>>> What to look at today - 20th of April 2023

Shares in Asia were broadly lower and US equity futures fell as investors parsed mixed corporate earnings and the latest assessment on the US economy. A region-wide index of Asian stocks edged lower for a second day as benchmarks in mainland China and South Korea fell, while those in Australia and Japan were flat and Hong Kong’s Hang Seng Index rose.
The Federal Reserve’s monthly Beige Book survey released on Wednesday showed the US economy “stalled” with narrower access to credit. Fed Bank of New York President John Williams said the recent trend of slowing inflation continues but that price gains remain too high. Trader bets continue to lean toward a rate hike next month.  The yield on the policy-sensitive two-year Treasury was steady in Asia after rising five basis points to the highest level in a month. The drop for US equity futures followed a flat day in New York trading. The CBOE VIX index of volatility to the lowest since 2021. A Bank of America global measure of volatility spanning stocks, rates, currencies and commodities sits at the lowest level since early 2022. First-quarter US earnings were mixed. Tesla Inc. missed profit expectations while International Business Machines Corp. and Morgan Stanley beat forecasts.  The drop for US equity futures followed a flat day in New York trading. The CBOE VIX index of volatility to the lowest since 2021. A Bank of America global measure of volatility spanning stocks, rates, currencies and commodities sits at the lowest level since early 2022.
First-quarter US earnings were mixed. Tesla Inc. missed profit expectations while International Business Machines Corp. and Morgan Stanley beat forecasts.  Banks in China kept loan prime rates unchanged after the People’s Bank of China stayed put. An independent review of Australia’s central bank recommended setting up an expert policy board and fewer meetings followed by press conferences. the dollar was steady, Bitcoin dropped below $30,000. Oil fell while gold was steady after a Wednesday decline pushed the precious metal below $2,000 an ounce. US After Hours LVS +4.7%, IBM +1.6% higher on earnings; FFIV -4.5%, TSLA -3.4%, AA -2.1% lower on earnings.

Nikkei +0.22% Hang Seng -0.11% CSI -0.67% Shanghai -0.45% Shenzen -0.82%

Eur$ 1.0960 CNH 6.8958 CNY 6.8885 JPY 134.70 GBP 1.2437 CHF 0.8962 RUB 81.7339 TRY 19.4038 WTI$ 78.21 -1.20% Gold 1,995 -0.01% BTC 28,905 -1.17% ETH 1,955 -1.33%

S&P -0.30% Nasdaq -0.51% EuroStoxx -0.02% FTSE -0.05% Dax -0.14% SMI -0.11%

Macro :
- Cashing Out of Russia Will Come With New Tax on Foreign Business
- Amundi Says European Bank Bonds Most Attractive as Crisis Fades

Keep an eye on :
- AF FP : Air France-KLM: Full Exit of French Recapitalization State Aid
- BCART BB : Biocartis 1Q Cash and Cash Equivalents EU43.9M Vs. EU26.1M Q/Q
- BONAVA SS : Bonava Prelim 1Q Net Sales About SEK2.4B
- BP/ LN :
- IAG LN : Vueling Cancels 66 Flights Fri.-Sat. Due to France Strikes: AFP
- CNHI IM : CNH Industrial Sold Business in Russia for $60M
- DBV FP : DBV to Run Viaskin Peanut Safety Study After pre-BLA response
- EDEN FP : Edenred 1Q Organic Revenue Beats Estimates
- ELISA FH : Elisa 1Q Comparable Ebitda Beats Estimates
- EQT SS : EQT 1Q Total Investments EU5B Vs. EU3B Y/y
- IPAR US : Inter Parfums FY EPS Forecast Beats Estimates
- OR FP : L’Oreal Posts ‘Strong’ 1Q Results Across the Board: Street Wrap
- LHA GY : Portugal Says Lufthansa ‘Welcome’ to Bid for a Stake in TAP
- MUL LN : Mulberry Says Performance is in Line With Expectations
- NOKIA FH ; Nokia Misses Estimates Citing Squeeze on Customer Spending
- NOD NO : Nordic Semiconductor 1Q Ebitda Misses Estimates
- RNO FP : Renault 1Q Revenue Beats Estimates
- RXL FP : Rexel 1Q Sales Beats Estimates
- RIO LN : Rio Tinto 1Q Pilbara Ore Shipments 82.5M Tons Vs. 71.5M Y/y
- ROG SW : Roche Says FDA OKs Polivy in Combination With R-CHP
- DIM FP : Sartorius Stedim Biotech 1Q Revenue Misses Estimates
- SCHP SW : Schindler 1Q Ebit Margin Beats Estimates
- SIKA SW : ACCC Won’t Oppose Sika’s Proposed Purchase of MBCC Group
- SIP BB : Sipef 1Q Palm Oil Output 87,639 Metric Tons Vs. 85,226 Y/y
- SUBC NO : Subsea 7 Extends $200M Share Repurchase Program
- TRYG DC : Tryg 1Q Pretax Profit Beats Estimates
- VRLA FP : Verallia Revenue and Earnings Substantially Ahead: Street Wrap
- VTWR GY : Virgin Media O2 Begins Sale of Stake in Mobile Tower Unit: FT
- VOLVB SS : Volvo 1Q Adjusted Operating Profit SEK18.41B Vs. SEK12.68B Y/y
- VOW GY : Russia Allows Volkswagen to Sell Its Domestic Plant: Vedomosti
- ROSE SW : Zur Rose 1Q Revenue CHF402.8M Vs. CHF418.9M Y/y

>>> US After Hours Summary: LVS +4.7%, IBM +1.6% higher on earnings; FFIV -4.5%,

After Hours Summary: LVS +4.7%, IBM +1.6% higher on earnings; FFIV -4.5%, TSLA -3.4%, AA -2.1% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CALX +10.5%, NBHC +5.4% (also acquires StoneCastle Digital Solutions), LVS +4.7%, BDN +2%, FNB +2%, IBM +1.6%, SLG +1.6%, RLI +1.4%, STLD +0.4%, LRCX +0.2%, FR +0.1% (also increases dividend), NVRO +0.1% (also names new CEO; guides Q1 revs above consensus; reaffirms FY23 revs)

Companies trading higher in after hours in reaction to news: WYNN +3.1% (in sympathy with strong LVS earnings), FUSN +2.9% (presents preclinical data for FPI-2059), MGM +1.9% (in sympathy with strong LVS earnings), STX +1% (to pay $300 mln US govt settlement related to shipping HDD to Huawei), RVNC +0.8% (FDA approves contract manufacturer for DAXXIFY), AMGN +0.6% (wins patent appeal case for Otezla), RIG +0.4% (RIG and NETI form JV engaging in offshore wind foundation installations), COST +0.1% (increases dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FFIV -4.5%, ZION -4.1%, TSLA -3.4%, WTFC -2.6%, ATEC -2.3% (guides Q1 revs above consensus; also acquires assets related to REMI Robotic Navigation System; also files mixed shelf securities offering), AA -2.1%, MATX -2%, CCI -1.2%, LBRT -1%, DFS -0.2% (also increases dividend; also approves new $2.7 bln share repurchase program), REXR -0.1%

Companies trading lower in after hours in reaction to news: CNHI -0.9% (announces divestiture of business activities in Russia), DDOG -0.4% (launches new data center in Japan), PRIM -0.1% (receives two renewables awards with combined value over $200 mln)

FT : What happens when quants go ‘Mad Men’

What happens when quants go ‘Mad Men’
The increasing use of data analytics in online advertising may have led to the growth in disinformation

Not long after the 2008 global financial crisis ended, I bumped into a banker who had previously hired “rocket scientists” — the label given to graduates with good engineering and maths skills — to work in the derivatives market. Since banking had, temporarily, been dented, I asked where these whizz kids were now heading if they wanted to make money. “Adtech!” he replied with a chuckle.

As someone who had previously written mostly about finance, I was surprised. I still saw advertising as a copy-and-images business, washed down with long martini lunches in the manner of Mad Men. But, around this time, advertising agencies were already using data analytics to send targeted digital ads, and connecting advertisers with media platforms to place them. Advertising was on its way to becoming a game dominated by big data. Engineers and mathematicians were therefore in demand.

I never determined how many had really gone from slicing and dicing mortgage debt to repackaging ads, but the fact that this tale was circulating was revealing: in adland, as in finance, those who understood computers and data were potentially wielding extraordinary power in a way that almost nobody else fully understood.

Why does this matter today? The issue lies with misinformation and extremism, especially with another US election looming in 2024. In recent years many big advertisers have said they do not want to put ads on the plethora of sites that have appeared to give a platform to racism, xenophobia, extremist politics or disinformation. 

However, it can be surprisingly hard for companies to actually avoid their ads appearing on such sites. Before the rise of digital advertising, companies typically paid media companies for ads via agencies, so they knew where these would appear. Today, only the biggest media companies, like the FT, have direct sales systems; most other platforms get revenue from brokers who use “programmatic” advertising, or computer programs that place ads according to how advertisers want to target groups.

That means advertisers may not know where their ads are appearing. They can appear in unwanted places and, in essence, be used to fund disinformation. A watchdog called the Check My Ads Institute has been trying to track this since 2021, by scouring the internet, and has discovered ads from Warby Parker, the glasses company, and the multinational Procter & Gamble on WeatherNation, a digital channel owned by the rightwing American firebrand Steve Bannon. (The companies say this was a mistake and removed them.) Due to scrutiny by Check My Ads, a slew of other groups, such as Nissan, Audi, LG TV or Royal Bank of Canada, have also removed ads from extremist sites or those associated with Russian disinformation. Claire Atkin, co-founder of Check My Ads, says this is just the tip of the iceberg. “Ad-financed disinformation just keeps rising,” she laments.

And these money flows are hard to track since the internet is so fragmented that when ads are sent to sites that target certain social or political online tribes, few others ever see them. Worse still, the adtech world is plagued by shadowy middlemen which, as it happens, is rather similar to finance. 

In 2020 the consultant PwC released a two-year study that suggested the market is worth about £100bn worldwide (although Atkin notes that other estimates suggest a figure four times higher). PwC concluded that almost half of corporate online ad spending is absorbed by brokers. It was also unclear where one-third of the money spent actually went. “The market is damn near impenetrable,” Phil Smith, the director-general of Isba, the UK advertising trade body that commissioned the study, told the FT at the time.

Is there any solution? There seems little prospect of returning to the days when advertisers struck direct deals with every media platform; the web has just grown too big. And regulators have hitherto been relatively toothless. So I suspect that the best remedy in adtech, as in finance, is the sunlight of exposure. The more scrutiny — which means the more eyeballs (or artificial intelligence tools) — that can peer into the murky corners of the internet, the better the chance of raising standards and fighting disinformation. “Advertisers are handing suitcases of money to strangers [ie brokers],” says Atkin. “We need data scientists to help figure out who owns the adtech middle men.” Let us hope some of those “rocket scientists” will help.

WWD : Prada and Miu Miu Top Lyst Index Hottest Brands List

Prada and Miu Miu Top Lyst Index Hottest Brands List
Versace saw the biggest jump in ranking this quarter, boosted by the brand's fall 2023 show in Los Angeles on Oscars weekend.

LONDON — Prada remained at the top spot in the latest quarter of the Lyst Index’s hottest brand list, while its sister brand Miu Miu climbed to second for the period between January to March, which is that brand’s highest ranking since the list began.

According to data gathered on the London-based shopping platfrom, searches for Prada went up 22 percent this quarter, with sunglasses being the biggest category increase as searches jumped 56 percent over the quarter.

The rise in popularity for Miu Miu can be largely attributed to the high demand for the pocket bag, a second collaboration with New Balance and a trend-setting Paris Fashion Week show featuring Emma Corrin, Zaya Wade, Mia Goth and Ethel Cain on the catwalk.

Versace saw the biggest jump in ranking this quarter, landing in eighth place. It was boosted by the brand’s fall 2023 show in Los Angeles on Oscars weekend, and subsequent red carpet appearances from the likes of Lady Gaga, Ariana DeBose and Kerry Condon.

Meanwhile, with a creative director reshuffle, Gucci’s ranking dropped to ninth place, the lowest in history. Balenciaga, which has still not recovered from a slew of controversies last year, was in 18th place in the ranking.

Newcomers on the list included Skims and JW Anderson, landing at 17th and 20th place, respectively. In the period, searches for Skims on Lyst increased 30 percent. Anderson became the third designer, after Virgil Abloh and Miuccia Prada, to have two brands on the ranking in the same quarter.

In terms of the hottest products ranking, Uniqlo’s shoulder bag, which retails for under $20, snatched the top spot. As the least expensive product to ever be featured in the Lyst Index, the style went viral on TikTok, generating more than 59 million views on the platform.

Rick Owens’ Kriester sunglasses was the second most in-demand item in the quarter, as it was worn by the likes of Shannon and Shannade Clermont and Lotta Volkova, while Skim’s sculpt bodysuit was the quarter’s third hottest product.

WWD : Brunello Cucinelli Plans New Factory, Banks on Men’s Sartorial Growth

Brunello Cucinelli Plans New Factory, Banks on Men’s Sartorial Growth
The company revealed its plans as it reported 34.7 percent increase in sales in the first quarter of the year.

MILAN — Brunello Cucinelli closed another quarter of strong growth and is gearing up for additional gains by setting up a new manufacturing plant in Penne, Italy.

Located in the central region of Abruzzo, Penne is historically a production hub that specializes in sartorial menswear. It is home to the storied Brioni brand.

During a call with analysts, chief executive officer Riccardo Stefanelli said the plant will be built by the company and begin operating in the last quarter of the year.

Stefanelli was speaking from Dallas, where he was accompanying Brunello Cucinelli, who was not on the call. After receiving the Neiman Marcus Fashion Award for Distinguished Service in the field of Fashion for the year 2023 in Paris on March 5, Cucinelli was in the Texan city attending another event for the award.

Stefanelli touted the “rich culture and craftsmanship” of the artisans and tailors in Penne and said the company was creating a “bella fabbrica [beautiful factory],” in sync with Cucinelli’s belief that it contributes to give moral dignity to work and improve the quality of the products.

Asked by analysts to reveal the investment, Stefanelli demurred, saying the project is in line with Cucinelli’s long-term strategy, and that it will be gradually developed, without changing the company’s business model.

This move telegraphs the brand’s belief in the growth potential of the tailoring segment and it is in sync with the acquisition in 2013 of the production division of the prestigious “Sartoria D’Avenza” in Carrara, another example of Made in Italy excellence in the production of men’s suits.

After the pandemic, when brands and retailers saw tailored clothing sales plummet as men worked from home in casual gear, there has been a rebound in sales of sports jackets and suits — but not the traditional versions. Instead, suits now are more versatile and for fall are more relaxed, can be in unusual colors and often are worn over sweaters or turtlenecks.

Luca Lisandroni, who shares the CEO title with Stefanelli, confirmed Cucinelli’s previous expectations of 15 percent sales growth in 2023 and of a 10 percent increase in revenues in 2024 and said that in the three months ended March 31, sales climbed 34.7 percent to 265.3 million euros. This compares with 197 million euros in the same period last year.

In a statement, Cucinelli said “there is no doubt that we are reaping the fruits of the positive period that our brand is experiencing for the style it represents and perhaps also for the way we share our ideas with all of our counterparts. As regards our market segment of absolute luxury, we continue to have a very positive vision for the entire coming year.”

Lisandroni said the company saw sales accelerate since Cucinelli was revealed as the recipient of the Neiman Marcus award.

In the first quarter, sales in Italy rose 13.8 percent to 27.6 million euros, representing 10.4 percent of the total.

The company converted two wholesale stores to directly operated: in Rome and in the luxury resort beach town Forte dei Marmi in April. The new Roman boutique is located on Via dei Condotti and spans four floors.

Lisandroni touted the “excellent” performance of Asia and America, and “very solid” business in Europe, where sales were up 16.6 percent to 67.9 million euros, accounting for 25.6 percent of the total. In the region, revenues were boosted by both local customers and tourists, including customers from the East returning in the first quarter.

Sales in the Americas climbed 42.9 percent to 95.5 million euros, accounting for 36 percent of the total.

Revenues in Asia soared 56 percent to 74.3 million euros, representing 28 percent of the total. “The decidedly positive trend in China continues, recording very encouraging signs in the period,” Lisandroni said. He has recently returned from a 10-day trip in China, and said the country was brimming with projects.

While China represented 12 percent of sales in 2022 and there are only 17 directly operated stores in the region, it is “becoming increasingly important,” said Lisandroni, adding that 2023 will be “a golden year” in China.

He also touted the “strong energy and program of cultural activities” in Hong Kong, and the solid performance of Taiwan and Macau. “We have a big opportunity in ready-to-wear in China, but we don’t want to force an acceleration,” he said.

He also believes “it will be an extraordinary year” for the company in Dubai, where Cucinelli just opened a second store.

In the first quarter, retail revenues jumped 63.7 percent to 164 million euros, representing 61.8 percent of the total. The gains were driven by strong like-for-like growth, with a significantly higher sell-out of spring collections and a network expansion, although the company noted that the comparison is favored by the fact that last year the retail division was affected by the COVID-19 restrictions in the first quarter.

As of March 31, there were 122 retail boutiques compared to 115 in the same period last year.

Sales in the wholesale channel rose 4.7 percent to 101.3 million euros, accounting for 38.2 percent of the total. Over the past six months, the wholesale channel grew 22.2 percent.

E-commerce growth was in line with expectation, Lisandroni said. The direct e-store segment accounts for 6 to 7 percent of sales, while in total e-commerce represents 13 or 14 percent of sales.

Lisandroni also spoke of the launch of the two new fragrances that were presented in the first quarter in Milan on March 28.

The fragrances “Brunello Cucinelli pour Femme” and “Brunello Cucinelli pour Homme” are the result of a collaboration with EuroItalia, owned by the Sgariboldi family, and with experienced perfumer noses Daphné Bugey and Olivier Cresp.

Retailing at 180 euros for a 100-ml bottle, the fragrances were launched in the Brunello Cucinelli boutiques in Milan and Solomeo, where the company is based, and will be rolled out in May. They will be available in the U.S. in October and in Asia in January next year.

The first sun and prescription eyewear with EssilorLuxottica will bow in the early months of 2024.

In line with the pact established 15 years ago, whereby executives are expected to leave their role at the age of 70, chief financial officer Moreno Ciarapica will pass on the baton to deputy CFO Dario Pipitone after 12 years in that position and 30 with the company. Ciarapica will remain an adviser as a senior co-CFO.

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • LUNR +24.7%, WAL +15.1%, EDU +7.7%, ISRG +7%, FHN +2.2%, RF +1.1%, ORIC +0.9%, UAL +0.9%, ELV +0.8%
  • Gapping down:
    • GMDA -21.9%, CDW -5.4%, FULT -4.7%, UCBI -4.4%, IBKR -4.3%, MRTN -3.7%, SYF -3.4%, ASML -3%, PCVX -2.4%, AI -2.5% LAD -2.4%, ROKU -1.9%, NE -1.9%, NFLX -1.3%, ZYME -1.1%, FOXA -1%, VALE -1%, GOOG -0.9%, CLPT -0.8%, SAIC -0.8%, CENTA -0.7%, RIG -0.6%, WBD -0.6%, RTX -0.5%

FT : Glencore says it is willing to improve $23bn bid for Teck Resources

Glencore says it is willing to improve $23bn bid for Teck Resources
Swiss commodities trader says offer depends on engagement from Canadian miner’s board

Glencore has said it is willing to improve its $23bn offer for Teck Resources if the Canadian mining company’s board is prepared to engage with it to discuss in the deal.

In a letter addressed to Teck shareholders on Wednesday morning, Glencore chief executive Gary Nagle said the Teck board had “consistently refused any engagement”.

“Glencore has never stated that its proposal is ‘best and final’,” Nagle wrote. “We believe that with engagement, we could improve our proposal’s terms and value, which would be in the best interests of all Teck shareholders.”

Earlier this month the Swiss-based commodities trading company proposed to acquire Teck Resources, merge the two companies, then split then into a coal and metals business.

Teck’s board unanimously rejected Glencore’s bid, as well as an improved offer, saying the proposal was a “non-starter”.

Teck’s shareholders will vote on April 26 whether to approve the company’s earlier plan to split itself in two — a vote that is increasingly seen as an indirect referendum on Glencore’s offer.

Wednesday’s public letter is the first time that Glencore has addressed Teck’s shareholders directly, whereas previously it had addressed the board.