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18/03/22 Briefing


The S&P 500 futures trade 24 points, or 0.6%, below fair value after a three-day rally in which the S&P 500 rose 5.7%. There are lingering concerns regarding Russia's invasion of Ukraine.

U.S. officials believe that Russia will use "brandish threats" to use nuclear weapons against the West amid Ukrainian resistance, according to Bloomberg, and are worried that China is moving closer to supporting Russia's war in Ukraine. President Biden will reportedly call Chinese President Xi at 9:00 a.m. ET today to try and convince him not to do that.

WTI crude futures, which jumped more than 8.0% yesterday, are currently up 0.9% to $103.80/bbl after Russian missiles struck just outside Lyiv, a city close to Poland where many Ukrainians have been sheltering.

U.S. Treasury yields are moving lower amid the negative bias in the futures market and the negative-sounding geopolitical headlines. The 2-yr yield is down five basis points to 1.89%, and the 10-yr yield is down five basis points to 2.14%. The U.S. Dollar Index is up 0.4% to 98.39.

Separately, Saint Louis Fed President Bullard (voting FOMC member) told CNBC that he wanted the Fed to begin reducing the balance sheet last meeting and that interest rates this year should be above 3% to bring inflation under control. On a related note, the Bank of Japan made no policy changes, keeping its interest on excess reserves at -0.1%, as expected.

Today's economic data will include Existing Home Sales for February (Briefing.comconsensus 6.20 million) and the Conference Board's Leading Economic Index for February at 10:00 a.m. ET.

In U.S. Corporate news:

  • FedEx (FDX 219.95, -8.03): -3.5% after missing EPS estimates on above-consensus revenue. FedEx reaffirmed FY22 EPS guidance.

  • Boeing (BA 191.35, +1.16): +0.6% amid news that it's in discussions with Delta (DAL 36.77, -0.38, -1.0%) for 100 737 Max jets, according to Reuters.

  • GameStop (GME 81.35, -6.35): -7.2% after reporting an EPS loss, overshadowing its revenue miss.

  • StoneCo Ltd. (STNE 12.35, +2.74): +28.5% after beating revenue estimates and appointing COOs for its Financial Platform and Software divisions.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a higher note while India's Sensex was closed for Holi. Japan's Nikkei: +0.7% (+6.6% for the week) Hong Kong's Hang Seng: -0.4% (+4.2% for the week) China's Shanghai Composite: +1.1% (-1.8% for the week) India's Sensex: CLOSED (+4.2% for the week) South Korea's Kospi: +0.5% (+1.7% for the week) Australia's ASX All Ordinaries: +0.7% (+3.2% for the week).

  • In economic data:

  • Japan's February National CPI 0.4% m/m (last 0.0%); 0.9% yr/yr (last 0.5%). February National Core CPI 0.6% yr/yr, as expected (last 0.2%). January Tertiary Industry Activity Index -0.7% m/m (last 0.1%)


  • In news:

  • Japan's energy prices increased 20.5% yr/yr in February, representing the fastest increase since 1981.

  • The leader of Japan's opposition called for appointing a governor to the Bank of Japan who can steer policy toward an exit from stimulus.

  • The Bank of Japan made no policy changes, keeping its interest on excess reserves at -0.1%.



  • Major European indices are on track for a lower finish to a solid week. STOXX Europe 600: -0.4% (+4.1% week-to-date) Germany's DAX: -1.6% (+3.9% week-to-date) U.K.'s FTSE 100: -0.8% (+2.3% week-to-date) France's CAC 40: -1.3% (+4.2% week-to-date) Italy's FTSE MIB: -0.8% (+3.9% week-to-date) Spain's IBEX 35: -0.9% (+2.5% week-to-date).

  • In economic data:

  • Eurozone's January trade deficit EUR27.20 bln (last deficit of EUR4.80 bln). Q4 wages 1.5% yr/yr (last 2.2%) and Q4 labor cost index 1.9% yr/yr (last 2.3%)

  • Italy's January trade deficit EUR5.052 bln (last surplus of EUR1.103 bln)


  • In news:

  • European Central Bank policymaker Knot noted that persistent weakening in the euro could worsen energy inflation in the short term.

  • Norway lowered its non-oil GDP growth forecast for 2022 to 3.6% from 4.1% while the outlook for 2023 was increased to 2.5% from 2.4%.

  • Standard & Poor's lowered Russia's sovereign rating to CC from CCC-.



U.S. equity futures:

  • S&P 500 Futures: -31 @ 4,381

  • DJIA Futures: -211 @ 34,269

  • Nasdaq 100 Futures: -111 @ 14,007

Overseas:

  • Europe: DAX -1.6%, FTSE -0.8%, CAC -1.3%

  • Asia: Nikkei +0.7%, Hang Seng -0.4%, Shanghai +1.1%

Commodities:

  • Crude Oil +0.47 @ 103.45

  • Nat Gas -0.132 @ 4.858

  • Gold -3.15 @ 1940.05

  • Silver -0.181 @ 25.435

  • Copper +0.0048 @ 4.7068

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Americas Silver (USAS) beats by $0.35; misses on revs

  • BigBear.ai (BBAI) misses by $1.00 (one estimate), misses on revs (two estimates); guides FY22 revs below two analyst estimate

  • Embark Technology (EMBK) reports Q4 (Dec) EPS of $0.24; secures 14,200 truck reservations under partner development program

  • FedEx (FDX) misses by $0.06, beats on revs; reaffirms FY22 EPS guidance

  • GameStop (GME) reports Q4 (Jan) results, beats on revs

  • JOANN Inc. (JOAN) beats by $0.12, misses on revs, comps of -12.4%

  • On (ONON) reports Q4 (Dec) results, beats on revs; guides FY22 revs above consensus

  • Schnitzer Steel (SCHN) guides FebQ EPS below consensus

  • StoneCo (STNE) misses by $0.04, beats on revs

  • Torrid (CURV) beats by $0.04, beats on revs; guides AprQ revs below consensus; guides FY22 revs above consensus

  • U.S. Steel (X) guides Q1 EPS below consensus


  • General News:

  • Russian missiles hit just outside of Lviv. Intelligence believes Russian offensive is slowing down amid losses and logistical issues, according to the New York Times

  • US defense officials believe Russian President Putin will make "brandish threats" to use nuclear weapons against western nations amid Ukrainian resistance, according to Bloomberg

  • White House officials believe China is moving closer to supporting Russia's war in Ukraine. President Biden will call Chinese President Xi today at 9:00 ET to try and convince him not to do that, according to Bloomberg

  • Saint Louis Fed President James Bullard (voting FOMC member) gives comments to CNBC -- says wanted 50 basis point hike and wanted Fed to begin balance sheet reduction at last meeting; says 2022 interest rate should be above 3% to bring inflation under control; says committee will have to move faster or it could lose credibility

  • Chinese President Xi says country will reduce coronavirus restrictions on economy while maintaining zero tolerance coronavirus policy, according to Bloomberg

  • Dr. Anthony Fauci says US will likely see "a bit of an increase" in coronavirus cases due to sub variant and vulnerable people will need fourth dose of vaccine. He also said masks might return to some settings, according to Bloomberg

  • Dr. Scott Gottlieb on CNBC says US cases could rise to about 60,000/day (at 30,000/day now), but he is not expecting a major wave or a major increase in hospitalizations from Omicron sub variant; vaccines and natural immunity work against subvariant

  • Russia foreign and local currency ratings lowered To 'CC' at S&P on high vulnerability to debt nonpayment, still on watch neg

  • Some Senators want to ban imports of Russian uranium, according to Reuters

  • Nickel prices decline 12% and it hit limit down on London Metal Exchange, CNBC

  • NYC residents are struggling to pay utility bills, according to Financial Times

  • Aerie Pharma (AERI) appoints Peter Lang as CFO effective March 18, 2022

  • Allegiant Travel (ALGT) reports February traffic results

  • Amneal Pharmaceuticals (AMRX) awarded sub-license from Medicines Patent Pool to manufacture and commercialize generic version of nirmatrelvir

  • Aris Water Solutions (ARIS) expands alliance with Texas Pacific Land (TPL)

  • AT&T's (T) Warner Bros. Games says Hogwarts Legacy title will release "Holiday 2022"

  • BNY Mellon (BK) provides Russia updates

  • Boeing (BA) in discussions with Delta (DAL) for 100 737 Max jets, according to Reuters

  • Brinks (BCO) appoints Mark Eubanks as President and CEO, effective May 2, 2022

  • Centerra Gold (CGAU) has temporarily suspended gold dor bar production at the kst Mine due to mercury having been detected in the gold room of the adsorption-desorption recovery plant

  • Core Labs (CLB) announces strategic alliance with Talos Energy (TALO)

  • Crinetics Pharmaceuticals (CRNX) now expects to release preliminary data from the ongoing Phase 1 study of CRN04894 in the second quarter of 2022 due to the fact that some of the healthy volunteers contracted COVID-19 during a recent cohort of the multiple ascending dose portion of the study

  • Embraer SA's (ERJ) Eve and Acciona enter strategic partnership to accelerate the development of a sustainable Urban Air Mobility ecosystem

  • Equinix (EQIX) announces its planned expansion into Chile and Peru through its intended acquisition of four data centers from Empresa Nacional De Telecomunicaciones S.A. for an enterprise value of ~$705 mln

  • Equity Residential (EQR) increases quarterly dividend to $0.625/share from $0.6025/share

  • First Majestic Silver (AG) received regulatory consent to extend its share repurchase program

  • Genesco (GCO) active shareholder Legion Partners (6.2%) believes more share repurchases should be immediately executed in an accelerated manner

  • Great Lakes Dredge & Dock (GLDD) announces receipt of several dredging awards totaling $132.3 mln

  • Independent Bank (INDB) increases quarterly dividend by 6% to $0.51/share

  • JP Morgan (JPM) received Russian bond payment, according to Reuters

  • Lexicon Pharma (LXRX) enters into loan facility with Oxford Finance to support commercialization of sotagliflozin

  • LPL Financial (LPLA) reports monthly activity highlights for February

  • Maxeon Solar (MAXN) announces 400MW module supply agreement with Origis Energy

  • Medifast (MED) increases quarterly cash dividend to $1.64/share from $1.42/share

  • Meta Platforms (FB): ACCC takes action over alleged misleading conduct by Meta for publishing scam celebrity crypto ads on Facebook

  • MSG Entertainment (MSGE): Andrew Lustgarten is stepping down from his position as President of Madison Square Garden Entertainment Corp., effective April 1, 2022

  • Nexa Resources (NEXA): production at the Atacocha San Gerardo open pit mine is temporarily suspended

  • Noble Corporation (NE) and Maersk Drilling announce Executive Management Team for Combined Company

  • NRx Pharmaceuticals (NRXP) names Ira Strassberg as CFO

  • Perrigo (PRGO) receives final approval from FDA for OTC use of Nasonex 24HR Allergy

  • PotlatchDeltic (PCH) transfers approximately $70 mln of pension obligations to American General Life Insurance Company

  • Riley Exploration Permian (REPX) reports partial distribution of common stock by investor

  • Seres Therapeutics (MCRB) presents preclinical research on investigational microbiome therapeutic SER-155 at the 2022 European Bone Marrow Transplantation Annual Meeting

  • Tencent (TCEHY): China mulling new license requirements for Tencent, according to Bloomberg

  • TeraWulf (WULF) reports progress on building out mining operations and establishing digital asset infrastructure

  • Tesla (TSLA) restarts production at its plant in Shanghai, according to Reuters

  • The Metals Company (TMC) subsidiary signs non-binding term sheet for development of commercial system to collect deep-sea polymetallic nodules

  • Triumph Group (TGI) awarded five year contract with U.S. Navy for repair of SH-60 Seahawk enhanced digital electronic control units

  • TrueCar (TRUE) launches Sell Your Car offering and introduces Home Delivery program in Texas

  • Uber (UBER) and Lyft (LYFT) drivers are limiting their hours on the road amid high gas prices, according to the New York Times

  • Verisk Analytics (VRSK) issues statement in response to D.E. Shaw letter


  • M&A:

  • Brookline Capital Acquisition Corp. (BCAC) and Apexigen announce business combination agreement to create publicly listed immuno-oncology company

  • Pono Capital Corp (PONO): Benuvia signs definitive agreement to become a publicly traded company through a business combination with Pono Capital Corp

  • Targa Resources (TRGP) to acquire Southcross Energy Operating LLC and subsidiaries for $200 mln

  • Trustmark (TRMK) subsidiary agrees to sell assets of Corporate Trust business to Peoples Bank; terms not disclosed


  • Syndicate:

  • Antero Midstream (AM) files mixed securities shelf offering

  • Arbor Realty Trust (ABR) prices offering of 6.5 mln shares of common stock for gross proceeds of $108.9 mln

  • Osisko Gold Royalties (OR) announces bought deal financing agreement for total gross proceeds of approx. US$250 mln

  • SolarEdge Technologies (SEDG) prices offering 2.0 mln shares of common stock at $295.00 per share


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • STNE +23.9%, WULF +7.3%, USAS +5.8%, LXRX+4.5%, TMC +4%, TGI +2.3%, GLDD +1.5%, ONON+1.5%, ALGT +1.4%, PRGO +0.9%, CURV +0.8%, AMRX +0.5%, TRGP +0.5%


  • Gapping down:

  • BBAI -18.6%, JOAN -8.4%, GME -7.7%, ABR -4.8%, MSGE -4.8%, OR -3.5%, DS -3.5%, FDX -3.5%, CLF-3.1%, SEDG -3%, X -2.9%, AVPT -2.1%, EMBK-1.5%, NUE -1.4%, SCHN -1.1%, MAXN -0.9%, MED-0.8%, BCO -0.7%, UDR -0.7%, CLB -0.7%, AM -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Allstate (ALL) upgraded to Strong Buy from Outperform at Raymond James; tgt raised to $165

  • DigitalBridge (DBRG) upgraded to Neutral from Underweight at JP Morgan; tgt $7

  • Garmin (GRMN) upgraded to Buy from Neutral at BofA Securities; tgt lowered to $140

  • Guidewire Software (GWRE) upgraded to Mkt Outperform from Mkt Perform at JMP Securities; tgt $110

  • MongoDB (MDB) upgraded to Buy from Neutral at UBS; tgt raised to $450

  • STAAR Surgical (STAA) upgraded to Buy from Neutral at BTIG Research; tgt $98

  • Tractor Supply (TSCO) upgraded to Outperform from Perform at Oppenheimer; tgt $270

  • United Airlines (UAL) upgraded to Neutral from Underperform at Exane BNP Paribas; tgt $38


  • Downgrades:

  • America Movil SA (AMX) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $21

  • Cummins (CMI) downgraded to Neutral from Buy at UBS; tgt lowered to $214

  • HarborOne Bancorp (HONE) downgraded to Underweight from Neutral at Piper Sandler; tgt $15.50

  • JOANN Inc. (JOAN) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $11

  • NN Inc (NNBR) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets

  • Noodles & Co (NDLS) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $7

  • Park-Ohio (PKOH) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets

  • Wingstop (WING) downgraded to Underweight from Overweight at Piper Sandler; tgt lowered to $102


  • Others:

  • Allbirds (BIRD) initiated with a Hold at Jefferies; tgt $6

  • Booz Allen Hamilton (BAH) resumed with a Buy at Stifel; tgt $96

  • CACI Intl (CACI) resumed with a Hold at Stifel; tgt $305

  • Datadog (DDOG) initiated with a Neutral at SMBC Nikko; tgt $136

  • Farfetch (FTCH) initiated with a Buy at Jefferies; tgt $25

  • GMS (GMS) initiated with a Buy at Loop Capital; tgt $62

  • Jacobs Engineering (J) resumed with a Buy at Stifel; tgt $159

  • KBR (KBR) resumed with a Buy at Stifel; tgt $65

  • Leidos (LDOS) resumed with a Buy at Stifel; tgt $126

  • ManTech (MANT) resumed with a Hold at Stifel; tgt $90

  • Montrose Environmental Group (MEG) resumed with a Neutral at JP Morgan; tgt $55

  • Parsons (PSN) resumed with a Buy at Stifel; tgt $43

  • Performance Food Group (PFGC) initiated with a Buy at Deutsche Bank; tgt $62

  • Science Applications (SAIC) resumed with a Hold at Stifel; tgt $95

  • Vectrus (VEC) resumed with a Hold at Stifel; tgt $42

  • ZimVie (ZIMV) initiated with a Neutral at Guggenheim


Upcoming Events:

  • Econ Data:

  • 10:00 ET: Existing Home Sales for Feb. (Briefing.comConsensus 6.20M; Prior 6.50M)


  • Earnings:

  • Monday (Mar 14)

  • Afternoon: CVGW COUP DLO MTN WPRT


  • Tuesday (Mar 15)

  • Morning: DOLE IHS

  • Afternoon: CAL GOCO S SMAR


  • Wednesday (Mar 16)

  • Morning: DOYU JBL

  • Afternoon: BRLT GES LEN PD SMTC WSM ZTO


  • Thursday (Mar 17)

  • Morning: ACN CSIQ CMC DBI DG GIII SCWX SIG WRBY

  • Afternoon: FDX GME JOAN STNE CURV


  • Friday (Mar 18)

  • Morning: ONON




Asia & Europe detail:

Asia: Nikkei +0.7%, Hang Seng -0.4%, Shanghai +1.1%

Equity indices in the Asia-Pacific region ended the week on a higher note while India's Sensex was closed for Holi. Japan's energy prices increased 20.5% yr/yr in February, representing the fastest increase since 1981. The leader of Japan's opposition called for appointing a governor to the Bank of Japan who can steer policy toward an exit from stimulus. The Bank of Japan made no policy changes, keeping its interest on excess reserves at -0.1%.

  • In economic data:

  • Japan's February National CPI 0.4% m/m (last 0.0%); 0.9% yr/yr (last 0.5%). February National Core CPI 0.6% yr/yr, as expected (last 0.2%). January Tertiary Industry Activity Index -0.7% m/m (last 0.1%)


---Equity Markets---

  • Japan's Nikkei: +0.7% (+6.6% for the week)

  • Hong Kong's Hang Seng: -0.4% (+4.2% for the week)

  • China's Shanghai Composite: +1.1% (-1.8% for the week)

  • India's Sensex: CLOSED (+4.2% for the week)

  • South Korea's Kospi: +0.5% (+1.7% for the week)

  • Australia's ASX All Ordinaries: +0.7% (+3.2% for the week)

---FX---

  • USD/JPY: +0.4% to 119.09

  • USD/CNH: +0.2% to 6.3760

  • USD/INR: +0.2% to 76.13

Europe: DAX -1.6%, FTSE -0.8%, CAC -1.3%

Major European indices are on track for a lower finish to a solid week. European Central Bank policymaker Knot noted that persistent weakening in the euro could worsen energy inflation in the short term. Norway lowered its non-oil GDP growth forecast for 2022 to 3.6% from 4.1% while the outlook for 2023 was increased to 2.5% from 2.4%. Standard & Poor's lowered Russia's sovereign rating to CC from CCC-.

  • In economic data:

  • Eurozone's January trade deficit EUR27.20 bln (last deficit of EUR4.80 bln). Q4 wages 1.5% yr/yr (last 2.2%) and Q4 labor cost index 1.9% yr/yr (last 2.3%)

  • Italy's January trade deficit EUR5.052 bln (last surplus of EUR1.103 bln)


---Equity Markets---

  • STOXX Europe 600: -0.4% (+4.1% week-to-date)

  • Germany's DAX: -1.6% (+3.9% week-to-date)

  • U.K.'s FTSE 100: -0.8% (+2.3% week-to-date)

  • France's CAC 40: -1.3% (+4.2% week-to-date)

  • Italy's FTSE MIB: -0.8% (+3.9% week-to-date)

  • Spain's IBEX 35: -0.9% (+2.5% week-to-date)

---FX---

  • EUR/USD: -0.5% to 1.1039

  • GBP/USD: -0.2% to 1.3128

  • USD/CHF: -0.2% to 0.9353

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