The S&P 500 futures trade 18 points, or 0.4%, above fair value to start the week amid a carryover of positive momentum.
Ostensibly, weaker oil prices ($108.09, -5.81, -5.1%) are helping risk sentiment, although they're down on growth concerns after Shanghai imposed lockdowns to curb an outbreak of COVID-19. China's Shanghai Composite eked out a 0.1% gain on Monday.
The Treasury market is also reflecting growth concerns by way of curve-flattening activity. The 2-yr yield is up two basis points to 2.31%, while the 10-yr yield is down two basis points to 2.47%.
The U.S. Dollar Index is up 0.5% to 99.25 amid relative weakness in the Japanese yen, which is down 1.6% against the dollar after the Bank of Japan offered to buy an unlimited amount of JGBs at 0.25%. That move was consistent with the central bank's policy of yield curve control.
In key corporate news, Apple (AAPL 172.84, -1.88, -1.1%) is planning to cut production for the iPhone SE by roughly 20% and AirPods by more than 10 million units this year amid the geopolitical uncertainty, according to The Nikkei. Tesla (TSLA 1067.50, +56.86, +5.6%) will ask shareholders to authorize additional shares to enable another stock split.
Separately, investors will receive the Advance International Trade in Goods, Retail Inventories, and Wholesale Inventories reports for February at 8:30 a.m. ET.
In U.S. Corporate news:
Apple (AAPL 172.84, -1.88): -1.1% after The Nikkei reported that the company is planning to cut production for the iPhone SE and AirPods amid the geopolitical uncertainty. The report said the company will reduce SE production by about 20% and reduce AirPod production by more than 10 million this year.
Tesla (TSLA 1067.50, +56.86): +5.6% after the company tweeted it will ask shareholders to vote at this year's annual meeting to authorize additional shares in order to enable a stock split.
Beyond Meat (BYND 45.90, -2.73): -5.6% after the stock was downgraded to Underweight from Neutral at Piper Sandler.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei: -0.7% Hong Kong's Hang Seng: +1.3% China's Shanghai Composite: +0.1% India's Sensex: +0.4% South Korea's Kospi: UNCH Australia's ASX All Ordinaries: UNCH.
In economic data:
China's February Industrial Profit 5.0% YTD (last 34.3%) o Hong Kong's February trade deficit HKD32.10 bln (last surplus of HKD6.60 bln). February Imports 6.2% m/m (last 9.6%) and Exports 0.9% m/m (last 18.4%)
In news:
The Bank of Japan conducted a second bond buying operation at a fixed rate after the first operation failed to entice buyers.
The yen plunged in response, falling toward its low from 2015. The central bank plans to continue buying bonds through Thursday.
China auctioned over 500 kilotons of wheat from state reserves.
Westpac noted that financial markets are overstating the likelihood of tighter policy over the next couple years.
Major European indices trade on a firmly higher note. STOXX Europe 600: +0.9% Germany's DAX: +1.9% U.K.'s FTSE 100: +0.7% France's CAC 40: +1.7% Italy's FTSE MIB: +2.1% Spain's IBEX 35: +1.8%.
There was no economic data today
In news:
Spain's Prime Minister Sanchez announced that EUR6 bln will be spent to offset higher energy prices.
Negotiators from Russia and Ukraine are reportedly meeting in Turkey today.
Germany's ruling SPD won a regional election in Saarland.
A referendum to join Russia may be held in Luhansk, Ukraine, but Ukraine's officials already indicated that the vote would have no legal basis in their eyes.
U.S. equity futures:
S&P 500 Futures: +10 @ 4,553
DJIA Futures: +57 @ 34,918
Nasdaq 100 Futures: +38 @ 14,792
Overseas:
Europe: DAX +1.9%, FTSE +0.7%, CAC +1.7%
Asia: Nikkei -0.7%, Hang Seng +1.3%, Shanghai Composite +0.1%
Commodities:
Crude Oil -6.97 @ 106.93
Nat Gas -0.055 @ 5.556
Gold -26.60 @ 1927.60
Silver -0.493 @ 25.122
Copper -0.0265 @ 4.6720
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Science Applications (SAIC) beats by $0.28, reports revs in-line; guides FY23 EPS in-line, revs below consensus
Tuya (TUYA) updates Q1 revenue guidance
General News:
White House officials say President Biden was not calling for regime change in Russia on Saturday when he said Russian President Putin "cannot remain in power." The remark was not in the pre-prepared speech, according to Politico
Kremlin calls President Biden's remark "alarming", according to Bloomberg
Ukrainian President Volodymyr Zelenskyy says his country is prepared to discuss neutrality with Russia, according to Reuters
Russia claimed to focusing invasion on eastern Ukraine, but attacks continue throughout the country. Mariupol could soon fall, according to the New York Times
President Biden will soon propose 20% minimum tax on individuals with $100 million in income or unrealized capital gains, but previous efforts to do this did not gain support of moderate Democrats such as Senator Kyrsten Sinema (D-AZ), according to the Washington Post
USTR Katherine Tai says US will increase pressure on China's trade practices. This could include new trade investigations that could result in additional tariffs, according to Reuters
Shanghai enters staggered coronavirus lockdown, according to the New York Times
Nuclear deal with Iran is not imminent, according to Financial Times
China and US regulators working to solve audit dispute, according to Reuters
US will increase fines for automakers not meeting fuel economy standards, according to Reuters
President Biden will propose $32 bln in funding to fight crime in today's budget (which will be released this afternoon), according to Axios
President Biden will propose blackout period for executive stock sales following buybacks in today's budget, CNBC
Amarin (AMRN) received its first national reimbursement in a European country for VAZKEPA in Sweden
AMC (AMC) CEO Adam Aron expects more meme stock deals, according to Reuters
Amryt (AMYT) Announces Positive Interim Analysis Data From Open Label Phase of EASE Phase 3 Trial in EB
Apple (AAPL) aiming to lower production of iPhone SEs, according to Nikkei
AstraZeneca (AZN) reports Evusheld long-acting antibody combination approved in the EU
AT&T (T) provides details on WarnerMedia transaction, expects to close deal in April
Bayer AG (BAYRY) receives approval in Japan for Kerendia
Bayer (BAYRY): Key investor is trying to remove Bayer CEO Werner Baumann, according to Bloomberg
Biogen (BIIB) and Ionis Announce Topline Phase 1 Study Results of Investigational Drug in C9orf72 Amyotrophic Lateral Sclerosis
Brady (BRC) enters into license agreement with Honeywell for barcode scanning devices
Cara Therapeutics (CARA) Announces Oral KORSUVA (difelikefalin) Improves Itch and Inflammatory Biomarkers in Atopic Dermatitis Patients with Moderate-To-Severe Pruritus
CenterPoint (CNP) announces full exit from midstream interest and receives improved credit thresholds from Moody's
Centerra Gold (CGAU) provides update on negotiations with the Kyrgyz Government
Colfax (CFX) announces board of directors for post-spinoff ESAB
Eli Lilly (LLY) and Innovent expand strategic partnership in oncology
Eli Lilly (LLY): Nearly 40% of Adults with Alopecia Areata Taking OLUMIANT 4-mg Saw at Least 80% Scalp Hair Coverage at 52 Weeks in Lilly's Pivotal Phase 3 Studies
Evelo Biosciences (EVLO) Presents Late-Breaking Oral Abstract on Data from Phase 2 Trial of EDP1815 in Psoriasis at 2022 American Academy of Dermatology Annual Meeting
Express (EXPR) appoints Jason Judd as CFO, effective April 4
Fluidigm (FLDM) provides stockholders additional time to consider previously announced $250 mln strategic capital infusion from Casdin Capital and Viking Global Investors
Hasbro (HAS) rejects settlement offer from Alta Fox Capital Management, according to Reuters
Heineken (HEINY) concluded that its ownership of the business in Russia is no longer sustainable nor viable in the current environment; co has decided to leave Russia
Huntsman (HUN) doubles size of share repurchase authorization to $2 billion, targets $1 billion of repurchases in 2022
Incyte (INCY) announces 52-Week Data From the Phase 3 TRuE-V Program Evaluating Ruxolitinib Cream (Opzelura) in Patients With Vitiligo
Industrias Bachoco SA (IBA) to initiate the process to launch a voluntary tender offer for up to all of the outstanding shares of Bachoco
Krystal Biotech (KRYS) reports new GEM-3 Phase 3 Results for B-VEC Presented at 2022 American Academy of Dermatology Annual Meeting
L3Harris (LHX) and Thales Defense to compete for each order of $6.11 bln contract to modernize SINCGARS radios for US Army
MAG Silver (MAG) appoints Fausto Di Trapani as Chief Financial Officer effective May 20, 2022
MindMed (MNMD) CFO David Guebert will be retiring from his position on March 31
Mizuho Financial (MFG) updates businesses in connection with the Russia-Ukraine situation
New Gold (NGD) appoints Patrick Godin as COO
Okta (OKTA) says it does not consider recent cybersecurity incident to be material
Oxford Industries (OXM) announces that CFO Scott Grassmyer has been promoted to the additional role of COO
Protagonist Therapeutics (PTGX) announces the appointment of Asif Ali as Executive Vice President and Chief Financial Officer
Provention Bio (PRVB) positive results from the final analysis of its first-in-human PROVENT study of PRV-101
Regeneron Pharma (REGN): Late-breaking Phase 3 Data at AAD 2022 Show Dupixent (dupilumab) Significantly Improved Signs and Symptoms of Prurigo Nodularis
Sanofi (SNY) reports Xenpozyme (olipudase alfa) approved in Japan
Scorpio Tankers (STNG) to sell three vessels
Sea Limited (SE) unit Shopee to close its operations in India, according to Reuters
STAAR Surgical (STAA) receives FDA approval of EVO Visian Implantable Collamer Lenses
Tesla (TSLA) will suspend production at Shanghai plant due to coronavirus restrictions, according to Bloomberg
Tesla (TSLA) tweets "Tesla will ask shareholders to vote at this year's annual meeting to authorize additional shares in order to enable a stock split"
Vertex Pharma (VRTX) announces reimbursement agreement in Australia for TRIKAFTA
Vir Biotechnology (VIR): FDA amended the EUA fact sheet for sotrovimab, an investigational monoclonal antibody
Volta (VLTA) announces that Founder Scott Mercer has resigned as Chief Executive Officer
Walmart (WMT) aiming to end cigarette sales in some stores, according to the Wall Street Journal
Wheaton Precious Metals (WPM) Chairman to retire
M&A:
Eagle Pharma (EGRX) acquires Acacia Pharma Group
Highland Transcend Partners I Corp. (HTPA) terminates merger agreement with Packable
Jazz Pharma (JAZZ) divests Sunosi to Axsome Therapeutics (AXSM)
KKR (KKR) close to deal to purchase Ivirma, according to Bloomberg
National Grid (NGG) announces that it has agreed to sell a 60% equity interest in its UK gas transmission and metering business to a consortium of long-term infrastructure investors
Poly (POLY) to be acquired by HP Inc (HPQ) for $40.00 per share
Sarcos Technology (STRC) announces that the Company has reached a definitive merger agreement to acquire Pittsburgh-based RE2, Inc.
Schweitzer-Mauduit (SWM) and Neenah (NP) to combine in all-stock transaction to create a ~$3 billion global leader in specialty materials
Southwest Gas (SWX) unanimously rejects Carl Icahn's revised unsolicited tender offer
USD Partners (USDP) entered into an agreement to acquire entities owning the Hardisty South terminal assets
Vermilion Energy (VET) acquires Leucrotta Exploration for $477 mln
Syndicate:
ALX Oncology (ALXO) files for $450 mln mixed securities shelf offering
Benson Hill (BHIL) entered into definitive subscription agreements for the private placement of 26,150,000 units at a price of $3.25 per Unit
Cyxtera Technologies (CYXT) files for 7.5 mln share common stock offering by selling shareholders
Eiger BioPharmaceuticals (EIGR) enters into an Open Market Sale Agreement for up to $50 mln in shares through Jefferies
Greenwich LifeSciences (GLSI) files mixed securities shelf offering
PerkinElmer (PKI) files mixed securities shelf offering
IPOs:
Expected to Price:
No IPOs expected to price.
Gapping Up/Down
Gapping up:
STAA +18%, AXSM +7.2%, TSLA +4.4%, EXPR+2.3%, SNY +1.2%, AMYT +1.2%, JAZZ +0.9%, EVLO +0.7%, T +0.4%
Gapping down:
VIR -3.9%, OIIM -3.8%, FLDM -2%, VET -1.5%, ALXO -1.1%, GLSI -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
BASF AG (BASFY) upgraded to Buy from Hold at HSBC Securities
BNY Mellon (BK) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt lowered to $58
Deere (DE) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $440
Illinois Tool (ITW) upgraded to Overweight from Neutral at JP Morgan; tgt lowered to $255
KLA Corporation (KLAC) upgraded to Buy from Neutral at Goldman; tgt $430
The Duckhorn Portfolio (NAPA) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt $23
Downgrades:
Adecco S.A. (AHEXY) downgraded to Underweight from Neutral at JP Morgan
Advanced Micro (AMD) downgraded to Buy from Conviction Buy at Goldman; tgt $127
Alliance Data (ADS) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $67
Altria (MO) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $53
Beyond Meat (BYND) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $29
Buzzi Unicem SpA (BZZUY) downgraded to Hold from Buy at HSBC Securities
Campbell Soup (CPB) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $46
Citigroup (C) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $60
Fifth Third (FITB) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $50
Foot Locker (FL) downgraded to Market Perform from Outperform at Cowen; tgt $34
Guild Holdings (GHLD) downgraded to Equal Weight from Overweight at Wells Fargo; tgt $11
Heineken (HEINY) downgraded to Underweight from Equal Weight at Barclays
Honest Company (HNST) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $6.50
ITT (ITT) downgraded to Perform from Outperform at Oppenheimer
KB Home (KBH) downgraded to Peer Perform from Outperform at Wolfe Research
Kennametal (KMT) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $31
M&T Bank (MTB) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $179
Microchip (MCHP) downgraded to Neutral from Buy at Goldman; tgt $79
Qorvo (QRVO) downgraded to Neutral from Buy at Goldman; tgt $138
SEI Investments (SEIC) downgraded to Neutral from Buy at Goldman; tgt lowered to $65
Synchrony Financial (SYF) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $40
Teradyne (TER) downgraded to Neutral from Buy at Goldman; tgt $127
Trex (TREX) downgraded to Underperform from Neutral at Exane BNP Paribas; tgt $81
Others:
BigBear.ai (BBAI) initiated with an Outperform at Oppenheimer; tgt $10
Brookfield Renewable Partners (BEP) initiated with a Buy at UBS; tgt $46
Globus Medical (GMED) initiated with an Overweight at Wells Fargo; tgt $80
NuVasive (NUVA) initiated with an Overweight at Wells Fargo; tgt $58
Roblox (RBLX) initiated with an Outperform at Daiwa Securities; tgt $56
Toast (TOST) initiated with a Neutral at Credit Suisse; tgt $22
Unity Software (U) initiated with an Outperform at Daiwa Securities; tgt $110
Upcoming Events:
Econ Data:
08:30 ET: Adv. Intl. Trade in Goods for Feb (Briefing.comConsensus NA; Prior -$107.6B)
08:30 ET: Adv. Retail Investors for Feb (Briefing.comConsensus NA; Prior 1.9%)
08:30 ET: Adv. Wholesale Inventories for Feb (Briefing.comConsensus NA; Prior 0.8%)
Earnings:
Monday (Mar 28)
Morning: SAIC
Afternoon: PLAY
Tuesday (Mar 29)
Morning: ASO CONN LOVE MKC DTC
Afternoon: CALM CHWY LULU MU MLKN PRGS PVH RH SPWH VRNT
Wednesday (Mar 30)
Morning: AER BNTX CNM FIVE MSM PAYX
Afternoon: PHR PATH
Thursday (Mar 31)
Morning: SHCR WBA
Afternoon: BB BLND DCT NCNO
Asia & Europe detail:
Asia: Nikkei -0.7%, Hang Seng +1.3%, Shanghai Composite +0.1%
Equity indices in the Asia-Pacific region began the week on a mixed note. The Bank of Japan conducted a second bond buying operation at a fixed rate after the first operation failed to entice buyers. The yen plunged in response, falling toward its low from 2015. The central bank plans to continue buying bonds through Thursday. China auctioned over 500 kilotons of wheat from state reserves. Westpac noted that financial markets are overstating the likelihood of tighter policy over the next couple years.
In economic data:
China's February Industrial Profit 5.0% YTD (last 34.3%) o Hong Kong's February trade deficit HKD32.10 bln (last surplus of HKD6.60 bln). February Imports 6.2% m/m (last 9.6%) and Exports 0.9% m/m (last 18.4%)
---Equity Markets---
Japan's Nikkei: -0.7%
Hong Kong's Hang Seng: +1.3%
China's Shanghai Composite: +0.1%
India's Sensex: +0.4%
South Korea's Kospi: UNCH
Australia's ASX All Ordinaries: UNCH
---FX---
USD/JPY: +1.8% to 124.26
USD/CNH: +0.1% to 6.3811
USD/INR: -0.2% to 76.12
Europe: DAX +1.9%, FTSE +0.7%, CAC +1.7%
Major European indices trade on a firmly higher note. Spain's Prime Minister Sanchez announced that EUR6 bln will be spent to offset higher energy prices. Negotiators from Russia and Ukraine are reportedly meeting in Turkey today. Germany's ruling SPD won a regional election in Saarland. A referendum to join Russia may be held in Luhansk, Ukraine, but Ukraine's officials already indicated that the vote would have no legal basis in their eyes.
There was no economic data today
---Equity Markets---
STOXX Europe 600: +0.9%
Germany's DAX: +1.9%
U.K.'s FTSE 100: +0.7%
France's CAC 40: +1.7%
Italy's FTSE MIB: +2.1%
Spain's IBEX 35: +1.8%
---FX---
EUR/USD: UNCH at 1.0985
GBP/USD: -0.4% to 1.3134
USD/CHF: +0.5% to 0.9348