The S&P 500 futures trade 66 points, or 1.5%, above fair value as buyers follow through on yesterday's rebound effort in front of the FOMC policy decision this afternoon. Corporate news, including earnings, have provided an added measure of support.
The FOMC policy statement will be released at 2:00 p.m. ET, and Fed Chair Powell will host a press conference at 2:30 p.m. ET. No change to policy is expected, but the Fed is expected to signal an intention to conclude asset purchases and begin hiking rates in March to rein in inflation.
There is hope that Fed Chair Powell will sound less hawkish than feared regarding the path of rate hikes this year, as well as any commentary on plans for reducing the balance sheet.
In corporate news, most companies since yesterday's close topped EPS estimates, including Microsoft (MSFT 299.00, +10.51, +3.6%), Texas Instruments (TXN 181.75, +7.79, +4.5%), and AT&T (T 26.93, +0.45, +1.7%). Apple (AAPL 163.14, +3.36, +2.1%) is up nicely amid a report from Bloomberg indicating that the iPhone was the top-selling smartphone in China in Q4 of 2021 for the first time since 2015.
Separately, Ukraine continues to downplay concerns of a Russian attack, urging everyone to "stay calm," although the U.S. is warning that an attack could be imminent, according to The New York Times. The market is receiving mixed signals on this front and will continue to monitor the situation.
The Treasury market is seeing modest selling pressure amid the positive bias in the futures market. The 2-yr yield is up two basis points to 1.04%, and the 10-yr yield is up one basis point to 1.79%. The U.S. Dollar Index is up 0.1% to 96.06. WTI crude futures are up 0.9% to $96.39/bbl.
On the data front, investors will receive the Advance International Trade in Goods, Retail Inventories, and Wholesale Inventories reports for December at 8:30 a.m. ET, followed by New Home Sales for December (Briefing.comconsensus 765,000) at 10:00 a.m. ET.
In U.S. Corporate news:
Microsoft (MSFT 299.00, +10.51): +3.6% after beating top and bottom-line estimates and guiding fiscal Q3 revenue above consensus.
Apple (AAPL 163.14, +3.36): +2.1% amid a report from Bloomberg indicating that the iPhone was the top selling smartphone in China in Q4 of 2021 for the first time since 2015.
Texas Instruments (TXN 181.75, +7.79): +4.5% after beating top and bottom-line estimates and guiding Q1 EPS and revenue above consensus.
AT&T (T 26.93, +0.45): +1.7% after beating EPS estimates, although the company guided FY22 EPS and revenue below consensus.
Boeing (BA 203.15, -0.95): -0.5% after missing top and bottom-line estimates.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the midweek session on a mixed note while markets in Australia and India were closed for holidays. Japan's Nikkei: -0.4% Hong Kong's Hang Seng: +0.2% China's Shanghai Composite: +0.7% India's Sensex: CLOSED South Korea's Kospi: -0.4% Australia's ASX All Ordinaries: CLOSED.
In economic data:
Japan's December Leading Index 1.7% m/m (last 1.5%) and Coincident Indicator 3.0% m/m (expected 3.8%; last 1.1%). November Corporate Services Price Index 1.1% yr/yr (expected 1.0%; last 1.1%)
South Korea's January Consumer Confidence 104.4 (last 103.8)
Singapore's December Industrial Production 4.3% m/m (expected 0.9%; last 1.8%); 15.6% yr/yr (expected 12.0%; last 14.1%)
In news:
The Bank of Japan expects that CPI will briefly rise to 1.5% in the first half of the year.
Caixin reported that China Minsheng Bank has lent tens of billions of yuan to Chinese property developers.
Samsung is expected to report its Q4 results tomorrow.
Major European indices trade on a sharply higher note, extending yesterday's bounce from recent losses. STOXX Europe 600: +2.1% Germany's DAX: +2.3% U.K.'s FTSE 100: +1.7% France's CAC 40: +2.3% Italy's FTSE MIB: +1.8% Spain's IBEX 35: +2.3%.
In economic data:
France's January Consumer Confidence 99 (expected 98; last 100)
Italy's December non-EU trade surplus EUR4.74 bln (last surplus of EUR4.22 bln)
Swiss January ZEW Expectations 9.5 (last -10.8)
In news:
The Italian parliament will continue voting for president after yesterday's second round failed to produce a winner.
British Prime Minister Johnson is resisting renewed calls to resign after the publishing of a report that details several parties that the government held during the coronavirus lockdown.
U.S. equity futures:
S&P 500 Futures: +56 @ 4,412
DJIA Futures: +320 @ 34,618
Nasdaq 100 Futures: +266 @ 14,414
Overseas:
Europe: DAX +2.3%, FTSE +1.7%, CAC +2.3%
Asia: Nikkei -0.4%, Hang Seng +0.2%, Shanghai Composite +0.7%
Commodities:
Crude Oil +0.79 @ 86.39
Nat Gas +0.233 @ 4.127
Gold -6.00 @ 1846.50
Silver +0.052 @ 23.948
Copper +0.0627 @ 4.5125
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Abbott Labs (ABT) beats by $0.11, beats on revs; guides Q1 EPS above consensus; guides FY22 EPS roughly in-line
Agilysys (AGYS) beats by $0.04, misses on revs; expects FY 22 revs to be at low end of guidance
Anthem (ANTM) beats by $0.02, misses on revs; sees FY22 EPS greater than $28.25
AT&T (T) beats by $0.02, reports revs in-line; guides FY22 EPS below consensus, revs below consensus
Automatic Data (ADP) beats by $0.02, beats on revs; guides FY22EPS above consensus at midpoint, revs above consensus
Boeing (BA) misses by $7.50, misses on revs; results include a $285 mln charge in Q4; expects further delays in 787 deliveries; co increases 787 abnormal cost est to $2 bln from $1 bln
Boston Properties (BXP) beats by $0.02, reports revs in-line; guides Q1 FFO below consensus; guides FY22FFO in-line
Cadence Bank (CADE) beats by $0.20; raises common stock dividend
Canadian Nat'l Rail (CNI) beats by CAD 0.18, beats on revs; guides FY22EPS above consensus
Capital One (COF) beats by $0.22, beats on revs
Corning (GLW) beats by $0.02, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY22revs above consensus
F5 Networks (FFIV) beats by $0.11, beats on revs; guides Q2 revs below consensus; guides FY22revs below consensus
First Bancorp (FBP) beats by $0.03
First Commonwealth (FCF) beats by $0.05, reports revs in-line
Flagstar Bancorp (FBC) misses by $0.05
Forward Air (FWRD) provides update on Q4 performance
General Dynamics (GD) beats by $0.02, misses on revs
Harmony Gold (HMY) reports South African operations' half-year results in line with guidance
Hawaiian Holdings (HA) beats by $0.32, reports revs in-line; guides Q1 revs below consensus
Hess (HES) beats by $0.12, beats on revs
Kimberly-Clark (KMB) beats by $0.05, beats on revs; guides FY22EPS below consensus, revs below consensus, increases dividend by 1.8%
MarketAxess (MKTX) misses by $0.06, reports revs in-line; increases quarterly dividend to $0.70/share from $0.66/share, approves $150 mln share repurchase program
Marten Transport (MRTN) beats by $0.04, beats on revs
Microsoft (MSFT) beats by $0.16, beats on revs; Azure growth of 46% yr/yr vs 50% growth in SepQ, provides MarQ guidance on the call, guides revs above consensus
Monro Muffler (MNRO) misses by $0.03, reports revs in-line; Q3 comps +13.8%; not providing FY22outlook at this time
NASDAQ (NDAQ) beats by $0.15, beats on revs
Navient (NAVI) misses by $0.09, misses on revs
New York Community (NYCB) reports EPS in-line, revs in-line
NextGen Healthcare (NXGN) beats by $0.03, beats on revs; guides FY22EPS above consensus, revs above consensus
Oshkosh (OSK) misses by $0.65, beats on revs; guides FY22EPS in-line, revs in-line
Prosperity Bancshares (PB) beats by $0.01
RenaissanceRe (RNR) beats by $0.35, beats on revs
Renasant (RNST) beats by $0.04, beats on revs
Rollins (ROL) misses by $0.01, beats on revs
RPC (RES) beats by $0.03, beats on revs
Scientific Games (SGMS) reports certain preliminary estimated results of SG Lottery for the quarter ended December 31, 2021
Silgan Holdings (SLGN) beats by $0.06, beats on revs; guides Q1 EPS below consensus; guides FY22EPS above consensus
Stifel Financial (SF) beats by $0.34, beats on revs; to increase dividend 100% in 1Q22
Stride (LRN) beats by $0.18, beats on revs; guides MarQ revs above consensus; guides FY22revs above consensus
TE Connectivity (TEL) beats by $0.15, beats on revs; guides Q2 EPS in-line, revs in-line
Texas Instruments (TXN) beats by $0.37, beats on revs; guides Q1 EPS above consensus, revs above consensus
Trustmark (TRMK) misses by $0.07, misses on revs
UMB Financial Corporation (UMBF) misses by $0.24, reports revs in-line
Veritex Holdings (VBTX) beats by $0.12, beats on revs; declares quarterly dividend
WesBanco Inc (WSBC) beats by $0.12, net interest margin down 34 bps yr/yr
General News:
Ukraine continues to downplay concerns of Russian attack, urging everyone to "stay calm." US warning that attack could be imminent, according to the New York Times
OSHA confirms it is withdrawing the vaccination and testing mandate for businesses with 100 or more employees following Supreme Court decision to block the mandate
OPEC+ still planning modest production increase, according to Bloomberg
House Speaker Nancy Pelosi (D-CA) says she will run for another term in Congress
Activision Blizzard (ATVI) will release at least the next three games of Call of Duty on Sony PlayStation, according to Bloomberg
Activision (ATVI) is against staff forming a union, according to Bloomberg
Amazon (AMZN) ends influence campaign to attract talent, according to Financial Times
Apple (AAPL) iPhone was the top selling smartphone in China in Q4 of 2021 for the first time since 2015, according to Bloomberg
Arqit Quantum (ARQQ) selected by Department for Digital, Culture, Media and Sport for 5G project
Baidu's (BIDU) JIDU arm raises $400 mln; Mass-produced models to be launched in 2023
Canadian Nat'l Rail (CNI) approves new C$5 bln normal course issuer bid; increases 2022 dividend by 19%; appoints Tracy Robinson as CEO, effective February 28; announces resolution agreement with TCI
Clean Energy Fuels (CLNE) outlines certain plans for RNG, hydrogen network ahead of 'RNG Day'
DoorDash (DASH) names Netflix exec to its board
Energous' (WATT) 1W WattUp PowerBridge transmitter received regulatory approval from the Innovation, Science and Economic Development Canada
Energy Transfer (ET) increases quarterly cash distribution to $0.175/unit from $0.1525/unit
Five Point Holdings (FPH) CFO Erik Higgins to resign
Ford Motor (F) and General Motors (GM) CEOs will meet with President Biden tomorrow to discuss Build Back Better, according to CBS News
Fortuna (FSM) drills 20.2 g/t gold over 18.2 meters at the Sgula gold Project, Cte d'Ivoire
Gatos Silver (GATO) Provides Update on Mineral Resources and Reserves at Cerro Los Gatos and 2022 Performance Guidance
Gilead Sciences (GILD) receives Partial Clinical Hold from FDA for studies evaluating Magrolimab in combination with Azacitidine
Global Ship Lease (GSL) provides update on recent chartering and refinancing activity
Gores Guggenheim (GGPI): Polestar receives over 4,000 reservations in South Korea for Polestar 2 in one week
Immunocore (IMCR) announces approval from the United States Food and Drug Administration of KIMMTRAK for the treatment of HLA-A02:01-positive adult patients with unresectable or metastatic uveal melanoma
Incyte (INCY) withdraws NDA for parsaclisib; confirms opt-out of development of MCLA-145
Li-Cycle (LICY) announces that it has formed a joint venture with ECO STOR AS and Morrow Batteries AS
Mattel (MAT) confirms license agreement with Disney (DIS) for Disney Princess and Disney Frozen franchises
Merus (MRUS) regains worldwide rights to MCLA-145 from Incyte (INCY)
Microsoft (MSFT): UK CMA secures changes to Xbox subscription practices following concerns about Microsoft's use of auto-renewing subscriptions for online gaming services
New Found Gold Corp. (NFGC) makes new discovery intercepting 28.20 g/t au over 4.50m at keats footwall zone, 145m below the keats main zone, reports first results using chrysos photonassaytm method
NRx Pharmaceuticals (NRXP) has received a first safety report from a Southwestern hospital where physicians have administered ZYESAMI to patients with COVID-19 respiratory failure
Palomar Holdings (PLMR) announces that its Board of Directors has approved a share repurchase program effective January 24, 2022
Progenity (PROG) announces new patent related to single-molecule detection assay platform
Quest Diagnostics (DGX) launches at-home COVID-19 rapid antigen test service with QuestDirect
Radware (RDWR) announces that it signed a multimillion-dollar deal expansion with a Tier-1 U.S. carrier
Robinhood Markets (HOOD) announces steps it is taking to avoid trading restrictions
M&A:
Brookfield Renewable Partners (BEP) announces the acquisition of clean power developer Urban Grid and its high-quality pipeline of projects comprising ~13,000 megawatts of utility-scale solar and 7,000 megawatts of energy storage capacity for $650 mln
Cazoo (CZOO) agrees to acquire digital car retailer brumbrum for 80 mln
Midland States Bancorp (MSBI) signs agreement to acquire deposits and loans associated with two FNBC Bank & Trust locations
Syndicate:
8x8 (EGHT) files for 5,623,429 share common stock offering by selling shareholders
Agrify (AGFY) has entered into securities purchase agreements with an institutional investor and other accredited investors in a private placement transaction
eFFECTOR Therapeutics (EFTR) files for 8,133,926 share common stock offering by selling shareholder
Mainz Biomed B.V. (MYNZ) prices follow-on offering of 1.5 mln shares of stock at $15.00 per share
Sierra Oncology (SRRA) intends to offer and sell $100.0 mln of shares of its common stock in an underwritten public offering
IPOs:
Expected to Price:
Credo (Nasdaq: CRDO): The semiconductor company providing secure, high-speed connectivity solutions that deliver improved power and cost efficiency is expected to price its 25.0 M share IPO between $10-$12.
Gapping Up/Down
Gapping up:
JKS +14.5%, LRN +7%, PROG +5.2%, ET +5%, TXN+4.3%, ARQQ +3.9%, MSFT +3.9%, LICY +3.8%, MRTN +3.5%, F +3.1%, FCF +2.9%, SONY +2.6%, GM +2.3%, BIDU +2.3%, CADE +1.5%, GSL +1.2%, PLMR+1.1%, ATVI +1%
Gapping down:
MYNZ -21.8%, FFIV -14.2%, NAVI -11.7%, SRRA-6.2%, EFTR -4.1%, MRUS -3.3%, ANTM -2.5%, GILD-1.7%, SB -1.5%, QCRH -1.4%, TEL -1.4%, EGHT-1.1%, AGYS -0.6%, INCY -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Avis Budget (CAR) upgraded to Neutral from Underweight at JP Morgan; tgt $205
Capital City Bank (CCBG) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $33
DraftKings (DKNG) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $31
Intl Flavors (IFF) upgraded to Buy from Hold at Stifel; tgt raised to $160
J.B. Hunt Transport (JBHT) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $235
Lumentum (LITE) upgraded to Overweight from Neutral at JP Morgan; tgt $110
Moderna (MRNA) upgraded to Hold from Sell at Deutsche Bank; tgt $175
Schlumberger (SLB) upgraded to Outperform from Neutral at Exane BNP Paribas; tgt $45
Tenaris (TS) upgraded to Outperform from Neutral at Exane BNP Paribas
Downgrades:
Brookfield Asset Mgmt (BAM) downgraded to Neutral from Buy at Citigroup; tgt lowered to $61
C.H. Robinson (CHRW) downgraded to Equal Weight from Overweight at Barclays; tgt $108
Gatos Silver (GATO) downgraded to Underperform from Outperform at RBC Capital Mkts; tgt lowered to $4
Heartland Express (HTLD) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $15
Nielsen (NLSN) downgraded to Sell from Neutral at Goldman; tgt lowered to $17
Red Rock Resorts (RRR) downgraded to Neutral from Outperform at Macquarie; tgt lowered to $55
Verizon (VZ) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $56
Others:
Advanced Energy (AEIS) initiated with an Overweight at KeyBanc Capital Markets; tgt $105
Aflac (AFL) initiated with a Hold at Jefferies; tgt $60
American Equity Investment Life (AEL) initiated with a Hold at Jefferies; tgt $42
Ameriprise Financial (AMP) initiated with a Buy at Jefferies; tgt $355
Applied Materials (AMAT) initiated with a Sector Weight at KeyBanc Capital Markets
Brighthouse Financial (BHF) initiated with a Hold at Jefferies; tgt $52
CNO Financial (CNO) initiated with a Hold at Jefferies; tgt $25
Equitable Holdings (EQH) initiated with a Buy at Jefferies; tgt $44
Globe Life (GL) initiated with a Hold at Jefferies; tgt $106
Jackson Financial (JXN) initiated with a Buy at Jefferies; tgt $52
KLA Corporation (KLAC) initiated with an Overweight at KeyBanc Capital Markets; tgt $480
Lam Research (LRCX) initiated with a Sector Weight at KeyBanc Capital Markets
Lincoln National (LNC) initiated with a Buy at Jefferies; tgt $80
MetLife (MET) initiated with a Buy at Jefferies; tgt $74
MKS Instruments (MKSI) initiated with a Sector Weight at KeyBanc Capital Markets
Primerica (PRI) initiated with a Hold at Jefferies; tgt $160
Principal Fincl (PFG) initiated with an Underperform at Jefferies; tgt $62
Prudential (PRU) initiated with an Underperform at Jefferies; tgt $93
Reinsurance Group of America (RGA) initiated with a Buy at Jefferies; tgt $130
Teradyne (TER) initiated with an Overweight at KeyBanc Capital Markets; tgt $180
Unum Group (UNM) initiated with a Hold at Jefferies; tgt $27
Voya Financial (VOYA) initiated with a Hold at Jefferies; tgt $75
ZUpcoming Events:
Econ Data:
07:00 ET: MBA Mortgage Applications Index for Jan. 22 (Briefing.comConsensus NA; Prior 2.3%)
08:30 ET: Adv. Intl. Trade in Goods for Dec. (Briefing.comConsensus NA; Prior -$97.8 B)
08:30 ET: Adv. Retail Inventories for Dec. (Briefing.comConsensus NA; Prior 2.0%)
08:30 ET: Adv. Wholesale Inventories for Dec. (Briefing.comConsensus NA; Prior 1.2%)
10:00 ET: New Home Sales for Dec. (Briefing.comConsensus 765K; Prior 744K)
10:30 ET: EIA Crude Oil Inventories for Jan. 22 (Briefing.comConsensus NA; Prior +515K)
14:00 ET: FOMC Rate Decision (Briefing.comConsensus 0.125%; Prior 0.125%)
Earnings:
Monday (Jan 24)
Morning: BOH CBU HAL PHG
Afternoon: BRO CR ELS HOPE IBM IBTX LOGI SSB STLD WSFS ZION
Tuesday (Jan 25)
Morning: MMM AXP ADM AUB BANC CVLT ERIC GATX GE IVZ JNJ LKFN LMT NEE NEP PCAR PII RTX UMC VZ XRX
Afternoon: AGYS BXP CADE CNI COF FFIV FCF HA MRTN MSFT NAVI NXGN RNR RNST SLGN LRN TXN TRMK UMBF VBTX WSBC
Wednesday (Jan 26)
Morning: ABT APH ANTM T ADP BA GLW FBP FBC FCX GD HES KMB KNX MKTX MNRO NDAQ NYCB NSC OSK PGR PB ROL RES SF TEL
Afternoon: AMP AZPN AVT AXS CACI CALX CLS CNS CNMD CCI CVBF DRE EW FLEX HXL INTC ISBC LRCX LSTR LVS LC LEVI MTH CASH MEOH MKSI PKG PLXS PTC XM RJF RLI SLM STX SEIC NOW SIMO SLG TER TSLA URI VRTX WHR WOLF XLNX
Thursday (Jan 27)
Morning: FLWS AOS ALK ADS MO AIT BLL BX BC CNX CMCO CMCSA CFR DHR DOV DOW EXP EWBC EXTR HCA IP JBLU KEX MTSI HZO MMC MA MKC MCD MSCI MUR NTCT NOC NUE OSIS BPOP ROK RCI SAP SHW SFNC LUV STM TROW TDY TXT TSCO VLO VLY XEL
Afternoon: ABCB AAPL AJG TEAM AX BZH BOOT CP CATY CE EMN ETD FICO FHI FFBC FIBK GBCI HTH JNPR KLAC MITK MDLZ NATI OLN RMD RHI HOOD SYK X V WRB WAL WDC
Friday (Jan 28)
Morning: ALV BMI BAH CAT CHTR CVX CHD CL GNTX LYB MOG.A PSX PFS SBSI SYF VFC WY WETF
Asia & Europe detail:
Asia: Nikkei -0.4%, Hang Seng +0.2%, Shanghai Composite +0.7%
Equity indices in the Asia-Pacific region ended the midweek session on a mixed note while markets in Australia and India were closed for holidays. The Bank of Japan expects that CPI will briefly rise to 1.5% in the first half of the year. Caixin reported that China Minsheng Bank has lent tens of billions of yuan to Chinese property developers. Samsung is expected to report its Q4 results tomorrow.
In economic data:
Japan's December Leading Index 1.7% m/m (last 1.5%) and Coincident Indicator 3.0% m/m (expected 3.8%; last 1.1%). November Corporate Services Price Index 1.1% yr/yr (expected 1.0%; last 1.1%)
South Korea's January Consumer Confidence 104.4 (last 103.8)
Singapore's December Industrial Production 4.3% m/m (expected 0.9%; last 1.8%); 15.6% yr/yr (expected 12.0%; last 14.1%)
---Equity Markets---
Japan's Nikkei: -0.4%
Hong Kong's Hang Seng: +0.2%
China's Shanghai Composite: +0.7%
India's Sensex: CLOSED
South Korea's Kospi: -0.4%
Australia's ASX All Ordinaries: CLOSED
---FX---
USD/JPY: +0.3% to 114.15
USD/CNH: -0.1% to 6.3246
USD/INR: +0.1% to 74.84
Europe: DAX +2.3%, FTSE +1.7%, CAC +2.3%
Major European indices trade on a sharply higher note, extending yesterday's bounce from recent losses. The Italian parliament will continue voting for president after yesterday's second round failed to produce a winner. British Prime Minister Johnson is resisting renewed calls to resign after the publishing of a report that details several parties that the government held during the coronavirus lockdown.
In economic data:
France's January Consumer Confidence 99 (expected 98; last 100)
Italy's December non-EU trade surplus EUR4.74 bln (last surplus of EUR4.22 bln)
Swiss January ZEW Expectations 9.5 (last -10.8)
---Equity Markets---
STOXX Europe 600: +2.1%
Germany's DAX: +2.3%
U.K.'s FTSE 100: +1.7%
France's CAC 40: +2.3%
Italy's FTSE MIB: +1.8%
Spain's IBEX 35: +2.3%
---FX---
EUR/USD: -0.2% to 1.1275
GBP/USD: +0.1% to 1.3514
USD/CHF: +0.2% to 0.9199
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