US EARLY MORNING: US equity futures are paring Thursday's gains

• Thursday’s sharp afternoon rebound on Wall Street has not been sustained, with major US equity index futures trading 80-100bps lower; losses are being led by the NQ. Traders have been trying to dissect the equity rally on Thursday, and there does not seem to be a consensus about what drove the upside; possible theories include: a) sanctions on Russia exclude energy exports and the nation has not been removed from the SWIFT messaging system, and are being framed as more limited than could have been the case, b) technically oversold conditions in many equities, c) dovish repricing of central bank expectations, which allowed the growth style to outperform. The pre-market session has been dominated once again by geopolitical news flow, with a battle for Ukraine’s Kyiv city underway. European equity index futures have come off highs, but are still above the watermark (likely because of the ‘limited’ nature of the sanctions, and that Russian energy – a key import for Europe – has not yet been sanctioned). Headline risk is likely to continue dominating macro sentiment as we close out the week, with headline risks over the weekend too.


• The Treasury curve is mixed, but the bias is towards marginal flattening. Yields are higher along the front-end (0-4bps in 2s through 5s), likely as the Ukraine geopolitical fallout does not yet threaten to derail FOMC tightening; the long-end is seeing a bid, however.


• The Dollar Index is about flat, but is back above the 97.00 handle after an overnight dip; the risk-sensitive currencies are mixed, however, with the AUD and NZD higher as macro conditions remain friendly, and for the latter, its central bank governor suggesting that Russia/Ukraine geopolitics may result in a quicker pace of monpol normalisation. Elsewhere, the EUR is sub-1.12 ahead of commentary from ECB officials post their informal gathering on Thursday, and remarks from President Lagarde are eyed.


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  Crude futures remain elevated, however, ahead of next week’s OPEC meeting (likely to stay the course) as geopolitical developments underpin gains. Goldman Sachs told its clients that it sees a clear risk of crude rising to USD 125/bbl and said that while the range of near-term price outcomes is wide, its longer-term, bullish underinvestment thesis is very much intact and reinforced by these events.

EQUITY NEWS:

COMMUNICATIONS:

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  Playtika Holding (PLTK) - Rose over 10% in after hours. Initiated process to evaluate potential strategic alternatives to maximise value for stockholders. Will consider a full range of strategic alternatives, which could include a sale of the company or other possible transactions. (PLTK)

CONSUMER CYCLICAL

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  Amazon (AMZN) - A group of workers seeking to form a union in NY filed a charge with labour regulators after a high-profile organiser and a pair of employees were arrested outside a company warehouse. (Reuters)


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  Carvana (CVNA) - Fell 4% in after hours as profits missed and it issued cautions Q1 expectations. Q4 EPS -1.02 (exp. -0.82), revenue USD 3.75bln (exp. 3.53bln). Sees Q1 being a tougher quarter as a result of the supply chain challenges brought on by the Omicron variant and severe winter storms and the recent rapid increase in short-term interest rates, expects these effects to have a significant impact on total GPU and SG&A per retail unit sold, leading to an expected EBITDA margin loss in the mid-single digit range. (CVNA)


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  Carvana (CVNA), KAR Global (KAR) - CVNA agrees to USD 2.2bln purchase of ADESA US Physical Auction Business from KAR Global. (KAR)


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  Etsy (ETSY) - Surged by over 20% in after hours trade after a profit beat and despite light guidance. Q4 EPS 1.11 (0.79), revenue 717mln (exp. 685mln). Is raising seller transaction fee by 1.5ppts to 6.5%. Sees Q1 revenue between USD 565-590mln (exp. 630mln). (ETSY)


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  Farfetch Limited (FTCH) - Rose by over 25% in after hours; profits were in line, and it guided FY22 Digital GMV above the street's view. Q4 adj. EPS -0.03 (exp. -0.03), revenue USD 666mln (exp. 677mln). Sees FY22 Digital GMV +30% (exp. +28%). (FTCH)


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  Moncler (MONRY) - FY21 Revenue EUR 2.0bln (exp. 1.99bln). EBIT 603mln (exp. 575mln). Net 411mln (exp. 390mln). (Newsquawk)


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  The Gap (GPS) - Approved plans to increase the annual dividend +25% to USD 0.60/shr in FY22. (GPS)


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  Valeo (VLEEY) - FY21 sales EUR 17.26bln (prev. 16.44bln). EBITDA 2.31bln (prev. 1.51bln). Co. proposes a dividend of 0.35/shr. Guidance does not take into account recent Russia-Ukraine developments. (Newsquawk)

CONSUMER STAPLES:

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  Beyond Meat (BYND) - Fell over 10% in after hours after reporting a wider than expected loss. Q4 adj. EPS -1.27 (exp. -0.71), revenue USD 100.7mln (exp. 101.4mln). Said operating environment continues to be affected by near-term uncertainty related to COVID-19 and its potential impact on demand levels, labour availability and supply chain disruptions. Expects 'flat to modest' revenue growth in Q1. Sees FY22 revenue between USD 560-620mln (exp. 637mln); Said it was not planning to grow operating expenses significantly in FY22. (AMD)


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  Casino (CGUSY) - FY21 EBITDA EUR 2.53bln (exp. 2.51bln). Revenue 30.6bln (prev. 31.9bln Y/Y). Co. recommends no dividend. EBIT margin 7.2% (prev. 7.0%). (Newsquawk)


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  Monster Beverage Corporation (MNST) - Gained 2% in after hours. Q4 EPS 0.60 (exp. 0.61), Q4 revenue USD 1.43bln (exp. 1.33bln). Said it continued to experience additional global supply chain challenges. Said quarter included reduced marketing, sponsorships and other operating expenses, largely as a consequence of COVID-19. (MNST)

ENERGY:

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  BP (BP) - Under lawmaker pressure in the UK to abandon its 20% stake in Russian oil company Rosneft; PM Johnson said the UK must reduce reliance on Russian hydrocarbons. (Telegraph)

FINANCIALS:

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  Citigroup (C) - The sale of its Russian consumer bank could be complicated by US sanctions on Russian state bank VTB, the only publicly confirmed bidder, banking sources said. (Reuters)


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  Deutsche Bank (DB) - CEO reportedly exchanged friendly WhatsApp messages with a German businessman who the bank had ditched as a client after a number of potentially suspicious payments. (FT)


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  Rocket Companies (RKT) - Slipped in after hours trade. Q4 adj. EPS 0.32 (exp. 0.36), Q4 revenue USD 2.59bln (exp. 2.62bln). Announced USD 1.01/shr special dividend. (RKT)


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  Swiss Re (SSREY) - FY21 Net CHF 1.44bln (exp. 1.9bln). Net premiums 42.7bln (prev. 40.88bln Y/Y). (Newsquawk)

HEALTH CARE:

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  Centene Corporation (CNC) - Chairman & Chief Executive Officer Michael Neidorff to take a medical leave of absence; James Dallas has named Acting Chairman of the Board. (CNC)

INDUSTRIALS:

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  Saint-Gobain (CODYY) - FY21 Revenue EUR 44.2bln (prev. 38.1bln Y/Y). Adj. EBITDA 6.20bln (exp. 6.24bln). Recurring net 2.82bln (prev. 1.47bln). (Newsquawk)


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  Tesla (TSLA) - SEC is investigating whether recent stock sales by Tesla CEO Musk and his brother violated insider-trading rules. (WSJ)


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  Volkswagen (VWAGY), Porsche (POAHY) - VW CEO said there is potential for a Porsche IPO in Q4; if Porsche does IPO, VW will distribute a special dividend amounting to 49% of gross proceeds. (Newsquawk)

MATERIALS:

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  ArcelorMittal (MT) - A significant shareholder has decided not to partake further in the USD 1bln buyback programme, as such their percentage holding will increase as the buyback operation occurs. (Newsquawk)


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  BASF (BASFY) - Sees profit declining this year. Q4 2021 Revenue EUR 19.78bln (exp. 18.68bln). Adj. EBIT 1.23bln (exp. 1.35bln). Guides 2022 revenue between 74-77bln (exp. 76.41bln). Guides 2022 Adj. EBIT between 6.6-7.2bln (exp. 7.03bln). FY dividend 3.40/shr (exp. 3.39/shr). (Newsquawk)


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  Holcim (HCMLY) - Q4 2021 Revenue CHF 6.99bln (prev. 5.99bln). Recurring EBIT 1.10bln (prev. 1.04bln). (Newsquawk)

TECH:

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  Advanced Micro Devices (AMD) - Announced a new USD 8bln share repurchase programme; new authorisation is in addition to the USD 4bln repurchase announced in May 2021, under which the company has repurchased approximately USD 3bln shares. (AMD)


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  Autodesk (ADSK) - Fell in after hours as next quarter guidance was light. Q4 adj. EPS 1.50 (exp. 1.44), revenue USD 1.21bln (exp. 1.19bln). Sees Q1 adj. EPS between 1.30-1.36 (exp. 1.45), and sees Q1 revenue between USD 1.145-1.16 (exp. 1.16bln). (ADSK)


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  Block Inc (SQ) - Q4 adj. EPS 0.27 (exp. 0.22), Q4 revenue USD 4.1bln (exp 4bln). Q4 total net revenue ex-Bitcoin +51% Y/Y to USD 2.12bln, GPV was +45% Y/Y and +24% on 2yr CAGR basis. Said GPV growth slowed in January due to Omicron before recovering in February; sees Square GPV +35% Y/Y in Jan and Feb, 2yr CAGR GPV +16%. (SQ)


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  Coinbase Global (COIN) - Fell by over 5% in after hours. Q4 revenue USD 2.49bln (exp. 1.94bln), Q4 Monthly Transacting Users MTUs 11.4M (vs 2.8M Y/Y), Trading Volume USD 547bln (vs 89bln Y/Y). Said Quarter-to-date, it has seen a decline in crypto asset volatility and crypto asset prices compared to all-time high levels in Q4 2021, and sees retail MTU and total Trading Volume will both be lower in Q1 2022 as compared to Q4 2021. (COIN)


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  Dell Technologies (DELL) - Dropped by nearly 10% in after hours after a profit miss. Q4 adj. EPS 1.72 (exp. 1.95), Q4 revenue USD 27.99bln (exp. 27.44bln). Approved quarterly dividend of 0.33/shr. (DELL)


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  Intuit (INTU) - Slipped by 3% in after hours. Q2 adj. EPS 1.55 (exp. 1.85), Q2 revenue USD 2.7bln (exp. 2.73bln). Sees Q3 adj. EPS 7.51-7.57 (exp. 7.17). Reiterates FY22 adj EPS view of between 11.48-11.64 (exp. 11.70), and FY22 revenue is seen between 12.165-12.3bln (exp. 12.27bln). (INTU)


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  VMware (VMW) - Fell by 4% in after hours as it provided soft guidance. Q4 adj. EPS 2.02 (exp. 1.97), revenue USD 3.5bln (exp. 3.5bln). Sees Q1 EPS at 1.56 (exp. 1.64), and sees Q1 revenue at USD 3.19bln (exp. 3.23bln); FY23 revenue seen at USD 13.75bln (exp. 13.86mln), and sees FY23 EPS 6.97 (exp. 7.29). (VMW)


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  Zscaler (ZS) - Dropped 15% in after hours on a profit miss, although guidance was above expectations. Q2 EPS 0.13 (exp. 0.11), Q2 revenue USD 255.6mln (exp. 241.6mln). Raises FY22 EPS view to 0.55 at the midpoint (exp. 0.52), and raised FY22 revenue view to 1.05bln (exp. 1.01bln). (ZS)

25 Feb 2022 - 10:19- EnergyGeopolitical- Source: Newsquawk