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21/09/22

Updated: Sep 22

The S&P 500 futures are up 10 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 4 points and are trading slightly above fair value. The Dow Jones Industrial Average futures are up 88 points and are trading 0.3% above fair value.

Equity futures are in the green but little changed from the flat line. There's not a lot of conviction ahead of the FOMC decision at 2:00 p.m. ET. The focal point for participants will be the updated terminal rate (from 3.80%) in the Summary of Economic Projections.

In other central bank news, there was continued chatter about Japan intervening in the currency market to strengthen the yen ahead of the Bank of Japan's policy meeting Thursday. The Asia Development Bank lowered its 2022 growth forecast for China to 3.3% from 5.0% and cut the outlook for 2023 to 4.3% from 5.2%.

Separately, the British government announced a cap on electricity and gas prices for businesses that will be effective from October 1 through March 31.

Russian President Putin announced a partial mobilization of troops in his country's campaign in Ukraine, boosting the price of oil. WTI crude oil futures are up 2.5% to $86.05/bbl. Natural gas futures are up 4.6% to $8.07/mmbtu.

Treasury yields are moderating this morning. The 2-yr note yield is down two basis points to 3.95% and the 10-yr note yield is down three basis points to 3.54%.

The weekly MBA Mortgage Applications Index showed a total increase of 3.8% versus last week's 1.2% decline. Other economic data released today includes August Existing Home Sales (Briefing.comconsensus 4.70 million; prior 4.81 million) at 10:00 a.m. ET, weekly EIA Crude Oil Inventories (prior +2.44 million barrels) at 10:30 a.m. ET

The FOMC rate hike decision and updated Summary of Economic Projections are out at 2:00 p.m. ETfollowed by Fed Chair Powell's press conference at 2:30 p.m. ET

In corporate news:

  • Stitch Fix (SFIX 4.4500, -0.27, -5.72%):  misses by $0.26, misses on revs; guides Q1 revs below consensus

  • General Mills (GIS 76.91, +1.50, +1.99%): beats by $0.11, reports revs in-line; raises FY23 EPS above consensus

  • Estee Lauder (EL 243.70, +4.20, +1.75%): upgraded to Buy from Neutral at Goldman Sachs

  • Coty (COTY 8.09, +0.30, +3.85%): set out comprehensive strategy to double skincare sales by FY25; sees FY23 EPS in line with consensus

  • Cisco (CSCO 41.80, -0.78, -1.83%): downgraded to Equal Weight from Overweight at Barclays

  • Micron (MU 49.47, -1.33, -2.62%): downgraded to Neutral from Buy at Mizuho

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a lower note. Japan's Nikkei: -1.4%, Hong Kong's Hang Seng: -1.8%, China's Shanghai Composite: -0.2%, India's Sensex: -0.4%, South Korea's Kospi: -0.9%, Australia's ASX All Ordinaries: -1.5%.

  • In economic data:

  • Australia's August MI Leading Index -0.1% m/m (last -0.2%)

  • New Zealand's August Credit Card Spending 29.4% yr/yr (last 5.1%). GDT Price Index 2.0% (last 4.9%)

  • In news:

  • Asia Development Bank lowered its 2022 growth forecast for China to 3.3% from 5.0% and cut the outlook for 2023 to 4.3% from 5.2%.

  • There was continued chatter about Japan intervening in the currency market to strengthen the yen and there was some speculation that the Bank of Korea and the Federal Reserve will establish an FX swap agreement.

  • Chinese press speculated that state banks could lower their lending rates even though the loan prime rate was left unchanged in September.

  • Major European indices trade on a mostly higher note while Germany's DAX (-0.1%) lags. STOXX Europe 600: +0.5%, Germany's DAX: -0.1%, U.K.'s FTSE 100: +0.9%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.1%.

  • In economic data:

  • U.K.'s August Public Sector Net Borrowing GBP11.06 bln (expected GBP8.20 bln; last GBP2.11 bln) and September CBI Industrial Trends Orders -2 (expected -11; last -7)

  • In news:

  • Russian President Putin announced a partial mobilization of troops in his country's campaign in Ukraine, boosting the price of oil.

  • The British government announced a cap on electricity and gas prices for businesses that will be effective from October 1 through March 31.

  • British Prime Minister Truss said that tax rates may be reduced, and she is expected to announce that stamp duties will be cut.

  • Germany's economy minister confirmed that energy giant Uniper will be nationalized.

 

U.S. equity futures:

  • S&P 500 Futures: -15 @ 3,885

  • DJIA Futures: -92 @ 30,927

  • Nasdaq 100 Futures: -58 @ 11,895

Overseas:

  • Europe: DAX -0.1%, FTSE +0.9%, CAC +0.2%

  • Asia: Nikkei +0.4%, Hang Seng +1.2%, Shanghai Composite +0.2%

Commodities:

  • Crude Oil +0.08 @ 85.44

  • Nat Gas  +0.086 @ 7.838

  • Gold -1.30 @ 1676.90

  • Silver -0.041  @ 19.317

  • Copper -0.0085 @ 3.5040

U.S. Summary:

  • Earnings/Guidance:

  • Aurora Cannabis (ACB) misses on top and bottom lines

  • Coty (COTY) sets out comprehensive strategy to double skincare sales by FY25; sees FY23 EPS in line with consensus

  • General Mills (GIS) beats by $0.11, reports revs in-line; raises FY23 EPS above consensus

  • Stitch Fix (SFIX) misses by $0.26, misses on revs; guides Q1 revs below consensus

  • General News:

  • Russian President Putin threatened a nuclear response and mobilized 300K additional troops for Ukraine war, according to Bloomberg

  • Economists expect Fed to hike rates 75 basis points today, CNBC

  • NYC ends private sector coronavirus vaccination mandate, according to the New York Times

  • President Biden will address United Nations General Assembly today at 10:35 ET, per White House schedule

  • Bank CEOs will testify to House Financial Services Committee today at 10:00 ET

  • UK government outlines plans to help cut energy bills for businesses

  • German government acquires 99% stake in Uniper

  • Actinium Pharmaceuticals (ATNM) Announces Iomab-B SIERRA Trial Database Lock, Provides Corporate Update Highlighting Key Upcoming Milestones

  • AMD (AMD) wants to secure foundry support for TSMC (TSM), according to Digitimes

  • Apartment Income REIT Corp. (AIRC) provides operating update for August 31, 2022; In same store portfolio, blended transacted leases increased by 14%

  • Apple (AAPL): Anti-ESG investor wants changes at Apple and Disney (DIS), according to the Wall Street Journal

  • argenx (ARGX) submits BLA to FDA for subcutaneous Efgartigimod

  • argenx (ARGX) highlights key programs from Neuromuscular Franchise at upcoming medical meetings

  • AstraZeneca (AZN) receives EU approval for Tezspire

  • Beyond Meat (BYND) COO Doug Ramsey has been suspended effective immediately

  • Boeing (BA) aiming to eliminate 150 financial jobs, according to the Wall Street Journal

  • Catalent (CTLT): US regulators found issues at Catalent (CTLT) vaccine factory, but allowed some doses to be used

  • Change Healthcare (CHNG): as previously announced, declares one-time special dividend of $2.00/share payable on or about the first business day following the closing of its merger with UnitedHealth Group (UNH)

  • ClearPoint Neuro (CLPT) appoints Mazin Sabra as COO

  • Clearway Energy (CWEN) Provides operational update on El Segundo Energy Center

  • Clene (CLNN) and its wholly owned subsidiary Clene Nanomedicine announces presentation of updated survival results from the Phase 2 RESCUE-ALS trial open-label extension at the 2022 American Association of Neuromuscular and Electrodiagnostic Medicine Clinical & Scientific Conference, taking place September 21-24in Nashville, Tennessee

  • Eni S.p.A. (E) UK applies for carbon storage license for the Hewett depleted field in the UK Southern North Sea

  • Equity Bancshares (EQBK) raises quarterly dividend by 25%; authorizes stock repurchase

  • Fennec Pharmaceuticals (FENC) confirms FDA approval of PEDMARK

  • Glatfelter Co (GLT) has suspended the Company's quarterly cash dividend as part of its focused efforts to optimize the operational and financial results of the business

  • Granite Constr (GVA) awarded two construction contracts worth approximately $107 mln in TX

  • ICF International (ICFI): CDC awards ICFI with a new $12 mln task order to support and modernize public health laboratory informatics and data exchange services

  • Intl Game Tech. PLC (IGT) subsidiary chosen by the Ontario Lottery and Gaming Corporation as the primary tech provider of self-serve lottery terminals

  • Magnolia Oil & Gas (MGY) appoints Christopher Stavros as President and Chief Executive Officer

  • Novartis (NVS) plans to petition the U.S. Supreme Court to uphold validity of the Gilenya (fingolimod) dosing regimen patent

  • Omnicell (OMCL) provides highlights from its 2022 Investor Day

  • OraSure (OSUR) selected by CDC to provide its OraQuick in-home HIV tests for CDC's HIV self-test program

  • Palantir Technologies (PLTR) confirms $20 mln expansion contract from Hyundai Heavy Industries Group

  • Puma Biotech. (PBTI)  announces agreement with Takeda to license the R&D and commercial rights to alisertib, an investigational aurora kinase A inhibitor

  • PyroGenesis Canada (PYR) announces the in-person powder production audit at PyroGenesis' metal powder production facility in Montreal was completed by a tier one global aerospace company

  • Schlumberger (SLB) and Aramco to develop digital platform for sustainability solutions for hard-to-abate industrial sectors

  • Sinclair Broadcast (SBGI): MLB, NBA, and NHL are expected to begin talks with Diamond Sports, according to NY Post

  • Spirit Aerosystems (SPR) signs MOU with Malaysia Airlines Berhad to create MRO services for 737NG

  • Take-Two (TTWO) discloses it had become aware that an unauthorized third party illegally accessed legitimate credentials for a vendor platform 2K uses to provide support to its customers and that the unauthorized party sent a communication containing a malicious link to certain players who use that platform for customer service

  • Teck Resources (TECK) reports Elkview plant outage

  • Toyota Motor (TM) to extend the repurchase period for shares of its common stock to November 1, 2022from June 17, 2022

  • United Airlines' (UAL) didn't perform required inspections on certain wing parts on twenty-five Boeing 777-200 jets, leading to cancellations -- Wall Street Journal

  • Vaccitech plc (VACC) announces promotion of Gemma Brown as CFO

  • Verve Therapeutics (VERV) announced UK clearance of trial for VERVE-101 as a potential treatment for patients with heterozygous familial hypercholesterolemia

  • M&A:

  • Avalon Acquisition Inc. (AVAC) and The Beneficient Company Group announce merger; expects to list on the Nasdaq, to be completed in 1H23

  • Core & Main (CNM) to acquire substantially all of the assets of Distributors, Inc., a distributor of fire protection products in Hawaii

  • Southern Missouri Bancorp (SMBC) and Citizens Bancshares (CZBS) announce agreement to merge

  • Syndicate

  • Alpine Immune Sciences (ALPN) prices offering of 13,606,000 shares of its common stock at $7.35 per share

  • Archrock (AROC) files mixed securities shelf offering

  • Kenon Holdings (KEN) agreed to a private placement of OPC's ordinary shares with a number of classified investors

  • Transphorm (TGAN) files for $100 mln mixed securities shelf offering

  • IPOs:

  • Tencent Music (TME) successfully lists on Hong Kong Stock Exchange

  • Expected to Price:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • AIRC +2.4%, COTY +1.9%, SBGI +1.8%, PBYI +1.6%, SLB +1.5%, TECK +0.7%

  • Gapping down:

  • SFIX -8.5%, ACB -3.6%, VACC -3.1%, ALPN -2%, OSUR -1.8%, TME -1.5%, CLPT -1.3%, BYND -1.2%, NVS -0.8%, UAL -0.5%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Arista Networks (ANET) upgraded to Overweight from Equal Weight at Barclays; tgt $131

  • Estee Lauder (EL) upgraded to Buy from Neutral at Goldman; tgt raised to $303

  • Oxford Industries (OXM) upgraded to Neutral from Sell at Citigroup; tgt raised to $105

  • PBF Energy (PBF) upgraded to Overweight from Neutral at JP Morgan; tgt $43

  • Downgrades:

  • Arthur J. Gallagher (AJG) downgraded to Neutral from Overweight at Piper Sandler; tgt $195

  • Associated British Foods (ASBFY) downgraded to Neutral from Buy at UBS

  • Block (SQ) downgraded to Neutral from Outperform at SMBC Nikko; tgt lowered to $70

  • Cisco (CSCO) downgraded to Equal Weight from Overweight at Barclays

  • Deutsche Post (DPSGY) downgraded to Neutral from Buy at Goldman

  • HF Sinclair (DINO) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $55

  • Micron (MU) downgraded to Neutral from Buy at Mizuho; tgt lowered to $56

  • Sotera Health (SHC) downgraded to Underweight from Overweight at JP Morgan; tgt lowered to $9

  • Stitch Fix (SFIX) downgraded to Hold from Buy at Canaccord Genuity; tgt $7

  • Western Digital (WDC) downgraded to Neutral from Buy at Mizuho; tgt lowered to $40

  • Others:

  • ADC Therapeutics (ADCT) initiated with an Overweight at JP Morgan; tgt $5

  • Adicet Bio (ACET) initiated with an Overweight at JP Morgan; tgt $23

  • Apollo Medical (AMEH) initiated with an Outperform at William Blair

  • Crocs (CROX) initiated with a Neutral at Exane BNP Paribas

  • Datadog (DDOG) assumed with an Outperform at Robert W. Baird; tgt $120

  • Dynatrace (DT) assumed with an Outperform at Robert W. Baird; tgt $49

  • Gossamer Bio (GOSS) initiated with a Neutral at JP Morgan; tgt $17

  • Intellia Therapeutics (NTLA) initiated with an Overweight at JP Morgan; tgt $85

  • Jabil (JBL) placed on 90-day Positive Catalyst Watch at Citigroup

  • Jack In The Box (JACK) initiated with a Peer Perform at Wolfe Researc

  • Matador Resources (MTDR) assumed with a Buy at MKM Partners; tgt $68

  • Micron (MU) initiated with a Hold at Stifel; tgt $56

  • On (ONON) initiated with an Outperform at Exane BNP Paribas

  • PayPal (PYPL) added to US 1List at BofA Securities

  • RumbleOn (RMBL) initiated with a Peer Perform at Wolfe Research

  • Steven Madden (SHOO) initiated with an Outperform at Exane BNP Paribas

  • Travere Therapeutics (TVTX) initiated with a Sell at Bryan Garnier; tgt $17

  • Xencor (XNCR) initiated with an Overweight at JP Morgan; tgt $37

  • Wolters Kluwer N.V. (WTKWY) initiated with a Buy at UBS

Upcoming Events:

  • Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for Sept 17 (Briefing.comConsensus NA; Prior -1.2%)

  • 10:00 ET: Existing Home Sales for Aug (Briefing.comConsensus 4.70M; Prior 4.81M)

  • 10:30 ET: EIA Crude Oil Inventories for Sept 17 (Briefing.comConsensus NA; Prior +2.44M)

  • 14:00 ET: FOMC Rate Decision (Briefing.comConsensus 3.00-3.25%; Prior 2.375%)

  • Earnings

  • Monday (Sep 19)

  • Morning:  AZO

  • Tuesday (Sep 20)

  • Morning: APOG

  • Afternoon:  SFIX

  • Wednesday (Sep 21)

  • Morning:  GIS

  • Afternoon:  FUL KBH LEN

  • Thursday (Sep 22)

  • Morning: CAN DRI FDS

  • Afternoon:  AIR CAMP COST

  • Friday (Sep 23) 

  • None


Asia & Europe detail:

Asia:

Equity indices in the Asia-Pacific region ended the midweek session on a lower note. Asia Development Bank lowered its 2022 growth forecast for China to 3.3% from 5.0% and cut the outlook for 2023 to 4.3% from 5.2%. There was continued chatter about Japan intervening in the currency market to strengthen the yen and there was some speculation that the Bank of Korea and the Federal Reserve will establish an FX swap agreement. Chinese press speculated that state banks could lower their lending rates even though the loan prime rate was left unchanged in September.

  • In economic data:

  • Australia's August MI Leading Index -0.1% m/m (last -0.2%)

  • New Zealand's August Credit Card Spending 29.4% yr/yr (last 5.1%). GDT Price Index 2.0% (last 4.9%)

---Equity Markets---

  • Japan's Nikkei: -1.4%

  • Hong Kong's Hang Seng: -1.8%

  • China's Shanghai Composite: -0.2%

  • India's Sensex: -0.4%

  • South Korea's Kospi: -0.9%

  • Australia's ASX All Ordinaries: -1.5%

---FX---

  • USD/JPY: +0.1% to 143.89

  • USD/CNH: +0.4% to 7.0551

  • USD/INR: +0.3% to 79.94

Europe: DAX -0.1%, FTSE +0.9%, CAC +0.2%

Major European indices trade on a mostly higher note while Germany's DAX (-0.1%) lags. Russian President Putin announced a partial mobilization of troops in his country's campaign in Ukraine, boosting the price of oil. The British government announced a cap on electricity and gas prices for businesses that will be effective from October 1 through March 31.British Prime Minister Truss said that tax rates may be reduced, and she is expected to announce that stamp duties will be cut. Germany's economy minister confirmed that energy giant Uniper will be nationalized.

  • In economic data:

  • U.K.'s August Public Sector Net Borrowing GBP11.06 bln (expected GBP8.20 bln; last GBP2.11 bln) and September CBI Industrial Trends Orders -2 (expected -11; last -7)

---Equity Markets---

  • STOXX Europe 600: +0.5%

  • Germany's DAX: -0.1%

  • U.K.'s FTSE 100: +0.9%

  • France's CAC 40: +0.2%

  • Italy's FTSE MIB: +0.7%

  • Spain's IBEX 35: +0.1%

---FX---

  • EUR/USD: -0.6% to 0.9911

  • GBP/USD: -0.4% to 1.1330

  • USD/CHF: +0.1% to 0.9646



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The S&P 500 futures are up 3 points and are trading % above fair value. The Nasdaq 100 futures are up 9 points and are trading roughly in-line with fair value. The Dow Jones Industrial Average futures