The S&P 500 futures trade 19 points, or 0.4%, above fair value a day after the S&P 500 and Dow Jones Industrial Average closed at record highs.
The Omicron variant continues to spread rapidly across the country, causing work disruptions due to staffing issues, but the market appears confident that Omicron-related disruptions will be transient with cases expected to peak later this month.
The manufacturing data, meanwhile, has been encouraging with December manufacturing PMIs out of China, Japan, Australia, and the UK showing expansionary readings on Tuesday. The U.S. ISM Manufacturing Index for December (Briefing.com consensus 60.3%) will be released at 10:00 a.m. ET alongside the JOLTS - Job Openings report for November.
In corporate news, Ford Motor (F 22.18, +0.41, +1.9%) plans to nearly double production capacity of the all-electric F-150 Lightning pickup at one of its Michigan plants to meet soaring demand. AT&T (T 25.58, +0.15, +0.6%) and Verizon (VZ 52.61, +0.17, +0.3%) agreed to delay their 5G rollout for two weeks after initially rejecting a government request.
Elsewhere, the 10-yr Treasury note yield is up another three basis points to 1.66% after jumping 12 basis points yesterday. The 2-yr yield is unchanged at 0.79%. The U.S. Dollar Index is up 0.2% to 96.41. WTI crude futures are up 0.4% to $76.36/bbl in front of an OPEC+ production decision today.
In U.S. Corporate news:
AT&T (T 25.58, +0.15): +0.6% even after agreeing with Verizon (VZ 52.61, +0.17, +0.3%) to delay their 5G rollout for two weeks over airline concerns. The decision reverses course after initially denying a government request.
Ford Motor (F 22.18, +0.41): +1.9% after announcing plans to nearly double production capacity of the all-electric F-150 Lightning pickup to 150,000 vehicles/year at the Rouge Electric Vehicle Center to meet soaring demand.
Coca-Cola (KO 59.80, +0.50): +0.8% after receiving an upgrade to Buy from Neutral at Guggenheim.
Honeywell (HON 205.50, -1.30): -0.6% after receiving a downgrade to Neutral from Outperform at Credit Suisse.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Japan's Nikkei: +1.8% Hong Kong's Hang Seng: +0.1% China's Shanghai Composite: -0.2% India's Sensex: +1.1% South Korea's Kospi: UNCH Australia's ASX All Ordinaries: +1.9%.
In economic data:
China's December Caixin Manufacturing PMI 50.9 (expected 50.0; last 49.9)
Japan's December Manufacturing PMI 54.3 (expected 54.2; last 54.5)
Australia's December Manufacturing PMI 57.7 (last 59.2)
In news:
Japan's Manufacturing PMI expanded for the 11th consecutive month in December while Australia's Manufacturing PMI expanded for the 19th month in a row.
Yonhap reported that South Korea's home transactions in November were down 43% yr/yr due to new lending restrictions.
Evergrande has been ordered to demolish 39 apartment buildings.
Bank of Korea Governor Lee said that issuing consumption vouchers for all citizens "would be helpful."
Major European indices trade in the green. STOXX Europe 600: +0.9% Germany's DAX: +0.7% U.K.'s FTSE 100: +1.4% France's CAC 40: +1.3% Italy's FTSE MIB: +0.8% Spain's IBEX 35: +0.6%.
In economic data:
Germany's December unemployment -23,000 (expected -15,000; last -34,000) and December Unemployment Rate 5.2% (expected 5.3%; last 5.3%). November Retail Sales 0.6% m/m (expected -0.5%; last 0.5%); -2.9% yr/yr (expected -4.9%; last -2.0%)
U.K.'s December Manufacturing PMI 57.9 (expected 57.6; last 58.1). November Mortgage Lending GBP3.69 bln (expected GBP3.55 bln; last GBP1.15 bln)
France's December CPI 0.2% m/m (last 0.4%); 2.8% yr/yr, as expected (last 2.8%)
Spain's December unemployment -76,800 (last -74,400)
Swiss December CPI -0.1% m/m, as expected (last 0.3%); 1.5% yr/yr (expected 1.6%; last 1.5%)
In news:
France's Finance Ministry reiterated its forecast for 4.0% growth in 2022.
Germany loosened its travel restrictions for the U.K. and South Africa.
Italy's parliament will begin the process of electing a new president on January 24.
Prime Minister Draghi and former Prime Minister Berlusconi are among the leading candidates.
U.S. equity futures:
S&P 500 Futures: +11 @ 4,807
DJIA Futures: +97 @ 36,509
Nasdaq 100 Futures: +9 @ 16,510
Overseas:
Europe: DAX +0.7%, FTSE +1.4%, CAC +1.3%
Asia: Nikkei +1.8%, Hang Seng +0.1%, Shanghai Composite -0.2%
Commodities:
Crude Oil +0.31 @ 76.39
Nat Gas +0.113 @ 3.928
Gold -0.25 @ 1799.85
Silver -0.098 @ 22.712
Copper -0.0340 @ 4.3875
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Blackbaud (BLKB) acquires global social impact technology leader EVERFI for $750 mln in cash and stock; reiterates full year outlook
NexTier Oilfield (NEX) guides Q4 revs and adjusted EBITDA above consensus
Niu Technologies (NIU): In Q4 of 2021, NIU sold 238,188 units, including e-motorcycles, e-mopeds, kick-scooters and e-bikes, representing a 58.3% year-over-year growth
General News:
White House aiming to select Philip Jefferson for Fed Board, according to Bloomberg
Democrats begin to blame inflation on corporations, according to the New York Times
Businesses, schools, and government agencies are being impacted by Omicron related staffing issues and some are closing, according to the New York Times
Florida urges residents without any symptoms to stop getting COVID-19 tests, according to Orlando Sentinel
Agrify (AGFY) has signed a definitive agreement for its largest Agrify Total Turn-Key Solution partnership to date with Gold Leaf Florida LLC
Airbnb (ABNB): U.S. Department of the Treasury's Office of Foreign Assets Control confirmed last night a settlement with Airbnb Payments
Alamo Group (ALG) increases quarterly dividend to $0.18/sh from $0.14/sh
ASGN Incorporated (ASGN) authorizes up to $350 mln for share repurchases through December 2023
AT&T (T) and Verizon (VZ) will delay 5G rollout for two weeks over airline concerns, according to the Wall Street Journal
Aurora Cannabis (ACB) announces the delivery of a cannabis shipment worth approximately C$10 million - the company's largest ever shipment to Israel, and what is believed to be the largest export of medical Cannabis into the Israeli market
Autohome (ATHM) entered into a limited partner interest subscription agreement, a limited partnership agreement and certain other auxiliary documents with Ping An Capital
AVROBIO (AVRO) is shifting its portfolio priorities to focus on other clinical-stage programs and extending its cash runway into the first quarter of 2024
Bank OZK (OZK) increases quarterly dividend by 3.45% to $0.30/share
Blackberry (BB) devices with original operating system will no longer be supported, according to NDTV
Cable ONE (CABO) enters into a joint venture with affiliates of GTCR, Stephens Capital Partners, The Pritzker Organization, and certain investors to support the growth of Clearwave Fiber LLC
Canaan (CAN) has entered into strategic collaboration agreements with multiple crypto mining firms for joint-mining business in Kazakhstan
Carrier Global (CARR) entered into an accelerated share repurchase agreement to repurchase $500 million of the Company's common stock
CME Group (CME) reports Q4 and December stats
COMPASS Pathways (CMPS) reported that COMP360 psilocybin study of 89 healthy participants published in Journal of Psychopharmacology
Cullinan Management (CGEM) granted Breakthrough Therapy Designation for CLN-081
EMX Royalty (EMX) identifies new gold and cobalt targets on Australian projects
Enzo Biochem (ENZ) entered into a cooperation agreement with Bradley L. Radoff and certain affiliated entities
Evelo Biosciences (EVLO) announces its strategic priorities and upcoming catalysts for 2022
Ford Motor (F) planning to nearly double production capacity of the all-electric F-150 Lightning pickup to 150,000 vehicles per year at the Rouge Electric Vehicle Center in Dearborn, Michigan, to meet soaring customer demand
Foxconn (FXCNY) India plant will likely not open before Friday, according to Reuters
Grab (GRAB) announced that Alex Hungate has joined the company as Chief Operating Officer
Gritstone bio (GRTS) reports positive clinical results from first cohort of a phase 1 study evaluating a t cell-enhanced self-amplifying mRNA (samRNA) vaccine against COVID-19
Heritage Insurance (HRTG) announces $25 mln common stock repurchase authorization
Humacyte (HUMA) announces presentation of first preclinical results of the HAV in Coronary Artery Bypass Grafting at Advanced Therapies Week Conference
Ionis Pharma (IONS) announces that Biogen (BIIB) exercised its option to obtain from Ionis a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB115/ION306
Jazz Pharma (JAZZ) announces that FDA has granted Orphan Drug Exclusivity for Xywav oral solution
Life Storage (LSI) raises quarterly dividend by 16% to $1.00/share
Liquidia Technologies (LQDA) appoints Dr. Roger Jeffs as CEO, effective January 3, 2022
MagnaChip Semi (MX) appoints Shinyoung Park as CFO, effective January 1
Marathon Digital Holdings (MARA) reports bitcoin production and miner installation updates for December; produced approximately 3,197 self-mined bitcoin during 2021, up 846%
Nokia (NOK) and Tele2 expand 5G partnership in the Baltics
Novartis AG (NVS) announces U.S. Court of Appeals for the Federal Circuit upholds validity of Gilenya dosage regimen patent
Repligen (RGEN) promoted James Bylund, the current Senior Vice President, Operations and Information Technologies, to the role of Chief Operating Officer of the Company, effective January 1
Restaurant Brands (QSR) to develop and open hundreds of Popeyes restaurants across South Korea in the coming years
TCR2 Therapeutics (TCRR) and Arbor Biotechnologies announce that the two companies have entered into a strategic research collaboration and non-exclusive license agreement focused on the further development of a defined set of allogeneic TRuC-T cell therapies
Tesla (TSLA) opens showroom in Xinjiang, according to the Wall Street Journal
Valaris (VAL) awarded new bareboat charter agreements with ARO Drilling for several jackups
Viridian Therapeutics (VRDN) submits investigational new drug application for VRDN-002 to the FDA
Wal Mart (WMT) temporarily closes 60 stores to sanitize them, according to Reuters
WISeKey (WKEY) to invest up to $10 mln over the next two years to perform Bitcoin mining from its Geneva datacenter
XPO Logistics' (XPO) President has decided to step down, effective December 27, 2021
M&A:
Acadia Healthcare (ACHC) announces acquisition of CenterPointe Behavioral Health System; terms not disclosed
Ambac (AMBC) subsidiary acquires three admitted insurance carriers
AZEK (AZEK) announced its acquisition of StruXure Outdoor
Benson Hill (BHIL) announced the acquisition of ZFS Creston for approximately $102 million primarily financed through a new debt facility
Digital Realty Trust (DLR) to acquire Teraco for approx. $3.5 bln
Emerald Holding (EEX) acquires MJBiz, a B2B event and content platform for the cannabis industry
Greif (GEF) enters into a definitive agreement to divest its 50% share in the Flexible Packaging join venture to Gulf Refined Packaging for a total cash consideration of $123 mln
Inspired Entertainment (INSE) acquired Sportech Lotteries for $12.5 mln
Mudrick Capital Acquisition Corporation II (MUDS): Fanatics aiming to acquire Topps (MUDS) trading card unit, according to the Wall Street Journal
PNM Resources (PNM) and Avangrid (AGR) announce extension of merger agreement
Wabtec (WAB) announced it recently acquired the railway friction business from MASU
Syndicate:
AFC Gamma (AFCG) launches 3 mln share public offering
APi Group (APG) files for 45 mln share common stock offering by selling shareholders
Core & Main (CNM) announces secondary public offering of 20.0 mln Class A common shares by selling stockholders
Silverback Therapeutics (SBTX) files for $250 mln mixed securities shelf offering
Warner Music Group (WMG) announces sale of 8,562,500 shares of common stock by affiliates of Access Industries
IPOs:
Expected to Price:
Amylyx Pharmaceuticals (Nasdaq: AMLX): The developer of therapies for the treatment of ALS and neurodegenerative diseases is expected to price its 8.8 M share IPO between $18-$20.
CinCor (Nasdaq: CINC): The clinical-stage biopharmaceutical company developing its lead clinical candidate, CIN-107, for treatment of hypertension and other cardio-renal diseases is expected to price its 11.0 M share IPO between $15-$17.
Gapping Up/Down
Gapping up:
LQDA +10.3%, MRSN +7.3%, MARA +2.3%, CAN +2.3%, ENZ +2.2%, NEX +2.1%, F +1.6%, HRTG +1.5%, WKEY +1.5%, GRAB +1.1%, CARR +1%
Gapping down:
CNM -8.4%, SE -6.6%, AFCG -5.4%, WMG -4%, SBTX -2.1%
Analyst Research (see Upgrades/Downgrades calendar for full list):
Upgrades
AXIS Capital (AXS) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $57
BP (BP) upgraded to Outperform from In-line at Evercore ISI; tgt $36
Clean Energy Fuels (CLNE) upgraded to Mkt Perform from Underperform at Raymond James
Coca-Cola (KO) upgraded to Buy from Neutral at Guggenheim; tgt raised to $66
Eni S.p.A. (E) upgraded to Mkt Perform from Underperform at Bernstein
First Solar (FSLR) upgraded to Mkt Perform from Underperform at Raymond James
Forward Air (FWRD) upgraded to Overweight from Equal-Weight at Stephens; tgt raised to $165
General Electric (GE) upgraded to Outperform from Neutral at Credit Suisse; tgt $122
Globus Medical (GMED) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $88
Halliburton (HAL) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $30
Hewlett Packard Enterprise (HPE) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $20
Houlihan Lokey (HLI) upgraded to Buy from Neutral at UBS; tgt lowered to $116
Lions Gate Entertainment (LGF.A) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $25
Northern Trust (NTRS) upgraded to Neutral from Sell at Goldman; tgt raised to $125
Stryker (SYK) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $315
SunPower (SPWR) upgraded to Outperform from Mkt Perform at Raymond James; tgt $26
Trip.com Group (TCOM) upgraded to Buy from Neutral at New Street; tgt $30
Under Armour (UAA) upgraded to Outperform from Neutral at Robert W. Baird; tgt $32
Warner Music Group (WMG) upgraded to Buy from Hold at Jefferies; tgt raised to $50
Downgrades:
Artisan Partners Asset Mgmt (APAM) downgraded to Neutral from Buy at Goldman; tgt lowered to $48
Audacy (AUD) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $3
Ball Corp (BLL) downgraded to Neutral from Buy at Citigroup; tgt $105
Columbia Sportswear (COLM) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $107
Equinor (EQNR) downgraded to Mkt Perform from Outperform at Bernstein
Evoqua Water (AQUA) downgraded to Mkt Perform from Outperform at Raymond James
Foot Locker (FL) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $42
H.B. Fuller (FUL) downgraded to Neutral from Outperform at Robert W. Baird; tgt raised to $85
Honeywell (HON) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $226
JPMorgan Chase (JPM) downgraded to Peer Perform from Outperform at Wolfe Research; tgt $185
Medtronic (MDT) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $110
NASDAQ (NDAQ) downgraded to Sell from Neutral at Goldman; tgt $190
NextEra Energy Partners (NEP) downgraded to Mkt Perform from Outperform at Raymond James
PagSeguro Digital (PAGS) downgraded to Neutral from Buy at UBS; tgt lowered to $30
PetroChina (PTR) downgraded to Sell from Neutral at Citigroup
Pinterest (PINS) downgraded to Neutral from Buy at Guggenheim
Sealed Air (SEE) downgraded to Neutral from Outperform at Robert W. Baird; tgt $72
SelectQuote (SLQT) downgraded to In-line from Outperform at Evercore ISI; tgt $11
Sherwin-Williams (SHW) downgraded to Neutral from Buy at Northcoast
Sherwin-Williams (SHW) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt raised to $376
Sirius XM (SIRI) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $7
StoneCo (STNE) downgraded to Neutral from Buy at UBS; tgt lowered to $21
Tata Motors (TTM) downgraded to Sell from Buy at CLSA
Teleflex (TFX) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $325
T. Rowe Price (TROW) downgraded to Sell from Neutral at Goldman; tgt lowered to $175
UMB Financial Corporation (UMBF) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $110
Umpqua Holdings (UMPQ) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $20
Wolverine (WWW) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $33
Xylem (XYL) downgraded to Underperform from Mkt Perform at Raymond James
Zimmer Biomet (ZBH) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $135
Others:
4D Molecular Therapeutics (FDMT) initiated with an Outperform at SVB Leerink; tgt $30
Altus Power (AMPS) initiated with a Buy at Citigroup; tgt $13
Applied Therapeutics (APLT) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $7
Blue Owl Capital (OWL) added to Conviction Buy List at Goldman
Boxed (BOXD) initiated with a Neutral at BTIG Research
Enovix (ENVX) initiated with an Outperform at Cowen; tgt $32
Global Payments (GPN) initiated with a Buy at Loop Capital; tgt $180
HashiCorp (HCP) initiated with a Neutral at Citigroup; tgt $100
Local Bounti (LOCL) initiated with a Buy at Deutsche Bank; tgt $9
Match Group (MTCH) initiated with an Outperform at Wolfe Research; tgt $163
Nu Holdings (NU) initiated with a Neutral at JP Morgan; tgt $10
P3 Health Partners (PIII) initiated with an Outperform at William Blair
Pinterest (PINS) initiated with a Peer Perform at Wolfe Research; tgt $45
Renalytix (RNLX) initiated with a Buy at BTIG Research; tgt $24
Riot Blockchain (RIOT) initiated with an Overweight at Cantor Fitzgerald; tgt $45
Sysco (SYY) initiated with a Hold at Deutsche Bank; tgt $82
Two Harbors Investment (TWO) initiated with a Neutral at Citigroup; tgt $5.50
Zillow (ZG) initiated with a Peer Perform at Wolfe Research; tgt $75
Upcoming Events:
Econ Data:
10:00 ET: ISM Manufacturing Index for Dec (Briefing.com Consensus 60.3%; Prior 61.1%)
10:00 ET: JOLTS - Job Openings for Nov (Briefing.com Consensus NA; Prior 11.033M)
Earnings:
Tuesday (Jan 4)
Afternoon: MLKN SGH
Wednesday (Jan 5)
Morning: RPM SMPL
Afternoon: RGP
Thursday (Jan 6)
Morning: ANGO BBBY CAG STZ HELE LW LNN SCHN WBA
Afternoon: DCT PSMT WDFC
Friday (Jan 7)
Morning: AYI GBX
Asia & Europe detail:
Asia: Nikkei +1.8%, Hang Seng +0.1%, Shanghai Composite -0.2%
Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Japan's Manufacturing PMI expanded for the 11th consecutive month in December while Australia's Manufacturing PMI expanded for the 19th month in a row. Yonhap reported that South Korea's home transactions in November were down 43% yr/yr due to new lending restrictions. Evergrande has been ordered to demolish 39 apartment buildings. Bank of Korea Governor Lee said that issuing consumption vouchers for all citizens "would be helpful."
In economic data:
China's December Caixin Manufacturing PMI 50.9 (expected 50.0; last 49.9)
Japan's December Manufacturing PMI 54.3 (expected 54.2; last 54.5)
Australia's December Manufacturing PMI 57.7 (last 59.2)
---Equity Markets---
Japan's Nikkei: +1.8%
Hong Kong's Hang Seng: +0.1%
China's Shanghai Composite: -0.2%
India's Sensex: +1.1%
South Korea's Kospi: UNCH
Australia's ASX All Ordinaries: +1.9%
---FX---
USD/JPY: +0.7% to 116.13
USD/CNH: +0.1% to 6.3775
USD/INR: +0.3% to 74.61
Europe: DAX +0.7%, FTSE +1.4%, CAC +1.3%
Major European indices trade in the green. France's Finance Ministry reiterated its forecast for 4.0% growth in 2022. Germany loosened its travel restrictions for the U.K. and South Africa. Italy's parliament will begin the process of electing a new president on January 24. Prime Minister Draghi and former Prime Minister Berlusconi are among the leading candidates.
In economic data:
Germany's December unemployment -23,000 (expected -15,000; last -34,000) and December Unemployment Rate 5.2% (expected 5.3%; last 5.3%). November Retail Sales 0.6% m/m (expected -0.5%; last 0.5%); -2.9% yr/yr (expected -4.9%; last -2.0%)
U.K.'s December Manufacturing PMI 57.9 (expected 57.6; last 58.1). November Mortgage Lending GBP3.69 bln (expected GBP3.55 bln; last GBP1.15 bln)
France's December CPI 0.2% m/m (last 0.4%); 2.8% yr/yr, as expected (last 2.8%)
Spain's December unemployment -76,800 (last -74,400)
Swiss December CPI -0.1% m/m, as expected (last 0.3%); 1.5% yr/yr (expected 1.6%; last 1.5%)
---Equity Markets---
STOXX Europe 600: +0.9%
Germany's DAX: +0.7%
U.K.'s FTSE 100: +1.4%
France's CAC 40: +1.3%
Italy's FTSE MIB: +0.8%
Spain's IBEX 35: +0.6%
---FX---
EUR/USD: -0.2% to 1.1275
GBP/USD: UNCH at 1.3479
USD/CHF: UNCH at 0.9187
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