top of page
Search

22/11/22 Briefing


The S&P 500 futures are up 8 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 13 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 67 points and are trading 0.2% above fair value.

There's been a positive response to earnings from retailers Best Buy and Abercrombie & Fitch while other earnings news is receiving a more mixed reaction. However, equity futures are still leaning higher this morning in thinner holiday trading conditions.

Treasury yields are modestly lower. The 10-yr note yield is down two basis points to 3.80% and the 2-yr note yield is down one basis point to 4.51%. The dollar is also losing strength this morning. The U.S. Dollar Index is down 0.4% to 107.45.

Mike Wilson, Chief Investment Officer at Morgan Stanley, said in a CNBC interview that he expects a "pretty steep decline in inflation."

China lockdowns reach record levels amid a surge in coronavirus cases, according to the FT.

There is no U.S. economic data of note today.

In corporate news:

  • Baidu (BIDU 96.19, +1.63, +1.72%): beats by RMB1.21, beats on revs

  • Dell (DELL 40.45, -0.62, -1.51%): provides Q4 outlook in shareholder presentation; guides Q4 adjusted EPS in-line, revs below consensus

  • Zoom Video (ZM 72.83, -7.43, -9.26%): beats by $0.23, reports revs in-line; guides Q4 EPS below consensus, revs below consensus

  • Best Buy (BBY 75.95, +5.12, +7.23%): beats by $0.36, beats on revs

  • Dick's Sporting Goods (DKS 103.90, -3.04, -2.84%): beats by $0.34, beats on revs; raises FY23 EPS and comp guidance; Q3 comps +6.5%

  • Agilent (A 150.99, +5.85, +4.03%): beats by $0.14, beats on revs; guides Q1 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Medtronic (MDT 79.50, -2.79, -3.39%): beats by $0.02, misses on revs; lowers FY23 EPS below consensus

  • Analog Devices (ADI 164.58, +5.34, +3.35%): beats by $0.14, beats on revs; guides Q1 EPS above consensus, revs above consensus

  • Burlington Stores (BURL 166.05, +8.41, +5.33%): misses by $0.09, reports revs in-line; guides Q4 EPS in-line

  • Urban Outfitters (URBN 26.04, +0.51, +2.00%): misses by $0.02, beats on revs

  • Toll Brothers (TOL 45.65, +0.61, +1.35%): upgraded to Overweight from Neutral at JPMorgan

  • GameStop (GME 25.57, +0.41, +1.63%): Carl Icahn is shorting GameStop shares, according to Bloomberg

  • Dollar Tree (DLTR 160.00, -5.24, -3.17%): beats by $0.02, beats on revs; guides Q4 revs above consensus; guides FY23 EPS in-line, revs above consensus

  • Abercrombie & Fitch (ANF 21.25, +2.62, +14.06%): beats by $0.13, beats on revs; guides Q4 revs above consensus; Terry Burman to step down as Chairperson of the Board after fiscal year ending Jan. 28, 2023; Nigel Travis to become new Board Chairperson

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: +0.1%, India's Sensex: +0.5%, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: +0.6%.

  • In economic data:

  • Japan's October BoJ Core CPI 2.7% yr/yr (expected 2.2%; last 2.0%)

  • South Korea's November Consumer Confidence 86.5 (last 88.8)

  • New Zealand's October trade deficit NZD2.13 bln (expected deficit of NZD1.72 bln; last deficit of NZD1.70 bln)

  • In news:

  • Press reports from Japan indicated that power companies will petition the government to raise prices this month, but Tokyo Electric Power indicated that it has no plans to request a rate hike in November.

  • There are growing speculations that Japan's Prime Minister Kishida will reshuffle his cabinet before the year is over.

  • Moody's expects credit conditions in China to worsen next year.

  • Major European indices trade in mixed fashion. STOXX Europe 600: +0.3%, Germany's DAX: UNCH, U.K.'s FTSE 100: +0.5%, France's CAC 40: -0.2%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +1.0%.

  • In economic data:

  • Eurozone's September Current Account deficit EUR8.1 bln (expected deficit of EUR20.3 bln; last deficit of EUR26.3 bln)

  • U.K.'s October Public Sector Net Borrowing GBP12.73 bln (expected GBP19.10 bln; last GBP16.94 bln)

  • In news:

  • European Central Bank policymaker Holzmann repeated his support for a 75-bps rate hike in December while Mario Centeno said that conditions are in place for a smaller rate hike.

  • Italy is increasing the windfall tax on energy producers.

  • The Spanish government will reportedly approve a mortgage relief package for more than a million households today.

 

U.S. equity futures:

  • S&P 500 Futures: +12 @ 3,962

  • DJIA Futures: +92 @ 33,792

  • Nasdaq 100 Futures: +28 @ 11,582

Overseas:

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

  • Asia: Nikkei +0.6%, Hang Seng -1.3%, Shanghai Composite +0.1%

Commodities:

  • Crude Oil +1.19 @ 81.23

  • Nat Gas -0.136 @ 6.64

  • Gold +8.05 @ 1747.65

  • Silver +0.405 @ 21.277

  • Copper +0.635 @ 3.6365

 

Earnings/Guidance:

  • Abercrombie & Fitch (ANF) beats by $0.13, beats on revs; guides Q4 revs above consensus

  • Agilent (A) beats by $0.14, beats on revs; guides Q1 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Agora (API) misses on top and bottom lines

  • American Woodmark (AMWD) beats by $0.32, beats on revs

  • Analog Devices (ADI) beats by $0.14, beats on revs; guides Q1 EPS above consensus, revs above consensus

  • Baidu (BIDU) beats by RMB1.21, beats on revs

  • Best Buy (BBY) beats by $0.36, beats on revs

  • Burlington Stores (BURL) misses by $0.09, reports revs in-line; guides Q4 EPS in-line

  • Caleres (CAL) beats by $0.03, beats on revs; raises lower end of FY23 EPS guidance, reaffirms FY23 revs guidance

  • Canadian Solar (CSIQ) beats by $0.74, misses on revs; guides Q4 revs below consensus

  • Dell (DELL) beats by $0.69, misses on revs; guides Q4 adjusted EPS in-line, revs below consensus

  • Dick's Sporting Goods (DKS) beats by $0.34, beats on revs; raises FY23 EPS and comp guidance; Q3 comps +6.5%

  • Dollar Tree (DLTR) beats by $0.02, beats on revs; guides Q4 revs above consensus; guides FY23 EPS in-line, revs above consensus

  • Dycom (DY) beats by $0.49, beats on revs; guides Q4 revs below consensus

  • Enanta Pharmaceuticals (ENTA) beats by $0.08, misses on revs

  • GDS Holdings (GDS) reports Q3 (Sep) results, revs in-line; reaffirms FY22 revs, adjusted EBITDA, and CapEx guidance

  • Inter Parfums (IPAR) guides FY23 earnings above consensus, revs in-line due to several factors

  • MAXIMUS (MMS) beats by $0.56, beats on revs; guides FY23 EPS in-line, revs above two analyst estimate

  • Medtronic (MDT) beats by $0.02, misses on revs; lowers FY23 EPS below consensus

  • Super Group (SGHC) beats by $0.01, beats on revs

  • Urban Outfitters (URBN) misses by $0.02, beats on revs

  • Vipshop (VIPS) beats by RMB0.80, misses on revs; guides Q4 revs below consensus

  • Warner Music Group (WMG) beats by $0.16, beats on revs

  • Zoom Video (ZM) beats by $0.23, reports revs in-line; guides Q4 EPS below consensus, revs below consensus

News:

  • China lockdowns reach record levels amid surge in coronavirus cases, according to Financial Times

  • The UK CMA has launched a market investigation into cloud gaming and mobile browsers after receiving widespread support for its proposals first published in June

  • Cryptocurrency company Genesis Global Capital needs to raise cash, according to the Wall Street Journal

  • Abercrombie & Fitch (ANF): Terry Burman to step down as Chairperson of the Board after fiscal year ending Jan. 28, 2023; Nigel Travis to become new Board Chairperson

  • Amazon (AMZN) prepared to invest several hundred million dollars into self-driving startup Argo, which boasted backers such as Ford Motor (F), according to Bloomberg

  • argenx (ARGX) receives FDA Acceptance of Biologics License Application for subcutaneous Efgartigimod

  • Arvinas (ARVN) announces initial results from the Phase 2 cohort expansion portion of a phase 1/2 study with ARV-471, a novel PROTAC estrogen receptor protein degrader

  • AstraZeneca (AZN) will present new data advancing its ambition to redefine care at the 2022 San Antonio Breast Cancer Symposium

  • Camping World (CWH) COO Tamara Ward to retire, effective December 31; Matthew Wagner, Exec VP, to be promoted to COO role on January 1, 2023

  • CVR Energy (CVI) exploring potential spin-off of its nitrogen fertilizer business

  • Denison Mines (DNN) announces additional highlights from highly successful leaching phase of Phoenix ISR feasibility field test

  • F45 Training Holdings (FXLV) CFO Chris Payne, as well as a member of the Board, stepped down effective November 15 to address immediate personal and family matters

  • GameStop (GME): Carl Icahn is shorting GameStop shares, according to Bloomberg

  • Gamida Cell (GMDA) Provides Regulatory Update on Omidubicel

  • GlaxoSmithKline (GSK) withdraws US marketing authorization for Blenrep

  • ICF International (ICFI) awarded over $45 mln in digital modernization contracts from HHS

  • iStar (STAR) declares special common stock dividend payable in shares of Safehold common stock

  • Kroger (KR): Teamsters at Kroger have voted by an overwhelming 88 percent to ratify a new national contract

  • Lion Electric (LEV) enters into a four-year supply agreement with a top-tier supplier for the supply of lithium-ion battery cells to be used for the manufacturing of batteries for electric vehicles

  • Merck (MRK) announces phase 3 KEYNOTE-859 trial met primary endpoint of overall survival in patients with HER2-negative gastric or gastroesophageal junction adenocarcinoma

  • Novavax (NVAX) discloses it terminates advance purchase agreement with Gavi

  • PacWest Bancorp (PACW) appoints current President Paul W. Taylor to CEO; current CEO Matthew P. Wagner to transition to Executive Chairman; names Kevin L. Thompson CFO

  • Pegasystems (PEGA): Clayton Dubilier & Rice in discussions to invest $1 bln in Pegasystems, according to Bloomberg

  • Regeneron Pharma (REGN): EC approves Libtayo (cemiplimab) as monotherapy for the treatment of adult patients with recurrent or metastatic cervical cancer

  • Rocket Lab USA (RKLB) confirms it completed final launch rehearsal and is ready for lift-off for its first mission from its Launch Complex 2 in VA as early as December 7

  • Sotera Health (SHC) issues statement on favorable verdict in Fornek trial

  • Tanger Factory (SKT) adds nearly 30 new stores to its retail lineup during Q4, including Allbirds (BIRD)

  • Tencent Music (TME) announced performance report for its overseas service by Tencent Musician Platform

  • TSMC (TSM) could produce Tesla (TSLA) self driving car chips, according to Digitimes

  • Treace (TMCI) Announces First Patient Treated in MTA3D Adductoplasty Clinical Study

  • Valaris (VAL) awarded four-well contract with BP offshore Egypt with estimated contract value of $136.4 mln

  • Walt Disney (DIS) head of media Kareem Danial is out, according to CNBC

  • ZTO Express (ZTO) approves upsizing the aggregate value of its repurchase program to $1.5 bln and extending the effective time by one year through June 30, 2024

M&A:

  • AgroFresh Solutions (AGFS) confirms that the Company entered into a definitive merger agreement with investment funds affiliated with Paine Schwartz Partners pursuant to which such funds will acquire all of the outstanding common stock of the Company for $3.00/share in cash

  • Construction Partners (ROAD) acquires three hot-mix asphalt plants in Nashville, TN from Blue Water Industries; financial details not disclosed

  • KKR (KKR) and EQT (EQT) among final bidders for Global Switch, according to Bloomberg

  • Norfolk Southern (NSC) announces purchase agreement to acquire substantially all the assets of Cincinnati Southern Railway

  • Paramount Global (PARA) terminates agreement for sale of Simon & Schuster; Penguin Random House obligated to pay a $200 mln termination fee to PARA

Syndicate

  • Diamondback Energy (FANG) files mixed securities shelf offering

  • Equinox Gold (EQX) announces at-the-market offering; files base shelf prospectus

  • scPharmaceuticals (SCPH) announces a proposed public offering of common stock; size of deal not disclosed

IPOs:

  • Expect to Price:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • VIPS +5.3%, ZTO +4.6%, STAR +4.5%, A +4.5%, FULT+4%, RKLB +3.2%, URBN +2.6%, CSIQ +2.5%, MMS+2.4%, DY +2.2%, BIDU +1.9%, NVAX +1.7%, CVI+1.4%, TMCI +1.1%, PARA +1%

  • Gapping down:

  • GMDA -18%, SCPH -13%, ZM -9.2%, API -6%, BRBR-3.2%, FXLV -2.7%, PFGC -1.8%, EQX -1.8%, ARGX-1%, DELL -1%, GDS -0.9%

 


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Activision Blizzard (ATVI) upgraded to Outperform from Neutral at Robert W. Baird; tgt $95

  • Downgrades:

  • Airbnb (ABNB) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $100

  • Others:

  • CSG Systems (CSGS) initiated with an Outperform at Oppenheimer; tgt $75

  • CTS Corp (CTS) initiated with a Hold at Jefferies; tgt $44

Upcoming Events:

  • Econ Data:

  • No economic data of note.

  • Earnings:

  • Monday (Nov 21)

  • Morning:  SJM J

  • Afternoon: A DELL GDS MMS URBN ZM

  • Tuesday (Nov 22)

  • Morning: ANF AEO AMWD ADI BIDU BBY BURL CAL CSIQ ROAD DKS DLTR DY JACK MDT SGHC VIPS WMG

  • Afternoon:  ADSK GES HPQ JWN

  • Wednesday (Nov 23)

  • Morning:  DE KC

Asia & Europe detail:

Asia: Nikkei +0.6%, Hang Seng -1.3%, Shanghai Composite +0.1%

Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Press reports from Japan indicated that power companies will petition the government to raise prices this month, but Tokyo Electric Power indicated that it has no plans to request a rate hike in November. There are growing speculations that Japan's Prime Minister Kishida will reshuffle his cabinet before the year is over. Moody's expects credit conditions in China to worsen next year.

  • In economic data:

  • Japan's October BoJ Core CPI 2.7% yr/yr (expected 2.2%; last 2.0%)

  • South Korea's November Consumer Confidence 86.5 (last 88.8)

  • New Zealand's October trade deficit NZD2.13 bln (expected deficit of NZD1.72 bln; last deficit of NZD1.70 bln)

---Equity Markets---

  • Japan's Nikkei: +0.6%

  • Hong Kong's Hang Seng: -1.3%

  • China's Shanghai Composite: +0.1%

  • India's Sensex: +0.5%

  • South Korea's Kospi: -0.6%

  • Australia's ASX All Ordinaries: +0.6%

---FX---

  • USD/JPY: -0.6% to 141.25 

  • USD/CNH: -0.5% to 7.1416

  • USD/INR: -0.1% to 81.65

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

Major European indices trade in mixed fashion. European Central Bank policymaker Holzmann repeated his support for a 75-bps rate hike in December while Mario Centeno said that conditions are in place for a smaller rate hike. Italy is increasing the windfall tax on energy producers. The Spanish government will reportedly approve a mortgage relief package for more than a million households today.

  • In economic data:

  • Eurozone's September Current Account deficit EUR8.1 bln (expected deficit of EUR20.3 bln; last deficit of EUR26.3 bln)

  • U.K.'s October Public Sector Net Borrowing GBP12.73 bln (expected GBP19.10 bln; last GBP16.94 bln)

---Equity Markets---

  • STOXX Europe 600: +0.3%

  • Germany's DAX: UNCH

  • U.K.'s FTSE 100: +0.5%

  • France's CAC 40: -0.2%

  • Italy's FTSE MIB: +0.4%

  • Spain's IBEX 35: +1.0%

---FX---

  • EUR/USD: +0.3% to 1.0267

  • GBP/USD: +0.5% to 1.1875 

  • USD/CHF: -0.4% to 0.9548

0 views0 comments

Recent Posts

See All
bottom of page