Search

25/04/22 Briefing



The S&P 500 futures trade 29 points, or 0.7%, below fair value as growth concerns continue to pressure risk sentiment in front of a huge week for earnings.

Growth concerns were especially evident in Asia, where China's Shanghai Composite dropped 5.1% on Monday and Hong Kong's Hang Seng dropped 3.7%. Chinese officials reportedly described the coronavirus situation as "grim" with cases and deaths continuing to rise.

In addition, the Fed's plans to tighten policy more aggressively continue to hang over the market while ECB members reportedly want a rate hike in July and a fast end to bond purchases. Elsewhere, Russia's war in Ukraine continues to show no end in sight.

Appropriately, Treasury yields are trading lower, oil prices are trading below $100 per barrel ($97.75, -4.32, -4.2%), and the U.S. Dollar Index (101.61, +0.39, +0.4%) is up once again. The 2-yr yield is down 11 basis points to 2.60%, and the 10-yr yield is down nine basis points to 2.82%.

Regarding earnings, Microsoft (MSFT 271.50, -2.53, -0.9%) and Alphabet (GOOG 2374.60, -17.68, -0.7%) will report after Tuesday'sclose, Meta Platforms (FB 182.00, -2.11, -1.2%) on Wednesday, and Apple (AAPL 160.25, -1.54, -1.0%) and Amazon.com (AMZN 2855.00, -32.00, -1.1%) on Thursday.

Coca-Cola (KO 65.57, +0.32, +0.5%), meanwhile, is up modestly in pre-market action after beating top and bottom-line estimates.

In U.S. Corporate news:

  • Coca-Cola (KO 65.57, +0.32): +0.5% after beating top and bottom-line estimates.

  • Twitter (TWTR 51.20, +2.27): +4.6% on takeover optimism. The company met with Elon Musk yesterday on a potential deal that could be finalized by this week, according to The Wall Street Journal. CNBC is reporting a deal could happen as soon as today.

  • Advanced Micro Devices (AMD 88.33, +0.21): +0.2% after the stock was upgraded to Strong Buy from Outperform at Raymond James.

  • Verizon (VZ 51.20, -0.71): -1.4% amid an analyst downgrade to Neutral from Buy at Goldman following its earnings report last week.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a lower note while markets in Australia and New Zealand were closed for ANZAC Day. Japan's Nikkei: -1.9% Hong Kong's Hang Seng: -3.7% China's Shanghai Composite: -5.1% India's Sensex: -1.1% South Korea's Kospi: -1.8% Australia's ASX All Ordinaries: CLOSED.

  • In economic data:

  • Japan's February Corporate Services Price Index 1.3% yr/yr (expected 1.2%; last 1.1%). February Leading Index -1.2% m/m (last -1.6%) and Coincident Indicator 0.5% m/m (last -0.1%)

  • Singapore's March CPI 5.4% yr/yr (expected 4.7%; last 4.3%)


  • In news:

  • Equities in China struggled notably while the yuan fell to its lowest level since November 2020 against the dollar.

  • Nikkei reported that Japan's government is planning JPY6.2 trln in new stimulus.

  • The spokesman for Japan's Finance Ministry denied last week's reports that a plan for joint currency intervention was discussed with U.S. Treasury Secretary Yellen.

  • China's National Development and Reform Commission expects that the 3.0% CPI target will be reached this year.



  • Major European indices trade in the red. STOXX Europe 600: -2.0% Germany's DAX: -1.5% U.K.'s FTSE 100: -2.0% France's CAC 40: -2.1% Italy's FTSE MIB: -1.6% Spain's IBEX 35: -0.4%.

  • In economic data:

  • Eurozone's February Construction Output 1.86% m/m (last 3.87%)

  • Germany's April ifo Business Climate Index 91.8 (expected 89.1; last 90.8). April Current Assessment 97.2 (expected 95.8; last 97.1) and Business Expectations 86.7 (expected 83.5; last 84.9)

  • U.K.'s April CBI Industrial Trends Orders 14 (expected 21; last 26)

  • Spain's March PPI 46.6% yr/yr (last 41.2%)


  • In news:

  • The EU's next set of sanctions on Russia may be presented today.

  • French President Macron won a second term.

  • European Central Bank President Lagarde indicated that there is a high probability that asset purchases will end in early Q3.

  • The German government is expected to announce that this year's borrowing plan was increased by EUR40 bln to EUR140 bln. Separately, this year's CPI forecast was raised to 6.1% from 3.3%.

  • Standard & Poor's affirmed Italy's BBB rating with a Positive outlook while Greece's rating was raised to BB+ from BB.



U.S. equity futures:

  • S&P 500 Futures: -31 @ 4,281

  • DJIA Futures: -197 @ 33,614

  • Nasdaq 100 Futures: -104 @ 13,253

Overseas:

  • Europe: DAX -1.5%, FTSE -2.0%, CAC -2.1%

  • Asia: Nikkei -1.9%, Hang Seng -3.7%, Shanghai Composite -5.1%

Commodities:

  • Crude Oil -5.26 @ 96.81

  • Nat Gas +0.059 @ 6.722

  • Gold -26.75 @ 1907.65

  • Silver -0.669 @ 23.590

  • Copper -0.1040 @ 4.4900

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Activision Blizzard (ATVI) misses by $0.10, misses on revs

  • Bank of Hawaii (BOH) beats by $0.36

  • Coca-Cola (KO) beats by $0.06, beats on revs; reaffirms FY22 guidance

  • Community Bank (CBU) beats by $0.36; raises dividend 2.4%

  • Dorman Products (DORM) beats by $0.08, beats on revs; reaffirms FY22 EPS guidance, revs guidance

  • Lennox Int'l (LII) beats by $0.28, beats on revs; reaffirms FY22 EPS guidance, raises revenue growth guidance

  • Otis Worldwide (OTIS) beats by $0.03, reports revs in-line; lowers FY22 EPS and revenue guidance

  • Philips (PHG) reports EPS in-line, beats on revs

  • Roche Hldg (RHHBY) sees Q1 revs above consensus; reaffirms FY22 outlook

  • Sasol (SSL) reports fiscal YTD production and provides production outlook

  • US Foods (USFD) Sends Letter to Shareholders Highlighting Strong Preliminary First Quarter 2022 Results and Highly Qualified Board Nominees


  • General News:

  • French President Emmanuel Macron won re-election, defeating Marine Le Pen, according to the New York Times

  • Russian President Putin has no interest in diplomatic solution or peace talks as Ukraine is concerned Russia will seize the entire southeast portion of the country, according to the Financial Times

  • Secretary of State Antony Blinken and Defense Secretary Lloyd Austin visit Ukraine and say they "want to see Russia weakened" and they want to prevent Russia from reproducing capacity, according to the New York Times

  • ECB members want rate hike in July & fast end to bond purchases, according to Reuters

  • Chinese officials in Beijing say situation with coronavirus is "grim" as cases and deaths rise. Shanghai business district remains under lockdown, according to France 24

  • COVID-19 has been spreading undetected in Beijing for over a week, according to CNBC

  • Alvaro Bedoya will soon be confirmed to FTC, which could lead to oil company investigations, according to Reuters

  • Accel Entertainment (ACEL) announces that Mathew Ellis has been named Chief Financial Officer of Accel, effective May 1, 2022

  • Actinum Pharma (ATNM) highlighted data from full patient enrollment in the pivotal Phase 3 SIERRA trial of Iomab-B

  • Activision Blizzard (ATVI): NLRB rules workers at its Raven Software unit are eligible for union election, according to Washington Post

  • Akamai Tech (AKAM) launched a managed database service powered by Linode with support for MySQL, PostgreSQL, Redis, and MongoDB

  • Alcon (ALC) SMARTCataract demonstrates enhanced efficiency and time savings for cataract surgeries

  • Arrowhead (ARWR) has formed a joint venture, Visirna Therapeutics, with Vivo Capital to expand the reach of innovative medicines in Greater China

  • Bausch Health (BHC) presents data from first pivotal Phase 3 trial of investigational treatment NOV03(Perfluorohexyloctane); NOV03met both primary endpoints

  • Block (SQ): Jack Dorsey changes title from 'CEO, President and Chairperson' to 'Block Head and Chairperson,' effective immediately. There will be no changes in Mr. Dorsey's roles and responsibilities

  • Broadcom's (AVGO) under antitrust scrutiny from the FTC again, according to The Information

  • Cango (CANG) announced the declaration of a special cash dividend and a new share repurchase program

  • CBAK Energy Technology (CBAT) provides update on HFCAA status

  • CEMEX S.A. (CX) has successfully tested a process that converts flue gases emitted by the cement kiln into carbon nanomaterials, thereby transforming "bad" carbon into "good" carbon

  • Cian PLC (CIAN) announced that Mr. Dmitriy Grigoriev, the Chief Product Officer will assume the position of the Chief Executive Officer effective May 30

  • Credit Suisse (CS) could make some changes to senior management, according to Reuters

  • ERYTECH Pharma (ERYP) sells U.S. manufacturing facility and enters long-term supply agreement with Catalent (CTLT)

  • Foxconn (FXCNY) plant still operating despite lockdowns, according to Bloomberg

  • Gamida Cell (GMDA) announces the results of a new study demonstrating the potential impact of access to omidubicel on health disparities in allogeneic hematopoietic stem cell transplant

  • Genius Group (GNS) appoints Brad Warkins as Chief Operating Officer of the Company, effective April 25, 2022

  • Gilead Sciences (GILD): Several new studies presented at ECCMIC 2022 confirm Veklury activity in treating COVID-19

  • Gossamer Bio (GOSS) announces topline results from its Phase 2 SHIFT-UC Study clinical trial studying GB004 in patients with mild-to-moderate active ulcerative colitis

  • Hyatt (H) ends relationship with Russian hotel owners, according to Financial Times

  • ICL Group (ICL) details litigation updates

  • Intra-Cellular Therapies (ITCI) announces that the U.S. Food and Drug Administration approved two new dosage strengths of CAPLYTA, 10.5 mg and 21 mg capsules, to provide dosage recommendations for patients concomitantly taking strong or moderate CYP3A4 inhibitors, and 21 mg for patients with moderate or severe hepatic impairment

  • Kimbell Royalty Partners (KRP) raises cash distribution payment to $0.47/common unit from $0.37/common unit

  • Lockheed Martin (LMT) reaches deal with union over Texas plant, according to Bloomberg

  • Merck (MRK) receives positive EU CHMP opinion for KEYTRUDA plus chemotherapy as neoadjuvant treatment, then continued as adjuvant monotherapy after surgery for locally advanced, or high-risk early-stage triple-negative breast cancer

  • Meta Platforms (FB): EU confirms political agreement reached between the European Parliament and EU Member States on the proposal on the Digital Services Act

  • Nektar Therapeutics (NKTR) present preclinical data on NKTR-255, a novel IL-15 receptor agonist, in combination with CAR Cell therapies

  • NeoGenomics (NEO) announces partnership with Eli Lilly (LLY) for lung cancer sponsored testing program utilizing the NeoTYPE DNA and RNA Assay

  • NexGen Energy (NXE) signed Impact Benefit Agreement with the Clearwater River Dene Nation covering all phases of the Rook I Project

  • Nkarta (NKTX) announces positive preliminary dose finding data for two lead engineered natural killer cell programs

  • Ocugen (OCGN) announces positive DSMB recommendation for OCU400-101 clinical trial

  • Otis Worldwide (OTIS) increases its quarterly dividend 20.8% to $0.29/share

  • Pfizer (PFE) announced voluntary nationwide recall of lots of ACCUPRIL (Quinapril HCl) due to N-nitroso-quinapril content

  • Sapiens Int'l (SPNS) and Mindtree announce partnership to lower risks & accelerate change processes for insurers

  • Tata Motors (TTM) announced a price increase across its passenger vehicles, to partially offset the rise in input cost

  • Valneva SE (VALN) Provides regulatory update on its inactivated COVID-19 vaccine candidate

  • Vulcan Materials (VMC) provided an update with respect to its Mexican operations

  • WW (WW) announces restructuring plan, which includes an organizational realignment and reduces real estate portfolio; plan eliminates COO position; current COO Nicholas Hotchkin to depart on April 22


  • M&A:

  • Kinross Gold (KGC) announces it sold a 90% interest in the Chirano mine in Ghana to Asante Gold Corp (ASGOF) for $220 mln in cash and shares

  • Owens Corning (OC) signs an agreement with JR Plastics Corporation to acquire WearDeck; financial terms were not disclosed

  • Sprott Inc. (SII) and Sprott Funds Trust announce acquisition of assets relating to the North Shore Global Uranium Mining ETF (URNM)

  • Twitter (TWTR) met with Elon Musk yesterday on potential deal and could finalize acquisition deal by this week, according to the Wall Street Journal

  • Twitter (TWTR) on track to reach deal with Elon Musk as soon as today, according to CNBC

  • Twitter (TWTR) under pressure from shareholders to strike deal with Elon Musk, according to Reuters


  • Syndicate:

  • Avery Dennison (AVY) files mixed securities shelf offering

  • Industrial Logistics Properties Trust (ILPT) files mixed securities shelf offering

  • Provident Bancorp (PVBC) files for $100 mln mixed securities shelf offering

  • Redwire (RDW) files for 9,127,751 share common stock offering by selling shareholder

  • Terran Orbital (LLAP) files for 116,916,188 share common stock offering by selling shareholders

  • Warner Bros. Discovery (WBD) files mixed securities shelf offering


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • ERYP +59.8%, CANG +20.8%,


  • Gapping down:

  • VALN -14.5%, NXE -7%, NKTR -4.8%, RDW -4.6%, WBD -2.5%, TTM -1.7%, USFD -1.6%, ICL -1.6%, ALC-1.5%, AVGO -1.1%,


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Advanced Micro (AMD) upgraded to Strong Buy from Outperform at Raymond James; tgt $160

  • BioMarin Pharm (BMRN) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $113

  • GoDaddy (GDDY) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $110


  • Downgrades:

  • AGNC Investment (AGNC) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $11.50

  • Alnylam Pharma (ALNY) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $178

  • Avalara (AVLR) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $100

  • AZEK (AZEK) downgraded to Hold from Buy at Loop Capital; tgt lowered to $25

  • BankUnited (BKU) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $43

  • Charles River (CRL) downgraded to Hold from Buy at Jefferies; tgt lowered to $280

  • Claros Mortgage Trust (CMTG) downgraded to Neutral from Overweight at JP Morgan; tgt raised to $19

  • National Grid (NGG) downgraded to Hold from Buy at Deutsche Bank

  • Squarespace (SQSP) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $26

  • Wix.com(WIX) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $78


  • Others:

  • Arbor Realty Trust (ABR) initiated with an Overweight at Piper Sandler; tgt $20

  • AZEK (AZEK) resumed with a Neutral at BofA Securities; tgt $26

  • Darling Ingredients (DAR) initiated with a Market Perform at Cowen; tgt $80


Upcoming Events:

  • Econ Data:

  • No economic data of note.


  • Earnings:

  • Monday (Apr 25)

  • Morning: ATVI BOH KO CBU DORM LKFN LII OTIS PHG

  • Afternoon: ARE ACC AMP AXTA BRO CADE CDNS CALX CATY CR CCK HSTM HTLF HXL IBTX LXFR MEDP OI PKG PEP PCH ROIC SBAC SSD TBI UHS WRB WHR ZION


  • Tuesday (Apr 26)

  • Morning: MMM ALLE ARCH ADM ARCC AWI AVY CNC GLW DHI ECL ENTG FCF FELE GE GPK HUBB NSP IVZ JBLU MSCI NTRS NVS NVR ONB PCAR PPBI PII BPOP RTX ROP ST SHW SSTK SITC SBSI AAN TRU UBS UPS VLO WBD WM

  • Afternoon: ACCO GOOG ABCB APAM ASH AGR BHE BYD CNI COF CHX CHE CMG CB CSGP EGP EW ENPH EQR ESS EXAS FFIV FCPT GM GSHD HA HIW IEX JBT JNPR MANH MTDR MSFT MKSI MDLZ NAVI NCR PEB QS RRC RNST RHI SKX TENB TER TX TXN TNET TRMK UDR UMBF VBTX V WSBC WH


  • Wednesday (Apr 27)

  • Morning: ALKS AMT APH ADP BXMT BA BOKF BSX BG CVE GIB CHKP CHEF CME CSTM DAN DRVN ETR EEFT EVR EXTR FISV GRMN GD GPI HEES HOG HELE HES HUM IART IQV KHC MAS NEO NYCB NSC ODFL OC PAG PRG PB RGEN ROL RES R STX SLGN SLAB SPOT SHOO SF STM TMUS TMHC TEL TECK TDY TRN TPB UMC VRT WNC WAB

  • Afternoon: AFL AGI ALGN ALSN AMED AWK AMGN NLY AM AR ACGL ASGN AZPN AVB AVT AXS BMRN BCOV CHRW CACI CP CG CLS CCS CAKE CHDN FIX CYH CLB COUR DFS DRE ESI EIG EHC EQT EQIX RE FICO FARO F FORM FWRD GGG HP HTZ HOLX HPP ICLR PI INVH KRC LVS LC MAT MXL MMSI MTH FB MEOH MAA MC MOH MSA MYRG NTGR NEX NDLS ORLY OII PGRE PYPL PDM PPC PINS PLXS PTC QGEN QCOM RJF RRX SLM NOW SAVE FTI TDOC TROX TYL UCTT UIS URI UPWK WRE WSC AUY


  • Thursday (Apr 28)

  • Morning: FLWS AOS ABMD ALNY AIMC MO AEP AIT ARES ABG BAX BFH BC CRS CARR CAT CBZ CHD CNX CMCSA CTS CFR DPZ DTE LLY ERJ EME EXLS FAF FBP FCFS FTV FCN GWW GFF HAYW HSY HNI HUN IP ITGR IPG IRM JKS KBR KDP KIM KEX LH LAZ LLNW LECO LIN LKQ MTSI MA MTRN MCD MDC MPW MD MRK NLSN NOK NOC NVCR OPCH OSTK PATK PTEN PBF BTU PRFT PCG PBI PNM POR PDS PHM RLGY RS SNY SNDR STNG SFNC SIRI SAH SO LUV SWK SRCL STRA TROW TFX TPX TNC TXT SHYF TMO TW TNL TRS TWTR VLY VNE VIRT VC WBS WST WEX WTW XEL

  • Afternoon: ACCD AEM LNT ATUS AMZN AAPL ATR ACA AJG AMK TEAM AVTR AX BZH BIO CAMP CPT CSL CWST CE CINF COHU COLM OFC CUZ CUBE DXCM DLR DRQ EMN EBS WIRE ETD EVTC EXPO FHI FIBK FSLR FIVN FTAI FBHS ULCC GLPI GILD HIG HUBG IMAX INTC KNSL KLAC KN LMAT LYLT LPLA LTC MGRC MERC CASH MTX MITK MHK COOP NATI NWE NOV OIS OLN OMCL OMF OSIS PEGA POWI PFG RMAX RMD HOOD ROKU SGEN SKYW SM SSB SWN SPSC SSNC SYK TEX TRUP X VRSN WDC WU ZEN


  • Friday (Apr 29)

  • Morning: ABBV AB AON ARCB AZN B BLMN BMY CBOE GTLS CHTR CVX CL XOM HON IMO LNTH LYB MGA MOG.A NWL NMRK NVT PSX PIPR PFS SXT SYNH TRP SLCA WPC WY WETF



Asia & Europe detail:

Asia: Nikkei -1.9%, Hang Seng -3.7%, Shanghai Composite -5.1%

Equity indices in the Asia-Pacific region began the week on a lower note while markets in Australia and New Zealand were closed for ANZAC Day. Equities in China struggled notably while the yuan fell to its lowest level since November 2020 against the dollar. Nikkei reported that Japan's government is planning JPY6.2 trln in new stimulus. The spokesman for Japan's Finance Ministry denied last week's reports that a plan for joint currency intervention was discussed with U.S. Treasury Secretary Yellen. China's National Development and Reform Commission expects that the 3.0% CPI target will be reached this year.

  • In economic data:

  • Japan's February Corporate Services Price Index 1.3% yr/yr (expected 1.2%; last 1.1%). February Leading Index -1.2% m/m (last -1.6%) and Coincident Indicator 0.5% m/m (last -0.1%)

  • Singapore's March CPI 5.4% yr/yr (expected 4.7%; last 4.3%)


---Equity Markets---

  • Japan's Nikkei: -1.9%

  • Hong Kong's Hang Seng: -3.7%

  • China's Shanghai Composite: -5.1%

  • India's Sensex: -1.1%

  • South Korea's Kospi: -1.8%

  • Australia's ASX All Ordinaries: CLOSED

---FX---

  • USD/JPY: -0.2% to 128.16

  • USD/CNH: +1.2% to 6.6024

  • USD/INR: +0.3% to 76.70

Europe: DAX -1.5%, FTSE -2.0%, CAC -2.1%

Major European indices trade in the red. The EU's next set of sanctions on Russia may be presented today. French President Macron won a second term. European Central Bank President Lagarde indicated that there is a high probability that asset purchases will end in early Q3. The German government is expected to announce that this year's borrowing plan was increased by EUR40 bln to EUR140 bln. Separately, this year's CPI forecast was raised to 6.1% from 3.3%. Standard & Poor's affirmed Italy's BBB rating with a Positive outlook while Greece's rating was raised to BB+ from BB.

  • In economic data:

  • Eurozone's February Construction Output 1.86% m/m (last 3.87%)

  • Germany's April ifo Business Climate Index 91.8 (expected 89.1; last 90.8). April Current Assessment 97.2 (expected 95.8; last 97.1) and Business Expectations 86.7 (expected 83.5; last 84.9)

  • U.K.'s April CBI Industrial Trends Orders 14 (expected 21; last 26)

  • Spain's March PPI 46.6% yr/yr (last 41.2%)


---Equity Markets---

  • STOXX Europe 600: -2.0%

  • Germany's DAX: -1.5%

  • U.K.'s FTSE 100: -2.0%

  • France's CAC 40: -2.1%

  • Italy's FTSE MIB: -1.6%

  • Spain's IBEX 35: -0.4%

---FX---

  • EUR/USD: -0.5% to 1.0739

  • GBP/USD: -0.7% to 1.2742

  • USD/CHF: +0.1% to 0.9580

0 views0 comments

Recent Posts

See All