The S&P 500 futures are up 15 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 29 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 130 points and are trading 0.3% above fair value.
Stock futures have been sporting a positive disposition so far this morning. Some optimism about the debt ceiling talks along with Western Alliance's (WAL) encouraging deposit growth update seem to be overshadowing lingering worries about economic growth after Target (TGT) indicated that sales trends softened in the first quarter.
Treasuries are little changed from yesterday's settlement levels. The 2-yr note yield is unchanged at 4.07% and the 10-yr note yield is down three basis points to 3.51%.
The MBA Mortgage Applications Index fell 5.7% with purchase applications declining 4.8% and refinancing applications dropping 8.0%.
Other economic data today includes:
8:30 ET: April Housing Starts (Briefing.comconsensus 1.405 mln; prior 1.420 mln) and Building Permits (Briefing.comconsensus 1.438 mln; prior 1.413 mln)
10:30 ET: Weekly crude oil inventories (prior +2.95 mln)
In corporate news:
Target (TGT 156.75, -0.16, -0.1%): beats by $0.26, misses on revs; guides Q2 EPS below consensus; reaffirms FY24 EPS guidance
Western Alliance Bancorp (WAL 34.86, +3.27, +10.4%): in 2Q23 Investor Update slides: deposits stabilized by March 20 and resumed growth trajectory; QTD deposit growth exceeded $2.0 bln as of May 12
Keysight (KEYS 158.54, +12.02, +8.2%): beats by $0.17, reports revs in-line; guides Q3 EPS above consensus, revs in-line
Wynn Resorts (WYNN 106.00, +2.95, +2.9%): upgraded to Overweight from Equal Weight at Barclays
Tesla (TSLA 169.08, +2.56, +1.5%): at yesterday's share holder meeting, CEO Elon Musk teases "two new products"
TJX (TJX 77.15, -1.07, -1.4%): beats by $0.05, reports revs in-line; guides Q2 EPS below consensus; lowers top end of FY24 EPS below consensus; Q1 comps +3%
Doximity (DOCS 30.62, -3.25, -9.6%): beats by $0.03, reports revs in-line; guides JunQ revs below consensus; guides FY24 (Mar) revs in-line
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Wednesday on a mixed note, though Japan's Nikkei reached its best level since September 2021. Japan's Nikkei: +0.8%, Hong Kong's Hang Seng: -2.1%, China's Shanghai Composite: -0.2%, India's Sensex: -0.6%, South Korea's Kospi: +0.6%, Australia's ASX All Ordinaries: -0.5%
In economic data:
China's April House Prices -0.2% yr/yr (last -0.8%) and April FDI 2.2% YTD (last 4.9%)
Japan's flash Q1 GDP 0.4% qtr/qtr (expected 0.1%; last 0.0%); 1.6% yr/yr (expected 0.7%; last -0.1%). Q1 Private Consumption 0.6% qtr/qtr (expected 0.4%; last 0.2%). GDP Price Index 2.1% yr/yr (expected 2.0%; last 1.2%). March Industrial Production 1.1% m/m (expected 0.8%; last 4.6%) and Capacity Utilization 0.8% m/m (expected 1.5%; last 3.9%)
Australia's Q1 Wage Price Index 0.8% qtr/qtr (expected 0.9%; last 0.8%); 3.7% yr/yr (expected 3.6%; last 3.4%)
Singapore's April trade surplus $4.713 bln (expected surplus of $6.346 bln; last surplus of $6.207 bln). April non-oil exports 2.7% m/m (expected -3.0%; last 18.4%); -9.8% yr/yr (expected -9.4%; last -8.3%)
In news:
Japan's Prime Minister Kishida will meet with executives from seven major chipmakers on Thursday.
Australia's Prime Minister Albanese said that next week's meeting of Quad leaders will now be held in Japan instead of Australia.
Australia's Wage Price Index for Q1 increased at its fastest pace since Q3 2012.
ANZ expects that the Reserve Bank of New Zealand will raise its official cash rate by another 50 bps by July.
Major European indices trade near their flat lines while Germany's DAX (+0.5%) outperforms. STOXX Europe 600: -0.1%, Germany's DAX: +0.5%, U.K.'s FTSE 100: -0.1%, France's CAC 40: UNCH, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: UNCH.
In economic data:
Eurozone's April CPI 0.6% m/m (expected 0.7%; last 0.9%); 7.0% yr/yr, as expected (last 6.9%). April Core CPI 1.0% m/m, as expected (last 1.3%); 5.6% yr/yr, as expected (last 5.7%)
France's Q1 Unemployment Rate 7.1%, as expected (last 7.1%)
Italy's March trade surplus EUR7.54 bln (expected surplus of EUR2.50 bln; last surplus of EUR2.10 bln)
In news:
Siemens reported better than expected quarterly results and raised its outlook for the year while SAP announced a new buyback.
European Central Bank policymaker de Cos said that the central bank is nearing the end of its tightening cycle while British Chancellor Hunt said that the U.K. is on the right path to lower inflation and rates.
U.S. equity futures:
S&P 500 Futures: +13 @ 4,123
DJIA Futures: +108 @ 33,121
Nasdaq 100 Futures: +25 @ 13,451
Overseas:
Europe: DAX +0.5%, FTSE -0.1%, CAC UNCH
Asia: Nikkei +0.8%, Hang Seng -2.1%, Shanghai Composite -0.2%
Commodities:
Crude Oil +0.17 @ 71.03
Nat Gas +0.047 @ 2.423
Gold -1.75 @ 1991.25
Silver -0.033 @ 23.86
Copper +0.0495 @ 3.7165
Earnings/Guidance:
Aegon N.V. (AEG) provides Q1 trading update
Agilysys (AGYS) beats by $0.04, beats on revs; guides FY24 revs in-line
Dorian LPG (LPG) sees Q4 revs above consensus
Doximity (DOCS) beats by $0.03, reports revs in-line; guides JunQ revs below consensus; guides FY24 (Mar) revs in-line
Dynatrace (DT) beats by $0.09, beats on revs; guides Q1 EPS in-line, revs above consensus; guides FY24 EPS in-line, revs above consensus
Keysight (KEYS) beats by $0.17, reports revs in-line; guides Q3 EPS above consensus, revs in-line
Kyndryl (KD) reports Q4 (Mar) results, beats on revs; guides FY24 revs slightly below consensus
NextGen Healthcare (NXGN) beats by $0.02, beats on revs; guides FY24 EPS in-line, revs above consensus
Riskified (RSKD) misses by $0.03, reports revs in-line; reaffirms FY23 revs guidance
Siemens AG (SIEGY) reports Q2 results; raises outlook
Target (TGT) beats by $0.26, misses on revs; guides Q2 EPS below consensus; reaffirms FY24 EPS guidance
Tencent (TCEHY) reports Q1 results & provides outlook
TJX (TJX) beats by $0.05, reports revs in-line; guides Q2 EPS below consensus; lowers top end of FY24 EPS below consensus; Q1 comps +3%
Triumph Group (TGI) beats by $0.15, beats on revs; guides FY24 revs in-line
WalkMe Ltd. (WKME) beats by $0.03, beats on revs; guides Q2 revs below consensus; guides FY23 revs in-line
Western Alliance Bancorp (WAL) in 2Q23 Investor Update slides: deposits stabilized by March 20 and resumed growth trajectory; QTD deposit growth exceeded $2.0 bln as of May 12
Wix.com(WIX) beats by $0.75, beats on revs; guides Q2 revs above consensus; raises FY23 revs outlook
News:
President Biden and House Speaker Kevin McCarthy show optimism about debt ceiling talks, but acknowledge both sides are still far apart. President Biden will shorten his international trip to continue in-person negotiations, according to the New York Times
House Speaker McCarthy says "still very far apart" on reaching a deal to lift the debt ceiling
Senate Majority Leader Schumer says having bipartisan bill in both chambers is only way we can avoid a default
Offices remain half empty as companies settle into hybrid work arrangements, according to the Wall Street Journal
Nevada lithium mine will be allowed to move forward, according to AP
2seventy bio (TSVT) presents broad range of new data highlighting novel approaches across its cell therapies portfolio
Accuray (ARAY) CyberKnife and TomoTherapy Platforms Featured in More Than 55 Abstracts Presented at ESTRO 2023, Reinforcing Systems' Versatility, Efficiency and Effectiveness
Ardelyx (ARDX) announces FDA acceptance and six-month review for resubmission of its new drug application of XPHOZAH
AstraZeneca (AZN) reports Tagrisso plus chemotherapy demonstrated strong improvement in progression-free survival for patients with EGFR-mutated advanced lung cancer in FLAURA2 Phase III trial
Avidity Biosciences (RNA): FDA has eased the partial clinical hold on AOC 1001
Axon (AXON) signs 10-year contract for Axon Justice Premier with the San Bernardino County District Attorney's Office
Bunge (BG) and Nutrien announce alliance and commercial agreement to provide crop consulting services and contracts with farmers to manage harvest and post-harvest commercialization
Century Casinos, Inc. (CNTY) announces sale-leaseback of four properties in Alberta, Canada
DocuSign (DOCU) appoints Blake Grayson as CFO, succeeding Cynthia Gaylor who will remain as CFO through the release of the company's Q1 earnings
Editas Medicine (EDIT) announces appointment of Erick Lucera as Executive Vice President and Chief Financial Officer, effective May 17, 2023
Edwards Lifesciences (EW) reports data from Benchmark Registry demonstrate improved TAVR efficiency with preserved patient safety
Infinera Corporation (INFN) Announces the Repurchase of Approximately $83.9M of Convertible Senior Notes Due 2024 using Proceeds from the Reopening of Convertible Senior Notes Due 2028
Innoviz Technologies (INVZ) announced that a major existing leading global automotive customer aims to expand its use of the InnovizTwo LiDAR to an existing light commercial vehicle program
Intercept Pharmaceuticals (ICPT) receives FDA Orphan drug designation for the fixed-dose combination of OCA and Bezafibrate for the treatment of Primary Biliary Cholangitis
L3Harris (LHX) awarded $8.12 bln U.S. Air Force contract modification
Lyft (LYFT) names Erin Brewer CFO, effective July 10; succeeds Elaine Paul
Middlesex Water's (MSEX) President and CEO announces plans to retire for the later of December 31, 2023or, the date when a successor is duly named and on board
Newegg Commerce (NEGG) announced its PC Builder shopping tool reached a milestone for results after ChatGPT artificial intelligence was implemented
New Found Gold Corp. (NFGC) intercepts 5.16 g/t Au Over 28.65m & 4.02 g/t Au Over 14.65m at Keats West
Northrop Grumman (NOC) increases quarterly dividend 8% to $1.87/share from $1.73/share
Prime Medicine's (PRME) PASSIGE technology shows potential to generate multiplex-edited CAR-T cells for the treatment of certain cancers and immune diseases
ProPetro (PUMP) announces $100 mln share repurchase program
PTC Therapeutics (PTCT): APHENITY trial achieved primary endpoint
PulteGroup (PHM) names Matthew Koart as COO, effective May 18; succeeds John Chadwick who retired on April 21
Roche Hldg (RHHBY) reports Genentech's BTK Inhibitor Fenebrutinib Significantly Reduced Brain Lesions in People With Relapsing Forms of Multiple Sclerosis
Sapiens Int'l (SPNS) announces that Atain selected Sapiens CoreSuite for P&C SaaS solution to provide its specialty lines with greater automation and standardization
ScanSource (SCSC) announces it was subject to a ransomware attack impacting some of its systems; launches investigation
ServiceNow (NOW) authorizes up to $1.5 bln for share repurchases in its first-ever buyback program
Sony (SONY): Sky and Sony Pictures Television announce partnership extension across UK & Ireland
Sony (SONY) approves 25 mln share repurchase program
Stellantis (STLA) believes a key factory could close without Brexit deal, according to Financial Times
Takeda Pharma (TAK) granted Priority Review from FDA for TAK-755
Tesla (TSLA) CEO Elon Musk in interview says that next 12 months will be different for the company due to economic reasons, CNBC
Tesla (TSLA) shareholder meeting: mentioned two new products that will be "head and shoulders" above anything in the industry; estimates will make over 5.0 mln units of these two new products combined; did not unveil anything today
Tesla (TSLA) shareholder meeting: working towards developing an EV that is cheaper than a gasoline vehicle
UBS AG (UBS) filed an amended Form F-4 registration statement with the SEC, including pro forma financial information
Virgin Galactic (SPCE) announced that the flight window for its upcoming spaceflight will open on May 25, 2023- The Unity 25 mission specialists will begin astronaut training on May 22, 2023
WesBanco Inc (WSBC) announces that its CEO plans to retire, effective August 1, 2023
X4 Pharmaceuticals (XFOR) Announces Positive Phase 3 Results Showing Mavorixafor Reduced the Rate, Severity, and Duration of Infections vs. Placebo in Participants Diagnosed with WHIM Syndrome
M&A:
ANSYS (ANSS) enters into definitive agreement to acquire Diakopto; acquisition not expected to have material impact on financials in 2023
Manchester United (MANU): Qataris aiming to bid for Manchester United, according to Sunday Times
PayPal (PYPL) aiming to sell Xoom, according to The Information
UnitedHealth (UNH): UK CMA gives more details on phase one decision regarding UNH acquisition of EMIS Group Plc.
Wheaton Precious Metals (WPM) acquires gold stream from Lumina Gold's Cangrejos Project
Syndicate:
Akero Therapeutics (AKRO) prices offering of 5,238,500 shares of common stock at $42.00 per share
AZEK (AZEK) announces pricing offering of 14 mln shares of Class A common stock by an entity affiliated with Ares Management Corporation and Ontario Teachers' Pension Plan Board and concurrent share repurchase
Everest Re (RE) prices offering of 3.6 mln shares of common stock at $360.00 per share
Gates Industrial (GTES) announces secondary offering of 22,500,000 ordinary shares
Hess Midstream Partners (HESM) prices secondary offering of 11.1 mln Class A shares at $27.00 per Class A share
Intapp (INTA) files mixed shelf securities offering; also files for 47,816,280 shares of its common stock by selling shareholders
Maxeon Solar (MAXN) files mixed shelf securities offering; announces public offering of an aggregate of 6.8 mln ordinary shares
MultiPlan (MPLN) files for 21,588,652 shares of common stock by selling shareholders
New York Community (NYCB) announces secondary offering of 39,032,006 common stocks by the federal deposit insurance corporation
OneSpaWorld (OSW) prices secondary offering of 9.0 mln shares of common stock at $10.00 per share
Tecnoglass (TGLS) files mixed shelf securities offering; commences public offering of 2,000,000 shares to be sold by Energy Holding Corporation
Veeco Instruments (VECO) announces proposed private offering of $200 million of convertible senior notes
IPOs:
No IPOs expected to price.
Gapping Up/Down
Gapping up:
WAL +10%, KEYS +7.5%, WIX +6.7%, AEG +5.7%, TGI+3.7%, NXGN +3.3%, LPG +3%, PDLB +2.8%, MPLN+2.6%, ICPT +2.4%, TSLA +1.6%, NYCB +1.5%, NOW+0.9%
Gapping down:
DOCS -10.9%, OSW -8.2%, SEAT -8.1%, AGYS -6.9%, EVGO -6.6%, KD -6.5%, HESM -6.2%, TGLS -5.7%, MAXN -5.5%, INTA -5.2%, VECO -4.9%, RE -3.4%, GTES -1.4%, SCSC -1.3%, AZEK -1.1%, XFOR -1.1%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Airbnb (ABNB) upgraded to Buy from Accumulate at Phillip Securities; tgt $143
APi Group (APG) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $29
AppLovin (APP) upgraded to Buy from Neutral at BofA Securities; tgt raised to $27
BioNTech (BNTX) upgraded to Buy from Neutral at Redburn; tgt raised to $170
Fluence (FLNC) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $26
iQIYI (IQ) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $8
Norfolk Southern (NSC) upgraded to Outperform from In-line at Evercore ISI; tgt $242
Old Dominion (ODFL) upgraded to Outperform from In-line at Evercore ISI; tgt $350
Tencent Music (TME) upgraded to Buy from Hold at China Renaissance; tgt $10.60
Tencent Music (TME) upgraded to Buy from Neutral at Citigroup; tgt $9.70
Tencent Music (TME) upgraded to Neutral from Underperform at Macquarie; tgt raised to $7.40
Visteon (VC) upgraded to Buy from Neutral at Guggenheim; tgt $161
Wynn Resorts (WYNN) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $135
Downgrades:
Consolidated Water (CWCO) downgraded to Neutral from Buy at Janney; tgt $19
Knight-Swift (KNX) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $60
Magellan Midstream (MMP) downgraded to Neutral from Buy at Citigroup; tgt raised to $63
Magellan Midstream (MMP) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt raised to $66
Nutrien (NTR) downgraded to Hold from Buy at Berenberg; tgt lowered to $49
On (ONON) downgraded to Sell from Hold at Williams Trading; tgt $26
Werner Enterprises (WERN) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $48
WeWork (WE) downgraded to Neutral from Buy at Mizuho; tgt lowered to $0.30
Others:
Blue Foundry Bancorp (BLFY) initiated with a Neutral at Piper Sandler; tgt $9.50
Disc Medicine (IRON) initiated with an Outperform at Raymond James; tgt $50
EVgo Inc. (EVGO) initiated with a Buy at Stifel; tgt $9
Kura Oncology (KURA) initiated with a Buy at BTIG Research; tgt $31
Madison Square Garden Entertainment (MSGE) initiated with a Buy at Guggenheim; tgt $37
NorthWestern (NWE) initiated with a Neutral at Ladenburg Thalmann; tgt $57.50
Old Republic (ORI) initiated with a Neutral at Piper Sandler; tgt $27
Vizsla Silver Corp. (VZLA) initiated with a Buy at Alliance Global Partners; tgt $3.25
Econ Data:
07:00 ET: MBA Mortgage Applications Index for May 13 (Briefing.comConsensus NA; Prior 6.3%)
08:30 ET: Housing Starts for Apr (Briefing.comConsensus 1405K; Prior 1420K)
08:30 ET: Building Permits for Apr (Briefing.comConsensus 1438K; Prior 1413K)
10:30 ET: EIA Crude Oil Inventories for May 13 (Briefing.comConsensus NA; Prior +2.95M)
Earnings:
Monday (May 15)
Morning: AZUL CTLT MNDY SFL TSEM TPG
Afternoon: NVTS
Tuesday (May 16)
Morning: BIDU HD HUYA ONON PSFE SE SSYS TME
Afternoon: AGYS CPRT DOCS KEYS KD NXGN
Wednesday (May 17)
Morning: DT JACK RSKD TGT TJX TGI WKME WIX
Afternoon: BOOT CSCO DLO SQM STNE SNPS TTWO VSAT ZTO
Thursday (May 18)
Morning: WMS BABA BBWI BRC GOOS CSIQ DOLE EXP GRAB BEKE MNRO WMT
Afternoon: AMAT DXC FTCH FLO GLOB ROST
Friday (May 19)
Morning: DE FL RBC
Asia & Europe detail:
Asia: Nikkei +0.8%, Hang Seng -2.1%, Shanghai Composite -0.2%
Equity indices in the Asia-Pacific region ended Wednesday on a mixed note, though Japan's Nikkei reached its best level since September 2021. Japan's Prime Minister Kishida will meet with executives from seven major chipmakers on Thursday. Australia's Prime Minister Albanese said that next week's meeting of Quad leaders will now be held in Japan instead of Australia. Australia's Wage Price Index for Q1 increased at its fastest pace since Q3 2012. ANZ expects that the Reserve Bank of New Zealand will raise its official cash rate by another 50 bps by July.
In economic data:
China's April House Prices -0.2% yr/yr (last -0.8%) and April FDI 2.2% YTD (last 4.9%)
Japan's flash Q1 GDP 0.4% qtr/qtr (expected 0.1%; last 0.0%); 1.6% yr/yr (expected 0.7%; last -0.1%). Q1 Private Consumption 0.6% qtr/qtr (expected 0.4%; last 0.2%). GDP Price Index 2.1% yr/yr (expected 2.0%; last 1.2%). March Industrial Production 1.1% m/m (expected 0.8%; last 4.6%) and Capacity Utilization 0.8% m/m (expected 1.5%; last 3.9%)
Australia's Q1 Wage Price Index 0.8% qtr/qtr (expected 0.9%; last 0.8%); 3.7% yr/yr (expected 3.6%; last 3.4%)
Singapore's April trade surplus $4.713 bln (expected surplus of $6.346 bln; last surplus of $6.207 bln). April non-oil exports 2.7% m/m (expected -3.0%; last 18.4%); -9.8% yr/yr (expected -9.4%; last -8.3%)
---Equity Markets---
Japan's Nikkei: +0.8%
Hong Kong's Hang Seng: -2.1%
China's Shanghai Composite: -0.2%
India's Sensex: -0.6%
South Korea's Kospi: +0.6%
Australia's ASX All Ordinaries: -0.5%
---FX---
USD/JPY: +0.5% to 136.96
USD/CNH: +0.3% to 7.0122
USD/INR: +0.1% to 82.35
Europe: DAX +0.5%, FTSE -0.1%, CAC UNCH
Major European indices trade near their flat lines while Germany's DAX (+0.5%) outperforms. Siemens reported better than expected quarterly results and raised its outlook for the year while SAP announced a new buyback. European Central Bank policymaker de Cos said that the central bank is nearing the end of its tightening cycle while British Chancellor Hunt said that the U.K. is on the right path to lower inflation and rates.
In economic data:
Eurozone's April CPI 0.6% m/m (expected 0.7%; last 0.9%); 7.0% yr/yr, as expected (last 6.9%). April Core CPI 1.0% m/m, as expected (last 1.3%); 5.6% yr/yr, as expected (last 5.7%)
France's Q1 Unemployment Rate 7.1%, as expected (last 7.1%)
Italy's March trade surplus EUR7.54 bln (expected surplus of EUR2.50 bln; last surplus of EUR2.10 bln)
---Equity Markets---
STOXX Europe 600: -0.1%
Germany's DAX: +0.5%
U.K.'s FTSE 100: -0.1%
France's CAC 40: UNCH
Italy's FTSE MIB: -0.1%
Spain's IBEX 35: UNCH
---FX---
EUR/USD: -0.2% to 1.0835
GBP/USD: -0.2% to 1.2459
USD