US EARLY MORNING: US equity futures continue to consolidate ahead of Thursday's CPI

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  EQUITIES: APAC indices traded in a mixed fashion overnight after a soft lead from Wall Street, while European shares opened with a flattish bias. US index futures are higher by 0.1-0.5%, (NDX lagging, RTY leading). For the broader S&P 500 E-mini, the consolidation around 4,500 continues in the absence of any fresh macro catalysts before this Thursday’s crucial CPI report. Geopolitics continues to feature – both on the Russia/Ukraine and Iranian fronts – though this has not provided any significant headwinds for the US equities complex this week. Global monetary policy drivers are having more influence; ECB President Lagarde attempted to tone down her hawkishness on Monday, with mixed results, and ultimately, the course of ECB monetary policy will be determined by its updated economic projections due in March. For the Fed, the lack of speakers this week implies policymakers may be satisfied with messaging thus far, and the incoming CPI report will be the next major catalyst: any upside will raise bets of a 50bps Fed rate hike in March, and that could provide further volatility for the rate-sensitive Tech sector. Conversely, a CPI miss, will reduce fears about aggressive monetary policy tightening.


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  TREASURIES: Yields are higher by 2-3bps across the curve, with the belly bearing the brunt of underperformance. The complex appears to be taking its cues from elsewhere. Overnight, a hawkish RBA rate trajectory view from a former member of the central bank saw Aussie yields jump, with Treasuries also moving in sympathy. But the pull has been in an opposite direction since the start of the European day, where EGBs which have been supported after ECB President toned down her hawkishness at a testimony to lawmakers on Monday, helping Treasury yields to drift lower. The US will sell 3yr notes later today after last week announcing cuts to auction sizes, as were expected; the sale comes ahead of Thursday’s CPI data, which is expected to show annual consumer prices rising to 7.3%, which may lead to more aggressive Fed bets which could influence the set up going into today’s auction.


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  DOLLAR: The Dollar Index is up by around 20bps. There are not many US-focussed catalysts on the radar before the CPI report on Thursday, but there is a lot of ECB-speak, and with the central bank undergoing a hawkish pivot, of sorts, the buck will likely take its cues from the overarching risk narrative (geopolitics, and the health of corporates) as well as from what its peers like the EUR are doing; and on that note, desks have been highlighting comments due from the ECB’s Villeroy in afternoon trade today. Elsewhere, activity currencies aren’t deviating too far off neutral against the USD, while EMFX is generally off. An NBP rate decision rate may see the central bank lift rates by 50-75bps after policymakers have pledged to tackle high prices.


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  CRUDE: Oil benchmarks are off by 0.30-0.50. Weekly inventory data is expected to show a crude stock build of 0.7mln, gasoline is expected to build by 1.6mln, while distillates are seen drawing by 1.8mln. Traders will be watching the tone of Iran nuclear talks in Vienna, where progress is reportedly being made; ING said it continues to assume that Iranian supply will gradually increase over the course of this year, and if that did not happen, then the market balance for crude would become a lot tighter than it is currently expecting. On the other major geopolitical event – Russia/Ukraine – the Russian President has sternly warned against Ukraine joining NATO, suggesting it could lead to war. Analysts at JPMorgan, after a fireside with Russia's OPEC+ governor, suggested that the oil risk premium was here to stay. The event concluded that while action by Russia to curb gas exports in the context of heightened Ukraine tensions appears unlikely, oil is particularly exposed in the event production is restricted to the US in favour of increased shipments to Asia; despite OPEC+ group supply continuing to undershoot, near-term upward revisions to quota baselines seem unlikely; and Russia is not overly concerned with oil demand destruction at current price levels.

DAY AHEAD FEBRUARY 8TH:

• 08:00GMT/03:00EST: Spain Industrial Production (DEC)


• 09:00GMT/04:00EST: Italy Retail Sales (DEC)


• 11:00GMT/06:00EST: BCB Minutes


• 11:00GMT/06:00EST: Russia Vehicle Sales (JAN)


• 11:00GMT/06:00EST: US NFIB Business Optimism Index (JAN)


• 11:45GMT/06:45EST: Pfizer Inc (PFE) earnings (preview)


• 13:30GMT/08:30EST: Canada Trade Data (DEC)


• 13:30GMT/08:30EST: US Trade Data (DEC)


• 13:55GMT/08:55EST: US Redbook (05/FEB)


• 15:00GMT/10:00EST: US IBD/TIPP Economic Optimism (FEB)


• 16:00GMT/11:00EST: US Q4 Report on Household Debt and Credit


• 17:00GMT/12:00EST: ECB's Villeroy


• 18:00GMT/13:00EST: US 3-Year Note Auction (history)


• 21:30GMT/16:30EST: US Weekly API Energy Inventories (04/FEB)

EQUITY NEWS:

TECH:

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  Nvidia (NVDA), Softbank (SFTBY) - Nvidia’s USD 66bln deal to buy SoftBank’s Arm Ltd collapses after global regulators raised concerns about its effects on competition; Softbank has confirmed that it will explore an IPO of Arm. (Times)


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  Semiconductors - EU Chips Act to include investment of EUR 11bln for a public-private R&D partnerships, aims for EUR 15bln; including national government research and microchip investment the total is EUR 43bln. State aid rules to be softened, new mechanisms to be announced allowing the EU to pressure manufacturers into maintaining chip supply. (Politico)


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  Apple (AAPL) - Acquires a UK start-up that makes music with artificial intelligence; will bulk up Apple’s audio technology. Article notes it is rare for Apple to make such acquisitions. (Bloomberg)


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  Amazon (AMZN), Velodyne Lidar (VLDR) - Amazon secures warrant to acquire 39.6 million shares in Velodyne Lidar. VLDR more than doubled in extended trade before settling around +63% higher. (Reuters)


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  Alphabet (GOOG) - Co-founder Larry Page sold around USD 80mln worth of shares, according to a filing. (Alphabet)


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  Nuance (NUAN), Microsoft (MSFT) - Nuance expects merger with Microsoft to close at the end of Q1. (NUAN)


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  Teradata Corporation (TDC) - Q4 adj. EPS 0.57 (exp. 0.27), Q4 revenue USD 475mln (exp. 478.6mln). Raises FY22 guidance, now sees adj. EPS between 1.82-1.92 (exp. 1.61, prev. 1.60-1.70), Public Cloud ARR seen +80% Y/Y, Total ARR expected to grow mid-to-high-single-digits Y/Y. (TDC)


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  NortonLifeLock (NLOK) - Received UK, German antitrust approval for Avast merger. (NLOK)


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  Micro Focus (MCRO) - FY21 revenue USD 2.9bln (prev. 3.0bln Y/Y), adj. EBITDA 1.04bln (prev. 1.19bln Y/Y). (Newsquawk)

COMMUNICATIONS:

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  Meta Platforms (FB) - Tech billionaire Peter Thiel will leave Meta's board to back numerous Trump-aligned candidates in the midterm elections. (NYT)


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  Take-Two Interactive Software (TTWO) - Q3 EPS 1.24 (exp. 1.23), Q3 revenue 903mln (exp. 879.58mln). Next quarter guidance was light: Q4 EPS seen between 0.78-0.88 (exp. 1.15), and Q4 revenue seen between USD 808-858mln (exp. 919mln). (TTWO)


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  AMC Theatres (AMC), AT&T (T) - AMC will offer Batman NFTs to customers who prebook. (AMC)


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  Vodafone (VOD), Iliad (ILIAY) - Iliad tables bid for Vodafone’s Italian operation, according to sources; no deal value cited. (Bloomberg)


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  Orange (ORAN) - Reportedly in talks to merge Spanish operations with Masmovil. (Expansion)

HEALTH CARE:

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  Amgen Inc (AMGN) - Q4 adj. EPS 4.36 (exp. 4.08), Revenue 6.85bln (exp. 6.87bln). Has seen some shift back to virtual engagement by field staff, delayed healthcare procedures and variability in demand patterns due to Omicron. Notes volatility with recent Omicron surge which may impact Prolia sales this year. Will provide 2022 financial guidance on Tuesday. (AMGN)


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  Tenet Healthcare (THC) - Q4 adj. EPS 2.70 (exp. 1.49), revenue 4.86bln (exp. 5bln). Sees Q1 adj. EPS between 0.92-1.15 (exp. 1.43), sees Q1 revenue between 4.6-4.8bln (exp. 5bln). Sees FY22 adj. EPS between 5.86-7.05 (exp. 6.62), and sees FY22 revenue between 19.5-19.9bln (exp. 20.3bln). (MarketWatch)


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  Biogen (BIIB), Xbrane Biopharma (XBRANE) - Entered into a deal for the commercialisation and license agreement to develop, manufacture, and commercialize Xcimzane. (BIIB )


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  CooperCompanies (COO) - To acquire Cook Medical’s Reproductive Health business for USD 875mln. (COO)

INDUSTRIALS:

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  Nissan (NSANY) - Nissan 9-month net profit JPY 201.3bln (prev. -367bln), operating profit JPY 191.3bln (prev. -131.6bln), recurring profit 256bln (prev. -216bln). Raises profit outlook; now sees FY21/22 net profit at JPY 205bln, and FY21/22 operating profit at JPY 210bln. Maintains outlook for vehicle sales at 3.8mln units. (Bloomberg)


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  Tesla (TSLA) - Automaker is cutting a steering component from some vehicles to deal with the chip shortage, sources said. (CNBC)


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  Stellantis (STLA) - Deal with the Italian government on planned Termoil gigafactory could be signed next week. (La Repubblica)


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  Continental (CTTAY) - Looks to strengthen automated driving unit, exploring partial IPO. (Handelsblatt)


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  Raytheon (RTX) - Missiles division CFO, and other leaders depart in shakeup. (Bloomberg)


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  Aecom (ACM) - Q1 adj. EPS 0.89 (exp. 0.77), Q1 revenue USD 3.27bln (exp. 3.45bln). Raises guidance: Sees FY22 adj. EPS between 3.30-3.50 (prev. 3.20-3.40, exp. 3.35), raises FY24 adjusted EPS to 4.75+ (prev. 4.30-4.75). (ACM)

ENERGY:

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  BP (BP) - Reports highest profits in 8yrs, expedites green plan. Q4 adj. net USD 4.07bln (exp. 3.87bln), Q4 revenue 52.2bln (exp. 42.1bln). Executes an additional share buyback programme of USD 1.5bln. Expects oil supply/demand to move back into balance through 2022, warns of price volatility given lower levels of spare capacity. (Newsquawk)


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  Shell (SHEL) - To develop the next phase of onshore natural gas in Queensland, Australia, for both domestic customers and exports. (Upstream Online)


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  North Sea - UK to give six North Sea oil and gas fields the green light this year, to fast-track licence approvals. (Telegraph)


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  Repsol (REPYY) - Reportedly mulls sale of Duvernay basin assets in Canada; could fetch USD 590mln. (Reuters)


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  Phillips 66 (PSX) - Will create JV with H2 Energy Europe to develop up to 250 retail hydrogen refuelling stations across Germany, Austria and Denmark by 2026. (MarketWatch)

MATERIALS

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  Copper - Mining activity at Peru's Las Bambas copper mine (2% of global supply) tumbles amid protestor blockade. Mine operator Monday warned it might have to halt operations if the blockade is not lifted by February 20th. (Reuters)

FINANCIALS:

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  Bitcoin (BTC) - Crypto currency Bitcoin topped USD 45k for the first time since early January, but has since fallen back.


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  Principal Financial (PFG) - Q4 EPS 1.76 (exp. 1.65), Q4 AUM 714bln. Q1 dividend +14% Y/Y to USD 0.64/shr. (PFG)


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  Deutsche Bank (DB) - Reportedly plans expansion of wealth management in Florida. (Bloomberg)


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  BNP Paribas (BNPQY) - Tops analyst expectations in Q4, sets new targets for 2025. (Newsquawk)

CONSUMER CYCLICAL:

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  Leggett & Platt (LEG) - Q4 EPS 0.77 (exp. 0.73), Q4 revenue USD 1.33bln (exp. 1.29bln). Sees FY22 EPS 2.70-3.00 (exp. 2.95), and sees FY22 revenue 5.3-5.6bln (exp. 5.23bln). (LEG)


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  Yum! Brands (YUM) - Raises quarterly dividend +14% to USD 0.57/shr. (YUM)


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  Just Eat Takeaway (TKAYY) - Will voluntarily delist from Nasdaq to reduce complexity and costs. (Newsquawk)


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  Las Vegas Sands (LVS) - Unveils USD 1bln reinvestment in its Marina Bay Sands. (LVS)


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  Evolution Gaming (EVVTY) - Extends US live casino partnership with FanDuel. (Gambling Insider)


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  Hugo Boss (BOSSY) - CEO aims to double sales by 2025. (SZ)

CONSUMER STAPLES:

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  Ocado (OCDDY) - Said results were constrained by labour shortages. FY21 revenue GBP 2.49bln (exp. 2.56bln); retail GBP 2.23bln (prev. 2.19bln). Did not declare dividend. Does not expect 'Re:Imagined' to have a material impact on FY22 results. (Newsquawk)

UTILITIES:

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  EDF (ECIFY) - Narrows FY22 guidance on nuclear generation, sees between 295-315TWh (prev. 300-330TWh). (Newsquawk)

REAL ESTATE:

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  Simon Property Group (SPG) - Q4 FFO/shr 3.09 (exp. 2.90), Revenue 1.33bln (exp. 1.24bln); sees FY FFO/shr between 11.50-11.70 (exp. 11.79), and sees FY EPS view 5.90-6.10 (exp. 6.10). (SPG)

08 Feb 2022 - 09:59- EnergyData- Source: Newsquawk