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21/06/23 Briefing


The S&P 500 futures are down 3 points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 24 points and are trading 0.1% below fair value. The Dow Jones Industrial Average futures are down 20 points and are trading 0.1% below fair value.

The stock market is poised for flattish open today. There's still a lingering sense that the market is due for consolidation period. Also, Fed Chair Powell will begin his semiannual monetary policy report before the House Financial Services Committee at 10:00 a.m. ET

Hotter than expected CPI and Core CPI figures from the U.K. have created some angst and boosted expectations for a 50-bps rate hike ahead of the Bank of England's policy decision tomorrow. 

The weekly MBA Mortgage Applications Index rose 0.5% with purchase applications rising 2.0% while refinancing applications fell 2.0%. 

Treasuries are little changed from yesterday's settlement levels. The 2-yr note yield is up one basis point to 4.71% and the 10-yr note yield is up three basis points to 3.75%. The U.S. Dollar Index is flat at 102.57. 

In corporate news:

  • FedEx (FDX 225.99, -5.66, -2.4%): beats by $0.09, misses on revs; guides FY24 EPS in-line, revs in-line; says demand backdrop likely to pressure sales growth in FY24

  • Visa (V 226.60, +0.13, +0.1%): appoints Chris Suh as CFO; succeeds Vasant Prabhu, who will serve as CFO Designate from July 10 until August 1, departing on September 30

  • American Intl (AIG 56.00, -0.08, -0.1%): annonces that that Sabra Purtill, who has served as Interim CFO January 2023, has been named to the role on a permanent basis, effective immediately

  • Spotify (SPOT 159.65, +2.83, +1.8%): upgraded to Outperform from Peer Perform at Wolfe Research

  • Tesla (TSLA 278.27, +3.82, +1.4%): downgraded to Equal Weight from Overweight at Barclays

  • Adobe (ADBE 493.95, +8.09, +1.7%): upgraded to Outperform from Market Perform at BMO Capital Markets

  • 3M (MMM 102.16, -0.14, -0.1%): could face dividend cut & higher debt amid potential lawsuits, according to the WSJ

  • Patterson Companies (PDCO 30.90, +2.64, +9.3%): beats by $0.14, beats on revs; guides FY24 EPS above consensus

  • Intel (INTC 34.79, -0.21, -0.6%): to sell 20% stake in IMS Nanofabrication GmbH to Bain Capital in deal that values IMS at approx. $4.3 bln

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: -2.0%, China's Shanghai Composite: -1.3%, India's Sensex: +0.3%, South Korea's Kospi: -0.9%, Australia's ASX All Ordinaries: -0.6%.

  • In economic data:

  • Japan's June Reuters Tankan Index 8 (last 6)

  • South Korea's May PPI -0.3% m/m (expected -0.2%; last -0.1%); 0.6% yr/yr (expected 0.5%; last 1.6%)

  • Australia's May MI Leading Index 0.0% m/m (last 0.0%)

  • In news:

  • Property stocks in Hong Kong underperformed amid ongoing hope for more impactful stimulus measures while China Securities Journal speculated that more rate cuts will be made this year.

  • Japan's Prime Minister Kishida may reshuffle his cabinet this summer.

  • South Korea's exports were up 5.3% yr/yr through the first 20 days of June, though chip exports were down 23.5% yr/yr.

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

  • In economic data:

  • U.K.'s May CPI 0.7% m/m (expected 0.5%; last 1.2%); 8.7% yr/yr (expected 8.4%; last 8.7%). May Core CPI 0.8% m/m (expected 0.6%; last 1.3%); 7.1% yr/yr (expected 6.8%; last 6.8%). May Input PPI -1.5% m/m (expected -0.5%; last 0.1%); 0.5% yr/yr (expected 1.2%; last 4.2%) May Output PPI -0.5% m/m (expected -0.1%; last -0.2%); 2.9% yr/yr (expected 3.6%; last 5.2%). June CBI Industrial Trends Orders -15 (expected -17; last -17)

  • In news:

  • Hotter than expected CPI and Core CPI figures from the U.K. have boosted expectations for a 50-bps rate hike tomorrow.

  • European Central Bank policymaker Villeroy de Galhau repeated that the bulk of the tightening has been completed and that inflation could return to the 2.0% target around the end of 2024.

 

U.S. equity futures:

  • S&P 500 Futures: -2 @ 4,387

  • DJIA Futures: -12 @ 34,042

  • Nasdaq 100 Futures: -21 @ 15,050

Overseas:

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

  • Asia: Nikkei +0.6%, Hang Seng -2.0%, Shanghai Composite -1.3%

Commodities:

  • Crude Oil -0.08 @ 71.11

  • Nat Gas +0.029 @ 2.521

  • Gold -1.35 @ 1946.35

  • Silver -0.099 @ 23.135

  • Copper -0.0317 @ 3.8518


 

Earnings/Guidance:

  • Bristow Group (VTOL) guides FY23 and FY24 revenue inline

  • Dollar Tree (DLTR) reaffirms Q2 and FY23 guidance at ahead of Investor Conference' provides longer term outlook

  • Equinix (EQIX) in slide presentation says total FY23 Capex is projected at $8-11 bln

  • FedEx (FDX) beats by $0.09, misses on revs; guides FY24 EPS in-line, revs in-line

  • La-Z-Boy (LZB) beats by $0.27, beats on revs; guides JulQ revs below two analyst estimate; expects FY24 growth ahead of industry with 2H24stronger than 1H24

  • Patterson Companies (PDCO) beats by $0.14, beats on revs; guides FY24 EPS above consensus

  • SM Energy (SM) announces certain Q2 activity: 2.6 million shares repurchased, production up, capital expenditures down, and entered agreements to acquire 22,800 oily net acres; provides Q2 and FY23 guidance

  • Winnebago (WGO) beats by $0.33, misses on revs

News:

  • China says President Biden calling Xi Jinping a dictator is a "public political provocation", according to Bloomberg

  • Wall Street is betting against downtown business centers by paying less for bonds connected to downtown office buildings and public transit, according to the Wall Street Journal

  • China introduced tax breaks for electric vehicles, according to Reuters

  • SEC secures emergency relief to protect Binance.US customers' assets

  • 3M (MMM) could face dividend cut & higher debt amid potential lawsuits, according to the Wall Street Journal

  • Airbus (EADSY): Avolon Agrees Memorandum of Understanding to Order 20 Airbus A330neo Aircraft

  • American Intl (AIG) announces that that Sabra Purtill, who has served as Interim CFO January 2023, has been named to the role on a permanent basis, effective immediately

  • Ant Group developing language model technology, according to Bloomberg

  • Arbutus (ABUS) presents preliminary AB-729 and Pegylated Interferon Alfa-2a Combination Data at the EASL Congress 2023

  • argenx (ARGX) receives FDA approval of VYVGART Hytrulo injection

  • Blackstone Secured Lending Fund (BXSL) increases quarterly dividend 10% to $0.77/share from $0.70/share

  • Bluebirdbio (BLUE) announces that the U.S. Food and Drug Administration has accepted the Biologics License Application for lovotibeglogene autotemcel (lovo-cel) for priority review

  • Boeing (BA): Alaska Air (ALK) orders four 737-8s to support international growth plans

  • Boeing (BA): Luxair selects Boeing 737-7 to grow single-aisle fleet

  • Boeing (BA) and Air Lease (AL) announce order for two 787 Dreamliners

  • Catalent (CTLT) names Matti Masanovich as Senior Vice President & Chief Financial Officer, effective July 5, 2023

  • Chemomab Therapeutics (CMMB) Reports Positive Data from Secondary Analysis of Phase 2a Liver Fibrosis Trial in NASH Patients at EASL 2023

  • Cleveland-Cliffs (CLF) reached a new three-year labor agreement with the United Auto Workers for Coshocton Works, to become effective July 31, 2023

  • CymaBay Therapeutics (CBAY) Presents Data Showing Seladelpar Treatment in Primary Biliary Cholangitis (PBC) Correlates with Alleviation of Self-Reported Pruritus and Reduction in Serum IL-31 Levels

  • Electronic Arts (EA) appoints Stuart Canfield CFO, effective immediately; succeeds Chris Suh, who is leaving for Visa

  • Electronic Arts (EA) aligning its studios into two organizations: EA Entertainment and EA SPORTS

  • Eli Lilly (LLY): FDA last night approved new class of medicines to treat pediatric type 2 diabetes

  • Exact Sciences Corp. (EXAS): Next-generation Cologuard Test Demonstrates 94 Percent Sensitivity for Colorectal Cancer at 91 Percent Specificity, Raising the Bar in Non-invasive Screening

  • FedEx (FDX) announces that CFO and EVP Michael Lenz will retire effective July 31, 2023

  • GlaxoSmithKline (GSK) reports positive data for Arexvy

  • Illumina (ILMN) unit, GRAIL, reports The Lancet Oncology published results from SYMPLIFY

  • InflaRx (IFRX) announced today the commercial launch of Gohibic (vilobelimab) in the U.S. In April 2023

  • Insulet (PODD) announces commercial launch of its Omnipod 5 Automated Insulin Delivery System for individuals aged two years and older with type 1 diabetes in the UK

  • LPL Financial (LPLA) announces total assets at the end of May were +6.2% yr/yr to $1.19 trln

  • MiMedx Group (MDXG) announces strategic realignment; raises expectations to deliver mid-teens percentage sales growth in 2023

  • Oatly Group AB (OTLY) partners with TH International (THCH) to launch a dairy-free ready-to-drink oatmilk latte product line

  • Orthofix (OFIX) announced that Catherine Burzik has been re-appointed as the Chair of the Company's Board of Directors

  • Pfizer (PFE) receives FDA approval for TALZENNA in combination with XTANDI

  • PTC Therapeutics (PTCT) Shares Positive Interim Data from PIVOT-HD Clinical Trial in Huntington's Disease Patients

  • QIAGEN (QGEN): FBI approves QIAGEN's NGS-based ForenSeq MainstAY workflow for the U.S. National DNA Index System

  • Raytheon Technologies (RTX) awarded $1.15 bln U.S. Air Force contract for Advanced Medium Range Air-to-Air Missile Production Lot 37

  • Raytheon Technologies (RTX) receives $1.15 bln US Air Force award for latest AMRAAM configuration

  • Ross Stores' (ROST) Board of Directors approves new employment agreement with Barbara Rentler, Vice Chair and CEO, extending her contract through March 31, 2027

  • Southern's (SO) Nicor Gas is analyzing the Illinois Commission's order and estimates a range of possible outcomes of approximately $38 million to $44 million in disallowances

  • Stanley Black & Decker (SWK): SEC announces settled charges against Stanley Black & Decker

  • Starbucks (SBUX): Shanghai regulators have concerns about data collection at Starbucks and Shake Shack (SHAK), according to Reuters

  • Ternium S.A.'s (TX) new steel slab mill will be built at and integrated into the company's existing downstream facility in Pesquera, Nuevo Len, Mexico following an extensive review of location candidates

  • Tesla (TSLA): Texas to require that charging stations include Tesla plug, according to Reuters

  • Tesla (TSLA) CEO Elon Musk says Tesla will come to India market "as soon as possible", according to BBC

  • TikTok preparing move into online shopping, according to Financial Times

  • uniQure (QURE) announces promising interim data, including up to 24 months of follow-up, from 26 patients enrolled in the ongoing U.S. Phase I/II clinical trial of AMT-130 for the treatment of Huntington's disease

  • Victoria's Secret (VSCO) announces leadership appointments

  • Visa (VISA) appoints Chris Suh as CFO; succeeds Vasant Prabhu, who will serve as CFO Designate from July 10 until August 1, departing on September 30

  • Vodafone (VOD) mulling options for Spanish unit, according to Reuters

  • Worthington (WOR) announces that the D.C. Circuit Court of Appeals supported Worthington's position in concluding that the U.S. Environmental Protection Agency's 2021 ban of non-refillable refrigerant cylinders is invalid because the EPA overstepped its authority granted by Congress

  • Xeris Biopharma (XERS) announces that the first participant has been dosed in a multi-center, open label, Phase 2 study of XP-8121 for the treatment of adults with hypothyroidism

M&A:

  • 3D Systems (DDD) Affirms Commitment to Pursuing Combination with Stratasys (SSYS)

  • Eni S.p.A. (E) nearing $5.0 bln deal for oil and gas explorer Neptune Energy Group, according to Bloomberg

  • Intel (INTC) to sell 20% stake in IMS Nanofabrication GmbH to Bain Capital for $4.3 bln

  • Petrobras (PBR) reaffirms no decision on Braksem (BAK)

  • Seadrill Ltd (SDRL) divests tender-assist units for $85 mln

  • Shore Bancshares (SHBI) and The Community Financial Corporation (TCFC) announce that SHBI's shareholders approved the merger of TCFC with and into SHBI, with SHBI as the surviving corporation

Syndicate:

  • Chicago Atlantic Real Estate Finance (REFI) and Chicago Atlantic REIT Manager entered into separate at-the-market sales agreements to issue and sell up to $75,000,000 of common stock

  • CNB Financial (CCNE) files mixed shelf securities offering

  • Desktop Metal (DM) files for 444,793 shares of common stock by selling shareholders

  • Euronav (EURN) files mixed shelf securities offering

  • Madison Square Garden Entertainment (MSGE) files for 5,250,000 shares of common stock by selling shareholder

  • ONEOK (OKE) files mixed shelf securities offering

IPOs:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • PCT +14.9%, EXAS +6.6%, ABR +5.4%, BXSL +3%, DM +2.9%, FULT +2.1%, PODD +1.8%, SDRL +1.5%, AIG +1.3%, DDD +1%, SSYS +0.8%, THCH +0.7%, ARGX +0.7%, NFLX +0.5%, BA +0.5%

  • Gapping down:

  • MSGE -6.6%, LZB -5.3%, FDX -3.6%, NPWR -2.5%, ABUS -1.6%, DLTR -0.8%, UPS -0.7%, MDXG -0.7%, QGEN -0.7%, XPO -0.5%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Adidas AG (ADDYY) upgraded to Buy from Neutral at UBS

  • Adobe (ADBE) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $570

  • AVANGRID (AGR) upgraded to Sector Weight from Underweight at KeyBanc Capital Markets

  • LiveRamp (RAMP) upgraded to Buy from Hold at The Benchmark Company; tgt $33

  • OneSpaWorld (OSW) upgraded to Buy from Hold at Loop Capital; tgt $13

  • Petrobras (PBR) upgraded to Buy from Neutral at Goldman

  • Spotify (SPOT) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $190

  • Downgrades:

  • Coherent (COHR) downgraded to Neutral from Buy at Rosenblatt; tgt raised to $55

  • Constellation Energy (CEG) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets

  • Infosys (INFY) downgraded to Negative from Neutral at Susquehanna; tgt $13

  • Lloyds Banking (LYG) downgraded to Neutral from Outperform at Exane BNP Paribas

  • Match Group (MTCH) downgraded to Peer Perform from Outperform at Wolfe Research

  • NatWest Group plc (NWG) downgraded to Underperform from Neutral at Exane BNP Paribas

  • Peloton (PTON) downgraded to Underperform from Peer Perform at Wolfe Research; tgt $6

  • Tesla (TSLA) downgraded to Equal Weight from Overweight at Barclays; tgt raised to $260

  • The Beauty Health Company (SKIN) downgraded to Hold from Buy at Stifel; tgt lowered to $10

  • Others:

  • Avantor (AVTR) initiated with an Outperform at RBC Capital Mkts; tgt $27

  • Avidbank Holdings (AVBH) initiated with a Buy at DA Davidson; tgt $24

  • Bumble Inc. (BMBL) assumed with a Peer Perform at Wolfe Research

  • Duolingo (DUOL) initiated with a Peer Perform at Wolfe Research

  • Everest Re (RE) initiated with a Buy at Citigroup; tgt $406

  • FiscalNote Holdings (NOTE) initiated with a Buy at ROTH MKM; tgt $4.75

  • Private Bancorp of America (PBAM) initiated with a Buy at DA Davidson; tgt $39

  • Tidewater (TDW) initiated with a Buy at BTIG Research; tgt $75

  • Tyler Tech (TYL) initiated with an Overweight at JP Morgan; tgt $472

Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for June 17 (Briefing.comConsensus NA; Prior 7.2%)

  • 10:30 ET: EIA Crude Oil Inventories for June 17 (Briefing.comConsensus NA; Prior +7.92M)

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 +0.6%, Hang Seng -2.0%, Shanghai Composite -1.3%

Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. Property stocks in Hong Kong underperformed amid ongoing hope for more impactful stimulus measures while China Securities Journal speculated that more rate cuts will be made this year. Japan's Prime Minister Kishida may reshuffle his cabinet this summer. South Korea's exports were up 5.3% yr/yr through the first 20 days of June, though chip exports were down 23.5% yr/yr.

  • In economic data:

  • Japan's June Reuters Tankan Index 8 (last 6)

  • South Korea's May PPI -0.3% m/m (expected -0.2%; last -0.1%); 0.6% yr/yr (expected 0.5%; last 1.6%)

  • Australia's May MI Leading Index 0.0% m/m (last 0.0%)

---Equity Markets---

  • Japan's Nikkei: +0.6%

  • Hong Kong's Hang Seng: -2.0%

  • China's Shanghai Composite: -1.3%

  • India's Sensex: +0.3%

  • South Korea's Kospi: -0.9%

  • Australia's ASX All Ordinaries: -0.6%

---FX---

  • USD/JPY: +0.3% to 141.78

  • USD/CNH: +0.2% to 7.1895

  • USD/INR: UNCH at 81.98

 

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

Major European indices trade near their flat lines. Hotter than expected CPI and Core CPI figures from the U.K. have boosted expectations for a 50-bps rate hike tomorrow. European Central Bank policymaker Villeroy de Galhau repeated that the bulk of the tightening has been completed and that inflation could return to the 2.0% target around the end of 2024.

  • In economic data:

  • U.K.'s May CPI 0.7% m/m (expected 0.5%; last 1.2%); 8.7% yr/yr (expected 8.4%; last 8.7%). May Core CPI 0.8% m/m (expected 0.6%; last 1.3%); 7.1% yr/yr (expected 6.8%; last 6.8%). May Input PPI -1.5% m/m (expected -0.5%; last 0.1%); 0.5% yr/yr (expected 1.2%; last 4.2%) May Output PPI -0.5% m/m (expected -0.1%; last -0.2%); 2.9% yr/yr (expected 3.6%; last 5.2%). June CBI Industrial Trends Orders -15 (expected -17; last -17)

---Equity Markets---

  • STOXX Europe 600: -0.2%

  • Germany's DAX: -0.2%

  • U.K.'s FTSE 100: -0.2%

  • France's CAC 40: -0.3%

  • Italy's FTSE MIB: +0.3%

  • Spain's IBEX 35: +0.1%

---FX---

  • EUR/USD: UNCH at 1.0920

  • GBP/USD: -0.3% to 1.2721

  • USD/CHF: -0.1% to 0.8971

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