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28/02/23 Briefing

The S&P 500 futures are up 14 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 54 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are up points and are trading 0.3% above fair value.

Equity futures indicate a higher open, thanks in part to gains in the mega cap space, positive reactions to earnings news from the likes of Zoom Video (ZM) and Target (TGT), and technical buying interest after the S&P 500 managed to eke out a close yesterday above its 50-day moving average (3,979). 

The 2-yr Treasury note yield is unchanged at 4.80% and the 10-yr note yield is up one basis point to 3.93%.

WTI crude oil futures are up 1.8% to $77.03/bbl and natural gas futures are down 0.8% to $2.83/mmbtu. 

Market participants will receive the following economic data today:

  • 8:30 ET: January advance goods trade deficit (prior -$90.30 bln), advance Retail Inventories (prior 0.5%), and advance Wholesale Inventories (prior 0.1%)

  • 9:00 ET: December FHFA Housing Price Index (prior -0.1%) and December S&P Case Shiller Home Price Index (Briefing.com consensus 5.8%; prior 6.8%)

  • 9:45 ET: February Chicago PMI (Briefing.com consensus 45.0; prior 44.3)

  • 10:00 ET: February Consumer Confidence (Briefing.com consensus 108.4; prior 107.1)

In corporate news:

  • Target (TGT 169.50, +2.69, +1.6%): beats by $0.49, beats on revs; guides Q1 EPS below consensus; guides FY24 EPS below consensus; Q4 comps +0.7% ahead of guidance; Q4 Operating income margin 3.7%, ahead of guidance

  • Zoom Video (ZM 78.65, +4.93, +6.7%): beats by $0.40, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus

  • Norwegian Cruise Line (NCLH 15.50, -1.00, -6.1%): misses by $0.20, beats on revs; guides Q1 EPS below consensus; guides FY23 EPS below consensus

  • Workday (WDAY 179.84, -5.09, -2.8%): beats by $0.09, reports revs in-line; maintains FY24 subscription revenue midpoint and increases FY24 non-GAAP operating margin; announces co-CEO appointment

  • Occidental Petro (OXY 58.57, -0.39, -0.7%): misses by $0.22, reports revs in-line; also announces $3 bln share repurchase authorization and 38% dividend increase

  • Universal Health (UHS 137.13, -8.71, -6.0%): beats by $0.05, beats on revs; guides FY23 EPS below consensus, revs above consensus

  • Advance Auto (AAP 146.35, +5.72, +4.1%): beats by $0.46, beats on revs; guides FY23 revs above consensus

  • AutoZone (AZO 2550.00, -22.25, -0.9%): beats by $2.73, beats on revs

  • J.M. Smucker (SJM 149.00, +0.94, +0.6%): beats by $0.08, reports revs in-line; guides FY23 EPS in-line, revs above consensus

  • Chevron (CVX 164.90, +2.08, +1.3%): raises share buyback guidance to $10-20 billion per year

  • Arconic (ARNC 21.43, -0.70, -3.2%): downgraded to Sell from Neutral at Goldman

  • DISH Network (DISH 11.59, -0.61, -5.0%): downgraded to Underperform from Buy at BofA Securities

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: -0.8%, China's Shanghai Composite: +0.7%, India's Sensex: -0.6%, South Korea's Kospi: +0.4%, Australia's ASX All Ordinaries: +0.5%.

    • In economic data:

      • Japan's January Industrial Production -4.6% m/m (expected -2.6%; last 0.3%) and January Retail Sales 6.3% yr/yr (expected 4.0%; last 3.8%). January Housing Starts 6.6% yr/yr (expected 1.0%; last -1.7%) and Construction Orders -14.0% yr/yr (last 8.5%). January BoJ Core CPI 3.1% yr/yr, as expected (last 3.1%)

      • Australia's Q4 Current Account surplus AUD14.10 bln (expected surplus of AUD6.50 bln; last deficit of AUD2.30 bln). January Private Sector Credit 0.4% m/m (expected 0.3%; last 0.3%) and January Retail Sales 1.9% m/m (expected 1.5%; last -3.9%)

      • New Zealand's February ANZ Business Confidence -43.3 (last -52.0)

    • In news:

      • Japan's industrial production declined at the fastest pace in eight months in the January reading.

      • Bank of Japan Deputy Governor Wakatabe said that the inflation target has not been achieved yet.

      • Japan's Lower House passed a record JPY114.4 trln annual budget.

      • Australia will reportedly resume exporting cotton to China.

      • Hong Kong will lift its mask mandate tomorrow.

  • Major European indices trade on a mostly higher note. STOXX Europe 600: +0.1%, Germany's DAX: +0.3%, U.K.'s FTSE 100: -0.4%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +1.2%.

    • In economic data:

      • Germany's January Import Price Index -1.2% m/m (expected -1.5%; last -1.6%); 6.6% yr/yr (last 12.6%)

      • France's Q4 GDP 0.1% qtr/qtr, as expected (last 0.1%); 0.5% yr/yr (last 1.0%). January Consumer Spending 1.5% m/m (expected 0.4%; last -1.6%). February CPI 0.9% m/m (expected 0.7%; last 0.4%); 6.2% yr/yr (expected 6.1%; last 6.0%). January PPI 2.7% m/m (last 1.2%)

      • Italy's December Industrial Sales 0.7% m/m (last 0.9%); 14.9% yr/yr (last 11.4%). January non-EU trade deficit EUR1.36 bln (last surplus of EUR4.08 bln)

      • Spain's February CPI 1.0% m/m (expected 0.0%; last -0.2%); 6.1% yr/yr (expected 5.9%; last 5.9%)

    • In news:

      • France and Spain reported hotter than expected flash CPI readings for February, keeping the inflation conversation at the forefront.

      • European Central Bank policymaker Vujcic said that rates are about to enter restrictive territory and that it is correct to expect a 50-bps rate hike in March while ECB Chief Economist Lane also said that there is a solid case for a 50-bps hike in March.

 

U.S. equity futures:

  • S&P 500 Futures: +12 @ 3,982

  • DJIA Futures: +72 @ 32,889

  • Nasdaq 100 Futures: +72 @ 11,467

Overseas:

  • Europe: DAX +0.3%, FTSE -0.4%, CAC +0.3%

  • Asia: Nikkei +0.1%, Hang Seng -0.8%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil +1.37 @ 77.05

  • Nat Gas -0.022 @ 2.709

  • Gold -9.80 @ 1815.10

  • Silver -0.158 @ 20.635

  • Copper +0.0302 @ 4.0412

 

Earnings/Guidance:

  • AAON (

  • Acadia Healthcare (

  • ACADIA Pharmaceuticals (

  • AdaptHealth (

  • Addus HomeCare (

  • ADT (

  • Advance Auto (

  • Alcon (

  • Allot Comms (

  • Ameresco (

  • American Woodmark (

  • APi Group (

  • Aurinia Pharma (

  • AutoZone (

  • Bank of Montreal (

  • Bank of Nova Scotia (

  • Bayer AG (

  • Beam Therapeutics (

  • Bentley Systems (

  • BioMarin Pharmaceutical (

  • Builders FirstSource (

  • CareDx (

  • Chevron (

  • Chinook Therapeutics (

  • Daqo New Energy (

  • Darling Ingredients (

  • Delek US Holdings (

  • Denali Therapeutics (

  • Dentsply Sirona (

  • Diamond Offshore (

  • Dorman Products (

  • Dril-Quip (

  • Easterly Government Properties (

  • Ecovyst (

  • eHealth (

  • Emergent BioSolutions (

  • FibroGen (

  • First Advantage Corp. (

  • ForgeRock (

  • Frontline (

  • FS KKR Capital (

  • Gogo (

  • Golar LNG (

  • Hayward Holdings (

  • Helios Technologies (

  • Hims & Hers Health (

  • HUTCHMED (

  • ICU Medical (

  • Inari (

  • Ingevity (

  • Innovative Industrial Properties (

  • Interface (

  • International Seaways (

  • Intl Game Tech. PLC (

  • James River Group (

  • J.M. Smucker (

  • Jones Lang LaSalle (

  • Kontoor Brands (

  • MKS Instruments (

  • National Storage Affiliates (

  • New Fortress Energy (

  • Nexstar (

  • Norwegian Cruise Line (

  • Occidental Petro (

  • Olaplex (

  • ONEOK (

  • Ovintiv (

  • Owens & Minor (

  • Perrigo (

  • Playtika (

  • PNM Resources (

  • PRA Group (

  • Primoris Services (

  • Privia Health (

  • ProAssurance (

  • Progyny (

  • RadNet (

  • Range Resources (

  • RLJ Lodging Trust (

  • Rocket Pharmaceuticals (RCKT) misses by $0.10

  • Rover Group (

  • SeaWorld Entertainment (

  • Sempra Energy (

  • Shift4 Payments (

  • Sotera Health (

  • Spirit Realty Capital (

  • SpringWorks Therapeutics (

  • Target (

  • TaskUs (

  • The Beauty Health Company (

  • Thoughtworks (

  • Tidewater (TDW) beats by $0.06; misses on revs; sees FY23 revs above consensus

  • Trex (

  • TTEC Holdings (

  • Universal Health (

  • ViewRay (

  • Vimeo (

  • Warby Parker (

  • Workday (

  • Zoom Video (

News:

  • White House officials say there is no consensus on coronavirus origins despite Department of Energy report suggesting it leaked from lab in China, according to the Wall Street Journal

  • The Biden administration gave federal agencies 30 days to remove TikTok from phones, according to Reuters

  • Elon Musk developing ChatGPT rival, according to The Information

  • Hong Kong removes mask mandate, according to the Wall Street Journal

  • Advance Auto (

  • Aldeyra Therapeutics (

  • Apple (

  • Applied Materials (

  • Arrowhead (

  • Arteris (

  • Athena Consumer Acquisition Corp. (

  • Banco Santander (

  • Biogen (

  • Bristol-Myers (

  • Credit Suisse (

  • Farmland Partners (

  • Mercer Intl (

  • Merck (

  • MeridianLink (

  • Meta Platforms (

  • MultiPlan (

  • Occidental Petro (

  • Oceaneering Intl (

  • Ocugen, Inc. (

  • Primerica (

  • Restaurant Brands Int'l (

  • Robinhood Markets (

  • Shell (

  • Stellantis (

  • Tesla (

  • Verrica Pharmaceuticals (

M&A:

  • Ameresco (

  • Ares Management (

  • Broadcom (

  • Methode Electronics (

  • Ranger Oil (

  • Seadrill Ltd (

  • The Beauty Health Company (

Syndicate:

  • AirSculpt Technologies (

  • Ares Management (

  • CMS Energy (

  • EverQuote (

  • FTAI Aviation Ltd. (

  • General Electric (

  • Mondelez Int'l (

  • Principal Fincl (

  • Restaurant Brands Int'l (

  • Ritchie Bros. (

  • Travere Therapeutics (

  • WesBanco (

IPOs:

  • Expected to Price:

Gapping Up/Down

  • Gapping up:

    • VRCA +23.9%, PGNY +14.2%, HIMS +9.3%, FGEN +8.9%, ZM +6.4%, IIPR +5.4%, PRAA +5%, HCM +5%, SRC +4.6%, SAN +4.3%, AAON +4.3%, AUPH +3.7%, FSK +3.1%, XRAY +3%, ALC +2.3%, TREX +2%, CDNA +1.9%, PRGO +1.8%, VMEO +1.7%, TDW +1.7%, CLBR +1.3%, MERC +1.3%, CVX +1.2%, TILE +1%, VRAY +0.9%, ECVT +0.9%, META +0.7%, NARI +0.7%

  • Gapping down:

    • AHCO -18.3%, TPIC -13.9%, NEWT -9.2%, EVER -8.2%, TWKS -7.4%, TTEC -6.5%, ROVR -6.3%, ALLT -5.8%, AMRC -5.7%, UHS -5.4%, DQ -5.2%, TASK -5%, OVV -4.2%, BMRN -3.9%, TVTX -3.4%, ICUI -3.4%, NWSA -3%, ESTA -3%, PRIM -3%, NGVT -2.6%, WDAY -2.6%, SDRL -2.5%, DAR -2.3%, ACHC -1.2%, DDD -1.1%, RCKT -1.1%, HEI -1%, FRO -0.9%, QSR -0.8%, RRC -0.8%, FTAI -0.7%, MKSI -0.7%


Analyst Research (see Upgrades/Downgrades calendarfor full list):

  • Upgrades

    • Adidas AG (ADDYY) upgraded to Buy from Hold at Berenberg

    • Adidas AG (ADDYY) upgraded to Overweight from Neutral at JP Morgan

    • Broadmark Realty (BRMK) upgraded to Neutral from Underweight at Piper Sandler

    • HomeTrust Bank (HTBI) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $32

    • Honda Motor (HMC) upgraded to Overweight from Neutral at JP Morgan

    • Krystal Biotech (KRYS) upgraded to Buy from Neutral at Goldman; tgt raised to $124

    • Revolution Medicines (RVMD) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $38

    • Softbank (SFTBY) upgraded to Hold from Underperform at Jefferies

    • United Micro (UMC) upgraded to Buy from Neutral at Citigroup

  • Downgrades:

    • Anywhere Real Estate (HOUS) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $7

    • Arconic (ARNC) downgraded to Sell from Neutral at Goldman; tgt lowered to $21

    • Argo Group (ARGO) downgraded to Underperform from Mkt Perform at Raymond James

    • Dick's Sporting Goods (DKS) downgraded to Neutral from Buy at Citigroup; tgt lowered to $140

    • DISH Network (DISH) downgraded to Underperform from Buy at BofA Securities; tgt lowered to $10

    • fuboTV (FUBO) downgraded to In-line from Outperform at Evercore ISI; tgt lowered to $3

    • Fulcrum Therapeutics (FULC) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $8

    • Holley Inc. (HLLY) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $2

    • LendingTree (TREE) downgraded to Neutral from Positive at Susquehanna; tgt lowered to $36

    • OGE Energy (OGE) downgraded to Neutral from Buy at UBS; tgt lowered to $39

    • Thomson Reuters (TRI) downgraded to Sector Perform from Outperform at National Bank Financial

  • Others:

    • AbCellera Biologics (ABCL) initiated with an Outperform at Cowen

    • Aemetis (AMTX) initiated with an Underweight at Piper Sandler; tgt $3

    • Air Lease (AL) resumed with a Buy at Goldman; tgt $59

    • Axcelis Tech (ACLS) initiated with a Buy at Loop Capital; tgt $150

    • Clean Energy Fuels (CLNE) initiated with an Overweight at Piper Sandler; tgt $8

    • Disc Medicine (IRON) initiated with an Outperform at SVB Securities; tgt $36

    • Hexcel (HXL) assumed with an Equal Weight at Wells Fargo; tgt $76

    • IDEAYA Biosciences (IDYA) initiated with an Outperform at RBC Capital Mkts; tgt $25

    • Nurix Therapeutics (NRIX) initiated with an Outperform at Oppenheimer; tgt $25

    • OPAL Fuels (OPAL) initiated with an Overweight at Piper Sandler; tgt $12

    • Structure Therapeutics (GPCR) initiated with a Buy at Jefferies; tgt $34

    • Structure Therapeutics (GPCR) initiated with an Outperform at BMO Capital Markets; tgt $40

    • Structure Therapeutics (GPCR) initiated with a Buy at Guggenheim; tgt $50

    • Trip.com Group (TCOM) initiated with a Buy at BOCOM International; tgt $42.80

Upcoming Events:

  • Econ Data:

    • 08:30 ET: Adv. Intl. Trade in Goods for Jan (Briefing.com Consensus NA; Prior -$90.3B)

    • 08:30 ET: Adv. Retal Inventories for Jan (Briefing.com Consensus NA; Prior 0.5%)

    • 08:30 ET: Adv. Wholesale Inventories for Jan. (Briefing.com Consensus NA; Prior 0.1%)

    • 09:00 ET: FHFA Housing Price Index for Dec (Briefing.com Consensus NA; Prior -0.1%)

    • 09:00 ET: S&P Case-Shiller Home Price Index for Dec (Briefing.com Consensus 5.8%; Prior 6.8%)

    • 09:45 ET: Chicago PMI fo Feb (Briefing.com Consensus 45.0; Prior 44.3)

    • 10:00 ET: Consumer Confidence for Feb (Briefing.com Consensus 108.4; Prior 107.1)

  • Earnings:

    • Monday (Feb 27)

      • Morning:  AES BGNE WTRG FSR FRPT FUBO HSC ITRI KOP TREE LI NE PNW TGNA VTRS

      • Afternoon: AAON ACHC ACAD ADUS AMRC BMRN CDNA DAR DRQ EBS FGEN FSK HEI HLIO HIMS ICUI NARI NGVT IIPR JRVR MKSI NSA OXY OKE PRAA PRIM PRA PGNY RRC RLJ ROVR TASK TREX TTEC UHS VRAY VMEO WDAY ZM

    • Tuesday (Feb 28)

      • Morning: AHCO ADT AAP AMWD APG AZO BMO BNS BSY BKI BLDR CBRL CRON DK XRAY DORM DEA ECVT EHTH EXPI FA FRO GOGO HAYW HSKA TILE IGT SJM JLL KTB NFE NXST NCLH OLPX OMI PCRX PRFT PRGO PLTK RDNT SEAS SRE FOUR SHC SRC TGT SKIN TWKS WRBY

      • Afternoon:  DDD A ALLO AMBA AMC AXON BGS BLNK CARG CLNE COMP CPNG CUTR DUOL EDR FATE FIGS FSLR FLYW FRG FLGT GDRX GO HCAT HPQ HURN ICFI IPAR NVTA IOVA JXN JAMF LXFR MQ MASI MRTX MNST MYGN NSTG NTRA KIND NVAX OMCL OSPN PAYO PETQ PUBM RGNX RIVN RKT ROST RYAN SRPT SDGR SHLS SILK SUPN TALO URBN VRSK SPCE VZIO

Asia & Europe detail:

Asia: Nikkei +0.1%, Hang Seng -0.8%, Shanghai Composite +0.7%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's industrial production declined at the fastest pace in eight months in the January reading. Bank of Japan Deputy Governor Wakatabe said that the inflation target has not been achieved yet. Japan's Lower House passed a record JPY114.4 trln annual budget. Australia will reportedly resume exporting cotton to China. Hong Kong will lift its mask mandate tomorrow.

  • In economic data:

    • Japan's January Industrial Production -4.6% m/m (expected -2.6%; last 0.3%) and January Retail Sales 6.3% yr/yr (expected 4.0%; last 3.8%). January Housing Starts 6.6% yr/yr (expected 1.0%; last -1.7%) and Construction Orders -14.0% yr/yr (last 8.5%). January BoJ Core CPI 3.1% yr/yr, as expected (last 3.1%)

    • Australia's Q4 Current Account surplus AUD14.10 bln (expected surplus of AUD6.50 bln; last deficit of AUD2.30 bln). January Private Sector Credit 0.4% m/m (expected 0.3%; last 0.3%) and January Retail Sales 1.9% m/m (expected 1.5%; last -3.9%)

    • New Zealand's February ANZ Business Confidence -43.3 (last -52.0)

---Equity Markets---

  • Japan's Nikkei: +0.1%

  • Hong Kong's Hang Seng: -0.8%

  • China's Shanghai Composite: +0.7%

  • India's Sensex: -0.6%

  • South Korea's Kospi: +0.4%

  • Australia's ASX All Ordinaries: +0.5%

---FX---

  • USD/JPY: +0.4% to 136.74

  • USD/CNH: UNCH at 6.9578

  • USD/INR: -0.1% to 82.54

 

Europe: DAX +0.3%, FTSE -0.4%, CAC +0.3%

Major European indices trade in mixed fashion. France and Spain reported hotter than expected flash CPI readings for February, keeping the inflation conversation at the forefront. European Central Bank policymaker Vujcic said that rates are about to enter restrictive territory and that it is correct to expect a 50-bps rate hike in March while ECB Chief Economist Lane also said that there is a solid case for a 50-bps hike in March.

  • In economic data:

    • Germany's January Import Price Index -1.2% m/m (expected -1.5%; last -1.6%); 6.6% yr/yr (last 12.6%)

    • France's Q4 GDP 0.1% qtr/qtr, as expected (last 0.1%); 0.5% yr/yr (last 1.0%). January Consumer Spending 1.5% m/m (expected 0.4%; last -1.6%). February CPI 0.9% m/m (expected 0.7%; last 0.4%); 6.2% yr/yr (expected 6.1%; last 6.0%). January PPI 2.7% m/m (last 1.2%)

    • Italy's December Industrial Sales 0.7% m/m (last 0.9%); 14.9% yr/yr (last 11.4%). January non-EU trade deficit EUR1.36 bln (last surplus of EUR4.08 bln)

    • Spain's February CPI 1.0% m/m (expected 0.0%; last -0.2%); 6.1% yr/yr (expected 5.9%; last 5.9%)

---Equity Markets---

  • STOXX Europe 600: +0.1%

  • Germany's DAX: +0.3%

  • U.K.'s FTSE 100: -0.4%

  • France's CAC 40: +0.3%

  • Italy's FTSE MIB: +0.7%

  • Spain's IBEX 35: +1.2%

---FX---

  • EUR/USD: UNCH at 1.0613

  • GBP/USD: +0.3% to 1.2096

  • USD/CHF: +0.2% to 0.9377



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