>>> Up
* Anglo American Raised to Outperform at RBC; PT 3,400 pence
* Antofagasta Raised to Sector Perform at RBC; PT 1,000 pence
* Boliden Raised to Outperform at RBC; PT 345 kronor
* Enel Raised to Neutral at Citi; PT 4.80 euros
* Hapag-Lloyd Raised to Hold at HSBC; PT 300 euros
* Rilba Raised to Buy at SEB Equities; PT 950 kroner
* Sandvik Raised to Neutral at UBS
* Segro Raised to Buy at Jefferies; PT 1,175 pence
* Vestas Raised to Hold at HSBC; PT 190 kroner
>>> Down
* Argenx ADRs Cut to Neutral at Baird; PT $460
* EDF Cut to Neutral at JPMorgan; PT 12 euros
* Handelsbanken Cut to Hold at Deutsche Bank; PT 100 kronor
* Philips Cut to Hold at HSBC; PT 20 euros
* Swedbank Cut to Hold at Deutsche Bank; PT 162 kronor
>>> Initiation
* Bachem Reinstated Reduce at Baader Helvea; PT 48 Swiss francs
* Haleon Rated New Hold at Deutsche Bank; PT 300 pence
* Imprendiroma Rated New Outperform at EnVent S.p.A.
* PolyPeptide Group Rated New Reduce at Baader Helvea
>>> Call
* EDF Cut to Neutral at JPM Amid Nationalization Risk, Poor 1H
* Segro Raised to Buy at Jefferies as Discount on Shares Overdone
* RBC Upgrades Three Mining Stocks as Pressure on Sector Eases
US equity futures climbed Friday on positive earnings from Amazon.com Inc. and Apple Inc. and expectations of shallower Federal Reserve monetary tightening, a prospect that’s also supporting sovereign bonds. Nasdaq 100 contracts added more than 1% after the US stock market hit a seven-week high Thursday. Amazon jumped over 13% in extended trading, while Apple also advanced, after their revenues beat estimates.
But Asian bourses were more mixed, hampered by a decline in Hong Kong and hesitant performance in China. Traders were parsing a downbeat economic growth assessment from China’s top leaders at a key meeting and a lack of new stimulus policies. Treasuries trimmed a rally that’s left the 10-year yield close to lowest level since April. Bonds jumped in the Wall Street session on data showing a second consecutive quarterly contraction in the US economy, which bolstered the view that inflation will cool and that the Fed will become less aggressive. A dollar gauge was steady, oil topped $97 a barrel and golddipped. Bitcoin slipped back after breaching $24,000. Global shares are on course for a second weekly advance, paring this year’s rout to about 16%. The risk is that the recent bout of optimism eventually gets a reality check if inflation stays stubbornly elevated, leaving interest rates higher than investors would like amid an economic downturn. Second-quarter US gross domestic product fell an annualized 0.9% after a 1.6% drop in the first three months of the year. Back-to-back quarters of decline define a recession in most parts of the world, but in the US it’s not official until economists at the National Bureau of Economic Research deem it so. Swaps tied to Fed meeting dates anticipate a peak in the fed funds rate of about 3.25% around year-end, less than a percentage point above its current level, followed by reductions next year to shore up growth. Such pricing is a major bone of contention for market participants. A call between US President Joe Biden and his Chinese counterpart Xi Jinping underlined bilateral tension even as the leaders told aides to plan an in-person meeting. US After Hours AMZN +12.7%, AAPL +3%, ROKU -24.9%, INTC -8.3% headline busy earning session
Nikkei +0,46% Hang Seng -2,14% CSI -1,10% Shanghai -0,71% Shenzen -0,71%
Eur$ 1,0202 CNH 6,7476 CNY 6,7441 JPY 133,54 GBP 1,2175 CHF 0,9351 RUB 62,3125 TRY 17,9496 WTI$ 96,79 Gold 1759,70 BTC 23,885 -0,60% ETH 1,725 61,80%
S&P +0,68% Nasdaq +1,37% EuroStoxx +0,49% FTSE +0,30% Dax +0,49% SMI +0,40%
Macro :
- Bitcoin and Ether Are on Track for Their Best Month Since 2021
Keep an eye on :
- ANA SM :Acciona 1H Net Income Misses Estimates
- ANDR AV : Andritz 2Q Ebita Beats Estimates
- AF FP : Air France-KLM 2Q Net Income Beats Estimates,
- AAL LN : Anglo American’s New Boss Sounds Warning on Future Copper Supply
- ADP FP : ADP Boosts FY Ebitda Margin Forecast
- AMS SM : Amadeus 2Q Ebitda Beats Estimates
- AMS SW : AMS-Osram 2Q Adjusted Ebit Misses Estimates
- AMUN FP : Amundi Defies Gloom Among Managers With $1.8 Billion of Inflows
- APAM NA : Aperam 2Q Sales Misses Estimates
- AAPL US : Apple 3Q Revenue Meets Estimates: Snapshot
- AKE FP : Arkema Sees FY Ebitda About EU2.10B, Est. EU1.96B
- BFIT NA : Basic-Fit Sees Network Growing to Around 1,250 Clubs in 2022 (1)
- BBVA SM : BBVA 2Q Net Income Beats Estimates (1)
- BEFB BB : Befimmo 1H Adjusted EPS EU1.34 Vs. EU1.14 Y/y
- BEKB BB : Bekaert 1H Adjusted Ebit Beats Estimates
- BNP FP : BNP Beats Estimates on Boost From Retail Unit, Equities Push
- BRNL NA : Brunel 2Q Ebit EU10.0M Vs. EU7.6M Y/y
- CABK SM : CaixaBank 2Q Net Income Beats Estimates
- CAP FP : Capgemini Boosts FY Revenue in Constant Currency Forecast
- CGG FP : CGG 2Q Segment Revenue $240M
- COFA FP : Coface 2Q Net Income EU78.2M Vs. EU66.9M Y/y
- CFN PL : Cofina 1H Net Income EU3.26M Vs. EU1.95M Y/y
- COFB BB : Cofinimmo 1H Net Rental Income EU159.3M Vs. EU145.4M Y/y
- EDP PL : EDP 1H Net Income EU306M Vs. EU343M Y/y
- ENEL IM : Enel 1H Adjusted Ebitda Meets Estimates
- ENI IM : Eni 2Q Adjusted Net Beats Estimates, *ENI RAISES 2022 SHARE BUYBACK TO EU2.4B
- EL FP : EssilorLuxottica 2Q Revenue Beats Estimates
- ENX FP : Euronext 2Q Revenue Beats Estimates
- FDJ FP : FDJ 1H Ebitda EU308M Vs. EU261M Y/y
- FDR SM : Fluidra Cuts FY Ebitda Forecast
- FORN SW : Forbo 1H Sales Beats Estimates
- FPE GY : Fuchs Petrolub Maintains FY Ebit Forecast
- GTT FP : GTT 1H Revenue EU144.2M Vs. EU165.3M Y/y
- HEIJM NA : Heijmans 1H Revenue EU864M Vs. EU881M Y/y
- HLE GY : Hella to Sell 33.33% Stake in HBPO Venture for 290 Million Euros
- COL SM : Inmobiliaria Colonial 1H Net Rental Income EU153M
- NK FP : Imerys in Talks to Sell Unit to Platinum Equity, 2Q Rev. EU1.35B
- IPR PL : Impresa 1H Net Loss EU2.16M Vs. Profit EU3.34M Y/y
- INW IM : INWIT 2Q Revenue Meets Estimates
- SKB GY : Koenig & Bauer 1H Ebit Loss EU13.8M Vs. Profit EU6.4M Y/y
- LDO IM : Leonardo 2Q Ebita Misses Estimates Merlin Properties 1H Ebitda EU165.8M
- MRL SM : Merlin Properties 1H Ebitda EU165.8M
- NEOEN FP : Neoen Boosts FY Ebitda Forecast, Beats Estimates
- ONTEX BB : Ontex 2Q Adjusted Ebitda Misses Estimates
- OR FP : L'Oreal 2Q Like-for-Like Sales Beats Estimates
- ORP FP : ORPEA to Sell Retirement Homes in Netherlands for ~EU125M
- PAH3 GY : Porsche's Luxury BEV Mix Drives $80 Billion IPO Despite CEO Move
- RNO FP : Renault Moves Past Hit From Russia Exit With Improved Outlook
- REN PL :REN 1H Net Income EU45.9M Vs. EU39.5M Y/y
- GEG NO : Seabird Exploration Offering Prices at NOK3/Share
- SGEN US : Seagen 2Q Revenue Beats Estimates, Boosts FY Revenue Forecast
- LIGHT NA : Signify 2Q Comparable Sales Beats Estimates
- WAF GY : Siltronic 2Q Ebitda Beats Estimates; Raises Sales Forecast
- SNBN SW : SNB 1H Loss CHF95.2B
- SON PL : Sonae 1H Net Income EU118M Vs. EU62M Y/y
- STAN LN : Standard Chartered 1H Adjusted Pretax Profit Beats Estimates
- SUN SW : Sulzer Sees FY Net Orders +3% to +5%
- SREN SW : Swiss Re First-Half Profit Plunges on Market Turmoil, Ukraine
- TOKMAN FH : Tokmanni 2Q Comparable Ebit Beats Estimates
- UMI BB : Umicore 1H Adjusted EPS Beats Estimates
- DG FP : Vinci 1H Ebit Beats Estimates
- VIS SM : Viscofan 2Q Net Income EU37.4M Vs. EU33.9M Y/y
- VIV FP : Vivendi 1H Ebita Misses Estimates
- WBD IM : Webuild 1H Adjusted Ebitda EU251.3M Vs. EU189.2M Y/y
- MF FP : Wendel 1H Sales EU4.22B Vs. EU3.63B Y/y
Tesla volatility spurs creation of first hedged single-stock ETF
Fund will limit potential losses to 10% a quarter in return for a cap on gains
Just weeks after the first leveraged single-stock exchange traded funds listed in the US, investors are being offered the polar opposite in a Tesla-based offering that hedges for steep declines in its price.
The world’s first “risk managed” single-stock ETF, from Illinois-based Innovator Capital Management, is designed to protect investors from large losses — in return for capping the potential upside.
The Innovator Hedged TSLA Strategy ETF (TSLH) will limit potential losses to 10 per cent a quarter, with the cap for the initial contract (running to the end of September) set at 9.29 per cent.
“While there is little doubt Teslas are amazingly sleek, smooth-driving vehicles, the very volatile ride in the shares leaves a lot to be desired,” said Bruce Bond, co-founder and chief executive of Innovator.
“Yet, the innovation potential that Elon Musk’s company represents is hard to ignore. For those investors with a lower risk tolerance who still desire exposure we’re excited to bring this investment strategy to market.”
The launch comes amid a banner year for so-called “defined outcome” ETFs in the US this year, as investors have sought protection from weak and volatile markets.
TSLH “is a logical extension of what we are seeing with defined outcome ETFs, which have been extremely popular with advisers and investors who want to get exposure to the equity market but in a risk-managed way”, said Todd Rosenbluth, head of research at VettaFi.
“Tesla is one of the most volatile stocks on the US stock market and this product is going to allow people to get exposure to a high-growth company but with downside protection.”
Innovator has built up a large book of buffered ETFs, which provide a degree of downward protection, based on indices such as the S&P 500.
TSLH differs from the bulk of its offerings, though, in that it instead has a hard floor — investors are fully on the hook for the first 10 per cent of any sell-off in a quarter but are fully protected after that.
“For some of these high beta stocks, the concern is that there can be a really big move. What people are looking for is protection against a big downdraft,” said Bond, who noted that Tesla’s share price tumbled 38 per cent in the second quarter of this year (when it was the 11th-most volatile stock in the S&P 500) after edging up 2 per cent in the prior quarter.
TSLH will invest 90 per cent of its assets in three-month US Treasury bills, which provide the floor and use call options to set the cap, which will vary every time the ETF resets quarterly, depending on market conditions.
They have taken in a net $5.4bn, according to Morningstar, up from $3.3bn during the whole of 2021 (itself a record), even as flows across the wider ETF spectrum have only reached 35 per cent of last year’s total. Innovator itself has seen net inflows of $2.6bn into its defined outcome ETFs so far this year.
TSLH “is a logical extension of what we are seeing with defined outcome ETFs, which have been extremely popular with advisers and investors who want to get exposure to the equity market but in a risk-managed way”, said Todd Rosenbluth, head of research at VettaFi.
“Tesla is one of the most volatile stocks on the US stock market and this product is going to allow people to get exposure to a high-growth company but with downside protection.”
Innovator has built up a large book of buffered ETFs, which provide a degree of downward protection, based on indices such as the S&P 500.
TSLH differs from the bulk of its offerings, though, in that it instead has a hard floor — investors are fully on the hook for the first 10 per cent of any sell-off in a quarter but are fully protected after that.
“For some of these high beta stocks, the concern is that there can be a really big move. What people are looking for is protection against a big downdraft,” said Bond, who noted that Tesla’s share price tumbled 38 per cent in the second quarter of this year (when it was the 11th-most volatile stock in the S&P 500) after edging up 2 per cent in the prior quarter.
TSLH will invest 90 per cent of its assets in three-month US Treasury bills, which provide the floor and use call options to set the cap, which will vary every time the ETF resets quarterly, depending on market conditions.
Bond said he expected the cap to generally be above the 9.29 per cent of the initial contract. Fees are 79 basis points a year.
Innovator has no immediate plans to launch similar products based on other companies until it has evaluated the success of TSLH, which had volume of $795,000 on its first day of trading on Tuesday.
“It has the potential to be very successful, but we really don’t know until we bring it out and test it. We would like to raise $0.5bn,” Bond said.
Investors could, of course, simply own Tesla stock outright and sell if losses approach their comfort level, without incurring a 79bp-a-year fee.
However, Rosenbluth said that while “this isn’t for everyone” it was “compelling to have that risk-management done for the end investor without them having to do it themselves.
“This is putting a plan in place and forcing you to stick with it. It’s setting the alarm clock for you. Is it a necessary tool in the toolbox? No, but it has its use cases. It’s solving a problem for some people,” he said, adding that it could be useful to gain exposure to other volatile, high-profile stocks, such as Alphabet and Meta.
Kenneth Lamont, senior fund analyst for passive strategies at Morningstar, was less convinced, though.
“You are investing in Tesla because it has the potential for stellar growth and high volatility, so why would you sacrifice some of that?” Lamont asked. “If you want less risk, put [Tesla] into a well-diversified portfolio. You can do that yourself without paying 80bp.”
After Hours Summary: AMZN +12.7%, AAPL +3%, ROKU -24.9%, INTC -8.3% headline busy earning sessionAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: AMZN +12.7%, CC +7.1%, SKYW +6.9%, MITK +6.5%, FIVN +6.2%, INFN +5.4%, DECK +5.1% (also authorizes new $1.2 bln share repurchase program), HIG +4.9% (also authorizes new $3 bln share repurchase program), NATI +4.6%, BZH +4.2%, X +4.1% (also authorizes new $500 mln share repurchase program), RGP +3.7%, COHU +3.6%, CLFD +3.5%, AAPL +3%, CWST +3%, IMAX +3%, HURN +2.6%, YUMC +2.3%, EMN +2.2%, CE +2%, MERC +2%, AUY +1.8%, FSLR +1.7%, EPRT +1.6%, MTD +1.4%, LTC +1%, CLR +0.9%, ZEN +0.9%, OLN +0.7% (also authorizes new $2 bln share repurchase program), SGEN +0.6%, TFII +0.4%, FHI +0.3%, ATR +0.2%, HTGC +0.2% (also increases dividend), OFC +0.2%, CPT +0.1%, LHX +0.1%, LAC +0.1%
Companies trading higher in after hours in reaction to news: BHC +29% (announce oral order in XIFAXAN patent litigation), IBRX +3.5% (FDA accepts BLA for N-803; sets PDUFA date as May 23), CRUS +1.8% (in sympathy with Apple earnings), QRVO +1.6% (in sympathy with Apple earnings), VAL +1.1% (provides quarterly fleet status report), SYNA +0.8% (in sympathy with Apple earnings), QCOM +0.5% (in sympathy with Apple earnings), B +0.3% (announces planned closure of production at Bristol facility), OI +0.2% (to build new greenfield glass plant in KY), GOLD +0.2% (reports the initial assay results for the 2022 drill program), STE +0.1% (increases dividend), GD +0.1% (awarded $698 mln U.S. Navy contract)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ROKU -24.9%, AVYA -22.8% (also names new CEO), DXCM -18.8%, AVTR -11.3%, INTC -8.3%, EW -5.4%, DRQ -4.5%, RARE -3.7%, DLR -2.9%, TWOU -2.5%, UCTT -2.3%, VFC -2.3%, KLAC -1.8%, TXRH -1.6%, GLPI -1.2%, MHK -1%, VALE -0.6%, KNSL -0.2%, MTX -0.2%, AJG -0.1%, BIO -0.1%, CUZ -0.1%, SHLX -0.1%, WRE -0.1%
Companies trading lower in after hours in reaction to news: VNRX -12.2% (commences stock offering), TTD -8.2% (in sympathy with weak ROKU earnings), ARCC -3.3% (commences stock offering), MNTK -1.3% (files provisional patent application), RWT -0.5% (authorizes a $125 mln stock repurchase program)
France’s EDF posts €5.3bn loss ahead of renationalisation
Energy group warns of €24bn hit to full-year core profits from output problems
EDF has posted a €5.3bn first-half loss, weeks before the French utility is due to be renationalised and after outages at some of its nuclear plants sent its electricity production plummeting.
The company on Thursday warned its core profits for the whole of 2022 would take a deeper hit than previously flagged of €24bn from its output problems, compared with a previous forecast of €18.5bn.
EDF, which is 84 per cent controlled by the French state and which operates France’s 56 nuclear reactors, has been struggling with corrosion issues at some plants that have forced it to carry out checks and closures. The group was also made to foot the bill for the government’s bid to cap electricity prices for households.
EDF said its first-half sales had risen 67 per cent year-on-year to €66.2bn. However, the group has been forced to buy supply on expensive wholesale markets, and its earnings before interest, taxes, debt and amortisation fell to €2.7bn, down almost 75 per cent from the first half last year.
On top of falling core profits, EDF said it had also recorded a negative change in the value of financial instruments of €3.8bn.
It recorded negative cash flow of nearly €4bn, a deterioration from the minus €240mn of a year earlier.
EDF, which has long been lumbered with a large debt pile, is due to return to government hands by around October through a tender offer of close to €10bn to buy out minority shareholders and convertible bonds.
The French government has said it wants to take full control of EDF again to be in a better position to face looming investments in new nuclear reactors, and to be able to move faster on some projects.
EDF’s deepening financial problems had also precipitated matters, analysts and people close to the group said, adding that the company would probably require further capital increases.