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19/12/23 Briefing


The S&P 500 futures are up nine points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 31 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 83 points and are trading 0.2% above fair value.

Stocks are poised to build on gains at the open. A drop in yields has acted as support. The 2-yr note yield is down four basis points to 4.42% and the 10-yr note yield is down six basis points to 3.90%.

The Bank of Japan voted unanimously to leave its policy rate unchanged at -0.10% and indicated it will be sticking with its negative interest rate policy. This weighed heavily on the yen (USD/JPY +1.0% to 144.20).

Today's economic calendar features November Building Permits (Briefing.com consensus 1.46 million; prior 1.487 million) and Housing Starts (Briefing.com consensus 1.36 million; prior 1.372 million) at 8:30 a.m. ET.

In other news, the US and allies have strengthened the naval task force in the Red Sea amid attacks by Houthi rebels in Yemen, according to FT.

In corporate news:

  • Accenture (ACN 335.20, -6.65, -2.0%): beats by $0.13, reports revs in-line; guides Q2 revs below consensus; reaffirms FY24 EPS guidance, revs guidance

  • HEICO

  • Salesforce (CRM 263.52, -0.07, -0.03%): to acquire Spiff

  • Alcoa (AA 30.73, +0.21, +0.7%): expects to record a valuation allowance on certain deferred tax assets in Brazil resulting in an impact to adjusted net loss per share in Q4 of $0.22-0.28

  • Alphabet (GOOG 137.74, +0.55, +0.4%): Google will pay $700 mln to settle AppStore case, according to WSJ

  • UBS

  • Amgen (AMGN 279.54, +4.06, +1.5%): upgraded to Outperform from Market Perform at BMO Capital Markets

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region were mostly higher, sporting modest gains. Japan's Nikkei: +1.3%, Hong Kong's Hang Seng: -0.7%, China's Shanghai Composite: +0.1%, India's Sensex: +0.2%, South Korea's Kospi: +0.1%, Australia's All Ordinaries: +0.9%.

  • In economic data:

  • Hong Kong's November Unemployment Rate 2.9% (Prior 2.9%)

  • New Zealand's December ANZ Business Confidence 33.2 (Prior 30.8)

  • In news:

  • Japan's Nikkei rallied on the back of a unanimous decision by the Bank of Japan's (BOJ) Policy Board to leave its short-term policy rate unchanged at -0.10%. That decision was not a surprise, but it was a bit of a pleasant surprise to market participants that there was no implication in the policy directive that the BOJ will be exiting its negative interest rate policy.

  • The directive said the BOJ will "patiently continue with monetary easing while nimbly responding to developments in economic activity and prices as well as financial conditions," given extremely high uncertainties surrounding economies and financial markets at home and abroad. USD/JPY +1.4% to 144.67, as the BOJ's easy position has weighed heavily on the yen.

  • Australia's All Ordinaries outperformed, keying off the reflection in the RBA Minutes that the case for leaving the cash rate target unchanged at the latest meeting was the stronger one.

  • An IMF report showed a forecast for 6.3% GDP growth for India in both 2023 and 2024.

  • Major European indices are mixed and little changed from yesterday's closing levels, battling conflicting views on when the ECB might eventually cut interest rates. STOXX Europe 600: +0.2%, Germany's DAX: +0.4%, UK's FTSE 100: -0.1%, France's CAC 40: -0.1%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +0.3%.

  • In economic data:

  • Eurozone's November CPI -0.6% m/m (expected -0.5%; last 0.1%) and 2.4% yr/yr (expected 2.4%; last 2.9%); Core CPI -0.6% m/m (expected -0.6%; last 0.2%) and 3.6% yr/yr (expected 3.6%; last 4.2%)

  • UK's December CB Industrial Trends Orders -23 (last -35)

  • In news:

  • ECB member Villeroy suggested the ECB could be able to lower rates sometime in 2024.

  • Fellow ECB member Simkus thinks the market's expectations for rate cuts are too optimistic, according to Bloomberg.

  • Notably, the ECB has raised capital demands for 20 large banks because of unpaid loans, according to Reuters.

  • The eurozone's final year-over-year CPI readings for November were in-line with the preliminary reports of 2.4% for CPI and 3.6% for core CPI.

  • UK Prime Minister Sunak confirmed a General Election will be held in 2024, not 2025, the German government is planning to sell less debt in 2024 than it did in 2023, and the EU is prolonging its tariff suspension for US products related to the steel and aluminum dispute to March 31, 2025. EUR/USD +0.2% to 1.0945.

 

U.S. equity futures:

  • S&P 500 Futures +10 @ 4,751

  • DJIA Futures: +83 @ 37,389

  • Nasdaq 100 Futures: +28 @ 16,758

Overseas:

  • Europe: DAX +0.4%, FTSE -0.1%, CAC -0.1%

  • Asia: Nikkei +1.3%, Hang Seng -0.7%, Shanghai Composite +0.1%

Commodities:

  • Crude Oil -0.22 @ 72.60

  • Nat Gas -0.061 @ 2.442

  • Gold +2.35 @ 2042.85

  • Silver +0.143 @ 24.250

  • Copper +0.0323 @ 3.8843

Earnings/Guidance:

  • Accenture (

  • Alcoa (

  • Exelon (

  • FactSet (

  • FuelCell Energy (

  • HEICO (

  • Imperial Oil (

  • Pebblebrook Hotel Trust (

  • Quipt Home Medical (

News:

  • US and allies strengthen naval task force in the Red Sea amid attacks by Houthi rebels in Yemen, according to Financial Times

  • Maersk diverting ships around Africa to avoid security threats in Red Sea, according to Financial Times

  • Senate Majority Leader Chuck Schumer says negotiators were still far from completing a deal on border security and Ukraine funding, according to the New York Times

  • US will run out of money for Ukraine thus month, according to Politico

  • Texas Governor Greg Abbott signs legislation giving the state the authority to arrest migrants who enter illegally. Legal challenges are expected, according to the New York Times

  • BOJ issues monetary decision; keeps minus 0.1% interest rate

  • EU prolongs tariff suspension for US products related to the steel and aluminium dispute

  • Accretion Acquisition Corp. (

  • ADMA Biologics (

  • Aldeyra Therapeutics (

  • Allurion Technologies (

  • Anavex (

  • Anheuser-Busch InBev (

  • APi Group (

  • AstraZeneca (

  • Berkshire Hathaway's PacifiCorp (

  • Biogen (

  • Boeing (

  • Cardlytics' (

  • Carlyle Group (

  • Centrais Electricas Brasileiras (

  • Chindata Group (

  • Churchill Downs (

  • Comcast's (

  • Crinetics (

  • CrossFirst Bankshares (

  • Dada (

  • Disney (

  • Enphase Energy (

  • Fisker (

  • Flex (

  • FMC Corp (

  • Gildan Activewear (

  • Gilead Sciences (

  • Ginkgo Bioworks' (

  • Ginkgo Bioworks (

  • Google (

  • HF Sinclair (

  • INmune Bio (

  • Illumina (

  • Ionis Pharma (

  • Kforce (

  • Krystal Biotech (

  • Markel Group (

  • Merit Medical (

  • Merck (

  • Microsoft (

  • Pan Am Silver (

  • Paranaense de Energia (

  • Parsons (

  • Primerica (

  • Rayonier (

  • Seacoast Banking (

  • Sight Sciences (

  • Supernus Pharma (

  • Taiwan Semiconductor Manufacturing (

  • Telefonica Brasil (

  • Tencent (

  • Tesla (

  • TFI International (

  • Trinity Capital (

  • uniQure (

  • XOMA (

M&A:

  • AngloGold Ashanti (

  • Archer-Daniels (

  • Carlyle (

  • Copart (

  • CSI Compressco LP (

  • Mirati Therapeutics (

  • Nabors Energy Transition Corp (

  • Neoleukin Therapeutics (

  • O'Reilly Auto (

  • Qorvo (

  • Salesforce (

  • Sea Limited's (

  • Sociedad Quimica y Minera (

  • SomaLogic (

Syndicate:

  • Ameren (

  • Bluebirdbio (

  • Diversified Healthcare Trust (

  • Endeavour Silver (

  • Mama's Creations (

  • Permian Resources (

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

 

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

  • Upgrades

  • American Intl (AIG) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $83

  • Amgen (AMGN) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $326

  • Arvinas (ARVN) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $63

  • Itron (ITRI) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $91

  • Rockwell Automation (ROK) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $357

  • Sunnova Energy (NOVA) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $26

  • Sunrun (RUN) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $31

  • Downgrades:

  • Array Tech (ARRY) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $22

  • Equinor (EQNR) downgraded to Sector Perform from Outperform at RBC Capital Mkts

  • Masonite International (DOOR) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $92

  • PepsiCo (PEP) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $176

  • Plug Power (PLUG) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $2.30

  • SolarEdge Technologies (SEDG) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $105

  • Others:

  • BARK Inc. (BARK) initiated with a Hold at Jefferies; tgt $1.34

  • Bruker (BRKR) initiated with an Equal Weight at Wells Fargo; tgt $72

  • Chemomab Therapeutics (CMMB) resumed with a Buy at ROTH MKM; tgt $7

  • Chewy (CHWY) initiated with a Buy at Jefferies; tgt $27

  • Equifax (EFX) initiated with an Outperform at Oppenheimer; tgt $273

  • Exelixis (EXEL) initiated with a Buy at BTIG Research; tgt $27

  • Freshpet (FRPT) initiated with a Hold at Jefferies; tgt $80

  • Kinetik (KNTK) resumed with a Neutral at Citigroup; tgt $35

  • Petco Health and Wellness (WOOF) initiated with a Hold at Jefferies; tgt $3.11

  • PetIQ (PETQ) initiated with a Buy at Jefferies; tgt $22

  • TransUnion (TRU) initiated with an Outperform at Oppenheimer; tgt $81

Econ Data:

  • 08:30 ET: Building Permits for Nov (Briefing.com Consensus 1460K; Prior 1487K)

  • 08:30 ET: Housing Starts for Nov (Briefing.com Consensus 1360K; Prior 1372K)

  • 16:00 ET: Net Long-Term TIC Flows for Oct (Briefing.com Consensus NA; Prior -$1.7B)

Earnings:

  • Monday (Dec 18)

  • Afternoon: HEI

  • Tuesday (Dec 19)

  • Morning: ACN FDS FCEL

  • Afternoon:  FDX SCS WOR

  • Wednesday (Dec 20)

  • Morning:  GIS TTC WGO

  • Afternoon: BB MLKN MU

  • Thursday (Dec 21)

  • Morning: APOG CCL KMX CTAS PAYX

  • Afternoon: AIR AVO NKE

 

Asia & Europe detail:

Asia: Nikkei +1.3%, Hang Seng -0.7%, Shanghai Composite +0.1%

Equity indices in the Asia-Pacific region were mostly higher, sporting modest gains. Japan's Nikkei (+1.3%) was an exception, rallying on the back of a unanimous decision by the Bank of Japan's (BOJ) Policy Board to leave its short-term policy rate unchanged at -0.10%. That decision was not a surprise, but it was a bit of a pleasant surprise to market participants that there was no implication in the policy directive that the BOJ will be exiting its negative interest rate policy. The directive said the BOJ will "patiently continue with monetary easing while nimbly responding to developments in economic activity and prices as well as financial conditions," given extremely high uncertainties surrounding economies and financial markets at home and abroad. USD/JPY +1.4% to 144.67, as the BOJ's easy position has weighed heavily on the yen. Australia's All Ordinaries (+0.9%) outperformed, keying off the reflection in the RBA Minutes that the case for leaving the cash rate target unchanged at the latest meeting was the stronger one. Separately, an IMF report showed a forecast for 6.3% GDP growth for India in both 2023 and 2024.

  • In economic data:

  • Hong Kong's November Unemployment Rate 2.9% (Prior 2.9%)

  • New Zealand's December ANZ Business Confidence 33.2 (Prior 30.8)

---Equity Markets---

  • Japan's Nikkei: +1.3%

  • Hong Kong's Hang Seng: -0.7%

  • China's Shanghai Composite: +0.1%

  • India's Sensex: +0.2%

  • South Korea's Kospi: +0.1%

  • Australia's All Ordinaries: +0.9%

---FX---

  • USD/JPY: +1.4% to 144.67

  • USD/CNH: +0.1% to 7.1489

  • USD/INR: flat at 83.180

 

Europe: DAX +0.4%, FTSE -0.1%, CAC -0.1%

Major European indices are mixed and little changed from yesterday's closing levels, battling conflicting views on when the ECB might eventually cut interest rates. ECB member Villeroy suggested the ECB could be able to lower rates sometime in 2024. Fellow ECB member Simkus thinks the market's expectations for rate cuts are too optimistic, according to Bloomberg. Notably, the ECB has raised capital demands for 20 large banks because of unpaid loans, according to Reuters. The eurozone's final year-over-year CPI readings for November were in-line with the preliminary reports of 2.4% for CPI and 3.6% for core CPI. Elsewhere, UK Prime Minister Sunak confirmed a General Election will be held in 2024, not 2025, the German government is planning to sell less debt in 2024 than it did in 2023, and the EU is prolonging its tariff suspension for US products related to the steel and aluminum dispute to March 31, 2025. EUR/USD +0.2% to 1.0945.

  • In economic data:

  • Eurozone's November CPI -0.6% m/m (expected -0.5%; last 0.1%) and 2.4% yr/yr (expected 2.4%; last 2.9%); Core CPI -0.6% m/m (expected -0.6%; last 0.2%) and 3.6% yr/yr (expected 3.6%; last 4.2%)

  • UK's December CB Industrial Trends Orders -23 (last -35)

---Equity Markets---

  • STOXX Europe 600: +0.2%

  • Germany's DAX: +0.4%

  • UK's FTSE 100: -0.1%

  • France's CAC 40: -0.1%

  • Italy's FTSE MIB: +0.2%

  • Spain's IBEX 35: +0.3%

---FX---

  • EUR/USD: +0.2% to 1.0945

  • GBP/USD: +0.6% to 1.2722

  • USD/CHF: -0.2% to 0.8654



































































































































































































































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