10/03/22 Briefing

The S&P 500 futures trade 45 points, or 1.1%, below fair value after a third round of ceasefire talks between Russia and Ukraine ended with no real progress. Oil prices are rebounding modestly while Treasuries trade little changed in front of key consumer inflation data.

After the talks, Russia confirmed a ban on exports of certain technology, auto, and agricultural products, among other items, until the end of 2022, in retaliation for Western sanctions on Moscow, according to Reuters. On a related note, the UK expanded sanctions against Russian oligarchs on Thursday.

Staying in Europe, the ECB recently left its key interest rates unchanged, as expected. The central bank said it's on pace to conclude net purchases under the APP in the third quarter of this year, and it extended the Eurosystem repo facility for central banks (EUREP) until Jan. 2023 because of the Russia-Ukraine situation.

WTI crude futures, which dropped 12% yesterday, are back up 4.2%, or $4.55, to $113.21/bbl. The 2-yr yield is up one basis point to 1.68%, and the 10-yr yield is unchanged at 1.95%. The U.S. Dollar Index is up 0.2% to 98.18.

As for the data, Consumer Price Index for February will be released at 8:30 a.m. ETalongside the weekly Initial Claims (Briefing.comconsensus 220,000) and Continuing Claims report. The Treasury Budget for February will be available at 2:00 p.m. ET.

Separately, shares of Amazon.com(AMZN 2923.00, +137.42, +4.9%) are up 5% in pre-market action after the company announced a 20-for-1 stock split and a $10 billion share repurchase authorization. Trading is expected to begin on a split-adjusted basis on June 6, 2022.

In U.S. Corporate news:

• Amazon.com(AMZN 2923.00, +137.42): +4.9% after announcing a 20-for-1 stock split and a $10 billion share repurchase authorization. Trading is expected to begin on a split-adjusted basis on June 6, 2022.

• CrowdStrike (CRWD 190.17, +20.38): +12.0% after beating top and bottom-line estimates and issuing upside guidance for fiscal Q1 and FY23. CRWD was upgraded to Buy from Neutral at BTIG Research.

• Cisco (CSCO 54.80, -1.12): -2.0% after the stock was downgraded to Equal Weight from Overweight at Wells Fargo.

• Walt Disney (DIS 133.00, -0.65): -0.5% amid an analyst downgrade to Neutral from Overweight at Atlantic Equities.

• McDonald's (MCD 220.48, -1.99): -0.9% amid an analyst downgrade to Neutral from Buy at Northcoast.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a higher note, taking the lead from Wednesday'srally on Wall Street. Japan's Nikkei: +3.9% Hong Kong's Hang Seng: +1.3% China's Shanghai Composite: +1.2% India's Sensex: +1.5% South Korea's Kospi: +2.2% Australia's ASX All Ordinaries: +1.1%.

  • In economic data:

    • Japan's February PPI 0.8% m/m (expected 0.6%; last 0.8%); 9.3% yr/yr (expected 8.7%; last 8.9%)

    • Australia's January Building Approvals -27.9% m/m, as expected (last 8.2%) and Pending House Approvals -17.5% m/m, as expected (last -1.8%)

    • New Zealand's February Electronic Card Retail Sales -7.8% m/m (last 3.0%); 1.1% yr/yr (last 5.7%)

• In news:

  • Optimism built ahead of the meeting between foreign ministers from Russia and Ukraine but reports from this morning indicate that no progress was made.

  • Japan's Prime Minister Kishida said that a "widespread" effect is being seen from rising prices and that a coordinated government response is needed.

  • Conservative challenger Yoon Suk-yeol won South Korea's presidency.

  • Australia is planning to increase defense spending.

• Major European indices trade on a lower not, giving back a portion of yesterday's big gains. STOXX Europe 600: -1.8% Germany's DAX: -2.7% U.K.'s FTSE 100: -1.2% France's CAC 40: -2.3% Italy's FTSE MIB: -3.0% Spain's IBEX 35: -1.2%.

  • In economic data:

    • Italy's January PPI 9.7% m/m (last 1.1%); 32.9% yr/yr (last 22.8%)

• In news:

  • The meeting between foreign ministers from Russia and Ukraine did not yield concrete results, though Russian officials expressed willingness to continue talking.

  • The Russian government has reportedly banned exports of technology, telecom, medical, auto, agricultural, and electrical equipment through the end of the year.

  • Spain's budget minister said that taxes on fuel will be cut if there is no action at the EU level.

U.S. equity futures:

• S&P 500 Futures: -46 @ 4,232

• DJIA Futures: -336 @ 32,950

• Nasdaq 100 Futures: -216 @ 13,526

Overseas:

• Europe: DAX -2.7%, FTSE -1.2%, CAC -2.3%

• Asia: Nikkei +3.9%, Hang Seng +1.3%, Shanghai Composite +1.2%
  

Commodities:

• Crude Oil +4.67 @ 113.37

• Nat Gas +0.046 @ 4.572

• Gold +21.45 @ 2009.65

• Silver +0.304 @ 26.120

• Copper +0.0940 @ 4.6662

U.S. Summary:

• Earnings/Guidance (Full Earnings Calendar):

  • Asana (ASAN) beats by $0.03, beats on revs; guides AprQ EPS below consensus, revs above consensus; guides FY23 revs above consensus

  • Babylon (BBLN) reports Q4 results; sees FY22 revs above consensus

  • Baozun (BZUN) beats by RMB0.25, reports revs in-line

  • Build-A-Bear Workshop (BBW) reports Q4 (Jan) results

  • ChipMOS TECHNOLOGIES (IMOS) reports Febrary revenue +7.1% yr/yr to NT$2,096.9 mln

  • Clarivate (CLVT) beats by $0.01, reports revs in-line; guides FY22 EPS in-line, revs in-line

  • Costamare (CMRE) misses by a penny, beats on revs; declares special dividend of $0.50/share

  • Couchbase (BASE) beats by $0.03, beats on revs; guides AprQ revs in-line; guides FY23 revs below consensus

  • CrowdStrike (CRWD) beats by $0.10, beats on revs; guides AprQ EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • Docebo (DCBO) beats by $0.02, beats on revs

  • Earthstone Energy (ESTE) beats by $0.12, beats on revs

  • Embraer SA (ERJ) reports Q4 results, revs light of consensus; guides FY22 revs below consensus

  • First Majestic Silver (AG) misses by $0.05, misses on revs

  • Franco-Nevada (FNV) misses by $0.01, beats on revs

  • FuelCell Energy (FCEL) reports Q1 (Jan) results, beats on revs

  • General Electric (GE) reaffirms FY22 guidance at Investor Day

  • Genesco (GCO) beats by $0.83, reports revs in-line; guides FY23 EPS above at the midpoint, revs in-line

  • JD.com(JD) beats by RMB0.54, reports revs in-line

  • KE Holdings (BEKE) reports Q4 (Dec) results, beats on revs; guides Q1 revs in-line

  • Life Time (LTH) reports Q4 (Dec) results, revs in-line

  • Lufax (LU) grows revs 19.2% yr/yr to RMB 15.83 bln; guides Q1 revs below estimate; guides FY22 revs below consensus; authorizes $500 mln for ADS repurchases

  • Marqeta (MQ) beats by $0.01, beats on revs

  • Prometheus Biosciences (RXDX) misses by $0.09, beats on revs; provides business updates

  • Spire Global (SPIR) reports preliminary Q4 revenue inline with two analyst estimate; guides Q1 EPS below consensus (3 estimates), revenue inline, guides FY22 EPS below consensus, revenue above consensus

  • Taiwan Semi (TSM) reports February revs increased 37.9% yr/yr to NT$146.93 bln

  • Thryv (THRY) beats by $0.53, beats on revs

  • Vaalco Energy (EGY) beats single estimate on top and bottom lines

  • Vivid Seats (SEAT) reports Q4 results; beats on revs; sees FY22 revs in-line with consensus

  • Wheels Up Experience (UP) reports Q4 (Dec) results, beats on revs

• General News:

  • Russia-Ukraine talks yield no concrete results, according to Bloomberg

  • U.S. House approves $1.5 trillion federal funding bill for current fiscal year 2022; provides $13.6 billion in emergency funding to support the Ukraine

  • UK has announced sanctions against 7 oligarchs including Roman Abramovich and Oleg Deripaska

  • House of Representatives votes to ban imports of Russian oil, according to Bloomberg

  • ECB releases Monetary policy decisions; interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively

  • United Arab Emirates lobbying OPEC for output increase, according to the Wall Street Journal

  • Russia suspends exports of certain tech, autos, agricultural products, among other items, according to Reuters

  • IMF Executive Board approves $1.4 bln in emergency financing support to Ukraine

  • AllianceBernstein (AB) reports preliminary assets under management of $739 bln as of February 28

  • Allegheny Tech (ATI) terminates joint venture with Russian-based VSMPO

  • Amazon (AMZN) announces 20-for-1 stock split and $10 bln share repurchase authorization

  • Apple (AAPL) made up over 25% of 2021 revenue at Taiwan Semiconductor Manufacturing Co (TSM), according to DigiTimes

  • Arconic (ARNC) to pause new contracts in Russia

  • Artisan Partners Asset Mgmt (APAM) reports preliminary assets under management (AUM) of $159.8 bln as of February 28, 2022

  • BNY Mellon (BK) CEO Todd Gibbons plans to retire, according to the Wall Street Journal

  • Chemours (CC) has suspended business with Russian entities in response to the ongoing military conflict and humanitarian crisis

  • Costco (COST): In a Form 8-K, company announces that James Murphy, Executive Vice President and Chief Operating Officer, International, is retiring at the end of 2022

  • Credit Suisse (CS) provides update on Russia; states market risk is not significant

  • Crocs (CROX) pauses operations and importation of goods in Russia

  • Docebo (DCBO) names Sukaran Mehta CFO, effective immediately

  • DTE Energy (DTE) Executive Chairman Gerry Anderson will retire on June 30after a 29-year career with the company

  • EHang (EH) receives pre-order for 60 units of passenger-grade AAVs from AEROTREE under Strategic Partnership

  • Enersys (ENS) establishes a new $150 mln stock repurchase authorization with no expiration date

  • Franklin Resources (BEN) reports preliminary month-end assets under management of $1,486.9 bln as of February 28

  • GeoPark (GPRK) appoints Andreas Ocampo to succeed James F. Park as CEO, effective July 1; increases quarterly cash dividend to $0.082/share from $0.041/share

  • GT Biopharma (GTBP) presents preclinical data demonstrating TriKE driving NK cell immunotherapy against NSCLC

  • Hillenbrand (HI) announces that Robert VanHimbergen, former Vice President and Corporate Controller at Johnson Controls, will join the Company as Executive Vice President, Finance on March 14, and will assume the role of Chief Financial Officer on April 30

  • iMedia Brands' (IMBI) iMedia Digital Services renewed its Google (GOOG / GOOGL) search agreement; recently promoted Matt Leardini to president of iMDS

  • Indonesia Energy (INDO) announces that the company has mobilized the drilling rig to drill 2 back-to-back producing wells at its 63,000-acre Kruh Block

  • Intellia Therapeutics (NTLA) confirms receipt of Orphan Drug Designation for NTLA-5001

  • Invesco (IVZ) reports preliminary month-end assets under management of $1,531.4 bln as of February 28

  • Kraton (KRA) announces a general price increase of 440 USD/MT for all Kraton HSBC polymers

  • Magnolia Oil & Gas (MGY) announces proposed block trade of 7.5 mln shares of Class A common stock of Magnolia by EnerVest affiliates

  • Meta (FB) executive stepping down, according to the Wall Street Journal

  • Murphy Oil (MUR) announces retirement of CFO David R, Looney, effective June 30

  • NIO (NIO) listed successfully on Main Board of Stock Exchange of Hong Kong

  • Noble Corporation (NE) names Charles Sledge as Chairman of combined company

  • Peloton (PTON) will test a new pricing plan in attempt to turnaround company; bike and subscription for between $60-$100 per month, according to the Wall Street Journal

  • Rio Tinto (RIO) plans to stop supplying bauxite and sourcing alumina from a Rusal refinery, according to Bloomberg

  • Sony (SNY) will suspend PlayStation hardware and software shipments in Russia, according to The Verge

  • Starbucks (SBUX) workers at three stores in NY vote to unionize, according to the New York Times

  • United Airlines (UAL) to allow unvaccinated employees with religious or medical exemptions to resume work, according to the Wall Street Journal

  • Velodyne Lidar (VLDR) announced that the city of Rsselsheim am Main, Germany, has selected Velodyne to deliver an Intelligent Infrastructure Solution to create a city-wide system for truck passage control

  • ViewRay (VRAY) announced the first toxicity results from the prospective single-arm Phase II SCIMITAR trial

  • Wheels Up Experience (UP) announced that long-time Delta Air Lines (DAL) senior executive Dave Holtz has joined the company as its Chairman of Operations

  • Wingstop (WING) completes $250 million securitization transaction and declares special dividend of $4.00 per share

  • Yellow Corporation (YELL) reaches agreement with US gov't regarding credits for the reweigh of freight shipments between 2005-2013

• M&A:

  • Bayer AG (BAYRY) divests its Environmental Science Professional Business to Cinven for $2.6 bln

• Syndicate:

  • Inari (NARI) announces 2.0 mln share underwritten public offering

  • Indonesia Energy (INDO) files for 9,100,574 ordinary share offering by selling shareholders

• IPOs:

  • Expected to Price:

    • No IPOs expected to price.

Gapping Up/Down

• Gapping up:

  • CRWD +11.3%, MQ +11.1%, AMZN +5.8%, DCBO +5%, SPIR +3.7%, ESTE +3.1%, SONY +2.6%, BZUN +2.5%, LU +2.3%, EGY +2.3%, JHG +2%, NTRA +1.9%, KRO+1.7%, CMRE +1.3%, RXDX +1%

• Gapping down:

  • ASAN -24%, FOSL -14.2%, BASE -13.3%, MGY-7.3%, BEKE -7.1%, JD -6.4%, HRZN -5.8%, GTBP-4.2%, NIO -3.9%, AB -2%, INDO -1.6%, JCI -1%, COST -1%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

• Upgrades

  • Alpha Metallurgical Resources (AMR) upgraded to Buy from Neutral at B. Riley Securities; tgt raised to $155

  • Arista Networks (ANET) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $160

  • CrowdStrike (CRWD) upgraded to Buy from Neutral at BTIG Research; tgt $257

  • Essential Utilities (WTRG) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $53

  • Givaudan SA (GVDNY) upgraded to Hold from Sell at Societe Generale

  • Hormel Foods (HRL) upgraded to Buy from Hold at Argus; tgt $57

  • IDEAYA Biosciences (IDYA) upgraded to Buy from Hold at Stifel; tgt lowered to $20

  • KB Home (KBH) upgraded to Overweight from Neutral at JP Morgan; tgt lowered to $51

  • NetApp (NTAP) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $102

  • Pilgrim's Pride (PPC) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $30

  • Toll Brothers (TOL) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $58
    

• Downgrades:

  • Asana (ASAN) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $32

  • Cisco (CSCO) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $65

  • Coterra Energy (CTRA) downgraded to Neutral from Overweight at Piper Sandler; tgt raised to $26

  • Green Brick Partners (GRBK) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $20

  • Hess Midstream Partners (HESM) downgraded to Equal Weight from Overweight at Wells Fargo; tgt $33

  • Huntington Ingalls (HII) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $215

  • McDonald's (MCD) downgraded to Neutral from Buy at Northcoast

  • Meritage (MTH) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $111

  • Mettler-Toledo (MTD) downgraded to Sell from Neutral at Goldman; tgt $1240

  • Pfizer (PFE) upgraded to Buy from Neutral at Independent Research; tgt $54

  • SLR Capital Partners (SLRC) downgraded to Neutral from Buy at Compass Point; tgt $20

  • Walt Disney (DIS) downgraded to Neutral from Overweight at Atlantic Equities; tgt lowered to $172

• Others:

  • Avista (AVA) initiated with a Neutral at Mizuho; tgt $47

  • C4 Therapeutics (CCCC) initiated with an Overweight at JP Morgan; tgt $43

  • Canadian Nat'l Rail (CNI) resumed with a Neutral at JP Morgan

  • Canadian Pacific (CP) resumed with an Overweight at JP Morgan, added to U.S. Analyst Focus List

  • Eli Lilly (LLY) initiated with an Outperform at Daiwa Securities; tgt $286

  • Esperion Therapeutics (ESPR) initiated with a Buy at H.C. Wainwright; tgt $22

  • Franklin BSP Realty Trust (FBRT) resumed with a Mkt Outperform at JMP Securities; tgt $15

  • Hims & Hers Health (HIMS) initiated with a Hold at Deutsche Bank; tgt $7

  • IdaCorp (IDA) initiated with a Buy at Mizuho; tgt $119

  • Kymera Therapeutics (KYMR) initiated with a Neutral at JP Morgan; tgt $44

  • NorthWestern (NWE) initiated with a Neutral at Mizuho; tgt $62

  • Verrica Pharmaceuticals (VRCA) initiated with a Buy at Brookline; tgt $20

Upcoming Events:

• Econ Data:

  • 08:30 ET: CPI for Feb (Briefing.comConsensus 0.8%; Prior 0.6%)

  • 08:30 ET: Core CPI for Feb (Briefing.comConsensus 0.5%; Prior 0.6%)

  • 08:30 ET: Initial Claims for March 5 (Briefing.comConsensus 220K; Prior 215K)

  • 08:30 ET: Continuing Claims for Feb 28 (Briefing.comConsensus NA; Prior 1476K)

  • 10:30 ET: EIA Natural Gas Inventories for March 5 (Briefing.comConsensus NA; Prior -139 bcf)

  • 14:00 ET: Treasury Budget for Feb (Briefing.comConsensus NA; Prior $118.7B)

• Earnings:

  • Monday (Mar 7)

    • Morning: CIEN SQSP

    • Afternoon: MASS AVDX ROVR TDUP

• Tuesday (Mar 8)

  • Morning: DM DKS OLPX WOOF STVN

  • Afternoon: ABM BMBL CASY CRCT DV FIGS GWRE MDB SFIX SUMO WTI YEXT

• Wednesday (Mar 9)

  • Morning: CPB DSEY EBIX KFY OTLY REVG PLCE THO UNFI VRA VERX

  • Afternoon: ASAN CVGW BASE CRWD FNV BEKE MQ

• Thursday (Mar 10)

  • Morning: BZUN CLVT DCBO AG GCO JD LTH PTLO THRY UP

  • Afternoon: AOUT BLNK CMTL DOCU LOCO LZ LFST MLNK AVO FIZZ ORCL RRGB RIVN SHLS ULTA WPM ZUMZ

• Friday (Mar 11)

  • Morning: GENI PLXP

  • Afternoon: BLDP

Asia & Europe detail:

Asia: Nikkei +3.9%, Hang Seng +1.3%, Shanghai Composite +1.2%

Equity indices in the Asia-Pacific region ended Thursday on a higher note, taking the lead from Wednesday'srally on Wall Street. Optimism built ahead of the meeting between foreign ministers from Russia and Ukraine but reports from this morning indicate that no progress was made. Japan's Prime Minister Kishida said that a "widespread" effect is being seen from rising prices and that a coordinated government response is needed. Conservative challenger Yoon Suk-yeol won South Korea's presidency. Australia is planning to increase defense spending.

• In economic data:

  • Japan's February PPI 0.8% m/m (expected 0.6%; last 0.8%); 9.3% yr/yr (expected 8.7%; last 8.9%)

  • Australia's January Building Approvals -27.9% m/m, as expected (last 8.2%) and Pending House Approvals -17.5% m/m, as expected (last -1.8%)

  • New Zealand's February Electronic Card Retail Sales -7.8% m/m (last 3.0%); 1.1% yr/yr (last 5.7%)

---Equity Markets---

• Japan's Nikkei: +3.9%

• Hong Kong's Hang Seng: +1.3%

• China's Shanghai Composite: +1.2%

• India's Sensex: +1.5%

• South Korea's Kospi: +2.2%

• Australia's ASX All Ordinaries: +1.1%

---FX---

• USD/JPY: +0.2% to 115.96

• USD/CNH: +0.1% to 6.3288

• USD/INR: UNCH at 76.35

Europe: DAX -2.7%, FTSE -1.2%, CAC -2.3%

Major European indices trade on a lower not, giving back a portion of yesterday's big gains. The meeting between foreign ministers from Russia and Ukraine did not yield concrete results, though Russian officials expressed willingness to continue talking. The Russian government has reportedly banned exports of technology, telecom, medical, auto, agricultural, and electrical equipment through the end of the year. Spain's budget minister said that taxes on fuel will be cut if there is no action at the EU level. The European Central Bank will release its latest policy statement in 15 minutes, but it is not expected to call for any significant policy changes.

• In economic data:

  • Italy's January PPI 9.7% m/m (last 1.1%); 32.9% yr/yr (last 22.8%)

---Equity Markets---

• STOXX Europe 600: -1.8%

• Germany's DAX: -2.7%

• U.K.'s FTSE 100: -1.2%

• France's CAC 40: -2.3%

• Italy's FTSE MIB: -3.0%

• Spain's IBEX 35: -1.2%

---FX---

• EUR/USD: -0.3% to 1.1044

• GBP/USD: -0.1% to 1.3165

• USD/CHF: +0.1% to 0.9267