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29/12/21 Briefing

Updated: Feb 15

The S&P 500 futures trade 13 points, or 0.3%, above fair value in a tame pre-market session. The S&P 500 snapped a four-session winning streak yesterday but not before setting an intraday record high.

The market has been supported by easing concerns about the Omicron variant's impact to the economy, a recognition that monetary policy is still accommodative (even with the Fed speeding up its tapering plan), seasonal factors with this week being part of the Santa Claus rally period, continued participation from retail investors, and relatively encouraging economic data.

Today's economic data will consist of the Advance November readings for International Trade in Goods, Retail Inventories, and Wholesale Inventories at 8:30 a.m. ET, followed by Pending Home Sales for November (Briefing.comconsensus 0.6%) at 10:00 a.m. ET.

Corporate news has been on the lighter side in terms of market impact, but Tesla (TSLA 1102.43, +13.96, +1.3%) is up 1.3% in pre-market amid reports speculating that CEO Elon Musk might be done selling shares following his latest transactions filed with the SEC.

U.S. Treasuries trade near their flat lines. The 2-yr yield is down one basis point to 0.74%, and the 10-yr yield is up one basis point to 1.49%. The U.S. Dollar Index is up 0.1% to 96.26. WTI crude futures are down 0.5% to $75.61/bbl.

In U.S. Corporate news:

  • Tesla (TSLA 1102.43, +13.96): +1.3% on reports speculating that CEO Elon Musk might be done selling shares after he sold another $1 billion in stock and exercised his remaining stock options expiring next year.

  • Victoria's Secret (VSCO 51.00, +2.42): +5.0% after reaffirming Q4 guidance and announcing a $250 million accelerated share repurchase program.

  • Cal-Maine Foods (CALM 35.64, -2.66): -7.0% after missing EPS estimates.

  • FuelCell Energy (FCEL 5.39, -0.48): -8.2% after missing top and bottom-line estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. Japan's Nikkei: -0.6% Hong Kong's Hang Seng: -0.8% China's Shanghai Composite: -0.9% India's Sensex: -0.2% South Korea's Kospi: -0.9% Australia's ASX All Ordinaries: +1.2%.

  • In economic data:

  • South Korea's January Manufacturing BSI Index 89 (last 88)


  • In news:

  • Reports from Japan suggest that the country's government is not planning to tighten its border restrictions.

  • Nikkei reported that Japanese automakers will begin fitting self-driving features to their vehicles in 2022.

  • It is unclear if Evergrande made its bond payment that was due yesterday. The developer faces about $7.4 bln in debt payments in 2022.

  • Yonhap reported that officials from the U.S. and South Korea agreed on a draft text to officially end the Korean war.



  • Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.8%) outperforms after returning from a two-day break, though the overall trading volume has remained low. STOXX Europe 600: UNCH Germany's DAX: -0.4% U.K.'s FTSE 100: +0.8% France's CAC 40: -0.1% Italy's FTSE MIB: -0.6% Spain's IBEX 35: -0.2%.

  • In economic data:

  • Eurozone's November M3 Money Supply 7.3% yr/yr (expected 7.6%; last 7.7%), November Private Sector Loans 4.2% yr/yr, as expected (last 4.1%), and November loans to nonfinancial corporations 2.9% yr/yr (last 2.5%)

  • Swiss December ZEW Expectations 0.0 (last -10.8)


  • In news:

  • Spain's government approved a record EUR240 bln budget for next year.

  • EU's Economy Commissioner Gentiloni said that he will propose setting individual debt limits for member states in the EU stability pact near the middle of next year.




U.S. equity futures:

  • S&P 500 Futures: +3 @ 4,789

  • DJIA Futures: -3 @ 36,396

  • Nasdaq 100 Futures: +22 @ 16,510

Overseas:

  • Europe: DAX -0.4%, FTSE +0.8%, CAC -0.1%

  • Asia: Nikkei -0.6%, Hang Seng -0.8%, Shanghai Composite -0.9%

Commodities:

  • Crude Oil -0.39 @ 75.59

  • Nat Gas +0.130 @ 4.185

  • Gold -15.30 @ 1795.60

  • Silver -0.271 @ 22.850

  • Copper -0.04 @ 4.39

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Burning Rock Biotech (BNR) sees FY21 revs slightly above consensus

  • Cal-Maine Foods (CALM) misses by $0.28, reports revs in-line

  • FuelCell Energy (FCEL) misses by $0.03, misses on revs

  • Victoria's Secret (VSCO) reaffirms Q4 guidance; announces $250 mln accelerated share repurchase program


  • General News:

  • Findings indicated that Omicron is causing milder illness in children, just like adults. NY Times

  • Media companies plan to spend $115 bln on new streaming content. FT

  • Calix (CALX) to join S&P MidCap 400 effective prior to the opening of trading on January 4

  • Carnival (CCL): Majority of Carnival itineraries were unchanged despite Omicron. Reuters

  • Delta (DAL) and Alaska Airlines (ALK) cancel hundreds more flights amid weather and Omicron issues. Reuters

  • Douglas Elliman (DOUG) will be added to the S&P SmallCap 600 prior to the open of trading on December 30

  • Huntsman (HUN) to conduct strategic review of its Textile Effects division, including a possible sale, beginning in 1Q22

  • JD.com(JD) enters five-year $2.0 bln unsecured term and revolving loan facility; upsizes and extends authorization under existing share repurchase program

  • Lucira Health (LHDX) announces a new distribution agreement for at least 600,000 tests in 2022 with Co-Defend and Co-Protect

  • NRx Pharmaceuticals (NRXP) files Breakthrough Therapy Designation request for ZYESAMI

  • Petrobras (PBR): Brazil court suspended Petrobras natural gas price increase. Reuters

  • Quidel's (QDEL) antigen tests detect the Omicron variant

  • Samsung (SSNLF) plants in Xian impacted by COVID-19 lockdowns in that portion of China, according to SCMP

  • TransAlta (TAC) achieves full phase-out of coal in Canada

  • Vale S.A. (VALE) says it had preliminary discussions with Anglo American on the possibility to develop mineral resources of the Serpentina Project

  • Weibo (WB): Alibaba (BABA) mulling options for WB stake, according to Bloomberg


  • M&A:

  • Athena Technology Acquisition Corp. (ATHN) shareholders approve combination with Heliogen

  • Darling Ingredients (DAR) to acquire Valley Proteins for $1.1 bln in cash

  • Marathon Digital Holdings (MARA) executes contract with Bitmain to purchase an additional 78,000 Miners for $879.1 mln


  • Syndicate:

  • Planet Labs (PL) files for 185,281,772 share common stock offering by selling shareholders


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • CALX +7.9%, ENS +2.9%, QDEL +1.6%, VALE +1%, DAR +0.7%, ASPN +0.7%, HUN +0.5%


  • Gapping down:

  • MTRX -8.3%, CALM -7.7%, JD -0.5%



Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • No upgrades of note


  • Downgrades:

  • Methanex (MEOH) downgraded to Mkt Perform from Outperform at Raymond James; tgt lowered to $52


  • Others:

  • Akamai Tech (AKAM) initiated with a Buy at DA Davidson; tgt $143

  • Altimmune (ALT) resumed with a Buy at Jefferies; tgt $30

  • Arbutus Biopharma (ABUS) resumed with a Hold at Jefferies; tgt $4

  • Brooklyn ImmunoTherapeutics (BTX) initiated with an Overweight at Cantor Fitzgerald; tgt $9

  • Icosavax (ICVX) resumed with a Buy at Jefferies; tgt $50

  • Inovio Pharma (INO) resumed with a Hold at Jefferies; tgt lowered to $6

  • Nurix Therapeutics (NRIX) initiated with a Buy at H.C. Wainwright; tgt $62

  • Orchard Therapeutics (ORTX) resumed with an Overweight at Cantor Fitzgerald; tgt lowered to $9

  • Pear Therapeutics (PEAR) initiated with a Buy at Citigroup; tgt $13

  • Vaxart (VXRT) resumed with a Buy at Jefferies; tgt lowered to $12

  • Vaxcyte (PCVX) resumed with a Buy at Jefferies; tgt $50

  • Vaxxinity (VAXX) resumed with a Buy at Jefferies; tgt $18

  • VBI Vaccines (VBIV) resumed with a Buy at Jefferies; tgt lowered to $6

  • Wingstop (WING) initiated with a Hold at The Benchmark Company


Upcoming Events:

  • Econ Data:

  • 08:30 ET: November advance international trade in goods (prior -$82.90 bln), advance Retail Inventories (prior 0.1%), and advance Wholesale Inventories (prior 2.2%)

  • 10:00 ET: November Pending Home Sales (Briefing.comconsensus 0.6%; prior 7.5%)

  • 10:30 ET: Weekly crude oil inventories (prior -4.715 mln)


  • Earnings:

  • Monday (Dec 27)

  • Morning: None of note

  • Afternoon: None of note


  • Tuesday (Dec 28)

  • Morning: None of note

  • Afternoon: CALM


  • Wednesday (Dec 29)

  • Morning: FCEL

  • Afternoon: None of note


  • Thursday (Dec 30)

  • Morning: None of note

  • Afternoon: None of note


  • Friday (Dec 31)

  • Morning: None of note

  • Afternoon: None of note




Asia & Europe detail:

Asia: Nikkei -0.6%, Hang Seng -0.8%, Shanghai Composite -0.9%

Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. Reports from Japan suggest that the country's government is not planning to tighten its border restrictions. Nikkei reported that Japanese automakers will begin fitting self-driving features to their vehicles in 2022. It is unclear if Evergrande made its bond payment that was due yesterday. The developer faces about $7.4 bln in debt payments in 2022. Yonhap reported that officials from the U.S. and South Korea agreed on a draft text to officially end the Korean war.

  • Economic data was limited:

  • South Korea's January Manufacturing BSI Index 89 (last 88)


---Equity Markets---

  • Japan's Nikkei: -0.6%

  • Hong Kong's Hang Seng: -0.8%

  • China's Shanghai Composite: -0.9%

  • India's Sensex: -0.2%

  • South Korea's Kospi: -0.9%

  • Australia's ASX All Ordinaries: +1.2%

---FX---

  • USD/JPY: UNCH at 114.83

  • USD/CNH: -0.1% to 6.3686

  • USD/INR: UNCH at 74.73

Europe: DAX -0.4%, FTSE +0.8%, CAC -0.1%

Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.8%) outperforms after returning from a two-day break, though the overall trading volume has remained low. Spain's government approved a record EUR240 bln budget for next year. EU's Economy Commissioner Gentiloni said that he will propose setting individual debt limits for member states in the EU stability pact near the middle of next year.

  • In economic data:

  • Eurozone's November M3 Money Supply 7.3% yr/yr (expected 7.6%; last 7.7%), November Private Sector Loans 4.2% yr/yr, as expected (last 4.1%), and November loans to nonfinancial corporations 2.9% yr/yr (last 2.5%)

  • Swiss December ZEW Expectations 0.0 (last -10.8)


---Equity Markets---

  • STOXX Europe 600: UNCH

  • Germany's DAX: -0.4%

  • U.K.'s FTSE 100: +0.8%

  • France's CAC 40: -0.1%

  • Italy's FTSE MIB: -0.6%

  • Spain's IBEX 35: -0.2%

---FX---

  • EUR/USD: -0.1% to 1.1295

  • GBP/USD: UNCH at 1.3431

  • USD/CHF: +0.2% to 0.9186


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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