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31/10/22 Briefing


The S&P 500 futures are down 12 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 52 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 83 points and are trading 0.2% below fair value.

Equity futures are somewhat weak this morning following the recent rally as some profit taking efforts kick in at month end.

Market participants are digesting worse than expected economic data from the eurozone, which saw CPI hit an all time high in October of 10.7% year-over-year. Also, China's Manufacturing PMI for October fell to its lowest level since July, slipping back into contraction with a sub-50 reading (49.2).

New COVID cases in parts of China are prompting new lockdown measures. Disney's Shanghai theme park suspended operations Monday, according to CNBC, and iPhone production could reportedly be at risk due to COVID cases at the Foxconn manufacturing facility. 

Treasury yields are inching higher this morning. The 10-yr note yield is up three basis points to 4.04% and the 2-yr note yield is up six basis points to 4.48%.

Economic data today is limited to the October Chicago PMI reading (Briefing.comconsensus 46.0; prior 45.7), which is out at 9:45 a.m. ET

In corporate news:

  • Apple (AAPL 154.77 -0.97 -0.62%): Foxconn (HNHPF) iPhone production could fall 30% at key factory due to coronavirus outbreak, according to Reuters.

  • Tesla (TSLA 227.65 -0.87 -0.38%): Tesla (TSLA) had talks last year about taking stake in Glencore (GLNCY), according to FT.

  • Credit Suisse (CS 4.0600 +0.13 +3.31%): Credit Suisse (CS) looking towards twenty banks for capital increase, according to Bloomberg.

  • Caterpillar (CAT 217.01 -2.33 -1.06%): UBS downgraded from Neutral to Buy

  • Emerson (EMR 87.48 +0.08 +0.09%): beats by $0.14, reports revs in-line; guides Q1 revs above consensus; guides FY23 revs above consensus; confirms it will sell majority stake in Climate Technologies to Blackstone (BX) in transaction valuing the business at $14.0 billion

  • Howmet Aerospace (HWM 34.06 -2.11 -5.83%):  reports EPS in-line, revs in-line; guides Q4 EPS in-line, revs below consensus

  • Global Payments (GPN 120.00 -5.31 -4.24%): reports EPS in-line, beats on revs; reaffirms FY22 EPS guidance

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: +1.8%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: -0.8%, India's Sensex: +1.3%, South Korea's Kospi: +1.1%, Australia's ASX All Ordinaries: +1.2%.

  • In economic data:

  • China's October Manufacturing PMI 49.2 (expected 50.0; last 50.1) and Non-Manufacturing PMI 48.7 (expected 50.2; last 50.6)

  • Japan's September Industrial Production -1.6% m/m (expected -1.0%; last 3.4%) and September Retail Sales 4.5% yr/yr (expected 4.1%; last 4.1%). September Housing Starts 1.0% yr/yr (expected 2.3%; last 4.6%) and September Construction Order 36.6% yr/yr (last 17.9%). October Household Confidence 29.9 (expected 31.0; last 30.8)

  • South Korea's September Industrial Production -1.8% m/m (expected -0.3%; last -1.4%); 0.8% yr/yr (expected 0.9%; last 1.5%). September Retail Sales -1.8% m/m (last 4.4%)

  • Australia's September Retail Sales 0.6% m/m, as expected (last 0.6%). September Private Sector Credit 0.7% m/m, as expected (last 0.8%). October MI Inflation Gauge 0.4% m/m (last 0.5%)

  • Hong Kong's Q3 GDP -2.6% qtr/qtr (last 1.0%); -4.5% yr/yr (last -1.3%)

  • Singapore's Q3 Business Expectations -20.0 (last -8.0)

  • In news:

  • The Bank of Japan announced that bond purchases in November will include a higher frequency of purchases of longer-term JGBs.

  • South Korea will reportedly encourage Korea Electric Power and other companies to sell offshore debt.

  • China's Manufacturing PMI for October fell to its lowest level since July.

  • China is reportedly maintaining its plan to loosen coronavirus restrictions to enter Macau despite the recent increase in coronavirus cases.

  • Major European indices trade near their flat lines. STOXX Europe 600: UNCH, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.3%, France's CAC 40: -0.1%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.1%.

  • In economic data:

  • Eurozone's flash Q3 GDP 0.2% qtr/qtr (expected 1.0%; last 0.8%); 2.1% yr/yr (last 4.3%). October CPI 1.5% m/m (last 1.2%); 10.7% yr/yr (expected 10.2%; last 9.9%). October Core CPI 5.0% m/m (last 4.8%); 5.0% yr/yr (expected 4.8%; last 4.8%)

  • Germany's September Retail Sales 0.9% m/m (expected -0.3%; last -1.4%); -0.9% yr/yr (expected -4.9%; last -1.5%)

  • U.K.'s September Mortgage Approvals 66,790 (expected 67,000; last 74,420) and BoE Consumer Credit GBP745 mln (expected GBP978 mln; last GBP1.215 bln)

  • Italy's Q3 GDP 0.5% qtr/qtr (expected 0.3%; last 1.1%); 2.6% yr/yr (expected 2.0%; last 4.7%)

  • Spain's September Retail Sales 0.1% yr/yr (last 0.1%). August Current Account deficit EUR110 mln (last surplus of EUR1.34 bln)

  • Swiss September Retail Sales 3.2% yr/yr (expected 3.5%; last 2.1%)

  • In news:

  • British Prime Minister Sunak is reportedly planning to freeze foreign aid for a couple years to help plug the budget hole.

  • The British government refuted reports that a plan is being prepared for a one-time windfall tax on banks.

  • Russia withdrew its participation from the UN-established grain shipping deal in the Black Sea.

  • There is speculation that International Consolidated Airlines is interested in acquiring EasyJet.

 

U.S. equity futures:

  • S&P 500 Futures: -15 @ 3,792

  • DJIA Futures: +12 @ 32,046

  • Nasdaq 100 Futures: -94 @ 11,097

Overseas:

  • Europe: DAX +0.3%, FTSE +0.3%, CAC -0.1%

  • Asia: Nikkei +1.8%, Hang Seng -1.2%, Shanghai Composite -0.8%

Commodities:

  • Crude Oil -1.53 @ 86.37

  • Nat Gas  +0.625 @ 6.309

  • Gold -1.95 @ 1642.85

  • Silver -0.025  @ 19.122

  • Copper -0.0523 @ 3.3773

U.S. Summary:

  • Earnings/Guidance:

  • Altra Industrial Motion (AIMC) beats by $0.01, reports revs in-line

  • CNA Financial (CNA) beats by $0.19

  • Criteo (CRTO) at investor day says it plans to " triple its fast-growing Retail Media business over the next three years"

  • Emerson (EMR) beats by $0.14, reports revs in-line; guides Q1 revs above consensus; guides FY23revs above consensus

  • Global Payments (GPN) reports EPS in-line, beats on revs; reaffirms FY22EPS guidance

  • Howmet Aerospace (HWM) reports EPS in-line, revs in-line; guides Q4 EPS in-line, revs below consensus

  • JELD-WEN (JELD) beats by $0.27, beats on revs; lowers FY22adjusted EBITDA guidance

  • Loews Corp (L) beats by $0.04

  • Mesoblast (MESO) reports Q3 results

  • Middlesex Water (MSEX) misses by $0.08, beats on revs

  • Nomad Foods (NOMD) sees Q3 revs above consensus; reaffirms FY22outlook

  • Public Service (PEG) beats by $0.04, beats on revs

  • Saia (SAIA) misses by $0.84, beats on revs

  • XPO Logistics (XPO) beats by $0.10, misses on revs

  • News:

  • Leftist leader Luis Inacio Lula da Silva wins Brazil election, according to the New York Times

  • Goldman Sachs expects Fed rates to reach 5% in March, according to Bloomberg

  • Republicans hold polling advantage in final days of midterm election campaign, according to Financial Times

  • Republicans will try to roll back corporate tax increases, climate change spending, student loan forgiveness, and IRS expansion if they retake Congress, according to the New York Times

  • Russia will suspend grain export deal with Ukraine, according to the New York Times

  • Macau reinstated some coronavirus restrictions, according to Reuters

  • Actinum Pharma (ATNM) announces "positive" top-line results from pivotal phase 3 SIERRA trial of Iomab-B in patients with active relapsed or refractory acute myeloid leukemia

  • Adient (ADNT) appoints Jerome Dorlack as company's CFO effective Dec 1

  • ADMA Biologics (ADMA) has received U.S. Food and Drug Administration approval for its seventh ADMA BioCenters plasma collection facility located in Greensboro, North Carolina

  • Align Tech (ALGN) entered into an accelerated share repurchase agreement to repurchase $200 mln of Align's common stock authorized under the $1.0 bln stock repurchase program

  • Apple (AAPL) will launch new Macs next year, according to Bloomberg

  • Apple (AAPL) iPhone sales in China fell by 27% last week, according to Bloomberg

  • Ashland (ASH) announces that the FDA Center for Drug Evaluation and Research Office of New Drugs has accepted Ashland Viatel bioresorbable mPEG-PDLLA pharmaceutical excipient in the review cycle of the FDA Novel Excipient Review Pilot Program

  • Bristol-Myers (BMY) reports Reblozyl, the first erythroid maturation agent, met primary and key secondary endpoints in the first-line treatment of patients with very low/low/intermediate-risk myelodysplastic syndromes

  • China Southern Airlines (ZNH) cancelled return of two Boeing (BA) 737 Max flights, according to Reuters

  • Credit Suisse (CS) looking towards twenty banks for capital increase, according to Bloomberg

  • Disney (DIS) Shanghai has shutdown due to coronavirus, according to Reuters

  • Dyne Therapeutics (DYN) receives FDA Fast Track designation for DYNE-251 for the treatment of duchenne muscular dystrophy

  • Foxconn (HNHPF) Apple (AAPL) iPhone production could fall 30% at key factory due to coronavirus outbreak, according to Reuters

  • General Motors (GM) will temporarily suspend advertising on Twitter following Elon Musk's takeover, according to CNBC

  • Helix Energy (HLX) awarded well decommissioning project from Shell Brasil (SHEL)

  • Instil Bio (TIL) announces voluntary pause of enrollment in ongoing clinical trials related to manufacturing

  • Johnson & Johnson (JNJ): ESSA (EPIX) provides an update on its clinical collaboration with Janssen

  • KalVista Pharmaceuticals (KALV) announces positive phase 1 data for orally disintegrating tablet formulation of sebetralstat for use in hereditary angioedema

  • KBR (KBR) launches its mega 10,000 MTPD blue and green ammonia offering to help meet the growing global sustainable energy and fertilizer demands

  • Loews Corp (L) CEO Jonathan Tisch will assume the role of Executive Chairman and Alex Tisch will become President and Chief Executive Officer, effective Jan. 1, 2023

  • LSB Industries (LXU) announces increase to stock repurchase authorization

  • Marinus Pharmaceuticals (MRNS) announces revenue interest financing agreement with Sagard Healthcare Partners for a total of $32.5 million upfront

  • Petrobras (PBR) provides update on the discovery in the Aram Block

  • Starbucks (SBUX) union expansion is slowing, according to the Wall Street Journal

  • Teck Resources (TECK): Toronto Stock Exchange accepts Teck's notice of intention to make a normal course issuer bid to purchase its Class B shares

  • Terran Orbital (LLAP) received a $100 mln investment from Lockheed Martin (LMT) in exchange for convertible notes and warrants issued by Terran Orbital

  • Tesla (TSLA) had talks last year about taking stake in Glencore (GLNCY), according to Financial Times

  • Thermo Fisher (TMO) announces $1.0 bln share repurchase program for 4Q22

  • TuSimple Holdings (TSP) lets go of CEO; initiates new CEO search

  • Tutor Perini's (TPC) Five Star Electric has been awarded two new contracts collectively valued at ~$90 mln

  • Twitter (TWTR): Elon Musk orders job cuts across Twitter starting Saturday, October 29, according to the New York Times

  • United Therapeutics (UTHR) reports top line data from the EXPEDITE study of Remodulin induction prior to Orenitram therapy

  • M&A:

  • Canadian Imperial Bank (CM) ends bid for HSBC (HSBC) Canadian unit, but BMO (BMO) is still in the hunt, according to Reuters

  • Emerson Electric (EMR) aiming to sell stake in climate tech unit to Blackstone (BX), according to the Wall Street Journal

  • Provident Acquisition (PAQC) completes combination with Perfect Corp., will change name and ticker; to begin trading on NYSE as Perfect Corp. (PERF) on Oct 31

  • Thermo Fisher (TMO) to acquire diagnostics company The Binding Site Group for 2.25 billion, or $2.6 bln; deal expected to be accretive to adjusted EPS by $0.07 in first full year

  • Vishay (VSH) acquires MaxPower Semiconductor for $50 mln

  • Syndicate

  • ALX Oncology (ALXO) entered into a loan facility agreement with Oxford Finance and Silicon Valley Bank for up to $100 mln of non-dilutive financing

  • Coca-Cola (KO) files mixed securities shelf offering

  • Glacier Bancorp (GBCI) files mixed securities shelf offering

  • Helix Energy (HLX) files mixed securities shelf offering

  • New York Community (NYCB) mixed securities shelf offering

  • Nuvalent (NUVL) commenced an underwritten public offering of $200.0 mln of its shares of Class A common stock

  • Vintage Wine Estates (VWE) files for 37,405,239 share common stock offering by selling shareholders

  • IPOs:

  • Expect to Price: No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • ATNM +23.2%, MSEX +5%, HLX +3.1%, NYCB +3%, CNA +2.4%, JELD +1.4%, GBCI +0.8%, SRE +0.7%, EMR +0.7%, KAR +0.6%, PTEN +0.5%

  • Gapping down:

  • YMAB -37.1%, TSP -17.7%, FOLD -6.2%, ALGN -2%, XPO -1.7%, ARGO -1.5%, MESO -1.4%, UTHR -1.3%, META -1%

 


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • BioMarin Pharmaceutical (BMRN) upgraded to Outperform from Perform at Oppenheimer; tgt raised to $110

  • Cullen/Frost (CFR) upgraded to In-line from Underperform at Evercore ISI; tgt raised to $160

  • Downgrades:

  • ABB Ltd (ABB) downgraded to Buy from Conviction Buy at Goldman

  • Advanced Micro (AMD) downgraded to Market Perform from Outperform at Northland Capital; tgt lowered to $60

  • Ameris Bancorp (ABCB) downgraded to Mkt Perform from Outperform at Raymond James

  • Aon (AON) downgraded to Underperform from Mkt Perform at Raymond James

  • Others:

  • Ares Commercial Real Estate (ACRE) resumed with a Buy at BofA Securities; tgt $13

  • Business First Bancshares (BFST) initiated with an Outperform at Raymond James; tgt $28

Upcoming Events:

  • Econ Data:

  • 09:45 ET: Chicago PMI for Oct (Briefing.comConsensus 47.1; Prior 45.7)

  • Earnings

  • Monday (Oct 31)

  • Morning:  CNA GPN HWM NSP JELD ON PEG SAIA XPO

  • Afternoon: ACHC ADUS AFL AWK AMKR ANET CAR AXNX NTB BCC CHE CINF CIVI CNO PLOW FLS GT HLIT HTLF HLF HOLX IMAX KMT KFRC LSCC LEG VAC NXPI OGS OTTR PSMT RMBS RRX RHP SBAC SON SYK TREX VRNS VNO WMB

  • Tuesday (Nov 1)

  • Morning: ABMD AJRD AGCO AME ARCB ARNC AVA TECH BCOR BPMC BP CTLT CNP CIGI CVLT DEA ETN ECL ECVT LLY NPO EPD ETRN ESPR FOXA BEN IT HLNE HSC HAYW HSIC IDXX INCY ICPT IPGP KKR LCII LEA LDOS LGIH LPX MPC TAP MPLX MYGN NBIX NEM PFE PSX PBI PINC PACK RGEN SAFE STNG SEE SPG SIRI SOFI SUN SYY TRI BLD TRTN UBER WAB WAT WEC XYL ZBRA

  • Afternoon:  AEIS AMD ABNB AYX AIG ANDE APAM AMK AIZ ATCO ATRC BTG BAND BLKB BFAM BRX CZR CWH CDLX CAKE CHGG CHK CRUS CLX CRK CNDT CACC DENN DVN EIX EA ET EXEL EXR FMC FCPT FRPT FRSH HRB THG PEAK HURN INSP INST IRTC JRVR KAI KAR LFUS LTHM MGY MTCH MCK MRCY MSTR MIR MDLZ NMIH OI OKE OSPN PAYC PUMP PRO PRU PSA RNR REZI SPNE SCI SIMO TSLX SKY SNCY SMCI UNVR UNM VRSK VRAY VOYA WU YUMC ZETA ZI



Asia & Europe detail:

Asia: Nikkei +1.8%, Hang Seng -1.2%, Shanghai Composite -0.8%

Equity indices in the Asia-Pacific region began the week on a mostly higher note. The Bank of Japan announced that bond purchases in November will include a higher frequency of purchases of longer-term JGBs. South Korea will reportedly encourage Korea Electric Power and other companies to sell offshore debt. China's Manufacturing PMI for October fell to its lowest level since July. China is reportedly maintaining its plan to loosen coronavirus restrictions to enter Macau despite the recent increase in coronavirus cases.

  • In economic data:

  • China's October Manufacturing PMI 49.2 (expected 50.0; last 50.1) and Non-Manufacturing PMI 48.7 (expected 50.2; last 50.6)

  • Japan's September Industrial Production -1.6% m/m (expected -1.0%; last 3.4%) and September Retail Sales 4.5% yr/yr (expected 4.1%; last 4.1%). September Housing Starts 1.0% yr/yr (expected 2.3%; last 4.6%) and September Construction Order 36.6% yr/yr (last 17.9%). October Household Confidence 29.9 (expected 31.0; last 30.8)

  • South Korea's September Industrial Production -1.8% m/m (expected -0.3%; last -1.4%); 0.8% yr/yr (expected 0.9%; last 1.5%). September Retail Sales -1.8% m/m (last 4.4%)

  • Australia's September Retail Sales 0.6% m/m, as expected (last 0.6%). September Private Sector Credit 0.7% m/m, as expected (last 0.8%). October MI Inflation Gauge 0.4% m/m (last 0.5%)

  • Hong Kong's Q3 GDP -2.6% qtr/qtr (last 1.0%); -4.5% yr/yr (last -1.3%)

  • Singapore's Q3 Business Expectations -20.0 (last -8.0)

---Equity Markets---

  • Japan's Nikkei: +1.8%

  • Hong Kong's Hang Seng: -1.2%

  • China's Shanghai Composite: -0.8%

  • India's Sensex: +1.3%

  • South Korea's Kospi: +1.1%

  • Australia's ASX All Ordinaries: +1.2%

---FX---

  • USD/JPY: +0.8% to 148.64

  • USD/CNH: +0.8% to 7.3235

  • USD/INR: +0.7% to 82.85

Europe: DAX +0.3%, FTSE +0.3%, CAC -0.1%

Major European indices trade near their flat lines. British Prime Minister Sunak is reportedly planning to freeze foreign aid for a couple years to help plug the budget hole. The British government refuted reports that a plan is being prepared for a one-time windfall tax on banks. Russia withdrew its participation from the UN-established grain shipping deal in the Black Sea. There is speculation that International Consolidated Airlines is interested in acquiring EasyJet.

  • In economic data:

  • Eurozone's flash Q3 GDP 0.2% qtr/qtr (expected 1.0%; last 0.8%); 2.1% yr/yr (last 4.3%). October CPI 1.5% m/m (last 1.2%); 10.7% yr/yr (expected 10.2%; last 9.9%). October Core CPI 5.0% m/m (last 4.8%); 5.0% yr/yr (expected 4.8%; last 4.8%)

  • Germany's September Retail Sales 0.9% m/m (expected -0.3%; last -1.4%); -0.9% yr/yr (expected -4.9%; last -1.5%)

  • U.K.'s September Mortgage Approvals 66,790 (expected 67,000; last 74,420) and BoE Consumer Credit GBP745 mln (expected GBP978 mln; last GBP1.215 bln)

  • Italy's Q3 GDP 0.5% qtr/qtr (expected 0.3%; last 1.1%); 2.6% yr/yr (expected 2.0%; last 4.7%)

  • Spain's September Retail Sales 0.1% yr/yr (last 0.1%). August Current Account deficit EUR110 mln (last surplus of EUR1.34 bln)

  • Swiss September Retail Sales 3.2% yr/yr (expected 3.5%; last 2.1%)

---Equity Markets---

  • STOXX Europe 600: UNCH

  • Germany's DAX: +0.3%

  • U.K.'s FTSE 100: +0.3%

  • France's CAC 40: -0.1%

  • Italy's FTSE MIB: +0.4%

  • Spain's IBEX 35: +0.1%

---FX---

  • EUR/USD: -0.3% to 0.9933

  • GBP/USD: -0.5% to 1.1551

  • USD/CHF: +0.4% to 1.0003


 

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