US EARLY MORNING: Equity futures are mixed ahead of manufacturing ISM, Fedspeak, ECBspeak

US equity futures have given up overnight gains, and are currently trading mixed around the unchanged mark (YM +0.2%, RTY +0.0%, ES +0.0%, NQ -0.4%) ahead of today’s key data and economic releases (ISM manufacturing, BoC) and Fedspeak (2022 voters Williams and Bullard). There are also a lot of ECB speakers ahead of the one-week pre-meeting blackout window, which kicks in on Thursday (both Chief Economist Lane and President Lagarde are due, amongst others). Accordingly, it appears that inflation and growth themes will be in focus, particularly as the final May manufacturing PMI data from S&P Global are also being released today. The monthly OPEC meetings are also taking place, although the consensus is for policy to be kept steady in June. Focussing on the US, the manufacturing ISM is seen falling to 54.5 in May vs 55.4 in April. Analysts note that the regional Fed manufacturing surveys have fallen-off recently, with the NY Fed, Philadelphia Fed and the Richmond Fed's gauges all lingering around post-pandemic lows. Credit Suisse notes that global supply chains are likely to remain under pressure, which should worsen the growth slowdown, but also provide a boost to headline ISM due to longer supplier-delivery times. The bank also notes that industrial production has been resilient recently, despite some of the shocks this year, like the COVID lockdowns in China and Russia's invasion of Ukraine; that said, it argues that while it is not expecting a sharp decline in US manufacturing, the recent outperformance is likely unsustainable and a slowdown remains its base case. NOTE: ADP jobs data for May, which is usually released on the Wednesday before the official BLS jobs report, will instead be released Thursday on account of the Memorial Day holiday on Monday. In Canada, the BoC will likely lift rates by 50bps to 1.50% today, but some desks are not ruling out a larger 75bps rate rise given recent inflation pressures. Our BoC preview can be accessed here.

TECH:

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  Salesforce Inc (CRM) - Gained 9.2% after results. Q1 adj. EPS 0.98 (exp. 0.94), Revenue 7.41bln (exp. 7.38bln). Q1 Subscription and support revenue 6.86bln (exp. 6.87bln), Q1 Service revenue 1.76bln (exp. 1.78bln), Q1 Platform & other revenue 1.42bln (exp. 1.37bln), Q1 Marketing & commerce revenue 1.09bln (exp. 1.07bln). FY EPS view raised to 4.74-4.76 from 4.62-4.64 (exp. 4.65). FY Revenue view 31.7bln-31.8bln (exp. 32.06bln). Exec said that so far not seeing any material impact from broader economic environment; exec said business incredibly healthy, it is carefully watching the economic data, and it is not seeing any material impact from the broader economic world on its demand environment, adding that CRM's pipeline looks really strong for the rest of the year. On labour markets, Salesforce said it would continue hiring but at a more measured pace. On M&A, exec said that although valuations have cheapened, it is not looking at major M&A right now.


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  HP Inc (HPQ) - Q2 adj. EPS 1.08 (exp. 1.05), Q2 revenue 16.50bln (exp. 16.17bln). Q2 Personal systems revenue 11.5bln (exp. 11.2bln), Q2 Printing revenue 4.96bln (exp. 4.95bln). Q3 adjusted EPS view 1.03-1.08 (exp. 1.04), FY EPS view raised to 4.24-4.38 from 4.18-4.38 (exp. 4.25), FY Free Cash Flow view maintained at a minimum 4.50bln (exp. 4.48bln). Exec said it mitigated the impact of higher commodity costs by implementing effective pricing strategies in both Print and Personal systems while maintaining strong demand. Added that HPQ was well on track to deliver on its USD 10bln FY revenue target. Said supply chain actions continued to have a positive impact in PCs, and it reduced its backlog here Q/Q. Company said that from a demand perspective, it expects to continue to see strong commercial demand with some softening of the consumer businesses. And on China, it expects to see a reopening and easing of restrictions from the recent lockdowns beginning in June.


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  China Names - USTR Raimondo said the Biden administration was considering adding new Chinese companies to the government's economic blacklist as it investigates what it calls efforts by China to evade US sanctions, Reuters reported. USTR said the US was working to get information around bad actors in China and adding those companies to the Entity List, and it was in the middle of a number of investigations.


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  Ambarella, Inc. (AMBA) - Fell 5.7% after hours. Q1 EPS 0.44 (exp. 0.36), Q1 revenue USD 90.3mln (exp. 90.1mln). Exec said its near-term outlook was under pressure with the flare-up of the pandemic in China and resulting lock-down, which is disrupting AMBA's orders and its customers' production, as well as logistics throughout the greater Asia supply-chain. Sees Q2 revenue between USD 78-82mln (exp. 91.5mln).


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  Digital Turbine, Inc. (APPS) - Fell 4% after hours. Q4 adj. EPS 0.39 (exp. 0.39), Q4 revenue USD 184.1mln (exp. 337mln, might not compare). Sees Q1 adj. EPS between 0.34-0.35 (exp. 0.44), and sees Q1 revenue between USD 183-187mln (exp. 357mln, might not compare).

COMMUNICATIONS:

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  Meta Platforms (FB) - Meta ticker will change from FB to META on June 9th.


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  Meta Platforms (FB), Twitter (TWTR) - US Supreme Court blocks Texas social media law that had restricted 'viewpoint discrimination' by Twitter and Facebook; tech groups had argued the law would bar the removal of extremism and hate speech from platforms.


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  Warner Bros Discovery (WBD), BT (BT/A LN) - UK regulators open probe into the proposed deal to combine the sports broadcasting business of BT and Warner Bros Discovery.


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  Telecom Italia (TIIAY), Vivendi (VIVHY) - Attaches an enterprise value of around EUR 20bln to its landline grid, which it is considering selling as part of national fibre network plan, according to Reuters sources. In relevant news, Vivendi CEO said it would never support the sale of the Telecom Italia's network for a valuation of EUR 17-21bln.

INDUSTRIALS:

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  Defence Names - US President Biden published an op-ed in the NYT, where he talked about America's role in the Ukraine conflict. Biden said US wants to see a democratic, independent, sovereign, prosperous Ukraine with the means to deter and defend itself against further aggression. Biden has decided that the US will provide Ukraine with more advanced rocket systems and munitions, and the US would continue providing Ukraine with advanced weaponry, including Javelin anti-tank missiles, Stinger antiaircraft missiles, artillery and precision rocket systems, radars, unmanned aerial vehicles, Mi-17 helicopters and ammunition. US will send billions more in financial assistance. US will continue cooperating with allies and partners on Russian sanctions, and will also work with to address the global food crisis that Russia’s aggression is worsening. US will help European allies and others reduce their dependence on Russian fossil fuels, and speed our transition to a clean energy future. US will continue reinforcing NATO’s eastern flank. Biden said the US does not seek a war between NATO and Russia, and said that as the US or our allies are not attacked, it would not be directly engaged in this conflict, either by sending American troops to fight in Ukraine or by attacking Russian forces. But added that if Russia does not pay a heavy price for its actions, it will send a message to other would-be aggressors that they too can seize territory and subjugate other countries. Biden said there is no indication that Russia intends to use nuclear weapons in Ukraine, but said that any use of nuclear weapons in this conflict on any scale would be completely unacceptable and would entail severe consequences.


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  The Boeing Company (BA) - FAA renews Boeing's organisation designation authorisation programme for three-years instead of the five years sought by Boeing, according to Reuters.


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  Southwest Airlines Co. (LUV), Frontier Group Holdings, Inc. (ULCC), JetBlue Airways Corporation (JBLU) - Spirit said it disagreed with ISS recommendation on proposed transaction with Frontier, continues to recommend shareholders vote for the merger. ISS this week urged Spirit shareholders to vote against a proposed merger with Frontier, preferring the competing offer from JetBlue Airways.


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  Lockheed Martin (LMT) - Awarded a USD 185.7mln Navy contract modification.


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  CAE Inc. (CAE) - Q4 adj. EPS 0.29 (exp. 0.18), Q4 revenue USD 955mln (exp. 749.3mln).

CONSUMER CYCLICAL:

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  Victoria's Secret & Co. (VSCO) - Rose 7.3% after hours following the publication of results. Q1 EPS USD 1.11 (exp. 0.84), Q1 revenue USD 1.5bln (exp. 1.5bln). Sees Q2 EPS between 0.95-1.25 (exp. 1.19), and sees Q2 sales up low-single digits to down low-single digits vs Q2 Y/Y (exp. 1.6bln).


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  ChargePoint Holdings, Inc. (CHPT) - Slipped 2.7% after hours. Q1 EPS -0.27 (exp. -0.19), Q1 revenue USD 81.6mln (exp. 75.7mln). Q1 activated ports under management over 188K, with around 57k in Europe. Sees Q2 revenue between USD 96-106mln (exp. 105.6mln), which would be +80% Y/Y. Sees FY23 revenue between USD 450-500mln (exp. 471.6mln), at the midpoint, sees FY23 non-GAAP operating expenses +50% Y/Y at USD 350-370mln.

HEALTH CARE:

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  Infant Formula - President Biden will hold a virtual meeting Wednesday with manufacturers of infant formulas.


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  Sanofi (SNY) - FDA grants efanesoctocog alfa Breakthrough Therapy designation for hemophilia A.


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  GSK (GSK), Pfizer (PFE) - GSK expects Haleon ordinary shares to be admitted to the Premium listing segment of the Official List of the FCA and admitted to trading on the Main Market of the London Stock Exchange on Monday 18 July 2022. Pfizer will sell down its stake in Haleon after the listing in July; FT said Pfizer had committed to selling its shares in a "disciplined manner" and had formed an "orderly marketing" agreement with GSK to ensure the two sellers do not destabilise stock in the new independent company. GSK said an application will also shortly be made to list Haleon ADS on NYSE.

ENERGY:

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  Laredo Petroleum, Inc. (LPI) - Gained 3.1% after hours. Announced UD 200mln share buyback programme. Raises its debt repayment target updated to around USD 700mln by year-end 2023.


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  Shell (SHEL) - Said it had not agreed to new payment terms set out by Gazprom, including the creation of a "K" Rouble account, according to Reuters.


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  Eni (ENI IM) – Exploring spin-off of its Bio unit, according to Milano Finanza.


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  Saipem (SAPMY) - Saipem signed a binding agreement with KCA Deutag to sell the entirety of its Drilling Onshore operations for EUR 550mln plus a 10% stake in KCA Deutag after its acquisition of the Saipem’s Drilling Onshore.


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  Siemens Energy (SMNEY), Siemens Gamesa (GCTAY) - Siemens Energy reportedly in discussions with lenders on structuring a bridge loan required to buy out Siemens Gamesa, according to El Confidencial.


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  John Wood Group (WDGJY) - To sell its Built Environment unit to WSP for around USD 1.9bln, according to Bloomberg.


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  Panasonic Energy (PCRFY) - CEO aims to increase dry battery production capacity by three to four times, mainly in North America.

UTILITIES:

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  RWE (RWEOY) - Transferred euro currency to an account at Gazprombank under the new payment scheme for Russian gas, according to Reuters.


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  Snam (SNMRY) - Purchased a floating LNG regasification terminal from Golar LNG for USD 350mln.

FINANCIALS:

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  Deutsche Bank (DB), DWS (DWS GY) - Deutsche's DWS unit CEO steps down after greenwashing claims; Stefan Hoops appointed new CEO, effective June 10th.


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  Spacs - Forbes scraps plan to go public via SPAC, NYT reported; had aimed to go public through a blank-check company based in Hong Kong but changed course after the market flipped.


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  HSBC (HSBC) - CEO said investments in China may exceed CNY 3bln in the period between 2020-25, Xinhua reported.


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  FTSE100 Reshuffle - The second FTSE 100 reshuffle of the year will be announced after the close on Wednesday June 1st, based on closing prices from May 31st, changes effective June 20th. ITV (ITVPY) and Royal Mail (ROYMY) are to be relegated.


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  Saint-Gobain (CODYY) - To purchase building-products firm Kaycan Ltd. for USD 928mln. Net purchase price will be USD 820mln after Saint-Gobain sells Kaycan's US distributions business.

REAL ESTATE:

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  CBRE Group, Inc. (CBRE), CaixaBank (CABK SM) - CaixaBank reportedly hires CBRE for the sale of its HQ in Madrid for EUR 250mln, according to Expansion.

01 Jun 2022 - 09:26- Data- Source: Newsquawk