>>> What to look at today - 3rd of May 2023

Shares in Asia slipped on renewed concerns about the health of the banking sector and ahead of a Federal Reserve decision Wednesday where policymakers are expected to add to their rate-hike cycle. MSCI Inc.’s Asia Pacific Index headed for its first loss in five days with benchmark indexes in Hong Kong, South Korea and Australia all declining. Energy and banking shares were among the biggest losers. Markets are shut in Japan and mainland China for holidays, and there’s no trading of cash Treasuries in Asia hours. The dollar weakened. The S&P 500 fell 1.2% Tuesday as US regional lenders PacWest Bancorp and Western Alliance Bancorp both tumbled at least 15%. That came just a day after JPMorgan Chase & Co.’s acquisition of First Republic Bank seemed to bolster confidence in the sector. US futures ticked marginally higher in Asian trade and Euro Stoxx 50 futures gained. Swap traders are pricing a more than 90% probability the Fed will raise borrowing costs by 25 basis points later Wednesday, bringing the key rate to the highest since 2007. Market pricing also indicates the increase will mark the peak of the tightening cycle before weaker growth prompts the central bank to cut rates later in the year. The dollar fell against all its Group-of-10 peers as traders positioned for the Fed decision. Treasury futures traded in a narrow range in Asia after jumping Tuesday as concerns over the banking sector boosted demand for haven assets. A lack of clarity regarding the US debt ceiling added to the uncertain mood. Between now and June 1 — the date by which the Treasury Department may run out of sufficient cash — President Joe Biden and members of the House and Senate are scheduled to be in town at the same time for the sum total of one week to find a solution. US economic data pointed to a cooling of the labor market, with the number of job openings in March dropping to the lowest level in two years. In Europe, BNP Paribas SA reported higher revenue from debt trading and global banking in the first quarter, while Deutsche Lufthansa AG said it expected earnings to rise above pre-pandemic levels in the second quarter as air travel rebounds. Oil edged lower in Asia after tumbling more than 5% on Tuesday, and gold was little changed. US After Hours Busy earnings night; SPT -14.2%, AMD -6.3%, SBUX -4.8%, HLF -4.3%, F -2% lower on earnings; SMCI +8.7%, LTHM +8%, ARWR +6.6%, LUMN +5.8% higher on earnings.

Nikkei Close Hang Seng -1.82% CSI +1.02% Shanghai +1.14% Shenzen +1.41%

Eur$ 1.1022 CNH 6.9357 CNY 6.9184 JPY 135.95 GBP 1.2488 CHF 0.8913 RUB 79.9940 TRY 19.4761 WTI$ 71.53 -0.18% Gold 2,015 -0.09% BTC 28,503 -0.67% ETH 1,862 -0.45%

S&P +0.18% Nasdaq +0.01% EuroStoxx +0.55% FTSE +0.32% Dax +0.50% SMI +0.35%

Macro :
- Morgan Stanley, UBS Pick Bonds Over Stocks on Recession Risk
- UK Proposes Ditching Premium Listings to Boost London’s Appeal
- BofA’s Institutional Clients Plow Into Stocks as Retail Exits

Keep an eye on :
- ADS GY : House Panel Seeks Info from Nike, Adidas on China Forced Labor
- ABNB US : Airbnb to Reveal ‘Most Extensive Set of Improvements’ Wednesday
- ALB US : Lithium Giant Albemarle Eyes $1.5 Billion Processing Expansion
- AMBUB DC : Ambu 2Q Ebit Misses Estimates
- APAM NA : Aperam 1Q Adjusted Ebitda Misses Estimates
- AG1 GY : AUTO1 1Q Adjusted Ebitda Loss EU25.1M Vs. Loss EU47.6M Y/y
- BNP FP : BNP Paribas 1Q FICC Sales & Trading Rev EU1.91B Vs. EU1.75B Y/y
- BRAV SS : Bravida 1Q Net Sales SEK7.43B Vs. SEK5.83B Y/y
- BRG NO : Borregaard 1Q Ebitda Beats Estimates
- AI US : AI Start-Up Cohere in Talks for $250m in Fresh Funding: FT
- COLR BB : Colruyt Group Lifts FY Net Result Outlook
- DEMANT DC : Demant Maintains FY Ebit Forecast
- DPW GY : Deutsche Post 1Q Ebit Beats Estimates, Affirms Forecast
- EDPR PL : EDP Renovaveis 1Q Net Income EU65M Vs. EU66M Y/y
- EDPR PL : EDPR Approves EU67.4m Capital Increase for Scrip Dividend Plan
- EDP PL : EDPR Gets Long Term PPA With Inditex for Wind Portfolio in Spain
- ETL FP : SES, Eutelsat Good Fits for Europe Sovereign-Communication Plan
- IBE SM : Mexico to Seek Equity, Debt Financing for Iberdrola Power Deal
- IEP US : Icahn Enterprises Plunge One of Hindenburg’s Many Hits (Correct)
- NK FP : Imerys 1Q Organic Revenue -0.9%
- KCO GY : Kloeckner 1Q Adjusted Ebitda EU69M Vs. EU201M Y/y
- LCIN US : Lannett Company Files for Chapter 11 in Delaware Court
- LNZ AV : Lenzing 1Q Ebitda -66% Y/y; Sees First Signs of Recovery (1)
- LIAB SS : Lindab 1Q Operating Profit Beats Estimates
- LSEG LN : UK Proposes Ditching Premium Listings to Boost London’s Appeal
- LHA GY : Lufthansa Sees 2Q Adj Ebit Above Pre-Crisis Level of €754m
- MBTN SW : Meyer Burger, Ingka Investments Sign Offtake Deal for 4 Years
- NEOEN FP : Neoen 1Q Revenue EU154.4M Vs. EU109.1M Y/y
- NKT DC : NKT: Denmark Rejected Divestment of Unit to Hamamatsu Photonics
- OERL SW : Oerlikon 1Q Ebitda Beats Estimates
- PNDORA DC : Pandora Narrows FY Organic Revenue Forecast
- PCA FP : Pcas Gets Offer for Canadan Unit at Value of EU88M
- PRL IM : 3M to Sell Some Local Anesthetic Assets to Pierrel for $70M
- RAIVV FH : Raisio 1Q Net Sales Beats Estimates
- SAN FP : Lilly, Sanofi to Cap Insulin at $35/Month for Uninsured in NY
- SCST SS : Scandi Standard 1Q Operating Profit Meets Estimates
- SEBA SS : SEB Economists Revise Swedish Growth Forecast Upward for 2023
- SESG FP : SES, Eutelsat Good Fits for Europe Sovereign-Communication Plan
- LIGHT NA : Signify 1Q Comparable Sales Misses Estimates
- SF SS : Stillfront 1Q Ebit Misses Estimates
- STMN SW : Straumann 1Q EMEA Revenue Beats Estimates
- TMW GY : TeamViewer SE Maintains FY Adjusted Ebitda Margin Forecast
- TWKS US : Apax Said to Weigh Buyout of $2 Billion IT Firm Thoughtworks
- 8TRA GY : Class 8 Truck North American Orders Fall 22% YoY in April
- UCG IM : UniCredit Boosts Profit, Payout Targets After Record Quarter
- URW NA : Simon Property Narrows FY FFO per Share Forecast
- VWS DC : Vestas Gets Positive Catalyst Watch at Citi on US IRA Upside
- VOW GY : *FORD MOTOR SHARES DROP 3% POSTMARKET AFTER RESULTS

>>> US Close Dow -1.08% S&P -1.16% Nasdaq -1.08% Russell -2.10%

Closing Stock Market Summary

Concerns over an economic slowdown were driving today's sell-off, along with the surprisingly large fallout in bank stocks on no news. In addition, worries about the debt ceiling weighed on investors' sentiment after Treasury Secretary Yellen warned that the Treasury is unlikely to be able to continue to satisfy all of the government's obligations by June, and potentially as early as June 1.

The S&P 500, which hit 4,186 at its high yesterday, briefly slipped below the 4,100 level today. Ultimately, the major indices were able to close off their worst levels of the day, albeit still sporting losses of at least 1.1%.

Today's downbeat price action comes ahead of an FOMC policy decision tomorrow, where a 25 basis point rate hike is expected but the tone of the directive and Fed Chair Powell's remarks is still indeterminate. 

The bank stock sell-off was presumably tied to concerns about an economic slowdown weighing on earnings estimates. PacWest (PACW 6.55, -2.52, -27.8%) and Western Alliance (WAL 30.93, -5.51, -15.1%) were some of the biggest losers in the regional bank space; however, even larger banks that had been viewed as potentially benefitting from the fallout in the regional bank industry, like JPMorgan Chase (JPM 138.92, -2.28, -1.6%) and Bank of America (BAC 28.16, -0.88, -3.0%), underperformed the broader market. 

Slowdown concerns were fueled by some manufacturing PMI readings for April out of the eurozone that were weaker than March, a JOLTs - Job Openings Report for March that showed openings shrinking to 9.590 million from 9.974 million in February, and a 0.6% decline in nondefense capital goods orders, excluding aircraft, for March.

Global growth concerns also manifested themselves in falling commodity prices. WTI crude oil futures sank 5.4% to $71.72/bbl and copper futures declined 1.6% to $3.87/lb. 

The sharp decline in oil prices contributed to the underperformance of the S&P 500 energy sector (-4.3%), which logged the biggest decline by a sizable margin. Unsurprisingly, the financials sector (-2.3%) was another top laggard today.

The consumer discretionary sector (+0.2%) was the lone standout in positive territory thanks to gain in Amazon.com (AMZN 103.63, +1.58, +1.6%). 

In the Treasury market, the nervousness about the debt ceiling issue, an economic slowdown, and the behavior of the bank stocks fueled buying interest in most tenors. The 2-yr Treasury note yield sank 15 basis points to 3.97% and the 10-yr note yield fell 14 basis points to 3.44%.

  • Nasdaq Composite: +15.4% YTD
  • S&P 500: +7.3% YTD
  • Dow Jones Industrial Average: +1.6% YTD
  • S&P Midcap 400: +1.0% YTD
  • Russell 2000: -1.7% YTD

Reviewing today's economic data:

  • March Factory Orders 0.9% ( consensus 1.4%); Prior was revised to -1.1% from -0.7%
    • The key takeaway from the report is that factory orders weren't as robust as they appear at first blush. Nondefense aircraft and parts orders, up 78.3%, drove the increase. Excluding transportation, new orders were down 0.7% month-over-month for the second straight month.
  • March JOLTS - Job Openings 9.590 mln; Prior was revised to 9.974 mln from 9.931 mln

Ahead of Wednesday's open, CVS Health (CVS), Phillips 66 (PSX), Kraft Heinz (KHC), Exelon (EXC), CDW (CDW), Adient (ADNT), Estee Lauder (EL), Emerson (EMR), Builders FirstSource (BLDR), Yum! Brands (YUM), Scotts Miracle-Gro (SMG), Hanesbrands (HBI), Garmin (GRMN), and Generac (GNRC) are among the more notable companies reporting earnings. 

Market participants will receive the following economic data tomorrow:

  • 7:00 ET: Weekly MBA Mortgage Index (prior 3.7%)
  • 8:15 ET: April ADP Employment Change ( consensus 142,000; prior 145,000)
  • 9:45 ET: Final April IHS Markit Services PMI (prior 53.7)
  • 10:00 ET: April ISM Non-Manufacturing Index (consensus 51.9%; prior 51.2%)
  • 10:30 ET: Weekly crude oil inventories (prior -5.05 mln)
  • 14:00 ET: May FOMC Decision ( consensus 5.00-5.25%; prior 4.75-5.00%)

>>> US After Hours Summary: Busy earnings night; SPT -14.2%, AMD -6.3%, SBUX -4.

After Hours Summary: Busy earnings night; SPT -14.2%, AMD -6.3%, SBUX -4.8%, HLF -4.3%, F -2% lower on earnings; SMCI +8.7%, LTHM +8%, ARWR +6.6%, LUMN +5.8% higher on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SMCI +8.7%, LTHM +8%, ARWR +6.6%, LUMN +5.8%, CWH +5.4%, LFUS +4.8%, PRO +4.6%, ASH +4.2%, BAND +3.9%, WU +3.6%, BFAM +3%, PAYC +2.4% (also initates dividend), LMAT +2.3%, UNM +2.2%, OKE +2%, LNC +2% (also enters into $28 bln reinsurance transaction with Fortitude Re), MCW +1.9%, ATGE +1.6%, MTW +1.6%, MUSA +1.4% (also authorizes new $1.5 bln share repurchase program), MTCH +1.3%, APAM +1%, CZR +0.9%, RNR +0.6%, ET +0.5%, FNV +0.4%, CHK +0.2%, KAI +0.2%, SPG +0.2% (also increases dividend), EXR +0.1%, THG +0.1%, GPOR +0.1%

Companies trading higher in after hours in reaction to news: COCO +2.3% (files for $200 mln mixed securities shelf offering; also files for offering by selling shareholders), KKR +2.1% (to acquire CoolIT Systems), FTI +2% (awarded a large contract by XOM affiliate), INTC +1.9% (in sympathy with AMD earnings), MYRG +0.4% (authorizes new $75 mln share repurchase program), MARA +0.2% (announces April bitcoin production), WTS +0.1% (increases dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SPT -14.2% (also announces continued strategic partnership with Twitter), ANDE -13.4%, MRCY -9.5%, AMD -6.3%, SBUX -4.8%, HLF -4.3% (also names new COO and other changes), WK -2.7%, ENLC -2.7%, AXTA -2.5%, PEN -2.5%, VOYA -2.4%, AFG -2.2% (also AFG will purchase Crop Risk Services from AIG), PACB -2.2%, SRPT -2.2%, F -2%, OHI -1.8%, PRU -1.8%, VIAV -1.5%, CCCS -1%, CRK -0.9%, HURN -0.6%, AMCR -0.6%, CLX -0.4%, UIS -0.3%, EXPI -0.2%, AIZ -0.1%, MLNK -0.1%, WELL -0.1% (also issues business update), XHR -0.1%, AROC -0.1%

Companies trading lower in after hours in reaction to news: MORF -3.1% (stock offering), NVDA -1.4% (in sympathy with AMD earnings), LMT -0.4% (awarded a $1.44 bln US Navy contract)

>>> US Gapping down


Gapping down
In reaction to earnings/guidance:

  • CHGG -43.2%, ETWO -24.4%, TREE -19.9%, CYH -13.6%, ANET -9.2%, CACC -6.8%, CNO -6.3%, ZBRA -6.3%, BP -5.2%, DD -4.9%, SCI -3.8%, SYK -3.7%, CAR -3.4%, RGEN -3.2%, ADUS -3.1%, BRX -3.1%, RE -3%, FMC -3%, FWRD -2.5%, INMD -2.4%, AXNX -2.3%, MED -2%, FANG -2%, KIDS -1.9%, TRTN -1.9%, INCY -1.8%, RMBS -1.7%, OGS -1.7%, SYM -1.6%, MDC -1.6%, RYTM -1.6%, LDOS -1.4%, TRI -1.3%, VRTX -1.2%, AQUA -1.2%, JJSF -1%, LGIH -1%, BSM -0.9%, HOLX -0.8%, MGM -0.8%

Other news:

  • TVTX -23.7% (topline primary efficacy results from Phase 3 DUPLEX study)
  • ADSE -5.3% (delaying filing 20-F)
  • ACT -3% (increases dividend)
  • MLTX -2.9% (files mixed shelf)

Analyst comments:

  • SHLS -4.3% (downgraded to Underweight from Equal Weight at Barclays)
  • SOFI -3.7% (downgraded to Neutral from Outperform at Wedbush)
  • CPRI -2.1% (downgraded to Equal Weight from Overweight at Barclays)
  • COIN -1.5% (downgraded to Neutral from Buy at Citigroup)
  • DGX -1.4% (downgraded to Neutral from Buy at BofA Securities)
  • CHKP -1.1% (downgraded to Neutral from Buy at BTIG Research)
  • WD -1.1% (downgraded to Mkt Perform from Mkt Outperform at JMP Securities)

>>> US Gapping up


Gapping up
In reaction to earnings/guidance:

  • WWD +16.1%, SIBN +10.6%, SFM +10.2%, UBER +8.1%, HSBC +5.8%, FLS +5.2%, PDM +5%, NXPI +4.7%, TEX +4.6%, AER +4.4%, ZI +3.6%, ZBH +3.4%, HWM +3.1%, AMRC +2.8%, OTTR +2.7%, GPK +2.7%, ESAB +2.6%, VNOM +2.2%, LOGI +2.1%, MSTR +2%, LEG +2%, CRC +2%, KNSA +1.9%, LSCC +1.8%, ETRN +1.8%, INVH +1.7%, SAGE +1.7%, DEA +1.6%, STNG +1.6%, LNG +1.6%, TMDX +1.5%, AME +1.5%, MAR +1.5%, CEIX +1.4%, PEG +1.3%, HRMY +1.3%, QSR +1.2%, PFE +1.2%, ARLP +1%, TROW +0.9%, TAP +0.9%, CMI +0.9%, AIRC +0.8%, ABC +0.8%

Other news:

  • IMTX +27.7% (announces an interim clinical data update for 11 patients with recurrent and/or refractory solid cancers treated with ACTengine IMA203 TCR-T monotherapy in the ongoing Phase 1b dose expansion Cohort A)
  • APYX +8.1% (receives clearance from the U.S. FDA for the use of its APR Handpiece in procedures for coagulation of soft tissues following liposuction)
  • STAG +7.3% (replacing AXON in MidCap 400)
  • BB +6.4% (considering strategic alternatives for its businesses)
  • BOC +2.9% (increases ownership to 100% in 24th Street Asset Management)
  • CIFR +1.9% (announces April 2023 production)
  • WTRG +1.6% (subsidiary acquires wastewater system)
  • EDIT +1.6% (study of SLEEK published)

Analyst comments:

  • VSEC +4.9% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
  • PENN +3.1% (upgraded to Buy from Neutral at ROTH MKM)
  • DELL +2.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • HPQ +1.5% (upgraded to Equal-Weight from Underweight at Morgan Stanley)
  • NLY +1.1% (upgraded to Overweight from Neutral at Piper Sandler)