US EARLY MORNING: US index futures are flat/lower ahead of the key CPI report

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  EQUITIES: APAC equities were mixed with a heavy earnings docket and US/China frictions, while European indices opened higher amid its own heavy earnings slate. US equity futures are currently flat/lower by zero to -0.4% (Dow futures flat, Nasdaq-100 futures lower). The key focus today falls on the crucial January CPI report out of the US, where upside relative to the consensus will result in more aggressive bets for a +50bps FOMC rate hike in March, while a softer reading may see markets coalesce around a +25bps move; some desks suggests that an in-line reading could result in a ‘sell-the-fact’ market reaction, similar to what was seen in January after the December metrics were published. We discuss some of the nuances in our CPI primer, which can be accessed here.


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  TREASURIES: Treasury yields are higher across the curve by between 1-2bps, with the shape steeper by around 1bps or so. Wednesday saw a solid sale of new 10yr notes, which stopped through, had stronger cover, while indirects had record participation amid the cut in auction sizes. The 10yr auction followed the decent 3yr auction on Tuesday, and lines us up for a decent 30s auction today, although much of how Treasuries trade will likely be determined by the CPI data out a few hours before the auction. The Treasury will announce next week’s 20yr and 30yr TIPS auctions later today.


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  DOLLAR: The Dollar Index is sub-95.50, a little lower on the session. As with other macro, the CPI data will determine the buck’s near-term fortunes, although as we have noted recently, some desks are wary that an in line reading could trigger a sell-the-fact reaction, like we saw after the December CPI data release in January. Elsewhere, the Banxico rate decision will be of focus in EM; already today we have had a dovish surprise from the Indian central bank. Meanwhile, JPY is weakening after the BoJ announced it would purchase unlimited 10yr JGBs to rein-in higher yields. For EUR traders, there is a lot of ECB speak scheduled – for US traders, it is worth monitoring this commentary; often it is easy for US traders to look through updates of other global central banks, but ECB speak has recently been having a global macro impact.


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  CRUDE: Oil benchmarks are higher by 0.40-0.60, with WTI outperforming after the surprise inventory draw this week. Desks continue to monitor the potential impact of geopolitical developments, where any positive outcome this week could see bets of increased Iranian barrels returning to the market (bearish crude); some reports this week have suggested that the US wants a quick resolution, possibly within weeks.

DAY AHEAD FEBRUARY 10TH:

• 11:00GMT/06:00EST: PepsiCo Inc (PEP) earnings (preview)


• 11:00GMT/06:00EST: South Africa Manufacturing Production (DEC)


• 11:25GMT/06:25EST: Linde PLC (LIN) earnings (preview)


• 11:30GMT/06:30EST: Turkey FX Reserves (04/FEB)


• 11:55GMT/06:55EST: Coca-Cola Co (KO) earnings (preview)


• 12:00GMT/07:00EST: Philip Morris International Inc (PM) earnings (preview)


• 12:00GMT/07:00EST: ECB's De Guindos


• 13:15GMT/08:15EST: ECB's Lane


• 13:30GMT/08:30EST: US CPI (JAN) (preview)


• 13:30GMT/08:30EST: US Initial Jobless Claims (05/FEB), Continuing Claims (29/JAN)


• 14:30GMT/09:30EST: Brazil Business Confidence (FEB)


• 15:30GMT/10:30EST: US EIA NatGas Stocks (04/FEB)


• 16:00GMT/11:00EST: Treasury 20yr Bond, 30yr TIPS Announcement


• 16:30GMT/11:30EST: US 4-Week, 8-Week Bills Auction


• 17:30GMT/12:30EST: President Biden on health care costs


• 18:00GMT/13:00EST: US 30-Year Bond Auction


• 19:00GMT/14:00EST: Banxico Rate Decision (preview)


• 19:00GMT/14:00EST: US Monthly Budget Statement (JAN)


• 17:00GMT/12:00EST: BoE Governor Bailey


• 22:30GMT/17:30EST: RBA Governor Lowe


• Newsquawk Daily Economic Releases (10/Feb)


• Newsquawk Daily US Earnings Estimates (10/Feb) 

EQUITY NEWS:

KEY US EQUITY LEVELS (VIA CREDIT SUISSE):

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  SPX: 4430, 4446, 4452/53, 4522, 4540/44, 4568, 4589, 4591/95, 4602/12, 4629.


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  NDX: 14215, 14320, 14443/52, 14735, 14814/57, 14961, 15039, 15140/196, 15245/66, 15348/82.


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  RUT: 1988, 1996/2000, 2026/28, 2035, 2048/55, 2062, 2085, 2095, 2105/15, 2133.

COMMUNICATIONS:

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  Walt Disney (DIS) - Gained by over 6% in after hours trade as profits, revenues topped expectations, and subscriber growth was solid. Q1 adj. EPS 1.06 (exp. 0.63), revenue USD 21.8bln (exp. 20.91bln). Disney+ paid subscribers +11.8mln to 129.8mln (exp. 125.1mln), CEO affirmed guidance for 230-260mln subscribers by 2024; continues to expect Disney+ growth in H2 vs H1, will look at Disney+ price increase in 2023. Media and Entertainment Distribution revenues USD 14.59bln (exp. 14.59bln), Parks, Experiences and Products revenues USD 7.23bln (exp. 6.13bln); said international parks will continue to be impacted by COVID-related volatility through Q2. (DIS)


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  Vodafone (VOD), Iliad (ILIAY) - Iliad said to have raised bid for Vodafone's Italian unit to over EUR 11bln. (FT)


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  Twilio (TWLO) - Surged almost 20% in extended trading after results topped expectations. Q4 EPS -0.20 (exp. -0.23), Q4 revenue USD 842.7mln (exp. 768mln). Active customer accounts 256k (vs 221k Y/Y). Sees Q1 revenue between USD 860mln at the mid-point (exp. 803mln), but sees Q1 EPS between -26c and -22c (exp. -5c). (TWLO)


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  Roblox (RBLX) - Teams up with NFL to expand Metaverse presence. (RBLX)


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  Zynga (ZNGA) - Q4 EPS -0.06 (exp. 0.09), revenue USD 695 mln (exp. 719.6mln). Q4 bookings +4% Y/Y at USD 727mln. (MarketWatch)


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  Informa (IFJPY) - Sells 'Pharma Intelligence' to Warburg Pincus for GBP 1.9bln. (Warburg)

TECH:

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  Uber Technologies (UBER) - Rose by over 5% in after hours as Q4 earnings and revenues topped expectations, and its food delivery service posted a profit. Q4 EPS 0.44 (exp. -0.35), Revenue USD 5.80bln (exp. 5.34bln). Monthly Active Users (MAU) 118mln (exp. 116.70mln), Gross bookings USD 25.87bln (exp. 25.67bln), Delivery bookings USD 13.44bln (exp. 13.62bln), Mobility bookings USD 11.34bln (exp. 11.25bln), Freight bookings USD 1.08bln (exp. 685.6mln), Trips 1.77bln (exp. 1.87bln). Sees Q1 adjusted EBITDA USD 100mln-130mln (exp. 150.2mln). Sees gross bookings USD 25bln-26bln (exp. 27.25bln). CEO expects trips and gross bookings to recover rapidly in Q1, expects significant EBITDA increase even with new investments. (UBER)


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  Taiwan Semiconductor Manufacturing Company (TSM) - January sales TWD 172.2bln (prev. TWD 126.8bln Y/Y). (Newsquawk)


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  Intel (INTC) - NEC Director Deese said the chipmaker would invest USD 100bln if the chip bill passes. (CNN)


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  Sonos (SONO) - Gained over 6% after hours after revenue and profits beat. Q1 EPS 1.02 (exp. 0.92), Q1 revenue USD 664.5mln (exp. 637.5mln). Sees FY22 revenue between USD 1.95-2.0bln (exp. 1.95bln), raised FY24 revenue target +13% CAGR vs FY22 guidance to USD 2.5bln (prev. 2.25bln vs March 2021 target). CEO believes SONO would have sold much more were it not for chip shortages, said demand continues to be strong. (SONO)


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  Western Digital (WDC) - Reports contamination of material used for manufacturing processes is impacting operations at its Yakkaichi and Kitakami JV flash fabrication facilities. (WDC)


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  Vimeo (VMEO) - Fell by over 20% after hours on disappointing profits. Q4 EPS -0.15 (exp. -0.08), Q4 revenue USD 106mln (exp. 105mln). Sees Q1 revenue +17-19% (exp. 109mln), sees FY22 revenue +15-18% (exp. 482mln). Expects positive FCF for the year. CFO Menon to resign, VMEO initiated a search for his successor. (VMEO)


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  Lumen Technologies (LUMN) - Fell over 10% as Q4 profits and FY22 guidance was soft. Q4 adj. EPS 0.51 (exp. 0.53), Q4 revenue USD 4.85bln (exp. 4.86bln). Sees FY22 adj. EBITDA between USD 6.5-6.7bln, FCF seen between 1.6-1.8bln. (LUMN)


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  Motorola Solutions (MSI) - Q4 adj EPS 2.85 (exp. 2.74), Q4 revenue USD 2.3bln (exp. 2.3bln). Sees Q1 adj. EPS between 1.53-1.59 (exp. 1.80), and sees Q1 revenue growth around +3% (exp. 1.9bln). Sees FY22 adj. EPS between 9.80-9.95 (exp. 9.89), and sees FY22 revenue growth around +7% (exp. 8.8bln). CEO said record backlog and continued robust demand positioned it very well for sustained strong growth this year. (MSI)


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  Atos (AEXAY) - Books EUR 1.9bln of impairments; affirms FY21 revenue and FCF view. (Newsquawk)

CONSUMER STAPLES:

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  Unilever (UL) - Underlying sales rise in Q4, rules out major acquisitions to win back trust of investors. Sees very high input cost inflation in H1 2022 in excess of EUR 2bln. (Newsquawk)


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  Pernod Ricard (PRNDY) - H1 results beat forecasts, sees strong sales growth ahead. Noted slightly softer start to the Chinese New Year Y/Y. (Reuters)


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  Metro (MTGGY) - Saw continued strong momentum into Q1. (MarketWatch)

CONSUMER CYCLICAL:

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  MGM Resorts International (MGM) - Added 2% in after hours trading as earnings and revenues topped expectations. Q4 adj. EPS 0.12 (exp. 0.02), revenue USD 3.06bln (exp. 2.79bln). (MGM)


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  Mattel (MAT) - Gained 11% in after hours. Q4 adj. EPS 0.53 (exp. 0.30), Q4 revenue USD 1.795bln (exp. 1.66bln). Sees FY22 adj. EPS between 1.42-1.48 (exp. 1.39), and sees FY22 revenue growing by +8-10% (exp. 5.52bln). Updated its FY23 goals and sees adj. EPS rising to above 1.90; raised FY23 revenue growth view to 'high-single digits' (prev. 'mid-single digits'). (MAT)


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  iRobot Corporation (IRBT) - Tumbled 15% in after hours on light Q4 profits on supply chain issues. Q4 adj. EPS -1.05 (exp. -0.91), Q4 revenue USD 455.4mln (exp. 463.8mln). Sees FY22 EPS between 1.50-2.00 (exp. 1.81), and sees FY22 revenue between 1.75-1.85. (ZDNet)


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  L'Oreal (LRLCY) - Revenue tops expectations, solid performance in US and in China. (Newsquawk)


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  Delivery Hero (DELHY) - Disappointing outlook for FY22. (Newsquawk)

HEALTH CARE:

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  AstraZeneca (AZN) - Reports record sales in Q4, underpinned by COVID drugs. Sees higher sales in FY22, but COVID effect to fade. (Newsquawk)


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  Regeneron (REGN), Sanofi (SNY) - FDA accepts Dupixent for Priority Review. (REGN)


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  Sanofi (SNY) - Olipudase alfa shown to provide sustained improvement across multiple clinical manifestations of ASMD. (SNY)

INDUSTRIALS:

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  General Electric (GE), EDF (ECIFY) - EDF to acquire GE's turbine Unit. (MarketWatch)


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  Ford (F) - Running plants Oakville and Windsor plants at reduce schedules due to interruption on Detroit/Windsor bridge amid a blockade by protestors; the route is a key trade link between US and Canada, and the blockade has lasted a third day. (ABC)


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  O'Reilly Automotive (ORLY) - Added almost 6% in after hours trading as Q4 EPS 7.64 (exp. 6.05), and Q4 revenue 3.29bln (exp. 3.11bln). Sees FY EPS between 32.35-32.85 (exp. 29.58), and sees FY revenue between 14.2-14.5bln (exp. 13.16bln). (Investing)


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  Mercedes-Benz Group (DDAIF) - China's Banking Regulator has criticized the Ci's financial unit for violating disclosure rules. (Newsquawk)


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  Renault (RNLSY) - Backs moratorium on deep-sea mining for battery metals. (Reuters)


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  Siemens (SIEGY) - Q1 profits top expectations, orders rise strongly. (Newsquawk)


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  Thyssenkrupp (TYEKF) - Profits up nearly five-fold in Q1. (Newsquawk)

ENERGY:

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  TotalEnergies (TTE) - Q4 metrics showed a return to profitability as energy prices rose. Raised dividend +5%, plans USD 2bln share buyback programme in H1; could announce more buybacks in H2. (Newsquawk)


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  Aker BP (AKERBP) - Posts record Q4 profits as O&G prices surge; plans more drilling. (Newsquawk)


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  Neste (NTOIY) - Revenue above consensus, but warns renewables margins seen falling. (Newsquawk)

MATERIALS:

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  ArcelorMittal (MT) - Q4 earnings top expectations; CEO less upbeat on FY global steel consumption. (Newsquawk)


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  International Flavors & Fragrances (IFF) - Fell by 0.75% in extended trade; current quarter metrics beat expectations, although its EBITDA view and margin commentary was soft. Ahead of the release, shares were supported on news that it had appointed Barry Bruno to board in settlement with activist investor Icahn. (WSJ)

FINANCIALS:

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  Nexi (NEXXY) - Weighs sale of USD 1.1bln BNPL unit. (Bloomberg)


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  Credit Suisse (CS) - Net losses widened in Q4. (Newsquawk)


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  Credit Agricole (CRARY) - Making progress towards its profit goals earlier than anticipated. (Newsquawk)


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  SocGen (SCGLY) - Strong earnings results. (Newsquawk)


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  UniCredit (UNCRY) - To sell c.EUR 2bln of impaired loans to Prelios. (Reuters)


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  Deutsche Boerse (DBOEY) - Q4 revenue EUR 1.13bln (prev. 1.02bln Y/Y). EBITDA 504mln (exp. 490mln). Net 300mln (prev. 242.3mln). (Newsquawk)


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  Prudential (PRU) - Group CEO Mike Wells to retire at end March 2022. Group CFO/COO Mark FitzPatrick to become Interim Group CEO. (PRU)

10 Feb 2022 - 09:47- Fixed IncomeData- Source: Newsquawk