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Writer's pictureSimon Charles Hooper

15/11/21 Briefing

The S&P 500 futures trade 16 points, or 0.3%, above fair value in a positive start to the week. The S&P 500 enters the session down 0.8% from its all-time high after snapping a five-week winning streak last week.

With the earnings season winding down, political headlines have captured a lot of attention this morning: President Biden will meet with Chinese President Xi in a virtual meeting tonight, the Senate might not vote on the reconciliation bill until next month, there are growing calls for the U.S. to release oil from strategic reserves, and President Biden will sign the bipartisan infrastructure bill today.

The economic calendar is looking light today, with the data being limited to the Empire State Manufacturing Survey for November (Briefing.comconsensus 20.3) at 8:30 a.m. ET. The key report this week will be Retail Sales for October, which will be released tomorrow.

U.S. Treasury yields have edged lower after rising noticeably last week. The 2-yr yield is down one basis point to 0.51%, and the 10-yr yield is down two basis points to 1.56%. The U.S. Dollar Index is down 0.1% to 95.05. WTI crude futures are down 1.4%, or $1.12, to $79.67/bbl.

In U.S. Corporate news:

  • Boeing (BA 227.66, +6.70): +3.0% after receiving an order for two Boeing 777 freighters from Emirates. On a related note, Airbus foresees demand for 39,000 new passenger and freighter aircraft by 2040.

  • Tyson Foods (TSN 82.26, +1.03): +1.3% after beating EPS estimates and guiding FY22 revs above consensus.

  • Dollar Tree (DLTR 121.17, +8.9): +7.2% after activist investor Mantle Ridge LP took a $1.8 billion stake in the company. The stock was upgraded to Buy from Hold at Deutsche Bank.

  • CoreSite Realty Corporation (COR 170.00, +3.41): +2.1% after agreeing to be acquired by American Tower (AMT 273.50, +1.40, +0.5%) for $170.00/share in cash. The total value of the transaction is worth approximately $10.1 billion.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: +0.6% Hong Kong's Hang Seng: +0.3% China's Shanghai Composite: -0.2% India's Sensex: +0.1% South Korea's Kospi: +1.0% Australia's ASX All Ordinaries: +0.4%.

    • In economic data:

      • China's October Retail Sales 4.9% yr/yr (expected 3.5%; last 4.4%), October Industrial Production 3.5% yr/yr (expected 3.0%; last 3.1%), October Fixed Asset Investment 6.1% yr/yr (expected 6.2%; last 7.3%), and October House Prices 3.4% yr/yr (last 3.8%). October Unemployment Rate 4.9% (last 4.9%) and October FDI 17.8% YTD (last 19.6%)

      • Japan's Q3 GDP -0.8% qtr/qtr (expected -0.2%; last 0.4%); -3.0% yr/yr (expected -0.8%; last 1.5%). Q3 GDP Capital Expenditure -3.8% qtr/qtr (expected -0.6%; last 2.2%), Q3 GDP External Demand 0.1% qtr/qtr (expected -0.1%; last -0.3%), and Q3 Private Consumption -1.1% qtr/qtr (expected -0.5%; last 0.9%).

      • September Industrial Production -5.4% m/m (last -5.4%) and Capacity Utilization -7.3% m/m (last -3.9%)

      • South Korea's October trade surplus $1.78 bln. October Imports 37.7% yr/yr (last 37.8%) and October Exports 24.1% yr/yr (last 24.0%)

      • India's October WPI Inflation 12.54% yr/yr (expected 10.90%; last 10.66%)

      • New Zealand's September External Migration & Visitors -58.1% yr/yr (last -44.0%)


  • In news:

    • Japan's Economy Minister said that the Japanese economy is continuing to expand, but at a slowing pace, which indicates the need for more policy support.

    • Several property developers in China announced plans to raise cash.

    • China's General Secretary Xi is expected speak with President Biden via a video call today.



  • Major European indices trade near their flat lines. STOXX Europe 600: +0.1% Germany's DAX: +0.1% U.K.'s FTSE 100: -0.2% France's CAC 40: +0.5% Italy's FTSE MIB: +0.2% Spain's IBEX 35: +0.1%.

    • In economic data:

      • Eurozone's September trade surplus EUR7.30 bln (expected surplus of EUR6.50 bln; last surplus of EUR3.50 bln)


  • In news:

    • European Central Bank President Lagarde repeated her view that inflation will moderate next year but acknowledged that it will take longer than previously expected.

    • Airbus received an order for 255 new jets from a private equity firm that owns several carriers.

    • BBVA is taking steps to acquire the rest of Turkish Garanti Bank.



U.S. equity futures:

  • S&P 500 Futures: +11 @ 4,694

  • DJIA Futures: +115 @ 36,215

  • Nasdaq 100 Futures: +39 @ 16,239

Overseas:

  • Europe: DAX +0.1%, FTSE -0.2%, CAC +0.5%

  • Asia: Nikkei +0.6%, Hang Seng +0.3%, Shanghai Composite -0.2%

Commodities:

  • Crude Oil -1.14 @ 78.55

  • Nat Gas -0.042 @ 4.749

  • Gold -4.35 @ 1864.15

  • Silver -0.113 @ 25.233

  • Copper -0.0052 @ 4.4443

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

    • Aecom Tech (ACM) beats by $0.04, reports revs in-line; guides FY22 EPS in-line

    • Atlanticus (ATLC) reports Q3 results, revs up 41.2% yr/yr

    • Clear Secure (YOU) misses by $0.05, beats on revs; guides Q4 revs above consensus

    • Ginkgo Bioworks (DNA) misses on top and bottom lines

    • HeadHunter Group (HHR) beats on revs

    • Jasper Therapeutics (JSPR) reports Q3 (Sep) results; cash position expected to be sufficient through mid-2023

    • Lithium Americas (LAC) misses by CAD 0.04

    • Oatly Group AB (OTLY) beats by $0.03, misses on revs; provides FY21 guidance

    • Thoughtworks (TWKS) reports Q3 results; revs rise 45%; provides Q4 outlook

    • Tyson Foods (TSN) beats by $0.08, reports revs in-line; guides FY22 revs above consensus

    • Warner Music Group (WMG) reports Q4 (Sep) results, beats on revs

    • WeWork (WE) reports Q3 results (no estimates)


  • General News:

    • President Biden will sign $1.2 trillion bipartisan infrastructure bill at 15:00 ETper White House schedule

    • Portions of CBO score on reconciliation bill will be released this week, but House moderates want full score before voting this week. The bill will likely have to wait weeks for a Senate vote if it passes the House. Senate Majority Leader Chuck Schumer (D-NY) says the Senate will likely have to pass another continuing resolution to fund government. He also said Senate will possibly have to address debt limit next month as well, according to Politico

    • US Appeals Court keeps block in place against vaccine mandate for companies with 100 or more employees. The court said lawsuits challenging mandate were likely to succeed and banned the federal government from moving ahead with the mandate, according to the New York Times

    • Treasury Secretary Janet Yellen says labor shortages have to do with coronavirus and that inflation will get better in the second half of year. She said reducing tariffs in "some areas" is under consideration. She said Fed Chair Jerome Powell has done a "good job", but there are "range of candidates" for Fed Chair, according to CBS News

    • Republican congressional candidates have the largest lead in midterm election vote preference polling in 40 years, according to ABC News

    • Dispute among federal agencies is delaying rollout of 5G services, according to the Wall Street Journal

    • Senate aiming to attach $250 bln semiconductor competitiveness legislation to national defense authorization act, according to Bloomberg

    • Senate Majority Leader Charles Schumer (D-NY) wants President Biden to release oil from strategic reserve, according to Bloomberg

    • President Biden will aim to ease tensions with Chinese President Xi in meeting tonight (at 20:00 ET); no solid outcomes are anticipated, according to the Wall Street Journal

    • Japan and US agree to start talks regarding steel and aluminum tariffs, according to Reuters

    • White House issues fact sheet from Cop26 climate conference

    • 89bio (ETNB) Presents New Data from Phase 1b/2a NASH Study Showing BIO89-100 Reduces Spleen Volume

    • Airbus (EADSY) foresees demand for 39,000 new passenger & freighter aircraft by 2040

    • Alnylam (ALNY) presents new data for Zilebesiran, an investigational RNAi Therapeutic for the treatment of hypertension, at the American Heart Association Scientific Sessions 2021

    • Apple (AAPL) will require states to maintain the systems needed for digital identification cards, according to CNBC

    • Arrowhead (ARWR) presents new clinical data on ARO-APOC3 at AHA 2021

    • Atlas Technical Consultants (ATCX) was selected for a $15 million contract to provide design quality assurance for the I-35 Northeast Expansion (NEX) project

    • BeiGene (BGNE) receives approval of BRUKINSA in Saudi Arabia

    • Bioventus (BVS) announced that Greg Anglum is transitioning from his role as Senior Vice President and Chief Financial Officer (CFO) to pursue other career opportunities

    • Bitfarms (BITF) receives and installs 1,500 Bitmain S19j Pro Miners

    • Boeing (BA) receives order for two Boeing 777 freighters from Emirates

    • Boeing (BA): SAUDIA selected Boeing for a suite of services to improve their 787 Dreamliner and 777 fleets' operational efficiency through digital analytics, and to modify their 777 cabin interiors

    • Boeing (BA) is optimistic about 737 Max orders in China, according to Bloomberg

    • Citrix Systems' (CTXS) Board approves a restructuring program whereby certain positions will be terminated; expects $130-240 mln in charges associated with the program

    • CMC Materials (CCMP) announces that Scott D. Beamer has resigned as Vice President and Chief Financial Officer of the company

    • Digihost Technology Inc. (DGHI) announces bitcoin production update

    • Discover Financial Services (DFS) reports October card metrics

    • Dollar Tree (DLTR): Activist investor Mantle Ridge LP has a $1.8 bln stake and plans to push co to take action, according to the Wall Street Journal

    • Duke Energy (DUK) enters agreement with Elliott Investment Management; Idalene Kesner, Ted Craver named new independent director

    • Dynatrace (DT) CEO and Director, John Van Siclen, plans to retire effective December 13, 2021

    • Enact Holdings (ACT) declares a special cash dividend of $1.23/share

    • Eton Pharmaceuticals (ETON) entered into a multi-year agreement with Tolmar Pharmaceuticals

    • EyePoint Pharmaceuticals (EYPT) reports interim safety and efficacy data from Phase 1 DAVIO

    • Frontier Group Holdings (ULCC) orders 91 additional A321neo Aircraft

    • GlycoMimetics (GLYC) completes enrollment for Phase 3 trial for uproleselan

    • InflaRx (IFRX) announces positive data from phase II IXCHANGE study with vilobelimab in anca-associated vasculitis

    • Iovance Biotherapeutics (IOVA) announces clinical data for Lifileucel in combination with Pembrolizumab in advanced cancers at Society for Immunotherapy of Cancer (SITC) Annual Meeting

    • Lexicon's (LXRX) Sotagliflozin Demonstrates Benefits in Heart Failure and Blood Glucose Control Across the Full Range of Kidney Function in New Analysis of Clinical Data

    • Masimo (MASI): New Study finds that use of Masimo SedLine PSi and DSA may significantly reduce postoperative delirium

    • Moderna (MRNA) announces interim data on mRNA-2752 (Triplet) study; was tolerated and elicited evidence of anti-tumor activity

    • New Found Gold Corp. (NFGC) entered into three royalty purchase agreements

    • New Oriental Education & Technology (EDU) provides business update

    • NextCure (NXTC) and collaborators provide clinical and research updates on NC318 and NC410 candidates at Society for Immunotherapy of Cancer Annual Meeting

    • NovoCure (NVCR): 2-THE-TOP phase 2 trial reports positive top-line results in newly diagnosed glioblastoma

    • Palantir Technologies (PLTR) and BigBear.ai announce strategic partnership, combining AI-powered products with next generation operating platform

    • Protagonist Therapeutics (PTGX) Announces Positive Phase 2a Data Supporting the Potential Use of Rusfertide as a First-in-Class Therapy in Hereditary Hemochromatosis

    • RedHill Biopharma (RDHL): Recruitment complete for Part A of Phase 2/3 for RHB-107 (upamostat); top line results expected in 1Q22

    • Regeneron Pharma (REGN) authorizes $3 bln share repurchase program

    • REGENXBIO (RGNX) shows positive interim data from RGX-314 trials at AAO 2021

    • Rocket Pharmaceuticals (RCKT) reports "positive" upgrades from RP-A501 trial for Danon Disease

    • Royal Dutch Shell (RDS.A) shareholders are asked to vote on a special resolution to amend the Royal Dutch Shell plc Articles of Association to allow the simplification of the company's structure

    • Rhythm Pharmaceuticals (RYTM) announces that the U.S. Food and Drug Administration has accepted for filing the company's supplemental New Drug Application for IMCIVREE for patients with Bardet-Biedl syndrome or Alstrm syndrome

    • Six Flags (SIX) announced that Selim Bassoul, formerly the Non-Executive Chairman of the Board, has been appointed Chief Executive Officer and President of Six Flags

    • Southwest Gas (SWX): Carl Icahn plans to name ten directors to board of Southwest Gas today, according to Bloomberg

    • TAL Education (TAL) to stop offering academic subjects to K thru 9 students in China by fiscal year-end; will have a substantial adverse impact on revenue

    • Tesla (TSLA) CEO Elon Musk suggests he could sell more stock after Twitter disagreements with Senator Bernie Sanders

    • Textron (TXT) receives $143 mln contract from Royal Thai Air Force

    • Veracyte (VCYT) announces new data on immuno-oncology offerings presented at SITC 2021

    • Viridian Therapeutics (VRDN) announces the U.S. Food and Drug Administration clearance of its Investigational New Drug application for VRDN-001


  • M&A:

    • American Tower (AMT) and CoreSite Realty Corporation (COR) have entered into a definitive agreement through which American Tower will acquire CoreSite for $170.00/share in cash

    • CyrusOne (CONE) to be acquired by KKR and GIP for $90.50 per share in an all-cash transaction valued at approximately $15 billion

    • Digimarc (DMRC) to acquire cloud software firm EVRYTHNG Limited in a stock deal

    • Group 1 Auto (GPI) divests Brazil operations

    • Materialise (MTLS) to acquire Link3D, an additive workflow and digital manufacturing software company for US$ 33.50 mln

    • NVIDIA (NVDA): UK will order phase 2 investigation this week regarding Nvidia acquisition of Arm Holdings (ARMH), according to Sunday Times UK

    • S&P Global (SPGI) and IHS Markit (INFO) announces deal with DOJ to allow combination to proceed

    • Stewart Info (STC) to acquire PropStream, a leader in residential real estate data and analytics

    • Village Farms (VFF) acquires 70% interest in ROSE LifeScience


  • Syndicate:

    • Agenus (AGEN) files for 650,000 share common stock offering by selling shareholders

    • Array Tech (ARRY) files for 7.875 mln share common stock offering by selling shareholders

    • DigitalOcean (DOCN) proposes offering of $900 mln of convertible senior notes due 2026

    • Laird Superfood (LSF) files for $100 mln mixed securities shelf offering

    • MediaAlpha (MAX) files for 34,935,871 share common stock offering by selling shareholders

    • Milestone Pharmaceuticals (MIST) files for $250 mln mixed securities shelf offering

    • NextDecade (NEXT) files for 2,175,856 share common stock offering by selling shareholders

    • Omnicom (OMC) files mixed securities shelf offering

    • Prelude Therapeutics (PRLD) files for $400 mln mixed securities shelf offering; also files for 31,574,631 share common stock offering by selling shareholders

    • TransAct Tech (TACT) files for $50 mln mixed securities shelf offering

    • Whole Earth Brands (FREE) files for $250 mln mixed securities shelf offering


  • IPOs:

    • Expected to Trade:

      • Braze (Nasdaq: BRZE): The customer engagement platform that powers customer-centric interactions between consumers and brands is expected to price its 8.0 M share IPO between $55-$60.

      • Iris Energy (Nasdaq: IREN): The builder, owner and operator of data center and electrical infrastructure for the mining of Bitcoin primarily powered by renewable energy is expected to price its 8.3 M share IPO between $25$27.

      • KinderCare Learning Center (NYSE: KLC): The largest private provider of early childhood education and care services in the United States is expected to price its 25.8 M share IPO between $18-$21.

      • Sono Group (Nasdaq: SEV): The manufacturer of solar electric vehicles is expected to price its 10.0 M share IPO between $14-$16.

      • Sweetgreen (NYSE: SG): The restaurant chain focused on healthier food and environmental impact is expected to price its 12.5 M share IPO between $23-$25.

      • UserTesting (NYSE: USER): The pioneer of a video-first, enterprise-grade SaaS platform that enables organizations to see and hear the experiences of people as they engage with products, designs, apps, processes, concepts, or brands, is expected to price its 14.2 M share IPO between $15-$17.



Gapping Up/Down

  • Gapping up:

    • EYPT +42.8%, MESO +14.8%, DLTR +7%, LXRX+5.9%, JSPR +5.2%, ETON +4.6%, ATLC +4.6%, IOVA+4.4%, OTLK +4.4%, ULCC +4.3%, CLOV +3.1%, BA+2.6%, PNM +1.9%, NFGC +1.8%, NXTC +1.6%, RDS.A +1.6%, M +1.6%, CPNG +1.5%, TWKS +1.5%, JOBY +1.3%, REGN +0.8%, FSR +0.7%


  • Gapping down:

    • PRLD -5.9%, LIVN -3.8%, TAL -3.4%, TSLA -2.2%, NEXT -1.3%, EDU -0.9%, AADI -0.9%, ARRY -0.7%, OPEN -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

    • Amicus Therapeutics (FOLD) upgraded to Buy from Hold at Stifel; tgt raised to $16

    • Blink Charging (BLNK) upgraded to Buy from Neutral at H.C. Wainwright; tgt $50

    • Caribou Biosciences (CRBU) upgraded to Buy from Neutral at Citigroup; tgt $27

    • Chevron (CVX) upgraded to Buy from Neutral at UBS; tgt $125

    • CMC Materials (CCMP) upgraded to Buy from Neutral at Goldman; tgt raised to $192

    • Dollar Tree (DLTR) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $148

    • EngageSmart (ESMT) upgraded to Buy from Neutral at BofA Securities; tgt $35

    • Fluor (FLR) upgraded to Neutral from Underperform at BofA Securities; tgt $24

    • Graphic Packaging (GPK) upgraded to Buy from Neutral at UBS; tgt $25

    • Hanmi Financial (HAFC) upgraded to Buy from Neutral at DA Davidson

    • Hope Bancorp (HOPE) upgraded to Buy from Neutral at DA Davidson


  • Downgrades:

    • Acutus Medical (AFIB) downgraded to Underweight from Neutral at JP Morgan

    • Akamai Tech (AKAM) downgraded to Perform from Outperform at Oppenheimer

    • BioXcel Therapeutics (BTAI) downgraded to Sell from Neutral at Goldman; tgt lowered to $24

    • EVgo Inc. (EVGO) downgraded to Neutral from Outperform at Credit Suisse; tgt raised to $17

    • National Vision (EYE) downgraded to Neutral from Buy at Goldman; tgt lowered to $57

    • TechnipFMC (FTI) downgraded to Hold from Buy at Societe Generale; tgt $7.57


  • Others:

    • AvidXchange (AVDX) initiated with a Neutral at BofA Securities; tgt $28

    • ChargePoint (CHPT) initiated with a Neutral at JP Morgan; tgt $26

    • CrowdStrike (CRWD) initiated with an Underweight at Morgan Stanley; tgt $247

    • CytomX Therapeutics (CTMX) initiated with a Buy at BTIG Research; tgt $16

    • Decibel Therapeutics (DBTX) initiated with a Buy at H.C. Wainwright; tgt $23

    • Kyndryl (KD) initiated with an In-line at Evercore ISI; tgt $22


Upcoming Events:

  • Econ Data:

    • 08:30 ET: Empire State Manufacturing for Nov (Briefing.comConsensus 20.3; Prior 19.8)


  • Earnings:

    • Monday (Nov 15)

      • Morning: ACM HHR OTLY TSN WMG

      • Afternoon: AAP AXON CSPR CMP DM JJSF LCID PLBY RXT COOK


  • Tuesday (Nov 16)

    • Morning: ARMK DOYU DAVA AQUA GDS GFF HD NTES SE TDG WMT

    • Afternoon: AVDX DLO DLB LZB STNE VREX


  • Wednesday (Nov 17)

    • Morning: BIDU BILI BV IQ LOW MANU MTOR TGT TJX

    • Afternoon: BBWI CSCO CPA CPRT HP HI KLIC NVDA SONO TTEK VSCO ZTO


  • Thursday (Nov 18)

    • Morning: BABA ATKR ATHM AZEK BERY BJ BRC CSIQ JD KSS M MMS NJR WOOF PLCE VIPS

    • Afternoon: AMAT BECN CAL ESE FTCH GLOB INTU NUAN PANW POST ROST UGI WSM WWD WDAY


  • Friday (Nov 19)

    • Morning: FL



Asia & Europe detail:

Asia: Nikkei +0.6%, Hang Seng +0.3%, Shanghai Composite -0.2%

Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Economy Minister said that the Japanese economy is continuing to expand, but at a slowing pace, which indicates the need for more policy support. Several property developers in China announced plans to raise cash. China's General Secretary Xi is expected speak with President Biden via a video call today.

  • In economic data:

    • China's October Retail Sales 4.9% yr/yr (expected 3.5%; last 4.4%), October Industrial Production 3.5% yr/yr (expected 3.0%; last 3.1%), October Fixed Asset Investment 6.1% yr/yr (expected 6.2%; last 7.3%), and October House Prices 3.4% yr/yr (last 3.8%). October Unemployment Rate 4.9% (last 4.9%) and October FDI 17.8% YTD (last 19.6%)

    • Japan's Q3 GDP -0.8% qtr/qtr (expected -0.2%; last 0.4%); -3.0% yr/yr (expected -0.8%; last 1.5%). Q3 GDP Capital Expenditure -3.8% qtr/qtr (expected -0.6%; last 2.2%), Q3 GDP External Demand 0.1% qtr/qtr (expected -0.1%; last -0.3%), and Q3 Private Consumption -1.1% qtr/qtr (expected -0.5%; last 0.9%). September Industrial Production -5.4% m/m (last -5.4%) and Capacity Utilization -7.3% m/m (last -3.9%)

    • South Korea's October trade surplus $1.78 bln. October Imports 37.7% yr/yr (last 37.8%) and October Exports 24.1% yr/yr (last 24.0%)

    • India's October WPI Inflation 12.54% yr/yr (expected 10.90%; last 10.66%)

    • New Zealand's September External Migration & Visitors -58.1% yr/yr (last -44.0%)


---Equity Markets---

  • Japan's Nikkei: +0.6%

  • Hong Kong's Hang Seng: +0.3%

  • China's Shanghai Composite: -0.2%

  • India's Sensex: +0.1%

  • South Korea's Kospi: +1.0%

  • Australia's ASX All Ordinaries: +0.4%

---FX---

  • USD/JPY: UNCH at 113.82

  • USD/CNH: UNCH at 6.3792

  • USD/INR: +0.1% to 74.42

Europe: DAX +0.1%, FTSE -0.2%, CAC +0.5%

Major European indices trade near their flat lines. European Central Bank President Lagarde repeated her view that inflation will moderate next year but acknowledged that it will take longer than previously expected. Airbus received an order for 255 new jets from a private equity firm that owns several carriers. BBVA is taking steps to acquire the rest of Turkish Garanti Bank.

  • In economic data:

    • Eurozone's September trade surplus EUR7.30 bln (expected surplus of EUR6.50 bln; last surplus of EUR3.50 bln)


---Equity Markets---

  • STOXX Europe 600: +0.1%

  • Germany's DAX: +0.1%

  • U.K.'s FTSE 100: -0.2%

  • France's CAC 40: +0.5%

  • Italy's FTSE MIB: +0.2%

  • Spain's IBEX 35: +0.1%

---FX---

  • EUR/USD: +0.1% to 1.1450

  • GBP/USD: +0.1% to 1.3429

  • USD/CHF: -0.1% to 0.9200


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