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23/12/21 Briefing

The S&P 500 futures trade 24 points, or 0.5%, above fair value in front of a big batch of data before the market closes for Christmas Eve tomorrow. The benchmark index enters the session down 0.3% from its all-time closing high after rallying 2.8% over the past two days.

At 8:30 a.m. ET, investors will receive Personal Income (Briefing.com consensus 0.5%) and Personal Spending (Briefing.com consensus 0.6%) for November, PCE Prices for November, weekly Initial Claims (Briefing.com consensus 206,000), and Durable Goods Orders for November (Briefing.com consensus 1.5%).

New Home Sales for November (Briefing.com consensus 770,000) and the final University of Michigan Index of Consumer Sentiment for December (Briefing.com consensus 70.4) will be available at 10:00 a.m. ET.

The market will pay particular attention to the PCE Price component of the personal income/spending report since monetary policy has become more sensitive to inflation pressures. It's also the Fed's preferred measure of inflation.

Separately, concerns about the Omicron variant continue to wane amid encouraging vaccine data from Novavax (NVAX 187.50, +4.20, +2.3%) and AstraZeneca (AZN 57.88, -0.20, -0.3%). On a related note, China locked down the western city of Xi'an, and Apple (AAPL 176.12, +0.52, +0.3%) temporarily closed eight stores because of the coronavirus.

U.S. Treasury yields have edged higher across the curve. The 2-yr yield is up two basis points to 0.68%, and the 10-yr yield is up two basis points to 1.48%. The U.S. Dollar Index is up 0.1% to 96.17. WTI crude futures are up 0.4%, or $0.29, to $73.04/bbl.

In U.S. Corporate news:

  • Novavax (NVAX 187.50, +4.20): +2.3% after data showed its COVID-19 vaccine produced cross-reactive immune responses against the Omicron variant.

  • Ortho Clinical Diagnostics (OCDX 22.50, +2.71): +13.7% after agreeing to be acquired by Quidel Corporation (QDEL 154.33, -11.91, -7.2%) for $24.68/share, or approximately $6 billion in cash and stock.

  • Scientific Games (SGMS 67.10, +4.92): +7.9% after withdrawing its all-stock offer to acquire the remaining 19% equity interest in SciPlay (SCPL 12.65, -2.82, -18.2%) that it doesn't currently own.

  • Apple (AAPL 176.12, +0.52): +0.3% as investors continue to buy the dip in the market. On a related note, the company temporarily closed eight stores due to the spread of the coronavirus.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a higher note. Japan's Nikkei: +0.8% Hong Kong's Hang Seng: +0.4% China's Shanghai Composite: +0.6% India's Sensex: +0.7% South Korea's Kospi: +0.5% Australia's ASX All Ordinaries: +0.3%.

  • In economic data:

  • Japan's October Leading Index 1.3% m/m (last -0.4%) and Coincident Indicator 1.1% m/m (last -2.6%)

  • Singapore's November CPI 3.8% yr/yr (expected 3.4%; last 3.2%)

  • Australia's November Private Sector Credit 0.9% m/m (last 0.5%) and November Housing Credit 0.7% m/m (last 0.6%)


  • In news:

  • The Japanese government plans FY22/23 debt issuance of JPY36.90 trln, nearly JPY7 trln down from the original estimate.

  • FY22 GDP is expected to reach 3.2%, up from the previous forecast for 2.2% growth.

  • Q1 crude steel production is expected to be down 1.4% qtr/qtr.

  • China's Industry Minister said that the country's industrial economy will face downward pressure in Q1.



  • Major European indices trade in the green. STOXX Europe 600: +0.6% Germany's DAX: +0.6% U.K.'s FTSE 100: +0.2% France's CAC 40: +0.4% Italy's FTSE MIB: +0.3% Spain's IBEX 35: +1.1%.

  • In economic data:

  • Germany's November Import Price Index 3.0% m/m (expected 1.1%; last 3.8%); 24.7% yr/yr (expected 22.3%; last 21.7%)

  • Spain's Q3 GDP 2.6% qtr/qtr (expected 2.0%; last 1.2%); 3.4% yr/yr (expected 2.7%; last 17.7%)

  • Italy's December Consumer Confidence 117.7 (expected 116.2; last 117.5) and Business Confidence 115.2 (expected 115.3; last 115.9)


  • In news:

  • Import prices in Germany grew at their fastest yr/yr pace since 1974 in the November reading.

  • Germany's health minister said that new lockdown measures are not currently needed, but he did not rule out a future lockdown.

  • British Prime Minister Johnson is not expected to announce new post-Christmas restrictions at this time.

  • EU officials will meet in January to determine a resolution to the fishing dispute between France and the U.K.

  • Wholesale natural gas prices in Europe dipped from a record high.




U.S. equity futures:

  • S&P 500 Futures: +14 @ 4,711

  • DJIA Futures: +119 @ 35,872

  • Nasdaq 100 Futures: +39 @ 16,219

Overseas:

  • Europe: DAX +0.6%, FTSE +0.2%, CAC +0.4%

  • Asia: Nikkei +0.8%, Hang Seng +0.4%, Shanghai Composite +0.6%

Commodities:

  • Crude Oil +0.12 @ 72.88

  • Nat Gas -0.175 @ 3.801

  • Gold +2.60 @ 1804.80

  • Silver -0.029 @ 22.790

  • Copper -0.0295 @ 4.3620

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • InnovAge (INNV) receives CMS audit sanctions; withdraws guidance

  • Mission Produce (AVO) misses by $0.06, misses on revs; expects flat to slightly down volumes yr/yr in JanQ


  • General News:

  • Three separate research teams say Omicron is milder than Delta despite being more contagious -- NY Times

  • China orders lockdown of western city of Xi'an due to coronavirus (FXI) -- Bloomberg

  • Supreme Court will hear challenges to President Biden's vaccination mandates for private businesses and healthcare workers on January 7 -- Washington Post

  • Alnylam Pharma (ALNY) confirms that the FDA has approved Leqvio

  • Apple (AAPL) closes seven stores amid increasing coronavirus cases -- Bloomberg

  • Arcutis Biotherapeutics (ARQT): FDA accepts review of NDA for roflumilast cream for psoriasis; PDUFA date is July 29

  • AstraZeneca (AZN) reports Vaxzevria significantly boosted antibody levels against Omicron

  • Boeing (BA): FAA proposes engine fixes for Boeing 777 jets -- WSJ

  • Citigroup (C) divests Philippines Consumer Bank

  • JD.com (JD) announced it is aware that Tencent Holdings (TCEHY), which currently owns indirectly approximately 17.0% of the Company's outstanding shares, announced that it will distribute approximately 460 million Class A ordinary shares of the Company owned by Tencent to its shareholders

  • LiveNation (LYV): House to investigate LiveNation over Astroworld incident -- WSJ

  • Merck (MRK): France cancelled order of Merck coronavirus treatment -- FT

  • Novartis AG (NVS) receives FDA approval for Cosentyx

  • Novavax (NVAX): two-dose of NVX-CoV2373 demonstrated cross-reactive immune responses against Omicron; third dose produced increased immune compared to levels in Phase 3 trials

  • Yellowstone Acquisition Co (YSAC) announces additional $45 mln common stock PIPE subscription for Sky Harbour Group business combination


  • M&A:

  • Crocs (CROX) acquires HEYDUDE for $2.5 bln

  • Laboratory Corp (LH) entered into a definitive agreement to acquire Personal Genome Diagnostics Inc.

  • Marsh McLennan (MMC) increased its shareholding in Marsh India Insurance Brokers Pvt. Ltd. from 49% to 92%

  • Ortho Clinical Diagnostics (OCDX) to be acquired by Quidel Corporation (QDEL) for $24.68/share

  • Scientific Games (SGMS) withdraws all-stock offer to acquire remaining 19% equity interest in SciPlay (SCPL) that it doesn't currently own


  • Syndicate:

  • Cadre Holdings (CDRE) files for 27,483,350 share common stock offering by selling shareholders

  • Guild Holdings (GHLD) files for 996,644 share common stock offering by selling shareholders

  • KKR Real Estate Finance Trust (KREF) files mixed securities shelf offering; also files for 17.75 mln share common stock offering by selling shareholders

  • Rocket Lab USA (RKLB) announces it will redeem all outstanding public warrants to purchase shares of its common stock

  • Roivant Sciences (ROIV) files for 17,407,773 share common stock offering by selling shareholders

  • Truist (TFC) files for $17.9 bln mixed securities shelf offering


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • NVAX +5.6%, SGMS +4.7%, NKLA +3.5%, PHG +3.1%, ARQT +1.9%, ENDP +1.9%, UGRO +1%, PCH +1%, NVS +0.7%, BANR +0.6%


  • Gapping down:

  • SCPL -17.3%, AVO -9.2%, JD -8.2%, DKL -3.3%, ROIV -2.1%, KREF -1.7%, NFGC -1.7%, AEM -1.4%, RKLB -1.2%, WEN -1%, TFC -0.9%



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

  • Upgrades

  • No upgrades of note


  • Downgrades:

  • StoneCo (STNE) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $22


  • Others:

  • AT&T (T) initiated with a Neutral at Daiwa Securities; tgt $26

  • Elevation Oncology (ELEV) initiated with a Buy at H.C. Wainwright; tgt $12

  • HYZON Motors (HYZN) initiated with a Buy at Canaccord Genuity; tgt $12

  • Ikena Oncology (IKNA) initiated with a Buy at H.C. Wainwright; tgt $25

  • Porch Group (PRCH) initiated with an Outperform at Wedbush; tgt $21

  • Spartan Acquisition Corp. III (SPAQ) initiated with a Buy at DA Davidson; tgt $15

  • T-Mobile US (TMUS) initiated with a Neutral at Daiwa Securities; tgt $128

  • The Beauty Health Company (SKIN) initiated with a Mkt Perform at Raymond James

  • Verizon (VZ) initiated with a Neutral at Daiwa Securities; tgt $57

  • Vincerx (VINC) initiated with an Overweight at Cantor Fitzgerald; tgt $25


Upcoming Events:

  • Econ Data:

  • 08:30 ET: November Personal Income (Briefing.com consensus 0.5%), Personal Spending (Briefing.com consensus 0.6%), PCE Price Index (Prior 0.6%) and Core PCE Price Index (Briefing.com consensus 0.4%)

  • 08:30 ET: Initial Jobless Claims for week ending Dec. 18 (Briefing.com consensus 206K) and Continuing Claims for week ending Dec. 11 (Prior 1.845M)

  • 08:30 ET: November Durable Goods Orders (Briefing.com consensus 1.5%) and Durable Goods Orders, Excluding Transportation (Briefing.com consensus 0.6%)

  • 10:00 ET: November New Home Sales (Briefing.com consensus 770K)

  • 10:00 ET: December Univ. of Michigan Consumer Sentiment - Final (Briefing.com consensus 70.4)

  • 10:30 ET: EIA Natural Gas Inventories for week ending Dec. 18 (Prior -88 bcf)


  • Earnings:

  • Monday (Dec 20)

  • Afternoon: CVGW MU NKE


  • Tuesday (Dec 21)

  • Morning: APOG CGNT EPAC FDS GIS NEOG RAD

  • Afternoon: AIR BB CAMP


  • Wednesday (Dec 22)

  • Morning: KMX CTAS MSM PAYX




Asia & Europe detail:

Asia: Nikkei +0.8%, Hang Seng +0.4%, Shanghai Composite +0.6%

Equity indices in the Asia-Pacific region ended Thursday on a higher note. The Japanese government plans FY22/23 debt issuance of JPY36.90 trln, nearly JPY7 trln down from the original estimate. FY22 GDP is expected to reach 3.2%, up from the previous forecast for 2.2% growth. Q1 crude steel production is expected to be down 1.4% qtr/qtr. China's Industry Minister said that the country's industrial economy will face downward pressure in Q1.

  • In economic data:

  • Japan's October Leading Index 1.3% m/m (last -0.4%) and Coincident Indicator 1.1% m/m (last -2.6%)

  • Singapore's November CPI 3.8% yr/yr (expected 3.4%; last 3.2%)

  • Australia's November Private Sector Credit 0.9% m/m (last 0.5%) and November Housing Credit 0.7% m/m (last 0.6%)


---Equity Markets---

  • Japan's Nikkei: +0.8%

  • Hong Kong's Hang Seng: +0.4%

  • China's Shanghai Composite: +0.6%

  • India's Sensex: +0.7%

  • South Korea's Kospi: +0.5%

  • Australia's ASX All Ordinaries: +0.3%

---FX---

  • USD/JPY: +0.2% to 114.26

  • USD/CNH: UNCH at 6.3721

  • USD/INR: -0.3% to 75.21

Europe: DAX +0.6%, FTSE +0.2%, CAC +0.4%

Major European indices trade in the green. Import prices in Germany grew at their fastest yr/yr pace since 1974 in the November reading. Germany's health minister said that new lockdown measures are not currently needed, but he did not rule out a future lockdown. British Prime Minister Johnson is not expected to announce new post-Christmas restrictions at this time. EU officials will meet in January to determine a resolution to the fishing dispute between France and the U.K. Wholesale natural gas prices in Europe dipped from a record high.

  • In economic data:

  • Germany's November Import Price Index 3.0% m/m (expected 1.1%; last 3.8%); 24.7% yr/yr (expected 22.3%; last 21.7%)

  • Spain's Q3 GDP 2.6% qtr/qtr (expected 2.0%; last 1.2%); 3.4% yr/yr (expected 2.7%; last 17.7%)

  • Italy's December Consumer Confidence 117.7 (expected 116.2; last 117.5) and Business Confidence 115.2 (expected 115.3; last 115.9)


---Equity Markets---

  • STOXX Europe 600: +0.6%

  • Germany's DAX: +0.6%

  • U.K.'s FTSE 100: +0.2%

  • France's CAC 40: +0.4%

  • Italy's FTSE MIB: +0.3%

  • Spain's IBEX 35: +1.1%

---FX---

  • EUR/USD: UNCH at 1.1316

  • GBP/USD: +0.6% to 1.3433

  • USD/CHF: +0.1% to 0.9207


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