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20/06/23 Briefing


The S&P 500 futures are down 13 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 41 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 108 points and are trading 0.3% below fair value.

The stock market is poised to start this holiday shortened week on a softer note. Still, there hasn't been any real urgency to sell, leading to only a modest pullback after a big run recently.

The People's Bank of China lowered its one-year loan prime rate by ten basis points to 3.55% while the five-year rate was also lowered by ten basis points, to 4.20%. On a related note, Goldman Sachs lowered its 2023 GDP estimate for China to 5.4% from 6.0%.

Treasury yields are little changed from Friday's settlement levels. The 2-yr note yield is down three basis points to 4.69% and the 10-yr note yield is down one basis point to 3.75%.

U.S. economic data today is limited to May Housing Starts (prior 1.401 million) and Building Permits (prior 1.416 million) at 8:30 a.m. ET. Looking ahead, Fed Chair Powell will deliver his semiannual monetary policy report before Congress on Wednesday and Thursday.

In corporate news:

  • Alibaba (BABA 89.98, -2.12, -2.3%): announces Chairman and CEO succession plan

  • U.S. Foods (USFD 42.71, +1.06, +2.6%): upgraded to Overweight from Equal Weight at Morgan Stanley

  • Baidu (BIDU 146.75, +1.64, +1.1%): upgraded to Overweight from Equal-Weight at Morgan Stanley

  • U.S. Steel (X 23.28, -0.13, -0.6%): sees Q2 EPS above consensus

  • Avis Budget (CAR 212.72, +8.43, +4.1%): upgraded to Overweight from Equal-Weight at Morgan Stanley

  • Tesla (TSLA 260.40, -0.14, -0.1%): offers discounts on Model S and Model X, according to ElecTrek

  • Lazard (LAZ 33.55, +1.45, +4.5%): Abu Dhabi's sovereign wealth fund in discussions to take Lazard (LAZ) private, according to the FT.

  • V.F. Corp (VFC 19.50, -0.01, -0.1%): appoints Bracken Darrell as President and CEO

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: -1.5%, China's Shanghai Composite: -0.5%, India's Sensex: +0.3%, South Korea's Kospi: -0.2%, Australia's ASX All Ordinaries: +0.8%.

  • In economic data:

  • Japan's April Industrial Production 0.7% m/m (expected -0.4%; last 0.3%) and Capacity Utilization 3.0% m/m (expected 0.3%; last -0.1%)

  • Hong Kong's May CPI -0.3% m/m (last 0.2%); 2.0% yr/yr (expected 2.3%; last 2.1%)


  • In news:

  • The People's Bank of China lowered its one-year loan prime rate by ten basis points to 3.55% while the five-year rate was also lowered by ten basis points, to 4.20%, though the moves were seen as underwhelming by the market.

  • India's Prime Minister Modi will meet with President Biden at the White House tomorrow.

  • Warren Buffett is reportedly looking at investment possibilities in Japan.



  • Major European indices trade on a mostly lower note. STOXX Europe 600: -0.3%, Germany's DAX: -0.5%, U.K.'s FTSE 100: +0.1%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: +0.2%.

  • In economic data:

  • Eurozone's April Current Account surplus EUR4.0 bln (expected surplus of EUR27.3 bln; last surplus of EUR31.0 bln). April Construction Output -0.44% m/m (expected 0.0%; last -1.64%)

  • Germany's May PPI -1.4% m/m (expected -0.7%; last 0.3%); 1.0% yr/yr (expected 1.7%; last 4.1%)

  • Swiss May trade surplus CHF5.479 bln (expected surplus of CHF3.450 bln; last surplus of CHF2.560 bln)


  • In news:

  • Germany's PPI decreased in May with the yr/yr growth rate slowing down to 1.0%, the smallest increase since January 2021.

  • European Central Bank policymaker Stournaras said that additional rate hikes cannot be excluded and that a peak rate will likely be maintained for at least six months.

  • The Bank of England will reportedly implement a new stress test focusing on the strength of the financial system.



U.S. equity futures:

  • S&P 500 Futures: -15 @ 4,395

  • DJIA Futures: -115 @ 34,184

  • Nasdaq 100 Futures: -51 @ 15,033

Overseas:

  • Europe: DAX -0.5%, FTSE +0.1%, CAC -0.2%

  • Asia: Nikkei +0.1%, Hang Seng -1.5%, Shanghai Composite -0.5%

Commodities:

  • Crude Oil -0.02 @ 71.91

  • Nat Gas +0.043 @ 2.675

  • Gold -8.75 @ 1962.45

  • Silver -0.236 @ 23.89

  • Copper -0.0193 @ 3.8697


Earnings/Guidance:

  • Avanos Medical ( AVNS 1.01% ) lowers FY23 EPS guidance at investor day

  • General Electric ( GE 0.83% ): GE Aerospace states its on track to meet FY23 guidance

  • IDT Corp ( IDT 2.08% ) in slide presentation says that it sees 4 year CAGR of +32%

  • NJ Resources ( NJR 0.25% ) reaffirms FY23 guidance in slide presentation

  • Raytheon Technologies ( RTX 0.27% ) reaffirms FY23 outlook at Investor Day; reaffirms 2025 financial outlook and increases targeted capital return to shareowners

  • U.S. Steel ( X 1.89% ) sees Q2 EPS above consensus

  • WEC Energy Group ( WEC 0.16% ) provides 2025-2027 sales growth forecast in slide presentation: Electric and gas growth of +0.7-1.0%

News:

  • Chinese banks lowered lending rates, Wall Street Journal

  • Secretary of State Antony Blinken met with Chinese President Xi to ensure that competitive relationship does not veer into a conflict. Mr. Xi praised both sides for making progress, according to the New York Times

  • China and Cuba are negotiating terms for joint military training facility in Cuba, according to the Wall Street Journal

  • Regulators are concerned about commercial real estate amid increasing vacancies, according to Bloomberg

  • Homeless numbers rising in several American cities, according to the Wall Street Journal

  • 360 DigiTech ( QFIN 0.06% ) announces $150 million share repurchase plan

  • Abcam ( ABCM 0.13% ) highlights successful execution of strategic priorities to drive shareholder value

  • Agnico-Eagle Mines ( AEM 1.15% ) provides update on Canadian Malartic Complex

  • Airbus ( EADSY ): Philippine Airlines finalises order for nine A350-1000s

  • Airbus ( EADSY ): India's IndiGo places record order for 500 A320 Family aircraft

  • Airbus ( EADSY ): Qantas finalises incremental order for nine A220s

  • Albemarle ( ALB 1.19% ) achieved an IRMA 50 level of performance in an independent third-party assessment of its lithium brine extraction and concentration site in the Salar de Atacama

  • Alibaba ( BABA 0.11% ) announces Chairman and CEO succession plan

  • Alibaba ( BABA 0.11% ) co founder Jack Ma made appearance at company event, according to Bloomberg

  • Allegheny Tech ( ATI 0.63% ) secures estimated $1.2 billion in aerospace and defense sales commitments

  • Allego Holding B.V. ( ALLG 2.70% ) enters into long-term agreement with Esso Deutschland GmbH to sell compliance credits

  • Altus Power ( AMPS 4.35% ) secured an incremental $47 million in capital from Blackstone (BX)

  • Arcellx ( ACLX 0.03% ) announces clinical hold for its iMMagine-1 Phase 2 Clinical Program

  • argenx ( ARGX 0.02% ) Initiates Second Cohort of Phase 2 ARDA Study of Empasiprubart in Multifocal Motor Neuropathy

  • Ascendis Pharma ( ASND 0.18% ) reports One-Year Data from Phase 3 Trial of TransCon PTH in Adults with Hypoparathyroidism Presented at ENDO 2023

  • AstraZeneca ( AZN 0.04% ) planning to spin off China unit, according to Financial Times

  • AT&T ( T 0.19% ) using OpenAI to streamline operations, according to Axios

  • Berkshire Hathaway (BRK.B) increases its passive stakes in each of five leading Japanese trading companies

  • BlueLinx ( BXC 1.07% ) and Louisiana Pacific Corp (LPX) announce expansion of their distribution partnership

  • Boeing ( BA 0.26% ) forecasts demand for 42,600 new commercial jets over next 20 years

  • Boeing ( BA 0.26% ): Air Algrie orders eight Boeing 737 (BA) MAX jets, commits to two 737-800 Boeing converted freighters

  • Boeing ( BA 0.26% ) and Avolon announced an order for 40 737 MAX airplanes at the Paris Air Show

  • BridgeBio Pharma ( BBIO 0.30% ) presents updated six month results from its phase 2 cohort 5 trial of infigratinib in Achondroplasia at the Endocrine Society 2023 Annual Conference

  • Bristol Myers Squibb's ( BMY 0.01% ) Breyanzi (lisocabtagene maraleucel) Delivers Deep and Durable Responses in Relapsed or Refractory Follicular Lymphoma and Mantle Cell Lymphoma in TRANSCEND Clinical Trials Presented at ICML 2023

  • British American Tobacco ( BTI 0.15% ) announces changes to Management Board structure and composition

  • C4 Therapeutics ( CCCC 0.00% ) appoints Leonard Reyno, M.D., as Chief Medical Officer

  • Cano Health ( CANO 3.85% ) CEO Dr. Marlow Hernandez has agreed to step down immediately

  • Carlyle Group ( CG 0.03% ) announced that Curtis L. Buser, Chief Financial Officer, will retire from the Company, effective December 31, 2023

  • Catalyst Pharma ( CPRX 0.16% ) to license North American rights to Vamorolone for Duchenne Muscular Dystrophy from Santhera Pharmaceuticals

  • Chindata Group ( CD 0.21% ) announces appointment of independent financial advisor and legal counsel to the Special Committee

  • Chinook Therapeutics ( KDNY 0.08% ) Presents Data from CHK-336 Phase 1 Trial in Healthy Volunteers and New Insights into the Role of Failed Repair in Chronic Kidney Disease at the 60th European Renal Association (ERA) Congress

  • Civitas Resources ( CIVI 0.26% ) to enter Permian Basin through transformative transactions

  • Cleveland-Cliffs ( CLF 1.85% ) announces price increase for flat-rolled steel products

  • Corporacin Amrica Airports ( CAAP 1.12% ) reports May 2023 passenger traffic

  • Cytokinetics ( CYTK 0.03% ) announces start of MAPLE-HCM, a phase 3 clinical trial of aficamten compared to metoprolol in patients with Symptomatic Obstructive Hypertrophic Cardiomyopathy

  • Denali Therapeutics ( DNLI 0.16% ) Announces Robust Reduction in Neurofilament Light (NfL) with DNL310 (ETV:IDS) Treatment in MPS II (Hunter Syndrome)

  • Ecopetrol ( EC 0.19% ) requests disbursement of financing line with local bank as part of its 2023 refinancing strategy

  • Enanta Pharmaceuticals ( ENTA 0.04% ) announces positive data from a phase 1 clinical study of EDP-323, an oral, l-protein inhibitor in development for the treatment of respiratory syncytial virus

  • GE Aerospace ( GE 0.83% ) CEO Larry Culp says all options on table regarding A220 engine, according to Reuters

  • Google ( GOOG 0.05% ) wants to move some Pixel production to India, according to Bloomberg

  • Grifols, S.A. ( GRFS 0.17% ) retains Maxim Group to explore U.S. spinoff of its Graphex Technologies Business

  • Honeywell ( HON 0.01% ) detected unauthorized access on a single MOVEit server; had no impact on company operations

  • Horizon Pharma ( HZNP 0.01% ) reports Additional Data from Phase 4 TEPEZZA (teprotumumab-trbw) Clinical Trial Presented at the Endocrine Society Annual Meeting Reinforces Efficacy in People with Thyroid Eye Disease (TED) Regardless of Disease Activity or Duration

  • Horizon Pharma ( HZNP 0.01% ) reports New Data from TEPEZZA (teprotumumab-trbw) Clinical Trials and Real-World Analyses Shed Light on Link Between Thyroid Autoimmunity and Hearing Risks

  • Kenon Holdings ( KEN 0.53% ) announces the commencement by OPC's subsidiary CPV Group of construction of a solar power project with a capacity of 170 MW in Maryland, United States, in the PJM market, also called the Backbone project

  • McEwen Copper ( MUX 2.53% ) announces results of an updated Preliminary Economic Assessment (PEA) on a copper leaching phase of development at the Los Azules project in San Juan, Argentina

  • Merck ( MRK 0.07% ) provides update on phase 3 KEYNOTE-585 trial in locally advanced resectable gastric and gastroesophageal junction adenocarcinoma

  • Milestone Pharmaceuticals ( MIST 0.57% ) announces the publication of results in The Lancet from the Phase 3 RAPID clinical trial evaluating etripamil nasal spray, the Company's investigational calcium channel blocker, in patients with paroxysmal supraventricular tachycardia

  • NaaS Technology ( NAAS 0.65% ) has amended and restated its previously adopted New 2022 Share Incentive Plan to expand the number of Class A ordinary shares available for grant of awards

  • NASDAQ ( NDAQ 0.01% ) Commodities & EEX announce intention to transfer Nasdaq's European Power Business to EEX

  • New Found Gold Corp. ( NFGC 1.42% ) Intercepts 49.5 g/t Au Over 2.30M & 20.2 g/t Au Over 3.35M at Knob, 2km South of Keats

  • Newmont Goldcorp ( NEM 2.65% ) defers investment decision for Yanacocha sulfides project to advance portfolio optimization strategy

  • Newpark Res ( NR 1.11% ) is exploring strategic alternatives for the long-term positioning of its Fluids Systems division

  • Nouveau Monde Graphite ( NMG 0.61% ) provides commercial update

  • PayPal ( PYPL 0.06% ) and KKR (KKR) announce an exclusive multi-year agreement for a 3 billion replenishing loan commitment

  • Perpetua Resources ( PPTA 0.50% ) announces that the Company and the Nez Perce Tribe have an agreement in principle which outlines the provisions for a settlement of the Nez Perce Tribe's Clean Water Act lawsuit

  • Precigen ( PGEN 0.82% ) Receives Breakthrough Therapy Designation for PRGN-2012 AdenoVerse Immunotherapy for the Treatment of Recurrent Respiratory Papillomatosis

  • Rhythm Pharmaceuticals ( RYTM 0.11% ) Presents Data Demonstrating BMI Reduction in Patients with Hypothalamic Obesity Treated with Setmelanotide over Six Months at ENDO 2023

  • Rivian Automotive ( RIVN 0.00% ) is selling trucks out of a factory lot, according to the Wall Street Journal

  • Sanofi ( SNY 0.04% ) prevails in Zantac arbitration initiated by Boehringer Ingelheim

  • Seres Therapeutics ( MCRB 0.46% ) and Nestl Health Science Present Late-Breaking Data on VOWST, a Microbiota-Based Oral Therapeutic for Prevention of Recurrence of C. Difficile Infection in Adults, at ASM Microbe 2023

  • Silicon Valley Bank ( SIVB 62.76% ) customers in Asia might be on hook for loans, according to the Wall Street Journal

  • SSR Mining ( SSRM 0.14% ) Announces Positive Exploration Results at Copper Hill

  • Stellantis ( STLA 1.05% ) and Hon Hai Technology (HNHPF) announced the creation of SiliconAuto, a 50/50 joint venture dedicated to designing and selling a family of state-of-the-art semiconductors to supply the automotive industry

  • Stellantis ( STLA 1.05% ) Archer move partnership from 'concept phase' to 'execution phase'

  • Stellantis ( STLA 1.05% ) limits gasoline powered car sales in 14 states amid emission rules, according to Bloomberg

  • STMicroelectronics ( STM 0.28% ) and Airbus (EADSY) have signed an agreement to cooperate on power electronics Research & Development

  • Surmodics ( SRDX 0.12% ) announced the receipt of FDA approval for the SurVeil drug-coated balloon; to receive $27 million milestone payment from Abbott (ABT)

  • TC Energy ( TRP 1.53% ) provides strategic alignment of 2023 priorities and energy transition

  • Tesla ( TSLA 0.05% ) offers discounts on Model S and Model X, according to ElecTrek

  • Thomson Reuters ( TRI 1.10% ) Receives Court Approval for Return of Capital Transaction

  • Triumph Group ( TGI 0.16% ) selected to design and build main transmission prototype for piasecki aircraft PA-890 hydrogen-powered Evtol

  • UBS ( UBS 0.05% ) will face hundreds of millions of dollars in penalties over Archegos Capital, according to Financial Times

  • Vera Therapeutics ( VERA 0.08% ) Announces Positive Week 36 Efficacy and Safety Results of Phase 2b ORIGIN Clinical Trial of Atacicept in IgAN in Late-Breaking Presentation at 60th European Renal Association (ERA) Congress

  • V.F. Corp ( VFC 0.83% ) appoints Bracken Darrell as President and CEO

M&A:

  • 3D Systems ( DDD 1.97% ) updates its shareholders on its proposal for Stratasys (SSYS)

  • Adobe ( ADBE 0.02% ) acquisition of Figma could face long EU investigation, according to Financial Times

  • Beam Global ( BEEM 0.70% ) acquires Amiga; announces offering and sees Q2 revs above consensus

  • Brown-Forman (BF.B) divests Finlandia Vodka for $220 mln

  • DICE Therapeutics ( DICE 0.12% ): Lilly (LLY) to acquire DICE Therapeutics to advance innovation in immunology for $48 per share in cash

  • Hudbay Minerals ( HBM 0.39% ) to acquire Rockcliff to consolidate the Snow Lake Camp

  • Lazzrd ( LAZ 0.37% ): Abu Dhabi's sovereign wealth fund in discussions to take Lazard private, according to Financial Times

  • LivePerson ( LPSN 0.27% ) and the selling stockholders of WildHealth agreed to amend the terms of the merger

  • Mayville Engineering Company ( MEC 1.68% ) acquires Mid-States Aluminum Corp for $96 mln

  • NiSource ( NI 0.15% ) announces agreement to sell minority equity interest in NIPSCO to strengthen financial foundation and support sustainable, long-term growth; reaffirms FY23 guidance

  • PNM Resources ( PNM 0.54% ) and Avangrid (AGR) agree to merger extension

Syndicate:

  • Beam Global ( BEEM 0.70% ) prices 2.5 mln shares of common stock at $9.00 per share

  • Delta Air Lines ( DAL 0.21% ) files mixed securities shelf offering

  • Edgewise Therapeutics ( EWTX 0.06% ) enters into Sales Agreement with BofA to sell shares up to $125 mln through an "at the market offering" program

  • Endeavour Silver ( EXK 0.00% ) files mixed securities shelf offering

  • Iovance Biotherapeutics ( IOVA 0.62% ) files mixed securities shelf offering; entered into a new Open Market Sale Agreement of up to $450.0 million of shares

  • Pharvaris N.V. ( PHVS 1.42% ) entered into a subscription agreement relating to the offer and sale of an aggregate of 6,951,340 ordinary shares of the Company

IPOs:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • DICE +40.2%, VERA +8.8%, FUSN +4.9%, RDNT +3.9%, NKLA +3.4%, SNY +2.7%, MCRB +2.4%, NMG +2.4%, CPRX +2.2%, KEN +1.6%, KDNY +1.4%, EVER +1.1%, EXK +1%


  • Gapping down:

  • ACLX -18.9%, BEEM -7.4%, RYTM -3%, BABA -2.4%, HEAR -2%, X -1.3%, DAL -0.7%, BF.B -0.5%


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

  • Upgrades

  • Avis Budget (CAR) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $230

  • Baidu (BIDU) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $190

  • Melco Resorts & Entertainment (MLCO) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $18.20

  • Studio City (MSC) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $11


  • Downgrades:

  • Abcam (ABCM) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $22

  • Performance Food Group (PFGC) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $66


  • Others:

  • Arch Capital (ACGL) initiated with an Overweight at Morgan Stanley; tgt $92

  • Calliditas Therapeutics AB (CALT) initiated with a Buy at H.C. Wainwright; tgt $60

  • Element Solutions (ESI) initiated with an Outperform at BMO Capital Markets; tgt $23

  • Entegris (ENTG) initiated with an Outperform at BMO Capital Markets; tgt $129

  • Everest Re (RE) initiated with an Overweight at Morgan Stanley; tgt $429

  • Lemonade (LMND) initiated with an Underweight at Morgan Stanley; tgt $14

  • Manpower (MAN) initiated with a Buy at Redburn; tgt $94


Econ Data:

  • 08:30 ET: Housing Starts for May (Briefing.com Consensus 1400K; Prior 1401K)

  • 08:30 ET: Building Permits for May (Briefing.com Consensus1425K; Prior 1416K)

Earnings:

  • Tuesday (Jun 20)

  • Afternoon: FDX LZB


  • Wednesday (Jun 21)

  • Morning: PDCO WGO

  • Afternoon: KBH SCS


  • Thursday (Jun 22)

  • Morning: ACN CMC DRI FDS GMS

  • Afternoon: SWBI


  • Friday (Jun 23)

  • Morning: APOG KMX


Asia & Europe detail:

Asia: Nikkei +0.1%, Hang Seng -1.5%, Shanghai Composite -0.5%

Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. The People's Bank of China lowered its one-year loan prime rate by ten basis points to 3.55% while the five-year rate was also lowered by ten basis points, to 4.20%, though the moves were seen as underwhelming by the market. India's Prime Minister Modi will meet with President Biden at the White House tomorrow. Warren Buffett is reportedly looking at investment possibilities in Japan.

  • In economic data:

  • Japan's April Industrial Production 0.7% m/m (expected -0.4%; last 0.3%) and Capacity Utilization 3.0% m/m (expected 0.3%; last -0.1%)

  • Hong Kong's May CPI -0.3% m/m (last 0.2%); 2.0% yr/yr (expected 2.3%; last 2.1%)


---Equity Markets---

  • Japan's Nikkei: +0.1%

  • Hong Kong's Hang Seng: -1.5%

  • China's Shanghai Composite: -0.5%

  • India's Sensex: +0.3%

  • South Korea's Kospi: -0.2%

  • Australia's ASX All Ordinaries: +0.8%

---FX---

  • USD/JPY: -0.4% to 141.41

  • USD/CNH: +0.3% to 7.1825

  • USD/INR: +0.2% to 82.08

Europe: DAX -0.5%, FTSE +0.1%, CAC -0.2%

Major European indices trade on a mostly lower note. Germany's PPI decreased in May with the yr/yr growth rate slowing down to 1.0%, the smallest increase since January 2021. European Central Bank policymaker Stournaras said that additional rate hikes cannot be excluded and that a peak rate will likely be maintained for at least six months. The Bank of England will reportedly implement a new stress test focusing on the strength of the financial system.

  • In economic data:

  • Eurozone's April Current Account surplus EUR4.0 bln (expected surplus of EUR27.3 bln; last surplus of EUR31.0 bln). April Construction Output -0.44% m/m (expected 0.0%; last -1.64%)

  • Germany's May PPI -1.4% m/m (expected -0.7%; last 0.3%); 1.0% yr/yr (expected 1.7%; last 4.1%)

  • Swiss May trade surplus CHF5.479 bln (expected surplus of CHF3.450 bln; last surplus of CHF2.560 bln)


---Equity Markets---

  • STOXX Europe 600: -0.3%

  • Germany's DAX: -0.5%

  • U.K.'s FTSE 100: +0.1%

  • France's CAC 40: -0.2%

  • Italy's FTSE MIB: -0.3%

  • Spain's IBEX 35: +0.2%

---FX---

  • EUR/USD: +0.1% to 1.0928

  • GBP/USD: -0.3% to 1.2756

  • USD/CHF: +0.2% to 0.8977

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