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27/06/23 briefing

Writer's picture: Simon Charles HooperSimon Charles Hooper

The S&P 500 futures are up 3 points and are trading 0.1% above fair value. The Nasdaq 100 futures are up 49 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are down 55 points and are trading 0.2% below fair value.

The S&P 500 and Nasdaq 100 futures are somewhat higher this morning thanks to some rebound action in the mega cap stocks. Alphabet (GOOG) is an exception in that regard after being downgraded to Market Perform from Outperform at Bernstein. Dow Jones Industrial Average futures trade on the weaker side. A decent loss in Walgreens Boots Alliance (WBA) after its disappointing earnings report has contributed to that weakness.

Quarter end rebalancing activity will be in play again today.

Market participants will also have a slate of economic data to digest that will include:

  • 8:30 ET: May Durable Orders (Briefing.com consensus -1.0%; prior 1.1%) and Durable Orders -ex transportation (Briefing.com consensus 0.0%; prior -0.2%)

  • 9:00 ET: April FHFA Housing Price Index (prior 0.6%) and April S&P Case-Shiller Home Price Index (Briefing.com consensus -2.5%; prior -1.1%)

  • 10:00 ET: June Consumer Confidence (Briefing.com consensus 103.8; prior 102.3) and May New Home Sales (Briefing.com consensus 665,000; prior 683,000)

The 2-yr Treasury note yield is down six basis points to 4.68% and the 10-yr note yield is unchanged at 3.72%. The U.S. Dollar Index is down 0.1% to 102.55.

In corporate news:

  • Walgreens Boots Alliance (WBA 29.47, -2.12, -6.7%): misses by $0.07, beats on revs; guides FY23 EPS below consensus; immediate actions to improve profitability including $600 million of incremental cost savings

  • Delta Air Lines (DAL 43.75, +0.61, +1.4%): sees Q2 EPS and revs above consensus; sees FY23 EPS at the top end of prior guidance range

  • Eli Lilly's (LLY 459.90, +7.14, +1.6%): phase 2 retatrutide results published in The New England Journal of Medicine show the investigational molecule achieved up to 17.5% mean weight reduction at 24 weeks in adults with obesity and overweight

  • Robinhood Markets (HOOD 9.76, +0.13, +1.4%): cutting roughly 7% of its full-time staff, according to WSJ

  • Alphabet A (GOOGL 117.42, -0.92, -0.8%): downgraded to Mkt Perform from Outperform at Bernstein

  • Kellogg (K 67.20, +1.60, +2.4%): upgraded to Buy from Neutral at Goldman

  • Microsoft (MSFT 330.40, +1.80, +0.6%): CEO Satya Nadella says company aims to reach $500 bln in sales by 2030, according to CNBC

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Japan's Nikkei: -0.5%, Hong Kong's Hang Seng: +1.9%, China's Shanghai Composite: +1.2%, India's Sensex: +0.7%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +0.5%.

    • In economic data:

      • Japan's May BoJ Core CPI 3.1% yr/yr (expected 3.0%; last 2.9%) o India's Q1 trade deficit $52.6 bln (last deficit of $72.7 bln)

      • Hong Kong's May trade deficit $26.4 bln (expected deficit of $32.6 bln; last deficit of $36.6 bln). May Imports -16.7% m/m (expected -13.5%; last -11.9%) and Exports -15.6% m/m (expected -17.3%; last -13.0%)


  • In news:

    • Chinese banks reportedly intervened in the currency market to support the yuan after the currency reached its lowest level against the dollar since late November. Separately, Chinese banks have reportedly been asked to lend more to manufacturers.

    • The chairman of China's State-owned Assets Supervision and Administration Commission of the State Council said that global trade is now growing as fast as it had been expected.

    • Japan's Finance Minister Suzuki said that recent moves in the currency markets have been sharp and one-sided.



  • Major European indices trade near their flat lines while Spain's IBEX (+0.5%) outperforms thanks to leadership from bank stocks. STOXX Europe 600: -0.2%, Germany's DAX: -0.1%, U.K.'s FTSE 100: -0.1%, France's CAC 40: UNCH, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: +0.5%.

    • In economic data:

      • Italy's June Consumer Confidence 108.6 (expected 105.5; last 105.1) and Business Confidence 100.3 (expected 101.0; last 101.2)


  • In news:

    • European Central Bank President Lagarde maintained a hawkish tone in remarks made at the two-day Sintra conference. Fed Chairman Powell is scheduled to speak at the conference tomorrow.

    • There is a growing sense that the ECB will follow its July rate hike with another increase in September.

    • Germany is reducing its planned debt issuance for Q3 by EUR14 bln.



U.S. equity futures:

  • S&P 500 Futures: +4 @ 4,333

  • DJIA Futures: -48 @ 33,667

  • Nasdaq 100 Futures: +49 @ 14,738

Overseas:

  • Europe: DAX -0.1%, FTSE -0.1%, CAC UNCH

  • Asia: Nikkei -0.5%, Hang Seng +1.9%, Shanghai Composite +1.2%

Commodities:

  • Crude Oil -1.51 @ 67.86

  • Nat Gas -0.043 @ 2.849

  • Gold -1.85 @ 1931.95

  • Silver +0.087 @ 22.913

  • Copper -0.017 @ 3.7875


Earnings/Guidance:

  • Abcam ( ABCM 0.00% ) reaffirms FY23 revenue guidance, guides FY24 revenue inline

  • Applied Digital Corporation ( APLD 0.00% ) guides Q4 (May) revs below consensus; provides business update

  • Delta Air Lines ( DAL â–´ 0.65% ) sees Q2 EPS and revs above consensus; sees FY23 EPS at the top end of prior guidance range

  • Korn/Ferry ( KFY â–´ 2.37% ) beats by $0.01, beats on revs; guides Q1 EPS below consensus, revs in-line

  • Manchester United ( MANU â–¾ 1.11% ) reports Q3 results

  • Walgreens Boots Alliance ( WBA 0.00% ) misses by $0.07, beats on revs; guides FY23 EPS below consensus; immediate actions to improve profitability including $600 million of incremental cost savings

News:

  • Russia drops investigation into Yevgeny Prigozhin, according to the New York Times

  • Treasury Secretary Janet Yellen to visit Beijing in early July; Biden administration executive order potentially cutting offer certain U.S. investments in China nearing completion, according to Bloomberg

  • European Central Bank President Christine Lagarde says inflation is too high, according to CNBC

  • NYC grants final approval for congestion pricing plan which will start next year, according to the New York Times

  • Abcam ( ABCM 0.00% ): Starboard issues statement regarding the opportunity to maximize value at Abcam

  • Adicet Bio ( ACET 0.00% ) Reports Positive Data from Ongoing ADI-001 Phase 1 Trial in Patients with Relapsed or Refractory Aggressive B-Cell Non-Hodgkin's Lymphoma

  • AC Immune ( ACIU 0.00% ) receives FDA fast track designation for anti-amyloid-beta active immunotherapy, aci-24.060, to treat alzheimer's disease

  • Aecom Tech ( ACM â–´ 0.11% ) among several firms competing for $245 mln US Army contract for architect-engineer services for hazardous, toxic and radioactive waste

  • Aldeyra Therapeutics ( ALDX 0.00% ) announces "positive" top-line results from the Phase 2 clinical trial of orally administered ADX-629

  • American Express ( AXP â–¾ 0.57% ) announces retirement of Chief Financial Officer Jeffrey Campbell and names deputy Chief Financial Officer Christophe Le Caillec as successor

  • Amicus Therapeutics ( FOLD 0.00% ) announces approval and launch of new pompe disease therapy in the European Union

  • Anheuser-Busch InBev ( BUD â–¾ 1.33% ): Bud Light will offer free beer on July 4, according to the New York Post

  • AstraZeneca ( AZN 0.00% ) announces Xigduo XR approved in China for adults with type-2 diabetes

  • AutoZone ( AZO â–´ 2.18% ) announces Bill Rhodes' decision to relinquish his positions as President and CEO, effective January 2024

  • Biogen ( BIIB 0.00% ): Alcyone Therapeutics receives FDA IDE approval to initiate clinical study of the ThecaFlex DRxTM System for Administration of SPINRAZA (

  • Bristol Myers Squibb ( BMY â–´ 0.01% ) Receives European Commission Approval of CAMZYOS (mavacamten), for the Treatment of Symptomatic Obstructive Hypertrophic Cardiomyopathy

  • Clearwater Paper ( CLW â–´ 2.41% ) names Rebecca A. Barckley as Interim CFO, effective July 1; currently engaged in search for permanent CFO

  • Edgewise Therapeutics ( EWTX 0.00% ) announces "positive" 12-month topline results from the ARCH open label study of EDG-5506 in adults with Becker Muscular Dystrophy

  • eXp World Holdings ( EXPI 0.00% ) enters into amendment with Stephens Inc., increasing repurchase cap to $1.0 bln from $500 mln

  • Ford ( F â–´ 0.64% ) to eliminate hundreds of jobs, according to Bloomberg

  • FREYR Battery ( FREY â–´ 3.56% ) announces key achievements ahead of capital markets day

  • General Dynamics ( GD â–¾ 0.14% ) awarded a $257.6 mln modification to US Army contract

  • GlaxoSmithKline ( GSK â–¾ 0.30% ) receives FDA Fast Track designation for investigational vaccine against gonorrhoea

  • Illumina ( ILMN 0.00% ) commencing headcount reduction; expects further staff cuts in Q3 as it commits to lower its annualized run rate expenses by over $100 mln in 2023

  • Inspired Entertainment ( INSE 0.00% ) signs long-term contract extension with bet365 to continue providing bet365 with the latest products

  • Jacobs Engineering ( J â–´ 0.51% ) has signed an Engineering Partnering Agreement with Fortescue Future Industries

  • Korn/Ferry ( KFY â–´ 2.37% ) approved an increase of 20% to the company's quarterly dividend, which is now $0.18 per share

  • KORU Medical Systems ( KRMD 0.00% ) names Andrew D. C. LaFrence as CFO effective July 10, 2023

  • Lilly's ( LLY â–¾ 1.33% ) phase 2 retatrutide results published in The New England Journal of Medicine show the investigational molecule achieved up to 17.5% mean weight reduction at 24 weeks in adults with obesity and overweight

  • Linde plc ( LIN â–´ 0.03% ) signed a series of contracts with Wanhua Chemical Group, expanding the companies' cooperation across multiple key sites in China

  • Livent ( LTHM â–´ 1.55% ) provides update on fire at Bessemer City manufacturing facility; the fire has subsided and was principally contained to the warehouse portion of a steel and concrete building, although storage area was structurally damaged

  • MeiraGTx ( MGTX 0.00% ) Announces Positive Clinical Data from the AQUAx Phase 1 Clinical Study of AAV2-hAQP1 for the Treatment of Grade 2/3 Radiation-Induced Xerostomia

  • Minerals Tech ( MTX â–´ 1.16% ) subsidiary Barretts Minerals to exit the talc business; decision follows strategic review

  • Mobileye Global ( MBLY 0.00% ) announces that CFO Anat Heller is stepping down, current VP of Finance Moran Rojansky will serve as interim CFO; effective immediately

  • Nkarta ( NKTX 0.00% ) announces "positive" updated data from its Phase 1 study of NKX101 to treat patients with relapsed or refractory acute myeloid leukemia

  • Noodles & Co ( NDLS 0.00% ) announces appointment of Michael Hynes as CFO, effective July 24, 2023

  • Orange ( ORAN â–´ 0.27% ): EU commission sends Orange and MasMovil statement of objections over their proposed joint venture in Spain

  • Pfizer ( PFE â–¾ 3.68% ): FDA accepts Pfizer's application for hemophilia B gene therapy fidanacogene elaparvovec

  • Robinhood Markets ( HOOD 0.00% ) inching higher after cutting roughly 7% of its full-time staff, according to the Wall Street Journal

  • Sanofi ( SNY 0.00% ) reports topline Phase 2b data in atopic dermatitis support amlitelimab as a potential first and best-in-class novel investigational anti-OX40-ligand monoclonal antibody

  • Scorpio Tankers ( STNG â–¾ 3.04% ) announces commitments for new $1 billion term loan and revolving credit facility

  • Starbucks ( SBUX 0.00% ) plans clearer guidance for pride merchandise amid dispute with union, according to Bloomberg

  • TechnipFMC ( FTI â–´ 4.33% ) awarded "significant contract" by Azule Energy to supply subsea production systems offshore Angola

  • Terns Pharmaceuticals ( TERN 0.00% ) Highlights New Preclinical Data for TERN-601 Program in Obesity at the ADA's 83rd Annual Scientific Session and Upcoming Events

  • Verona Pharma ( VRNA 0.00% ) submits NDA to FDA for Ensifentrine for the Maintenance Treatment of COPD

  • Volkswagen AG ( VWAGY ) is committed to developing a sub-$22,000 electric vehicle, according to Inside EVs

M&A:

  • Alpha Healthcare Acquisition Corp. III ( ALPA 0.00% ) announces the execution of a non-binding letter of intent to acquire a commercial stage regenerative medicine company conditioned upon the closing of ALPA's initial business combination with Carmell Therapeutics Corporation

  • American Equity Investment Life ( AEL â–´ 10.89% ) receives acquisition proposal from Brookfield Reinsurance for $55.00 per AEL share

  • Circor ( CIR â–¾ 0.04% ) enters into amendment to definitive merger agreement with KKR (KKR) at $51/share

  • Microsoft ( MSFT 0.00% ) reportedly considered acquiring Bungie and Sega, according to The Verge

  • Thomson Reuters ( TRI â–´ 1.18% ) acquires Casetext for $650 mln in cash

Syndicate:

  • Stratasys ( SSYS 0.00% ): 3D Systems (DDD) submits enhanced proposal to combine with Stratasys

  • enCore Energy Corp. ( EU â–¾ 4.60% ) announces agreement for at-the-market offering

  • IDEAYA Biosciences ( IDYA 0.00% ) files mixed shelf securities offering

  • MoonLake Immunotherapeutics ( MLTX 0.00% commences $250 mln public offering; to use net proceeds to fund the ongoing advancement of Sonelokimab and other general purposes

IPOs:

  • IPOs Expected to Price:

    • Fidelis Insurance (NYSE: FIHL): The global reinsurance company with operations in Bermuda, Irelands, and the UK is expected to price its 17.0 M share IPO between $16-$19.

    • Kodiak Services (NYSE: KGS): The leading operator of contract compression infrastructure in the United States is expected to price its 16.0 M share IPO between $19-$22.

    • Savers Value Village (NYSE: SVV): The largest for-profit thrift operator in the United States and Canada is expected to price its 18.8 M share IPO between $15-$17.


Gapping Up/Down

  • Gapping up:

    • AEL +9.1%, ALDX +6.3%, MOD +4.6%, INSE +4.5%, TERN +3%, EWTX +2.8%, FREY +2.8%, IQ +2.6%, EGLE +1.6%, EU +1.4%, ABCM +1.2%, EXPI +1%, LLY +1%, HOOD +0.9%, MBLY +0.6%, MSFT +0.5%


  • Gapping down:

    • ACET -11.6%, NDLS -4.8%, APLD -4.8%, MLTX -3.3%, FTI -2.5%, IDYA -0.8%, LTHM -0.7%


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

  • Upgrades

    • Guidewire Software (GWRE) upgraded to Buy from Hold at Stifel; tgt raised to $85

    • Kellogg (K) upgraded to Buy from Neutral at Goldman; tgt raised to $83

    • Saia (SAIA) upgraded to Outperform from In-line at Evercore ISI


  • Downgrades:

    • Adicet Bio (ACET) downgraded to Mkt Perform from Mkt Outperform at JMP Securities

    • Alibaba (BABA) downgraded to Mkt Perform from Outperform at Bernstein; tgt lowered to $98

    • Allete (ALE) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $54

    • Alphabet A (GOOGL) downgraded to Mkt Perform from Outperform at Bernstein; tgt $125

    • Ballard Power (BLDP) downgraded to Neutral from Buy at B. Riley Securities; tgt lowered to $5

    • Equinix (EQIX) downgraded to Hold from Buy at Truist; tgt lowered to $815


  • Others:

    • Avita Medical (RCEL) initiated with an Overweight at Cantor Fitzgerald; tgt $23

    • Frontier Communications Parent (FYBR) initiated with an Outperform at Wolfe Research; tgt $27

    • Gilat Satellite (GILT) initiated with a Buy at Needham; tgt $7

    • Mondee Holdings (MOND) initiated with a Mkt Outperform at JMP Securities; tgt $13


Econ Data:

  • 08:30 ET: Durable Orders for May (Briefing.com Consensus -1.0%; Prior 1.1%)

  • 08:30 ET: Durable Orders ex-transportation for May (Briefing.com Consensus 0.0%; Prior -0.2%)

  • 09:00 ET: FHFA Housing Price Index for Apr (Briefing.com Consensus NA; Prior 0.6%)

  • 09:00 ET: S&P Case-Shiller Home Price Index for Apr (Briefing.com Consensus -2.5%; Prior -1.1%)

  • 10:00 ET: Consumer Confidence for June (Briefing.com Consensus 103.8; Prior 102.3)

  • 10:00 ET: New Home Sales for May (Briefing.com Consensus 665K; Prior 683K)

Earnings:

Asia & Europe detail:

Asia: Nikkei -0.5%, Hang Seng +1.9%, Shanghai Composite +1.2%

Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Chinese banks reportedly intervened in the currency market to support the yuan after the currency reached its lowest level against the dollar since late November. Separately, Chinese banks have reportedly been asked to lend more to manufacturers. The chairman of China's State-owned Assets Supervision and Administration Commission of the State Council said that global trade is now growing as fast as it had been expected. Japan's Finance Minister Suzuki said that recent moves in the currency markets have been sharp and one-sided.

  • In economic data:

    • Japan's May BoJ Core CPI 3.1% yr/yr (expected 3.0%; last 2.9%) o India's Q1 trade deficit $52.6 bln (last deficit of $72.7 bln)

    • Hong Kong's May trade deficit $26.4 bln (expected deficit of $32.6 bln; last deficit of $36.6 bln). May Imports -16.7% m/m (expected -13.5%; last -11.9%) and Exports -15.6% m/m (expected -17.3%; last -13.0%)


---Equity Markets---

  • Japan's Nikkei: -0.5%

  • Hong Kong's Hang Seng: +1.9%

  • China's Shanghai Composite: +1.2%

  • India's Sensex: +0.7%

  • South Korea's Kospi: UNCH

  • Australia's ASX All Ordinaries: +0.5%

---FX---

  • USD/JPY: +0.2% to 143.73

  • USD/CNH: -0.3% to 7.2199

  • USD/INR: UNCH at 81.97

Europe: DAX -0.1%, FTSE -0.1%, CAC UNCH

Major European indices trade near their flat lines while Spain's IBEX (+0.5%) outperforms thanks to leadership from bank stocks. European Central Bank President Lagarde maintained a hawkish tone in remarks made at the two-day Sintra conference. Fed Chairman Powell is scheduled to speak at the conference tomorrow. There is a growing sense that the ECB will follow its July rate hike with another increase in September. Germany is reducing its planned debt issuance for Q3 by EUR14 bln.

  • In economic data:

    • Italy's June Consumer Confidence 108.6 (expected 105.5; last 105.1) and Business Confidence 100.3 (expected 101.0; last 101.2)


---Equity Markets---

  • STOXX Europe 600: -0.2%

  • Germany's DAX: -0.1%

  • U.K.'s FTSE 100: -0.1%

  • France's CAC 40: UNCH

  • Italy's FTSE MIB: +0.1%

  • Spain's IBEX 35: +0.5%

---FX---

  • EUR/USD: +0.4% to 1.0950

  • GBP/USD: +0.2% to 1.2731

  • USD/CHF: -0.2% to 0.8938

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