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20/11/23 Briefing


The S&P 500 futures are down 2 points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 1 points and are trading roughly in line with fair value. The Dow Jones Industrial Average futures are down 31 points and are trading 0.1% below fair value.

There is not a lot of conviction in the equity futures market. Participants are hesitant following big gains coming into this holiday-shortened week. Markets will be closed on Thursday and close at 1:00 p.m. ET on Friday for Thanksgiving.

The 2-yr note yield is unchanged from Friday at 4.90% and the 10-yr note yield is up four basis points to 4.48%. On a related note, there will be a $16 billion 20-yr bond auction today; results will be released at 1:00 p.m. ET.

The People's Bank of China left its one-year and five-year loan prime rates unchanged at 3.45% and 4.20%, respectively.

In corporate news:

  • Microsoft (MSFT 374.87, +5.02, +1.3%): announces that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team

  • Walgreens (WBA 21.21, -0.01, -0.1%): aims to offload Boots pension scheme, according to the Sunday Times UK

  • Bristol-Myers (BMY 48.70, -2.14, -4.2%): and 2seventy bio (TSVT) announce the U.S. FDA's Oncologic Drugs Advisory Committee will meet to review data supporting the supplemental Biologics License Application for Abecma for earlier lines of triple-class exposed relapsed or refractory multiple myeloma based on results from the pivotal Phase 3 KarMMa-3 study

  • Boeing (BA 210.80, +2.76, +1.3%): upgraded to Buy from Hold at Deutsche Bank

  • Dutch Bros (BROS 28.50, +0.65, +2.3%): upgraded to Overweight from Neutral at JP Morgan

  • Vale S.A. (VALE 15.32, +0.18, +1.2%): upgraded to Buy from Neutral at BofA Securities

  • Chegg (CHGG 9.93, -0.53, -5.1%): downgraded to Underweight from Equal-Weight at Morgan Stanley

  • Krispy Kreme, Inc. (DNUT 12.74, -0.30, -2.3%): downgraded to Neutral from Overweight at JP Morgan

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: -0.6%, Hong Kong's Hang Seng: +1.9%, China's Shanghai Composite: +0.5%, India's Sensex: -0.2%, South Korea's Kospi: +0.9%, Australia's ASX All Ordinaries: +0.1%.

    • There was no noteworthy data

    • In news:

      • The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.45% and 4.20%.

      • Alibaba refuted speculation that it is looking to cut 25,000 jobs.

      • Japan's Finance Minister Suzuki said that bright signs are emerging in the Japanese economy.

      • New Zealand is reportedly closer to having a new government after National Party, ACT New Zealand, and New Zealand First agreed on some policy programs as they pursue a coalition agreement.



  • Major European indices trade near their flat lines while Spain's IBEX (+0.6%) outperforms. STOXX Europe 600: -0.1%, Germany's DAX: -0.3%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.2%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: +0.6%.

    • In economic data:

      • Eurozone's September Construction Output 0.45% m/m (last -1.06%)

      • Germany's October PPI -0.1% m/m, as expected (last -0.2%); -11.0% yr/yr, as expected (last -14.7%)


  • In news:

    • Bayer is down nearly 20.0% in Frankfurt after an early stop to one of the company's studies and news that it is on the hook to pay over $1.5 bln in a case related to Roundup.

    • The U.K. may lower income taxes and national insurance fees in the Autumn budget statement.

    • European Central Bank policymaker Wunsch said that rates should stay unchanged in December and January, but future hikes should not be ruled out.

    • Moody's affirmed Italy's Baa3 rating and raised the outlook to Stable from Negative.

    • Moody's raised Portugal's rating to A3 from Baa2 with a Stable outlook.



U.S. equity futures:

  • S&P 500 Futures -3 @ 4,511

  • DJIA Futures: -40 @ 34,907

  • Nasdaq 100 Futures: -1 @ 15,837

Overseas:

  • Europe: DAX -0.3%, FTSE -0.3%, CAC +0.2%

  • Asia: Nikkei -0.6%, Hang Seng +1.9%, Shanghai Composite +0.5%

Commodities:

  • Crude Oil +1.47 @ 77.51

  • Nat Gas -0.048 @ 2.912

  • Gold -10.15 @ 1974.55

  • Silver -0.375 @ 23.477

  • Copper +0.0213 @ 3.7598

Earnings/Guidance:

  • Ashtead ( ASHTF ) lowers FY23 rental revenue guidance

  • Franco-Nevada ( FNV 0.00% ) provides additional operations update and revised Franco-Nevada guidance

  • Legend Biotech ( LEGN 0.06% ) beats by $0.14, misses on revs

  • ReNew ( RNW 0.34% ) reports Q2 results (no comparable ests)

  • Simulations Plus ( SLP 0.00% ) issues slides ahead of Monday investor presentation; reaffirms FY24 EPS and revenue guidance

  • VEON ( VEON 0.63% ) raises full-year revenue and EBITDA guidance, return to USD revenue growth, exit from Russia completed (no ests)

News:

  • Israel and Hamas close to deal to release hostages in exchange for five day pause in fighting, according to the Washington Post

  • UK Treasury chief Jeremy Hunt is considering tax cuts and more restrictions on welfare benefits, according to ABC News

  • ESG funds are closing following disappointing returns, according to the Wall Street Journal

  • Far-right candidate Javier Milei wins election in Argentina. He plans to eliminate Argentina's central bank and switch its currency to US dollar, according to the New York Times

  • Several advertisers have paused spending on X following controversial comments from Elon Musk, according to the New York Times

  • I-80 Gold Corp ( IAUX 0.00% ) announces high-grade results from underground drilling at Cove

  • 10x Genomics ( TXG 0.00% ) Wins Another Patent Infringement Case Against NanoString Technologies

  • American Water Works ( AWK 0.02% ) reaches partial settlement agreement in its general rate case on revenues

  • AstraZeneca ( AZN 0.02% ) launches Evinova, a health-tech business to accelerate innovation across the life sciences sector, the delivery of clinical trials and bet

  • Bayer AG ( BAYRY ) OCEANIC-AF study stopped early due to lack of efficacy

  • Bayer ( BAYRY ): Monsanto ordered to pay $1.5 bln by Missouri jury in Roundup weedkiller case, according to Bloomberg

  • Blackstone ( BX 0.02% ) could secure portfolio of $17 bln in commercial real estate loans from Signature Bank (SBNY), according to Bloomberg

  • Bowman Consulting Group ( BWMN 0.00% ) announces a new $10 million share repurchase program

  • Bristol-Myers ( BMY 0.00% ) and 2seventy bio (TSVT) announce the U.S. FDA's Oncologic Drugs Advisory Committee will meet to review data supporting the supplemental Biologics License Application for Abecma for earlier lines of triple-class exposed relapsed or refractory multiple myeloma based on results from the pivotal Phase 3 KarMMa-3 study

  • Canada Goose ( GOOS 0.05% ) Announces Renewal of Normal Course Issuer Bid

  • Centrus Energy ( LEU 0.35% ) announces that Amir Vexler will succeed Daniel Poneman as Chief Executive Officer on January 1, 2024

  • Churchill Capital Corp VI ( CCVI 0.00% ) to redeem all shares; co will not consummate an initial business combination; stock will cease trading

  • enCore Energy Corp. ( EU 0.13% ) provides update from South Texas Alta Mesa In-Situ Recovery Uranium Central Processing Plant and Wellfield

  • Expro Group ( XPRO 0.13% ) discloses update regarding main crane incident; continues to expect that recovery and repair costs, net of insurance, will not be material to the Company's financial results

  • General Motors ( GM 0.00% ): Kyle Vogt resigns as CEO of GM's Cruise unit

  • General Motors ( GM 0.00% ) Cruise unit will allow employee share sales, according to Reuters

  • Masimo ( MASI 0.01% ) receives FDA clearance or over-the-counter and prescription use

  • Medtronic ( MDT 0.00% ) announces FDA approval of minimally invasive device to treat hypertension

  • Merck ( MRK 0.00% ): FDA panel votes against data submitted by MRK related to chronic cough drug gefapixant, according to Reuters

  • Microsoft ( MSFT 0.00% ) announces that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team

  • N-able ( NABL 0.08% ) announces that Cove Data Protection for Microsoft 365 now offers additional layer of protection from data loss for Microsoft Teams

  • Nevro ( NVRO 0.12% ) delivers long-term relief with high-frequency spinal cord stimulation: 24-month data demonstrates profound improvements for non-surgical refractory back pain

  • Nikola Corp ( NKLA 0.00% ) CFO Anastasiya Pasterick to resign

  • Novartis AG ( NVS 0.02% ) showcases significant data updates from Kisqali, iptacopan and Scemblix at SABCS and ASH

  • NRG Energy ( NRG 0.12% ) announces leadership changes

  • Oscar Health ( OSCR 0.00% ) announces that Mark Bertolini's Foundation and Deerfield Management have entered into an agreement with a selling shareholder to purchase shares of Oscar Health

  • Palo Alto Networks ( PANW 0.00% ) increases share repurchase authorization by $316.7 mln, bringing total auth to $1 bln

  • Perdoceo Education ( PRDO 0.00% ) appoints Todd Nelson as President and CEO; Andrew Hurst resigned on Nov 15

  • Qorvo ( QRVO 0.02% ) names Dr. Walden C. Rhines as Chair of the Board, replacing Ralph Quinsey who is retiring

  • Signature Bank's ( SBNY 41.18% ) apartment loans are selling at a large discount, according to the Wall Street Journal

  • Starbucks ( SBUX 0.03% ): Luckin Coffee surpassed Starbucks in China sales, according to the Wall Street Journal

  • Teck Resources ( TECK 0.08% ) receives regulatory approval for share buy-back program

  • Tempur Sealy Int'l ( TPX 0.00% ) certifies substantial compliance with the FTC"s second request

  • Walgreens ( WBA 0.05% ) aims to offload Boots pension scheme, according to Sunday Times UK

M&A:

  • American Shared ( AMS 1.23% ) to acquire 60% majority interest in three radiation therapy cancer centers

  • Coeur Mining's ( CDE 0.00% ) subsidiary, Coeur Mexicana, has signed a purchase agreement with a subsidiary of Fresnillo to acquire mining concessions adjacent to the Palmarejo gold-silver complex located in the state of Chihuahua, Mexico

  • Zevra Therapeutics ( ZVRA 0.46% ) completes acquisition of Acer Therapeutics, which included 2.96 mln shares of stock and contingent value rights

Syndicate:

  • American Airlines ( AAL 0.04% ) announces pricing of $1 billion aggregate principal amount of its 8.50% senior secured notes due 2029

  • BioLife Solutions ( BLFS 0.16% ) files for 927,165 share common stock offering by selling shareholder; also files for $75 mln mixed securities shelf offering

  • LuxUrban Hotels ( LUXH 0.59% ) files for 2 mln share common stock offering by selling shareholder

  • SIMPPLE LTD. ( SPPL 2.52% ) files for 2.5 mln ordinary share offering by selling shareholders

  • Structure Therapeutics ( GPCR 0.02% ) files for 8,006,405 ADS offering by selling shareholders

  • Uber ( UBER 0.00% ) announces that it proposes to offer $1.2 bln aggregate principal amount of Convertible Senior Notes due 2028

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up:

    • LUXH +5.0%, VEON +2.3%, BROS +2.1%, BA +1.6%, MSFT +1.7%, VALE +1.7%, FCX +1.3%


  • Gapping down:

    • PRDO -3.4%, DNUT - 1.8%, GPCR -1.4%, NKLA -1.0%


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

  • Upgrades

    • Arvinas (ARVN) upgraded to Buy from Neutral at Guggenheim

    • Boeing (BA) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $270

    • Dutch Bros (BROS) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $35

    • Compass Minerals (CMP) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $24


  • Downgrades:

    • Biotricity (BTCY) downgraded to Neutral from Buy at H.C. Wainwright

    • Chegg (CHGG) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $9

    • ChargePoint (CHPT) downgraded to Neutral from Buy at BofA Securities

    • ChargePoint (CHPT) downgraded to Hold from Buy at Stifel

    • Energizer (ENR) downgraded to Neutral from Buy at UBS; tgt lowered to $34

    • Gerdau S.A. (GGB) downgraded to Neutral from Buy at BofA Securities

    • HIVE Digital Technologies (HIVE) downgraded to Neutral from Buy at H.C. Wainwright

    • Krispy Kreme, Inc. (DNUT) downgraded to Neutral from Overweight at JP Morgan; tgt $13


  • Others:

    • Alkermes Plc (ALKS) resumed with a Neutral at JP Morgan; tgt $33

    • Amarin (AMRN) resumed with an Underweight at JP Morgan

    • Arm Holdings plc (ARM) initiated with an Overweight at Wells Fargo; tgt $70

    • BioCryst Pharma (BCRX) resumed with an Overweight at JP Morgan; tgt $10

    • Caterpillar (CAT) initiated with a Hold at HSBC Securities; tgt $250

    • Cerevel Therapeutics (CERE) resumed with a Neutral at JP Morgan; tgt $25

    • Crinetics Pharmaceuticals (CRNX) resumed with an Overweight at JP Morgan; tgt $35

    • Deciphera Pharmaceuticals (DCPH) resumed with a Neutral at JP Morgan; tgt $14

    • Dell (DELL) initiated with a Buy at Melius Research

    • Denali Therapeutics (DNLI) resumed with an Overweight at JP Morgan; tgt $28

    • Emergent BioSolutions (EBS) resumed with an Underweight at JP Morgan

    • Equifax (EFX) initiated with a Buy at Citigroup; tgt $243

    • Esperion Therapeutics (ESPR) resumed with a Neutral at JP Morgan

    • Global Payments (GPN) initiated with a Buy at BTIG Research; tgt $135

    • Harpoon Therapeutics (HARP) initiated with an Outperform at TD Cowen

    • Immunocore (IMCR) resumed with an Overweight at JP Morgan; tgt $60

    • ImmunoGen (IMGN) initiated with a Neutral at Goldman; tgt $17


Econ Data:

  • 10:00 ET: Leading Indicators for Oct (Briefing.com Consensus -0.7%; Prior -0.7%)

Earnings:

  • Monday (Nov 20)

    • Morning: LEGN

    • Afternoon: A BRBR KEYS ZM


  • Tuesday (Nov 21)

    • Morning: ANF ADI BIDU BBY BURL CAL DKS DY EMBC GDS HIBB J KC KSS LOW MDT NJR

    • Afternoon: AEO ADSK DLO GES HPQ JACK JWN NVDA URBN


  • Wednesday (Nov 22)

    • Morning: DE

    • Afternoon: BZUN



Asia & Europe detail:

Asia: Nikkei -0.6%, Hang Seng +1.9%, Shanghai Composite +0.5%

Equity indices in the Asia-Pacific region began the week on a mostly higher note. The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.45% and 4.20%. Alibaba refuted speculation that it is looking to cut 25,000 jobs. Japan's Finance Minister Suzuki said that bright signs are emerging in the Japanese economy. New Zealand is reportedly closer to having a new government after National Party, ACT New Zealand, and New Zealand First agreed on some policy programs as they pursue a coalition agreement.

  • There was no noteworthy data

---Equity Markets---

  • Japan's Nikkei: -0.6%

  • Hong Kong's Hang Seng: +1.9%

  • China's Shanghai Composite: +0.5%

  • India's Sensex: -0.2%

  • South Korea's Kospi: +0.9%

  • Australia's ASX All Ordinaries: +0.1%

---FX---

  • USD/JPY: -0.9% to 148.16

  • USD/CNH: -0.6% to 7.1739

  • USD/INR: +0.1% to 83.34

Europe: DAX -0.3%, FTSE -0.3%, CAC +0.2%

Major European indices trade near their flat lines while Spain's IBEX (+0.6%) outperforms. Bayer is down nearly 20.0% in Frankfurt after an early stop to one of the company's studies and news that it is on the hook to pay over $1.5 bln in a case related to Roundup. The U.K. may lower income taxes and national insurance fees in the Autumn budget statement. European Central Bank policymaker Wunsch said that rates should stay unchanged in December and January, but future hikes should not be ruled out. Moody's affirmed Italy's Baa3 rating and raised the outlook to Stable from Negative. Separately, Moody's raised Portugal's rating to A3 from Baa2 with a Stable outlook.

  • In economic data:

    • Eurozone's September Construction Output 0.45% m/m (last -1.06%)

    • Germany's October PPI -0.1% m/m, as expected (last -0.2%); -11.0% yr/yr, as expected (last -14.7%)


---Equity Markets---

  • STOXX Europe 600: -0.1%

  • Germany's DAX: -0.3%

  • U.K.'s FTSE 100: -0.3%

  • France's CAC 40: +0.2%

  • Italy's FTSE MIB: -0.2%

  • Spain's IBEX 35: +0.6%

---FX---

  • EUR/USD: +0.1% to 1.0922

  • GBP/USD: +0.1% to 1.2467

  • USD/CHF: -0.1% to 0.8840

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