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BofA downgrades Carvana to Neutral on liquidity concerns
BofA analyst Nat Schindler downgraded Carvana to Neutral from Buy with a price target of $10, down from $43, citing concerns about its cash burn and liquidity. Carvana has been struggling to turn profitable and is burning through cash quickly with about $600M in annual interest expense and now about $477M in cash and inventory of $2.6B, which is "far outweighed" by its long-term notes payable of $6.6B, Schindler said. Without a cash infusion, he now thinks Carvana is likely to run out of cash by the end of 2023, Schindler added.
Insider Trading: notable purchases -- CEO adds to MOFG; notable sales -- President/CEO active in MNTK
Buyers:
GOCO 10% owner bought 47,330 shares at $8.79 - $10.77 worth ~$467K.
MOFG CEO bought 24,858 shares at $34.00 - $34.50 worth ~$857K.
Sellers:
APP Chief Marketing Officer sold 48,562 shares at $13.98 - $14.105 worth ~$682K.
FHI Principal Accounting Officer sold 19,175 shares at $37.30 - $37.73 worth ~$719K.
MNTK President/CEO and VP of Business Development sold a total of 164,147 shares at 11.62 - $12.78 worth ~$2 mln.
premarket gappers
Gapping up:
HZNP +28.4%, VRDN +15.2%, XPEV +12.8%, W +10.4%, WDAY +10%, BEKE +7.9%, CBL +3.8%, MAXR +3%, BIIB +2.9%, SANA +2.3%, HPE +2.2%, DOOO +2%, PBI +1.6%, BRY +1.6%, FUBO +1.5%, BA +1.1%, STLA +1.1%, ERIC +1%, CMP +1%, SNPS +0.9%, CRM +0.9%, FRO +0.9%, NAT +0.9%, FL +0.6%, RTX +0.6%
Gapping down:
CRWD -19.6%, NTAP -12.7%, XFOR -11.9%, ASPN -11.8%, ASTS -6%, DCI -2.7%, FND -2.4%, INTU -2.3%, SDRL -2%, ALTO -1.2%, LTHM -1.2%, MU -0.9%, SLDP -0.9%, DDOG -0.8%
Intuit price target lowered to $525 from $575 at Jefferies
Jefferies analyst Brent Thill lowered the firm's price target on Intuit to $525 from $575 and keeps a Buy rating on the shares post the fiscal Q1 results. Intuit cut Credit Karma guidance as expected, though by a greater than expected magnitude, as the company assumes further deterioration from the macro environment, Thill tells investors in a research note. The analyst says Intuit "remains a high quality, defensive franchise, though not entirely immune to macro headwinds.
Bullish Call Activity:
IMAX Dec 17 calls (volume: 15.6K, open int: 10, implied vol: ~63%, prev day implied vol: 53%). 7500 contracts traded in a single transaction. Co is presenting at a Wells Fargo conference today. Co is expected to report earnings late February.
MU Dec 58.5 calls (volume: 10.9K, open int: 560, implied vol: ~53%, prev day implied vol: 46%). Digitimes reported that the company is aiming to increase 1-beta DRAM shipments. Co is presenting at a Wells Fargo conference today. Co is confirmed to report earnings December 21 after the close.
FDX Dec 180 calls (volume: 3520, open int: 650, implied vol: ~36%, prev day implied vol: 33%). Co is confirmed to report earnings December 20 after the close.
Bearish Put Activity:
CRM Dec 152.5 puts are seeing interest ahead of earnings tomorrow after the open (volume: 2290, open int: 300, implied vol: ~109%, prev day implied vol: 96%).
NAT Jan23 3 puts are seeing interest with the underlying stock up 4% (volume: 1200, open int: 140, implied vol: ~83%, prev day implied vol: 75%). Co is scheduled to present at an investor conference on December 2. Co is expected to report earnings mid-February.
FTCH - Bullish option flow detected in Farfetch Limited (7.86 +0.22) with 15,093 calls trading (2x expected) and implied vol increasing almost 2 points to 98.06%. . The Put/Call Ratio is 0.48. Earnings are expected on 02/23
CrowdStrike Holdings options imply 8.9% move in share price post-earnings
Pre-earnings options volume in CrowdStrike Holdings is normal with calls leading puts 7:5. Implied volatility suggests the market is anticipating a move near 8.9%, or $12.21, after results are released. Median move over the past eight quarters is 5.7%
Apple (AAPL 141.39, -2.83, -2.0%): falling to its lowest level in nearly three weeks. TF International Securities estimated a 15-20 mln shortfalls in Q4 iPhone shipments. Lockdown measures in the area that houses the company's iPhone production facilities are reportedly being lifted today.
PayPal (PYPL 78.65, -1.28, -1.6%): falling to a one-week low after surrendering an earlier gain amid analyst commentary calling attention to competition from Apple Pay.
Visa (V 208.67, -2.59, -1.2%): falling toward its 200-day moving average (204.91). Redburn initiated coverage with a Sell rating.
Salesforce (CRM 152.32, -1.37, -0.9%): slipped back to its 50-day moving average (151.62) before narrowing its loss.
Skyworks Solutions (SWKS 90.50, -0.74, -0.8%): slipping toward its 50-day moving average (88.94).
NVIDIA (NVDA 156.98, -1.29, -0.8%): slipping to a one-week low.
Oracle (ORCL 80.77, -0.62, -0.8%): deepening last week's pullback from its best level since early April.
Microsoft (MSFT 240.16, -1.60, -0.7%): slipping toward its 50-day moving average (237.02).
Micron (MU 55.48, -0.27, -0.5%): slipping toward its 50-day moving average (54.75).
Texas Instruments (TXN 173.31, +0.31, +0.2%): hit its lowest level in nearly two weeks before turning positive.
AMD (AMD 73.56, +0.37, +0.5%): trading near the midpoint of yesterday's range.
Intel (INTC 28.93, +0.21, +0.7%): seeking its first gain in four days.
Shopify reports Black Friday Cyber Monday weekend sales up 19% y/y
Shopify announced earlier a record-setting Black Friday Cyber Monday weekend, with sales of $7.5B from independent businesses worldwide. That's a 19% increase in sales from the $6.3B during Shopify's Black Friday Cyber Monday weekend in 2021, or 21% on a constant currency basis, Shopify said in a statement. More than 52 million consumers globally purchased from brands powered by Shopify this year, an 18% increase from 2021, it added. "This year, Black Friday Cyber Monday showed us once again that consumers are voting with their wallets to support the independent brands they love," said Harley Finkelstein, President of Shopify. "We saw record level shopping happening across all channels this weekend, proving businesses that meet their customers where they are, whether that's online or in-person, will earn their loyalty in return."
Shopify reports Black Friday Cyber Monday weekend sales up 19% y/y
Shopify announced earlier a record-setting Black Friday Cyber Monday weekend, with sales of $7.5B from independent businesses worldwide. That's a 19% increase in sales from the $6.3B during Shopify's Black Friday Cyber Monday weekend in 2021, or 21% on a constant currency basis, Shopify said in a statement. More than 52 million consumers globally purchased from brands powered by Shopify this year, an 18% increase from 2021, it added. "This year, Black Friday Cyber Monday showed us once again that consumers are voting with their wallets to support the independent brands they love," said Harley Finkelstein, President of Shopify. "We saw record level shopping happening across all channels this weekend, proving businesses that meet their customers where they are, whether that's online or in-person, will earn their loyalty in return."
Workday (WDAY) is set to report Q3 (Oct) results today after the close, with a call to follow at 4:30pm ET. The current S&P CapitalIQ consensus is for a 24% drop yr/yr in adjusted EPS to $0.84 and revenue growth of 19% to $1.59 bln.
WDAY has remained fairly consistent with its earnings reports lately, posting revenue growth above 20% for four straight quarters while also topping earnings expectations in three of those four quarters.
WDAY shares received a considerable push after its mostly upbeat Q2 (Jul) results in late August, climbing around 11% during after-hours trading.
However, since then, the stock has been mostly flat, finding slightly lower lows and lower highs, but still mainly trading within the $130-170 range.
WDAY's lofty multiple of ~38x forward earnings has hovered in the background this year as it represents a sizeable premium relative to competitors Oracle (ORCL) at ~16x and SAP SE (SAP) at ~21x.
This pricey valuation also opens the door to nitpicking, which could spark selling pressure on an earnings report that contains only a few minor blemishes.
WDAY just reiterated its long-term floor of maintaining at least 20% subscription revenue growth during its Investor Day in mid-September, so we would like to hear that nothing has changed on that front.
A few catalysts could help WDAY sustain the momentum from its prior quarter.
WDAY has penetrated over half of Fortune 500 companies, giving it a commanding presence to build upon.
Financial management has become a focal point for organizations looking to navigate the rising rate and inflationary environment.
Digital transformations are still ongoing despite the challenging economic environment, boding well for WDAY, which fundamentally takes offline processes and digitizes them.
On the flip side, WDAY is not without its share of challenges.
Although financial management is a focus, companies are tightening their budgets to improve profitability and survive unfavorable economic conditions.
ORCL remains a fierce competitor, noting during its AugQ earnings call in September that its competitors' ERP and HCM software is so expensive to maintain and run, paving the way for additional savings when shifting to ORCL's ERP and HCM offerings.
Meanwhile, alongside ORCL, SAP is also expanding its market share in ERP, boasting accelerated momentum across all of its key cloud indicators in SepQ.
Lastly, WDAY's Q3 report will serve as a good indicator of what to expect from Salesforce (CRM) when it reports OctQ earnings on November 30 after the close.
NRF says a record 196.7 million Americans shopped in stores and online during the five-day holiday shopping period from Thanksgiving Day through Cyber Monday (65.71 -0.27)
A record 196.7 million Americans shopped in stores and online during the five-day holiday shopping period from Thanksgiving Day through Cyber Monday, according to the annual survey released today by the National Retail Federation and Prosper Insights & Analytics. The total number of shoppers grew by nearly 17 million from 2021 and is the highest figure since NRF first started tracking this data in 2017.
According to the survey, more than three-quarters (76%) of consumers say they shopped over the Thanksgiving holiday weekend, up from 70% in 2021. The numbers shattered NRF's initial expectations by more than 30 million.
Retailers saw a sizable uptick of in-store shoppers. More than 122.7 million people visited bricks-and-mortar stores over the weekend, up 17% from 2021. The number of online shoppers also grew, albeit at a slower pace. This year saw 130.2 million online shoppers, a 2% increase over 2021
Black Friday continues to reign as the most favored day for in-store shopping. Approximately 72.9 million consumers opted for a more traditional in-person shopping experience, up from 66.5 million in 2021. The Saturday after Thanksgiving followed suit, with 63.4 million in-store shoppers, up from 51 million last year. A majority (77%) of Saturday shoppers indicated they shopped specifically for Small Business Saturday.
Black Friday was also the most popular day for online shopping, continuing a trend that started in 2019. Roughly 87.2 million consumers shopped online during Black Friday this year, in line with 2021. Similar to last year, 77 million people shopped online on Cyber Monday. A record 59% of online Cyber Monday shoppers used their mobile device, up from 52% in 2021.
The total iPhone 14 Pro and 14 Pro Max shipments in 4Q22 will be 15–20 million units less than expected. Significant downside risks to Apple & iPhone supply chain due to Zhengzhou iPhone plant labor protests
lowers
U.S. stocks were trading lower Tuesday, as investors gauged the chances that Beijing may ease its COVID-zero policies which provoked widespread protests over the weekend and added to investor worries about global economic growth.
Domestically, they are weighing downbeat data on consumer mood, the housing market and are staying tuned for more talk from the Federal Reserve on future interest rate hikes.
How are stocks are trading
On Monday, the Dow Jones Industrial Average fell 498 points, or 1.45%, to 33849, the S&P 500 declined 62 points, or 1.54%, to 3964, and the Nasdaq Composite dropped 177 points, or 1.58%, to 11050.
What's driving markets
Asian stocks recovered Tuesday as unrest across China declined and hopes rose that Beijing might ease Covid-19 restrictions.
See: Some markets cheer as China vows to vaccinate more elderly. Analysts see positive movement by officials
"Police in China have quashed mass COVID demonstrations for now, helping stocks regain their footing," said Susannah Streeter , senior investment and markets analyst at Hargreaves Lansdown.
Equities, bond yields and industrial commodity prices fell at the start of the week on concerns a wave of anti COVID- lockdown demonstrations would cause a crackdown by Beijing , further hobbling activity in the world's second biggest economy and slowing global growth.
However, on Tuesday China's National Health Commission said it would ramp up COVID vaccinations for the elderly, a move that may allow less draconian COVID restrictions to be imposed.
See: China to hold media briefing on COVID policy and boost vaccinations for the elderly
The Hang Seng index in Hong Kong , which fell 1.6% on Monday, surged 5.2%.
"The unrest in China duly weighed on equity indices everywhere yesterday, and some moderately hawkish commentary from FOMC members weighed additionally on the U.S. market," said Ian Williams , strategist at Peel Hunt.
"However, the mood has brightened considerably through the Asian session after a more encouraging update on COVID cases and speculation that some of the local restrictions may be relaxed," Williams added.
Copper , the industrial metal that tends to closely track perceptions of Chinese demand, rose 1.1% to $3.651 a pound, and U.S. crude oil , which on Monday hit a near 11-month low, climbed 2.1% to $78.82 a barrel ahead of the OPEC+ meeting this weekend.
Domestically, investors are getting another look at the financial health of consumers going into the holiday season.
Shoppers spent $11.3 billion on Cyber Monday deals, according to Adobe (ADBE). That's a record haul passing the $10.7 spent last year on Cyber Monday sales, according to Adobe. This also follows a record $9.12 billion in online sales during Black Friday, Adobe data shows. But analysts noted that the record sales numbers include the higher prices that consumers are paying as a result of inflation running at a forty year high.
The S&P Case-Shiller U.S. home price index gave a look at America's housing market, which remains under pressure. The Case-Shiller 20-city price index dropped 1.2 % in September, marking the third straight monthly decline.
The U.S. consumer confidence index for November fell to a four-month low as inflation, higher interest rates and recession worries keep grinding at consumer mood.
Investors are working Tuesday with a mixed bag of information, said Paul Nolte , senior vice president at Kingsview Investment Management .
On the one hand, results from the home price index were "a little disappointing" and the consumer confidence data flagged trouble signs like an uptick in inflation expectations, he noted.
At the same time, "there's still some hope" that China's approach to COVID will soften, Nolte said. "Certainly, an opening of China is going to help out a lot," he said -- but noted it's tough to anticipate the next moves from China's president, Xi Jinping .
Investors also are awaiting a Wednesday speech from Federal Reserve Chairman Jerome Powell , Nolte noted. That's following Fed speakers earlier this week, including a MarketWatch interview with St. Louis Fed President James Bullard . When it comes to rate hikes, "to a person they were all saying we're not done yes," Nolte said.
Then layer on the seasonal boost, when investors are starting to look for year-end stock bargains. That "tends to provide a positive bias to the markets," Nolte said.
Rebound attempt hits a wall
The major indices tried to rebound from yesterday's losses but have run into a mega-cap wall in the last half hour that has knocked them lower.
The weakness in the Dow, Nasdaq, and S&P 500 is a far cry from the 5.2% gain Hong Kong's Hang Seng registered on Tuesday amid hopes that Chinese authorities will take steps in coming months to shift away from the extreme zero-COVID policy restrictions and pave the way for stronger growth.
Those hopes were burnished by social protests over the weekend, which gave way to a briefing by health officials today that included a plan to speed up vaccinations for the elderly and an urging of local officials to avoid extreme restrictions when possible.
Still, there hasn't been much carryover enthusiasm for the U.S. market, which is anxiously waiting to hear what Fed Chair Powell will say in a 1:30 p.m. ET speech on Wednesday at the Brookings Institution entitled Economic Outlook, Inflation, and the Labor Market.
That speech will influence the market's policy path expectations, so it is understandable that conviction is lacking in front of it. At the same time, there is a slew of notable economic releases this week that will also help shape policy expectations.
Today's reports featured a 0.1% month-over-month increase in the September FHFA Housing Price Index (prior +0.7%), a 10.4% year-over-year increase in the S&P Case-Shiller Home Price Index (prior 13.1%), and a 100.2 reading for the November Consumer Confidence Index (prior 102.2) that also included an uptick in year-ahead inflation expectations to 7.2% from 6.9%.
The 2-yr note yield is down one basis point at 4.45% and the 10-yr note yield is up two basis points to 3.72%.
The energy sector (+1.1%) is today's biggest winner in the stock market, running alongside oil prices ($78.92, +1.68, +2.2%) that have moved up on speculation OPEC+ could soon announce a cut in production and the hopeful consideration that oil demand in China will improve with some relaxed COVID restrictions.
Weakness in the mega-cap stocks, which has accelerated over the last 30 minutes, has more than offset the strength there, as it has also undercut the heavily-weighted information technology (-1.0%), communication services (-1.0%), and consumer discretionary (-0.6%) sectors. The Vanguard Mega-Cap Growth ETF (MGK) is down 1.0%.
The Russell 2000 is up 0.6%; the Dow Jones Industrial Average is down 0.5%; the S&P 500 is down 0.6%; and the Nasdaq Composite is down 0.9%.
APA (APA 46.50, +1.54, +3.4%): best performer in the sector, rising to the midpoint of its range from Friday.
Coterra Energy (CTRA 27.80, +0.65, +2.4%): hit its best level in over two weeks before narrowing its gain.
Diamondback Energy (FANG 146.75, +3.02, +2.1%): rising back above its 50-day moving average (145.53).
Williams Companies (WMB 34.17, +0.69, +2.1%): approached its November high (34.53) before narrowing its gain.
Kinder Morgan (KMI 18.81, +0.35, +1.9%): revisited its November high (18.96) before narrowing its gain.
EQT Corporation (EQT 42.22, +0.70, +1.7%): climbing back above its 50-day moving average (41.90).
ConocoPhillips (COP 125.90, +2.06, +1.7%): continuing yesterday's bounce off its 50-day moving average (121.22). Company and Qatar Energy signed a deal to provide LNG to Germany starting in 2026.
Occidental Petroleum (OXY 69.42, +1.19, +1.7%): rising back above its 50-day moving average (68.58).
Baker Hughes (BKR 28.56, +0.37, +1.3%): rising toward its 200-day moving average (29.53).
Chevron (CVX 180.49, +2.13, +1.2%): revisiting yesterday's intraday high.
Exxon Mobil (XOM 110.68, +0.87, +0.8%): trading near yesterday's intraday high.
Pioneer Natural Resources (PXD 241.18, +1.68, +0.7%): trading near its 200-day moving average (242.82). Stock went ex-dividend today.
Valero (VLO 135.76, +0.92, +0.7%): weakest performer in the sector, trading in the lower half of yesterday's range.
NASDAQ market internals summary
Volume is above average for this time of day. Breadth is mixed with issues and volume bullish while new highs to new lows are bearish (negative divergence). Advancing Issues: 2528 / Declining Issues: 1570 -- for a ratio of 1.6 to 1. Advancing Volume: 1,107,633,000 / Declining Volume: 486,426,000 -- for a ratio of 2.3 to 1. New 52-Week Highs: 47 / New 52-Week Lows: 108
CHINESE CITY HOSTING KEY IPHONE PLANT LOOSENS COVID CONTROL
$AAPL
SNAP call sweeper
(OPTION ALERT) SNAP call sweep on the ask -- $SNAP Dec22 2nd 10.0 Calls 1000 contracts at $0.26
S&P 500 futures are up 8 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 44 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are down 1 point and are trading slightly above fair value.
Equity futures are mixed, but things are generally more positive as speculation grows that China may temper its zero-COVID measures. The country reported its first decline in COVID infections in more than a week and Chinese officials announced they're aiming to increase vaccination rates among older people, according to Bloomberg. Hong Kong's Hang Seng rose 5.2% on the news.
WTI crude oil futures have continued to rebound ($78.92/bbl, +1.67, +2.1%) on these latest developments.
Treasury yields are moving lower. The 10-yr note yield is down four basis points to 3.66% and the 2-yr note yield is down two basis points to 4.43% with some cooler-than-expected inflation readings out of Europe contributing to the buying interest.
Market participants will receive the following economic data today:
9:00 a.m. ET: September FHFA Housing Price Index (prior -0.7%)
9:00 a.m. ET: September S&P Case-Shiller Home Price Index (Briefing.com consensus 10.7%; prior 13.1%)
10:00 a.m. ET: November Consumer Confidence (Briefing.com consensus 100.0; prior 102.5)
In corporate news:
Roku (ROKU 52.35, -1.56, -2.9%): downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
UnitedHealth (UNH 530.10, -2.17, -0.4%): updates FY22 outlook and introduces FY23 outlook ahead of its Investor Conference; reaffirms FY22 earnings, guides revs ahead of consensus; guides FY23 earnings below consensus, revs above
Microchip (MCHP 75.25, +0.91, +1.2%): reiterates its Q3 (Dec) net sales guidance and expectations for sequential revenue growth for Q4 (Mar)
Hibbett (HIBB 63.70, -3.90, -5.8%): misses by $0.57, misses on revs; guides FY23 EPS in-line, revs in-line
Bilibili (BILI 13.88, +1.29, +10.3%): beats by RMB0.20, beats on revs; guides Q4 revs below consensus
UPS (UPS 182.50, +2.59, +1.4%): upgraded to Buy from Hold at Deutsche Bank
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's Nikkei: -0.5%, Hong Kong's Hang Seng: +5.2%, China's Shanghai Composite: +2.3%, India's Sensex: +0.3%, South Korea's Kospi: +1.0%, Australia's ASX All Ordinaries: +0.3%.
In economic data:
Japan's October Retail Sales 4.3% yr/yr (expected 5.0%; last 4.8%). October Unemployment Rate 2.6% (expected 2.5%; last 2.6%) and October Jobs/Application Ratio 1.35 (expected 1.35; last 1.34)
In news:
Chinese equities rallied amid speculation that the government is looking to speed up coronavirus shots for the elderly and is aiming to avoid excessive restrictions.
China Securities Regulatory Commission said that the ban on share sales by developers will be lifted on Monday.
The Reserve Bank of New Zealand's Shadow Board sees the official cash rate peaking at 5.00% in 2023 with a risk of "overcorrecting."
Japan's Finance Minister Suzuki said that a budget that directs 2.0% of GDP to defense spending is being prepared.
The South Korean government ordered drivers of cement trucks to return to work from a strike.
Taiwan's domestic growth forecast for 2022 was cut to 3.06% from 3.76% while the outlook for 2023 was lowered to 2.75% from 3.05%.
Major European indices trade near their flat lines while the U.K.'s FTSE (+0.7%) outperforms. STOXX Europe 600: +0.2%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.2%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: -0.1%.
In economic data:
Eurozone's November Business and Consumer Survey 93.7 (expected 93.5; last 92.7)
U.K.'s October Mortgage Lending GBP3.97 bln (expected GBP5.02 bln; last GBP5.88 bln) and net Lending to Individuals GBP4.70 bln (expected GBP6.70 bln; last GBP6.50 bln)
Italy's September Industrial Sales -1.2% m/m (last 3.4%); 18.0% yr/yr (last 22.9%). October PPI -3.3% m/m (last 2.7%); 28.0% yr/yr (last 41.7%)
Spain's November CPI -0.1% m/m (last 0.3%); 6.8% yr/yr (expected 7.4%; last 7.3%)
Swiss Q3 GDP 0.2% qtr/qtr (expected 0.3%; last 0.1%); 0.5% yr/yr (expected 1.0%; last 2.2%)
In news:
Spain's November CPI and Italy's October PPI showed a deceleration on a month-over-month basis ahead of tomorrow's release of the November CPI report for the eurozone.
The Airbus CEO said that the supply chain environment is still "very complex."
British Prime Minister Sunak said that the "golden era" of U.K. relations with China has come to an end.
Germany signed an agreement to purchase LNG from Qatar beginning in 2026.
U.S. equity futures:
S&P 500 Futures: +8 @ 3,978
DJIA Futures: -1 @ 33,870
Nasdaq 100 Futures: +44 @ 11,660
Overseas:
Europe: DAX +0.2%, FTSE +0.7%, CAC +0.2%
Asia: Nikkei -0.5%, Hang Seng +5.2%, Shanghai Composite +2.3%
Commodities:
Crude Oil +2.23 @ 78.96
Nat Gas +0.103 @ 7.299
Gold +12.60 @ 1752.90
Silver +0.310 @ 21.225
Copper +0.0325 @ 3.644
Earnings/Guidance:
Arrowhead (ARWR) reports FY22 (Sep) results, misses on revs
AZEK (AZEK) misses by $0.02, beats on revs; guides DecQ revs below consensus; expects FY23 volume to fall 10% yr/yr
Bank of Nova Scotia (BNS) beats by CAD 0.09, misses on revs
Baozun (BZUN) misses by RMB0.33, reports revs in-line
Bilibili (BILI) beats by RMB0.20, beats on revs; guides Q4 revs below consensus
Geo Group (GEO) sees FY22 EPS and revs in line with consensus
Hibbett (HIBB) misses by $0.57, misses on revs; guides FY23 EPS in-line, revs in-line
Microchip (MCHP) reiterates its Q3 (Dec) net sales guidance and expectations for sequential revenue growth for Q4 (Mar)
Nestle (NSRGY) raises FY22 organic sales outlook
TC Energy (TRP) reaffirms long-term comparable EBITDA growth outlook
UnitedHealth (UNH) updates FY22 outlook and introduces FY23 outlook ahead of its Investor Conference; reaffirms FY22 earnings, guides revs ahead of consensus; guides FY23 earnings below consensus, revs above
News:
China aiming to increase COVID-19 vaccination rates among older people. Note: CNBC reported that China is officially sticking by Zero COVID-19 policy, however there are "unverified rumors" that Chinese President Xi is looking for a way to exit from zero COVID policy, according to Bloomberg
President Biden wants Congress to pass legislation immediately to adopt the tentative agreement between railroad workers and operators; House Speaker Nancy Pelosi (D-CA) says House will proceed with that legislation
Spain's November CPI and Italy's October PPI showed a deceleration on a month-over-month basis
British Prime Minister Sunak said that the "golden era" of U.K. relations with China has come to an end
The Reserve Bank of New Zealand's Shadow Board sees the official cash rate peaking at 5.00% in 2023 with a risk of "overcorrecting."
AMC Networks (AMCX) announced that its Chief Executive Officer Christina Spade has stepped down from her role
Apollo Global Management (APO) co-founder Leon Black was accused of rape, according to FT
Baidu (BIDU) to build world's largest fully driverless ride-hailing service area in 2023
Brookfield Infrastructure (BIP) to renew its normal course issuer bid for its outstanding limited partnership units
ConocoPhillips (COP) and QatarEnergy announce the signing of two agreements to supply long-term liquefied natural gas to Germany
Micron (MU) aiming to increase 1-beta DRAM shipments, according to Digitimes
Silvergate Capital (SI) announced a business update, citing that its deposit relationship with BlockFi is limited to less than $20 million of its total deposits from all digital asset customers as of November 28, 2022
Snap (SNAP) staff will be required to be in the office four days a week, according to Bloomberg
Suncor Energy (SU) to retain and optimize its Petro-Canada retail business
Toyota (TM) global output has slowed, according to Bloomberg
uniQure (QURE) and Bristol-Myers Squibb (BMY) collaboration and license agreement will terminate effective February 21, 2023
Uranium Royalty (UROY) notified Orano Canada of its election to receive royalty proceeds from the recently re-started world-class McArthur River mine through delivery of physical uranium
M&A:
Apollo Endosurgery (APEN) to be acquired by Boston Scientific (BSX) for $10 per share
AstraZeneca (AZN) acquires Neogene Therapeutics for total consideration up to $320 mln
Bionano Genomics (BNGO) to acquire Purigen Biosystems to enable simplified and accelerated DNA isolation for optical genome mapping for up to $64 mln, including $32 mln in cash paid at closing
Royal Bank of Canada (RY) to strengthen premium Canadian business with agreement to acquire HSBC Canada for an all-cash purchase price of $13.5 billion
USANA (USNA) acquires Rise Bar and Oola
Syndicate:
There is no syndicate activity of note
IPOs:
Expect to Price:
No IPOs expected.
Gapping Up/Down
Gapping up:
BILI +8.3%, NXST +6.5%, BIDU +5.7%, BZUN +5.5%, BIGC +4.4%, SABR +4.1%, NUS +2.6%, CNI +1.4%, PBF +1.1%, AZN +0.9%, NSC +0.8%, UNP +0.7%, CP +0.7%, AAPL +0.6%, MCHP +0.6%, TRP +0.6%
Gapping down:
AZEK -8.1%, SI -3.7%, AMR -2.7%, USNA -2.5%, ENFN -2.4%, SF -1.4%, ICHR -1.2%, BNGO -1%, UNH -0.5%
Analyst Research (see Upgrades/Downgrades calendar for full list):
Upgrades
Canadian Pacific (CP) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $98
Geo Group (GEO) upgraded to Outperform from Neutral at Wedbush; tgt raised to $14
NovoCure (NVCR) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $89
UPS (UPS) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $220
Downgrades:
Darden Restaurants (DRI) downgraded to Neutral from Outperform at Robert W. Baird; tgt raised to $150
Evergy (EVRG) downgraded to Underperform from Outperform at Credit Suisse; tgt lowered to $57
Roku (ROKU) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
American Homes 4 Rent (AMH) downgraded to Outperform from Strong Buy at Raymond James
CinCor Pharma (CINC) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $22
CinCor Pharma (CINC) downgraded to Perform from Outperform at Oppenheimer
Generac (GNRC) downgraded to Underperform from Hold at Jefferies; tgt lowered to $85
Invitation Homes (INVH) downgraded to Outperform from Strong Buy at Raymond James
PagSeguro Digital (PAGS) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $12
Others:
23andMe (ME) initiated with a Buy at Berenberg; tgt $7
Atlantic Union Bankshares (AUB) initiated with an Outperform at Hovde Group; tgt $41
OmniAb (OABI) initiated with an Outperform at SVB Leerink; tgt $6
Toast (TOST) initiated with a Peer Perform at Wolfe Research
VersaBank (VBNK) initiated with an Outperform at Keefe Bruyette
American Express (AXP) initiated with a Neutral at Redburn
Mastercard (MA) initiated with a Neutral at Redburn
Visa (V) initiated with a Sell at Redburn
Upcoming Events:
Econ Data:
09:00 ET: September FHFA Housing Price Index (Prior -0.7%)
09:00 ET: September S&P Case-Shiller Home Price Index (Prior 13.1%)
10:00 ET: November Consumer Confidence (Prior 102.5)
Earnings:
Monday (Nov 28)
Morning: None of note
Afternoon: ARWR, AZEK
Tuesday (Nov 29)
Morning: BNS, BZUN, BILI, CRNC, HIBB, SJR
Afternoon: CMP, CRWD, HPE, INTU, NTAP, WDAY
Wednesday (Nov 30)
Morning: DCI, FRO, HRL, BEKE, LESL, WOOF, RY, SFL, TITN
Afternoon: BOX, CRDO, ESTC, FIVE, LZB, NCNO, NTNX, OKTA, PSTG, PVH, CRM, SMTC, SNOW, SPLK, SNPS, VSCO, YEXT
Thursday (Dec 01)
Morning: BMO, BIG, CM, DBI, DG, KR, PDCO, SCWX, TD
Afternoon: AMBA, AOUT, ASAN, CHPT, MRVL, PD, SMAR, PATH, ULTA, VEEV, ZS, ZUMZ
Friday (Dec 02)
Morning: CBRL, GCO
Afternoon: None of note
Asia & Europe detail:
Asia: Nikkei -0.5%, Hang Seng +5.2%, Shanghai Composite +2.3%
Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Chinese equities rallied amid reports that the government is looking to speed up coronavirus shots for the elderly and is aiming to avoid excessive restrictions. China Securities Regulatory Commission said that the ban on share sales by developers will be lifted on Monday. The Reserve Bank of New Zealand's Shadow Board sees the official cash rate peaking at 5.00% in 2023 with a risk of "overcorrecting." Japan's Finance Minister Suzuki said that a budget that directs 2.0% of GDP to defense spending is being prepared. The South Korean government ordered drivers of cement trucks to return to work from a strike. Taiwan's domestic growth forecast for 2022 was cut to 3.06% from 3.76% while the outlook for 2023 was lowered to 2.75% from 3.05%.
In economic data:
Japan's October Retail Sales 4.3% yr/yr (expected 5.0%; last 4.8%). October Unemployment Rate 2.6% (expected 2.5%; last 2.6%) and October Jobs/Application Ratio 1.35 (expected 1.35; last 1.34)
---Equity Markets---
Japan's Nikkei: -0.5%
Hong Kong's Hang Seng: +5.2%
China's Shanghai Composite: +2.3%
India's Sensex: +0.3%
South Korea's Kospi: +1.0%
Australia's ASX All Ordinaries: +0.3%
---FX---
USD/JPY: -0.7% to 137.97
USD/CNH: -1.1% to 7.1702
USD/INR: UNCH at 81.65
Europe: DAX +0.2%, FTSE +0.7%, CAC +0.2%
Major European indices trade near their flat lines while the U.K.'s FTSE (+0.7%) outperforms. Spain's November CPI and Italy's October PPI showed a deceleration on a month-over-month basis ahead of tomorrow's release of the November CPI report for the eurozone. The Airbus CEO said that the supply chain environment is still "very complex." British Prime Minister Sunak said that the "golden era" of U.K. relations with China has come to an end. Germany signed an agreement to purchase LNG from Qatar beginning in 2026.
In economic data:
Eurozone's November Business and Consumer Survey 93.7 (expected 93.5; last 92.7)
U.K.'s October Mortgage Lending GBP3.97 bln (expected GBP5.02 bln; last GBP5.88 bln) and net Lending to Individuals GBP4.70 bln (expected GBP6.70 bln; last GBP6.50 bln)
Italy's September Industrial Sales -1.2% m/m (last 3.4%); 18.0% yr/yr (last 22.9%). October PPI -3.3% m/m (last 2.7%); 28.0% yr/yr (last 41.7%)
Spain's November CPI -0.1% m/m (last 0.3%); 6.8% yr/yr (expected 7.4%; last 7.3%)
Swiss Q3 GDP 0.2% qtr/qtr (expected 0.3%; last 0.1%); 0.5% yr/yr (expected 1.0%; last 2.2%)
---Equity Markets---
STOXX Europe 600: +0.2%
Germany's DAX: +0.2%
U.K.'s FTSE 100: +0.7%
France's CAC 40: +0.2%
Italy's FTSE MIB: UNCH
Spain's IBEX 35: -0.1%
---FX---
EUR/USD: +0.4% to 1.0375
GBP/USD: +0.5% to 1.2012
USD/CHF: +0.1% to 0.9500
The latest indicator about the strength of the U.S. economy arrives this morning at 10:00 a.m. ET. The Consumer Confidence Index provides insight into consumers' assessments of the labor market, as well as business activity, financial conditions and people's willingness to spend. More importantly, it provides opinions on both the current state of affairs (Present Situation Index) and future estimates (Expectations Index), which are needed to make any type of investment decision.
Bigger picture: Consumer spending accounts for more than two-thirds of the economy, so it's important to gauge how individuals might behave in the near future. Banks, manufacturers and retailers are also keen to see changes to the index, which can inform them on whether to take on additional financing, rethink overhead, or advance/delay business investment. Among those that also keep an eye on the figures are government officials and Fed leaders, who factor in whether additional fiscal or monetary action is needed to balance the economy.
Slight month-on-month fluctuations are normal, but index changes of more than 5% - or a continuous trend in one direction - can indicate a likely path of where the economy is headed. The indicator has been steadily decreasing since notching a score above 115 last December, barring two readings in August and September that prompted hopes of an uptrend. Today's number is forecast to come in at a reduced 100.0, from October's 102.5, though any figure above 90 generally reflects a healthy economy.
How is it calculated? The Consumer Confidence Index is the result of a survey of 5,000 U.S. households that is prepared by The Conference Board, a non-profit known for its private sources of business intelligence. Survey participants across America, and each of the country's nine census regions, are asked to answer questions with responses like "positive," "negative" or "neutral." Once the data has been collected, a portion known as the "relative value" is calculated for each question (which is compared to the sum of the responses and historical data to produce a final index value).
Relief rally
Will China alter its zero-COVID stance in response to growing discontent? That's the hot question on traders' minds, as protests and accompanying crackdowns take place on the streets of Beijing, Shanghai and elsewhere. It will be a delicate balancing act for Xi Jinping to pivot away from the draconian policy, but in some ways he already has, like the recently announced "20 measures" that cut quarantine periods for close contacts of COVID cases and inbound travelers.
Policy watch: Today's meeting of the Chinese State Council took on extra importance, as the weekly press conference signaled that further changes to current measures might be in the making. "China has been following and is closely watching the virus as it evolves and mutates," officials said during the briefing, while health authorities released a plan to boost elderly vaccination. China also reported a decline in new COVID-19 infections with 38,645 cases after a record daily high of 40,347 on Sunday.
Markets loved any sign of easing COVID-zero following some nervousness seen in the prior session. The Shanghai Composite closed 2.3% higher, while stocks in Hong Kong rocketed 5.2% and the Hang Seng TECH Index even finished the day up 7.7%. Chinese vaccine developers were also big winners, with shares of CanSino Biologics (OTCPK:CASBF) soaring as much as 18% in Hong Kong.
Why are the protests happening now? Xi Jinping has been at the helm for nearly a decade, but over most of that period, the benefits of a booming economy were widely felt across China. Things have slowed sharply due to zero-COVID policies, and many workers are now finding it difficult to make a living amid severe restrictions and lockdowns. The current measures are also unpredictable and being seen as irrational, especially as the Chinese watch a maskless World Cup and compare it to the strict protocols of the 2022 Beijing Winter Games. (17 comments)
Another collapse
Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection in the U.S. in an effort to stabilize and restructure its business following the abrupt downfall of crypto exchange FTX. Major digital tokens, like Bitcoin (BTC-USD) and Ethereum (ETH-USD) were dragged lower by the news, but pared some of the losses in overnight trading. BlockFi, which is still operating its business, said it will focus on recovering all obligations by its counterparties, though recoveries from FTX are expected to be delayed given its ongoing bankruptcy process.
Contagion: BlockFi is estimated to have over 100K creditors. One of its largest creditors included FTX US's business name, West Realm Shires, with a $275M unsecured claim, while Ankura Trust Company was the lender's largest creditor by a wide margin with a $730M unsecured claim. Reports suggest that BlockFi has begun slashing costs in preparation for a restructuring, including warning two-thirds of its employees about coming layoffs.
BlockFi, which received an outsized credit line from FTX earlier in 2022, was already forced to suspend client withdrawals earlier in November due to the uncertainty surrounding the status of Sam Bankman-Fried's crypto empire. However, even before the collapse of FTX, BlockFi was struggling to keep afloat following regulatory troubles and a broader market downturn. Crypto lender rival Nexo reportedly offered to buy BlockFi for $850M in July, but BlockFi turned down that offer in favor of a bailout with FTX that never went through due to the recent liquidity crisis.
Commentary: "It is unfortunate for BlockFi that the white knight [FTX] that had offered them a lifeline back in June, hasn’t managed to stay solvent themselves, in part because of the massive losses accumulated at Alameda Research stemming from the same event - the collapse of Terra Luna and Three Arrows Capital," said Bradley Duke, founder and co-CEO at ETC Group. (79 comments)
Rail strike
President Biden is imploring Congress to intervene in stalled negotiations between rail unions and operators to prevent a strike ahead of a Dec. 9 deadline. The move would end a long-running labor dispute between the country's biggest freight railroads and more than 115,000 of their workers by passing a joint resolution under the Railway Labor Act of 1926. That would force employees to accept the contract approved by the Presidential Emergency Board and their unions, which was set up to mediate the dispute this past summer.
Snapshot: The five-year agreement that resulted from previous discussions offered railroad workers a 24% increase in wages from 2020 through 2024. It also granted an additional paid day off, on top of existing vacation time, but sticking points remain over work schedules and paid sick time. By some estimates, the railroads in the U.S. impact about a third to about 45% of all freight in the U.S., meaning there can be knock-on effects for many industries that could result in another inflationary threat.
"I am calling on Congress to pass legislation immediately to adopt the Tentative Agreement between railroad workers and operators - without any modifications or delay - to avert a potentially crippling national rail shutdown," President Biden said in a statement. "As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement. But in this case - where the economic impact of a shutdown would hurt millions of other working people and families - I believe Congress must use its powers to adopt this deal."
Related Tickers: Canadian Pacific Railway (CP), Canadian National Railway (CNI), CSX Corp. (CSX), Union Pacific (UNP), Berkshire Hathaway (BRK.A, BRK.B) and Norfolk Southern (NSC). (113 comments)
Today's Markets
In Asia, Japan -0.5%. Hong Kong +5.2%. China +2.3%. India +0.3%.
In Europe, at midday, London +0.6%. Paris +0.2%. Frankfurt flat.
Futures at 6:30, Dow +0.1%. S&P +0.3%. Nasdaq +0.6%. Crude +2.5% to $79.18. Gold +1.7% to $1770. Bitcoin +1.9% to $16,501.
Ten-year Treasury Yield -5 bps to 3.65%
Today's Economic Calendar
9:00 S&P CoreLogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
Companies reporting earnings today »
What else is happening...
Disney's (DIS) Iger says Apple (AAPL) merger talk is 'pure speculation.'
Mouse House logs a win - and a bomb - at Thanksgiving box office.
Exxon Mobil (XOM) aiming to end oil production in Equatorial Guinea.
Shell (SHEL) to buy biogas producer Nature Energy in $2B deal.
Packaged foods: Nestle (OTCPK:NSRGY) lifts outlook, confirms buyback.
Activision (ATVI) gains on report of Microsoft (MSFT) EU deal concessions.
Apple (AAPL) has threatened to withhold Twitter from App Store - Musk.
Taboola (TBLA) jumps 43% after Yahoo enters commercial pact with stake.
Snap (SNAP) tells staff to be in office 4 days a week starting in February.
Baidu (BIDU) unveils plan to expand fully driverless ride-hailing service.
Churchill Downs and DraftKings (DKNG) announce a multi-year agreement that will bring pari-mutuel wagering on horse racing to DraftKings (221.38)
CDI's subsidiary, TwinSpires, will provide advance deposit wagering technology to DraftKings. TwinSpires is the premier, market leading online horse racing wagering platform in the U.S.
DraftKings will launch DK HORSE in the coming months, which will allow DraftKings' eligible customers to bet on horse racing using a standalone branded app. The initial launch of DK HORSE will require customers to sign up and deposit funds separate from that of their one account, one wallet tethered to the DraftKings Sportsbook, Casino and daily fantasy sports apps. Plans to integrate DK HORSE into the DraftKings product suite will be announced at a later date. DK HORSE is expected to be available initially in 21 states, pending all necessary licensing and regulatory approvals, and is scheduled to launch ahead of the 149th running of the Kentucky Derby in May 2023.
BILI +10.4%, BZUN +4.3%, MCHP +2% (reiterates guidance)
Select rail stocks showing strength after reports President Biden wants Congress to pass legislation immediately to adopt the tentative agreement between railroad workers and operators:
CNI +1.4%, CP +1.3% (also upgraded to Buy from Hold at Deutsche Bank) NSC +0.8%, UNP +0.7%.
Other news:
APEN +63.2% pollo Endosurgery to be acquired by Boston Scientific (BSX) for $10 per share)
BIDU +6.1% (to build world's largest fully driverless ride-hailing service area in 2023)
NXST +5.7% (replacing SABR in S&P MidCap 400)
SABR +2.9% (replacing FBC in S&P SmallCap 600)
BIGC +2.8% (merchant GMV increased 31% on Black Friday)
NUS +2.7% (replacing PBF in the S&P SmallCap 600)
BNGO +1.5% (to acquire Purigen Biosystems)
Analyst comments:
UPS +1.8% (upgraded to Buy from Hold at Deutsche Bank)
Yext (YEXT), the Answers Company, announces the addition of new functionality that will allow restaurant brands to manage pickup and delivery options on their Google Business Profiles.
ConocoPhillips (COP) and QatarEnergy announce the signing of two agreements to supply long-term liquefied natural gas to Germany. The suppliers are joint venture companies established between ConocoPhillips and QatarEnergy to participate in the North Field East and North Field South projects, and the buyer is a wholly owned subsidiary of ConocoPhillips. First delivery is expected in 2026 to the recently announced German LNG Terminal at Brunsbüttel.
Acima Leasing, a provider of lease-to-own services for merchants and consumers and Fintech platform of Rent-A-Center (RCII), is pleased to announce an agreement with CITY Furniture, a Florida-based home furnishings retailer. Acima was chosen as the exclusive lease-to-own platform for CITY's e-commerce site and approximately 23 showrooms across Florida.
Visa (V) announces a seven-year global partnership with GoHenry, the prepaid card and financial education app for 6-to 18-year-olds. Visa will provide support as the exclusive global network partner for GoHenry's prepaid cards for kids and teens in the US, UK, and Europe.
Allakos (ALLK) announces the publication of "Discovery of an agonistic Siglec-6 antibody that inhibits and reduces human mast cells," in Communications Biology. The publication describes the generation of Siglec-6 agonist monoclonal antibodies optimized for mast cell inhibition and their ability to suppress mast cell activity in pre-clinical models.
Elon Musk claims Apple has 'threatened to withhold' Twitter from its app store
good morning!!!!!!!!!!
premarket gappers
Gapping up:
BILI +8.3%, NXST +6.5%, BIDU +5.7%, BZUN +5.5%, BIGC +4.4%, SABR +4.1%, NUS +2.6%, CNI +1.4%, PBF +1.1%, AZN +0.9%, NSC +0.8%, UNP +0.7%, CP +0.7%, AAPL +0.6%, MCHP +0.6%, TRP +0.6%
Gapping down:
AZEK -8.1%, SI -3.7%, AMR -2.7%, USNA -2.5%, ENFN -2.4%, SF -1.4%, ICHR -1.2%, BNGO -1%, UNH -0.5%
Bullish Call Activity:
FUBO Dec 3 calls (volume: 1800, open int: 910, implied vol: ~135%, prev day implied vol: 104%). Co is expected to report earnings late February.
SHOP Dec 40 calls are seeing interest with the underlying stock up 4% (volume: 26.0K, open int: 1.2K, implied vol: ~77%, prev day implied vol: 65%). Shopify Black Friday sales were up 17% yr/yr, according to Charged Retail. Co is expected to report earnings mid-February.
LI Dec 19 calls are seeing interest with the underlying stock up 4% (volume: 6580, open int: 270, implied vol: ~95%, prev day implied vol: 84%). 5300 contracts traded in a single transaction. Stock was initiated with a Buy at Jefferies; tgt $20.66. Co is expected to report earnings early December.
RIG Jan23 4 calls (volume: 5200, open int: 30, implied vol: ~69%, prev day implied vol: 68%). 5000 contracts traded in a single transaction. Co is expected to report earnings mid-February.
Bearish Put Activity:
PYPL Dec 80 puts (volume: 2760, open int: 290, implied vol: ~50%, prev day implied vol: 41%). The company will present at a UBS Global conference on December 7. Co is expected to report earnings late January.
Energy Action:
Energy Action: oil prices have plunged today with WTI slumping to the lowest of the year at $73.61. The contract has bounced back to $75.40, however. Similarly, Brent dropped to $80.64, still above its $77.04 2022 nadir, and has recovered to $82.38. The unrest in China over the weekend is adding to worries over the country's reopening, with fears officials will take a heavy-handed approach which will further weigh on overall growth, and subsequent demand for oil. And that's on top of concerns over the bearish imparts of central bank tightenings
BlockFi will file for bankruptcy later today, a source at the company tells Decrypt
Upgrades
Citi upgraded Live Nation Entertainment (LYV) to Buy from Neutral with a price target of $82, down from $90. If Live Nation remains a single firm, the firm notes shares are worth $90 per share. If the company is forced to split into two firms, the shares are worth $48, says the firm, who ascribes an 80% likelihood that the firm remains intact and a 20% likelihood that Live Nation is forced to unwind the 2010 merger. Following the recent share selloff, the firm says Live Nation's risk/reward profile "looks more reasonable."
Deutsche Bank upgraded Coherent (COHR) to Buy from Hold with a price target of $50, up from $45. The firm says the company's multiple growth drivers outweigh its near-term risks. The firm is incrementally positive on Coherent's growth drivers and says investor concerns over its growth and debt leverage look overly pessimistic. With the stock trading at five-times enterprise value to EBITDA on 2024 estimates, the firm notes the risk/reward looks attractive.
Barclays upgraded BRF S.A. (BRFS) to Equal Weight from Underweight with a $2.50 price target. The firm says protein companies face a difficult outlook. The firm notes the worst is yet to come for most of the sector, though not until 2024 or 20225, amid increasingly price-conscious consumers and rising beef prices. The firm upgraded BRF due to valuation.
Downgrades
Morgan Stanley downgraded Aptiv (APTV) to Equal Weight from Overweight with a price target of $105, down from $120. The firm believes investors shoudl remain selective on the auto components names. The firm notes Aptiv will be negatively impacted by a potential slower than expected rollout of electric vehicles.
UBS downgraded Smith & Nephew (SNN) to Sell from Neutral. The firm says inflation driven margin misses in the near-term and structural price/mix pressure in the long-term drive the downgrade.
JP Morgan downgraded Penn Entertainment (PENN) to Neutral from Overweight with a price target of $39, up from $38. The firm notes shares are trading near fair value with less upside potential than Las Vegas Strip centric or Las Vegas Locals centric operators.
Others
Roth Capital initiated coverage of Turtle Beach (HEAR) with a Buy rating and $18 price target. The firm notes that since peaking at $37.22 in June 2021, Turtle Beach's share price has fallen over 75%. Besides the broader market selloff, the firm believes Turtle Beach's decline has two main causes, namely surprising weakness in the video game sector, leading to sales shortfalls and an industry-wide compression of stock prices; and a costly proxy fight and unsuccessful sale effort forced by an activist investor. The firm thinks both of these factors will ease over the next 12-18 months, propelling Turtle Beach to at least $18.
Wells Fargo initiated coverage of Xenon Pharmaceuticals (XENE) with an Overweight rating and $50 price target. The firm sees upside with depression data in 2023 for this otherwise de-risked epilepsy company. The firm notes Xenon's lead asset XEN1101 has all the qualities to become the branded add-on therapy of choice in focal onset seizures, and therefore a potential blockbuster given its compelling efficacy. The firm expects continuous progress in this indication asset to provide upside, with the Phase 3 readout late 2024/early 2025.
Stifel initiated coverage of OmniAb (OABI) with a Buy rating and $12 price target. The firm notes OmniAb represents the construction of a high-throughput antibody discovery platform via over 10 years of focused investment and strategic acquisitions. The firm believes the spin-off of OmniAb from Ligand creates an opportunity to unlock additional value and better-position the company for future growth.
Williams-Sonoma (WSM 117.01, -5.41,, -4.4%): downgraded to Underweight from Equal Weight at Morgan Stanley
Anheuser-Busch InBev (BUD 58.97, +2.38, +4.2%): upgraded to Overweight from Underweight at JPMorgan
Las Vegas Sands (LVS 44.51, +1.34, +3.1%), Wynn Resort (WYNN 79.41, +4.48, +6.0%), and MGM Resorts (MGM 36.53, +0.80, +2.2%): Chinese government renewed casino licenses for Macau
Chevron (CVX 180.31, -3.39, -1.9%): U.S. government granted license to resume oil production in Venezuela, according to Bloomberg
Axsome Therapeutics (AXSM 64.30, +7.48, +13.2%): announces AXS-05 achieves primary endpoint in the ACCORD phase 3 Trial in Alzheimer's Disease Agitation
Biogen (BIIB 293.99, -11.16, -3.7%): Another death was linked to Lecanemab, according to Science.Org
Apple (AAPL 145.50, -2.61, -1.8%): could lose 6 million iPhone Pro models from events at the Foxconn plant, according to Bloomberg.
$DKNG DraftKings downgraded to Underweight from Neutral at JP Morgan price target $12
U.S. Treasuries are on track for a modestly higher start in most tenors. Treasury futures climbed last evening, emboldened by weakening sentiment in Asia stemming from the reimposition of lockdown measures in China. The tightening of coronavirus restrictions invited protests in several cities, including Beijing. In Europe, there has been continued speculation that the Bank of England and the European Central Bank will shift down to 50-bp rate hikes going forward. Treasury futures reached overnight highs shortly after 3:00 ET, followed by a pullback that erased the bulk of last night's gains. Crude oil is on the defensive, falling to its lowest level in eleven months. The U.S. Dollar Index is down 0.3% at 105.61, returning to its 200-day moving average (105.37).
Yield Check:
2-yr: -2 bps to 4.46%
3-yr: UNCH at 4.23%
5-yr: UNCH at 3.87%
10-yr: -1 bp to 3.68%
30-yr: -2 bps to 3.72%
News:
Japan is expected to fine three power companies on antitrust grounds.
EU officials will reportedly continue discussing a potential price cap for Russian oil.
China's October Industrial Profit was down 3.0% YTD (last -2.3%).
Hong Kong's October trade deficit reached HKD20.90 bln (last deficit of HKD44.90 bln) as imports fell 11.9% m/m (last -7.8%) and exports were down 10.4% m/m (last -9.1%).
Australia's October Retail Sales were down 0.2% m/m (expected 0.5%; last 0.6%).
Eurozone's October Private Sector Loans were up 4.2% yr/yr (expected 4.5%; last 4.4%) and loans to nonfinancials were up 8.9% yr/yr (last 8.9%).
U.K.'s November CBI Distributive Trades Survey fell to -19 from 18 (expected 2).
Commodities:
WTI Crude: -3.0% to $74.00/bbl
Gold: +0.2% to $1756.80/ozt
Copper: -0.5% to $3.609/lb
Currencies:
EUR/USD: +0.7% to 1.0472
GBP/USD: UNCH at 1.2097
USD/CNH: +0.4% to 7.2191
USD/JPY: -0.6% to 138.30
MLCO +7.9%, WYNN +6%, LVS +3.7%, MGM +2.6%
Other news:
TBLA +57.1% (Taboola and Yahoo enter 30-year commercial agreement; partnership to generate ~$1 bln in annual revenue)
AXSM +12.7% (announces AXS-05 achieves primary endpoint in the ACCORD phase 3 Trial in Alzheimer's Disease Agitation)
UNVR +10.6% (confirms preliminary indication of interest from Brenntag SE)
INDT +10% (receives unsolicited, non-binding acquisition proposal)
SHOP +6.1% (sales were up 17% yr/yr, according to Charged Retail)
OSW +3% (announces new contract with Norwegian Cruise Line Holdings (NCLH))
SRPT +2.8% (FDA has accepted the Company's Biologics License Application seeking accelerated approval of SRP-9001 for the treatment of ambulant individuals with Duchenne muscular dystrophy)
Analyst comments:
BUD +4.3% (upgraded to Overweight from Underweight at JP Morgan)
USO -3.3%, SPY -0.7%, QQQ -0.7%, IWM -0.7%, DIA -0.5%
Other news:
CINC -14.3% (announces the topline results and completion of its Phase 2 HALO trial)
ADCT -3.1% (enter antibody agreement with Biocytogen)
HUT -2.5% (provides update on North Bay facility)
USFD -2% (announced that Dave Flitman will become CEO effective Jan. 5, 2023)
ENLC -1.8% (announces executive leadership changes)
AAPL -1.7% (could lose 6 million iPhone Pro models from events at Foxconn)
BSX -1.3% (reports Late-Breaking Post-Market Study Data Reinforcing Clinical Procedural Success and Safety of the ACURATE neo2 Aortic Valve System)
DIS -1% (cautious Barron's article)
Analyst comments:
FANG -3.6% (downgraded to Underperform from Neutral at BofA Securities)
TSN -2.2% (downgraded to Underweight from Equal Weight at Barclays)
BYND -2% (downgraded to Underweight from Equal Weight at Barclays)
APTV -1.8% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
Wedbush sees Deckers Brands as 'clearest winner' of Black Friday week
Commenting on this year's Black Friday, Wedbush analyst Tom Nikic notes that in a much more challenging environment, with more modest demand and excess supply, there was a big escalation of promotional activity year-over-year. While most retailers and brands have telegraphed that this Holiday season will be promotional, this doesn't come as a total surprise, he adds. Nonetheless, Nikic "did see one 'shining star' last week," namely Deckers Brands, as he saw several positive reads related to the UGG brand which bode well for this peak seasonal period for them.
U.S. SCREENED 2.56 MILLION AIR TRAVELERS SUNDAY, HIGHEST NUMBER SINCE DECEMBER 2019 - AGENCY
Upgrades:
Anheuser-Busch InBev (BUD) upgraded to Overweight from Underweight at JP Morgan; tgt raised to $70
BorgWarner (BWA) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $45
Downgrades:
Aptiv (APTV) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $105
Beyond Meat (BYND) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $10
Diamondback Energy (FANG) downgraded to Underperform from Neutral at BofA Securities; tgt $143
Tyson Foods (TSN) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $58
Others:
Ambac (AMBC) initiated with a Neutral at Compass Point; tgt $18
Assured Guaranty (AGO) initiated with a Buy at Compass Point; tgt $84
MBIA (MBI) initiated with a Neutral at Compass Point; tgt $14
GE Healthcare (GE) announced an agreement with ulrich medical for a GE Healthcare branded contrast media injector in the U.S. The CT motion multi-dose syringeless injector, which delivers iodinated contrast media for Computed Tomography imaging procedures, reduces procedure setup time and increases patient throughput by eliminating time consuming preparation steps, while helping to optimize patient dosing and reduce wasted contrast media.
Main Street Capital Corporation (MAIN) announces that its wholly owned subsidiary, MSCC Funding entered into a senior secured revolving credit facility led by Truist Bank with Truist serving as administrative agent and as one of three initial lenders under the facility. The Revolving Credit Facility provides for $240 million of aggregate initial commitments with an accordion feature that allows for increases up to $450 million of total commitments from new and existing lenders on the same terms and conditions as the existing commitments.
Momentus (MNTS) has signed a contract with the CUAVA Training Centre at the University of Sydney to deploy the CUAVA-2 CubeSat in low-Earth orbit in October 2023.
Evercore ISI analyst Sheriq Sumar upgraded StoneCo to Outperform from In Line with a price target of $16, up from $10. Base interest rates in Brazil have peaked and consensus points to a potential decline in the second half of 2023 as Brazil's inflation has started to normalize, reducing margin pressure from rising financial expenses, Sumar tells investors. Meanwhile, he expects StoneCo's revenue growth to benefit from rising digitization of payments, higher take rates, elevated growth in banking and software, and cross selling, added the analyst, who raised his 2023 EPS estimates to $3.75 from $2.50.
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FOSL | jimmybob | 02/14/2012 09:54:12 AM |
FOSL and SODA ~ WATCH!!! | jimmybob | 02/14/2012 09:50:52 AM |
![]() | uranium-pinto-beans ![]() | | Tuesday, February 14, 2012 12:43:05 PM | |
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