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29/11/21 Briefing

The stock market is on track to rebound from Friday'sslide, as futures on the S&P 500 trade 43 points above fair value.

Concerns related to the new coronavirus variant have not gone anywhere and the White House already imposed travel restrictions on South Africa and seven other countries, but equity futures bounced last evening as participants returned from last week's holiday. Futures reached their best levels of the night during the Asian session, followed by a sideways drift. Barring an early reversal, the benchmark index is on course to recover roughly half of Friday's loss at the open.

Crude oil futures have also bounced, rallying back above their 200-day moving average (69.77) to $71.68/bbl (+5.2%), though the price remains in the lower third of Friday's range.

Retailers are expected to be among today's focal points as the market reacts to early holiday sales figures. CNBCreported that store traffic on Friday was down 28.3% compared to 2019 levels but up nearly 50.0% from last year's levels.

Today's economic data will be limited to the 10:00 ETrelease of Pending Home Sales for October (Briefing.comconsensus 0.7%; prior -2.3%).

Treasuries trade lower across the curve, sending the 10-yr yield higher by six basis points to 1.54%.

In U.S. corporate news:

  • Moderna (MRNA 364.55, +34.34): +10.4% after the company's Chief Medical Officer said that a variant-specific vaccine could be ready early next year if needed.

  • Bumble (BMBL 35.48, +1.65): +4.9% after being upgraded to Outperform from Market Perform with a $48 target at Raymond James.

  • Norwegian Cruise Line (NCLH 20.74, +0.68): +3.4% bouncing from Friday'sslide.

  • TJX (TJX 71.09, +1.73): +2.5% after being upgraded to Buy from Neutral at Citigroup.

  • Merck (MRK 77.54, -1.62): -2.1% after being downgraded to Neutral from Buy with an $85 target at Citigroup.

Reviewing overnight developments:

  • Asian markets ended mostly lower. Japan's Nikkei -1.6%, Hong Kong's Hang Seng -1.0%, and China's Shanghai Composite was flat.

  • In economic data:

  • Japan's October Retail Sales +0.9% yr/yr (expected +1.1%; last -0.5%)

  • China's October Industrial Profit unchanged yr/yr (last +16.3%)

  • Australia's Q3 Business Inventories -1.9% (expected -0.6%; last +0.3%)


  • In news:

  • Japan is banning entry to all foreign travelers starting Nov. 30in a preemptive move to control the spread of the omicron variant.

  • An RBNZ official said omicron would have to be a "game changer" to affect a policy trajectory that many participants think will include another rate hike in February



  • European markets trade in the green. Germany's DAX +0.5%, U.K.'s FTSE +1.1%, and France's CAC +0.9%.

  • In economic data:

  • Eurozone's November Business and Consumer Survey 117.5 (expected 117.5; last 118.6)

  • Spain's November CPI +0.4% m/m (last +1.8%) and November HICP +5.6% yr/yr (expected +5.6%; last +5.4%)

  • Italy's October PPI +7.1% m/m (last +1.6%) and +20.4% yr/yr (last +13.3%)


  • In news:

  • Several ECB officials continue to discuss the idea that inflation pressures will be transitory and that preemptive measures to lessen the pressure are unnecessary.



U.S. equity futures:

  • S&P 500 Futures: +41 @ 4,636

  • DJIA Futures: +245 @ 35,145

  • Nasdaq 100 Futures: +173 @ 16,198

Overseas:

  • Europe: DAX +0.5%, FTSE +1.1%, CAC +0.9%

  • Asia: Nikkei -1.6%, Hang Seng -1.0%, Shanghai Composite Flat

Commodities:

  • Crude Oil +3.58 @ 71.77

  • Nat Gas -0.441 @ 5.036

  • Gold +7.75 @ 1795.85

  • Silver +0.430 @ 23.565

  • Copper +0.0730 @ 4.3640

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Frontline (FRO) misses by $0.02

  • Li Auto (LI) beats by RMB0.25, beats on revs; guides Q4 revs above consensus

  • Newegg Commerce (NEGG) reaffirms FY21outlook


  • General News:

  • Some experts are pointing to indications that Omicron variant will only cause mild illness, but it's too early to confirm that, according to the New York Times

  • White House orders additional air travel restrictions from South Africa and seven other countries, effective today due to the Omicron COVID-?19 variant

  • WHO provides update on Omicron variant; other European countries also confirm cases

  • New York Governor Hochul announces urgent action to boost hospital capacity and address staffing shortages

  • UK, Canada, Australia announce first cases of Omicron variant

  • Dr. Scott Gottlieb says vaccine developers have "a pretty good degree of confidence" that people who received a COVID-19 booster are protected against the Omicron variant, according to The Hill

  • Congress will have to pass legislation to avoid government shutdown by end of week and legislation to increase debt ceiling (by December 15), according to the Wall Street Journal

  • Robberies of high end department stores continue across California. Governor Gavin Newsom vows additional action despite 2014 law that downgraded theft to misdemeanor for $950 or less, according to Metro

  • Black Friday in store shopping dropped 28% from 2019 because shoppers spread out shopping throughout the holiday season, according to CNBC

  • OPEC delays technical meetings due to variant, according to Bloomberg

  • Adagio Therapeutics (ADGI) reports that none of the mutations present in SARS-CoV-2 Variant, Omicron, are associated with escape from ADG20 neutralization in Vitro

  • Amazon (AMZN) wants India to revoke Reliance-Future deal approval, according to Retuers

  • Applied DNA Sciences (APDN) announced its COVID-19 diagnostic strategy in response to the emergence of Omicron (B.1.1.529), a newly identified SARS-CoV-2 variant of concern

  • Ault Global Holdings' (DPW) TurnOnGreen to install commercial EV chargers at a California resort destination

  • BrainStorm Cell Therapeutics (BCLI) Announces the Presentation of New Analyses from the Phase 3 Trial of NurOwn in ALS at the 4th Annual ALS ONE Research Symposium

  • Eni S.p.A. (E) and Snam launch partnership on gas pipelines between Algeria and Italy

  • Fennec Pharmaceuticals (FENC) expects to receive a Complete Response Letter (CRL) after the PDUFA target action date of November 27, 2021 from the FDA regarding its NDA for PEDMARK

  • Flora Growth (FLGC) has signed a licensing agreement with Tonino Lamborghini to produce and distribute Tonino Lamborghini branded cannabis beverages across North America and Colombia under their renowned luxury lifestyle brand

  • Immunome (IMNM) has submitted an Investigational New Drug (IND) application to the FDA for IMM-BCP-01, a three-antibody cocktail, for the treatment of SARS-CoV-2 (COVID-19)

  • Kronos (KRON) reports data from ongoing Phase 1/2 trial of oral CDK9 inhibitor KB-0742

  • Krystal Biotech (KRYS) announces positive topline results from GEM-3 pivotal trial for VYJUVEK for treatment of dystrophic Epidermolysis Bullosa

  • Merck (MRK) receives EC approval for KEYTRUDA plus LENVIMA

  • Moderna (MRNA) Announces Strategy to Address Omicron (B.1.1.529) SARS-CoV-2 Variant

  • Moderna (MRNA) Chief Medical Officer Paul Burton believes a new vaccine to target Omicron variant could be ready early next year if needed, according to Bloomberg

  • Novavax (NVAX) aiming to develop coronavirus vaccine to target new variant, according to Reuters

  • NRx Pharmaceuticals (NRXP) identifies significantly higher likelihood of surviving and recovering from critical COVID-19 in ZYESAMI (aviptadil) treated patients previously administered remdesivir

  • Qiagen (QGEN) receives additional FDA approval for LIAISON XS platform

  • Shopify (SHOP) announced a record-setting Black Friday with sales of nearly $2.9 billion from the start of Black Friday in New Zealand through the end of Black Friday in California

  • Sigilon Therapeutics (SGTX) announces update on SIG-001 Phase 1/2 study in hemophilia A

  • SpringWorks Therapeutics (SWTX) announced that it has achieved full enrollment in its Phase 2b ReNeu trial evaluating mirdametinib, an investigational MEK inhibitor, in adult and pediatric patients with NF1-associated plexiform neurofibromas

  • SSR Mining (SSRM) Announces Positive Exploration Results At Copper Hill And Increases Ownership To 70%

  • Tesla (TSLA) to begin production in Germany next month, according to Bloomberg

  • Thermo Fisher (TMO) confirms detection of omicron variant with its TaqPath COVID-19 tests

  • Visa (V) complained to government about Indian rival, according to Reuters

  • Western Copper (WRN) and Gold Intersects 2.53% CuEq Over 65.8 m and 1.01% CuEq Over 289.6 m at Casino


  • M&A:

  • Berry Global (BERY): Ancora Holdings sends letter to the Board of Directors of Berry Global regarding opportunities for enhanced value creation; Sees opportunity to obtain $100 per share or more in value via a sale to one of the many well-capitalized financial sponsors and strategic acquirers in the marketplace

  • Blueprint Medicines (BPMC) expand precision therapy leadership in lung cancer with acquisition of Lengo Therapeutics

  • Church & Dwight (CHD) signed a definitive agreement to acquire the TheraBreath brand for $580 million in cash

  • Kirkland Lake Gold (KL) receives shareholder approval of merger of equals with Agnico Eagle

  • RR Donnelley & Sons' (RRD) 'go-shop" period expires

  • Seven Oaks Acquisition Corp. (SVOK): Boxed announced the signing of a definitive agreement to acquire MaxDelivery; financial terms not disclosed

  • Vermilion Energy (VET) announces the acquisition of an incremental 36.5% interest in the Corrib Natural Gas Project; plans to reinstate a $0.06 per share quarterly dividend; provides budget/production guidance


  • Syndicate:

  • Weibo (WB) launches global offering of 11 mln shares of ordinary shares


  • IPOs:

  • Expected to Price:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • APDN +47.2%, MRNA +10.1%, LI +7.7%, BNTX+4.7%, NVAX +4.5%, USO +3.8%, XPEV +3.2%, HAL+3%, HA +2.8%, DAL +2.7%, PSX +2.5%, NIO +2.3%, UAL +2.1%, SAVE +2.1%, OIH +2.1%, SLB +2.1%, RDS.A +2.1%, JETS +2%, AAL +2%, XLE +2%, XOM+1.8%, PFE +1.4%, LUV +1.4%, BP +1.4%, SHOP+1.3%, QQQ +1.1%, IWM +1.1%, TMO +1%, JBLU+1%, TTE +1%, SPY +0.9%, DIA +0.7%, LLY +0.5%, JNJ +0.5%


  • Gapping down:

  • FENC -31.5%, VXX -10.6%, LOGI -4.4%, WB -2.5%, ZM -2.1%, QGEN -1.2%, KL -0.8%, CYBN -0.7%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Adagio Therapeutics (ADGI) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $49

  • argenx (ARGX) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $354

  • Bumble Inc. (BMML) upgraded to Outperform from Mkt Perform at Raymond James; tgt $48

  • Burlington Stores (BURL) upgraded to Buy from Neutral at Citigroup

  • Copa Holdings (CPA) upgraded to Strong Buy from Outperform at Raymond James; tgt $110

  • MGP Ingredients (MGPI) upgraded to Buy from Hold at Truist; tgt raised to $100

  • TJX (TJX) upgraded to Buy from Neutral at Citigroup


  • Downgrades:

  • Alibaba (BABA) downgraded to Buy from Conviction Buy at Goldman; tgt lowered to $215

  • Beacon Roofing Supply (BECN) downgraded to Hold from Buy at Truist

  • Canadian Pacific (CP) downgraded to Hold from Buy at Deutsche Bank; tgt lowered to $80

  • Ecopetrol (EC) downgraded to Underweight from Neutral at JP Morgan; tgt $16.50

  • Merck (MRK) downgraded to Neutral from Buy at Citigroup; tgt lowered to $85

  • Pinduoduo (PDD) downgraded to Neutral from Buy at Citigroup; tgt lowered to $80


  • Others:

  • Affirm (AFRM) initiated with a Neutral at Piper Sandler; tgt $127

  • Allegion (ALLE) initiated with an Overweight at Atlantic Equities; tgt $155

  • Ecovyst (ECVT) initiated with a Neutral at Citigroup; tgt $10.80

  • Mirion Technologies (MIR) initiated with a Buy at Goldman; tgt $14


Upcoming Events:

  • Econ Data:

  • 10:00 ET: Pending Home Sales for Oct (Briefing.comConsensus 0.7%; Prior -2.3%)


  • Earnings:

  • Monday (Nov 29)

  • Morning: FRO LI

  • Afternoon: GBDC


  • Tuesday (Nov 30)

  • Morning: BNS BZUN MOMO JKS

  • Afternoon: AMBA BOX HPE NTAP CRM ZS


  • Wednesday (Dec 1)

  • Morning: DCI GIII PDCO RY

  • Afternoon: AI CRWD DSGX ESTC FIVE NCNO OKTA PVH SMTC SNOW SPLK SNPS VEEV ZUO


  • Thursday (Dec 2)

  • Morning: CM DG GMS KR SCWX SIG TD

  • Afternoon: ASAN COO DOCU DOMO GWRE JOAN MRVL OLLI OOMA SMAR SWBI ULTA VRNT ZUMZ


  • Friday (Dec 3)

  • Morning: BMO BIG DOLE GCO HIBB




Asia & Europe detail:

Asia: Nikkei -1.6%, Hang Seng -1.0%, Shanghai Composite Flat

Equity indices in the Asia-Pacific region traded tentatively on Monday as market participants tried to get their mind around the WHO's identification of omicron as a COVID variant of concern and what effect omicron could have on global economic growth. Many countries have barred travel from southern African countries. Japan, however, is banning entry to all foreign travelers starting Nov. 30in a preemptive move to control the spread of the omicron variant. More time is needed to assess the impact, yet an RBNZ official said omicron would have to be a "game changer" to affect a policy trajectory that many participants think will include another rate hike in February.

  • In economic data:

  • Japan's October Retail Sales +0.9% yr/yr (expected +1.1%; last -0.5%)

  • China's October Industrial Profit unchanged yr/yr (last +16.3%)

  • Australia's Q3 Business Inventories -1.9% (expected -0.6%; last +0.3%)


---Equity Markets---

  • Japan's Nikkei: -1.6%

  • Hong Kong's Hang Seng: -1.0%

  • China's Shanghai Composite: flat

  • India's Sensex: +0.3%

  • South Korea's Kospi: -0.9%

  • Australia's ASX All Ordinaries: -0.5%

---FX---

  • USD/JPY: +0.1% to 113.45

  • USD/CNH: -0.1% to 6.3859

  • USD/INR: flat at 75.007


Europe: DAX +0.5%, FTSE +1.1%, CAC +0.9%

Major European indices are on the rebound following sharp losses from Fridayas global market participants were anxious sellers as news of a new COVID variant made the rounds. That new variant, originating in South Africa, has been dubbed "omicron" by the WHO and labeled a "variant of concern." The rebound today has been fed by a hope that the variant may only cause mild symptoms and can be tackled with current and/or new vaccine formulations. The UK is hosting a meeting of G7 health ministers today to discuss omicron. Separately, several ECB officials continue to discuss the idea that inflation pressures will be transitory and that preemptive measures to lessen the pressure are unnecessary. The euro is down 0.3% against the dollar to 1.1286.

  • In economic data:

  • Eurozone's November Business and Consumer Survey 117.5 (expected 117.5; last 118.6)

  • Spain's November CPI +0.4% m/m (last +1.8%) and November HICP +5.6% yr/yr (expected +5.6%; last +5.4%)

  • Italy's October PPI +7.1% m/m (last +1.6%) and +20.4% yr/yr (last +13.3%)


---Equity Markets---

  • STOXX Europe 600: +1.1%

  • Germany's DAX: +0.5%

  • U.K.'s FTSE 100: +1.1%

  • France's CAC 40: +0.9%

  • Italy's FTSE MIB: +1.0%

  • Spain's IBEX 35: +1.1%

---FX---

  • EUR/USD: -0.3% to 1.1286

  • GBP/USD: UNCH at 1.3339

  • USD/CHF: +0.1% to 0.9245


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The S&P 500 futures are up 3 points and are trading % above fair value. The Nasdaq 100 futures are up 9 points and are trading roughly in-line with fair value. The Dow Jones Industrial Average futures