US EARLY MORNING: US index futures are a little better than flat; Russia sanctions updates, Fedspeak, Services ISM ahead

EQUITIES: US equity futures are trading a little better than flat (NQ +0.1%, RTY +0.1%, ES +0.1%, YM +0.1%), continuing the horizontal trading seen overnight. Analysts have suggested that the grind sideways may continue until the next catalyst (Fed’s balance sheet plans are the monetary policy focus, given that aggressive rate hikes have been priced in. On Russia, the next tranche of sanctions, and how the West begins to tackle allegations of human rights atrocities and war crimes as well as progress in peace talks). JPMorgan’s equity strategists continue to take a constructive line on equities, and its strategists are unsurprised by the resilience in equities; the bank said that the risk-rewards dynamic for stocks was not as bad as some believe, arguing that the Fed’s tightening process should not be seen as a negative, noting that historically, after the initial bouts of volatility, equities went on to make fresh record highs. But this view still meets scepticism. Credit Suisse, for instance has been highlighting a number of headwinds for equities: unemployment levels are below full employment, which has been a condition in nearly 80% of market peaks; it argues that the market is underestimating the impact of QT, adding that it would make a lot of sense for the Fed to be very aggressive now; the bank notes that equities have historically de-rated when inflation is above 3%, while historically, when bond yields rise 1.3ppts off their lows (like 10yr yields have); CS warns that equity earnings revisions may turn negative, and markets often struggle to rally when this happens; credit metrics are showing warning signs.

TREASURIES: Yields are higher by 3-4bps across the Treasury curve, with the belly underperforming. After Monday’s steepening, major curve spreads are mixed, with shorter-dated spreads steepening (inflation fears) as longer-dated spreads narrow slightly (growth fears), although moves are modest. Fedspeak will be eyed, with Vice Chair-in-waiting Brainard due to speak on a panel about inflation; Brainard has been quiet recently. Fed’s Williams (voter) and Daly (2024) will also deliver remarks, while the ISM services data for March is due for release. Our ‘Day Ahead’ calendar can be accessed here.

EQUITY NEWS:

KEY US EQUITY LEVELS (via Credit Suisse):

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  SPX: 4424, 4437, 4455-61, 4488, 4501-14, 4637, 4663-68, 4685, 4700, 4707-12.


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  NDX: 14385, 14441-46, 14578, 14581-647, 14706-724, 14926, 15088-145, 15230.


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  RUT: 2016-19, 2035, 2045-47, 2056, 2068-71, 2100-101, 2138, 2162, 2177, 2185.

MATERIALS:

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  Russia - Further EU sanctions against Russia over alleged civilian killings in Ukraine may include steel, luxuries and jet fuel; EU officials also said that oil and coal sanctions were an option. (Newsquawk)

FINANCIALS:

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  Morgan Stanley (MS), Palantir (PLTR) - Morgan Stanley accused of front-running a block trade in Palantir that it executed last year. (WSJ)


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  Citigroup (C) - Citi pauses new SPAC issuance amid SEC crackdown; Citi seeks more clarity on potential legal risks as regulators' plans could make it easier for investors to sue. (Bloomberg)


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  Marathon Digital (MARA) - Produces a record 1,259 BTC in Q1 2022 (+556% Y/Y, +15% Q/Q); total Bitcoin holdings rose to BTC 9,374. Hash rate +14% Q/Q, deployments expected to ramp in coming weeks. (MARA)


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  SEI Investments (SEIC) - Chairman and Founder Alfred West to become Executive Chairman; Ryan Hicke, Executive Vice President and Chief Information Officer, will become the company's next CEO. (SEIC)


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  ING (ING), Societe Generale (SCGLY) - ING and SocGen subsidiary Boursorama sign a deal to offer services to retail customers of ING in France. (ING)

TECH:

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  Hon Hai (FXCNY), Apple (AAPL) - Apple supplier Hon Hai reported March sales +15% Y/Y (prev. +13.2% Y/Y in February). (Newsquawk)


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  Tech names - A Reuters analysis notes that with capital markets jittery, private equity is pouncing to finance tech buyouts. (Reuters)


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  Qualcomm (QCOM) - CEO told CNBC that it is focusing on dividends rather than buybacks to deliver shareholder value. CEO added that QCOM wants to maintain strategic flexibility, also for M&A, since it sees diversification working for the company, and it wants it to grow faster. (CNBC)


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  Block (SQ) - SEC filing shows that a former employee accessed customer data without approval, gaining access to full names and brokerage-account numbers. (WSJ)


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  Synopsys (SNPS), Juniper Networks (JNPR) - To form a new, separate company that will provide an open silicon photonics platform to address the growing photonic requirements in applications such as telecom, datacom, LiDAR, healthcare, HPC, AI, and optical computing. (SNPS)

COMMUNICATIONS:

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  Meta Platforms (FB) - Facebook briefly restricted hashtags related to civilian deaths in Ukraine's Bucha, where alleged human rights atrocities by Russian forces is said to have been committed (Reuters). Separately, Russian bailiffs are set to collect RUB 2bln in fines from Meta Platforms (Newsquawk).


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  Telecom Italia (TIIAY), KKR (KKR) - Sources said KKR cannot confirm EUR 10.8bln bid for Telecom Italia unless it is given access to the telecom giant's books. (Reuters)

CONSUMER CYCLICAL:

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  Amazon (AMZN) - A new worker chat app blocks and flag employee posts on a planned internal messaging app that contain keywords pertaining to labor unions; banned words include: "union", "restrooms", "pay raise", "plantation", "grievance", "slave labor", "this is dumb", "living wage", "diversity", "vaccine", and others. (The Intercept)


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  Carnival (CCL) - Rose 3% in after hours trade after reporting that the one-week period between March 28-April 3 was its busiest booking week in the company's history, showing a double-digit increase from the previous record 7-day booking total. (CCL)


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  Hasbro (HAS) - Rejected activist investor calls to spin off the 'Wizards of the Coast' unit; also added two Discord and Electronic Arts directors to its board; WSJ says that sets up a proxy battle at the coming annual meeting. (WSJ)


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  Cars.com (CARS) - Rose 3.9% in after hours trade; announced CFO transition, and named Jandy Tomy interim CFO. (CARS)


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  Burlington Stores (BURL) - Announced John Crimmins will retire as CFO; initiated an external search for a new CFO; Crimmins to provide consulting services at the request of the company through the end of February 2023. (BURL)


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  Gaming names - UK companies will be banned from using ads which include sports personalities, reality TV and social media stars, as part of new rules to protect the vulnerable. (Guardian)

UTILITIES:

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  Southwest Gas Holdings (SWX) - In an open letter, activist investor Carl Icahn said he has "never seen anything as corrupt as the recent actions" of SWX Board. (Icahn)

HEALTH CARE:

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  Biogen (BIIB) - Data from NOVA study further support the efficacy and safety of natalizumab IV when administered every six weeks as compared to the approved every four-week dosing. Additional real-world data affirm high rates of persistence and adherence for VUMERITY. (BIIB)


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  Novartis (NVS) - Gets US FDA has commercial licensure approval for a multi-product gene therapies. (NVS)


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  Roche (RHHBY) - To showcase next generation diagnostic solutions at EuroMedLab (April 10-14th). (RHHBY)


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  Bayer (BAYRY) - Unveiled new data for chronic kidney disease and type 2 diabetes. (BAYRY)

INDUSTRIALS:

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  Nio (NIO) - In talks with several automakers about licensing its battery-swapping technology. (FT)


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  Eaton (ETN) - Names Heath Monesmith President and Chief Operating Officer; he will also have corporate responsibility for the EMEA region. (ETN)


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  GE (GE), Safran (SAFRY), Air France (AFLYY) - Air France in talks with GE/Safran JV on the purchase of Leap-1A engines, for use in Airbus (AIR FP) A320/21neo craft. (AFLYY)


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  Airbus (EADSY) - Continues to expect to increase A350 production rate from 5/month to around 6/month in early 2023; no change to delivery guidance. (Bloomberg)


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  AAR Government Services (AIR) - Awarded USD 365mln Air Force contract. (DoD)


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  Lion Electric Company (LEV) - Announced it had received an order for 50 all-electric LionC school buses from Autobus Campeau in Quebec; deliveries to begin Q1 2023. (LEV)

REAL ESTATE:

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  Marcus & Millichap (MMI) - Closes eight-asset Reno multifamily portfolio sale for USD 302mln. (MMI)


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  Ryman Hospitality Properties (RHP), Comcast (CMCSA) - RHP announced that Atairos and strategic partner NBCUniversal (CMCSA) are to acquire a 30% minority ownership stake in RHP's subsidiary OEG Attractions Holdings, which owns the assets that comprise Opry Entertainment Group; investment values OEG at USD 1.415bln. (RHP)

05 Apr 2022 - 09:48- EquitiesGeopolitical- Source: Newsquawk