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28/01/23 Briefing


The S&P 500 futures are down nine points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 39 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 29 points and are trading 0.1% below fair value.

Again, there isn't much conviction on the part of buyers or sellers, so the major indices look poised for a soft open with a slight downward bias. Following four straight weeks of gains, there seems to be some buyer exhaustion, which is understandable. The bigger takeaway at this juncture, though, is that sellers still don't have a pep in their step.

The corporate news flow has picked up some, but none of it has had market-moving cachet.

Today's economic calendar features the November Consumer Confidence Index at 10:00 a.m. ET (Briefing.com consensus 100.0; Prior 102.6). Treasuries are mixed in front of the report and today's $39 billion 7-yr note auction with results at 1:00 p.m. ET.

WTI crude futures are up 0.9% to $75.55/bbl.

In corporate news:

  • ZScaler (ZS 183.46, -8.45, -4.4%): beats by $0.18, beats on revs; guides Q2 EPS above consensus, revs above consensus; guides FY24 EPS above consensus, revs above consensus, reaffirms billings

  • Pinduoduo (PDD 134.80, +17.08, +14.5%): beats by RMB2.67, beats on revs

  • Boeing (BA 222.84, +3.54, +1.6%): upgraded to Outperform from Sector Perform at RBC Capital Markets

  • Affirm (AFRM 29.68, +0.31, +1.1%): upgraded to Hold from Underperform at Jefferies

  • Crocs (CROX 98.65, +2.49, +2.6%): upgraded to Strong Buy from Outperform at Raymond James

  • Edwards Lifesciences (EW 65.67, -1.49, -2.2%): downgraded to Underperform from Peer Perform at Wolfe Research

  • SpringWorks Therapeutics (SWTX 22.65, +1.88, +9.1%): receives FDA Approval of OGSIVEO

  • argenx SE (ARGX 445.80, -49.91, -10.0%): reports topline results from ADVANCE-SC Study of VYVGART Hytrulo in Primary Immune Thrombocytopenia; Study did not meet primary or secondary endpoints

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's Nikkei -0.1%, Hong Kong's Hang Seng -1.0%, China's Shanghai Composite +0.2%, India's Sensex +0.3%, South Korea's Kospi +1.1%, and Australia's All Ordinaries +0.4%.

    • In economic data:

      • Japan's October BoJ Core CPI 3.0% yr/yr (expected 3.4%; last 3.4%)

      • South Korea's November Consumer Confidence 97.2 (last 98.1)

      • Australia's October Retail Sales -0.2% m/m (expected 0.1%; last 0.9%)


  • In news:

    • Shares of developers were pressured in China even though the Chinese government announced 25 measures to encourage investment in the property sector.

    • The People's Bank of China released its Monetary Policy Implementation report for Q3, noting that the 5.0% growth target for 2023 is achievable.

    • Nikkei reported that the Bank of Japan has begun the groundwork to exit negative interest rate policy with rates expected to rise as early as the first half of 2024.



  • Major European indices trade on a mostly lower note. Germany's DAX -0.2%, U.K.'s FTSE 100 -0.4%, France's CAC 40 -0.6%, Italy's FTSE MIB -0.3%, and Spain's IBEX 35 +0.3%.

    • In economic data:

      • Eurozone's October M3 Money Supply -1.0% yr/yr (expected -0.9%; last -1.2%), October Loans to nonfinancials -0.3% yr/yr (last 0.2%), and Private Sector Loans 0.6% yr/yr (expected 0.7%; last 0.8%)

      • Germany' December GfK Consumer Climate -27.8 (expected -27.9; last -28.3)

      • France's November Consumer Confidence 87 (expected 84; last 84)

      • Italy's October non-EU trade surplus EUR5.37 bln (last surplus of EUR2.82 bln)


  • In news:

    • European Central Bank policymaker Nagel said that it is too early to discuss rate cuts while policymaker De Cos echoed the sentiment, though he acknowledged that demand is weakening.

    • Bank of England policymaker Ramsden highlighted the risk of sticky inflation in the services sector.

    • EasyJet will reinstate its dividend after returning to profitability.



U.S. equity futures:

  • S&P 500 Futures -6 @ 4,544

  • DJIA Futures: -7 @ 35,326

  • Nasdaq 100 Futures: -25 @ 15,938

Overseas:

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

  • Asia: Nikkei -0.1%, Hang Seng -1.0%, Shanghai Composite +0.2%

Commodities:

  • Crude Oil +0.71 @ 75.57

  • Nat Gas +0.012 @ 2.958

  • Gold +3.65 @ 2016.05

  • Silver +0.044 @ 24.725

  • Copper +0.0053 @ 3.8053

Earnings/Guidance:

  • Bank of Nova Scotia ( BNS 4.32% ) beats by $0.05

  • Canaan ( CAN 1.78% ) reports Q3 EPS per ADS of $0.47 vs. $0.04 last year; revs were $33.3 million, as compared to $145.5 million in the same period of 2022; also entered into a Securities Purchase Agreement

  • Chart Industries ( GTLS 4.48% ) provides medium-term financial targets through 2026 at Investor Day

  • Cool Company ( CLCO 5.73% ) reports Q3 results; beats on revs

  • Cytek Biosciences ( CTKB 0.29% ) reiterates operational and shareholder goals in presentation: Maintain positive A-EBITDA on annual basis, maximize free cash flow

  • Delek US Holdings ( DK 1.40% ) in slide presentation sees Q4 total crude throughput of 284-302K barrels per day

  • Elbit Systems ( ESLT 2.12% ) reports Q3 results; beats on revs

  • Novartis ( NVS 0.81% ) upgrades mid-term sales growth guidance; showcases its differentiated innovative medicines strategy and robust pipeline at R&D Day

  • Pebblebrook Hotel Trust ( PEB 4.31% ) reports October operating results were at the high end of expectations

  • Pinduoduo ( PDD 17.84% ) beats by RMB2.67, beats on revs

  • Seadrill Ltd ( SDRL 5.59% ) beats by $0.25, beats on revs; guides FY23 revs above consensus; increases repurchase authorization by $250 mln

  • TC Energy ( TRP 2.17% ) provides update to growth outlook at Investor Day

  • Zscaler ( ZS 0.16% ) beats by $0.18, beats on revs; guides Q2 EPS above consensus, revs above consensus; guides FY24 EPS above consensus, revs above consensus, reaffirms billings

News:

  • Investors expect Fed rate cut by May of 2024, according to the Wall Street Journal

  • 3M ( MMM 1.96% ) and Corteva (CTVA) unit defeat class action lawsuits in appeals court, according to Reuters

  • ACELYRIN, INC. ( SLRN 31.61% ) Provides Update on Izokibep Clinical Development Program

  • Airbus ( EADSY ): Cathay Pacific considers purchase of 6 Airbus A350 freighters, according to Reuters

  • Aldeyra Therapeutics ( ALDX 2.29% ) receives complete response letter from the U.S. Food and Drug Administration for the Reproxalap new drug application for the treatment of dry eye disease

  • Altair Engineering ( ALTR 0.04% ) announces series of new updates for Altair RapidMiner, its data analytics and AI platform

  • Amazon ( AMZN 0.58% ) considers purchase of more Miami office space, according to Bloomberg

  • American Lithium Corp. ( AMLI 0.45% ) files semi-detailed environmental impact assessment study to start falchani mine permitting process ahead of schedule

  • AnaptysBio ( ANAB 0.22% ) announces exclusive license agreement for Centessa Pharmaceuticals' (CNTA) blood dendritic cell antigen 2 (BDCA2) modulator antibody portfolio for the treatment of autoimmune and inflammatory diseases

  • Apollomics ( APLM 0.44% ) Announces Presentation of Vebreltinib Data at the 2023 IASLC North America Conference on Lung Cancer

  • argenx ( ARGX 10.05% ) reports topline results from ADVANCE-SC Study of VYVGART Hytrulo in Primary Immune Thrombocytopenia; Study did not meet primary or secondary endpoints

  • Arrowhead ( ARWR 0.73% ) files for regulatory clearance to initiate phase 1/2a study of ARO-DM1 for type 1 myotonic dystrophy

  • Avidity Biosciences ( RNA 18.83% ) expands cardiovascular collaboration with Bristol Myers Squibb (BMY) for up to five targets utilizing Avidity's Proprietary AOC platform technology

  • Barclays ( BCS 0.21% ) mulling plan to drop thousands of clients at its investment bank, according to Financial Times

  • Block's Square ( SQ 5.46% ) and Afterpay sellers hit record-breaking Black Friday and Cyber Monday with 70m transactions

  • Dow's ( DOW 1.50% ) Board of Directors approves final investment decision for Path2Zero Project

  • Elbit Systems ( ESLT 2.12% ) awarded $500 mln U.S. Navy contract

  • Emergent BioSolutions ( EBS 4.59% ) receives $75 mln contract option from BARDA to procure doses of CYFENDUS (Anthrax vaccine adsorbed, adjuvanted)

  • General Motors ( GM 1.42% ) aiming to lower spending on self driving unit after recent accident, according to Financial Times

  • Immunovant Sciences ( IMVT 7.83% ) announces initial data from 600 mg MAD cohort of a Phase 1 clinical trial of IMVT-1402 in healthy adults

  • Inari ( NARI 0.34% ) announces first patient enrollment in PEERLESS II trial

  • inTEST Corp ( INTT 2.47% ) approves stock repurchase plan of up to $10 mln through November 17, 2024

  • Kyndryl ( KD 1.14% ) announces collaboration with AWS

  • Merck ( MRK 1.09% ) announced results from STRIDE-3, a Phase 3 trial evaluating V116 demonstrated superior immunogenicity for 10 of 11 unique serotypes compared to PCV20 in adults 50 years of age and older

  • Novavax ( NVAX 5.77% ) announced that Nuvaxovid XBB.1.5 COVID-19 Vaccine (NVX-CoV2601) has been granted Emergency Use Listing by WHO for active immunization to prevent COVID-19 in individuals aged 12 and older

  • NovoCure ( NVCR 1.60% ) announces a series of actions to strengthen and optimize business operations to support near-term growth drivers and long-term value creation

  • Orchestra BioMed ( OBIO 3.52% ) amended lock-up agreement with certain investors

  • Orthofix ( OFIX 2.58% ) names Massimo Calafiore as President and CEO

  • Oshkosh ( OSK 1.10% ) awarded $342 mln U.S. Army contract to produce medium equipment trailers; will partner with Broshuis, B.V

  • PDS Biotechnology ( PDSB 9.32% ) CFO Matthew Hill submitted his resignation, effective December 1, 2023 in order to pursue other professional endeavors

  • Sempra Energy ( SRE 0.11% ) CFO Trevor Mihalik appointed VP and Group President; Karen Sedgwick promoted to CFO position, effective January 1, 2024

  • SenesTech ( SNES 51.14% ) launches Evolve Soft Bait at Ace Hardware locations in CA

  • Southwest Gas ( SWX 1.13% ) and Carl C. Icahn entered into an Amended and Restated Cooperation Agreement

  • SpringWorks Therapeutics ( SWTX 17.04% ) receives FDA Approval of OGSIVEO

  • SSR Mining ( SSRM 4.25% ) enters into automatic share purchase plan under its previously announced NCIB to purchase up to 10.2 mln shares of its common stock

  • Tenable ( TENB 0.81% ) announces $100 million share repurchase program

  • Universal Display ( OLED 0.76% ) signs OLED material supply and license agreements with BOE Technology

  • Vaxcyte ( PCVX 0.59% ) exercises option and enters into manufacturing rights agreement with Sutro Biopharma (STRO) to obtain control over manufacturing and development of cell-free extract for its vaccine candidates

  • Wabtec ( WAB 0.82% ) and Marinsa secure marine engine order for new panama canal tugboats

  • Western Copper ( WRN 5.34% ) announces further investment and entry into a new investor rights agreement with Rio Tinto (RIO)

  • ZIM Integrated Shipping ( ZIM 2.71% ) reaffirms its commitment to serve the East Mediterranean and Israeli ports; will re-route some of its vessels

M&A:

  • Adobe ( ADBE 0.41% ): UK CMA says Adobe / Figma deal could harm UK digital design sector

  • Canada Goose ( GOOS 1.50% ) announces the acquisition of the operating assets of Paola Confectii Manufacturing; financial terms were not disclosed

  • First Busey Corp ( BUSE 3.23% ) to acquire M&M Bank for an implied transaction value of approximately $41.6 mln; to close in 2Q24

  • Plum Acquisition Corp. I ( PLMI 0.00% ): Veea to become publicly traded company via proposed business combination with Plum Acquisition Corp. I

  • Synchrony Financial ( SYF 4.90% ) to sell its Pets Best Insurance Services unit

  • Toyota ( TM 0.19% ) mulling plan to sell 10% of Denso for $4.7 bln, according to Reuters

Syndicate:

  • Applied Optoelectronics ( AAOI 0.21% ) completed its previously announced $70.0 million "at the market" common stock offering

  • SunCar Technology Group ( SDA 7.84% ) files for 17,513,608 shares of common stock by selling shareholders

IPOs:

  • Shein confidentially files to go public in the U.S.; valued at $66 bln earlier this year, according to the Wall Street Journal

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up:

    • PDD +15.8%, BITF +10.4%, SWTX +10%, SDRL +5.6%, CWEN +5.4%, CG +5.4%, WPC +3.7%, NVAX +3.5%, INTT +3.2%, BUSE +2%, ICUI +1.8%, KD +1.2%, ANAB +1%, OSK +0.8%, SYF +0.7%, OLED +0.7%


  • Gapping down:

    • SNES -38.8%, ARGX -10.4%, CLCO -10.4%, SLRN -8.2%, ZS -6.2%, ALDX -4.6%, OBIO -2.9%, BNS -2.3%, NARI -1.6%, SDA -1.1%


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

  • Upgrades

    • Affirm (AFRM) upgraded to Hold from Underperform at Jefferies; tgt raised to $30

    • Boeing (BA) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $275

    • Continental AG (CTTAY) upgraded to Buy from Hold at Berenberg

    • Crocs (CROX) upgraded to Strong Buy from Outperform at Raymond James; tgt raised to $115

    • nLIGHT (LASR) upgraded to Speculative Buy from Hold at The Benchmark Company; tgt $17


  • Downgrades:

    • American Axle (AXL) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $8

    • Booz Allen Hamilton (BAH) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $138

    • ChargePoint (CHPT) downgraded to Neutral from Buy at UBS; tgt lowered to $2.25

    • Edwards Lifesciences (EW) downgraded to Underperform from Peer Perform at Wolfe Research; tgt $57

    • Grupo Aeroportuario Del Sureste (ASR) downgraded to Sell from Neutral at Citigroup; tgt lowered to $222


  • Others:

    • Confluent (CFLT) initiated with an Outperform at Bernstein; tgt $34

    • Estee Lauder (EL) initiated with a Buy at HSBC Securities; tgt $180

    • Glaukos (GKOS) initiated with a Buy at Truist; tgt $88

    • Hannon Armstrong Sust. Infr. (HASI) initiated with a Neutral at Goldman; tgt $26

    • Lending Club (LC) initiated with an Overweight at Piper Sandler; tgt $8

    • Lexeo Therapeutics (LXEO) initiated with a Buy at Chardan Capital Markets; tgt $23

    • Lexeo Therapeutics (LXEO) initiated with an Outperform at Leerink Partners; tgt $19

    • Lexeo Therapeutics (LXEO) initiated with an Outperform at RBC Capital Mkts; tgt $22

    • Lexeo Therapeutics (LXEO) initiated with a Buy at Stifel; tgt $20

    • Lexeo Therapeutics (LXEO) initiated with an Overweight at JP Morgan; tgt $20


Econ Data:

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

  • 09:00 ET: S&P Case-Shiller Home Price Index for Sep (Briefing.com Consensus 4.1%; Prior 2.2%)

  • 10:00 ET: Consumer Confidence for Nov (Briefing.com Consensus 100.0; Prior 102.6)

Earnings:

  • Monday (Nov 27)

    • Morning: CRNC

    • Afternoon: ZS


  • Tuesday (Nov 28)

    • Morning: PDD

    • Afternoon: AZEK CRWD FLNC HPE INTU LESL NTAP SPLK WDAY


  • Wednesday (Nov 29)

    • Morning: BILI DLTR DCI FTCH FL HRL ROAD PDCO VSTS WOOF

    • Afternoon: ARWR CRDO CRM FIVE LZB NCNO NTNX OKTA PSTG PVH SNOW SNPS VSCO ZUO


  • Thursday (Nov 30)

    • Morning: ASO AMWD BIG CBRL FRO KR RY TITN TD

    • Afternoon: AMBA DELL DOMO ESTC PD IOT MRVL PATH ULTA ZUMZ


  • Friday, (Dec 1)

    • Morning: GCO

    • Afternoon: None



Asia & Europe detail:

Asia: Nikkei -0.1%, Hang Seng -1.0%, Shanghai Composite +0.2%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Shares of developers were pressured in China even though the Chinese government announced 25 measures to encourage investment in the property sector. The People's Bank of China released its Monetary Policy Implementation report for Q3, noting that the 5.0% growth target for 2023 is achievable. Nikkei reported that the Bank of Japan has begun the groundwork to exit negative interest rate policy with rates expected to rise as early as the first half of 2024. Retail sales in Australia decreased in October for the first time since July.

  • In economic data:

    • Japan's October BoJ Core CPI 3.0% yr/yr (expected 3.4%; last 3.4%)

    • South Korea's November Consumer Confidence 97.2 (last 98.1)

    • Australia's October Retail Sales -0.2% m/m (expected 0.1%; last 0.9%)


---Equity Markets---

  • Japan's Nikkei: -0.1%

  • Hong Kong's Hang Seng: -1.0%

  • China's Shanghai Composite: +0.2%

  • India's Sensex: +0.3%

  • South Korea's Kospi: +1.1%

  • Australia's ASX All Ordinaries: +0.4%

---FX---

  • USD/JPY: -0.2% to 148.44

  • USD/CNH: +0.1% to 7.1619

  • USD/INR: UNCH at 83.28

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

Major European indices trade on a mostly lower note while Spain's IBEX (+0.3%) outperforms. European Central Bank policymaker Nagel said that it is too early to discuss rate cuts while policymaker De Cos echoed the sentiment, though he acknowledged that demand is weakening. On a similar note, Bank of England policymaker Ramsden highlighted the risk of sticky inflation in the services sector. EasyJet will reinstate its dividend after returning to profitability.

  • In economic data:

    • Eurozone's October M3 Money Supply -1.0% yr/yr (expected -0.9%; last -1.2%), October Loans to nonfinancials -0.3% yr/yr (last 0.2%), and Private Sector Loans 0.6% yr/yr (expected 0.7%; last 0.8%)

    • Germany' December GfK Consumer Climate -27.8 (expected -27.9; last -28.3)

    • France's November Consumer Confidence 87 (expected 84; last 84)

    • Italy's October non-EU trade surplus EUR5.37 bln (last surplus of EUR2.82 bln)


---Equity Markets---

  • STOXX Europe 600: -0.6%

  • Germany's DAX: -0.2%

  • U.K.'s FTSE 100: -0.4%

  • France's CAC 40: -0.6%

  • Italy's FTSE MIB: -0.3%

  • Spain's IBEX 35: +0.3%

---FX---

  • EUR/USD: UNCH at 1.0955

  • GBP/USD: UNCH to 1.2620

  • USD/CHF: +0.1% to 0.8810

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