US EARLY MORNING: US equity futures are a little better than flat; BoJ left policy settings unchanged overnight

US PRE-MARKETS: US equity futures are trading a little better than unchanged, Treasury yields are lower by 2-5bps, with the long-end outperforming as the curve bull-flattens, the Dollar Index is slightly higher, with much of the heavy lifting done by USDJPY, which is higher after the BoJ left policy settings unchanged, and Governor Ueda struck a dovish tone at his post-meeting press conference (recap on the policy decision here, and recap on Governor's press conference here). The US docket is thin today; the Fed speakers on the slate (Bostic, Goolsbee) have already spoken this week, and are unlikely to add much. CAD watchers will note the November CPI data, where the annual rate of headline inflation is seen easing.

TODAY’S AGENDA:

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  DAY AHEAD: The European morning will see the release of final Eurozone inflation metrics for November (headline and core expected to be confirmed at 2.4% Y/Y and 4.2% Y/Y respectively). EMFX watchers will be looking to the NBH rate decision, where the consensus looks for a 75bps rate reduction to 10.75%. UK CBI trends data is due later in the morning. The US Day will see the release of building permits and housing starts - the rate of both are expected to ease in November. Canadian inflation metrics for November are expected to show a sequential easing in annualised inflation (2.9% Y/Y expected from 3.1%) Afterhours, the API will release its gauge of weekly energy inventories. Ags watchers will note the GDT auction results are due in the European afternoon. On the speaker's slate, Fed's Bostic (2024) and Goolsbee (2025) are due to make another round of comments post the dovish FOMC last week - both have already spoken in wake of the meeting, and are unlikely to expand on their positions very much. Our interactive calendar can be accessed here; a pdf version can be downloaded here.

EQUITY NEWS:

TECH:

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  Apple (AAPL), Masimo (MASI) - Days before a US smartwatch ban, Apple aims to salvage its USD $17bln business, Bloomberg reports. The ban, starting December 25th, targets Apple's Series 9 and Ultra 2 watches. Engineers rush software fixes for its blood oxygen measurement after a patent clash with Masimo, Bloomberg reports, as the iPhone maker prepares retail changes, and explores legal solutions.


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  TSMC (TSM) - The world's top chipmaker sees no major operational disruptions due to Red Sea shipping issues, and sees no significant impact on company operations, Reuters reports.


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  Alphabet (GOOG) - Google settles a US state lawsuit, paying USD 700mln over Play Store competition issues. USD 630mln goes to a consumer settlement fund, USD 70mln to state funds. Changes include allowing alternate billing for in-app purchases on Android devices in the US.


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  Salesforce (CRM) - Salesforce to acquire Spiff, integrating it into its Sales Cloud. The deal doesn't alter financial guidance from November. No additional financial specifics about the acquisition were disclosed.


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  TomTom (TMOAY), Microsoft (MSFT) - TomTom and Microsoft are bringing the benefits of Generative AI to the auto industry.


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  Qorvo (QRVO) - Qorvo agrees to sell Beijing and Dezhou facilities to Luxshare Precision, ensuring continuity of operations. Luxshare will manufacture Qorvo products under a supply deal, expanding its capacity and capabilities. Transaction completion expected in H1 2024.

COMMUNICATIONS:

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  Tencent (TCEHY) - Tencent shut down its US-based game studio, Team Kaiju, which was a pivotal part of its global expansion into Western markets, Reuters reports. The closure occurred in June, and employees were reportedly reassigned to other projects within Tencent.


• HEALTHCARE:


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  Illumina (ILMN) - Activist investor Carl Icahn intends to initiate a proxy battle for Illumina's board following the Grail deal termination, Bloomberg said. He seeks accountability, considering nominating up to seven candidates for the board by the January 26th deadline.


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  Elekta (EKTAY), Bristol Myers Squibb (BMY) - Elekta and Bristol Myers Squibb are partnering on digital solutions for patients with melanoma.


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  Bluebird Bio (BLUE) - Bluebird's stock dropped 16% afterhours after it announced a public stock offering of USD 150mln, with a potential extra USD 22.5mln of shares. The funds are aimed at manufacturing gene therapies and bolstering working capital amid a 56% decrease in shares this year.

CONSUMER:

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  Tesla (TSLA) - Tesla intends to raise hourly pay by 10% or more for Nevada Gigafactory workers in January to potentially deter union interest and collective bargaining efforts among its workforce in the US, CNBC reports.


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  O'Reilly Automotive (ORLY) - O'Reilly Automotive will acquire Groupe Del Vasto, known as Vast-Auto, in January 2024. The purchase expands O'Reilly's reach into Canada, integrating a respected auto parts supplier with a strong network across Eastern Canada.


• 
  Gildan Activewear (GIL) - Anson Funds Management criticised Gildan Activewear's Board for mishandling succession planning, demanding Glenn Chamandy's immediate reinstatement as CEO due to his successful track record.

INDUSTRIALS:

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  Southwest Airlines (LUV) - DoT fines Southwest Airlines USD 140mln over holiday meltdown in 2022, where operational failures resulted in 16,900 cancelled flights and stranded over 2mln passengers over the 2022 Christmas holiday and into the New Year.


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  HEICO (HEI) - Q4 EPS 0.74 (exp. 0.68), Q4 revenue USD 936.4mln (exp. 898mln). Its 12% consolidated organic net sales growth was due to continued strong demand for commercial aerospace products, and services and the contributions from our fiscal 2023 and 2022 acquisitions.

MATERIALS:

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  Metals Names - EU is to suspend duties imposed on US imports in retaliation to US tariffs on EU steel and aluminium, EU measures will be suspended for another 15 months.

ENERGY:

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  TotalEnergies (TTE), LyondellBasell (LYB) - Total will supply LyondellBasell through two long-term solar contracts, with a capacity of 455MW.


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  Imperial Oil (IMO) - Imperial Oil foresees a 2024 capital spending of USD 1.7bln.

FINANCIALS/REAL ESTATE:

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  UBS Group AG (UBS) - Activist investor Cevian Capital has amassed a EUR 1.2bln stake in UBS, and is aiming to double its value in 3-5 years, FT reports. The report adds that unlike aggressive US activists, Cevian opts for behind-the-scenes work, not seeking a board seat, supporting UBS's current leadership.


• 
  Primerica (PRI) - Tracy Tan, Executive Vice President of Finance, promoted to the position of CFO, effective December 20th. It was previously announced that Tan would be the successor to CFO Alison Rand, no later than April 1st.


• 
  Rayonier (RYN) - Rayonier declared a special dividend of USD 0.20/shr, aimed at addressing increased REIT taxable income from timberland disposition in Oregon.

19 Dec 2023 - 09:30- Fixed IncomeResearch Sheet- Source: Newsquawk