gold and 10.25 m Interval Grading 1,213 g/t Silver at the Carangas Project

  • Nextdoor (KIND) announces first API partnership with Microsoft (MSFT) to deliver hyperlocal neighborhood content to users

  • Papa John's (PZZA) named Max Wetzel Executive Vice President and Chief Operating Officer

  • RenaissanceRe (RNR) announces renewal of share repurchase program, bringing total current authorization up to $500.0 mln

  • Repay Holdings (RPAY) authorizes share repurchase program to purchase up to $50 mln of the Company's Class A common stock

  • Ryder System (R) announces the further expansion of Ryder Last Mile, its customizable, multi-tiered delivery solution for big-and-bulky goods

  • Taiwan Semiconductor (TSM) aiming to raise prices further, according to Financial Times

  • TeraWulf (WULF) appoints Patrick Fleury as CFO, effective today

  • Teva (TEVA) Announces New Findings Highlighting Potential of ProAir Digihaler (albuterol sulfate) Inhalation Powder to Address Asthma Treatment Challenges

  • Twitter (Twitter has filed its preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with the previously announced agreement for Twitter to be acquired by affiliates of Elon Musk for $54.20 per share in cash) has filed its preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with the previously announced agreement for Twitter to be acquired by affiliates of Elon Musk for $54.20 per share in cash

  • UGI Corp (UGI) subsidiary receives funding for RNG projects in South Dakota

  • Vale S.A. (VALE) concludes buyback program and launches new program

  • Veracyte (VCYT) announces new data demonstrating clinical performance and utility of Percepta Nasal Swab test in lung cancer risk assessment

  • Vertex Pharma (VRTX) announces further expansion in the boston seaport at dedication of the Jeffrey Leiden Center for cell and genetic therapies

  • Zealand Pharma (ZEAL) announces asset purchase agreement with MannKind Corporation (MNKD) for V-Go insulin delivery device

  • Zebra Tech (ZBRA) announces the company's Board of Directors has authorized the repurchase of $1 bln shares of Zebra Technologies Corporation Common Stock


  • M&A:

  • AMN Healthcare (AMN) announces acquisition of Connetics USA; terms not disclosed

  • Brown & Brown (BRO) subsidiary acquires assets of Claim Technologies Incorporated; terms not disclosed

  • Clearfield (CLFD) to acquire Nestor Cables

  • First Solar (FSLR) agrees to sell project development and O&M platform in Japan to PAG Real Assets; terms not disclosed

  • Greentree Hospitality (GHG) entered into a definitive agreement to acquire Da Niang Dumplings and Bellagio

  • Intercontinental Exchange (ICE) provides update on divestment of Euroclear stake

  • KKR (KKR): Funds advised by KKR to acquire ContourGlobal for GBP 1.75 bln

  • PropTech Investment Corporation II (PTIC) to combine with Appreciate

  • SS&C Techs (SSNC) acquires MineralWare for $18 mln in cash

  • Twitter (TWTR): Elon Musk says TWTR deal "cannot move forward" until he gets information on percentage of fake accounts

  • Twitter (TWTR): SpaceX might be selling shares to fund Twitter bid, according to the New York Post

  • WillScot Mobile Mini (WSC) acquires Elite Modular Leasing and Sales; terms not disclosed


  • Syndicate:

  • Annaly Capital Management (NLY) announces public offering of 100.0 mln of its common shares

  • Impel Pharmaceuticals (IMPL) files for $200 mln mixed securities shelf offering

  • RH (RH) announces $500 mln incremental term debt financing


  • IPOs:

  • Priced to Trade:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • NU +10.8%, GAN +10.3%, TTWO +7.5%, IONQ +7.4%, ONON +7.1%, COIN +7%, TME +6.5%, RKLB +6.3%, MVST +5.7%, UUUU +5.7%, DADA +5.3%, HLGN +5%, SHLS +5%, IREN +4.9%, UAL +4.7%, HD +4.6%, FFIE+4.4%, DAC +4.1%, HUYA +3.3%, SSYS +3.2%, FXLV+3.2%, VALE +2.9%, IMPL +2.8%, NETI +2.6%, FSLR+2.5%, LOGI +2.2%, ABB +2%, CCSI +1.8%, IXHL+1.7%, LXU +1.4%, EAT +1.2%, WSC +1.2%, UGI +1%, RPAY +1%, VOD +1%


  • Gapping down:

  • GLBE -26.7%, BZFD -10.8%, ALBO -10.4%, NLY -4%, ALLT -3.8%, HPK -2.5%, VMEO -2.4%, TWTR -2.4%, VCYT -2%, SSNC -1.7%, ESEA -1.4%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Advanced Micro (AMD) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $140

  • Alliant Energy (LNT) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $60

  • Equity Residential (EQR) upgraded to Buy from Neutral at Mizuho; tgt lowered to $84

  • Essex Property (ESS) upgraded to Buy from Sell at Goldman; tgt lowered to $338

  • PBF Energy (PBF) upgraded to Neutral from Underweight at JP Morgan; tgt $34

  • Shake Shack (SHAK) upgraded to Mkt Perform from Underperform at Raymond James

  • Stratasys (SSYS) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $23

  • Ryanair Hldgs (RYAAY) upgraded to Strong Buy from Outperform at Raymond James; tgt $125

  • Teva Pharma (TEVA) upgraded to Neutral from Underperform at BofA Securities; tgt $9

  • Turtle Beach (HEAR) upgraded to Outperform from Neutral at Wedbush; tgt $27

  • Waters (WAT) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $330


  • Downgrades:

  • Camden Property (CPT) downgraded to Neutral from Buy at Goldman; tgt lowered to $158

  • Maxar Technologies (MAXR) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $25

  • Molson Coors Brewing (TAP) downgraded to Mkt Perform from Outperform at Bernstein; tgt $59

  • Nerdy (NRDY) downgraded to Neutral from Buy at Goldman; tgt lowered to $3

  • Q2 Holdings (QTWO) downgraded to Equal-Weight from Overweight at Stephens; tgt lowered to $50

  • Upwork (UPWK) downgraded to Hold from Buy at Stifel; tgt lowered to $20

  • UWM Holdings (UWMC) downgraded to Neutral from Outperform at Wedbush

  • Workday (WDAY) downgraded to Neutral from Buy at UBS


  • Others:

  • CNOOC Ltd (CEO) initiated with an Outperform at Credit Suisse

  • FactSet (FDS) initiated with a Sell at Redburn

  • J.B. Hunt Transport (JBHT) initiated with a Buy at The Benchmark Company; tgt $215

  • Livent (LTHM) initiated with a Hold at Deutsche Bank; tgt $29

  • Sportsman's Warehouse (SPWH) initiated with a Buy at B. Riley Securities; tgt $14


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Retail Sales for Apr (Briefing.comConsensus 0.9%; Prior 0.5%)

  • 08:30 ET: Retail Sales ex-auto for Apr (Briefing.comConsensus 0.3%; Prior 1.1%)

  • 09:15 ET: Industrial Production for Apr (Briefing.comConsensus 0.5%; Prior 0.9%)

  • 09:15 ET: Capacity Utilization for Apr (Briefing.comConsensus 78.6%; Prior 78.3%)

  • 10:00 ET: Business Inventories for Mar (Briefing.comConsensus 1.9%; Prior 1.5%)

  • 10:00 ET: NAHB Housing Market Index for May (Briefing.comConsensus 75; Prior 77)


  • 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 +0.4%, Hang Seng +3.3%, Shanghai Composite +0.7%

Equity indices in the Asia-Pacific region ended Tuesday on a higher note. Japan will reportedly allow small groups of tourists to enter the country this month. Korea Economic Research Institute reported that 43% of public companies fired some workers in 2021. South Korea's finance minister said that there are no current plans for additional extra budgets. The latest meeting minutes from the Reserve Bank of Australia showed that policymakers expect more rate hikes since the conditions for higher rates have been met. Coronavirus restrictions in Hong Kong will be relaxed later this week.

  • In economic data:

  • Japan's March Tertiary Industry Activity 1.3% m/m (expected 1.2%; last -1.8%)

  • India's April WPI Inflation 15.08% yr/yr (expected 14.48%; last 14.55%)

  • Singapore's April trade surplus SGD4.28 bln (last SGD4.191 bln). April non-oil exports -3.3% m/m (expected -1.3%; last -2.3%)


---Equity Markets---

  • Japan's Nikkei: +0.4%

  • Hong Kong's Hang Seng: +3.3%

  • China's Shanghai Composite: +0.7%

  • India's Sensex: +2.5%

  • South Korea's Kospi: +0.9%

  • Australia's ASX All Ordinaries: +0.3%

---FX---

  • USD/JPY: +0.2% to 129.31

  • USD/CNH: -0.7% to 6.7492

  • USD/INR: -0.5% to 77.45

Europe: DAX +1.6%, FTSE +0.9%, CAC +1.4%

Major European indices trade in the green. European debt has been pressured after European Central Bank policymaker Knot said that markets should not rule out the potential for a 50 bps hike once the ECB begins raising rates in July. Bank of England Governor Bailey said that the BoE has major concerns about second round effects from high inflation. Germany's finance minister said that the Maastricht Treaty should not be loosened, but acknowledged that fiscal rules should be "more realistic and effective."

  • In economic data:

  • Eurozone's Q1 GDP 0.3% qtr/qtr (expected 0.2%; last 0.2%); 5.1% yr/yr (expected 5.0%; last 5.0%). Q1 Employment Change 0.5% qtr/qtr (last 0.4%)

  • U.K.'s March Average Earnings Index + Bonus 7.0% yr/yr (expected 5.4%; last 5.6%). April Claimant Count Change -56,900 (expected -42,500; last -81,600). March three-month employment change 83,000 (expected 5,000; last 10,000)

  • France's Q1 Unemployment Rate 7.3% (expected 7.4%; last 7.4%)

  • Italy's April CPI -0.1% m/m (expected 0.2%; last 1.0%); 6.0% yr/yr (expected 6.2%; last 6.5%)

  • Spain's March trade deficit EUR4.60 bln (last deficit of EUR4.30 bln)


---Equity Markets---

  • STOXX Europe 600: +1.5%

  • Germany's DAX: +1.6%

  • U.K.'s FTSE 100: +0.9%

  • France's CAC 40: +1.4%

  • Italy's FTSE MIB: +1.4%

  • Spain's IBEX 35: +1.3%

---FX---

  • EUR/USD: +1.0% to 1.0531

  • GBP/USD: +1.3% to 1.2474

  • USD/CHF: -0.8% to 0.9939

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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