Early Look

Tuesday, March 21, 2023

U.S. equity futures are moving higher on the first day of Spring, currently at overnight highs at 4,013 (off low 3,981.75) as stocks add to Monday gains ahead of the 2-day FOMC starting today. The decision will be released tomorrow at 2:00 PM ET with Fed Chairman Powell’s press conference at 2:30 PM ET. Banking sector remains stable overnight after Bloomberg reported the U.S. Treasury Department is looking into whether the federal regulators can insure banking deposits beyond the current $250K FDIC cap. In Asian markets, The Nikkei Index fell -388 points to 26,945, the Shanghai Index rose 20 points to 3,255, and the Hang Seng Index gained 258 points to 19,258. In Europe, the German DAX is surging 260 points or 1.75% to 15,193, while the FTSE 100 gains 100 points to 1.37% to move back above 7,500. The euro rises as investor sentiment towards European bank equities improves. Stocks closed higher on Monday as traders grew hopeful that a crisis in the banking sector may be easing. The gains followed a forced takeover of Credit Suisse by UBS, engineered by the Swiss government. Financials were among the biggest gainers in the S&P 500 on Monday and looking higher early this morning. The recovery in risk appetite also sent Treasuries and the dollar down. The yield on the two-year Treasuries rose briefly above 4%; the 10-yr yield is up at 3.54%. Oil edges higher and Bitcoin holds gains above $28K.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 34.93 points, or 0.89%, to 3,951.57.

·     The Dow Jones Industrial Average rose 382.60 points, or 1.20%, to 32,244.58.

·     The Nasdaq Composite jumped 45.03 points, or 0.39%, to 11,675.54.

·     The Russell 2000 Index advanced 19.10 points, or 1.11% to 1,744.92.

Economic Calendar for Today

·     7:45 AM ET            ICSC Weekly Retail Sales

·     8:55 AM ET            Johnson/Redbook Weekly Sales

·     10:00 AM ET          Existing Home Sales M/M for February

·     1:00 PM ET             US Treasury to sell $15B in 20-year notes.

·     4:30 PM ET             API Weekly Inventory Data

Earnings Calendar:

·     Earnings Before the Open: ACDC CTRN INKT LLAP NAVB XFOR

·     Earnings After the Close: AEY AIR ARRY EPAC EVOK GME HQY NKE PAYS SMLR TBIO TELA

Other Key Events:

·     Two-day FOMC begins today – results tomorrow afternoon at 2:00 PM ET.

·     DA Davidson Annual Consumer Growth Conference, 3/21 in New York

·     Piper Annual Energy Conference, 3/20-3/22, in Las Vegas

Sector News Breakdown

Consumer

·     Harley-Davidson (HOG) upgraded to Overweight from Equal Weight at Morgan Stanley

Energy, Industrials and Materials

·     Canadian Solar (CSIQ) Q4 EPS $1.11 vs. est. $0.76; Q4 revs rose 29% y/y to $1.97B vs. est. $1.93B; reports 68% increase in solar module shipments year-over-year to 6.4 GW; sees Q1 revenue $1.6B-$1.8B vs. est. $1.95B; sees year revs $8.5B-$9.5B vs. est. $9.88B.

·     Emerson Electric (EMR) upgraded to overweight from equal weight at Morgan Stanley.

·     First Majestic (AG) announces it is taking action to reduce overall costs by reducing investments, temporarily suspending all mining activities, and reducing its workforce at Jerritt Canyon effective immediately.

·     Ritchie Bros Auctioneers Inc (RBA) said on Monday it had completed the acquisition of IAA Inc (IAA). Under the terms of the amended merger agreement, IAA shareholders will receive $12.80 per share in cash and 0.5252 common shares of Ritchie Bros for each share held.

·     Sempra (SRE) said that its 70%-owned subsidiary, Sempra Infrastructure Partners, LP (Sempra Infrastructure), reached a positive final investment decision (FID) for the development, construction, and operation of the Port Arthur LNG Phase 1 project in Jefferson County, Texas.

Financials

·     Bloomberg reported the U.S. Treasury Department is looking into whether the federal regulators can insure banking deposits beyond the current $250K FDIC cap.

·     Silvergate Capital Corp. (SI) said that President Ben Reynolds was laid off in connection with the decision to wind down operations at its subsidiary, Silvergate Bank.

Healthcare

·     Karuna Therapeutics (KRTX) announces $400M offering of common stock.

·     Fusion Pharmaceuticals (FUSN) announces first patient dosed in phase 1 study of FPI-2059, a targeted alpha therapy (tat) for the treatment of solid tumors expressing ntsr1.

·     Sarepta (SRPT) shares rose Monday after a report that FDA officials say agency needs to start using accelerated approval for gene therapies, STAT News reported.

·     Selecta Biosciences Inc. (SELB) and partner Swedish Orphan Biovitrum AB reported positive results from a pair of late-stage studies for their treatment candidate for the autoinflammatory disease gout.

·     Wells Fargo initiates coverage on U.S. SMID-cap biotechnology at a time of intense pain for management teams and investors. Assign Outperform ratings to Vertex (VRTX), Alnylam (ALNY), and Intellia (NTLA); Market-Perform ratings to Arrowhead (ARWR), CRISPR Therapeutics (CRSP), Beam (BEAM), and Allogene (ALLO) and Underperform on BioMarin (BMRN) and Ionis (IONS).

·     Akoya Biosciences (AKYA) announced that CFO Joe Driscoll is retiring from his position, effective March 20.

Technology, Media & Telecom

·     Meta Platforms (META) upgraded to Overweight from Equal Weight at Morgan Stanley and tgt raised to $250 from $190 citing structural pivot focusing on efficiency and ROIC, improving revenue and engagements trends, surging Reels monetization and 3 further revenue call options.

·     Harmonic (HLIT) announced that Charter Communications (CHTR) has selected Harmonic as its strategic technology partner to deploy virtual CMTS technology for next-gen broadband services.

·     Google (GOOGL) has suspended PDD Holdings Inc.’s (PDD) main Chinese shopping app Pinduoduo after discovering malware in unsanctioned versions of the software, dealing a blow to one of the country’s biggest online retailers.