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18/11/22 Briefing


The S&P 500 futures are up 27 points and are trading 0.7% above fair value. The Nasdaq 100 futures are up 101 points and are trading 0.9% above fair value. The Dow Jones Industrial Average futures are up 165 points and are trading 0.5% above fair value.

Equity futures are moving higher on this options expiration day as market participants digest some mostly positive earnings news since yesterday's close. The market showed resilience yesterday and battled back from larger losses, boosting investor sentiment this morning.

Treasury yields are inching higher. The 2-yr note yield is up four basis points to 4.49% and the 10-yr note yield is up two basis points to 3.79%.

Energy complex futures are moving lower. WTI crude oil futures are down 1.3% to $80.59/bbl and natural gas futures are down 3.3% to $6.53/mmbtu.

Market participants will receive the following economic data today:

  • 10:00 ET: October Existing Home Sales (Briefing.com consensus 4.38M; Prior 4.71M)

  • 10:00 ET: October Leading Economic Index (Briefing.com consensus -0.5%; Prior -0.4%)

In corporate news:

  • Gap (GPS 13.77, +1.06, +8.34%): reports Q3 (Oct) results, beats on revs

  • Foot Locker (FL 37.95, +4.95, +15.00%): beats by $0.15, beats on revs; guides Q4 EPS above consensus; raises FY23 EPS above consensus, revs above consensus

  • Ross Stores (ROST 114.00, +16.07, +16.41%): beats by $0.19, beats on revs; guides Q4 EPS mostly above consensus; guides FY23 EPS above consensus

  • Williams-Sonoma (WSM 120.83, -9.56, -7.33%): misses by $0.02, beats on revs; reaffirms FY23 revs guidance; will not reiterate or update guidance through FY24 due to macro uncertainty

  • Applied Materials (AMAT 108.68, +4.23, +4.05%): beats by $0.28, beats on revs; guides Q1 EPS in-line, revs in-line

  • Farfetch (FTCH 8.64, -0.50, -5.47%): misses by $0.04, reports revs in-line; sees FY22 digital platform GMV decreasing by 5-7%

  • JD.com (JD 60.20, +2.68, +4.66%): beats by RMB1.81, reports revs in-line

  • Keysight (KEYS 174.31, +8.28, +4.99%): beats by $0.15, beats on revs; guides Q1 EPS mostly above consensus, revs above consensus

  • Dillard's (DDS 372.00, +8.39, +2.31%): declares a special dividend of $15.00/share on the Class A and Class B common stock of the company

  • Dolby Labs (DLB 65.74, -4.01, -5.75%): misses by $0.17, misses on revs; guides Q1 EPS below consensus, revs below consensus; expects FY23 revs to grow by low single digits yr/yr

  • Visa (V 211.73, +0.74, +0.35%): announces appointment of Ryan McInerney as CEO, effective February 1, 2023

  • Amazon (AMZN 96.01, +1.16, +1.22%): CEO Andy Jassy provides a note about role eliminations: process extending into the new year; have not concluded how many other roles will be impacted

  • Palo Alto Networks (PANW 171.89, +15.33, +9.79%): beats by $0.14, reports revs in-line; guides Q2 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs mostly above consensus; signs definitive agreement to acquire Cider Security for approximately $195 mln in cash

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Friday on a mostly lower note. Japan's Nikkei: -0.1% (-1.3% for the week), Hong Kong's Hang Seng: -0.3% (+3.9% for the week), China's Shanghai Composite: -0.6% (+0.3% for the week), India's Sensex: -0.1% (-0.2% for the week), South Korea's Kospi: +0.1% (-1.6% for the week), Australia's ASX All Ordinaries: +0.2% (+0.1% for the week).

  • In economic data:

  • Japan's October National CPI 0.6% m/m (last 0.3%); 3.7% yr/yr (last 3.0%). October National Core CPI 3.6% yr/yr (expected 3.5%; last 3.0%)


  • In news:

  • A People's Bank of China adviser said that the country should aim for growth of at least 5.0% in 2023, which will require an overcoming of the pandemic's impact in the first half of the year.

  • Japan's National Core CPI increased at its fastest pace since early 1982 in the October reading. North Korea reportedly conducted an ICBM test.



  • Major European indices are on track for a solid finish to the week. STOXX Europe 600: +1.2% (+0.3% week-to-date), Germany's DAX: +1.2% (+1.5% week-to-date), U.K.'s FTSE 100: +0.9% (+1.3% week-to-date), France's CAC 40: +1.1% (+0.8% week-to-date), Italy's FTSE MIB: +1.1% (+0.7% week-to-date), Spain's IBEX 35: +0.9% (+0.2% week-to-date).

  • In economic data:

  • U.K.'s October Retail Sales 0.6% m/m (expected 0.3%; last -1.5%); -6.1% yr/yr (expected -6.5%; last -6.8%). October Core Retail Sales 0.3% m/m (expected 0.6%; last -1.5%); -6.7% yr/yr (expected -6.9%; last -6.1%). November GfK Consumer Confidence -44 (expected -52; last -47)

  • Swiss Q3 Industrial Production 5.2% yr/yr (last 5.0%)


  • In news:

  • The U.K. reported better than expected retail sales for October, but expectations for a future slowdown are growing.

  • Austria is imposing a windfall tax of up to 40% on oil, gas, and power companies.

  • Hungary's Prime Minister Orban said that his country will continue purchasing gas from Russia next year.

  • European Central Bank President Lagarde repeated that the governing council expects to continue raising rates to ensure that current high inflation doesn't feed into future expectations.



U.S. equity futures:

  • S&P 500 Futures: +29 @ 3,976

  • DJIA Futures: +184 @ 33,730

  • Nasdaq 100 Futures: +106 @ 11,783

Overseas:

  • Europe: DAX +1.2%, FTSE +0.9%, CAC +1.1%

  • Asia: Nikkei -0.1%, Hang Seng -0.3%, Shanghai Composite -0.6%

Commodities:

  • Crude Oil -1.08 @ 80.56

  • Nat Gas -0.236 @ 6.133

  • Gold +0.15 @ 1763.15

  • Silver +0.225 @ 21.20

  • Copper -0.0168 @ 3.6712

Earnings/Guidance:

  • Amedisys ( AMED 0.72% ) reaffirms FY22 guidance

  • Applied Materials ( AMAT 0.42% ) beats by $0.28, beats on revs; guides Q1 EPS in-line, revs in-line

  • Atkore International ( ATKR 0.99% ) beats by $0.44, beats on revs; guides Q1 EPS above consensus; guides FY23 EPS in-line

  • BellRing Brands ( BRBR 3.52% ) beats by $0.02, misses on revs; guides FY23 revs in-line

  • Buckle ( BKE 2.61% ) beats by $0.05, reports revs in-line; Q3 comps +3.0%

  • Clearfield ( CLFD 1.68% ) beats by $0.42 (single estimate), beats on revs; guides FY23 revs considerably above consensus

  • Dolby Labs ( DLB 1.22% ) misses by $0.17, misses on revs; guides Q1 EPS below consensus, revs below consensus; expects FY23 revs to grow by low single digits yr/yr

  • Esco Tech ( ESE 1.97% ) beats by $0.05, beats on revs; guides Q1 EPS below consensus; guides FY23 EPS below consensus, revs above consensus

  • Farfetch ( FTCH 7.64% ) misses by $0.04, reports revs in-line; sees FY22 digital platform GMV decreasing by 5-7%

  • Foot Locker ( FL 3.51% ) beats by $0.15, beats on revs; guides Q4 EPS above consensus; raises FY23 EPS above consensus, revs above consensus

  • Gap ( GPS 4.24% ) reports Q3 (Oct) results, beats on revs

  • Globant ( GLOB 1.72% ) beats by $0.01, reports revs in-line; guides FY22 EPS in-line, revs in-line

  • JD.com ( JD 6.37% ) beats by RMB1.81, reports revs in-line

  • Keysight ( KEYS 0.13% ) beats by $0.15, beats on revs; guides Q1 EPS mostly above consensus, revs above consensus

  • Palo Alto Networks ( PANW 1.87% ) beats by $0.14, reports revs in-line; guides Q2 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs mostly above consensus

  • Post ( POST 3.96% ) beats by $0.15, beats on revs

  • Ross Stores ( ROST 4.38% ) beats by $0.19, beats on revs; guides Q4 EPS mostly above consensus; guides FY23 EPS above consensus

  • Spectrum Brands ( SPB 1.32% ) beats by $0.14, misses on revs; guides FY23 revs in-line

  • StoneCo ( STNE 3.04% ) beats by $0.51, beats on revs; guides Q4 revs below consensus

  • Twist Bioscience ( TWST 3.22% ) beats by $0.23, reports revs in-line; guides Q1 revs below consensus; guides FY23 revs in-line

  • UGI Corp ( UGI 5.78% ) reports Q4 (Sep) results; guides FY23 EPS below consensus; reiterates long-term EPS growth rate of +6-10%

  • Williams-Sonoma ( WSM 2.60% ) misses by $0.02, beats on revs; reaffirms FY23 revs guidance; will not reiterate or update guidance through FY24 due to macro uncertainty

  • Woodward ( WWD 0.92% ) beats by $0.10, beats on revs; guides FY23 EPS in-line, revs above consensus

News:

  • White House economic adviser Brian Deese is expected to leave the administration in 2023, according to Bloomberg

  • The Biden Administration advances transmission buildout to deliver affordable, clean electricity

  • Biden Administration to ask Supreme Court to allow student loan relief program to resume, according to CNBC

  • Justice Department and Department of Education announce a fairer and more accessible bankruptcy discharge process for student loan borrowers

  • New FTX executive John Ray III says corporate controls at FTX are worse than Enron, according to Financial Times

  • Advanced Micro ( AMD 1.51% ) and Analog Devices (ADI) resolve all ongoing patent litigations, based on mutually agreed upon terms

  • Aecom Tech ( ACM 2.24% ) increases its quarterly dividend 20% to $0.18/share

  • Amazon ( AMZN 1.78% ) CEO Andy Jassy provides a note about role eliminations: process extending into the new year; have not concluded how many other roles will be impacted

  • Amedisys ( AMED 0.72% ) CEO Chris Gerard to depart effective today; Paul Kusserow, Chairman, will serve as Chairman and CEO until a replacement is hired

  • Apellis Pharmaceuticals ( APLS 4.40% ) announces that the U.S. Food and Drug Administration has accepted Apellis' unsolicited major amendment to the New Drug Application for intravitreal pegcetacoplan for the treatment of geographic atrophy secondary to age-related macular degeneration

  • AT&T ( T 0.69% ) CFO updates shareholders at Morgan Stanley European Technology Media & Telecom Conference; company's long-term capital allocation priorities remain unchanged

  • Brown-Forman (BF.A) announces that its Board of Directors approved an increase of 9% to the quarterly cash dividend from $0.1885 per share to $0.2055 per share on its Class A and Class B Common Stock

  • Canada Goose ( GOOS 3.59% ) launches share repurchase program

  • Canadian Solar's ( CSIQ 1.10% ) Japan flagship mega-project, the 100 MWp Azuma Kofuji solar project recently reached commercial operation

  • Credit Suisse ( CS 2.35% ) investment bank in Switzerland will not be affected by restructuring, according to Reuters

  • DigitalOcean ( DOCN 2.19% ) appoints Matt Steinfort as CFO beginning in early January 2023

  • Dillard's ( DDS 1.21% ) declares a special dividend of $15.00/share on the Class A and Class B common stock of the company

  • Evolent Health ( EVH 2.08% ) to acquire NIA, the specialty benefit management organization owned by Centene (CNC) for $650 mln; to be immediately accretive to adjusted EBITDA margins and cash flow; provides FY23 guidance

  • Granite Constr ( GVA 0.28% ) awarded an approximately $15 mln rehabilitation contract by the Arizona Department of Transportation

  • INOVIO ( INO 0.47% ) Provides an Update on Lassa Fever and MERS Programs

  • Iovance Biotherapeutics ( IOVA 1.96% ) provides update on biologics license application submission for lifileucel in advanced melanoma

  • Iveric Bio ( ISEE 2.68% ) Announces FDA Has Granted Breakthrough Therapy Designation for Avacincaptad Pegol for Geographic Atrophy

  • KemPharm ( KMPH 1.08% ): FDA grants Orphan Drug Designation to serdexmethylphenidate (SDX), the company's treatment of idiopathic hypersomnia

  • KeyCorp ( KEY 0.75% ) announces CFO transition as Donald Kimble will retire on May 1, 2023; He will be succeeded by Clark H.I. Khayat, current Chief Strategy Officer

  • Live Nation ( LYV 1.10% ): North Carolina AG Josh Stein will investigate Ticketmaster for allegedly violating consumers' rights and antitrust laws

  • MacroGenics ( MGNX 1.70% ) earns $60 mln milestone payment with FDA approval of Teplizumab

  • Meta ( META 1.95% ) CEO Mark Zuckerberg tells employees that WhatsApp and Messenger will drive sales growth, according to Reuters

  • Mirion Technologies ( MIR 0.33% ) files $1.0 bln mixed securities shelf offering

  • Open Lending ( LPRO 0.98% ) authorizes a repurchase program of up to $75 mln through November 17, 2023

  • Oramed Pharmaceuticals ( ORMP 0.39% ) signs contract with MEDICOX to distribute oral insulin in South Korea

  • Pfizer ( PFE 0.10% ) and BioNTech (BNTX) report new data on Omicron BA.4/BA.5-Adapted bivalent booster demonstrating improved immune response against emerging Omicron sublineages

  • Primerica ( PRI 0.43% ) authorizes a $375 mln share repurchase program to occur from January 1, 2023 through December 31, 2023

  • Provention Bio ( PRVB 3.84% ) receives FDA approval for TZIELD

  • Rackspace Technology ( RXT 0.64% ) announces appointment of Bobby Molu as CFO, effective January 16, 2023

  • Rogers Corp ( ROG 0.34% ) announces leadership transition as current CEO Bruce Hoechner plans to retire, effective December 31, 2022

  • Rubicon Technologies ( RBT 4.57% ) committed to a reduction in force plan to reduce spending and preserve cash

  • SeaSpine ( SPNE 0.29% ) and Orthofix (OFIX) announces John Bostjancic as CFO of the new combined company, effective upon merger completion

  • Sonoco Products ( SON 0.87% ) expands Sonopost cornerpost manufacturing in Europe with a new protective packaging production facility set to open in Turkey in November

  • Sorrento Therapeutics ( SRNE 1.40% ) authorized the Company to explore and consider a potential dividend to the Company's stockholders of shares of common stock of Scilex Holding Company (SCLX)

  • Twitter ( TWTR ): Hundreds of Twitter employees have left as Elon Musk softens remote work policy, according to the New York Times

  • Visa ( V 2.13% ) announces appointment of Ryan McInerney as CEO, effective February 1, 2023

  • Xenia Hotels ( XHR 0.40% ) authorized the repurchase of up to an additional $100 mln of outstanding common shares

  • ZTO Express ( ZTO 1.74% ) pursues voluntary conversion to dual-primary listing on The Main Board of The Stock Exchange of Hong Kong

M&A:

  • BHP Group ( BHP 2.55% ): OZ Minerals board intends to recommend BHP's revised proposal

  • Chevron's ( CVX 0.96% ) subsidiary, Chevron USA, signs definitive agreement to acquire full ownership of Beyond6, LLC

  • KKR ( KKR 0.98% ) aiming to sell Westbrick, according to Reuters

  • Palo Alto Networks ( PANW 1.87% ) signs definitive agreement to acquire Cider Security for approximately $195 mln in cash

  • Petrobras ( PBR 0.44% ) received binding proposal for the sale of the Gabriel Passos Refinery but decided to close the process, since the conditions of the presented proposal were below Petrobras' economic and financial evaluation

  • Turquoise Hill Resources ( TRQ 0.42% ): Rio Tinto (RIO) provides update on transaction with Turquoise Hill Resources

  • Zendesk ( ZEN 0.03% ) received written notice from CFIUS that it had concluded its review and cleared the transaction contemplated by the Merger Agreement

Syndicate:

  • 360 DigiTech ( QFIN 4.36% ) launces global offering

  • G1 Therapeutics ( GTHX 3.09% ) commences an underwritten public offering of its common stock

  • Laureate Education ( LAUR 2.45% ) prices underwritten public offering of 32,842,183 shares at $9.75/share

  • MetLife ( MET 0.52% ) files mixed securities shelf offering

  • RAPT Therapeutics ( RAPT 0.05% ) prices offering of 4,054,055 shares of common stock at $18.50 per share

  • Vertex ( VERX 1.58% ) prices offering of 1.5 mln shares of common stock at $15.15 per share

IPOs:

  • Expect to Price:

  • No IPOs expected.


Gapping Up/Down

  • Gapping up:

  • ISEE +20.4%, STNE +19.7%, ROST +17.9%, CLFD +13.9%, PANW +8.6%, MGNX +7.5%, GPS +7.2%, EVH +6.4%, PRVB +5.1%, ORMP +4.6%, AMAT +4.6%, LPRO +4.5%, ACMR +3.2%, ROG +3%, KEYS +2.8%, POST +2.7%, JD +2.6%, ATKR +2.3%, GLOB +1.9%, DDS +1.8%, ZTO +1.8%, AMD +1.6%, DOCN +1.3%, CSIQ +1.1%, UGI +1%


  • Gapping down:

  • SCLX -30.3%, GTHX -21.8%, FTCH -10.8%, RAPT -9.9%, VERX -8.9%, WSM -5.7%, DLB -5.7%, MIR -4.6%, QFIN -3.3%, INO -2.1%, AMED -0.8%, TRQ -0.8%



Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • Applied Materials (AMAT) upgraded to Buy from Hold at Summit Insights


  • Downgrades:

  • Coinbase Global (COIN) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $50


  • Others:

  • AbbVie (ABBV) initiated with an Outperform at Credit Suisse; tgt $170


Upcoming Events:

  • Econ Data:

  • 10:00 ET: Existing Home Sales for Oct (Briefing.com Consensus 4.38 M; Prior 4.71 M)

  • 10:00 ET: Leading Economic Index for Oct (Briefing.com Consensus -0.5%; Prior -0.4%)


  • Earnings:

  • Monday (Nov 14)

  • Morning: MASS ACM YOU CGEN XRAY MNDY OTLY TWKS TSEM TSN

  • Afternoon: AZTA DLO HLLY JJSF SHLS VVV


  • Tuesday (Nov 15)

  • Morning: ARMK BERY DAVA ENR AQUA HD HUYA DNUT SE TME WKME WMT

  • Afternoon: AAP VREX


  • Wednesday (Nov 16)

  • Morning: LOW ONON SR TGT TJX

  • Afternoon: BBWI CSCO CPA CPRT GLBE HP HI KLIC NVDA SONO


  • Thursday (Nov 17)

  • Morning: BABA BJ BRC BV CAMT CLBT DOLE KSS M NTES NJR WB

  • Afternoon: AMAT BRBR DLB ESE FTCH GPS GLOB KEYS PANW POST ROST STNE UGI WSM WWD


  • Friday (Nov 18)

  • Morning: ATKR BKE FL JD SPB TWST



Asia & Europe detail:

Asia: Nikkei -0.1%, Hang Seng -0.3%, Shanghai Composite -0.6%

Equity indices in the Asia-Pacific region ended Friday on a mostly lower note. A People's Bank of China adviser said that the country should aim for growth of at least 5.0% in 2023, which will require an overcoming of the pandemic's impact in the first half of the year. Japan's National Core CPI increased at its fastest pace since early 1982 in the October reading. North Korea reportedly conducted an ICBM test.

  • In economic data:

  • Japan's October National CPI 0.6% m/m (last 0.3%); 3.7% yr/yr (last 3.0%). October National Core CPI 3.6% yr/yr (expected 3.5%; last 3.0%)


---Equity Markets---

  • Japan's Nikkei: -0.1% (-1.3% for the week)

  • Hong Kong's Hang Seng: -0.3% (+3.9% for the week)

  • China's Shanghai Composite: -0.6% (+0.3% for the week)

  • India's Sensex: -0.1% (-0.2% for the week)

  • South Korea's Kospi: +0.1% (-1.6% for the week)

  • Australia's ASX All Ordinaries: +0.2% (+0.1% for the week)

---FX---

  • USD/JPY: -0.2% to 139.87

  • USD/CNH: -0.3% to 7.1241

  • USD/INR: +0.2% to 81.71

Europe: DAX +1.2%, FTSE +0.9%, CAC +1.1%

Major European indices are on track for a solid finish to the week. The U.K. reported better than expected retail sales for October, but expectations for a future slowdown are growing. Austria is imposing a windfall tax of up to 40% on oil, gas, and power companies. Hungary's Prime Minister Orban said that his country will continue purchasing gas from Russia next year. European Central Bank President Lagarde repeated that the governing council expects to continue raising rates to ensure that current high inflation doesn't feed into future expectations.

  • In economic data:

  • U.K.'s October Retail Sales 0.6% m/m (expected 0.3%; last -1.5%); -6.1% yr/yr (expected -6.5%; last -6.8%). October Core Retail Sales 0.3% m/m (expected 0.6%; last -1.5%); -6.7% yr/yr (expected -6.9%; last -6.1%). November GfK Consumer Confidence -44 (expected -52; last -47)

  • Swiss Q3 Industrial Production 5.2% qtr/qtr (last 5.0%)


---Equity Markets---

  • STOXX Europe 600: +1.2% (+0.3% week-to-date)

  • Germany's DAX: +1.2% (+1.5% week-to-date)

  • U.K.'s FTSE 100: +0.9% (+1.3% week-to-date)

  • France's CAC 40: +1.1% (+0.8% week-to-date)

  • Italy's FTSE MIB: +1.1% (+0.7% week-to-date)

  • Spain's IBEX 35: +0.9% (+0.2% week-to-date)

---FX---

  • EUR/USD: +0.2% to 1.0381

  • GBP/USD: +0.6% to 1.1934

  • USD/CHF: +0.1% to 0.9521

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