Early Look

Wednesday, July 13, 2022

Futures	Up/Down	%	Last
Dow	50.00	0.16%	31,016
S&P 500	7.25	0.19%	3,831
Nasdaq	33.50	0.28%	11,812

 

 

U.S. futures are edging higher, trading in a narrow 20-point range overnight for S&P futures (3,818.50-3,838.75) ahead of the CPI inflation data at 8:30 AM. Estimates for headline CPI M/M is to rise +1.1% for June and Y/Y to rise +8.8% (back near 40-year highs). For core reading (ex food & energy) est. to rise +0.6% M/M and +5.7% Y/Y. All else quiet ahead of the data and bank earnings staring tomorrow. The inflation day a key point for the Fed, as markets expect the central bank to raise the key Fed funds target rate by 75 basis points at the conclusion of its July policy meeting, which would mark its third consecutive interest rate hike, and second consecutive 75-bps hike. In Asian markets, The Nikkei Index rose 142 points to 26,478, the Shanghai Index was up slightly at 3,284, and the Hang Seng Index fell -46 points to 20,797. In Europe, the German DAX is down -120 points or 0.95%, while the FTSE 100 is down -0.75% to 7,155. The US Treasury will issue $19B of 30yr bonds later today as yield are a touch lower 2yr yields is 3.03%/10yr 2.95%. News flow slow, outside of Delta (DAL) earnings and TWTR suing Musk after he terminated his $44B agreement to buy the company last Friday.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -35.63 points, or 0.92%, to 3,818.80

·     The Dow Jones Industrial Average fell -192.51 points, or 0.62%, to 30,981.33

·     The Nasdaq Composite tumbled -107.87 points, or 0.95%, to 11,264.73

·     The Russell 2000 Index declined -3.83 points, or 0.22% to 1,728.18

 

Economic Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     8:30 AM ET          Consumer Price Index (CPI) MoM for June…est. +1.1%

·     8:30 AM ET          Consumer Price Index (CPI) YoY for June…est. +8.8%

·     8:30 AM ET          CPI core, Ex: Food & Energy MoM for June…est. 0.6%

·     8:30 AM Et           CPI Core, Ex: Food & Energy YoY for June…est. +5.7%

·     10:30 AM ET        Weekly DOE Inventory Data

·     2:00 PM ET           Federal Budget for June

 

Earnings Calendar:

·     Earnings Before the Open: AYR, DAL, FAST

·     Earnings After the Close: OPTT, RMCF, TPCS

 

Other Key Events:

·     Amazon (AMZN) 2-day “Prime Day” event, 7/12-7/13

·     SEMICon West 2022, 7/12-7/14, in San Francisco

·     William Blair Biotech Focus Conference (virtual), 7/12-7/14

 

 

Macro	Up/Down	Last
Nymex	0.53	96.37
Brent	0.79	100.28
Gold	1.40	1,726.20
EUR/USD	0.0022	1.0059
JPY/USD	0.18	137.06
10-Year Note	-0.002	2.956%

 

 

World News

·     The IMF trimmed 2022,2023 US GDP forecasts, cutting 2022 growth to 2.3% vs June estimate of 2.9%, 2023 to 1%, and 2024 to 1.2%. They raised jobless forecasts, expecting unemployment to rise to 3.7% in this year, 4.6% in 2023, and above 5% in 2024,2025

·     China’s daily crude oil imports in June sank to their lowest since July 2018, as refiners anticipated COVID-19 lockdown measures would curb demand, data showed on Wednesday. The world’s top crude buyer imported 35.82 million tonnes last month

·     Bank of Korea joined other central banks by raising interest rates by 50bps to try and slow inflation, following the sharp rise in headline CPI to 6.0% in June

·     June Germany CPI rose +7.6% in-line with consensus, +7.9% prior; CPI in Germany increased to 117.70 points in June from 117.30 points in May of 2022.

 

Sector News Breakdown

Consumer

·     Delta Airlines (DAL) Q2 adj EPS $1.44 vs. est. $1.64; Q2 revs $13.82B vs. est. $13.3B; Sees 3Q capacity down 15%-17% vs. 3Q 2019 and total revenue up 1%-5% vs. 3Q 2019 and sees 3Q CASM-Ex up about 22% vs. 3Q 2019 and operating margin 11%-13%; domestic passenger revenue continues to lead recovery with international revenue accelerating

·     Good Times (GTIM) said same store sales for its third quarter ended June 28, 2022, increased 1.6% for its Good Times brand from the same prior year quarter and increased 5.3% for its Bad Daddy’s brand from the same prior year quarter

·     Copa Holdings’ (CPA) consolidated capacity, ASMs, came in 1.8% lower than June 2019, while passenger traffic, RPMs, decreased 3.4%, which resulted in an 83.7% load factor vs. 85.1% last yea

 

Energy, Industrials and Materials

·     The American Petroleum institute reported weekly crude inventories rose +4.762M barrels, gasoline inventories rose +2.927M, Distillate stockpiles rise +3.262M and Cushing +0.298M

·     Airbus (EADSY) is in talks with Delta Air Lines (DAL) to expand the U.S. carrier’s existing order for A220 small jetliners, Reuters reported. The deal for a top-up order of around a dozen aircraft could be signed at next week’s Farnborough Airshow where the U.S. carrier is also widely expected to finalize an order for at least 100 Boeing (BA) 737 MAX airliners.

·     Mercury Systems (MRCY) announced it received a $56M contract award from a leading defense prime contractor to facilitate the rapid data processing requirements for a defense radar application.

·     Sherwin-Williams (SHW) downgraded to Neutral from Buy at Bank America

 

Financials

·     AllianceBernstein L.P. (AB) said preliminary assets under management decreased to $647 billion during June 2022 from $687 billion at the end of May. The 6% decrease was primarily attributed to negative markets, coupled with modest firm-wide net outflows.

·     Franklin Resources, Inc. (BEN) reported prelim month-end assets under management (AUM) of $1,379.8 billion at June 30, 2022, compared to $1,445.9 billion at May 31, 2022. This month’s decrease in AUM primarily reflected the negative impact of markets and long-term net outflows.

·     Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,390.4 billion, a decrease of 4.2% versus previous month-end. The firm experienced net long-term outflows of $3.9 billion in the month. Non-management fee earning net inflows were $0.7 billion and money market net inflows were $15.0 billion

·     Virtus Investment Partners, Inc. (VRTS) reported preliminary assets under management of $155.4 billion as of June 30, 2022. The decrease from March 31, 2022, primarily reflected market depreciation and net outflows in open-end funds and retail separate accounts, partially offset by positive net flows in institutional accounts

·     Artisan Partners Asset Management Inc. (APAM) reported that its preliminary assets under management (“AUM”) as of June 30, 2022, totaled $130.5 billion. Artisan Funds and Artisan Global Funds accounted for $63.0 billion of total firm AUM

·     Synchrony (SYF) to Equal Weight from Overweight at Wells Fargo and cut tgt to $32 from $45 given his more cautious view of the U.S. macro environment

 

Healthcare

·     Atara Biotherapeutics (ATRA) announces completion of the ATA188 Phase 2 EMBOLD study interim analysis in patients with progressive MS; Based on the analysis of the EMBOLD data available at the time of the IA, there was not a sufficient dataset to draw conclusions about the predictive value of six months EDSS improvement for 12 months EDSS improvement.

·     Humanigen (HGEN) shares -55% after the biotech firm said that its Covid-19 drug trial didn’t achieve statistical significance on the primary endpoint

·     Jackie Fouse is stepping down as CEO of Agios Pharma (AGIO) to be replaced by Brian Goff, a former executive with at Alexion Pharma, the company announced

·     Pliant Therapeutics (PLRX) 10.81M share Secondary priced at $18.50

 

Technology, Media & Telecom

·     Twitter (TWTR) sued billionaire Elon Musk over his abandoned $44 billion takeover bid

·     Desktop Metal (DM) announced that James Haley will be transitioning from his role as CFO of the Company to pursue other interests