US EARLY MORNING: US index futures are higher; news flow has been thin

US equity futures are higher (NQ +0.6%, ES +0.4%, YM +0.4%, RTY +0.3%). There is no single headline catalyst for the upside, and overnight sessions were quiet in terms of incremental macro news flow. Instead, as we detailed in yesterday’s US Early Morning note, technical factors may be playing a role as we await the next fundamental catalysts (next week we will see CPI and retail sales reports out of the US, an ECB policy meeting in Europe).Treasury yields have been marching higher; at pixel-time, the curve is mixed, with yields on maturities 2yr through 10yr up by 1-5bps (short-end underperforming), while the 20s and 30s sectors are slightly positive, albeit, yields have been moving higher gradually. The Dollar Index briefly hit 100.00, but has subsequently backed-off the level amid a lack of follow through. Other major FX is little changed, and rangebound. In its weekly flow report, Bank of America noted USD 9.2bln flows into stocks, USD 0.3bln flows into gold, USD 1.4bln flows out of bonds, and USD 7.5bln flows out of cash. Its strategists said the "inflation shock" was worsening, the "rates shock" was just beginning, while the "recession shock" was coming. The weekly flows report noted that the growth style was outpacing the value style, and tech saw its sixth week of inflows. Financials have now seen outflows in six of the last seven weeks.  Meanwhile, BofA notes that IG bonds saw USD 2bln of outflows in the week, HY saw USD 1.1bln of inflows, while TIPS saw its seventh week of inflows. The day ahead docket is thin, with Canadian labour market data standing out. Full ‘Day Ahead’ can be accessed here.

EQUITY NEWS:

MATERIALS:

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  WD-40 Company (WDFC) - Surged over 10% in after hours trade following results. Q2 EPS 1.41 (exp. 1.02), Q2 revenue USD 130mln (exp. 127mln). YTD sales were tracking +14%. WD-40 cut its FY22 EPS view to between 5.14-5.27 (exp. 5.26, prev. 5.24-5.38), and lowered its FY22 gross margin view to 50-51% (prev. 52-54%), but reiterated FY22 revenue view between USD 522-547mln (exp. 533mln). CEO noted the challenging inflationary environment, which was weighing on gross margins; aims to restore gross margins to or above our target of 55%, and will in the near-term implement price increases to offset the higher input costs. (WD-40)


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  Univar Solutions (UNVR), Dow (DOW) - Univar and expand their global relationship with lubricants & metalworking fluids agreement in Mainland China and Hong Kong. (Yahoo)


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  Turquoise Hill (TRQ), Rio Tinto (RIO) - Updated on the review process after the offer from Rio Tinto; board formed a Special Committee of independent directors and hired banks to evaluate proposal, and prepare a formal valuation of the company. (TRQ)


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  BHP (BHP) - Holders expected to be entitled to one Woodside share for every 5.5340 BHP share they hold; based on Woodsides' 6th April share price of USD 25.55/shr, the implied value of BHP Petroleum is USD 23.4bln. (Reuters)


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  Holcim (HCMLY) - Raises dividend +10%. (Newsquawk)

HEALTH CARE:

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  Biogen (BIIB) - CMS finalizes Medicare coverage policy for monoclonal antibodies directed against amyloid for the treatment of Alzheimer’s. (CMS)


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  Quidel Corporation (QDEL) - Up 1.6% after hours after Q1 pre-announcement. Sees Q1 revenue between USD 990mln to 1bln (exp. 817mln). Exec said it saw a record quarter for revenue after demand for its COVID-19 tests. (QDEL)


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  LianBio (LIAN), Pfizer (PFE) - LianBio announced that its partner, ReViral, is expected to be acquired by Pfizer; acquisition builds on LianBio's existing partnership with Pfizer to bring novel therapeutics to Greater China. (LIAN)


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  Genmab (GMAB), Janssen (JNJ) - Genmab announced the initial resolution of its arbitration with Janssen relating to its Daratumumab license agreement. (GMAB)

COMMUNICATIONS:

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  AT&T (T), Discovery (DISCA), Warner Bros. Discovery (WBD) - S&P notes that S&P 500 & S&P 100 constituent AT&T will spin-off its interest in WarnerMedia, and immediately after the spin-off, WarnerMedia will merge with S&P 500 constituent Discovery. All classes of shares of Discovery common stock will be converted and reclassified into a single share class named Warner Bros. Discovery, and it will remain in the S&P 500. AT&T will also remain in the S&P 500 and 100 indices after completion of the transaction. (S&P)


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  Activision Blizzard (ATVI) - The game maker will convert about 1,100 US-based temporary or contract quality assurance workers to full-time staffers, following years of criticism over its reliance on part-time employees. But The Verge reported that the QA testers at Raven Software, who recently organised as the Game Workers Alliance, will not be able to take advantage of the new minimum pay — something Activision Blizzard failed to mention upfront when it sent the initial news to media outlets. (Bloomberg, Verge)


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  Twitter (TWTR) - Social media giant said it was experimenting with "unmentioning", allowing users to "protect" their "peace" and remove themselves from conversations. (TWTR)


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  WideOpenWest (WOW) - After finishing regular trade with gains over 12%, added 3.7% in after hours after a Bloomberg report that it was exploring options including a sale, according to sources. (Bloomberg)


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  Telecom Italia (TIIAY) KKR (KKR) - Telecom Italia turns back on KKR takeover approach; refuses to grant access to its books since KKR has not confirmed bid terms. (RTE)


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  Scout24 (SCCTY) - Scout24 reportedly eyed by buyout groups including H&F, EQT and Permira. (Dealreporter)

TECH:

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  CrowdStrike (CRWD) - Said it had secured a Significant Impact Level 4 Authorisation to protect critical US DoD assets, a landmark milestone for its expanding public sector business. (CRWD)


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  ACM Research (ACMR) - Said Shanghai's COVID-19 related restrictions were limiting its ability to ship finished products to customers and to produce new products. ACM currently anticipates that restrictions will be lifted within a few weeks. Q1 revenue now expected to be significantly below its previous internal plan, but it believes the impact of the restrictions will be temporary, with some revenue being deferred from Q1 until later in the FY. It reitered its FY22 revenue view at between USD 365-405mln (exp. 390mln). (ACMR)


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  Paysafe Limited (PSFE) - Former FIS President and Fintech Industry Leader, Bruce Lowthers, Appointed CEO with mandate to scale the company; succeeds Philip McHugh. Company reaffirms guidance for Q1 and FY22. (PSFE)

INDUSTRIALS:

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  Spirit Airlines (SAVE), JetBlue Airways (JBLU), Frontier Group Holdings (ULCC) - Spirit announced that JetBlue's USD 33/shr proposal could reasonably be likely to lead to a "Superior Proposal" as defined in Spirit's merger agreement with Frontier Airlines. Spirit intends to engage in discussions with JetBlue, but has not determined that JetBlue's proposal in fact constitutes a superior offer. Board has therefore made no change to its recommendation that shareholders adopt the Frontier merger agreement. (SAVE)


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  Tesla (TSLA) - CEO said the automaker will make a dedicated self-driving taxi that will "look futuristic"; no timeframe was provided. (Reuters).


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  Lockheed Martin (LMT) - Awarded USD 261.4mln Navy contract modification. (DoD)


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  Volkswagen (VWAGY) - Confirms support for the potential entry of Audi and Porsche into F1. (Sky)


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  Renault (RNLSY), Nissan (NSANY) - Renault execs reportedly to meet with Nissan to discuss the Renault split plan, Russia issues. (AutoNews)


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  Volvo (VLVLY) - Foresees a SEK 4bln negative impact on operating income due to the war in Ukraine. (Reuters)


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  Atlantia (ATASY), Blackstone (BX) - Edizione and Blackstone plan EUR 22/shr bid for Atlantia, may increase to EUR 24/shr after the stock benefitted amid leaks. Bid could be launched around Easter.  (Reuters)

CONSUMER CYCLICAL:

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  Amazon (AMZN) - Accused new NYC warehouse union of threatening workers unless they voted to organise; NLRB gives Amazon until April 22nd to back up its objections to last week's election in New York; Amazon requested extra time to provide evidence because its objections are "substantial". (Reuters)


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  WestRock Company (WRK) - Announced it will permanently cease operations at its mill in Panama City Florida, which produces containerboard, primarily heavyweight kraft, and fluff pulp, with a combined annual capacity of 645,000 tons. Select grades of containerboard currently produced at the mill will be manufactured at other WestRock facilities. (WRK)


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  Best Buy (BBY) - CEO said Berkshire Hathaway's investment in HP supports Best Buy's view that consumer demand for tech upgrades will sustain. (CNBC)


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  Frasers Group (SDISY), Hugo Boss (BOSSY) - Frasers increased stake in Hugo Boss. (MarketWatch)

CONSUMER STAPLES:

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  Walmart (WMT) - Raises driver pay and launches private fleet development programme; Walmart drivers can now make up to USD 110,000 in their first year with the company. (WMT)


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  PriceSmart (PSMT) - Q2 EPS 1.03 (vs. 0.92 Y/Y), Q2 revenue USD 1.04bln (exp. 937.6mln Y/Y). Net merchandise sales groth +12.6% (vs. +10.3% Y/Y). 12-month trailing membership renewal rate 89.8%. (PSMT)

FINANCIALS:

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  Canadian Banks - Canada is imposing a one-time windfall levy on major banks, and permanently increasing their income tax rates. The budget plan suggests it would cost banks an additional CAD 6.1bln in tax over five years. (Bloomberg)


• 
  Western Alliance Bancorporation (WAL) - Announced two retirements from its Board. (WAL)

08 Apr 2022 - 09:18- EquitiesResearch Sheet- Source: Newsquawk