Early Look

Monday, January 9, 2023

Futures	Up/Down	%	Last
Dow	98.00	0.29%	33,870
S&P 500	14.25	0.36%	3,929
Nasdaq	40.50	0.36%	11,153

 

 

U.S. futures are looking higher, extending gains after Friday’s end of week rally saw stocks close at their highest levels since mid-December, with the S&P 500 squeezing above 3,900 following a mixed jobs report. All eyes on US inflation data in the coming week, with the consumer price index (CPI) expected to show further deceleration in inflation, easing fears the Fed will slow their pace of rate hikes. In corporate and macro news, supporters of former Brazilian President Jair Bolsonaro who refuse to accept his election defeat stormed Congress this weekend. A big week for Healthcare and Retailers with two major conferences upcoming – this morning seeing several earnings/rev outlooks ahead of the 41^st JPM Healthcare Conference and ICR 2023 Retail Conference in Orlando. There were also three M&A headline deals in the Biotech space this morning (ALBO, AMYT, CINC). In Asian markets, The Nikkei Index jumped 153 points to 25,973, the Shanghai Index rose 18 points to 3,176, and the Hang Seng Index gains 396 points to 21,388. In Europe, the German DAX is up 75 points to 14,685, while the FTSE 100 is little changed just below 7,700. Bitcoin rallies to extend gains for a sixth consecutive session — its longest streak in nearly a year, sending shares of COIN, MARA, RIOT, MSTR higher early.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 86.98 points, or 2.28%, to 3,895.08

·     The Dow Jones Industrial Average rose 700.53 points, or 2.13%, to 33,630.61

·     The Nasdaq Composite surged 264.05 points, or 2.56%, to 10,569.29

·     The Russell 2000 Index advanced 39.61 points, or 2.26% to 1,792.80

 

Economic Calendar for Today

·     10:00 AM ET            Employment Trends for December

·     12:30 PM ET            Fed’s Bostic Takes Part in Moderated Discussion

·     3:00 PM ET              Consumer Credit for November

 

Earnings Calendar:

·     Earnings Before the Open: AYI CMC

·     Earnings After the Close: ACCD APLD AZZ ETWO JEF PCYO PSMT VOXX

 

Other Key Events:

·     JPMorgan 41^st annual Healthcare Conference, 1/8-1/12, in San Francisco, CA

·     ICR 2023 Retail Conference, 1/9-1/12, in Orlando, FL

 

 

Macro	Up/Down	Last
Nymex	2.36	76.13
Brent	2.29	80.86
Gold	8.60	1,878.30
EUR/USD	0.0038	1.0682
JPY/USD	0.45	132.53
10-Year Note	+0.017	3.668%

 

 

World News

·     In Brazil (EWZ), supporters of former Brazilian President Jair Bolsonaro who refuse to accept his election defeat stormed Congress, the Supreme Court and presidential palace in the capital on Sunday, a week after the inauguration of his leftist rival, President Luiz Inácio Lula da Silva.

 

Sector News Breakdown

Consumer

·     Alibaba (BABA) shares rise on news that co-founder Jack Ma is ceding control of affiliate company Ant Group Co., potentially paving the way to revive plans for an initial public offering by the fintech giant

·     Bed Bath & Beyond (BBBY) mentioned cautiously in Barron’s saying the stock looks drained. No amount of activist cage-rattling appears to have been enough to save embattled Bed Bath & Beyond, after recently preannounced disappointing fiscal-third-quarter results.

·     Lululemon athletica Inc. (LULU) said it sees Q4 revs in the range of $2.66B-$2.7B, representing a 25%-27% increase y/y and above prior view of $2.605B-$2.655B; said it now expects gross margin for Q4 to decline 90-110 bps compared to its previous expectation for an increase of 10-20 bps

·     Macy’s (M) backs Q4 adjusted EPS view $1.47-$1.67 vs. est. $1.60; said Q4 net sales are now expected to be at the low-end to mid-point of the previously issued range of $8.161B-$8.401B vs. consensus $8.31B

·     Tesla (TSLA) mentioned positively in Barron’s saying the battered stock looking like a buy. Times are tough for Tesla, with demand slowing, costs rising and Elon Musk both distracted and a distraction, but says it’s time to buy the stock

·     Uber (UBER) upgraded to overweight at Piper and downgraded DoorDash (DASH) to underweight, recommending a pair-trade between the two as it favors ride-hailing over delivery in 2023

 

Energy

·     Pioneer Natural Resources (PXD) downgraded to sector weight from overweight with $260 price target at KeyBanc

·     According to GasBuddy data, weekly (Sun-Sat) US gasoline demand rose 1.8% from the prior week but was 7.7% below the four-week moving average. We model consumption at 7.67 million barrels per day.

·     Russian President Vladimir Putin’s plans to squeeze Europe by weaponizing energy look to be fizzling, at least for now, as mild weather, a wider array of suppliers, and efforts to reduce demand are helping – Bloomberg

 

Financials

·     Goldman Sachs Group Inc. (GS) is embarking on one of its biggest rounds of job cuts ever as it locks in on a plan to eliminate about 3,200 positions this week, with the bank’s leadership going deeper than rivals to shed jobs – Bloomberg

·     Swiss National Bank on Monday estimated it will lose 132 billion francs ($143 billion) for 2022, reportedly the largest in its history.

·     Mastercard (MA) upgraded to overweight to sector weight with $425 price target at Keybanc

·     Visa (V) upgraded to Overweight from Sector Weight at KeyBanc with a $210 price target.

·     PayPal (PYPL) downgraded to sector weight from overweight with $100 price target at KeyBanc

·     U.S. hedge funds are being subpoenaed to hand over information of its dealings with cryptocurrency platform Binance as part of a federal investigation into potential money-laundering breaches at the crypto company, the Washington Post reported over the weekend.

 

Healthcare

·     Albireo Pharma Inc. (ALBO) agreed to be acquired by France’s Ipsen for an initial $952M, as Ipsen said it agreed to pay $42 a share in cash upfront for Albireo, an 84% premium to Friday’s closing price $22.82 https://on.mktw.net/3irXYuY

·     Amryt Pharma PLC (AMYT) agreed to be acquired by Italian healthcare group Chiesi Farmaceutici S.p.A. for up to nearly $1.5 billion, which agreed to pay an initial $14.50 in cash for each American depositary share of Amryt, which each represents 5 Amryt ordinary shares, roughly 107% above Friday’s closing price https://on.mktw.net/3IzqCEV

·     AstraZeneca PLC (AZN) agreed to buy CinCor Pharma, Inc. (CINC), acquiring global rights to the latter’s baxdrostat cardiorenal drug for an upfront transaction value of around $1.3 billion, with holders to receive $26 a share in cash at the closing of the deal, along with a non-tradable contingent value right of $10 a share in cash https://on.mktw.net/3GsUVKK

·     BioMarin Pharmaceutical (BMRN) announced positive results from more than three years of follow up from its ongoing global Phase 3 GENEr8-1 study of ROCTAVIAN. Roctavian reduced the annualized rate of bleeding in patients with hemophilia A by 80% in a 3-year study; said 92% of patients weren’t taking prophylactic treatments three years after they received Roctavian

·     CureVac (CVAC) rises 26%, extending Friday’s gains after saying preliminary data from its early-stage trial for its COVID-19 and seasonal flu shots had positive results to advance to the next stage of clinical testing

·     CVS Corp. (CVS) reaffirmed its estimated full-year 2022 adjusted earnings per share guidance of $8.55 to $8.65 and expect total Medicare advantage membership growth to be in the low to mid-single digit percentage range in 2023; entered a $2.0 bln fixed dollar accelerated share repurchase transaction

·     Day One Biopharmaceuticals Inc. (DAWN) shares rise 19% early; said it saw positive topline results from an ongoing Phase 2 trial evaluating the investigational agent Tovorafenib and said additional data will be submitted for presentation in the second quarter of 2023.

·     Exact (EXAS) reports preliminary Q4 revenue $550.7M-$552.7M vs. est. $506.48M; an increase of 16%, or 28% excluding COVID-19 testing

·     Ironwood (IRWD) guides 2023 revenue $420M-$453M vs. est. $439.4M

·     QuidelOrtho (QDEL) guides Q4 revenue $853M-$868M vs. est. $753.63M and said COVID-19 product revenue is expected to be in the range of $124M-$134M and non-COVID-19 product revenue is expected to be in the range of $729M-$734M

 

Industrials & Materials

·     Acuity Brands (AYI) Q1 adjusted EPS $3.29 vs. est. $3.00; Q1 revs $997.9M vs. est. $984.46M

·     Commercial Metals (CMC) Q1 sales $2.23B vs. est. $2.19B; Q1 adj EPS $2.24 vs. est. $1.94

·     Mosaic (MOS) downgraded to Underperform from Outperform at Credit Suisse

·     Tianqi Lithium has agreed to buy an Australian lithium explorer in a deal that could accelerate production of enough supply of the metal for around 10 million electric vehicles – Bloomberg

 

Technology, Media & Telecom

·     Alibaba (BABA) upgraded to Conviction Buy from Buy at Goldman Sachs

·     Weibo (WB) upgraded to Buy from Neutral at Goldman Sachs

·     Oracle (ORCL) upgraded to overweight from neutral at Piper Sandler saying FY24 growth in operating profits and earnings per share could accelerate to more than 10%