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16/08/22 Briefing




The S&P 500 futures are down 4 points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 21 points and are 0.3% below fair value. The Dow Jones Industrial Average futures are down 9 points and are trading slightly above fair value.

Futures for the major indices are softer this morning after yesterday's rally. The Dow Jones Industrial Average futures recouped some losses after Walmart's (WMT) favorable earnings report.

In overseas news, China's government announced that new onshore bond issues from select developers will be guaranteed and there was speculation that the government will provide additional stimulus to boost growth. Also, there are growing expectations that a nuclear deal with Iran will be reached. Iran said Monday there are several issues with the nuclear deal that the U.S. needs to address before Iran will agree to it. 

Market participants will receive the July Housing Starts (Briefing.comconsensus 1.543 million; prior 1.559 million) and Building Permits (Briefing.comconsensus 1.647 million; prior 1.685 million) at 8:30 a.m. ET. July Industrial Production (Briefing.comconsensus +0.3%; prior -0.2%) and Capacity Utilization (Briefing.comconsensus 80.2%; prior 80.0%) at 9:15 a.m. ET.

Energy complex futures are on the rise. WTI crude oil futures are up 1.0% to $90.26/bbl. Natural gas futures are up 3.1% to $9.00/mmbtu. Unleaded gasoline futures are up 0.1% to $2.95/gal.

Treasury yields are also on the rise with the 2-yr note yield up two basis points to 3.20% while the 10-yr note yield is up two basis points to 2.81%.

In corporate news:

  • Walmart (WMT 137.59, +4.99, +3.76%): beats by $0.17, beats on revs; Q2 US comps +6.5%; guides Q3 EPS in-line; raises FY23 EPS above consensus

  • Home Depot (HD 313.23, -1.38, -0.44%): beats by $0.12, beats on revs; Q2 comps +5.8%; reaffirms EPS, revs, and comp guidance

  • American Airlines (AAL 15.34, +0.01, +0.07%): American Airlines removes 31000 flights from November schedule.

  • Tencent Music (TME 4.8500, +0.18, +3.85%): beats by $0.08, beats on revs

  • Sea Limited (SE 86.19, -3.78, -4.20%): beats by $0.03, misses on revs; will be suspending e-commerce GAAP revenue guidance for the full year 2022

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: -1.1%, China's Shanghai Composite: +0.1%, India's Sensex: +0.6%, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: +0.5%.

  • In economic data:

  • Japan's June Tertiary Industry Activity Index -0.2% m/m (expected 0.5%; last 0.8%)

  • South Korea's July trade deficit $4.80 bln (last deficit of $4.67 bln). July Imports 21.8% yr/yr (last 21.8%) and Exports 9.2% (last 9.4%)

  • India's July WPI Inflation 13.93% (expected 14.20%; last 15.18%)

  • In news:

  • China's government announced that new onshore bond issues from select developers will be guaranteed and there was speculation that the government will provide additional stimulus to boost growth.

  • Australia's Bureau of Statistics will begin publishing monthly CPI for Australia while the Reserve Bank of Australia repeated that it expects inflation to peak late this year.

  • South Korea's military will hold joint drills with the U.S. from August 22 to September 1.

  • Major European indices trade in the green. STOXX Europe 600: +0.4%, Germany's DAX: +0.6%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.4%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: +0.9%.

  • In economic data:

  • Eurozone's June trade deficit EUR24.60 bln (expected deficit of EUR20.00 bln; last deficit of EUR28.40 bln). August ZEW Economic Sentiment -54.9 (expected -57.0; last -51.1)

  • Germany's August ZEW Economic Sentiment -55.3 (expected -53.8; last -53.8) and ZEW Current Conditions -47.6 (expected -48.0; last -45.8)

  • U.K.'s June three-month employment change 160,000 (expected 256,000; last 296,000), June Claimant Count Change -10,500 (expected -32,000; last -26,800), and June Unemployment Rate 3.8%, as expected (last 3.8%). June Average Earnings Index + Bonus 5.1% yr/yr (expected 4.5%; last 6.4%)

  • In news:

  • Germany's ZEW economists cautioned that markets expect further weakening of Germany's economy and additional pressure on profit expectations.

  • There are growing expectations that a nuclear deal with Iran will be reached.

  • Germany's natural gas consumption was down 15% in the first half of 2022, according to BDEW.

U.S. equity futures:

  • S&P 500 Futures: -5 @ 4,292

  • DJIA Futures: -19 @ 33,894

  • Nasdaq 100 Futures: -21 @ 13,646

Overseas:

  • Europe: DAX +0.6%, FTSE +0.7%, CAC +0.4%

  • Asia: Nikkei UNCH, Hang Seng -1.1%, Shanghai Composite +0.1%

Commodities:

  • Crude Oil +0.87 @ 90.28

  • Nat Gas  +0.264 @ 8.992

  • Gold -7.40 @ 1790.70

  • Silver -0.214  @ 20.058

  • Copper +0.0050 @ 3.6225

U.S. Summary:

  • Earnings/Guidance:

  • Albireo Pharma (ALBO) misses by $0.21, misses on revs; guides for 2022 Bylvay sales of $24 mln

  • Archaea Energy (LFG) misses by $0.21, misses on revs

  • BHP Group (BHP) reports FY22 results; appoints Edgar Basto COO

  • Blend Labs (BLND) reports EPS in-line, beats on revs; reaffirms FY22 revs guidance

  • Compass (COMP) reports Q2 (Jun) results, misses on revs; guides Q3 revs below consensus; guides FY22 revs below consensus

  • Fabrinet (FN) beats by $0.14, beats on revs; guides Q1 EPS above consensus, revs above consensus

  • Ferroglobe PLC (GSM) beats by $0.14, beats on revs

  • Fluence (FLNC) misses by $0.05, misses on revs; expects to be at the lower-end of its prior range of its prior FY22 revs guidance

  • Genius Sports (GENI) beats by $0.03, beats on revs; reaffirms FY22 revs guidance

  • Ginkgo Bioworks (DNA) reports Q2 (Jun) results, beats on revs; guides FY22 revs above consensus

  • Global-E Online (GLBE) reports Q2 (Jun) results, beats on revs; guides Q3 revs above consensus; guides FY22 revs above consensus

  • Home Depot (HD) beats by $0.12, beats on revs; Q2 comps +5.8%; reaffirms EPS, revs, and comp guidance

  • HUYA (HUYA) beats by $0.21, reports revs in-line

  • IHS Holding Limited (IHS) reports EPS in-line, beats on revs; reaffirms FY22 revs guidance

  • Navitas Semiconductor (NVTS) reports Q2 (Jun) results, beats on revs; guides Q3 revs below consensus; acquires GeneSic Semiconductor

  • Lumentum (LITE) beats by $0.14, reports revs in-line; guides Q1 EPS below consensus, revs in-line

  • On (ONON) beats by $0.10, beats on revs; raises FY22 revs above consensus

  • Premier (PINC) beats by $0.01, beats on revs; guides FY23 EPS in-line, revs in-line

  • Sea Limited (SE) beats by $0.03, misses on revs; will be suspending e-commerce GAAP revenue guidance for the full year 2022

  • Sema4 Holdings Corp (SMFR) reports Q2 net loss of $(0.25), revenue decline of 23% yr/yr; trims FY22 revenue forecast to $245-255 mln from $305-315 mln; cost-savings plan is on track

  • Shoals Technologies (SHLS) reports EPS in-line, revs in-line; reaffirms FY22 revs guidance

  • Tencent Music (TME) beats by $0.08, beats on revs

  • thredUP (TDUP) misses by $0.07, reports revs in-line; guides Q3 revs below consensus; guides Q4 revs below consensus

  • Vimeo (VMEO) reports July 2022 total sales +10% yr/yr, subscribers +2% yr/yr, ARPU +7% yr/yr

  • Walmart (WMT) beats by $0.17, beats on revs; Q2 US comps +6.5%; guides Q3 EPS in-line; raises FY23EPS above consensus

  • World Wrestling (WWE) beats by $0.04, beats on revs; raises full year 2022 outlook

  • ZipRecruiter (ZIP) beats by $0.05 (single estimate), beats on revs; guides Q3 revs below consensus; guides FY22revs below consensus due to the current macro environment impacting hiring in 2H22

  • General News:

  • Iran still has several issues with pending nuclear deal, according to the Wall Street Journal

  • U.S. Treasury department data shows China reduced holdings of U.S. Treasuries for the seventh-straight month in June, according to Reuters

  • 3M (MMM): A judge was critical of 3M bankruptcy strategy to resolve injury claims, according to the Wall Street Journal

  • Air Lease (AL) announced long-term lease placements for 19 new Airbus aircraft with Condor (Germany), including 17 Airbus A321neos and two A320neos

  • Algonquin Power & Utilities (AQN) re-establishes at-the-market equity program

  • American Airlines (AAL) removes 31000 flights from November schedule, according to CNN

  • AMTD IDEA Group (AMTD) to inject $500 million worth of global portfolio of premium real estate assets located in major cities into AMTD Digital (HKD)

  • ANI Pharma (ANIP) announces FDA approval and imminent launch of dexamethasone tablets USP

  • Apple (AAPL) employees will return to offices three days a week beginning September 5, according to Bloomberg

  • AstraZeneca (AZN): Lynparza in combination with abiraterone granted Priority Review in the US for patients with metastatic castration-resistant prostate cancer

  • Atlas Technical Consultants (ATCX) awarded a three-year, $26 million contract with the Georgia Department of Transportation to provide Construction Engineering and Inspection (CE&I) services

  • Electronic Arts (EA) authorizes a new program to repurchase up to $2.6 bln shares of its common stock

  • Immunic (IMUX) received a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) for patent application 16/646130, entitled, "Compound Having Cyclic Structure"

  • Inhibrx (INBX): European Commission grants orphan medicinal product designation to INBRX-109 for the treatment of chondrosarcoma based on a positive opinion issued by the European Medicines Agency

  • Intl Game Tech. PLC (IGT) signed an agreement with Santa Casa da Misericrdia de Lisboa to debut IGT's innovative Retailer Vue lottery terminal in Portugal, following a competitive procurement

  • Kaman (KAMN) wins Boeing contract worth $38 mln

  • MediciNova (MNOV) reaches agreement to participate in grant-funded clinical trial to evaluate MN-166 (ibudilast) for the treatment of long COVID

  • Merck (MRK) and Orna Therapeutics collaborate to advance Orna's next generation of RNA technology

  • Nature Medicine (GRTS) Publishes Interim Results from Gritstone bio's Phase 1/2 Study of GRANITE, Individualized Neoantigen Vaccine for Solid Tumors

  • Paycom Software (PAYC) increases and extends existing stock repurchase plan; $1.1 bln now available for repurchases between August 15, 2022 and August 15, 2024, compared to $550 mln available prior to increase

  • Philips (PHG) announced that Roy Jakobs is proposed to succeed Frans van Houten as President and Chief Executive Officer, effective October 15, 2022

  • Qiagen (QGEN) launches QiAstat-DX Viral Vesicular Panel RUO, a syndromic test to differentiate between monkeypox and five other pathogens causing similar symptoms

  • Redwire Corporation (RDW) will be developing the only commercially owned and operated spaceflight-qualified plant growth platform capable of growing plants from seed to maturity in space

  • Roche Hldg (RHHBY): FDA accepts supplemental biologics license application for Genentech's Polivy combination for people with previously untreated diffuse large b-cell lymphoma

  • Rocket Lab USA's (RKLB) upcoming 30th Electron launch will deliver its 150th payload and 300th Rutherford engine to space

  • Scorpio Tankers (STNG) has repurchased 1,293,661 shares at $38.65 per share for a total of $50 mln from Eneti, a related party

  • Tile Shop's (TTSH) Board authorized $30 mln share repurchase program

  • Uber (UBER) is planning to attract 8,000 more drivers in London in order to meet the growing demand in the capital

  • Ventyx Biosciences (VTYX) Announces Positive Topline Phase 1 Data for Its Selective Allosteric TYK2 Inhibitor VTX958

  • Walmart (WMT) to offer Paramount+ streaming subscription at no cost

  • Warner Bros. Discovery (WBD): HBO Max will downsize its reality programming department, according to Variety

  • WeTrade Group (WETG) COO Zhuo Li resigns, effective August 12; Co notes Mr. Li's resignation was not a result of any disagreement with the Company's operations, policies, or procedures

  • Zurn Elkay Water Solutions (ZWS) appointed Craig G. Wehr, who currently serves as President of Zurn as Chief Operating Officer

  • M&A:

  • Bristol-Myers (BMY) and Turning Point Therapeutics (TPTX) announce expiration of HSR Act waiting period and clearance from federal cartel office of Germany related to pending acquisition of Turning Point Therapeutics

  • Crane (CR) announces sale of subsidiary Redco Corporation holding all asbestos liabilities, related insurance assets, and approximately $550 million of cash; will result in an estimated after-tax loss of approx. $170 mln

  • Gilead Sciences (GILD) to acquire remaining worldwide rights of Trodelvy

  • Navitas Semiconductor (NVTS) acquires GeneSiC Semiconductor for a total consideration of approximately $100 mln in cash, 24.9 mln shares of NVTS stock, and possible earn-out payments of up to $25 mln

  • Nerdy (NRDY) acquires Codeverse to add coding classes to its library of academic programs; financial details not disclosed

  • Tencent (TCEHY) aiming to sell $24 billion stake in Meituan, according to Reuters

  • Turquoise Hill Resources (TRQ): SailingStone applauds Turquoise Hill Rio Tinto's (RIO) offer

  • Twitter (TWTR): Judge says Twitter will need to give Elon Musk some documents, according to Reuters

  • Syndicate

  • Bloom Energy (BE) commences 13 mln share public offering

  • Fulcrum Therapeutics (FULC) priced an underwritten public offering of 9,590,792 shares of its common stock at $7.82/share

  • Talaris Therapeutics (TALS) files for $250 mln mixed securities shelf offering

  • TELA Bio (TELA) announced the pricing of offering of 4,000,000 shares of its common stock at a price of $8.00 per share, for gross proceeds of $32.0 million

  • Trinity Capital (TRIN) priced an underwritten public offering of $55.0 million of shares of its common stock at $15.33/share

  • Viridian Therapeutics (VRDN) commences public offering of $175 mln of shares of common stock and series B preferred stock

  • IPOs:

  • Expected to Price:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • AMTD +35.4%, BLND +14.5%, GLBE +10.6%, FN+10.5%, GNPX +7.7%, ONON +6.3%, ANIP +6%, GRTS+4.9%, FULC +4.7%, TME +4.5%, GENI +4.4%, NVTS+3.6%, WMT +3.3%, TDUP +3.3%, WMT +3.2%, BHP+2.9%, PHG +2.6%, UPLD +2.3%, RDW +2.2%, IHS+2.2%, AMTD +35.4%, BLND +14.5%, GLBE +10.6%, FN +10.5%, GNPX +7.7%, ONON +6.3%, ANIP +6%, GRTS +4.9%, FULC +4.7%, TME +4.5%, GENI +4.4%, NVTS +3.6%, WMT +3.3%, TDUP +3.3%, WMT +3.2%, BHP +2.9%, PHG +2.6%, UPLD +2.3%, RDW +2.2%, IHS +2.2%

  • Gapping down:

  • ALBO -15.2%, COMP -10.9%, TELA -7.7%, BE -7.7%, TRIN -7%, NOTE -6.8%, ZIP -6.2%, NOVA -6%, FLNC-5.9%, SE -2.9%, LITE -1.1%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • CalAmp (CAMP) upgraded to Buy from Hold at Craig Hallum; tgt raised to $10

  • Kanzhun Limited (BZ) upgraded to Buy from Neutral at UBS; tgt $27.50

  • Downgrades:

  • Aerovate Therapeutics (AVTE) downgraded to Neutral from Buy at BTIG Research

  • Avalara (AVLR) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $93.50

  • Bed Bath & Beyond (BBBY) downgraded to Sell from Neutral at B. Riley Securities; tgt $5

  • ChromaDex (CDXC) downgraded to Perform from Outperform at Oppenheimer

  • Clean Energy Fuels (CLNE) downgraded to Mkt Perform from Outperform at Raymond James

  • Coupang (CPNG) downgraded to Sell from Outperform at CLSA; tgt $16.40

  • Equifax (EFX) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt $230

  • Elanco Animal Health (ELAN) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $24

  • Others:

  • Alkermes (ALKS) initiated with a Neutral at Piper Sandler; tgt $26

  • EQRx (EQRX) initiated with a Neutral at JP Morgan; tgt $5.50

Upcoming Events:

  • Econ Data:

  • 08:30 ET: Housing Starts for Jul (Briefing.comConsensus 1543K; Prior 1559K)

  • 08:30 ET: Building Permits for Jul (Briefing.comConsensus 1647K; Prior 1685K)

  • 09:15 ET: Industrial Production for Jul (Briefing.comConsensus 0.3%; Prior -0.2%)

  • 09:15 ET: Capacity Utilization for Jul (Briefing.comConsensus 80.2%; Prior 80.0%)

  • Earnings:

  • Monday (Aug 15)

  • Morning:  YOU DOYU LI TWKS WEBR

  • Afternoon: LFG BLND COMP FN FLNC GLBE NVTS SHLS TME TDUP ZIP

  • Tuesday (Aug 16)

  • Morning: GENI HD HUYA IHS LITE ONON PINC SE WMT

  • Afternoon:  A JKHY

  • Wednesday (Aug 17)

  • Morning:  ADI DNUT LOW PFGC SFL TGT TJX

  • Afternoon:  AMCR BBWI CSCO KEYS SNPS WOLF

  • Thursday (Aug 18)

  • Morning: BJ CSIQ EL KSS NTES NICE SLQT SPTN TPR

  • Afternoon:  AMAT BILL GLOB OSIS ROST

  • Friday (Aug 19) 

  • Morning:  BKE DE FL VIPS

Asia & Europe detail:

Asia: Nikkei UNCH, Hang Seng -1.1%, Shanghai Composite +0.1%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. China's government announced that new onshore bond issues from select developers will be guaranteed and there was speculation that the government will provide additional stimulus to boost growth. Australia's Bureau of Statistics will begin publishing monthly CPI for Australia while the Reserve Bank of Australia repeated that it expects inflation to peak late this year. South Korea's military will hold joint drills with the U.S. from August 22 to September 1.

  • In economic data:

  • Japan's June Tertiary Industry Activity Index -0.2% m/m (expected 0.5%; last 0.8%)

  • South Korea's July trade deficit $4.80 bln (last deficit of $4.67 bln). July Imports 21.8% yr/yr (last 21.8%) and Exports 9.2% (last 9.4%)

  • India's July WPI Inflation 13.93% (expected 14.20%; last 15.18%)

---Equity Markets---

  • Japan's Nikkei: UNCH

  • Hong Kong's Hang Seng: -1.1%

  • China's Shanghai Composite: +0.1%

  • India's Sensex: +0.6%

  • South Korea's Kospi: +0.2%

  • Australia's ASX All Ordinaries: +0.5%

---FX---

  • USD/JPY: +0.6% to 134.08

  • USD/CNH: -0.1% to 6.8050

  • USD/INR: -0.3% to 79.30

Europe: DAX +0.6%, FTSE +0.7%, CAC +0.4%

Major European indices trade in the green. Germany's ZEW economists cautioned that markets expect further weakening of Germany's economy and additional pressure on profit expectations. There are growing expectations that a nuclear deal with Iran will be reached. Germany's natural gas consumption was down 15% in the first half of 2022, according to BDEW.

  • In economic data:

  • Eurozone's June trade deficit EUR24.60 bln (expected deficit of EUR20.00 bln; last deficit of EUR28.40 bln). August ZEW Economic Sentiment -54.9 (expected -57.0; last -51.1)

  • Germany's August ZEW Economic Sentiment -55.3 (expected -53.8; last -53.8) and ZEW Current Conditions -47.6 (expected -48.0; last -45.8)

  • U.K.'s June three-month employment change 160,000 (expected 256,000; last 296,000), June Claimant Count Change -10,500 (expected -32,000; last -26,800), and June Unemployment Rate 3.8%, as expected (last 3.8%). June Average Earnings Index + Bonus 5.1% yr/yr (expected 4.5%; last 6.4%)

---Equity Markets---

  • STOXX Europe 600: +0.4% 

  • Germany's DAX: +0.6%

  • U.K.'s FTSE 100: +0.7% 

  • France's CAC 40: +0.4%

  • Italy's FTSE MIB: UNCH 

  • Spain's IBEX 35: +0.9%

---FX---

  • EUR/USD: -0.3% to 1.0128

  • GBP/USD: -0.3% to 1.2021

  • USD/CHF: +0.5% to 0.9507


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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