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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