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23/03/23 Briefing

The S&P 500 futures are up 22 point and are trading 0.6% above fair value. The Nasdaq 100 futures are up 128 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 91 points and are trading 0.6% above fair value.

The stock market is poised for a higher open, trying to recover somewhat after yesterday's sharp declines as investors continue to digest the Fed's latest rate hike and subsequent commentary from Fed Chair Powell. Many mega cap stocks are seeing sizable gains this morning, giving a nice boost to the broader market.

Following rate hikes by the European Central Bank last week and the Federal Reserve yesterday, the Swiss National Bank announced a 50-bps rate hike to 1.50%, as expected, and said the country's bank crisis over. Also, the Norges Bank raised its rate by 25 bps to 3.00%.

The Bank of England is expected to announced a 25 basis points rate hike at 8:00 a.m. ET following the U.K.'s hotter than expected February Consumer Price Index earlier this week.

Treasury yields are little changed from their settlement levels yesterday. The 2-yr note yield is unchanged at 3.97% and the 10-yr note yield is down one basis point to 3.48%.

In corporate news:

  • Ford Motor (F 11.68, +0.20, +1.7%): announces that results will now be reported by Ford Blue (iconic gas, hybrid vehicles), Ford Model e (breakthrough EVs) and Ford Pro (commercial products, services), not by regional markets; reaffirms FY23 EBIT guidance

  • Accenture (ACN 264.10, +10.83, +4.3%): beats by $0.19, beats on revs; guides Q3 revs in-line; guides FY23 EPS in-line, revs above consensus

  • General Mills (GIS 81.23, +1.36, +1.7%): beats by $0.05, beats on revs; raises FY23 EPS above consensus

  • Darden Restaurants (DRI 151.59, +0.54, +0.4%): beats by $0.10, beats on revs; raises FY23 EPS, revenue, and comp guidance; Q3 comps +11.7%

  • Chewy (CHWY 35.64, -2.12, -5.6%): beats by $0.26, beats on revs; downgraded to Hold from Buy at Deutsche Bank

  • KB Home (KBH 37.85, +1.05, +2.9%): beats by $0.33, beats on revs, deliveries decreased by 3% to 2,788; narrows FY23 housing revenue guidance to $5.20-$5.90 bln

  • Coinbase Global (COIN 68.29, -8.85, -11.5%): receives a "Wells Notice" from the SEC stating recommending enforcement action alleging violations of federal securities laws; downgraded to Perform from Outperform at Oppenheimer

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: -0.2%, Hong Kong's Hang Seng: +2.3%, China's Shanghai Composite: +0.6%, India's Sensex: -0.5%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: -0.7%.

  • In economic data:

  • Japan's March Reuters Tankan Index -3 (last -5) o Hong Kong's February CPI 1.7% yr/yr (expected 2.3%; last 2.4%)

  • Singapore's February CPI 6.3% yr/yr (expected 6.5%; last 6.6%) and Core CPI 5.5% yr/yr (expected 5.8%; last 5.5%)


  • In news:

  • Evergrande announced a restructuring of its $22.7 bln in offshore debt.

  • Hong Kong Monetary Authority followed the Fed's 25 bps rate hike with a 25 bps increase of its own, pushing the rate up to 5.25%.

  • Bangko Sentral ng Pilipinas also announced a 25-bps hike (to 6.25%) while Taiwan's central bank raised its rate by 12.5 bps to 1.875%.

  • The Bank of Korea noted that the domestic financial sector is sound and that non-banks face stress from a weak property market.



  • Major European indices trade in the red. STOXX Europe 600: -0.8%, Germany's DAX: -0.6%, U.K.'s FTSE 100: -1.0%, France's CAC 40: -0.5%, Italy's FTSE MIB: -0.8%, Spain's IBEX 35: -0.7%.

  • There was no notable data

  • In news:

  • The Bank of England is expected to announce a 25-bps rate hike at 8:00 ET and there is an elevated likelihood of the announcement being coupled with a hawkish statement.

  • The Swiss National Bank announced a 50-bps rate hike to 1.50%, as expected, while the Norges Bank raised its rate by 25 bps to 3.00%.

  • European Central Bank policymaker Nagel cautioned that more rate hikes will be needed if inflation evolves according to projections.

  • Germany's government reiterated its plan to issue EUR126 bln of debt in Q2.



U.S. equity futures:

  • S&P 500 Futures: +22 @ 3,959

  • DJIA Futures: +83 @ 32,113

  • Nasdaq 100 Futures: +126 @ 12,693

Overseas:

  • Europe: DAX -0.6%, FTSE -1.0%, CAC -0.5%

  • Asia: Nikkei -0.2%, Hang Seng +2.3%, Shanghai Composite +0.6%

Commodities:

  • Crude Oil -0.44 @ 70.46

  • Nat Gas -0.112 @ 2.236

  • Gold +30.60 @ 1980.20

  • Silver +0.237 @ 23.023

  • Copper +0.0043 @ 4.0488


Earnings/Guidance:

  • Accenture ( ACN 7.26% ) beats by $0.19, beats on revs; guides Q3 revs in-line; guides FY23 EPS in-line, revs above consensus

  • Afya ( AFYA 7.26% ) misses by R$0.04, misses on revs, guides FY23 adjusted revenue above consensus

  • BRP Inc. ( DOOO 4.82% ) beats by CAD0.10, beats on revs; guides FY24 EPS in-line, revs above consensus

  • Chewy ( CHWY 7.49% ) beats by $0.26, beats on revs

  • Commercial Metals ( CMC 3.10% ) beats by $0.01, beats on revs

  • Darden Restaurants ( DRI 0.35% ) beats by $0.10, beats on revs; raises FY23 EPS, revenue, and comp guidance; Q3 comps +11.7%

  • FactSet ( FDS 5.55% ) beats by $0.13, reports revs in-line; guides FY23 EPS in-line, revs in-line

  • Ford Motor ( F 0.52% ) announces that results will now be reported by Ford Blue (iconic gas, hybrid vehicles), Ford Model e (breakthrough EVs) and Ford Pro (commercial products, services), not by regional markets; reaffirms FY23 EBIT guidance

  • General Mills ( GIS 2.85% ) beats by $0.05, beats on revs; raises FY23 EPS above consensus

  • Genuine Parts ( GPC 5.13% ) reaffirms FY23 guidance; provides long-term targets ahead of Investor Day

  • KB Home ( KBH 7.53% ) beats by $0.33, beats on revs, deliveries decreased by 3% to 2,788; narrows FY23 housing revenue guidance to $5.20-$5.90 bln

  • MillerKnoll ( MLKN 4.41% ) beats by $0.12, misses on revs; guides MayQ EPS below consensus, revs below consensus

  • Phreesia ( PHR 7.74% ) beats by $0.05, beats on revs; guides FY24 revs below consensus; maintains FY25 revenue target; provides update on cash balances at SVB

  • Steelcase ( SCS 5.99% ) beats by $0.08, beats on revs; guides MayQ EPS above consensus, revs above consensus; guides FY24 EPS in-line, targeting modest organic revenue growth

  • Tencent ( TCEHY ) reports Q4 results

  • Veradigm ( MDRX 0.69% ) lowers FY23 revenue forecast, reaffirms FY23 earnings forecast; receives Nasdaq notice regarding delayed 10-K

  • Vontier ( VNT 0.67% ) reaffirms FY23 guidance ahead of investor day; introduces long term targets

  • Worthington ( WOR 15.45% ) beats single est by $0.31, beats on revs

News:

  • Treasury Secretary Janet Yellen says that US is not considering providing "blanket insurance" for banking deposits, according to Reuters

  • Regional banks could be negatively impacted by commercial mortgages expiring in 2023, according to the Wall Street Journal

  • Germany could run out of gas next year, according to Financial Times

  • Swiss National Bank is tightening its monetary policy further and is raising the SNB policy rate by 0.5 percentage points to 1.5%

  • Oil companies are in discussions to develop oil fields in North Africa, according to the Wall Street Journal

  • China plans to open 100 new coal plants, according to Reuters

  • Altice USA ( ATUS 5.21% ) names Alexandre Fonseca as Chairman; currently serves as Co-CEO of Altice Group in Europe; succeeds Dexter Goei

  • Apple ( AAPL 0.70% ) might bid for English football streaming rights, according to Bloomberg

  • Arm likely to raise prices ahead of IPO, according to Financial Times

  • AstraZeneca ( AZN 1.04% ) reports Calquence granted first regulatory approval in China for adults with previously treated mantle cell lymphoma

  • Biogen ( BIIB 1.51% ): FDA advisers unanimously vote during its PCNS Meeting that protein-lowering data from its ALS drug trial is reasonably likely to predict clinical benefit

  • BlackSky Technology ( BKSY 1.52% ) selected by National Reconnaissance Office (NRO) to explore commercial hyperspectral image capabilities under a contract

  • Boeing ( BA 0.89% ): Japan Airlines selects 737-8 to grow sustainable world-class fleet

  • Cidara Therapeutics ( CDTX 24.74% ) and Melinta Therapeutics Announce FDA Approval of REZZAYO (rezafungin for injection) for the Treatment of Candidemia and Invasive Candidiasis

  • Citigroup ( C 0.59% ) CEO Jane Fraser says US is not in a credit crisis, according to Reuters

  • Coinbase Global ( COIN 14.05% ) receives a "Wells Notice" from the SEC stating recommending enforcement action alleging violations of federal securities laws

  • CSX ( CSX 0.74% ) reaches agreement with International Brotherhood of Electrical Workers to provide paid sick leave to employees

  • Everi ( EVRI 1.62% ) to introduce Vi the all-in-one, mobile games solution that extends the casino floor

  • Exelixis ( EXEL 0.11% ) files patent infringement lawsuit against Cipla

  • Generation Bio ( GBIO 28.87% ) and Moderna (MRNA) announce that the two companies have entered into a strategic collaboration to combine Moderna's biological and technical expertise with core technologies of Generation Bio's non-viral genetic medicine platform

  • Genuine Parts ( GPC 5.13% ) announces partnership with Google Cloud to support its business transformation

  • Gilead Sciences ( GILD 1.22% ) and Pionyr Immunotherapeutics change exclusive option agreement

  • Intl Game Tech. PLC ( IGT 0.12% ) recently signed agreement with Gift & Go to provide casino operators the option to add Gift & Go's gifting platform to their slot machines' service window

  • Invivyd ( IVVD 0.70% ) Publishes Model for Evaluating Biomarker Correlates of Protection for Monoclonal Antibodies Against Symptomatic COVID-19

  • Ionis Pharma ( IONS 4.73% ) announces FDA advisory committee voted unanimously for a potential accelerated approval of tofersen for SOD1-ALS

  • Johnson & Johnson ( JNJ 0.05% ): U.S. Court of Appeals for the Third Circuit denies request for a rehearing of the LTL bankruptcy petition, signaling reopening litigation against JNJ regarding talcum powder lawsuits

  • First Republic Bank ( FRC 0.33% ): Fitch downgrades First Republic's IDR to 'B'; Maintains Rating Watch Negative

  • Phreesia ( PHR 7.74% ) appoints Balaji Gandhi as CFO, succeeding Randy Rasmussen, effective March 24

  • Raymond James ( RJF 0.47% ) reports operating data for February 2023

  • Sanofi ( SNY 6.03% ) reports Dupixent demonstrates potential to become first biologic to treat COPD by showing significant reduction in exacerbations in pivotal trial

  • Silicon Valley Bank ( SIVB 62.76% ): FDIC delays bid deadline for Silicon Valley Bank, according to Bloomberg

  • TELA Bio ( TELA 1.42% ): FDA grants 510(k) clearance for the Company's OviTex PRS Long-Term Resorbable product

  • Tesla ( TSLA 0.56% ) expects to lose $7500 tax credit on least expensive car, according to Electrek

  • Toyota Motor ( TM 0.22% ) plans to discontinue Camry sales in Japan, according to Nikkei

M&A:

  • Carriage Services ( CSV 2.67% ) announces acquisition of Greenlawn Funeral Homes; terms of deal not disclosed

  • KBR ( KBR 0.31% ) announces that it has acquired Acetica, an acetic acid production technology, which expands KBR's petrochemicals value chain through a profitable pathway for CO2 utilization

  • Manchester United ( MANU 7.26% ): a Qatari delegation is expected to significantly increase their offer for the club this week, according to Independent

  • Manchester United ( MANU 7.26% ) bidders receive extension, according to Bloomberg

  • Regal Rexnord ( RRX 2.91% ) and Altra (AIMC) announce receipt of all required regulatory approvals for merger

  • Royalty Pharma ( RPRX 0.17% ) acquires interest in PureTech Health plc's (PRTC) royalty in Karuna Therapeutics' KarXT for up to $500 mln

  • Toshiba ( TOSBF ) accepts buyout from group led by PE firm Japan Industrial Partners for 2 trln, or about 4,620 yen/share ($15.3 bln), according to Bloomberg

Syndicate:

  • 89bio ( ENTB ) commences $200 mln public offering of its common stock or, in lieu of common stock to investors that so choose, pre-funded warrants to purchase shares of common stock

  • Carlyle Group ( CG 0.49% ) files mixed shelf securities offering

  • Pilgrim's Pride ( PPC 3.13% ) files mixed shelf securities offering

  • Vertical Aerospace Group ( EVTL 13.46% ) files for 216,013,700 share common stock offering by selling shareholders, relates to warrants

IPOs:

  • Expected to Price:

  • No IPOs expected.


Gapping Up/Down

  • Gapping up:

  • WOR +7%, SNY +6.4%, REGN +6.2%, EVTL +4.5%, SCS +3.5%, ETNB +3.1%, CG +2.4%, KBH +2.3%, AFYA +2.1%, UPST +1.9%, FRC +1.7%, AIMC +1.5%, GPC +1.1%, RJF +0.8%, ATUS +0.6%


  • Gapping down:

  • COIN -11%, CHWY -5.7%, CDTX -5.3%, MLKN -4.1%, MANU -3.8%, PHR -1.8%, EXEL -1.3%, CSX -0.8%, IONS -0.7%, MDRX -0.6%


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

  • Upgrades

  • Accolade (ACCD) upgraded to Buy from Neutral at Guggenheim; tgt $16

  • Americold Realty Trust (COLD) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $32

  • ArcelorMittal (MT) upgraded to Buy from Neutral at BofA Securities

  • BellRing Brands (BRBR) upgraded to Buy from Hold at Truist; tgt raised to $40

  • Inozyme Pharma (INZY) upgraded to Buy from Hold at Jefferies; tgt raised to $6

  • Marathon Oil (MRO) upgraded to Buy from Neutral at Citigroup; tgt $27

  • ORIC Pharmaceuticals (ORIC) upgraded to Buy from Neutral at H.C. Wainwright; tgt $16

  • Pioneer Natural Resources (PXD) upgraded to Buy from Neutral at Citigroup; tgt raised to $210

  • Regency Centers (REG) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $70


  • Downgrades:

  • Amwell (AMWL) downgraded to Market Perform from Outperform at TD Cowen; tgt lowered to $2.50

  • Boston Properties (BXP) downgraded to Equal Weight from Overweight at Barclays; tgt $57

  • Chewy (CHWY) downgraded to Hold from Buy at Deutsche Bank; tgt lowered to $35

  • Coinbase Global (COIN) downgraded to Perform from Outperform at Oppenheimer

  • M&T Bank (MTB) downgraded to Peer Perform from Outperform at Wolfe Research

  • nCino (NCNO) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets

  • Ovintiv (OVV) downgraded to Neutral from Buy at Citigroup; tgt lowered to $38

  • Samsara (IOT) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $19

  • SL Green Realty (SLG) downgraded to Underweight from Equal Weight at Barclays; tgt $22


  • Others:

  • AMC Entertainment (AMC) resumed with a Sell at Citigroup; tgt $1.60

  • Disc Medicine (IRON) initiated with an Outperform at BMO Capital Markets; tgt $40

  • Dynatrace (DT) initiated with a Buy at Stifel; tgt $45

  • HashiCorp (HCP) initiated with a Buy at BTIG Research; tgt $37

  • IDEAYA Biosciences (IDYA) initiated with a Buy at Berenberg; tgt $26

  • Intuitive Surgical (ISRG) initiated with an Outperform at William Blair

  • Mobileye Global (MBLY) initiated with a Hold at WestPark Capital

  • NVIDIA (NVDA) initiated with a Hold at WestPark Capital

  • Qualcomm (QCOM) initiated with a Hold at WestPark Capital

  • Roper (ROP) initiated with a Neutral at Mizuho; tgt $475

  • Select Energy Services (WTTR) initiated with a Strong Buy at Raymond James; tgt $12

  • Sociedad Quimica y Minera (SQM) initiated with an Outperform at Bradesco BBI

  • Talos Energy (TALO) initiated with an Overweight at KeyBanc Capital Markets; tgt $18

  • Western Alliance Bancorp (WAL) initiated with an Outperform at Hovde Group


  • Econ Data:

  • 08:30 ET: Initial Claims for Mar 18 (Briefing.com Consensus 204K; Prior 192K)

  • 08:30 ET: Continuing Claims for Mar 11 (Briefing.com Consensus NA; Prior 1684K)

  • 08:30 ET: Current Account Balance for Q4 (Briefing.com Consensus NA; Prior -$217.1B)

  • 10:00 ET: New Home Sales for Feb (Briefing.com Consensus 650K; Prior 670K)

  • 10:30 ET: EIA Natural Gas Inventories for Mar 18 (Briefing.com Consensus NA; Prior -58 bcf)


  • Earnings:

  • Monday (Mar 20)

  • Morning: FL PDD


  • Tuesday (Mar 21)

  • Morning: CSIQ HUYA ONON TME

  • Afternoon: AIR ARRY GME NKE


  • Wednesday (Mar 22)

  • Morning: BZUN OLLI WOOF WGO

  • Afternoon: CHWY KBH MLKN PHR SCS WOR


  • Thursday (Mar 23)

  • Morning: ACN CMC DRI FDS GIS

  • Afternoon: HRTX OXM CURV



Asia & Europe detail:

Asia: Nikkei -0.2%, Hang Seng +2.3%, Shanghai Composite +0.6%

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Evergrande announced a restructuring of its $22.7 bln in offshore debt. Hong Kong Monetary Authority followed the Fed's 25 bps rate hike with a 25 bps increase of its own, pushing the rate up to 5.25%. Bangko Sentral ng Pilipinas also announced a 25-bps hike (to 6.25%) while Taiwan's central bank raised its rate by 12.5 bps to 1.875%. The Bank of Korea noted that the domestic financial sector is sound and that non-banks face stress from a weak property market.

  • In economic data:

  • Japan's March Reuters Tankan Index -3 (last -5) o Hong Kong's February CPI 1.7% yr/yr (expected 2.3%; last 2.4%)

  • Singapore's February CPI 6.3% yr/yr (expected 6.5%; last 6.6%) and Core CPI 5.5% yr/yr (expected 5.8%; last 5.5%)


---Equity Markets---

  • Japan's Nikkei: -0.2%

  • Hong Kong's Hang Seng: +2.3%

  • China's Shanghai Composite: +0.6%

  • India's Sensex: -0.5%

  • South Korea's Kospi: +0.3%

  • Australia's ASX All Ordinaries: -0.7%

---FX---

  • USD/JPY: -0.1% to 131.21

  • USD/CNH: -0.4% to 6.8272

  • USD/INR: -0.3% to 82.26

Europe: DAX -0.6%, FTSE -1.0%, CAC -0.5%

Major European indices trade in the red. The Bank of England is expected to announce a 25-bps rate hike at 8:00 ET and there is an elevated likelihood of the announcement being coupled with a hawkish statement. The Swiss National Bank announced a 50-bps rate hike to 1.50%, as expected, while the Norges Bank raised its rate by 25 bps to 3.00%. European Central Bank policymaker Nagel cautioned that more rate hikes will be needed if inflation evolves according to projections. Germany's government reiterated its plan to issue EUR126 bln of debt in Q2.

  • There was no notable data

---Equity Markets---

  • STOXX Europe 600: -0.8%

  • Germany's DAX: -0.6%

  • U.K.'s FTSE 100: -1.0%

  • France's CAC 40: -0.5%

  • Italy's FTSE MIB: -0.8%

  • Spain's IBEX 35: -0.7%

---FX---

  • EUR/USD: +0.2% to 1.0878

  • GBP/USD: +0.2% to 1.2294

  • USD/CHF: -0.1% to 0.9167


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