Early Look

Tuesday, September 13, 2022

Futures	Up/Down	%	Last
Dow	174.00	0.54%	32,672
S&P 500	22.25	0.55%	4,152
Nasdaq	66.50	0.52%	12,890

 

 

U.S. futures look to make it a 5^th straight day of gains, with the S&P +0.4% around the 4,150 level ahead of the all-important August Consumer Price Index (CPI) report at 8:30. The dollar is lower, Treasury yields dip, and stocks rise amid expectations data will show prices decelerated in the most recent month. CPI month-over-month is expected to come in at (-0.1%) vs a 0% prior print. Year-over-year calls for 8.1% vs 8.5% last month. The core reading month-over-month is expected to be 0.3% vs a prior read of 0.3% and core year-over-year reading is expected to be 6.1% vs 5.9% in July. Stocks rose on Monday, led by year-to-date winners (energy) and year-to-date losers (technology) though all eleven S&P sectors finished in the “green” for a second straight day. In Asian markets, The Nikkei Index gained 72 points to 28,614, the Shanghai Index was little changed at 3,262, and the Hang Seng Index fell -35 points to 19,326. In Europe, the German DAX is higher by 60 points to 14,465, while the FTSE 100 is up 20 points to 7,495. Markets solely focused on inflation data, interest rate hikes by central banks. The FOMC expected to deliver 75-bps hike next week regardless of data today – but a “tamer” inflation reading could raise hopes that rate hikes could be less aggressive in future meetings.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 43.05 points, or 1.06%, to 4,110.41

·     The Dow Jones Industrial Average rose 229.63 points, or 0.71%, to 32,381.34

·     The Nasdaq Composite gained 154.10 points, or 1.27%, to 12,266.41

·     The Russell 2000 Index advanced 23.24 points, or 1.23% to 1,906.09

 

Economic Calendar for Today

·     6:00 AM ET           NFIB Small Business Optimism for August

·     7:45 AM ET           ICSC Weekly Retail Sales

·     8:30 AM ET           Consumer Price index (CPI) M/M for August…est. (-0.1%)

·     8:30 AM ET           Consumer Price index (CPI) Y/Y for August…est. +8.1%

·     8:30 AM ET           CPI Ex: Food & Energy (core) M/M for August…est. +0.3%

·     8:30 AM ET           CPI Ex: Food & Energy (core) Y/Y for August…est. +6.1%

·     8:55 AM ET           Johnson/Redbook Weekly Sales

·     4:30 PM ET           API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CNM

·     Earnings After the Close: ASPU CENN EPM INNV KSPN

 

Other Key Events:

·     Baird Global Healthcare Conference, 9/13-9/14, in NY

·     Barclay’s Global Financial Services Conference (virtual), 9/12-9/14

·     Credit Suisse 35th Annual Basic Materials Conference, 9/13-9/14, in NY

·     European Society for Medical Oncology (ESMO), 9/9-9/13, in Paris France

·     Goldman Sachs 2022 Communacopia + Technology Conference, 9/12-9/15, in San Francisco, CA

·     Morgan Stanley Annual Global Healthcare Conference, 9/12-9/14, in NY

·     Piper Growth Frontiers Conference, 9/13-9/14, in Nashville, TN

·     RBC Capital Global Industrials Conference, 9/13-9/14, in Las Vegas

·     Truist Internet Growth Summit (virtual), 9/12-9/16

 

 

Macro	Up/Down	Last
Nymex	0.99	88.87
Brent	1.01	95.01
Gold	-2.50	1,739.10
EUR/USD	0.005	1.0170
JPY/USD	-0.66	142.17
10-Year Note	-0.044	3.318%

 

 

World News

·     Two Chinese aircraft on Tuesday crossed the median line of the Taiwan Strait, which normally serves as an unofficial barrier between the two sides, Taiwan’s defense ministry said, as Beijing continues its military maneuvers near the island.

·     The European Union is considering capping the power-generation revenues of renewable and nuclear companies at €180-€200 per MWh as part of an emergency package

·     UK trade deficit widens while exports to the EU hit record high ‘; Data from the Office for National Statistics showed that the trade gap widened by £1.2bn to £27bn in the three months to July as energy imports surge because of war in Ukraine

 

Sector News Breakdown

Consumer

·     Oatly Group (OTLY) downgraded to Neutral from Outperform at Credit Suisse

·     Rent The Runway (RENT) 2Q adj EBITDA $1.8Mm vs est. ($3.3Mm) on revs $76.5Mm vs est. $73.3Mm; guides 3Q revs $72-74Mm vs est. $79.7Mm and FY revs $285-290Mm vs est. $303.8Mm; announces restructuring plan to reduce $25-$27 mln of annual operating costs, pulling forward path to profitability

 

Energy

·     Crestwood Equity (CEQP) 11.4M share Spot Secondary priced at implied $26.90

·     Antero Midstream Corporation (AM) entered into a definitive agreement to acquire Marcellus Shale gas gathering and compression assets from Crestwood Equity Partners LP (CEQP) for $205 million in cash, subject to customary adjustments. The transaction is expected to close in the fourth quarter of 2022 and is subject to customary regulatory approvals.

·     Weatherford International plc (WFRD) received a five-year framework agreement from Abu Dhabi National Oil Company (“ADNOC”) to provide directional drilling and logging-while-drilling services. The contract is currently valued at over $400 million and ADNOC has an option to extend the contract for an additional two years

 

Financials

·     RobinHood (HOOD) Aug operating metrics: assets under custody (AUC) at end of August were $71.0 bln, down 5% from end of July 2022; net cumulative funded accounts (NCFA) at end of August were 22.9 mln, unchanged from end of July 2022; notional trading volumes were mostly up in August from July 2022

·     AllianceBernstein L.P. (AB) preliminary assets under management decreased to $667 billion during August 2022 from $689 billion at the end of July. Firm-wide net inflows in August were outweighed by market depreciation, resulting in a 3% AUM decrease.

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,416.0 billion, a decrease of 2.3% versus previous month-end. The firm experienced net long-term inflows of $2.7 billion in the month.

·     Virtus Investment Partners, Inc. (VRTS) preliminary assets under management of $157.8 billion as of August 31, 2022. In addition, the company provided services to $2.9 billion of other fee-earning assets, which are not included in assets under management.

·     Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of August 31, 2022, totaled $132.7 billion. Artisan Funds and Artisan Global Funds accounted for $63.5 billion of total firm AUM, while separate accounts and others accounted for $69.2 billion.

·     Deposits at U.S. banks fell by a record $370 billion in the second quarter, the first decline since 2018 -WSJ

 

Healthcare

·     Akero Therapeutics (AKRO) said that an experimental medicine improved liver scarring at twice the rate of a placebo without worsening other symptoms — achieving the main goal of a mid-stage clinical trial involving patients with the fatty liver disease known as Nash. If the encouraging study results are confirmed in later Phase 3 clinical trials, the Akero drug, called efruxifermin, could become an effective treatment for the chronic disease

·     AnaptysBio (ANAB) downgraded to Hold from Buy at Truist

·     Revance (RVNC) 8M share Spot Secondary priced at $25.00

 

Industrials & Materials

·     Dow Inc. (DOW) downgraded to Hold from Buy at Jefferies and cut tgt t $45 from $71

·     Planet Labs (PL) 2Q EPS ($0.15) vs est. ($0.16) on revs $48.5Mm vs est. $42.4Mm; guides 3Q revs $45-48Mm vs est. $46.6Mm and RY revs $182-190Mm vs est. $182Mm

 

Technology, Media & Telecom

·     Oracle Corp. (ORCL) Q1 adj EPS $1.03 vs. est. $1.07; Q1 revs rose 18% y/y to $11.4B vs. est. $11.47B; Q1 cloud revenue $3.6B, up 45% in USD, up 50% in constant currency; Q1 non-Gaap operating income was $4.5B, up 3% in USD and up 10% in constant currency; said stronger dollar had a significant impact on results in quarter; Q1 non-Gaap op margin was 39%

·     Google (GOOGL) will face damages claims for up to 25 billion euros ($25.4 billion) over its digital advertising practices in two suits to be filed in British and Dutch courts in the coming weeks by a law firm on behalf of publishers.

·     AppLovin (APP) announced that it does not intend to submit another proposal to combine with Unity Software Inc. (U) and has withdrawn its initial proposal from August 9, 2022

·     Braze Inc. (BRZE) Q2 adj EPS loss (-$0.16) vs. est. loss (-$0.20); Q2 revs rose 54.5% to $86.1M vs. est. $81.1N; guides Q3 revs $90M-$91M while raises FY revs and narrows year loss outlook