Early Look

Wednesday, April 13, 2022

Futures	Up/Down	%	Last
Dow	103.00	0.30%	32,241
S&P 500	19.25	0.42%	4,411
Nasdaq	82.50	0.59%	14,027

 

 

Stock futures are looking to rebound following yesterday’s pullback amid a mixed inflation picture, while supply concerns amid Russia’s ongoing invasion of Ukraine helped push oil prices higher. After the prior day’s fall, the yield on 10-year edges higher at 2.73%, and the two-year yield was 2.42% (ahead of $20B auction of 30-year notes today). Oil prices rise another 1% with WTI crude back above the $102 level. Today also marks the unofficial start to earnings season with Dow component and bank giant JPMorgan (JPM) reporting this morning. Stocks fell on Tuesday, after an early morning bounce gave way to selling as investors weighed the latest U.S. CPI inflation data which showed another 40-year high. The data comes ahead of today’s producer price index (PPI) where March headline m/m PPI stands at +1.1% and on a y/y basis, to jump +10.6%; core March PPI m/m (ex food &energy) est. +0.5% and core y/y to rise +8.4%. Meanwhile, China’s race to stop the spread of COVID-19 is clogging highways and ports, stranding workers, and shutting countless factories – disruptions that are rippling through global supply chains. In Asian markets, The Nikkei Index jumped over 500 points or 1.93% to 26,843, the Shanghai Index fell -0.82% to 3,186, and the Hang Seng Index gained about 55 points or 0.26% to 21,374. In Europe, the German DAX is down over -0.9% to 13,993, while the FTSE 100 is flat at 7,575. The U.S. dollar pauses after a 9-day rally, euro falls ahead of ECB meeting tomorrow.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -15.08 points, or 0.34%, to 4,397.45

·     The Dow Jones Industrial Average fell -87.72 points, or 0.26%, to 34,220.36

·     The Nasdaq Composite slipped -40.38 points, or 0.30%, to 13,371.57

·     The Russell 2000 Index advanced 6.61 points, or 0.33% to 1,986.94

 

Economic Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM ET         Producer Price Index (PPI) m/m for March…est. +1.1%

·     8:30 AM ET         Producer Price Index (PPI) y/y for March…est. +10.6%

·     8:30 AM ET         PPI: Ex: Food & Energy (core) m/m for March…est. +0.5%

·     8:30 AM ET         PPI: Ex: Food & Energy (core) y/y for March…est. +8.4%

·     10:30 AM ET       Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BBBY, BLK, DAL, FAST, FRC, HOFT, JPM

·     Earnings After the Close: DLPN, RENT

 

 

Macro	Up/Down	Last
Nymex	1.54	102.16
Brent	1.74	106.38
Gold	6.60	1,982.70
EUR/USD	-0.000	1.0828
JPY/USD	0.64	126.02
10-Year Note	+0.008	2.735%

 

 

World News

·     Blinken says that he was not able to confirm that Moscow used chemical weapons in Mariupol. Has credible information that Russia may use chemical agents to weaken and incapacitate entrenched Ukrainian fighters and civilians, as part of the aggressive campaign to take Mariupol.

·     The RBNZ raised interest rates 50bps at today’s meeting vs. ests for a 25-bps hike. The RBNZ said ‘’moving the OCR to a more neutral stance sooner will reduce the risks of rising inflation. A larger move now also provides more policy flexibility ahead in light of the highly uncertain global economic environment.”

 

Sector News Breakdown

Consumer

·     Delta Airlines (DAL) Q1 adj EPS loss ($1.23) vs. est. loss ($1.27); Q1 revs $9.35B vs. est. $8.92B; march-qtr adj pre-tax loss of $1.0 bln, excluding a net expense of $164M; sees June quarter 2022 non-GAAP total revenue up 93% – 97% vs June quarter 2019; sees June quarter 2022 capacity up about 84% vs June quarter 2019; March month adjusted TRASM inflected to positive versus 2019

 

Energy

·     The IEA cuts oil demand forecast as China reimposes lockdowns China consumption estimate reduced by 925,000 b/d in April: global market now seen in balance for much of the year

·     The American Petroleum Institute (API) reported crude inventories rose 7.8M barrels in the latest week while inventories at Cushing rose 400K barrels on the week; gasoline inventories fell -5.1M barrels and distillates fell -5.0M barrels

·     A fire this past weekend at a San Francisco-area dock could force Valero Energy’s (VLO) Benicia refinery to cut fuel production, which could push sky-high local gasoline prices even higher, Bloomberg reported

 

Financials

·     JPMorgan (JPM) Q1 revs $31.59B vs. est. $31.44B; Total deposits $2.56 trillion; provision for credit losses $1.46 billion larger than most ests; non-interest expenses $19.19 billion, estimate $19.46 billion; said lending strength continued, average firmwide loans up 5%

·     BlackRock (BLK) Q1 adjusted EPS $9.52 vs. est. $8.84; Q1 revenue $4.7B vs. est. $4.73B; Q1 adj operating margin 44.2% and assets under management $9.67 trillion

·     PayPal (PYPL) announces departure of CFO John Rainey (going to WMT); Gabrielle Rabinovitch will serve as interim chief financial officer upon Rainey’s departure

·     Manning & Napier (MN) has reported prelim AUM of $20.6B for March, compared with Feb AUM of $20.8B and Jan AUM of $21.4B.

·     Victory Capital Holdings (VCTR) preliminary assets under management of $178.1B as of March 31, 2022, increased from $176.0B as of Feb. 28, the company said Tuesday

 

Healthcare

·     GlaxoSmithKline (GSK) is acquiring Sierra Oncology (SRRA) in a $1.9B cash deal to bolster its cancer drug portfolio. Under the agreement, outstanding shares of Sierra will be cancelled and converted into the right to receive $55 per share in cash https://bit.ly/378r9h3

·     Antares Pharma Inc. (ATRS) rises +46% after the company agreed to be acquired by Halozyme Therapeutics Inc. (HALO) in a cash deal valued at $960 million; Halozyme will pay $5.60 for each Antares share outstanding, which represents a 49.7% premium to Tuesday’s closing price https://bit.ly/3KIVXmU

·     Affimed (AFMD) 22.5M share Spot Secondary priced at $4.00

·     Crinetics (CRNX) 5.63M share Secondary priced at $22.22

·     Liquidia Technologies (LQDA) 9.804M share Spot Secondary priced at $5.10

·     Novavax (NVAX) rises as its protein-based COVID-19 shot receives conditional marketing authorization in Switzerland

·     Bio-Path Holdings Inc. (BPTH) said the preclinical data support BP1003 combination therapy to treat breast and ovarian cancers.” The data show that BP1003 enhances the efficacy of current standard of care chemotherapies in these difficult to treat solid tumor cancers.”

·     NanoString (NSTG) shares fall -20%; cuts Q1 revenue view to $31M from $34M-$38M (est. $35.8M) saying Q1 revenue fell short of expectations, impacted primarily as uneven sales execution resulted in an imbalance between capturing Q4 revenue and developing our Q1 2022 funnel of opportunities. Second, believe this was compounded by the impact of changes made to re-align our expanded commercial team early in the year

 

Industrials & Materials

·     Ashland (ASH) guided Q2 adj EPS $1.50c above consensus $1.14 and sees Q2 rev $604M well above consensus $575.31M saying it saw continued strong end-market demand; Disciplined pricing and product mix actions more than offset additional inflation in raw-material

·     J.B. Hunt (JBHT) upgraded to Buy from Hold at Deutsche Bank

·     Safe Bulkers, Inc. (SB) entered into an agreement for the acquisition of a 2012-built, Chinese, dry-bulk, 181,000 dwt, Capesize class vessel for $30M

 

Technology, Media & Telecom

·     Deutsche Telekom said it has bought additional shares in T-Mobile US (TMUS) from Softbank for $2.4 billion as part of a deal agreed in 2020; the purchase of the 21.2 million shares via a call option raises Deutsche Telekom’s stake in T-Mobile US to 48.4% from below 47%, as planned

·     Google (GOOGL) has unveiled its plan to invest about $9.5B across its U.S. offices and data centers in 2022, up from $7B in 2021.

·     Nutanix Inc (NTNX) reaffirms Q3 and full year fiscal 2022 financial guidance; appoints Rukmini Sivaraman as chief financial officer

·     Squarespace (SQSP) CFO Marcela Martin announced her intention to resign as chief financial officer effective July 31, 2022; said is not a result of a disagreement with co and that she will continue until the anticipated date of departure, while SQSP searches for a new CFO

·     Trimble (TRMB) entered into a definitive agreement to sell its Time and Frequency, LOADRITE, Spectra Precision Tools and SECO accessories businesses to Precisional, an affiliate of The Jordan