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31/08/22 Briefin

The S&P 500 futures are up 8 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 73 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are down 8 points and are trading slightly above fair value. The S&P 500 futures are up 8 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 73 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are down 8 points and are trading slightly above fair value.

Equity futures are mixed this morning. Strength in the mega caps is helping performance along with some hope that the market can forge a rebound effort today.

In a Wall Street Journal interview, New York Fed President Williams (FOMC voter) said that combating inflation is likely to require lifting the benchmark rate above 3.5% and holding it there for a while.

There's also some economic data from overseas in play, including China's Manufacturing PMI coming in stronger than expected but remaining in contraction for the second consecutive month in the August reading. Eurozone's CPI increased 9.1% yr/yr in the flash reading for August, accelerating past its peak from July.

Also, Russia halted gas supplies from Europe's key supply route today, as previously indicated, according to Reuters.

Amid the aforementioned headlines, energy complex futures trade mixed this morning. WTI crude oil futures are down 2.9% to $88.94/bbl while natural gas futures are up 0.9% to $9.12/mmbtu.

The weekly MBA Mortgage Applications Index showed a 3.7% decline following the prior week's 1.2% decrease.

Later this morning, market participants will receive the August ADP Employment Change (Briefing.comconsensus 315,000) at 8:15 a.m. ET, August Chicago PMI (Briefing.comconsensus 53.1; prior 52.1) at 9:45 a.m. ET, and weekly EIA Crude Oil Inventories (prior -3.28 million) at 10:30 a.m. ET.

In corporate news:

  • Bed Bath & Beyond (BBBY 9.19 -2.92 -24.11%): files common stock offering for an undisclosed amount; sees Q2 revs below consensus; provides outlook and update on strategic changes to strengthen its financial positioning and drive growth

  • HP Inc. (HPQ 28.98, -2.12, -6.82%): beats by $0.01, misses on revs; guides OctQ EPS below consensus

  • Chewy (CHWY 33.14, -4.25, -11.37%): beats by $0.16, reports revs in-line, guides Q3 and FY22 revenue below consensus

  • Ambarella (AMBA 77.60, -6.90, -8.17%): beats by $0.01, reports revs in-line; guides Q3 revs in-line

  • PVH Inc. (PVH 58.69, -4.15, -6.60%): beats by $0.06, misses on revs; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus; announces that Trish Donnelly, head of PVH Americas & Calvin Klein Global, will be leaving; plans to reduce people costs in its global offices by approximately 10%

  • CrowdStrike (CRWD 193.72, +0.43, +0.22%): beats by $0.09, beats on revs; guides OctQ EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • Snap (SNAP 9.27, -0.74, -7.39%): top ad executive Jeremi Gorman vice president of sales for the Americas, Peter Naylor, are leaving to join Netflix; to layoff ~20% of employees, according to The Verge

  • PayPal (PYPL 94.10, +2.30, +2.51%): upgraded to Buy from Neutral at BofA Securities

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note while India's Sensex was closed for a holiday. Japan's Nikkei: -0.4%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -0.8%, India's Sensex: CLOSED, South Korea's Kospi: +0.9%, Australia's ASX All Ordinaries: -0.1%.

  • In economic data:

  • China's August Manufacturing PMI 49.4 (expected 49.2; last 49.0) and Non-Manufacturing PMI 52.6 (last 53.8)

  • Japan's July Industrial Production 1.0% m/m (expected -0.5%; last 8.9%) and July Retail Sales 2.4% yr/yr (expected 1.9%; last 1.5%). July Housing Starts -5.4% yr/yr (expected -4.1%; last -2.2%). July Household Confidence 32.5 (expected 29.4; last 30.2)

  • South Korea's July Industrial Production -1.3% m/m (expected -0.1%; last 1.7%); 1.5% yr/yr (expected 2.9%; last 1.3%). July Retail Sales -0.3% m/m (last -1.0%)

  • Hong Kong's July Retail Sales 4.1% yr/yr (last -1.2%)

  • Australia's July Private Sector Credit 0.7% m/m, as expected (last 0.9%) and Q2 Construction Work Done -3.8% qtr/qtr (expected 0.9%; last -0.3%)

  • New Zealand's August ANZ Business Confidence -47.8 (last -56.7) and July Building Consents 5.0% m/m (last -2.3%)


  • In news:

  • Bank of Japan policymaker Nakagawa said that the central bank's response has exerted intended effects and that the impact of inflation on household spending must be watched carefully.

  • Japan's Prime Minister Kishida said that there has been no change in his country's plans to reduce the dependence on nuclear energy.

  • China's Manufacturing PMI remained in contraction for the second consecutive month in the August reading.



  • Major European indices trade in negative territory. STOXX Europe 600: -0.5%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -1.1%, France's CAC 40: -0.5%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: -0.8%.

  • In economic data:

  • Eurozone's July CPI 0.5% m/m (expected 0.4%; last 0.1%); 9.1% yr/yr (expected 9.0%; last 8.9%). July Core CPI 0.5% m/m (last 0.1%); 4.3% yr/yr (expected 4.0%; last 4.0%)

  • Germany's July Import Price Index 1.4% m/m (expected 1.5%; last 1.0%); 28.9% yr/yr (expected 29.9%; last 29.9%). August Unemployment Change 28,000, as expected (last 45,000) and August Unemployment Rate 5.5%, as expected (last 5.4%)

  • France's Q2 GDP 0.5% qtr/qtr, as expected (last 0.5%). July CPI 0.4% m/m (expected 0.5%; last 0.3%); 5.8% yr/yr (expected 6.1%; last 6.1%). July PPI 1.6% m/m (last 1.3%). July Consumer Spending -0.8% m/m (expected -0.3%; last 0.1%)

  • Italy's August CPI 0.8% m/m (expected 0.6%; last 0.4%); 8.4% yr/yr (expected 8.1%; last 7.9%). July PPI 5.0% m/m (last 1.0%); 36.9% yr/yr (last 34.1%)

  • Spain's June Current Account surplus EUR40 mln (last surplus of EUR2.85 bln)

  • Swiss August ZEW Expectations -56.3 (last -57.2)


  • In news:

  • Eurozone's CPI increased 9.1% yr/yr in the flash reading for August, accelerating past its peak from July.

  • Denmark lowered its GDP growth forecast for 2022 to 2.8% from 3.4% while the outlook for 2023 was cut to 0.8% from 1.9%.

  • The EU is debating a plan to restrict Russians from visiting EU countries.



U.S. equity futures:

  • S&P 500 Futures: +5 @ 3,991

  • DJIA Futures: -29 @ 31,762

  • Nasdaq 100 Futures: +59 @ 12,402

Overseas:

  • Europe: DAX -0.2%, FTSE -1.1%, CAC -0.5%

  • Asia: Nikkei -0.4%, Hang Seng UNCH, Shanghai Composite -0.8%

Commodities:

  • Crude Oil -2.65 @ 88.99

  • Nat Gas +0.091 @ 9.133

  • Gold -9.65 @ 1726.65

  • Silver -0.395 @ 17.892

  • Copper -0.0930 @ 3.4580

U.S. Summary:

  • Earnings/Guidance:

  • Ambarella (AMBA) beats by $0.01, reports revs in-line; guides Q3 revs in-line

  • Bed Bath & Beyond (BBBY) sees Q2 revs below consensus; provides outlook and update on strategic changes to strengthen its financial positioning and drive growth

  • ChargePoint (CHPT) reports Q2 (Jul) results, beats on revs; guides Q3 revs in-line; reaffirms FY23 revs guidance

  • Chewy (CHWY) beats by $0.16, reports revs in-line, guides Q3 and FY22 revenue below consensus

  • CrowdStrike (CRWD) beats by $0.09, beats on revs; guides OctQ EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • Donaldson (DCI) reports EPS in-line, beats on revs; guides FY23 EPS in-line, revs below consensus

  • Hewlett Packard Enterprise (HPE) reports EPS in-line, revs in-line; guides Q4 (Oct) EPS in-line; reaffirms FY22 revs guidance

  • HP Inc. (HPQ) beats by $0.01, misses on revs; guides OctQ EPS below consensus

  • PVH (PVH) beats by $0.06, misses on revs; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus


  • General News:

  • Russia halts key route of gas supplies to Europe, according to Reuters

  • New York Fed President John Williams (voting FOMC member) says market expectations for rate reduction soon are incorrect, according to the Wall Street Journal

  • Japan wants to reduce dependence on nuclear power, according to the Wall Street Journal

  • California passes bill to require social media companies to consider health of children, according to the Wall Street Journal

  • Utilities in US are postponing coal plant closures, according to Financial Times

  • White House provides update on monkeypox outbreak

  • Airbus (EADSY) could secure India order for 50 jets, according to Bloomberg

  • Algonquin Power & Utilities (AQN) CFO Arthur Kacprzak to step down, effective immediately; Darren Myers appointed CFO

  • Alibaba (BABA): US regulators are looking at audits of Alibaba and JD.com(JD), according to Reuters

  • AMGEN (AMGN) ANNOUNCES TOPLINE DATA FROM LUMAKRAS (SOTORASIB) PHASE 3 TRIAL IN NON-SMALL CELL LUNG CANCER

  • Apollo Global Management (APO) names Byron Vielehr COO of Apollo Asset Management, effective September 30

  • Ashland (ASH) expands its Viatel bioresorbable polymer manufacturing and research and development site in Ireland

  • BHP Group (BHP), Caterpillar and Finning to replace BHP's entire haul truck fleet at the Escondida mine

  • BioCryst Pharma (BCRX): FDA grants orphan drug designation for BCX9250 for the treatment of fibrodysplasia ossificans progressiva

  • Boeing (BA) awarded an indefinite-delivery/indefinite-quantity contract by the U.S. Missile Defense Agency with a maximum dollar amount of $5.02 bln

  • Boeing (BA): U.S. Army grounds its entire fleet of Chinook helicopters due to risk of engine fires, according to the Wall Street Journal

  • CACI Intl (CACI) awarded $5.7 bln blanket purchase agreement for Enterprise Information Technology as a Service Wave 1 by the U.S. Air Force

  • Cepton (CPTN) receives non-binding LoI for a $100 mln investment from long-term automotive Tier 1 partner and current shareholder, Koito Manufacturing

  • CGI Group (GIB) and CI Financial (CIXX) enter into a long-term strategic partnership under which CGI will transform CI's investment fund transfer agency operations

  • Denny's (DENN) COO Christopher Bode is leaving to pursue other opportunities, effective immediately

  • Designer Brands (DBI) beats by $0.10, beats on revs; raises FY23EPS above consensus

  • DigitalBridge (DBRG) and Equinix (EQIX) in final round of talks for data center business of Malaysia's Time Dotcom unit, according to Bloomberg

  • EyePoint Pharmaceuticals (EYPT) receives subpoena from the U.S. Attorney's Office for the District of Massachusetts seeking production of documents related to sales, marketing and promotional practices, pertaining to DEXYCU -- SEC Filing

  • FirstCash (FCFS) increases size of revolving bank credit facility; maturity date extended to August 2027

  • Goldman Sachs (GS) will remove coronavirus vaccine and testing mandates, according to CNN

  • HilleVax (HLVX) announces Positive Recommendation from safety data monitoring committee for NEST-IN1 Phase 2b Clinical Trial of HIL-214 norovirus vaccine candidate

  • Hill International (HIL) selected by Egypt's Ministry of Defense to provide project management for the International Stem Cell and Regenerative Medicine Research and Therapeutic Center project

  • ImmunoGen (IMGN) provides update on pivotal CADENZA study of pivekimab sunirine in frontline blastic plasmacytoid dendritic cell neoplasm

  • Inari Medical (NARI) Announces Randomized Controlled Trial Evaluating Clinical Outcomes of the ClotTriever System in Deep Vein Thrombosis

  • JELD-WEN (JELD) initiates a comprehensive review of strategic alternatives for its Australasia business

  • JP Morgan's (JPM) offices in Frankfort were raided amid tax investigation, according to Bloomberg

  • Light & Wonder (LNW) CEO Barry Cottle steps down; company appoints Matt Wilson, Group Chief Executive of Gaming, to Interim CEO

  • Medtronic (MDT) announces partnership with BioIntelliSense for rights to BioButton multi-parameter wearable for continuous, connected monitoring

  • Meta Platforms (META): Hundreds of Facebook US contractors set to lose work, according to Business Insider

  • Netflix (NFLX) names two SnapChat execs to lead its ads business, according to AdAge

  • Oscar Health (OSCR) reports that Health First Shared Services intends to terminate services agreement with company, effective as early as January 1, 2023-- SEC Filing

  • Privia Health (PRVA) says its ACOs achieved shared savings of $99.9 mln through the Medicare Shared Savings Program

  • PVH (PVH): announces that Trish Donnelly, head of PVH Americas & Calvin Klein Global, will be leaving; plans to reduce people costs in its global offices by approximately 10%

  • PyroGenesis (PYR) Canada announces commencement of in-factory audit of its NexGen metal powder production facility by top tier North American Global Aerospace Company

  • Raytheon Technologies (RTX) awarded a $972 mln U.S. Air Force competitive, firm-fixed-price incentive modification to a previously awarded contract

  • REGENXBIO (RGNX) announces additional "positive" interim data from the Phase I/II/III CAMPSIITE trial of RGX-121 for the treatment of patients up to 5 years old diagnosed with Mucopolysaccharidosis Type II, also known as Hunter Syndrome

  • SAP SE (SAP) names Dominik Asam as new CFO

  • Sorrento Therapeutics (SRNE) unit receives FDA Fast Track Designation for SP-103(Lidocaine Topical System) 5.4%

  • SunPower (SPWR) CFO Manavendra S. Sial to voluntarily resign

  • Toyota Motor (TM) to invest up to 730 billion yen in Japan/U.S. battery production

  • Toyota Motor (TM) announced an additional investment of $2.5 billion in its newest North American facility


  • M&A:

  • Balchem (BCPC) acquires Cardinal Associates, operating as Bergstrom Nutrition, a manufacturer of methylsulfonylmethane (MSM); financial details not disclosed

  • First Commonwealth (FCF) to acquire Centric Financial Corporation for $144 mln in an all-stock transaction

  • Jefferies (JEF) is close to a deal to sell its Oak Hill stake to Wafra, according to Bloomberg


  • Syndicate:

  • Bed Bath & Beyond (BBBY) files common stock offering for an undisclosed amount

  • Lightning eMotors (ZEV) enters into purchase agreement and registration rights agreement for up to $50 mln with Lincoln Park Capital Fund

  • Ocwen Fincl (OCN) files for 2,139,994 share common stock offering by selling shareholders


  • IPOs:

  • Expected to Price:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • CPTN +16.2%, SRNE +11.3%, CACI +4.3%, ZEV +2%, DBRG +1.7%, NFLX +1.6%, CHPT +1.6%, JELD+1.5%, PRVA +1%, HIL +0.9%, JEF +0.8%, SAP+0.7%, DCI +0.7%, AMGN +0.5%


  • Gapping down:

  • CHWY -10.9%, EYPT -8.4%, AMBA -8%, HPQ -7.2%, SNAP -6.6%, OSCR -5.3%, PVH -3.7%, BCPC -1.7%, HPE -1.1%, HON -0.8%, BA -0.5%, DELL -0.5%, CRWD -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • ASML (ASML) upgraded to Buy from Neutral at UBS

  • PayPal (PYPL) upgraded to Buy from Neutral at BofA Securities; tgt raised to $114

  • Rocket Lab USA (RKLB) upgraded to Outperform from Market Perform at Cowen; tgt raised to $8


  • Downgrades:

  • Ambarella (AMBA) downgraded to Hold from Buy at Summit Insights

  • Paysafe (PSFE) downgraded to Neutral from Positive at Susquehanna; tgt lowered to $2

  • Pt Sarana Menara Nusantara, Tbk (SMNUF) downgraded to Neutral from Buy at Citigroup

  • Redwood Trust (RWT) downgraded to Neutral from Buy at BTIG Research

  • Robinhood Markets (HOOD) downgraded to Underweight from Equal Weight at Barclays; tgt $10

  • Snap (SNAP) downgraded to Neutral from Buy at Citigroup; tgt lowered to $10


  • Others:

  • Apollo Global Management (APO) initiated with an Overweight at Barclays; tgt $70

  • Ares Management (ARES) initiated with an Overweight at Barclays; tgt $92

  • Bicycle Therapeutics (BCYC) initiated with an Outperform at Cowen

  • Blackstone (BX) initiated with an Overweight at Barclays; tgt $120

  • Charles Schwab (SCHW) initiated with an Equal Weight at Barclays; tgt $81

  • Coinbase Global (COIN) initiated with an Equal Weight at Barclays; tgt $80

  • Interactive Brokers (IBKR) initiated with an Overweight at Barclays; tgt $77

  • Landstar System (LSTR) initiated with a Hold at The Benchmark Company

  • LSB Industries (LXU) initiated with a Buy at UBS; tgt $20

  • P10, Inc. (PX) initiated with an Overweight at Barclays; tgt $15

  • Satsuma Pharmaceuticals (STSA) initiated with a Buy at Ladenburg Thalmann; tgt $16

  • Shattuck Labs (STTK) initiated with a Buy at BTIG Research; tgt $12

  • Shore Bancshares (SHBI) initiated with a Neutral at Janney

  • Signify Health (SGFY) initiated with a Buy at BTIG Research; tgt $35

  • StepStone Group (STEP) initiated with an Equal Weight at Barclays; tgt $33

  • T-Mobile US (TMUS) named Catalyst Driven Idea at Morgan Stanley

  • Welltower (WELL) resumed with an Overweight at Morgan Stanley; tgt $90


Upcoming Events:

  • Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for Aug 27 (Briefing.comConsensus NA; Prior -1.2%)

  • 08:15 ET: ADP Employment Change for Aug (Briefing.comConsensus 315K; Prior NA)

  • 09:45 ET: Chicago PMI for Aug (Briefing.comConsensus 53.1; Prior 52.1)

  • 10:30 ET: EIA Crude Oil Inventories for Aug 27 (Briefing.comConsensus NA; Prior -3.28M)


  • Earnings:

  • Monday (Aug 29)

  • Morning: CTLT SLQT

  • Afternoon: HEI


  • Tuesday (Aug 30)

  • Morning: AMWD BIDU BMO BBY BIG CONN PLAB

  • Afternoon: AMBA CHPT CHWY CRWD HPE HPQ PVH


  • Wednesday (Aug 31)

  • Morning: BF.B DBI DCI VRA

  • Afternoon: AI COO CRDO FIVE GEF MDB NTNX OKTA PSTG SMTC S VEEV


  • Thursday (Sep 1)

  • Morning: FLWS BRC CPB CIEN GCO GMS MOMO HRL OLLI PDCO SAIC SCWX SIG TTC WB

  • Afternoon: AVGO CVGW JOAN LULU NCNO OXM PD SMAR SPWH




Asia & Europe detail:

Asia: Nikkei -0.4%, Hang Seng UNCH, Shanghai Composite -0.8%

Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note while India's Sensex was closed for a holiday. Bank of Japan policymaker Nakagawa said that the central bank's response has exerted intended effects and that the impact of inflation on household spending must be watched carefully. Japan's Prime Minister Kishida said that there has been no change in his country's plans to reduce the dependence on nuclear energy. China's Manufacturing PMI remained in contraction for the second consecutive month in the August reading.

  • In economic data:

  • China's August Manufacturing PMI 49.4 (expected 49.2; last 49.0) and Non-Manufacturing PMI 52.6 (last 53.8)

  • Japan's July Industrial Production 1.0% m/m (expected -0.5%; last 8.9%) and July Retail Sales 2.4% yr/yr (expected 1.9%; last 1.5%). July Housing Starts -5.4% yr/yr (expected -4.1%; last -2.2%). July Household Confidence 32.5 (expected 29.4; last 30.2)

  • South Korea's July Industrial Production -1.3% m/m (expected -0.1%; last 1.7%); 1.5% yr/yr (expected 2.9%; last 1.3%). July Retail Sales -0.3% m/m (last -1.0%)

  • Hong Kong's July Retail Sales 4.1% yr/yr (last -1.2%)

  • Australia's July Private Sector Credit 0.7% m/m, as expected (last 0.9%) and Q2 Construction Work Done -3.8% qtr/qtr (expected 0.9%; last -0.3%)

  • New Zealand's August ANZ Business Confidence -47.8 (last -56.7) and July Building Consents 5.0% m/m (last -2.3%)


---Equity Markets---

  • Japan's Nikkei: -0.4%

  • Hong Kong's Hang Seng: UNCH

  • China's Shanghai Composite: -0.8%

  • India's Sensex: CLOSED

  • South Korea's Kospi: +0.9%

  • Australia's ASX All Ordinaries: -0.1%

---FX---

  • USD/JPY: UNCH at 138.78

  • USD/CNH: -0.2% to 6.9045

  • USD/INR: -0.3% to 79.48

Europe: DAX -0.2%, FTSE -1.1%, CAC -0.5%

Major European indices trade in negative territory. Eurozone's CPI increased 9.1% yr/yr in the flash reading for August, accelerating past its peak from July. Denmark lowered its GDP growth forecast for 2022 to 2.8% from 3.4% while the outlook for 2023 was cut to 0.8% from 1.9%. The EU is debating a plan to restrict Russians from visiting EU countries.

  • In economic data:

  • Eurozone's July CPI 0.5% m/m (expected 0.4%; last 0.1%); 9.1% yr/yr (expected 9.0%; last 8.9%). July Core CPI 0.5% m/m (last 0.1%); 4.3% yr/yr (expected 4.0%; last 4.0%)

  • Germany's July Import Price Index 1.4% m/m (expected 1.5%; last 1.0%); 28.9% yr/yr (expected 29.9%; last 29.9%). August Unemployment Change 28,000, as expected (last 45,000) and August Unemployment Rate 5.5%, as expected (last 5.4%)

  • France's Q2 GDP 0.5% qtr/qtr, as expected (last 0.5%). July CPI 0.4% m/m (expected 0.5%; last 0.3%); 5.8% yr/yr (expected 6.1%; last 6.1%). July PPI 1.6% m/m (last 1.3%). July Consumer Spending -0.8% m/m (expected -0.3%; last 0.1%)

  • Italy's August CPI 0.8% m/m (expected 0.6%; last 0.4%); 8.4% yr/yr (expected 8.1%; last 7.9%). July PPI 5.0% m/m (last 1.0%); 36.9% yr/yr (last 34.1%)

  • Spain's June Current Account surplus EUR40 mln (last surplus of EUR2.85 bln)

  • Swiss August ZEW Expectations -56.3 (last -57.2)


---Equity Markets---

  • STOXX Europe 600: -0.5%

  • Germany's DAX: -0.2%

  • U.K.'s FTSE 100: -1.1%

  • France's CAC 40: -0.5%

  • Italy's FTSE MIB: -0.6%

  • Spain's IBEX 35: -0.8%

---FX---

  • EUR/USD: -0.3% to 0.9990

  • GBP/USD: -0.3% to 1.1623

  • USD/CHF: +0.6% to 0.9805



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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