Early Look

Wednesday, January 12, 2022

Futures	Up/Down	%	Last
Dow	49.00	0.14%	36,177
S&P 500	5.25	0.12%	4,710
Nasdaq	31.50	0.20%	15,862

 

 

U.S. futures are edging higher, building on strong gains yesterday (markets closed at the highs) as markets await key inflation data upcoming (8:30 AM ET) in the form of December consumer prices (CPI) with headline CPI MoM est. +0.4%, and on a YoY basis expected to rise +7%; the core CPI MoM is expected to rise +0.5% and YoY estimate for ex food & energy a +5.4% gain. The dollar slipped and Treasury yields are steady (1.74% for 10-yr) as oil trades at the highest levels in more than two months. It was another good finish for stocks on Tuesday, as U.S. stocks bounced and Treasury yields retreated after investors absorbed remarks from the Federal Reserve that interest rates are likely to rise this year, not coming as a surprise after last week’s FOMC minutes or recent Fed speakers. Federal Reserve Chairman Jerome Powell said in testimony to the Senate banking Committee he expected the Fed would raise rates and end its asset purchases this year, but that the central bank had made no decision about the timing for tightening monetary policy. The Dow was up 0.51%, the S&P 500 gained 0.92% and the Nasdaq surged 1.41% in a good day for growth stocks. In Asian markets, The Nikkei Index spiked 543 points or nearly 2% to 28,765, the Shanghai Index gained 30 points or 0.84% to 3,596 and the Hang Seng Index jumped 663 points or 2.79% to settle at 24,402. In Europe, the German DAX is up +0.35% to trade around the 16,000 level, while the FTSE 100 gains +0.7% to 7,540. Global oil prices extended gains Wednesday, lifting prices to the highest levels since November, back to pre-Omicron levels, following a drop in domestic inventories and bets on near-term demand. In stock news, Biogen (BIIB) falls abut 10% after the U.S. government limited Medicare coverage of the company’s Aduhelm Alzheimer’s treatment.

Events Calendar for Today

·     7:00 AM ET                  MBA Mortgage Applications Data

·     8:30 AM ET                  Consumer Price Index (CPI) MoM for December…est. 0.4%

·     8:30 AM ET                  Consumer Price Index (CPI) YoY for December…est. 7.0%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) MoM for Dec…est. 0.5%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) YoY for Dec…est. 5.4%

·     10:30 AM ET                Weekly DOE Inventory Data

·     2:00 PM ET                   Federal Budget for December

 

Earnings Calendar:

·     Earnings Before the Open: JEF

·     Earnings After the Close: BBCP, ETWO, KBH, VOLT

 

Other Key Events:

·     Credit Suisse 2022 Aircraft Leasing Conference (virtual), 1/12

·     ICR Conference 2022, 1/10-1/12, in Orlando, FL

·     Jefferies 2022 Software Bus Tour (virtual), 1/10-1/14

·     JPMorgan 40^th Annual Healthcare Conference (virtual), 1/10-1/13

·     Needham 24^th Annual Growth Conference (virtual), 1/10-1/14

·     UBS Greater China Conference (virtual), 1/11-1/14

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 42.78 points, or 0.92%, to 4,713.07

·     The Dow Jones Industrial Average rose 183.15 points, or 0.51%, to 36,252.02

·     The Nasdaq Composite surged 210.62 points, or 1.41%, to 15,153.45

·     The Russell 2000 Index advanced 22.85 points, or 1.05% to 2,194.00

 

 

Macro	Up/Down	Last
Nymex	0.56	81.78
Brent	0.42	84.14
Gold	-3.65	1,818.00
EUR/USD	-0.0003	1.1361
JPY/USD	0.13	115.41
10-Year Note	-0.007	1.739%

 

 

World News

·     China December CPI: Annual CPI +1.5% vs. est. +1.8% and prior +2.3%; monthly CPI -0.3% vs. est. +0.2% and prior +0.4%; annual PPI +10.3% vs. est. +11.1% and prior +12.9%

·     Goldman Sachs cuts China 2022 growth forecast to 4.3% from 4.8%

·     Moody’s says interest rates to rise faster as Omicron’s impact on economy likely to be temporary; says now expect three U.S. Interest rate hikes this year, compared with November expectation of none until 2023; says Omicron’s impact on economic activity will likely be temporary and muted

 

Sector News Breakdown

Consumer

·     DoorDash (DASH) upgraded to Outperform from In Line at Evercore ISI with $256 tgt

·     Halo Collective (HCANF) to buy H2C Beverages and establishes a $30M distribution pact with Elegance Brands

·     Hyzon Motors (HYZN) said it received a subpoena from the SEC related to Blue Orca report allegations; co says is cooperating with them – Bloomberg

·     Southwest (LUV) downgraded to Peer Perform from Outperform at Wolfe Research

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) crude inventories fell -1.077M barrels in the latest week, gasoline inventories surged for a build of 10.86M barrels and Distillate inventories rose 3.035M barrels ahead of today’s DOE data at 10:30

·     Apogee Enterprises (APOG) raises dividend 10%, raises share repurchase authorization

·     The U.S. Federal Trade Commission has put off the sale of Aerojet Rocketdyne (AJRD) to Lockheed Martin (LMT) by up to two weeks, Reuters reported

 

Financials

·     AllianceBernstein Holding LP (AB) preliminary assets under management increased to $779 bln during December 2021 from $759 bln at end of November

·     Ally (ALLY) announces up to $2.0 billion share repurchase authorization and dividend on common stock; declares dividends on Series B and Series C preferred stock raises by 20%

·     Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of December 31, 2021, totaled $174.8B. Artisan Funds and Artisan Global Funds accounted for $84.4B of total firm AUM, while separate accounts and other AUM accounted for $90.4B

·     Citigroup Inc. (C) announced that it intends to exit the consumer, small business, and middle market banking operations of Citibanamex, which would advance Citi’s strategic goals to invest in businesses aligned with Citi’s core strengths, simplify its operations, and drive long-term shareholder value

·     Franklin Resources (BEN) reported preliminary month-end assets under management of $1.5781T at December 31, 2021, compared to $1.5468T at November 30, 2021.

·     Jefferies (JEF) Q4 EPS $1.36 vs. est. $1.34; Q1 revs $1.81B vs. est. $1.9B; raises quarterly dividend to 30c per share; raises share repurchase plan to $250M

·     Ready Capital (RC) 7M share Spot Secondary priced at implied $15.55

·     PayPal (PYPL) downgraded to Hold from Buy at Jefferies and cut tgt to $200 from $255

·     Silvergate Capital (SI) upgraded to Outperform from Market Perform at Keefe Bruyette

·     Wells Fargo (WFC) upgraded to Overweight from Neutral at Piper Sandler

 

Healthcare

·     Biogen (BIIB) shares fell 9% after hours as CMS noted Medicare plans to restrict access to controversial, pricey Alzheimer’s drug Aduhelm to patients in clinical trials; The decision comes after Biogen last month cut the yearly price of Aduhelm in half to $26,200; note shares of Eli Lilly (LLY) which also has an Alzheimer’s drug dropped in sympathy overnight

·     Glaukos (GKOS) announced that it has enrolled the first patient into a Phase 2 clinical trial of GLK-302 for the treatment of presbyopia

·     Hillstream BioPharma (HILS) 3.75M share IPO priced at $4.00

·     Immuron (IMRN) soars over 40% after announcing the funding of a new research agreement with the U.S Department of Defense (DoD); was awarded A$4.8M ($3.43M) funding

·     Integra LifeSciences (IART) guides Q4 revs $404M-$406M vs. est. $403.9M; guides FY revs up 12% to $1.541B-$1.543B vs. est. $1.54B

·     NeuroPace (NPCE) Q4 revs expected to be about $11.0M, compared to $10.8M YoY

·     Procept BioRobotics (PRCT) preliminary Q4 revenue $9.8M-$10.1M vs. est. $8.7M

 

Technology, Media & Telecom

·     DirecTV and Dish Network (DISH) are in fresh talks to merge after years of on-again, off-again wrangling, and multiple clampdowns from federal antitrust officials, The NY Post has learned. The satellite-TV giants attempted a merger nearly two decades ago, but the Federal Communications Commission and the Justice Department’s antitrust division stopped it https://bit.ly/3ffC1Kd

·     Ambarella (AMBA) upgraded to Overweight from Equal Weight at Wells Fargo

·     Snowflake (SNOW) upgraded to Overweight from Equal Weight at Barclays but trim tgt to $367 from $393