US EARLY MORNING: US equity futures, bond yields, crude benchmarks all higher

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  US equity futures are higher by 0.6-0.9% (NQ +0.9%, RTY +0.9%, ES +0.7%, YM +0.6%), supported by some easing of fears on inflation, after data Wednesday showed US core CPI undershooting expectations, leading some desks to call ‘peak inflation’ given the favourable base effects in the months ahead. However, that is not a global theme just yet; data this morning showed UK prices rising to the highest in 30yrs, with the potential for further upside in the months ahead. Meanwhile, the VIX has pared back from recent highs with a 25-handle; Bank of America's strategists warn, however, that high and persistent inflation was turning the Fed from a suppressor of vol and source of returns to a source of vol and suppressor of returns, according to Bloomberg, which skews the bank's outlook for equities negatively. Corporate earnings will come into sharper focus in the pre-market, with results due from asset manager BlackRock (BLK) and banking giant JPMorgan (JPM), with numbers from Delta Air (DAL) will also be eyed; full earnings estimates here.


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  Treasury yields are higher by 3-6bps, with underperformance most notable in the 5yr sector. The shape of the curve is biased towards steepening (2s10s +3bps, 2s30s+3bps, 5s30s +1bps). The probability of a 50bps May Fed rate hike is sitting at around 94% according to Refinitiv data, following remarks from the Fed’s Brainard on Tuesday; although she was coy on the prospects of a 50bps rate hike, she argued that rates should rise “expeditiously” to manage inflation. Today’s 30s auction will be eyed in the context of a soft 10s auction on Tuesday, which tailed by a hefty 3bps.


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  Crude benchmarks are adding 40-50c; weekly inventory data from the API was bearish crude but bullish for the products; crude saw a larger than expected build, though the products saw much larger than expected draws. The IEA lowered its view of 2022 global oil demand by 260k BPD on COVID in China and lower OECD demand. The agency said Russian oil supply was expected to fall by 1.5mln BPD in April and by around 3mln BPD from May, commentary that follows yesterday's sourced report from Reuters which suggests Russian output has fallen to the lowest levels since July 2020. OPEC this week also cut its view of 2022 world oil demand due to the fallout from the Ukraine War, and it also warned that sanctions on Russian crude could create one of the worst global oil supply shocks ever. Elsewhere, traders have been encouraged by Shanghai's relaxing of some COVID curbs, which eases some fears over Chinese demand levels; trade data released overnight showed China’s oil imports have fallen at a rate of 14% Y/Y in March.


• The Dollar Index is around flat, but USDJPY has vaulted the 126.00 level as traders on monetary policy divergence themes. Japan's Finance Minister had no comment on specific FX levels, but said that the sharp moves in FX were undesirable, and problematic, adding that officials were watching currency moves closely. NZD is gaining attention after the RBNZ became the first major central bank to boost rates by a 50bps increment; NZD knee jerked higher initially, but pared back afterwards; Citi explained that "the signal of front-loaded hikes and reference to February’s OCR plot (which is much less aggressive than market pricing) drove a strong rally in 2-4y rates and saw NZD as worst performer in G10 on large volumes," as a result.


• The day ahead features the BoC rate decision and MPR (preview here), US PPI for March, weekly DoE inventory data; results are due from BLK and JPM. Supply comes by way of a USD 20bln 30yr Treasury auction. Full day ahead calendar here.

EQUITY NEWS:

KEY US EQUITY INDEX LEVELS (VIA CREDIT SUISSE):

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  SPX: 4341/36, 4376, 4399/91, 4424, 4438, 4506, 4520/25, 4559/61, 4570, 4593.


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  NDX: 13827, 13878, 14000, 14014, 14143, 14490, 14624/39, 14701/24, 14783, 14821.


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  RUT: 1862/60, 1901/1882, 1921, 1933, 1946, 2018, 2031, 2041/50, 2068/72, 2103/07.

COMMUNICATIONS:

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  Alphabet (GOOG) - Judge presiding over the DoJ antitrust lawsuit vs Google has requested more information before deciding how to rule in the case over alleged abuse of attorney-client privilege. (Reuters)


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  Twitter (TWTR), Tesla (TSLA) - Elon Musk is being sued by former Twitter shareholders claiming they missed out on the recent upside in the stock since Musk waited too long in disclosing his 9.2% stake in the company. (Reuters)


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  Warner Bros. Discovery (WBD), Roku (ROKU), Alphabet (GOOG) - CNN+ reportedly has fewer than 10,000 daily users after two weeks into its existence casting doubt on the future of the application after the recent Discovery-WarnerMedia tie up, sources cited by CNBC said. The app became available on Roku this week, but is still not on Android TV. (CNBC)


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  Deutsche Telekom (DTEGY), Softbank (SFTBY), T-Mobile (TMUS) - Deutsche Telekom purchases Softbank's stake in T-Mobile for USD 2.4bln, taking Deutsche Telekom's stake to 48.4% (prev. 46.7%). (Bloomberg)


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  Snap (SNAP) - Introduced 'Dynamic Stories', which uses partners' RSS feeds to automatically create stories from the content a publisher is already creating on the web. (SNAP)


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  Telecom Italia (TIIAY), Iliad (ILIAY) - Iliad reportedly interested in Telecom Italia's Italian consumer services unit. (Reuters)


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  AMC Entertainment Holdings (AMC) - Finalised a deal with Bow Tie Cinemas to purchase and operate seven locations in Connecticut, upstate New York and Annapolis, Maryland. (AMC)


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  Angi (ANGI), InterActiveCorp (IAC) - IAC reports Angi March Total Revenue +9% Y/Y (prev. +18%), Search Total Revenue +14% (prev. +25%), Services Requests -20% (prev. -11%), Ads and Leads -7% (prev. +1%). (ANGI)


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  Cable One (CABO) - Appoints Todd Koetje as its next CFO; will succeed Steven Cochran in July. (CABO)

TECH:

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  Apple (AAPL) - Introduces a new version of its iMovie featuring Storyboards and Magic Movie, which makes it easier for users to share their stories via video. (AAPL)


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  Uber Technologies (UBER), Lyft (LYFT) - Lyft suspended surge pricing citywide in NY on Tuesday following subway attack; Uber limited its own suspension of demand-based rates to Brooklyn. (NYP)


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  Cirrus Logic (CRUS) - Venk Nathamuni appointed CFO; Venk joins Cirrus Logic from Arista Networks, where he served as head of corporate finance, M&A, investor relations, and information technology. (CRUS)


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  NanoString Technologies (NSTG) - Tumbled over 30% after hours. Cut its Q1 revenue view to USD 31mln (exp. 35.8mln, prev. 34-38mln). Said Q1 revenue was impacted primarily uneven sales execution, compounded by the impact of changes to re-align its expanded commercial team. Remains confident in its long-term prospects, is currently evaluating its financial outlook for the FY and will provide an update on its earnings call in May. (NSTG)


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  Nutanix (NTNX) - Rukmini Sivaraman appointed CFO, succeeding Duston Williams, who is leaving to become CFO of a pre-IPO company in a different space. (NTNX)

CONSUMER STAPLES:

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  Imperial Brands (IMBBY) - FDA banned myblue vaping device due to a lack of evidence that it would protect public health. (Times)


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  Procter & Gamble Company (PG) - Raises quarterly dividend to USD 0.9133/shr (prev. 0.87/shr). (PG)


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  Archer-Daniels-Midland (ADM), Valero Energy (VLO) - US to allow high-ethanol content gasoline to be sold in the hot summer months; move aimed at lowering prices at the pump. President Biden said it would reduce reliance on foreign oil, and that by adding this fuel source to gasoline, by 10% or 15% or even more, it stretches the supply. (WSJ)


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  Conagra Brands (CAG) - Independent director, Scott Ostfeld of JANA Partners, to assume a board seat at another company in the packaged food industry; JANA continues to hold a significant investment in Conagra Brands. (CAG)

MATERIALS:

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  Ashland Global Holdings (ASH) - Sees Q2 adj. EPS 1.50 (exp. 1.14), sees Q2 revenue at USD 604mln (exp. 575mln). Said disciplined pricing and product mix actions more than offset additional inflation in raw-material, freight and energy costs. Noted persistent supply-chain and labour-availability challenges impacting shipments and on-time order delivery. Affirmed FY22 revenue view of 2.25-2.35bln (exp. 2.3bln). (ASH)


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  Glencore (GLNCY) - Entered two "pre-payment" deals in 2016, where it provided cash upfront to Russian refineries that were owned by President Putin allies. (Times)

ENERGY:

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  Inventories - Weekly API data was reportedly bearish crude, bullish products; Crude stocks posted +7.8mln in the week (exp. +0.9mln), Cushing +0.4mln, Gasoline -5.1mln (exp. -0.4mln), Distillate -5.0mln (exp. -0.5mln).


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  Phillips 66 (PSX) - Greg Garland to step down as CEO in July, will remain Executive Chairman; Current President and COO Mark Lashier will assume President and CEO. (PSX)


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  Southwestern Energy Company (SWN) - Extended maturity date of its USD 3.5bln reserve-based credit facility by three years to April 2027, increases its borrowing base to USD 3.5 billion. Maintains elected commitments of USD 2.0bln. (SWN)

FINANCIALS:

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  BlackRock (BLK) - To launch its first China onshore ETF later this year, according to Reuters citing sources. (Reuters)


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  PayPal Holdings (PYPL), Walmart (WMT) - CFO and EVP of Global Customer Operations John Rainey is to depart to join Walmart as its CFO. (PYPL)


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  Wells Fargo & Co (WFC) - ISS recommends holders vote against CEO, other execs pay over concerns about the discretion used to award the pay and lack of disclosures. (Reuters)


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  Deutsche Bank (DB), Commerzbank (CRZBY) - Deutsche’s second-largest shareholder Capital Group was reportedly behind a block sale wort EUR 1.27bln on Monday, FT reported citing sources; an as yet unknown investor also sold EUR 475mln worth of Commerzbank shares. (FT)

HEALTH CARE:

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  GlaxoSmithKline (GSK), Sierra Oncology (SRRA) - GSK to acquire Sierra Oncology for USD 55/shr (vs prev. close USD 39.52) in a USD 1.9bln deal. (GSK)

INDUSTRIALS:

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  Smith & Wesson (SWBI), Sturm, Ruger & Co (RGR) - US judge questions whether allowing Mexico to sue US gun manufacturers would open the door to other countries suing them, including Russia over firearms used by Ukrainians in the ongoing war. (Reuters)

13 Apr 2022 - 09:51- EquitiesData- Source: Newsquawk