The S&P 500 futures are down 37 points and are trading 1.0% below fair value. The Nasdaq 100 futures are down 152 points and are trading 1.3% below fair value. The Dow Jones Industrial Average futures are down 211 points and are trading 0.6% below fair value.
The stock market is poised for a lower open today after a big run recently, driven by a sense that the market is due for a pullback. This is in front of a heavy slate of news this week, including earnings reports from over 100 S&P 500 companies headlined by Meta Platforms (META), Alphabet (GOOG), and Apple (AAPL). Some of the more notable data releases this week include the Q4 Employment Cost Index, ISM Manufacturing and Non-Manufacturing Indexes, and the Employment Situation Report for January.
Market participants are also aware that several influential central banks are holding meetings this week, namely the Federal Reserve, the Bank of England, and the European Central Bank.
Investors are likely worried about the Fed pushing back against the recent market rally. Adding fuel to that worry, a Wall Street Journal Article over the weekend by Nick Timiraos indicated that Fed officials are concerned that inflation could reaccelerate due to tight labor markets.
Treasury yields are inching higher this morning. The 2-yr note yield is up three basis points to 4.24% and the 10-yr note yield is up three basis points to 3.55%.
There is no U.S. data of note today.
In corporate news:
Colgate Palmolive (CL 72.31, +0.72, +1.0%): upgraded to Overweight from Equal Weight at Morgan Stanley
GE HealthCare (GEHC 69.60, -0.48, -0.7%): beats by $0.25, beats on revs; guides FY23 EPS above two analyst estimate
SoFi Technologies (SOFI 6.41, +0.47, +7.9%): reports Q4 (Dec) results, beats on revs; guides Q1 revs below consensus; guides FY23 revs in-line
Philips (PHG 17.96, +0.97, +5.7%): beats by 0.23, beats on revs; to eliminate additional 6K roles globally by 2025, presents its plan to create value with sustainable impact
Reviewing overnight developments:
Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei: +0.2%, Hong Kong's Hang Seng: -2.7%, China's Shanghai Composite: +0.1%, India's Sensex: +0.3%, South Korea's Kospi: -1.4%, Australia's ASX All Ordinaries: -0.1%.
In economic data:
New Zealand's December trade deficit NZD475 mln (expected deficit of NZD1.75 bln; last deficit of NZD2.18 bln)
In news:
China's Shanghai Composite followed its week-long closure with a higher open and a daylong pullback from opening highs.
Press reports in China noted that cities have room to reduce their mortgage rates.
China's Ministry of Culture and Tourism reported that domestic trips were up 23% yr/yr during the past week, but down 11.4% from the 2019 level.
Standard & Poor's affirmed Australia's AAA rating with a Stable outlook.
Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.1%) holds a slight gain. STOXX Europe 600: -0.6%, Germany's DAX: -0.6%, U.K.'s FTSE 100: +0.1%, France's CAC 40: -0.5%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: -0.2%.
In economic data:
Eurozone's January Business and Consumer Survey 99.9 (expected 97.0; last 97.1)
Germany's Q4 GDP -0.2% qtr/qtr (expected 0.0%; last 0.5%); 0.5% yr/yr (expected 0.8%; last 1.3%)
Italy's December non-EU trade surplus EUR4.08 bln (last surplus of EUR2.01 bln)
Spain's January CPI -0.3% m/m (last 0.2%); 5.8% yr/yr (expected 4.9%; last 5.7%). January Business Confidence -4.3 (last -5.1). December Retail Sales 4.0% yr/yr (last -0.5%)
Swiss January KOF Leading Indicators 97.2 (expected 93.3; last 91.5)
In news:
Concerns about a recession in the eurozone are back in the discussion after Germany's GDP contracted during Q4 against expectations for no growth.
Ryanair expects strong bookings during the summer.
Fitch raised Greece's rating to BB+ from BB with a Stable outlook.
U.S. equity futures:
S&P 500 Futures: -35 @ 4,036
DJIA Futures: -194 @ 33,785
Nasdaq 100 Futures: -141 @ 12,026
Overseas:
Europe: DAX -0.6%, FTSE +0.1%, CAC -0.5%
Asia: Nikkei +0.2%, Hang Seng -2.7%, Shanghai Composite +0.1%
Commodities:
Crude Oil -0.10 @ 79.58
Nat Gas -0.131 @ 2.718
Gold -3.50 @ 1925.90
Silver +0.186 @ 23.808
Copper -0.0148 @ 4.2077
Earnings/Guidance:
ACM Research (ACMR) operating unit provides preliminary FY22 results
BP (BP) provides long term outlook on key trends
Cincinnati Fincl (CINF) provides Q4 guidance, also increases dividend by 9%
GE HealthCare (GEHC) beats by $0.25, beats on revs; guides FY23 EPS above two analyst estimate
Haleon plc (HLN) reports Q3 trading statement; sees FY22 organic revs of +8.0-8.5%
SoFi Technologies (SOFI) reports Q4 (Dec) results, beats on revs; guides Q1 revs below consensus; guides FY23 revs in-line
Toyota Motor (TM) reports December 2022 worldwide sales -1.4% yr/yr to 839,299 units
News:
Fed officials are concerned that inflation could reaccelerate due to tight labor markets, according to the Wall Street Journal
Israel launches drone strike against a defense compound in Iran, according to the Wall Street Journal
House Speaker Kevin McCarthy says President Biden will meet with him on Wednesday to discuss debt ceiling and spending cuts. He said cuts to social security and Medicare are "off the table" and US will not default on debt, according to CBS News
House Speaker Kevin McCarthy says Republicans will look at ways to cut "wasteful" parts of defense spending, according to CBS News
China wants to make consumption the "main driving force" of the economy, according to Financial Times
China nuclear lab used U.S. chips after ban was in place, according to the Wall Street Journal
EU will make it easier for members to hand out tax credits for green energy investments, according toFinancial Times
Bill Ackman says banks have exposure to Adani Group deal, according to Bloomberg
Texas energy companies prepare for winter storm, according to Bloomberg
Abbvie (ABBV) drug Humira is expected to get competition this week, according to the New York Times
Allegiant Travel (ALGT) COO Scott Sheldon will resign, effective April 1
Alliance Resource (ARLP) increases its quarterly distribution by 40% to $0.70/unit
Ares Acquisition Corp. (AAC) merger partner X-energy Canada and Invest Alberta collaborate to develop economic opportunities in support of potential Xe-100 SMR Projects
Babcock & Wilcox Enterprises (BW) awarded contracts totaling more than $14 mln to design and supply highly efficient dry cooling systems for waste-to-energy plants in the UK
Baidu (BIDU) aiming to develop its own ChatGPT program, according to the Wall Street Journal
Bayer (BAYRY) investor wants CEO replaced, according to Reuters
Bed Bath & Beyond (BBBY) customers are experiencing empty shelves and outdated merchandise, according to Bloomberg
Biogen (BIIB) and Eisai announce Lecanemab receives Priority Review Status in Japan
Blackstone (BX) buyout fund plans were below expectations, according to Bloomberg
Boeing (BA) awarded a $2.26 bln modification to a previously awarded US Air Force contract
CACI Intl (CACI) has entered into an accelerated share repurchase agreement repurchase $250 mln of common stock under its previously announced $750 mln share repurchase authorization
Destination XL Group (DXLG) names Dara Pauker Chief Operating Officer
Evoke Pharma (EVOK) announces joint stipulation of dismissal in GIMOTI patent infringement case against Teva Pharma ()
Evolus (EOLS): "Extra-Strength" Formulation of Jeuveau Demonstrates Effects Lasting 26 Weeks in Interim Phase II Data Results, Representing Prolonged 6-Month Performance
Fluent (FLNT) CFO Sugandha Khandelwal gave notice of her resignation effective February 3, 2023
Ford (F) execs will hold labor talks in Germany, according to Reuters
Ginkgo Bioworks (DNA) files for 7,279,426 share common stock offering by selling shareholders
Guardant Health (GH) receives FDA approval for Guardant360 CDx as companion diagnostic for Menarini Group's ORSERDU for treatment of patients with ESR1 mutations in ER+, HER2- advanced or metastatic breast cancer
Humana (HUM): DOD provides update on HUM contract
JD.com(JD) aiming to close e-commerce sites in Indonesia and Thailand, according to Reuters
Microsoft (MSFT): Xbox CEO Phil Spencer says Xbox was too light on games in 2022, but a big 2023 could await, according to IGN.com
Miniso Group (MNSO) CFO resigns; names Eason Jingjing Zhang as CFO
Mitek Systems (MITK) names Scott Carter as Executive Chairperson
Nissan Motor (NSANY) reached an important milestone in its discussions with Renault (RNSDF) on defining new foundations for their partnership
Novartis' (NVS) unit Sandoz receives positive CHMP opinion for citrate-free high concentration formulation of adalimumab biosimilar
Regeneron Pharma (REGN) reports Dupixent (dupilumab) approved by EC as the first and only targeted medicine indicated for eosinophilic esophagitis
ReneSola (SOL) announces rebranding and changes name to Emeren; stock symbol will remain as SOL
Samsung (SSNLF) mulling chip production reduction, according to Korea Economic Daily
Unilever PLC (UL) announced the appointment of Hein Schumacher as its new CEO
Vera Therapeutics (VERA) Releases 36 Week Interim Analysis of Phase 2b Clinical Trial of Atacicept for the Treatment of IgA Nephropathy; Patients in the 150 mg Dose Group Achieved a Delta of 48% Versus Placebo in Mean Reduction in Proteinuria
Visa (V): DOJ issues a further Civil Investigative Demand
Whirlpool (WHR) President and Chief Operating Officer Joseph T. Liotine will transition to an advisory role
Xeris Biopharma (XERS) announces that the FDA granted its subsidiary Xeris Pharmaceuticals orphan-drug exclusivity for Recorlev
XPeng (XPEV) names Fengying Wang as President
Zai Lab (ZLAB): NDA for for sulbactam-durlobactam (SUL-DUR) was granted priority review status by Center for Drug Evaluation (CDE) of China's NMPA
M&A:
Charles River (CRL) has acquired SAMDI Tech
Timken (TKR) to acquire Nadella Group from ICG plc, anticipates deal to be accretive to adj. EPS in 2023; financial terms not disclosed
Syndicate:
Alvarium Tiedemann Holdings (ALTI) files for 121,551,230 share common stock offering by selling shareholders, relates to warrants
Moolec Science (MLEC) files for 35,865,887 share common stock offering by selling shareholders; relates to warrants
Newte (NEWT) files for $500 mln mixed securities shelf offering
VectivBio (VECT) files for $350 mln mixed securities shelf offering
IPOs:
Expected to Price:
No IPOs expected.
Gapping Up/Down
Gapping up:
SCLX +9.4%, EOLS +8.3%, ARLP +7.3%, PHG +6.6%, MLEC +6.2%, SRNE +5.9%, VZLA +3.1%, NVS +0.6%, HLN +0.5%
Gapping down:
MNSO -4.6%, XPEV -2.8%, BX -2%, NEWT -1.4%, QQQ -1.4%, BIIB -1.1%, IWM -1.1%, DNA -1%, SPY-1%, DIA -0.8%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Colgate-Palmolive (CL) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $82
Flowserve (FLS) upgraded to Buy from Neutral at BofA Securities; tgt raised to $40
Kemper (KMPR) upgraded to Neutral from Underperform at Credit Suisse; tgt raised to $56
Lockheed Martin (LMT) upgraded to Buy from Hold at DZ Bank; tgt $523
Xero (XROLF) upgraded to Conviction Buy from Buy at Goldman
Downgrades:
AZEK (AZEK) downgraded to Neutral from Buy at BofA Securities; tgt raised to $25
Celularity (CELU) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $1
Eastern Bankshares (EBC) downgraded to Neutral from Buy at Janney; tgt $17
Eastman Chemical (EMN) downgraded to Sector Perform from Sector Outperform at Scotiabank; tgt lowered to $90
Edwards Lifesciences (EW) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $80
First Interstate Bancsystem (FIBK) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $38
Fortune Brands Innovations (FBIN) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $60
General Motors (GM) downgraded to Hold from Buy at Berenberg; tgt lowered to $41
Lulu's Fashion Lounge (LVLU) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
Old Dominion (ODFL) downgraded to Underperform from Neutral at Credit Suisse; tgt $323
Others:
4D Molecular Therapeutics (FDMT) initiated with an Outperform at BMO Capital Markets; tgt $50
Denali Therapeutics (DNLI) initiated with an Outperform at SVB Securities; tgt $50
DoorDash (DASH) initiated with an Outperform at MoffettNathanson; tgt $79
Federal Realty (FRT) upgraded to Buy from Neutral at Compass Point; tgt $125
Kohl's (KSS) initiated with a Sell at Goldman; tgt $27
Macy's (M) initiated with a Buy at Goldman; tgt $28
Upcoming Events:
Econ Data:
No economic data of note.
Earnings:
Monday (Jan 30)
Morning: BEN GEHC PHG SOFI
Afternoon: AGNC ARE CADE ELS GGG HLIT HTLF HP JJSF NXPI PCH PFG SANM WHR WWD
Tuesday (Jan 31)
Morning: AOS ALGM CAT CVLT GLW DOV AQUA XOM GM HUBB IMO IP KEX LII MAN MPC MCD MDC MCO MPLX MSCI NYCB NVR PNR PFE PSX PBI PII PHM ST SPOT SYY UBS UPS
Afternoon: AMD DOX AMGN APAM ASH BXP CP CB CACC EW EA HA IEX JNPR MTCH MRCY MDLZ NATI OI RNR SNAP SYK SMCI UNM VREX WDC
Wednesday (Feb 1)
Morning: MO ABC ATKR BSX EAT GIB CMCO DT EPD EVR FTV HUM JCI NVS ODFL OTIS PTON SMG SLAB SR TMUS TMO TGI WM WRK
Afternoon: EGHT AFL ALGN ALGT ALL AFG AVT BHE BDN CHRW CCS CHX CLB CTVA DXC ELF ENVA GL THG HOLX KRC KLIC LSTR LFUS MXL MCK MTH META MET MTG MAA MUSA NTGR PTC QRVO RYN RRX SLM SITM TTEK TBI UGI VSTO
Asia & Europe detail:
Asia: Nikkei +0.2%, Hang Seng -2.7%, Shanghai Composite +0.1%
Equity indices in the Asia-Pacific region began the week on a mixed note. China's Shanghai Composite followed its week-long closure with a higher open and a daylong pullback from opening highs. Press reports in China noted that cities have room to reduce their mortgage rates. China's Ministry of Culture and Tourism reported that domestic trips were up 23% yr/yr during the past week, but down 11.4% from the 2019 level. Standard & Poor's affirmed Australia's AAA rating with a Stable outlook.
In economic data:
New Zealand's December trade deficit NZD475 mln (expected deficit of NZD1.75 bln; last deficit of NZD2.18 bln)
---Equity Markets---
Japan's Nikkei: +0.2%
Hong Kong's Hang Seng: -2.7%
China's Shanghai Composite: +0.1%
India's Sensex: +0.3%
South Korea's Kospi: -1.4%
Australia's ASX All Ordinaries: -0.1%
---FX---
USD/JPY: +0.3% to 130.22
USD/CNH: UNCH at 6.7538
USD/INR: UNCH at 81.48
Europe: DAX -0.6%, FTSE +0.1%, CAC -0.5%
Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.1%) holds a slight gain. Concerns about a recession in the eurozone are back in the discussion after Germany's GDP contracted during Q4 against expectations for no growth. Ryanair expects strong bookings during the summer. Fitch raised Greece's rating to BB+ from BB with a Stable outlook.
In economic data:
Eurozone's January Business and Consumer Survey 99.9 (expected 97.0; last 97.1)
Germany's Q4 GDP -0.2% qtr/qtr (expected 0.0%; last 0.5%); 0.5% yr/yr (expected 0.8%; last 1.3%)
Italy's December non-EU trade surplus EUR4.08 bln (last surplus of EUR2.01 bln)
Spain's January CPI -0.3% m/m (last 0.2%); 5.8% yr/yr (expected 4.9%; last 5.7%). January Business Confidence -4.3 (last -5.1). December Retail Sales 4.0% yr/yr (last -0.5%)
Swiss January KOF Leading Indicators 97.2 (expected 93.3; last 91.5)
---Equity Markets---
STOXX Europe 600: -0.6%
Germany's DAX: -0.6%
U.K.'s FTSE 100: +0.1%
France's CAC 40: -0.5%
Italy's FTSE MIB: -0.3%
Spain's IBEX 35: -0.2%
---FX---
EUR/USD: +0.3% to 1.0897
GBP/USD: -0.1% to 1.2390
USD/CHF: -0.1% to 0.9199