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30/12/22 Briefing


The S&P 500 futures are down 19 points and are trading 0.5% below fair value. The Nasdaq 100 futures are down 87 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down 119 points and are trading 0.4% below fair value.

Market participants are a fickle bunch on this last trading session of the year with the equity futures market indicating a lower open after yesterday's decent gains. The negative bias is driven in part by premarket losses in mega cap stocks amid thinner trading volume ahead of an extended holiday weekend.

President Biden signed the $1.7 trillion government spending bill.

There's growing concerns about a Covid surge in China and possible disruptions to supply chains in early 2023.

Treasury yields are inching higher. The 2-yr note yield is up two basis points to 4.39% and the 10-yr note yield is up two basis points to 3.85%.

Economic data today is limited to the December Chicago PMI (Briefing.comconsensus 40.0; Prior 37.2) at 9:45 a.m. ET.

In corporate news:

  • Southwest (LUV 33.20, -0.18, -0.5%) executives say holiday issues will impact Q4 results and company will reimburse travel expenses to customers with cancelled flights, according to CNBC

  • Cigna (CI 330.72, 0.00, 0.0%): reaffirms FY22 EPS guidance

  • Li Auto (LI 19.45, -0.04, -0.2%): holds media event at Auto Guangzhou 2022; announced its December deliveries will exceed 20,000 vehicles

  • Shaw Comms (SJR 28.93, +2.54, +9.6%): welcomes competition tribunal decision

  • UP Fintech (TIGR 3.1500, -1.62, -34.0%) & Futu Holdings (FUTU 42.59, -16.32, -27.7%) : asked by China regulators to take corrective measures amid allegations of unlawful activities, according to Reuters 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region had a subdued Friday session with mixed performances (and modest changes) for the major indices that were open for trading. Japan's Nikkei: flat (-0.5% for the week/-9.4% for the year), Hong Kong's Hang Seng: +0.2% (+1.0% for the week/-15.5% for the year), China's Shanghai Composite: +0.5% (+1.4% for the week/-15.1% for the year), India's Sensex: -0.5% (+1.7% for the week/+4.4% for the year), South Korea's Kospi: closed for holiday (-3.3% for the week/-24.9% for the year), Australia's ASX All Ordinaries: +0.3% (-0.9% for the week/-7.2% for the year).

  • In economic data:

  • South Korea's December CPI +0.2% m/m (expected +0.1%; last -0.1%) and +5.0% yr/yr (expected +5.0%; last +5.0%)

  • In news:

  • It was a quiet day of economic reporting. The only release of note was South Korea's December CPI report, which showed a 0.2% m/m increase and an unchanged 5.0% yr/yr rate that helped the peak inflation narrative.

  • China, meanwhile, will be releasing its official Manufacturing PMI and Non-Manufacturing PMI reports after the U.S. market closes today and both are expected to remain in contraction territory (i.e. sub-50).

  • Those reports will keep the spotlight on China to begin the new year, as will China's COVID case surge, which is stoking concerns about new variants being transmitted across the globe.

  • The Bank of Japan carried out an unscheduled bond buying operation for the third straight day, this time focusing a JPY300 bln effort on 10-25 yr JGBs. USD/JPY -0.9% to 131.83.

  • Major European indices are under some selling pressure in the final session of 2022 amid thin trading volumes. STOXX Europe 600: -0.6%, Germany's DAX: -0.9%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.7%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: -0.6%.

  • In economic data:

  • Spain's December CPI +0.3% m/m (last -0.1%) and +5.8% yr/yr (expected +6.1%; last +6.8%)

  • UK's December Nationwide HPI -0.1% m/m (expected -0.7%; last -1.4%) and +2.8% yr/yr (expected +2.3%; last +4.4%)

  • Switzerland's December KOF Leading Indicators 92.2 (expected 90.5; last 89.2)

  • In news:

  • The UK market is closing early today.

  • The London Times reports that Prime Minister Sunak is considering cutting in half the fiscal support provided to businesses to help pay fuel bills.

  • Spain's December CPI dropped to 5.8% yr/yr from 6.8%, leaving it at a high level but headed in the right direction. EUR/USD +0.2% to 1.0676.

 

U.S. equity futures:

  • S&P 500 Futures: -21 @ 3,829

  • DJIA Futures: -120 @ 33,100

  • Nasdaq 100 Futures: -90 @ 10,801

Overseas:

  • Europe: DAX -0.9%, FTSE -0.5%, CAC -0.7%

  • Asia: Nikkei UNCH, Hang Seng +0.2%, Shanghai Composite +0.5%

Commodities:

  • Crude Oil -0.27 @ 78.13

  • Nat Gas +0.033 @ 4.592

  • Gold -0.30 @ 1825

  • Silver -0.122 @ 24.122

  • Copper +0.0155 @ 3.856

 

Earnings/Guidance:

  • Cigna (CI) reaffirms FY22 EPS guidance

  • Li Auto (LI) holds media event at Auto Guangzhou 2022; announced its December deliveries will exceed 20,000 vehicles

News:

  • Global consortium says no new COVID-19 variants have emerged in China, according to Bloomberg

  • Russia and China emphasize their close ties, according to Bloomberg

  • President Biden signs $1.7 trillion omnibus spending bill; government funded through September 30, 2023

  • A group of restaurants file lawsuit against California to block fast food wage law, according to the Wall Street Journal

  • Northern Ireland households to receive voucher support for energy bills starting in January

  • AMC Entertainment (AMC) announced that Lee Wittlinger of Silver Lake stepped down from AMC's Board of Directors as of December 31, 2022

  • Avista (AVA) provides Washington Utilities and Transportation Commission settlement update

  • B2Gold (BTG) reports that two employees passed away as a result of injuries sustained in an off-site robbery incident in Mali today

  • CI Financial Corp (CIXX) confirms intent to voluntarily delist from the NYSE and deregister with the SEC

  • Delek US Holdings (DK) enters into inventory intermediation agreement up to $800 mln with Citigroup Energy

  • Ecopetrol's (EC) coexisting unions filed a petition on the current Collective Bargaining Agreement

  • Enovix (ENVX) appoints Raj Talluri as CEO, effective Jan 18 2023

  • Futu Holdings (FUTU) and UP Fintech (TIGR) asked by China regulators to take corrective measures amid allegations of unlawful activities, according to Reuters

  • Masonite International (DOOR) to incur pre-tax restructuring and other closure costs of $15-20 mln related to its restructuring plan

  • Merck (MRK): China approves Merck's coronavirus antiviral molnupiravir, according to Bloomberg

  • ORIC Pharmaceuticals (ORIC): Pfizer discloses 12% stake in ORIC

  • Shaw Comms (SJR) & Rogers (RCI) welcome competition tribunal decision

  • Southwest (LUV) executives say holiday issues will impact Q4 results and company will reimburse travel expenses to customers with cancelled flights, according to CNBC

M&A:

  • Brookline Bancorp (BRKL) receives regulatory approvals to complete its acquisition of PCSB Financial

  • Heidrick & Struggles (HSII) to acquire Atreus, an executive interim and on-demand talent business; financial details not disclosed

Syndicate:

  • Quantum (QMCO) files for 361,010 share common stock offering by selling shareholders

IPOs:

  • Expect to Price:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up: SJR +10.3%, ORIC +5.1%, QMCO +2.8%, ENVX +2.6%, HSII +1.5%, AMC +1%

  • Gapping down: TIGR -32.3%, FUTU -24.6%, KC -2.9%

 


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • No upgrades of note.

  • Downgrades:

  • No downgrades of note.

  • Others:

  • No initiations of note.

Upcoming Events:

  • Econ Data:

  • 09:45 ET: Chicago PMI for Dec (Briefing.comConsensus 40.0; Prior 37.2)

  • Earnings:

  • Wednesday (Dec 28)

  • Afternoon:  CALM

Asia & Europe detail:

Asia: Nikkei UNCH, Hang Seng +0.2%, Shanghai Composite +0.5%

Equity indices in the Asia-Pacific region had a subdued Friday session with mixed performances (and modest changes) for the major indices that were open for trading. It was a quiet day of economic reporting. The only release of note was South Korea's December CPI report, which showed a 0.2% m/m increase and an unchanged 5.0% yr/yr rate that helped the peak inflation narrative. China, meanwhile, will be releasing its official Manufacturing PMI and Non-Manufacturing PMI reports after the U.S. market closes today and both are expected to remain in contraction territory (i.e. sub-50). Those reports will keep the spotlight on China to begin the new year, as will China's COVID case surge, which is stoking concerns about new variants being transmitted across the globe. The Bank of Japan carried out an unscheduled bond buying operation for the third straight day, this time focusing a JPY300 bln effort on 10-25 yr JGBs. USD/JPY -0.9% to 131.83.

  • In economic data:

  • South Korea's December CPI +0.2% m/m (expected +0.1%; last -0.1%) and +5.0% yr/yr (expected +5.0%; last +5.0%)

---Equity Markets---

  • Japan's Nikkei: flat (-0.5% for the week/-9.4% for the year)

  • Hong Kong's Hang Seng: +0.2% (+1.0% for the week/-15.5% for the year)

  • China's Shanghai Composite: +0.5% (+1.4% for the week/-15.1% for the year)

  • India's Sensex: -0.5% (+1.7% for the week/+4.4% for the year)

  • South Korea's Kospi: closed for holiday (-3.3% for the week/-24.9% for the year)

  • Australia's ASX All Ordinaries: +0.3% (-0.9% for the week/-7.2% for the year)

---FX---

  • USD/JPY: -0.9% to 131.83

  • USD/CNH: -0.9% to 6.9114

  • USD/INR: -0.2% to 82.542

 

 

Europe: DAX -0.9%, FTSE -0.5%, CAC -0.7%

Major European indices are under some selling pressure in the final session of 2022 amid thin trading volumes. The UK market is closing early today. On a related note, the London Times reports that Prime Minister Sunak is considering cutting in half the fiscal support provided to businesses to help pay fuel bills. Spain's December CPI dropped to 5.8% yr/yr from 6.8%, leaving it at a high level but headed in the right direction. EUR/USD +0.2% to 1.0676.

  • In economic data:

  • Spain's December CPI +0.3% m/m (last -0.1%) and +5.8% yr/yr (expected +6.1%; last +6.8%)

  • UK's December Nationwide HPI -0.1% m/m (expected -0.7%; last -1.4%) and +2.8% yr/yr (expected +2.3%; last +4.4%)

  • Switzerland's December KOF Leading Indicators 92.2 (expected 90.5; last 89.2)

---Equity Markets---

  • STOXX Europe 600: -0.6%

  • Germany's DAX: -0.9%

  • U.K.'s FTSE 100: -0.5%

  • France's CAC 40: -0.7%

  • Italy's FTSE MIB: -0.6%

  • Spain's IBEX 35: -0.6%

---FX---

  • EUR/USD: +0.2% to 1.0676

  • GBP/USD: -0.1% to 1.2044

  • USD/CHF: flat at 0.9229

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