US EARLY MORNING: Equity futures lower with all eyes on further geopolitical updates

Analysis details (09:49)

Equity futures are lower on Wednesday morning, which comes after a raft of geopolitical updates. Overnight futures saw pressure as it was reported that Ukraine had begun shelling separatists in Luhansk, but these reports were later denied which allowed a more constructive tone of macro trading. Nonetheless, since then, the Ukraine military has stated Russian occupying forces fired on a village in the Luhansk region, according to Reuters, which waned some of the enthusiasm seen at the European cash open. Whilst in more recent comments Kremlin spokesperson said that Russia is currently giving its response on security issues and will provide a response to the US today, according to Interfax. As such, market participants will be firmly focused on any further geopolitical updates which are likely to drive the risk sentiment in trade, whilst attention will also be on EU leaders ahead of the meeting later on Thursday but Russia sanctions will not be discussed. Crude complex is lower with WTI and Brent on USD 92/bbl and USD 93/bbl handles, respectively, as oil prices come off overnight highs after the aforementioned Russia/Ukraine updates. Note, the crude complex tumbled lower following Wednesday’s settlement after positive rhetoric regarding the Iran nuclear talks from both the US and Iran. Away from geopols, earnings were in full swing Wednesday night, with Tech names, NVDA, CSCO, AMAT, firmly in focus, which comes ahead of Walmart (WMT) earnings before the open and as such marks the unofficial end of earnings season. Looking ahead, US data comes in the form of Housing Starts, Philly Fed, and IJC, whilst Fed’s Bullard speaks on monpol and as such it will be interesting to see what, if anything, he adds to his already hawkish views, such as 100bps of hiking by July 1st. Additionally, US 30yr TIPS auction and Mester after-hours are in focus.

DAY AHEAD FEBRUARY 17TH:

• 11:00GMT/06:00EST: CBRT Rate Decision


• 11:15GMT/06:15EST: Southern Co (SO) earnings


• 12:00GMT/07:00EST: Walmart Inc (WMT) earnings (preview here)          


• 13:30GMT/08:30EST: US Housing Starts, Building Permits (Jan)


• 13:30GMT/08:30EST: US Philly Fed (Feb)


• 13:30GMT/08:30EST: US Initial Jobless Claims


• 14:00GMT/09:00EST: ECB’s Lane speaking on The EZ Economy & ECB Policy


• 16:00GMT/11:00EST: Fed’s Bullard (2022 voter, Hawk) speaking on the Economy & Monetary Policy


• 16:00GMT/11:00EST: US 2yr, 5yr, 7yr Note and 2yr FRN Announcement


• 18:00GMT/13:00EST: US USD 9bln 30yr TIPS Auction


• 22:00GMT/17:00EST: Fed's Mester (2022/2024 Voter, Hawkish) speaking on the Monetary Situation


• 23:30GMT/18:30EST: Japanese CPI (Jan)

EQUITY NEWS

TECHNOLOGY:

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  Applied Materials Inc (AMAT) Q1 2022 (USD): EPS 1.89 (exp. 1.85), Revenue 6.27bln (exp. 6.16bln). OM’s marginally beat while GM’s marginally missed. Q2 revenue and EPS view both fell short of consensus which is due to the supply shortages persisting, but underlying fundamentals remain bullish. (Applied Materials).


• 
  NVIDIA Corp (NVDA) Q4 2022 (USD): Adj. EPS 1.32 (exp. 1.22), Revenue 7.64bln (exp. 7.42bln). Adj. gross margin just light, but Adj. operating expenses and operating income both beat as did all major revenue segments aside from robotics. Q1 revenue view surpassed consensus. Analysts note it’s a terrific Q, and attribute after-hours weakness to the gains not being even greater or auto/robotics revenue missing, but they anticipate this to quickly subside in the next day or so as people digest the fact NVDA has some of the strongest fundamentals in tech. (Nvidia)


• 
  Cisco Systems Inc (CSCO) Q2 2022 (USD): Adj. EPS 0.84 (exp. 0.81), Revenue 12.7bln (exp. 12.65bln). Adds USD 15bln stock buyback and raises dividend 3%. Product revenue 9.35bln (exp. 9.2bln). Service revenue 3.37bln (exp. 3.45bln). Adj. gross margin 65.5% (exp. 64.3%). FY and Q3 guidance more-or-less inline with consensus. CEO said continue to see incredibly strong demand across our portfolio. (PR Newswire).


• 
  AppLovin (APP) have plunged 15% after-hours as despite reporting a mixed Q, the FY22 outlook is weak with both revenue and EBITDA disappointing. (AppLovin)


• 
  Conduent (CNDT) earnings were inline, but issued a weak 2022 outlook. (GlobeNewswire)


• 
  Fastly (FSLY) have sunk 30% after-hours on its shocking guidance, as the Co. expects a FY  deeper loss per share than expected and revenue was also light. Note, Q4 results were perfectly decent. (Fastly)


• 
  Synopsys Inc (SNPS) Q1 2022 (USD): Adj. EPS 2.40 (exp. 2.37), Revenue 1.27bln (exp. 1.27bln). Guidance for next quarter was strong, with top and bottom line smashing expectations. (Synopsys)


• 
  Tyler Technologies Inc (TYL) Q4 2021 (USD): Adj. EPS 1.75 (exp. 1.74), Revenue 433.5mln (exp. 432.63mln). FY22 revenue inline with consensus, while EPS view was light. (Business Wire)


• 
  Kyndryl, former IBM (IBM) arm, has signed a network deal with Nokia (NOK) to help automate factories by bringing in cloud computing and AI over wireless networks. (Rtrs)


• 
  BIG TECH: Hedge Fund Third Point sees more value in Amazon (AMZN) and said is at an "inflection point" that should lead to a higher share price, and also likes some 'old' tech stocks such as Intel (INTC) that ‘deserve a second look’. (Rtrs)

INDUSTRIALS

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  CSX Corp (CSX) raises quarterly dividend 7.5% to USD 0.10/shr (prev. USD 0.093/shr). (GlobeNewswire)

COMMUNICATIONS

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  DoorDash Inc (DASH) Q4 2021 (USD): EPS -0.45 (exp. 0.25), Revenue 1.3bln (exp. 1.28bln); Adj. EBITDA 47mln (exp. 73.8mln). Orders and marketplace gross order value both topped expectations. MAUs reached an all time high and guidance for marketplace GOV was strong. DASH are +30% after-hours but analysts note should not read too much into the after-hours price action as other factors are helping the Co as opposed to a spectacular print. (PR Newswire)


• 
  Alphabet (GOOG) - Russia fines Google RUB 3.5mln for failing to delete banned content.


• 
  Altice USA (ATUS) fell short on EBITDA alongside recording worse video/sub numbers. (Altice) In addition, ATUS announced an acceleration of its fiber deployment strategy over the next four years. (Business Wire)


• 
  TripAdvisor (TRIP) fell short on top and bottom line in addition to EBITDA. However, TRIP notes 'we expect a significant improvement in the travel market in 2022 due to the expected easing of the pandemic and the pent-up demand demand for travel, particularly in H2 22'. (TripAdvisor)

REAL ESTATE

• 
  Equinix Inc (EQIX) Q4 2021 (USD): FFO 6.22 (exp. 4.41), Revenue 1.71bln (exp. 1.70bln). Q1 and FY22 EBITDA view is light of expectations. (Equinix)

ENERGY 

• 
  Pioneer Natural Resources Co (PXD) Q4 2021 (USD): EPS 4.58 (exp. 4.05), Revenue 4.32bln (exp. 4.80bln). Q1 2022 oil production seen between 350-365k BOEPD. Avg production 687,143 BOEPD (exp. 679,109 BOEPD). Announced a new 4bln buyback. (Pioneer Natural Resources)


• 
  Marathon Oil Corp (MRO) Q4 2021 (USD): Adj. EPS 0.77 (exp. 0.55), Revenue 1.8bln (exp. 1.55bln). Total Co. oil and oil equivalent production in 2022 expected to be flat with 2021 averages. (Marathon Oi)

MATERIALS

• 
  Albemarle Corp (ALB) Q4 2021 (USD): EPS 1.01 (exp. 0.99), Revenue 894mln (exp. 894.47mln). FY22 EPS midpoint in line with St. expectations. (Albemarle)


• 
  IFF (IFF) is to acquire Health Wright Products, a leader in formulation and capsule manufacturing for the dietary supplement industry. (Business Wire)


• 
  Nutrien (NTR) had a strong quarter where it beat on EPS and revenue, and looking ahead FY22 EPS view topped analysts expectations. (Nutrien)

AIRLINES

• US FAA Head Dickson to resign - will step down on March 31st, of note for Boeing (BA). (Rtrs)


• 
  Airbus (EADSY)  FY21 revenue ever so marginally missed, while net posted a surprise profit alongside adj. EBIT also printing above consensus. Q4 revenue and abj. EBIT beat and the Co. proposed a FY21 dividend of 1.50/shr (prev. 0.00/shr). (Airbus)

CONSUMER DISCRETIONARY

• 
  Amazon (AMZN) and Visa (V) strike an agreement to accept Visa card around the world. (Bloomberg).


• 
  Global-e (GLBE) +21% following a solid Q, where revenue and EBITDA beat, alongside strong FY22 revenue guidance. (Global-e)


• 
  Hasbro (HAS) activist Alta Fox Capital, which holds a 2.5% stake, has nominated five directors to the Cos. board, as it urges HAS to make changes which includes a spinoff of its fast-growing unit housing games such as Dungeons & Dragon. (WSJ)

FINANCIALS

• Ex-Goldman Sachs (GS) banker testified "greed and ambition" drove his involvement in 1MDB bribery. (Rtrs)


• 
  American International Group Inc (AIG) Q4 2021 (USD): Ad. EPS 1.58 (exp. 1.19). General Insurance net premiums +7% (exp. +10.5%). Combined ratio beat as did General Insurance APTI. (AIG)

HEALTHCARE

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  Moderna (MRNA) stated an Omicron specific COVID booster could be ready by August but it is not yet clear whether it would offer better protection than a new dose of the existing jab. (Rtrs)


• 
  Roche (RHHBY) received FDA EUA for Cobas. (Roche)

CONSUMER STAPLES

• 
  Walmart’s (WMT) Mexico unit saw a profit increase of 5% Y/Y, but at the same time also saw costs rise. (Rtrs)


• 
  Boston Beer (SAM) had yet another poor Q, as it posted a deeper loss per share than expectations which came alongside revenue missing. Moreover, forecasts were light but SAM did note it anticipates shipments to continue to decline in Q1 but then grow in Q2 '22. (Boston Beer)

AUTOMOBILES

• 
  Tesla (TSLA) has been sued following an alleged suspension failure which resulted in a deadly Florida crash. (Rtrs)

17 Feb 2022 - 09:49- Fixed IncomeResearch Sheet- Source: Newsquawk