The S&P 500 futures trade 18 points, or 0.4%, above fair value as the market sees some relief following yesterday's retreat, even as interest rates continue to creep higher. The Nasdaq 100 futures trade 0.3% above fair value.
Support has come from better-than-expected earnings results from Procter & Gamble (PG 158.26, +1.53, +1.0%), UnitedHealth (UNH 463.00, +2.01, +0.4%), Bank of America (BAC 47.75, +1.49, +3.2%), Morgan Stanley (MS 97.01, +3.00, +3.2%), and Fastenal (FAST 59.60, +1.21, +2.1%).
P&G successfully raised prices to offset higher costs and even raised its FY22 revenue guidance, anticipating demand to remain strong.
Given the scope of recent losses, overall buying conviction is still lacking, presumably because there are still concerns surrounding corporate profitability amid higher compensation costs, the Fed's tightening plans in the face of persistent inflation pressures and slower economic growth, and rising interest rates.
In the Treasury market, the 2-yr yield is currently up two basis points to 1.05%, and the 10-yr yield is up one basis point to 1.88% after touching 1.90% overnight. The U.S. Dollar Index is down 0.1% to 95.60. WTI crude futures are up 0.9% to $85.55/bbl.
On the data front, investors will receive Housing Starts (Briefing.comconsensus 1.650 million) and Building Permits (Briefing.comconsensus 1.702 million) for December at 8:30 a.m. ET. The weekly MBA Mortgage Applications Index increased 2.3% following a 1.4% increase in the prior week.
In U.S. Corporate news:
Procter & Gamble (PG 158.26, +1.53): +1.0% after beating top and bottom-line estimates and raising its FY22 revenue guidance.
UnitedHealth (UNH 463.00, +2.01): +0.4% after beating top and bottom-line estimates and reaffirming its FY22 guidance.
Bank of America (BAC 47.75, +1.49): +3.2% after beating EPS estimates.
Morgan Stanley (MS 97.01, +3.00): +3.2% after beating EPS estimates.
Fastenal (FAST 59.60, +1.21): +2.1% after beating top and bottom-line estimates.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. Japan's Nikkei: -2.8% Hong Kong's Hang Seng: +0.1% China's Shanghai Composite: -0.3% India's Sensex: -1.1% South Korea's Kospi: -0.8% Australia's ASX All Ordinaries: -1.0%.
In economic data:
Australia's January Westpac Consumer Sentiment -2.0% (last -1.0%)
New Zealand's December Electronic Card Retail Sales 0.4% m/m (last 9.5%); 4.2% yr/yr (last 2.9%)
In news:
The Bank of Japan's outlook for economic activity and prices noted that inflation expectations have seen a moderate increase.
Chinese local governments have reportedly released their development plans for the year with most aiming for growth of more than 6.0%.
Australia's prime minister is expected to call a federal election for the second half of May.
Major European indices trade on a mostly higher note while Italy's MIB (-0.1%) underperforms. STOXX Europe 600: +0.4% Germany's DAX: +0.4% U.K.'s FTSE 100: +0.3% France's CAC 40: +0.6% Italy's FTSE MIB: -0.1% Spain's IBEX 35: +0.7%.
In economic data:
Eurozone's November Current Account surplus EUR23.60 bln (last surplus of EUR18.10 bln). November Construction Output -0.18% m/m (last 0.64%) o Germany's December CPI 0.5% m/m, as expected (last -0.2%); 5.3% yr/yr, as expected (last 5.2%)
U.K.'s December CPI 0.5% m/m (expected 0.3%; last 0.7%); 5.4% yr/yr (expected 5.2%; last 5.1%). December Core CPI 0.5% m/m (expected 0.2%; last 0.5%); 4.2% yr/yr (expected 3.9%; last 4.0%). December Input PPI -0.2% m/m (expected 0.7%; last 1.5%) and Output PPI 0.3% m/m (expected 0.6%; last 1.0%). December RPI 1.1% m/m (expected 0.7%; last 0.7%); 7.5% yr/yr (expected 7.1%; last 7.1%)
In news:
British Prime Minister Johnson is expected to relax the U.K.'s coronavirus restrictions.
Bank of France Governor Villeroy de Galhau repeated that the European Central Bank will do whatever it needed to achieve the 2% inflation target, adding that growth in France is withstanding the latest coronavirus variant.
Germany's CPI increased at its fastest yr/yr pace since 1992 in the December reading.
U.S. equity futures:
S&P 500 Futures: +16 @ 4,593
DJIA Futures: +85 @ 35,454
Nasdaq 100 Futures: +67 @ 15,277
Overseas:
Europe: DAX +0.4%, FTSE +0.3%, CAC +0.6%
Asia: Nikkei -2.8%, Hang Seng +0.1%, Shanghai Composite -0.3%
Commodities:
Crude Oil +0.58 @ 85.42
Nat Gas -0.061 @ 4.222
Gold +5.05 @ 1817.45
Silver +0.268 @ 23.760
Copper +0.0638 @ 4.4463
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Alliance Data (ADS) reaffirms FY22 average receivables growth
ASML (ASML) beats by $0.63, misses on revs; guides FY22 revs above consensus
B2Gold (BTG) reports Q4 production of 304,897 ounces
Bank of America (BAC) beats by $0.06, reports revs in-line
Barrick (GOLD) delivers on production targets for the third consecutive year
BHP Group (BHP) misses by $0.06; beats on revs
Citizens Financial Group (CFG) beats by $0.13, beats on revs
Commerce Bancshares (CBSH) misses by $0.01
Concentrix (CNXC) beats by $0.18, revs in line; guides Q1 revenue in line; guides FY22 revenue above consensus
Fastenal (FAST) beats by $0.03, beats on revs
Fulton Fincl (FULT) reports EPS in-line, beats on revs
GeoPark (GPRK) announces Q4 operational update; annual average oil and gas production of 37,602 boepd, within 37,000-38,000 boepd guidance and with an exit production of 39,300 boepd
Gold Resource Corporation (GORO) Produces 37,512 Gold Equivalent Ounces in 2021 and Ends Year With Strong Cash Position of $34.0 Million
Hancock Whitney (HWC) beats by $0.16, net interest income down 2%
Interactive Brokers (IBKR) beats by $0.02, misses on revs
J.B. Hunt Transport (JBHT) beats by $0.26, beats on revs
Main Street Capital (MAIN) sees Q4 EPS above consensus
Morgan Stanley (MS) beats by $0.05, reports revs in-line
ONE Gas (OGS) narrows FY21 EPS guidance, still inline with consensus, guides FY22 EPS inline
Orion Energy Systems (OESX) issues downside Q3 revenue guidance, lowers FY22 revenue guidance
Pan American Silver (PAAS) announces preliminary 2021 production results
Pearson Plc (PSO) provides Q4 trading update
Pinnacle Finl (PNFP) beats by $0.12, beats on revs
Plug Power (PLUG) in slide presentation sees FY22revs above consensus
Procter & Gamble (PG) beats by $0.01, beats on revs; reaffirms FY22EPS guidance, raises FY22revs
Progress Software (PRGS) beats by $0.18, beats on revs; guides FebQ EPS below consensus, revs below consensus; guides FY22EPS below consensus, midpoint revs above consensus
State Street (STT) beats by $0.11, beats on revs
United Comm Banks (UCBI) misses by $0.01, misses on revs
UnitedHealth (UNH) beats by $0.17, beats on revs; reaffirms FY22EPS guidance, revs guidance
U.S. Bancorp (USB) misses by $0.03, misses on revs
Vimeo (VMEO) reports performance metrics for December 2021; total revenue jumped 23% yr/yr
General News:
US and Russia will have meetings Friday to try to find diplomatic solution to avoid conflict in Eastern Europe. US has warned that Russia might soon attack Ukraine, according to the New York Times
Airlines cancel some flights ahead of 5G launch, according to the Wall Street Journal
White House will distribute high quality masks through pharmacies and community sites, according to Politico
US and UK will likely announce start of negotiations around metals tariffs today, according to Reuters
White House looking for support around technology antitrust bill, but the administration does not plan to endorse the legislation at this time, according to Bloomberg
China wants to require approval from internet companies for investments, according to Reuters
AgEagle Aerial Systems (UAVS) reappoints Barrett Mooney as Chief Executive Office, effective immediately
Alphabet (GOOG): YouTube ends original programming division, according to the Wall Street Journal
AstraZeneca (AZN): positive results from the TOPAZ-1 Phase 3 trial showed IMFINZI with chemotherapy demonstrated a statically significant improvement in overall survival versus chemotherapy alone as a first-line treatment for patients with advanced biliary tract cancer
AstraZeneca (AZN) reports mfinzi plus chemotherapy reduced risk of death by 20% in 1st-line advanced biliary tract cancer
AstraZeneca (AZN) reports mfinzi plus tremelimumab demonstrated unprecedented survival in 1st-line unresectable liver cancer with 31% of patients alive at three years
Biohaven Pharmaceutical (BHVN): Global Coalition for Adaptive Research provides update on progress of GBM AGILE; troriluzole selected for inclusion
BIT Mining (BTCM) provides operational and business updates
BJ's Wholesale (BJ) to move co-branded credit cards to Capital One (COF) from Alliance Data Systems (ADS), according to the Wall Street Journal
Cardiff Oncology (CRDF) Announces New Data from Lead Clinical Program in KRAS-mutated Metastatic Colorectal Cancer Showing Robust Objective Response Rate and Progression Free Survival
Chimerix (CMRX) announces publication of ONC201 data from Phase 2 study in neuroendocrine tumors
Codexis (CDXS) receives FDA orphan designation for treatment of homocystinuria
DarioHealth (DRIO) has contracted with a large regional health plan (the "Plan") to deliver its digital therapeutic solution for diabetes for eligible Medicaid members in and around the mid-Atlantic region
EnLink Midstream (ENLC) increases quarterly distribution 20% to $0.1125/common unit
ESSA Pharma (EPIX) announced the first patient dosed in the Company-sponsored Phase 1/2 study to evaluate the safety, tolerability and preliminary efficacy of ESSA's lead product candidate, EPI-7386
Exact Sciences (EXAS) Presents Data Showing Improved Accuracy of Second-generation Cologuard Test and Progress Toward an Even Better Colorectal Cancer Screening Solution for Patients
Exelixis (EXEL) Announces Detailed Results for Cabozantinib in Combination with Immunotherapies in Patients with Advanced Colorectal Cancer at ASCO GI 2022
Fastenal (FAST) increases quarterly cash dividend to $0.31/share from $0.28/share
Ford Motor (F) updates certain special items it intends to report in early Feb as part of its Q4 results
Galapagos NV (GLPG) receives marketing authorization for Jyseleca in ulcerative colitis from the MHRA
Gamida Cell (GMDA) provides update on omidubicel BLA submission; Full BLA submission on track for first half of 2022
Honeywell (HON) and FREYR (FREY) collaborate to deploy energy storage solutions via next-generation battery cells
ImmunityBio (IBRX) Announces Results of Phase 2 Metastatic Pancreatic Cancer Trial at ASCO GI With Median Overall Survival of 6.3 Months in Patients With Third-Line Disease, More Than Doubling Historical Survival
Jacobs Engineering (J) was selected by Johns Hopkins Medicine to provide project management services for the redevelopment of laboratory space on its medical campus in Baltimore, Maryland
Kinnate BioPharma (KNTE): FDA has cleared investigational new drug application for KIN-3248, a pan-FGFR inhibitor being developed for intrahepatic cholangiocarcinoma and urothelial carcinoma
Leap Therapeutics (LPTX) to Present Positive New Data from the DisTinGuish Study of DKN-01 Plus Tislelizumab at the ASCO GI Cancers Symposium
Mainz Biomed B.V. (MYNZ) engages DCN Dx to support clinical study evaluating novel mRNA biomarkers for potential integration into ColoAlert
Matrix Service (MTRX) announces project award from Chemours (CC) in West Virginia
Merck (MRK) reports final results from Phase 3 KEYNOTE-394 trial; KEYTRUDA plus BSC demonstrated statistically significant improvement in primary endpoint of overall survival
Nevro (NVRO): FDA approves expanded labeling for Senza Spinal Cord Stimulation (SCS) System
New Found Gold Corp. (NFGC) intercepts 98.13 g/t au over 3.85m at golden joint, extending the high-grade zone to 305m vertical depth
NICE (NICE) and Magnet Forensics announced a partnership to digitally transform police case building and investigations to accelerate the pursuit of justice
nLIGHT (LASR) announces that Ran Bareket, Chief Financial Officer, plans to retire from nLIGHT
Olo Inc. (OLO) promotes Nithya B. Das to COO
OncoCyte (OCX) announces development and co-marketing agreement for two in vitro diagnostic assays on Thermo Fisher Scientific's Ion Torrent Genexus System
ONE Gas (OGS) increases quarterly dividend for Q1 by $0.04/share to $0.62/share
Orthofix (OFIX) announces a partnership and investment agreement to jointly develop and co-market the innovative nView systems with Orthofix cervical spine and pediatric limb deformity correction procedural solutions
Prosperity Bancshares (PB) authorizes stock repurchase program for up to 4.6 mln shares of common stock over a one year period
PS Business Parks (PSB) appoints Stephen W. Wilson as interim CEO, effective January 17
Regeneron Pharma (REGN) accepts for review Libtayo in combination with chemotherapy for first-line treatment of advanced NSCLC
Revance Therapeutics (RVNC): receives official Type A meeting minutes from the FDA regarding DaxibotulinumtoxinA for injection for glabellar lines
Seagen (SGEN) Reports Data From SEA-CD40 in Combination With Other Therapies in Metastatic Pancreatic Ductal Adenocarcinoma (PDAC) at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium
SoFi Technologies (SOFI) announces receipt of regulatory approval to become a national bank
Teva Pharma (TEVA) agrees to pay $420 mln to settle litigation concerning generic drug pricing, according to Reuters
Valaris (VAL) awarded two one-well contracts for semisubmersible VALARIS DPS-5
Whitestone REIT (WSR) CEO employment terminated for cause; appoints Dave Holeman as CEO
Zogenix (ZGNX) to be acquired by UCB for $26.00 per share in cash
M&A:
American Fincl (AFG) acquires Verikai for approximately $120 mln in cash
BrightView (BV) announces acquisition of Performance Landscapes; terms not disclosed
B. Riley Financial (RILY) agrees to acquire FocalPoint Securities for total consideration of up to $175 mln
Bruker (BRKR) announces the acquisition of Prolab Instruments GmbH; financial terms not disclosed
Ginkgo Bioworks (DNA) announces acquisition of Project Beacon COVID-19
NortonLifeLock (NLOK): UK CMA is investigating the anticipated acquisition by NortonLifeLock Inc. of Avast plc
SolarWinds (SWI) has acquired Monalytic, a monitoring, analytics, and professional services company, and preferred SolarWinds services provider; no financial terms disclosed
TEGNA (TGNA): Standard General and Apollo Global Management (APO) are nearing a potential bid for TEGNA, according to NY Post
Vintage Wine Estates (VWE) announces acquisition of Meier's Beverage Group
Syndicate:
Perella Weinberg Partners (PWP) prices offering of 3,502,033 shares of common stock at $10.75 per share
Signature Bank (SBNY) prices offering of 2.1 mln shares of common stock at $352.00 per share
Wendy's (WEN) evaluating a potential debt raise transaction within securitized debt facility
IPOs:
Expected to Price:
Four Springs Capital Trust (NYSE: FSPR): The REIT that's focused on acquiring, owning and actively managing a diversified portfolio of single-tenant, income-producing commercial properties is expected to price its 18.0 M share IPO between $13-$15.
Rhodium Enterprises (Nasdaq: RHDN): The industrial-scale digital asset technology company utilizing its proprietary technologies to mine bitcoin is expected to price its 7.7 M share IPO between $12-$14.
Verdant Earth Technologies (Nasdaq: VDNT): The development stage green energy company is expected to price its 6.3 M share IPO between $7-$9.
Gapping Up/Down
Gapping up:
ZGNX +60.2%, SOFI +17.9%, IBRX +11.5%, LPTX+8.8%, TGNA +6.6%, PSO +6.4%, BTCM +5.4%, CNXC+4.6%, OCX +4.1%, VMEO +2.9%, ASML +2.8%, EXAS+2.5%, RILY +2.2%, PWP +2.2%, IBKR +2.1%, BHP+1.5%, RVNC +1.3%, MTRX +1.2%, ENLC +1%, VAL+0.9%, PRGS +0.8%
Gapping down:
UCBI -16.9%, OESX -13.3%, CRDF -12.9%, AXU-5.9%, ADS -5.9%, FULT -2.7%, UAVS -2.1%, CMRX-1.1%, HWC -0.9%, SBNY -0.6%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
ABB Ltd (ABB) upgraded to Outperform from Sector Perform at RBC Capital Mkts
AEGON N.V. (AEG) upgraded to Neutral from Underperform at BofA Securities
Akamai Tech (AKAM) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $140
Arcos Dorados (ARCO) upgraded to Buy from Neutral at Goldman; tgt raised to $7
Bath & Body Works (BBWI) upgraded to Conviction Buy from Buy at Goldman; tgt $93
Boise Cascade (BCC) upgraded to Buy from Underperform at BofA Securities; tgt raised to $82
Exxon Mobil (XOM) upgraded to Sector Perform from Underperform at RBC Capital Mkts; tgt raised to $90
Rocket Companies (RKT) upgraded to Overweight from Underweight at JP Morgan; tgt lowered to $15
Qualtrics (XM) upgraded to Outperform from In-line at Evercore ISI; tgt $40
Tandem Diabetes Care (TNDM) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $160
Under Armour (UAA) upgraded to Neutral from Underperform at Exane BNP Paribas; tgt $18
Downgrades:
Ally Financial (ALLY) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $56
NeuroPace (NPCE) downgraded to Equal Weight from Overweight at Wells Fargo; tgt $11
Oportun Financial (OPRT) upgraded to Overweight from Neutral at JP Morgan; tgt lowered to $23
Passage BIO (PASG) downgraded to Neutral from Buy at Goldman; tgt lowered to $6
TCR2 Therapeutics (TCRR) downgraded to Neutral from Buy at Goldman; tgt lowered to $5
Toll Brothers (TOL) downgraded to Underweight from Sector Weight at KeyBanc Capital Markets; tgt $56
TopBuild (BLD) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
Zimmer Biomet (ZBH) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $124
Others:
ADS-TEC Energy GmbH (ADSE) initiated with a Strong Buy at Raymond James; tgt $14
Arrowhead (ARWR) assumed with a Buy at Goldman; tgt lowered to $85
Arvinas (ARVN) initiated with a Buy at Goldman; tgt $157
Brown-Forman (BF.B) initiated with a Mkt Perform at Bernstein; tgt $70
Cloudflare (NET) initiated with an Overweight at KeyBanc Capital Markets; tgt $132
Nutanix (NTNX) initiated with an Overweight at KeyBanc Capital Markets; tgt $39
Opendoor Technologies (OPEN) initiated with an Underperform at BofA Securities; tgt $8
Sea Limited (SE) initiated with a Hold at Loop Capital; tgt $190
SoFi Technologies (SOFI) initiated with an Outperform at Wedbush; tgt $20
US Foods (USFD) initiated with a Buy at Deutsche Bank; tgt $44
VMware (VMW) initiated with a Overweight at KeyBanc Capital Markets; tgt $164
Upcoming Events:
Econ Data:
07:00 ET: MBA Mortgage Applications Index for Jan. 15 (Briefing.comConsensus NA; Prior 1.4%)
08:30 ET: Housing Starts for Dec (Briefing.comConsensus 1650K; Prior 1679K)
08:30 ET: Building Permits for Dec (Briefing.comConsensus 1702K; Prior 1712K)
10:30 ET: EIA Crude Oil Inventories for Jan 15 (Briefing.comConsensus NA; Prior -4.55M)
Earnings:
Tuesday (Jan 18)
Morning: BK SCHW FMBI GS ONB PNC SBNY SI TFC
Afternoon: FULT HWC IBKR JBHT PNFP PRGS UCBI
Wednesday (Jan 19)
Morning: ASML BAC BOKF CFG CMA CBSH FAST MS PG PLD STT USB UNH
Afternoon: AA COLB DFS FNB FUL KMI STL UMPQ UAL WTFC
Thursday (Jan 20)
Morning: AAL BKR BKU FITB FHN HOMB KEY MTB NTRS PPBI RF SASR SNV TRV UNP WBS WNS
During Market Hours: WABC
Afternoon: ASB OZK CSX ISRG LLNW NBHC NFLX PBCT PPG SIVB TCBI
Friday (Jan 21)
Morning: ALLY FHB HBAN INFO SLB
Asia & Europe detail:
Asia: Nikkei -2.8%, Hang Seng +0.1%, Shanghai Composite -0.3%
Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. The Bank of Japan's outlook for economic activity and prices noted that inflation expectations have seen a moderate increase. Chinese local governments have reportedly released their development plans for the year with most aiming for growth of more than 6.0%. Australia's prime minister is expected to call a federal election for the second half of May.
In economic data:
Australia's January Westpac Consumer Sentiment -2.0% (last -1.0%)
New Zealand's December Electronic Card Retail Sales 0.4% m/m (last 9.5%); 4.2% yr/yr (last 2.9%)
---Equity Markets---
Japan's Nikkei: -2.8%
Hong Kong's Hang Seng: +0.1%
China's Shanghai Composite: -0.3%
India's Sensex: -1.1%
South Korea's Kospi: -0.8%
Australia's ASX All Ordinaries: -1.0%
---FX---
USD/JPY: -0.1% to 114.48
USD/CNH: -0.2% to 6.3481
USD/INR: -0.2% to 74.43
Europe: DAX +0.4%, FTSE +0.3%, CAC +0.6%
Major European indices trade on a mostly higher note while Italy's MIB (-0.1%) underperforms. British Prime Minister Johnson is expected to relax the U.K.'s coronavirus restrictions. Bank of France Governor Villeroy de Galhau repeated that the European Central Bank will do whatever it needed to achieve the 2% inflation target, adding that growth in France is withstanding the latest coronavirus variant. Germany's CPI increased at its fastest yr/yr pace since 1992 in the December reading.
In economic data:
Eurozone's November Current Account surplus EUR23.60 bln (last surplus of EUR18.10 bln). November Construction Output -0.18% m/m (last 0.64%) o Germany's December CPI 0.5% m/m, as expected (last -0.2%); 5.3% yr/yr, as expected (last 5.2%)
U.K.'s December CPI 0.5% m/m (expected 0.3%; last 0.7%); 5.4% yr/yr (expected 5.2%; last 5.1%). December Core CPI 0.5% m/m (expected 0.2%; last 0.5%); 4.2% yr/yr (expected 3.9%; last 4.0%). December Input PPI -0.2% m/m (expected 0.7%; last 1.5%) and Output PPI 0.3% m/m (expected 0.6%; last 1.0%). December RPI 1.1% m/m (expected 0.7%; last 0.7%); 7.5% yr/yr (expected 7.1%; last 7.1%)
---Equity Markets---
STOXX Europe 600: +0.4%
Germany's DAX: +0.4%
U.K.'s FTSE 100: +0.3%
France's CAC 40: +0.6%
Italy's FTSE MIB: -0.1%
Spain's IBEX 35: +0.7%
---FX---
EUR/USD: +0.2% to 1.1341
GBP/USD: +0.3% to 1.3632
USD/CHF: -0.1% to 0.9158