US EARLY MORNING: US Equity futures flat with eyes on geopolitics and FOMC Minutes

Analysis details (10:15)

Equity futures are flat Wednesday morning. Futures initially caught a bid at the European open although since there has been a knock to risk assets after NATO Secretary General Stoltenberg questioned the de-escalation of tensions. Stoltenberg said they are yet to see any Russian de-escalation and Russia is continuing with its military build-up, despite numerous reports of troops being withdrawn. Western officials are also yet to confirm troops are being withdrawn. The commentary has seen equity futures return to the unchanged mark while Treasuries are also hovering around the unchanged mark across the curve while crude prices are bid, paring some of the de-escalation decline Tuesday. Looking ahead, focus will remain around Geopolitical updates with situation still very fluid while the January FOMC minutes (preview here) will be eyed for hints about a potential 50bp move in March and the process of the balance sheet unwind. Fed’s Kashkari is also speaking and although a non-voter, his remarks will be viewed to see how the Doves are thinking amid a lot of hawkish commentary, particularly from uber-hawk Bullard. Data highlights will be on the January retail sales and industrial production while Canada CPI will also be eyed to help gauge expectations from the BoC, who are set to hike rates in March. In fixed income, there is the 20yr auction at 18:00GMT / 13:00 EST. Newsflow overnight was quiet, focus was on China CPI, which was cooler than expected in February, as was PPI, while Chinese press suggest the PBoC LPR will be maintained in February after it maintained the MLF rate. Elsewhere, the Private Energy Inventory data saw a smaller than expected draw for crude & distillate stocks while Gasoline saw a surprise draw ahead of the official EIA release Wednesday. UK CPI was hotter than expected.

COMING UP

• 12:00 GMT/07:00 EST: US Mortgage Applications


• 12:00 GMT/07:00 EST: Shopify Inc (SHOP) Q4 2021


• 12:00 GMT/07:00 EST: Analog Devices Inc (ADI) Q1 2022


• 12:00 GMT/07:00 EST: Garmin Ltd (GRMN) Q4 2021


• 12:00 GMT/07:00 EST: Kraft Heinz Co (KHC) Q4 2021


• 13:30GMT/08:30 EST: Canada CPI (Jan)


• 13:30GMT/08:30 EST: US Retail Sales (Jan)


• 13:30GMT/08:30 EST:US Import and Export Prices


• 14:15GMT/09:15 EST: US Industrial Production, Manufacturing Output & Capacity Utilisation (Jan)


• 15:00GMT/10:00 EST: Retail and Business Inventories (Dec)


• 15:00GMT/10:00 EST: US NAHB Housing Market Index (Feb)


• 15:30GMT/10:30 EST: US EIA Weekly Inventories


• 16:00GMT/11:00 EST: Fed's Kashkari (2023 Voter, Dove) speaking at a townhall event


• 18:00GMT/13:00 EST: US 20yr Bond Auction (USD 19bln)


• 19:00GMT/14:00 EST: US FOMC Minutes (Jan)


• 21:00 GMT/16:00 EST: Applied Materials Inc (AMAT) Q1 2022


• 21:05 GMT/16:05 EST: Equinix Inc (EQIX) Q4 2021


• 21:05 GMT/16:05 EST: Cisco Systems Inc (CSCO) Q2 2022


• 21:10 GMT/16:10 EST: Marathon Oil Corp (MRO) Q4 2021


• 21:15 GMT/16:15 EST: Albemarle Corp (ALB) Q4 2021


• 21:15 GMT/16:15 EST: American International Group Inc (AIG) Q4 2021


• 21:20 GMT/16:20 EST: DoorDash Inc (DASH) Q4 2021


• 21:20 GMT/16:20 EST: Pioneer Natural Resources Co (PXD) Q4 2021


• 21:20 GMT/16:20 EST: NVIDIA Corp (NVDA) Q4 2022

EQUITY STORIES

Consumer Discretionary

• 
  Airbnb (ABNB) beat on EPS, revenue & GBV’s with better-than-expected guidance and noted the Impact of omicron on booking and cancellation lower than experienced with Delta last summer. (PR Newswire)


• 
  Wynn Resorts (WYNN) missed on EPS but beat on revenue with strong Las Vegas metrics but disappointing Macau numbers. WYNN is to sell the real estate of Encore Boston Harbor to Realty Income (O) for USD 1.70bln through a sale-leaseback transaction. (Businesswire)


• 
  SeaWorld (SEAS) announced it offer to acquire Cedar Fair (FUN) was rejected and they do not see a path to a transaction. (Rrtrs)


• 
  Restaurant Brands (QSR) Burger King has removed its Whopper burger of its discount menu and QSR will raise menu prices again this year to offset higher costs. (Rtrs)


• 
  AUTOS: US President Biden’s administration is reportedly preparing new pollution limits from busses, delivery vans and other heavy trucks. (NYT)


• 
  CRUISES (CCL, RCL, NCLH): US CDC lowered its COVID alert level for cruise ships to "High" from "Very High (WaPo)

Technology

• 
  Akamai Tech (AKAM) beat on EPS and Revenue and will acquire Linode LLC for USD 900mln.  (Akamai)


• 
  Analog Devices (ADI) raised its quarterly dividend 10% to USD 0.76/shr, ahead of earnings Wednesday at 12:00GMT/07:00 EST. (Businesswire)


• 
  Lattice Semiconductor (LSCC) beat on EPS and revenue with guidance above analyst expectations. (Lattice Semi)


• 
  Solar Edge (SEDG) missed on EPS but saw a slight beat on revenue, Q1 revenue guidance was above street expectations. (Businesswire)

Communication

• 
  Roblox (RBLX) posted a larger loss per share than expected and missed on revenue, bookings, DAU’s and hours engaged. Says Y/Y booking comparisons should improve from May/June. (Businesswire)


• 
  ViacomCBS (VIAC) missed on EPS but beat on revenue and added 9.4mln global streaming subscribers, led by Paramount+ which hit over 56mln subscribers. Says it will hit its 2024 streaming goal by year-end and Paramount+ is expected to hit 100mln subs by 2024 (PR Newswire). Also changes name to Paramount to boost its streaming future (Rtrs)

Financials

• 
  Morgan Stanley's (MS) Senior Equities Banker is said to be facing US block-trading probe, according to sources. (BBG)

Energy

• 
  Devon Energy (DVN) beat on EPS and revenue and raised its dividend with production metrics higher than expected but warns Q1 production will take a 3% hit (15k BPD) due to severe winter weather. (Globe Newswire)

Real Estate

• 
  Invitation Homes (INVH) FFO was in line with expectations while revenue fell slightly short and FY22 FFO guidance disappointed expectation. (Invitation Homes)

Health Care

• 
  Crispr Therapeutics (CRSP) posted a larger loss per share than expected but revenue was above expectations. (Crispr)


• 
  Johnson & Johnson (JNJ) has appointed Dairus Adamczyk, Chairman and CEO of Honeywell (HON), to its Board of Directors. (JNJ)


• 
  Moderna (MRNA) announced it is expanding into Asia with four additional subsidiaries in Malaysia, Taiwan, Singapore and Hong Kong. (Moderna) CEO also stated he believes it is reasonable to assume we may be approaching the final stages of the pandemic. (CNBC)


• 
  AstraZeneca (AZN) Saphnelo has been approved for sale within the EU, in the treatment of moderate-severe systemic lupus erythematous. (AstraZeneca)

Industrials

• 
  AIRLINES: Wolfe Research analyst Scott Group upgraded three US airlines (AAL, JBLU and ULCC), while downgrading one (UAL). The downgrade on UAL is to reflect higher fuel prices while also adjusting capacity assumptions while stating he is lowering 2022 EPS estimates for most airlines based on the cost of higher jet fuel.


• 
  Lockheed Martin (LMT) has been awarded a Navy Contract modification worth USD 372mln. (DoD)


• 
  US Steel (X) CFO, Christine Breves, intends to leave the company in 2022. (Businesswire)


• 
  American Airlines (AAL) has signed a firm order with Embraer for three new E175s; contract value is USD 160mln at current list prices. (PR Newswire)

Staples

• 
  Heineken (HEINY) net income topped expectations, as did EPS. It also proposed a dividend of EUR 1.24/sh. Heineken expects COVID-19 to still have an impact on revenue, expect to be significantly impacted by inflation/supply chain pressures. Plans are under the assumption that APAC markets progressively bounce back during the period, on-trade European market may take longer to recover (Heineken). Heineken is also raising prices to offset inflation but said it was impossible to predict how much consumption would be reduced in response (FT).

16 Feb 2022 - 10:15- Fixed IncomeResearch Sheet- Source: Newsquawk