>>> Europe : Brokers Upgrades & Downgrades - 11th of July 2023

>>> Up
* Apple PT Raised to $200 from $180 at KeyBanc
* Bankinter Raised to Buy at UBS; PT 8.35 euros
* DWF Group Raised to Hold at Liberum; PT 100 pence
* GFT Raised to Buy at Berenberg; PT 40 euros
* JPMorgan Raised to Buy at Jefferies; PT $165
* Lifco Raised to Hold at ABG; PT 215 kronor
* Mondi Raised to Overweight at ABSA Securities; PT 1,437.48 pence

>>> Down
* Cancom Cut to Hold at Berenberg
* Citigroup Cut to Hold at SocGen
* Deutsche Bank Cut to Hold at SocGen
* DIC Asset Cut to Hold at Berenberg Following Profit Warning
* Esker Cut to Hold at Berenberg
* Goldman Sachs Cut to Hold at SocGen
* Henkel Cut to Hold at Jefferies; PT 77 euros
* JPMorgan Cut to Hold at SocGen; PT $160
* Michelin Cut to Hold at Jefferies; PT 28 euros
* New Work Cut to Hold at Berenberg
* VAT Cut to Neutral at Oddo BHF; PT 380 Swiss francs

>>> Initiation
* ERG Rated New Buy at Stifel; PT 33.80 euros
* JD.com ADRs Rated New Buy at BH Securities; PT $68.72
* Murphy Oil Rated New Overweight at KeyBanc; PT $47
* Nordex Rated New Buy at SRH AlsterResearch; PT 24 euros
* Orsted Rated New Hold at Stifel; PT 665 kroner
* Redde Northgate Rated New Buy at Panmure Gordon; PT 500 pence

>> Call
* ArcelorMittal, SSAB, Acerinox Are Citi’s Top Europe Steel Picks
* Citi’s Montagu Says Investors Cut Leverage to US Stocks Slightly
* SocGen Downgrades Major Banks Ahead of Earnings Season

>>> US After Hours Summary: WDFC +4.7% up on solid MayQ results; VRDN -18.4% lower on trial data; PSMT -3.8% edging lower following earnings


After Hours Summary: WDFC +4.7% up on solid MayQ results; VRDN -18.4% lower on trial data; PSMT -3.8% edging lower following earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: WDFC +4.7%

Companies trading higher in after hours in reaction to news: PRTA +3% (BMY to obtain commercial rights for PRX005), MDU +2% (pursuing tax-advantaged separation of construction services business), SSYS +1% (Nano Dimension increases offer price to acquire Stratasys), ABUS +0.9% (appoints new CMO), D +0.2% (selling 50% interest in Cove Point LNG for $3.5 bln)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: PSMT -3.8%

Companies trading lower in after hours in reaction to news: VRDN -18.4% (reports data from VRDN-001), IOVA -9% (files $150 mln stock offering), ADT -4.3% (to incur additional impairment charges for Solar reporting unit), COHR -1% (provides assessment of export restriction of gallium and germanium from China), LTCH -0.8% (reducing workforce by approximately 59%), KBH -0.1% (files mixed shelf), AMRC -0.1% (signs battery energy storage asset contract), GATO -0.1% (reports Q2 production figures)

>>> US Closing Stock Market Summary

Closing Stock Market Summary

The stock market had a fairly strong showing today. Index performance was more modest, however. The market-cap weighted S&P 500 rose only 0.2% while the Invesco S&P 500 Equal Weight ETF (RSP) rose 0.9%. Advancers led decliners by a roughly 2-to-1 margin at the NYSE and the Nasdaq. 

Gains for the three major indices were smaller, largely because of the relative weakness seen among the mega cap stocks. The Vanguard Mega Cap Growth ETF (MGK) fell 0.2% with Apple (AAPL 188.61, -2.07, -1.1%), Alphabet (GOOG 116.87, -3.27, -2.7%), and Microsoft (MSFT 331.83, -5.39, -1.6%) registering some of the largest declines from the space. Those losses followed the news from Nasdaq that there will be a Special Rebalance of the Nasdaq 100 to reduce overconcentration in the index by redistributing weights, effective prior to the open on July 24. The new weightings will be determined on Friday, July 14.

Even with lagging mega caps, the broader market held up well today. Small caps, banks, energy and semiconductor stocks all outperformed due to a more positive economic vibe in today's trade. The PHLX Semiconductor Index rose 2.1%, the Russell 2000 rose 1.6%, and the SPDR S&P Regional Banking ETF (KRE) rose 0.8%. 

The economically-sensitive S&P 500 industrials (+1.4%) and energy (+0.8%) sectors were among the top performers along with health care (+0.8%) and financials (+0.4%). Meanwhile, the communication services (-0.9%) and utilities (-0.4%) sectors fell to the bottom of the pack. 

A pullback in Treasury yields was supportive of equities today. The 2-yr note yield fell nine basis points to 4.85% and the 10-yr note yield fell four basis points to 4.01%.

The improvement in Treasury yields happened ahead of Wednesday's release of the June Consumer Price Index, which promises to be a market-moving catalyst.

  • Nasdaq Composite: +30.8% YTD
  • S&P 500: +14.9% YTD
  • S&P Midcap 400: +8.5% YTD
  • Russell 2000: +7.6% YTD
  • Dow Jones Industrial Average: +2.4% YTD

Reviewing today's economic data:

  • May Wholesale Inventories 0.0% (consensus -0.1%); Prior was revised to -0.3% from -0.1%

Economic data on Tuesday is limited to the NFIB Small Business Optimism Survey for June (prior 89.4) at 6:00 a.m. ET. 

Business Of Fashion : Israel’s Oddity Tech Seeks Up to $1.7 Billion Valuation in

Israel’s Oddity Tech Seeks Up to $1.7 Billion Valuation in US IPO

Israel-based Oddity Tech will seek a valuation of up to $1.7 billion in its US initial public offering (IPO), the beauty and wellness products company said on Monday.

The company is aiming to price its shares between $27 and $30 each to raise up to $315.8 million.

If the IPO is priced at the top end of the range, more than $263 million would go to existing investors who are selling some shares.

Oddity joins a host of companies that have rushed to the stock market in recent weeks, encouraged by strong debuts from firms like Johnson & Johnson’s consumer health unit Kenvue.

Oddity, which owns the IL Makiage and SpoiledChild brands, is seeking to list on the Nasdaq under the symbol “ODD.”

Goldman Sachs, Morgan Stanley and Allen & Co are the lead underwriters, Oddity said.

WWD : Italian Footwear Industry Sees Slowdown in Export Volume and Production De

Italian Footwear Industry Sees Slowdown in Export Volume and Production Despite Sales Increase
As sales and export value rise, production and export volume have fallen across the Italian footwear industry.

The Italian footwear industry reported another quarter of increased sales despite a slowdown in export volume and production, according to the latest data from Confindustria Moda Research Centre for Assocalzaturifici, the national association representing Italian shoemakers.

In the first quarter of 2023, the country’s shoe sector saw a 13.6 percent increase in sales compared to the same period last year, as well as a 16.1 percent increase in total value of footwear exports, the report said.

Giovanna Ceolini, chair of Assocalzaturifici, added in the report that all the top 20 international destinations for Italian footwear — with the sole exception of Switzerland, which was down 7.8 percent — saw increases in export value that were “almost always” in double-digit territory.

But as sales and export value rise, production and export volume have fallen across the Italian footwear industry. Specifically, the report noted that the number of shoes being exported to North America in the first quarter slowed down noticeably, by 19.4 percent. Decreases in exports were also seen in Germany (down 8.8 percent), the U.K. (down 10.1 percent) and Switzerland (down 24.8 percent).

But the report did see a “strong recovery” in Russia and Ukraine, after sales plummeted last March following Russia’s invasion of Ukraine, and noted a continued recovery in Italy’s domestic market, up 8.2 percent in household purchases in the quarter.

However, there is still cause for concern, the report highlighted. The Confindustria Moda Research Centre said there are “several signs” of a slowdown in growth, which was expected given the V-shaped recovery in 2021 and 2022. These signs include an overall export volume decrease of 2 percent and a 1 percent decline in production.

“The survey revealed that high prices for energy and raw materials are currently the biggest problem for footwear companies, due to their impact on balance sheets,” Ceolini said in a statement. The chair also noted that the survey found that more banks are tightening their credit, and 84 percent of entrepreneurs identified the difficulties of finding skilled labor as a “significant problem” for their business.

By product category, the report also showed that leather shoe uppers — the leading segment, which accounts for 63 percent of the value of exports — is the only one to have increased in the first quarter both in value terms (slightly above the average, up 18.6 percent) and volume (up 1.4 percent) compared to the same period in 2022. However, export volume of leather uppers are down 16.6 percent compared to 2019.

Among other segment’s items, there was a significant reduction for children’s leather footwear (down 12 percent in volume). Conversely, there was a 4.7 percent increase in total volume of men’s exports and a 1.5 percent include in volume in women’s shoe exports, with 2.2 percent and 4.2 percent increases for walking shoes and sandals, respectively, and a 24.5 percent reduction for boots/ankle boots.

This latest data comes after the Confindustria Moda Research Centre for Assocalzaturifici reported that the final balance of exports in 2022 were up 23 percent over 2021 at 12.65 billion euros ($13.89 billion, based on current exchange).

WWD : Ralph Lauren to Return to the Runway for New York Fashion Week

Ralph Lauren to Return to the Runway for New York Fashion Week
The last time Lauren showed during NYFW was in September 2019.

Ralph Lauren is returning to New York Fashion Week in September.

The designer plans to stage a women’s fashion show on the evening of Sept. 8, contributing a significant boost to the week. The exact location has not yet been revealed, nor could it be learned whether the show would feature menswear as well.

The last time Lauren staged a show during NYFW was Sept. 7, 2019, when he created Ralph’s Club, a swanky supper club at 48 Wall Street, where Lauren’s surprise performer was Janelle Monáe, who took the stage after the fashion show and sang old standards. Since then Lauren has hosted shows off-calendar in Los Angeles and New York later in the season.

The last U.S. fashion show Lauren staged was in the gardens of the Huntington Library, Art Museum and Botanical Gardens in San Marino, California, on Oct. 13, 2022, which attracted the likes of Jennifer Lopez and Ben Affleck, Diane Keaton, Laura Dern, John Legend and Lily Collins. There he showed Ralph Lauren women’s and men’s Collections and Purple Label, Double RL, Polo Ralph Lauren and Childrenswear.

Before that he held a show on March 22, 2022, where he transformed a gallery at the Museum of Modern Art into a sleek replica of his Fifth Avenue apartment, and welcomed guests for cocktails and a show, which WWD reported felt like a turning point for the brand in terms of runway cool. Guests included Monáe, Gigi and Bella Hadid, Shalom Harlow, Jessica Chastain and Tyson Beckford.

Other fashion show events he has held to showcase his collections were the 50th anniversary celebration at the Bethesda Terrace and Fountain in Central Park on Sept. 7, 2018, where he showed the women’s collection, Western-inspired men’s looks from Double RL and a multigenerational finale, followed by a gala dinner, and the café society show at his uptown store in Feb. 7, 2019.

After a four-year absence, the designer returned to the Milan’s men’s calendar on June 16 with his Purple Label collection, titled “Dolce Vita,” which he presented at the Ralph Lauren Palace.

In other news, Ralph Lauren is again the official apparel sponsor of Wimbledon in London, which runs through July 16.

FT : Chinese developer Kaisa hit by lawsuit over onshore bonds

Chinese developer Kaisa hit by lawsuit over onshore bonds
Case involving mainland debt reflects creditors’ impatience with restructuring in China’s property sector, analysts say

A Singapore hedge fund has filed a petition in Hong Kong to wind up defaulted developer Kaisa, marking one of the first cases dealing with a Chinese developer’s mainland debt following a property sector meltdown in the country.

The court filing by hedge fund Broad Peak Investment Advisers in Hong Kong comes during a liquidity crunch for Chinese property developers. The sector’s collapse has dragged on China’s economy, which is teetering on the brink of deflation.

A number of Hong Kong-listed Chinese developers including Evergrande, the world’s most indebted property developer, are battling winding-up petitions in Hong Kong. But while most other petitions involve offshore dollar-denominated debt, Broad Peak’s petition concerns the non-payment of Rmb170mn ($24mn) in onshore bonds.

“It’s definitely interesting,” said Nicholas Chen, an analyst at CreditSights in Singapore. “[It shows] the kind of impatience and frustration that even onshore creditors are having with some of these developers’ restructuring or lack thereof.”

Since a wave of Chinese developers started defaulting in late 2021, international investors have been mired in drawn-out and opaque restructuring processes to try to recover some of their investments.

One investor told the Financial Times that the case was being closely watched by offshore bondholders to see how the onshore claims would impact the international restructuring process.

“Onshore creditors are typically the ones that would be the first in line to assets that would get liquidated,” Chen said. “It could be the case where these onshore creditors are trying to speed up and get some kind of recovery.”

Kaisa said in a Monday filing to the Hong Kong stock exchange that it would “seek legal measures to resolutely oppose the petition” and continue to work with offshore creditors on a restructuring plan. Broad Peak declined to comment.

Kaisa’s Hong Kong shares, which were already at an all-time low after trading resumed in March following almost a year of suspension, closed down more than 15 per cent on Monday. A court hearing has been set for September 13.

The company was among the first to default in late 2021 as contagion spread through the sector. The developer had total liabilities amounting to more than Rmb200bn as of last year.

In January, Kaisa was hit with a lawsuit in New York by Hong Kong-based Oasis Capital Management, which claimed non-payment of about $102mn in principal and interest involving four of its bonds worth $90mn.

Evergrande, the only developer with more international debt than Kaisa, unveiled its offshore restructuring plan in March. Part of the plan included providing bondholders with access to offshore assets listed in Hong Kong.