US EARLY MORNING: US equity futures are around flat ahead of today's key CPI data

SNAPSHOT: Asia-Pac stocks were mixed overnight, failing to fully sustain the early momentum from Wall St. European equities are edging higher on Thursday morning. US equity futures are trading around flat, Treasury yields are lower by 1-5bps, with much of the rally being seen at the long-end of the curve. The Dollar Index is a little better than unchanged. Crude is trading around the neutral line too. US CPI data for December is ahead, and will inform the debate on whether the Fed has made substantial progress in reducing price pressures back towards target. The data may help crystalise expectations of a 25bps rate rise at the February FOMC, as well as expectations for terminal between 4.75-5.00% (more dovish than the Fed's SEP implies). We preview the data in detail here, including trading scenarios depending on how the release looks. Elsewhere, weekly US jobless claims data, and speeches from Fed’s Harker (2023), Barkin (2024) and Bullard (2025) are due. Our full day ahead sheet can be accessed here.

TECH:

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  Taiwan Semiconductor Manufacturing Company Limited (TSM) - The world's largest contract manufacturer of semiconductors reported solid earnings, but gave a cautious outlook. Q4 net profit was TWD 295.9bln (exp. 289.4bln), Q4 revenue was TWD 625.5bln (in line with the prelim. update). Guides Q1 revenue between TWD 16.7bln-17.5bln (exp. 16.4bln), and sees H1 revenue down mid-to-high single digit percentage. Exec said smartphone and PC demand dropped more severely than expected, data centre demand had softened. Expects 2023 will be only a "slight" growth year due to the cyclical downturn in the semi industry (the downturn was framed as more cyclical than structural), and as inventories normalise, but expects a demand recovery in H2.


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  Alphabet Inc. (GOOG) - Alphabet’s life-sciences subsidiary Verily is laying off 15% of staff (around 250 people), The Information reports, raising the prospect of job cuts at sister company Google. The job cuts also hit a different Alphabet subsidiary Intrinsic, The Information said. These layoffs appear to be the first cuts at the company stemming from a macroeconomic decline since the 2008-09 financial crisis, the report added, and the recent slide has significantly slowed Google’s advertising-sales growth.


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  Apple Inc. (AAPL) - Apple is working to add touch screens to its Mac computers for the first time, which co-founder Steve Jobs once called "ergonomically terrible," Bloomberg reports.


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  Cirrus Logic, Inc. (CRUS) - Apple watcher Ming-Chi Kuo said Cirrus Logic will be the primary winner as Apple looks to remove physical buttons from its handsets and adopt solid-state buttons on its H2 2023 high-end iPhone 15 models.


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  Marvell Technology Group Ltd. (MRVL), Advanced Micro Devices, Inc. (AMD) - Marvell appoints Willem Meintjes as CFO, follows resignation of Jean Hu, who will join AMD as CFO following retirement of Devinder Kumar. MRVL narrowed its Q4 revenue outlook to USD 1.4bln +/- 3% (exp. 1.4bln, prev. guidance was for +/- 5%).


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  Qualtrics International Inc. (XM) - The software company will eliminate 270 roles (less than 5% of its workforce), according to a regulatory filing.

COMMUNICATIONS:

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  Walt Disney Company (DIS) - Disney elected independent director Mark G. Parker as Chairman; Parker, a seven-year member of the Disney Board and Executive Chairman of Nike, will succeed Susan E. Arnold, who will not stand for re-election. Activist Trian Fund Management, which owns around 9.4mln Disney shares, will nominate its CEO Nelson Peltz to Disney's Board. Disney said it does not endorse Trian's nominee, stating that while it remains open to constructive engagement and ideas that help drive shareholder value, it recommends shareholders do not support the nomination, and instead vote for all the Disney's nominees.


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  Ubisoft (UBSFY) - The game maker cancelled three unannounced games, and delayed its release of 'Skull and Bones' for the sixth time. It also revised guidance lower. For Q3, now sees net bookings of EUR 725mln (prev. guided EUR 830mln), due to the more challenging environment and lower-than-expected performance of 'Mario + Rabbids' and 'Just Dance 2023' games. For the FY, sees net bookings down by over 10% Y/Y (prev. guided above 10% Y/Y). Said that the trends over the Holiday season, in particular the last weeks of December and beginning of January, were markedly and surprisingly slower than expected.


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  Angi Inc. (ANGI) - December revenue +6% Y/Y (vs +5% in November). Reiterates that December 2022 will be the last month it releases monthly metrics, will return to normal cadence of quarterly disclosures in Q1 2023.


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  IAC Inc. (IAC) - Dotdash Meredith December revenues -28% Y/Y (vs -27% in November).

CONSUMER:

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  KB Home (KBH) - Q4 EPS 2.47 (exp. 2.87), Q4 revenue USD 1.94bln (exp. 1.98bln). Q4 homes delivered +3% Y/Y to 3,786 (exp. 3,960), Q4 average selling price +13% Y/Y to USD 510,400, Q4 net orders 692 (exp. 2,012, and vs 3,529 Y/Y), Q4 net order value USD 362.7mln (prev. 1.77bln Y/Y). Q4 homebuilding operating income margin increased to 14.4% (vs 12.8%). Q4 gross orders -47%, reflecting sharply lower demand stemming from higher mortgage interest rates, inflation and other macroeconomic and geopolitical concerns. Sees Q1 housing revenue between USD 1.25-1.40bln, and sees Q1 average selling price between USD 490-500k. Exec said that due to significant uncertainty and limited forward visibility regarding 2023 housing market, macroeconomic and geopolitical conditions, which are anticipated to be challenging compared to prior periods, the Company is providing guidance as to the full fiscal year only for housing revenues, where FY23 housing revenue seen between USD 5.0-6.0bln (vs 6.88bln Y/Y).


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  Starbucks Corporation (SBUX) - CEO told corporate workers will return to the office for three days a week by the end of the month, CNBC reports. CEO added that badging data showed employees were not adhering to a loose requirement to work from the office one to two days a week.


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  Philip Morris International Inc (PM) - The tobacco company said executive chair Lucio Noto will not stand for re-election at the company's AGM; Noto will continue to serve as lead independent director of the Board and as chair of the audit committee. PM expects FY22 results in line with the guidance provided in October, and expects Q4 IQOS user growth to be similar to Q3's 22%.

ENERGY:

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  TotalEnergies (TTE) - Intends to restart most of the Port Arthur Texas Refinery (200k BPD) units this week, Reuters reports, after it restarted the crude unit, reformers, boilers and sulphur units.

MATERIALS:

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  BASF SE (BASF) - BASF has broken ground on the third and final phase of the methylene diphenyl diisocyanate (MDI) expansion project at the Verbund site in Geismar, Louisiana. Production capacity will be raised to approximately 600k metric tonnes per annum by the middle of the decade, it said.

FINANCIALS:

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  Coinbase (COIN) - The crypto exchange is reportedly mulling an exit from the Japanese market, Nikkei reports.


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  BlackRock, Inc. (BLK) - The asset manager plans to cut 500 employees (around 2.5%) from its global workforce as it grapples with the fallout from last year’s market sell-off, FT reports.


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  Citigroup Inc. (C) - Citigroup to launch search for a new global wealth management chief as the unit grapples with volatile markets and recession fears that have pressured revenue, Reuters reports. Incumbent Jim O'Donnell will become a vice chairman of the bank and the head of senior client engagement.


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  AllianceBernstein Holding L.P. (AB) - Prelim December AUM USD 646bln (vs USD 658bln at end-November). AB said firmwide net inflows were offset by market depreciation, driving a 2% decrease.


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  Franklin Resources, Inc. (BEN) - Prelim December AUM USD 1.3975tln (vs USD 1.4106tln at end-November). The decrease reflected the impact of negative markets, partially offset by long-term net inflows.


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  Invesco Ltd. (IVZ) - Prelim December AUM USD 1.41tln at end-December (+2.0% M/M).

HEALTH CARE:

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  Sanofi (SNY) - Sanofi Ventures announces a multi-year capital commitment from Sanofi, increasing the evergreen fund to USD 750mln, which supports future efforts for business development and M&A opportunities with Sanofi.


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  Roche (RHHBY) - European Commission approves Xofluza for the treatment and prevention of influenza in children aged one year and above.

12 Jan 2023 - 09:20- Research Sheet- Source: Newsquawk