The S&P 500 futures are up 37 points and are trading 1.0% above fair value. The Nasdaq 100 futures are up 145 points and are trading 1.2% above fair value. The Dow Jones Industrial Average futures are up 327 points and are trading 1.0% above fair value.
The futures for the major indices are indicating a modestly higher open to follow through with Friday's gains. There's relatively positive central bank news in the mix this morning. People's Bank of China Governor Yi Gang says the bank will step up with stronger support for China's struggling economy. Also, the WSJ noted that the Fed is likely to hike 75 basis points at its next meeting, versus a feared 100 basis point rate hike.
Other factors indicating a more risk-on tone are the rise in oil prices and strength in cryptocurrencies. WTI crude oil futures are back near the $100.00/bbl level, up 1.0% to $98.58/bbl currently. Bitcoin is up 3.4% to $22,063 and Ethereum is up 9.4% to $1,472.24.
The 2-yr Treasury note yield is up two basis points 3.15% and the 10-yr note yield is up two basis points to 2.95%.
In corporate news:
Bank of America (BAC 32.12, -0.13, -0.4%): Bank of America misses by $0.02, reports revs in-line
Synchrony Financial (SYF 32.66, +1.16, +3.7%): Synchrony Financial beats by $0.22
Boeing (BA 153.85, +6.11, +4.1%): Delta Air Lines to modernize single-aisle fleet with up to 130 Boeing 737 MAX jets; and the company is very close to resuming 787 deliveries, according to The Wall Street Journal.
Goldman Sachs (GS 303.50, +9.63, +3.3%): Goldman Sachs beats by $1.12, beats on revs; approves 25% increase in quarterly dividend to $2.50/share
Reviewing overnight developments:
Equity indices in the Asia-Pacific region began the week on a higher note while Japan's Nikkei was closed for Marine Day. Japan's Nikkei: CLOSED, Hong Kong's Hang Seng: +2.7%, China's Shanghai Composite: +1.6%, India's Sensex: +1.4%, South Korea's Kospi: +1.9%, Australia's ASX All Ordinaries: +1.3%.
In economic data:
New Zealand's Q2 CPI 1.7% qtr/qtr (expected 1.5%; last 1.8%); 7.3% yr/yr (expected 7.1%; last 6.9%)
Singapore's June trade surplus SGD4.494 bln (last surplus of SGD3.013 bln). June non-oil exports 3.7% m/m (expected 2.3%; last 2.8%); 9.0% yr/yr (expected 6.7%; last 12.0%)
In news:
China extended lockdown measures in some areas.
New Zealand's Q2 CPI increased at its fastest yr/yr pace in more than 30 years.
The Reserve Bank of New Zealand announced a new standing repurchase facility after short-term rates slipped below the official cash rate.
South Korea's President Yoon will meet with U.S. Treasury Secretary Yellen tomorrow.
Major European indices trade in the green. STOXX Europe 600: +1.3%, Germany's DAX: +1.3%, U.K.'s FTSE 100: +1.3%, France's CAC 40: +1.5%, Italy's FTSE MIB: +1.5%, Spain's IBEX 35: +1.5%.
In economic data:
Italy's May trade deficit EUR12 mln (last deficit of EUR3.639 bln)
Spain's May trade deficit EUR4.76 bln (last deficit of EUR6.40 bln)
In news:
The U.K.'s conservative party leadership contest will continue today.
Italy's Prime Minister Draghi is reportedly still intent on resigning in the coming days.
Moody's affirmed Spain's Baa1 rating with a Stable outlook.
Bank of England policymaker Saunders said that more monetary tightening is likely to take place in the U.K.
U.S. equity futures:
S&P 500 Futures: +37 @ 3,900
DJIA Futures: +327 @ 31,615
Nasdaq 100 Futures: +145 @ 12,129
Overseas:
Europe: DAX +1.3%, FTSE +1.3%, CAC +1.5%
Asia: Nikkei closed for holiday, Hang Seng +2.7%, Shanghai Composite +1.6%
Commodities:
Crude Oil +0.98 @ 98.57
Nat Gas +0.169 @ 7.095
Gold +8.60 @ 1712.20
Silver +0.156 @ 18.750
Copper +0.0765 @ 3.3105
U.S. Summary:
Earnings/Guidance:
Ashland (ASH) reports prelim upside Q3 results and raises guidance
Bank of America (BAC) misses by $0.02, reports revs in-line
Goldman Sachs (GS) beats by $1.12, beats on revs; approves 25% increase in quarterly dividend to $2.50/share
ODP Corporation (ODP) sees Q2 EPS above consensus; approves $600 million share repurchase authorization
Synchrony Financial (SYF) beats by $0.22
General News:
Fed preparing another 75 basis point rate increase at next meeting, leaning against a full percentage point rate increase, according to The Wall Street Journal
President Biden acknowledged that his climate change and tax increase bill is defeated following rejection from Senator Joe Manchin, according to New York Times
Russia advises troops to "further intensify" military action in Ukraine, according to New York Times
Treasury Secretary Janet Yellen believes Congressional deal will be "meaningful" regarding Obamacare subsidies and other healthcare measures, according to Bloomberg
Coronavirus cases in China rise as situation in Shanghai remains severe, according to Bloomberg
Senator John Cornyn (R-TX) says he will vote to proceed on $52 billion semiconductor manufacturing bill this week
AbbVie (ABBV) submits MAA to EMA for atogepant for the preventive treatment of migraine
Aecom Tech (ACM) selected by Arizona Department of Transportation to develop plan for the statewide deployment of electric vehicle charging stations
Air Lease (AL) announced long-term lease placements for six new Airbus (EADSY) A220-300 aircraft with TAAG Angola Airline
Apyx Medical (APYX) receives FDA 510(k) clearance for the use of Renuvion
Boeing (BA) and ANA Holdings (ALNPY) formalized order of 20 737-8 airplanes
Boeing (BA): Delta Air Lines (DAL) to modernize single-aisle fleet with up to 130 Boeing (BA) 737 MAX jets
Boeing (BA) very close to resuming 787 deliveries, according to The Wall Street Journal
Franco-Nevada (FNV) announces $352.5 million financing package with G mining ventures on the Tocantinzinho Gold Project
Kohl's (KSS) CTO steps down, names Siobhn Mc Feeney as CTO
J.M. Smucker (SJM) increases its quarterly dividend 3% to $1.02/share
Mastercard (MA) and D-Wave Systems announced a multi-year strategic alliance to champion the acceleration and adoption of quantum computing solutions
Red Rock Resorts (RRR) decided to permanently close its Texas Station, Fiesta Rancho, and Fiesta Henderson properties, which have been closed since the beginning of the pandemic
Starbucks (SBUX) is not selling UK unit, according to Reuters
Suncor Energy (SU) enters into agreement with Elliott Investment Management
Walt Disney (DIS): Hulu is now company's fastest-growing streaming service, helped by new content in attempt to attract wider variety of viewers, according to The Wall Street Journal
M&A:
Evoqua Water (AQUA) has acquired privately-held EPICOR, Inc.; financial terms were not disclosed
Fresh Del Monte Produce (FDP): I Squared Capital mulling partnership or acquisition, according to Bloomberg
Precision Drilling (PDS) to acquire the well servicing business and associated rentals assets of High Arctic Energy Services for $38.2 mln
Primo Water (PRMW) announced that Primo Water North America, a wholly-owned subsidiary of Primo, has acquired Highland Mountain Water, located in Atlanta, Georgia; terms not disclosed
Spectrum Brands (SPB) and ASSA ABLOY extend agreement for ASSA ABLOY to acquire the HHI division of Spectrum Brands to June 30, 2023
Twitter (TWTR) in latest proxy filing unanimously recommends that shareholders support merger agreement with Elon Musk
Syndicate:
Bally's (BALY): Standard RI notifies of its election to tender 360,000 common shares in modified Dutch auction
Earthstone Energy (ESTE) files for 5,650,977 share common stock offering by selling shareholders; also files for 29,837,033 share common stock offering by selling shareholders
Funko (FNKO) files for $100 mln mixed securities shelf offering; also files for 17,318,008 share common stock offering by selling shareholders
Icahn Enterprises (IEP) files for $1.2 bln mixed securities shelf offering
Immunocore (IMCR) announces $140 million private placement financing
LendingTree (TREE) files mixed securities shelf offering
Repay Holdings (RPAY) files for $440 mln convertible note offering by selling shareholders
SoFi Technologies (SOFI) files for $1 bln mixed securities shelf offering
Vertex (VERX) files for 36,197,237 share common stock offering by selling shareholders
IPOs:
Priced to Trade:
No IPOs expected.
Gapping Up/Down
Gapping up:
QD +61.3%, ITHX +25.1%, EYES +9.5%, RYTM +4.9%, PRMW +3.6%, JD +3.5%, SYF +3.2%, KWEB +3%, BABA +2.9%, STLA +2.8%, BA +2.7%, BALY +2.6%, NVDA +2.6%, BIDU +2.4%, CRNT +2.3%, NXPI +2.1%, TCOM +2.1%, CVNA +2.1%, SMH +1.9%, AMD +1.9%, SWKS +1.9%, MU +1.8%, VOD +1.7%, QQQ +1.1%, IWM +1.1%, SPY +0.9%, DIA +0.9%, ISEE +0.9%, INTC +0.9%, STM +0.8%
Gapping down:
EVLO -5%, AL -3%, FNKO -2%, ESTE -0.7%, GSK -0.5%, TWTR -0.5%, VERX -0.5%, SOFI -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Chunghwa Telecom (CHT) upgraded to Overweight from Neutral at JP Morgan
Expensify (EXFY) upgraded to Buy from Neutral at BofA Securities; tgt raised to $25
JPMorgan Chase (JPM) upgraded to Hold from Sell at Berenberg; tgt $120
Houlihan Lokey (HLI) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt lowered to $82
Rayonier Adv. Materials (RYAM) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt lowered to $5
Sims Metal Mgmt (SMSMY) upgraded to Buy from Neutral at Citigroup
WD-40 (WDFC) upgraded to Buy from Neutral at DA Davidson; tgt $205
Yum! Brands (YUM) upgraded to Buy from Sell at Goldman; tgt raised to $135
Downgrades:
Aeva (AEVA) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $3
BlackLine (BL) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $64
Brinker (EAT) downgraded to Neutral from Buy at Goldman; tgt lowered to $28
Chipotle Mexican Grill (CMG) downgraded to Buy from Conviction Buy at Goldman; tgt lowered to $1720
Comstock (CRK) downgraded to Sell from Neutral at Goldman; tgt $12
Ellington Financial (EFC) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $14.75
Enact Holdings (ACT) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $27
AG Mortgage Investment Trust (MITT) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $8.50
Fox Corporation (FOXA) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $38
H&M (HNNMY) downgraded to Neutral from Buy at UBS
Hologic (HOLX) downgraded to Neutral from Buy at BTIG Research
IDEX Corp (IEX) downgraded to Hold from Buy at Stifel; tgt lowered to $188
Int'l Paper (IP) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $47
Janus Henderson Group (JHG) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $18
Lazard (LAZ) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $30
Lemonade (LMND) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $20
MacroGenics (MGNX) downgraded to Neutral from Outperform at SMBC Nikko; tgt $5
MFA Financial (MFA) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $12.75
Moelis (MC) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $36
New York Mortgage Trust (NYMT) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $3
Paramount Global (PARA) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $22
Radian Group (RDN) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $27
Udemy (UDMY) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $11
Others:
Absci Corporation (ABSI) initiated with a Buy at Truist; tgt $8
Altus Power (AMPS) initiated with a Neutral at JP Morgan; tgt $9
Chesapeake Energy (CHK) initiated with a Buy at Goldman; tgt $106
Clene (CLNN) initiated with a Buy at H.C. Wainwright; tgt $16
DICE Therapeutics (DICE) initiated with a Buy at H.C. Wainwright; tgt $40
Badger Meter (BMI) initiated with a Neutral at Northcoast
Delta Air Lines (DAL) placed on 90-day Positive Catalyst Watch on Citigroup
Ecolab (ECL) initiated with a Neutral at Northcoast
Franklin Electric (FELE) initiated with a Buy at Northcoast; tgt $82
Kraft Heinz (KHC) initiated with a Buy at Mizuho; tgt $48
Lindsay Corp (LNN) initiated with a Buy at Northcoast; tgt $150
Mueller Water (MWA) initiated with a Neutral at Northcoast
Nkarta (NKTX) initiated with an Outperform at SVB Leerink; tgt $30
Oyster Point Pharma (OYST) initiated with a Buy at H.C. Wainwright; tgt $20
Pentair (PNR) initiated with a Neutral at Northcoast
Penumbra (PEN) initiated with an Outperform at RBC Capital Mkts; tgt $195
Tesla (TSLA) added to Catalyst Call Buy List at Deutsche Bank
Tetra Tech (TTEK) initiated with a Neutral at Northcoast
Valmont (VMI) initiated with a Buy at Northcoast; tgt $300
Watts Water Tech. (WTS) initiated with a Neutral at Northcoast
Xylem (XYL) initiated with a Neutral at Northcoast
Upcoming Events:
Econ Data:
10:00 ET: July NAHB Housing Market Index (Briefing.comconsensus 66; Prior 67)
16:00 ET: May Net Long-Term TIC Flows (Prior $87.7 billion)
Earnings:
Monday (Jul 18)
Morning: BAC SCHW GS PLD SYF
Afternoon: ELS IBM MRTN
Tuesday (Jul 19)
Morning: ALLY CFG HAL HAS JNJ LMT MAN NVS SBNY SI TFC
Afternoon: CALM FULT HWC HOPE IBKR JBHT NBHC NFLX OMC PNFP UCBI
Wednesday (Jul 20)
Morning: ABT ASML BMI BKR BIIB CMA ELV FHN HCSG LAD MTB MKTX NDAQ NTRS
Afternoon: AA CNS CCK CCI CSX CVBF DFS EFX FNB FR KMI KNX LSTR LVS PACW XM REXR RLI SEIC SLG STLD TSLA UMPQ UAL VMI WTFC
Thursday (Jul 21)
Morning: AIR ABB ALK AAL T AUB AN BANC BKU BX COLB DHI DHR DPZ DOV DOW EWBC FITB FCX GATX HRI HOMB HBAN IPG IQV KEY MMC NOK NUE PPBI PM POOL DGX SASR SAP SFNC SNA SON SNV TCBI TSCO TRV TPH UNP WBS WNS
Afternoon: ASB OZK BJRI SAM COF FFBC GBCI HTH ISRG MAT PPG RHI STX SNAP SIVB THC UFPI VICR WRB WAL
Friday (Jul 22)
Morning: AXP ALV CLF FBP GNTX HCA NEE NEP RF ROP SLB SXT TWTR VZ
Afternoon: None
Asia & Europe detail:
Asia: Nikkei closed for holiday, Hang Seng +2.7%, Shanghai Composite +1.6%
Equity indices in the Asia-Pacific region began the week on a higher note while Japan's Nikkei was closed for Marine Day. China extended lockdown measures in some areas. New Zealand's Q2 CPI increased at its fastest yr/yr pace in more than 30 years. The Reserve Bank of New Zealand announced a new standing repurchase facility after short-term rates slipped below the official cash rate. South Korea's President Yoon will meet with U.S. Treasury Secretary Yellen tomorrow.
In economic data:
New Zealand's Q2 CPI 1.7% qtr/qtr (expected 1.5%; last 1.8%); 7.3% yr/yr (expected 7.1%; last 6.9%)
Singapore's June trade surplus SGD4.494 bln (last surplus of SGD3.013 bln). June non-oil exports 3.7% m/m (expected 2.3%; last 2.8%); 9.0% yr/yr (expected 6.7%; last 12.0%)
---Equity Markets---
Japan's Nikkei: CLOSED
Hong Kong's Hang Seng: +2.7%
China's Shanghai Composite: +1.6%
India's Sensex: +1.4%
South Korea's Kospi: +1.9%
Australia's ASX All Ordinaries: +1.3%
---FX---
USD/JPY: -0.2% to 138.19
USD/CNH: -0.3% to 6.7430
USD/INR: +0.2% to 79.94
Europe: DAX +1.3%, FTSE +1.3%, CAC +1.5%
Major European indices trade in the green. The U.K.'s conservative party leadership contest will continue today. Italy's Prime Minister Draghi is reportedly still intent on resigning in the coming days. Moody's affirmed Spain's Baa1 rating with a Stable outlook. Bank of England policymaker Saunders said that more monetary tightening is likely to take place in the U.K.
In economic data:
Italy's May trade deficit EUR12 mln (last deficit of EUR3.639 bln)
Spain's May trade deficit EUR4.76 bln (last deficit of EUR6.40 bln)
---Equity Markets---
STOXX Europe 600: +1.3%
Germany's DAX: +1.3%
U.K.'s FTSE 100: +1.3%
France's CAC 40: +1.5%
Italy's FTSE MIB: +1.5%
Spain's IBEX 35: +1.5%
---FX---
EUR/USD: +0.7% to 1.0156
GBP/USD: +1.0% to 1.1981
USD/CHF: +0.1% to 0.9760
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