US EARLY MORNING: US index futures pare some of Thursday’s downside after reports Blinken/Lavrov will meet next week

Analysis details (10:07)

US Equity futures are firmer after the sharp downside seen on Thursday, with E-Mini S&P hovering beneath 4400, a level which gave way in late trade Thursday; E-mini-Russell futures are seeing marginal outperformance, but all indices are up by a similar magnitude. Geopolitics has been driving the price action, with optimism overnight after the US State Department announced Secretary of State Blinken will meet with Russian Foreign Minister Lavrov late next week, which could put on hold any imminent escalations. However, reports this morning note that Russia will carry out strategic drills over the weekend that President Putin will personally oversee, while the drills will involve the launching of ballistic and cruise missiles. The optimism in equity markets is being matched with downside in both WTI and Brent, adding to recent losses after the rally in recent weeks, perhaps as some profit taking takes place amid the apparent easing of tensions, but also while apparent progress is being made on the Iran deal, both bearish factors for crude. However, the Russia/Ukraine situation remains very fluid and will continue to dominate a headline-driven market. Treasuries are flat across the curve although there is a slight flatter bias with the long-end paring some of its weakness seen after a dismal 30yr TIPS auction Thursday. Highlights today will remain around geopolitics, but also Fed Speak with Evan’s, Waller, & Williams speaking – Evans is typically a dove, Waller typically a hawk, and Williams tends to be on the neutral side; the commentary may offer insight into the more centrist members of the FOMC after hawks have recently captured all the attention. Recently, the Fed's Bullard (2022), who has been calling for 100bps of hikes by July 1st , which he said can be managed many ways; Mester (2022) overnight reiterated support for a March hike, and that it would be appropriate to lift rates at a faster pace than in the GFC, but the Fed can increase the pace in H2 if inflation does not ease. Vice Chair Brainard is also due to speak later, but on Central Bank Digital Currencies. Aside from Fed and geopols, data is rather light but it’s option expiry day therefore there may be some added volatility.

COMING UP

• 10:00 GMT/05:00 EST: Belgian Consumer Confidence Indx (Feb)


• 11:45 GMT/06:45 EST: Deere & Co (DE) (preview here)


• 12:00 GMT/07:00 EST: DraftKings Inc (DKNG)


• 13:30 GMT/08:30 EST: Canadian Retail Sales (Dec.)


• 14:30 GMT/09:30 EST: Feb 2022 Option expiry for E-mini S&P, Nasdaq, Dow Jones


• 15:00 GMT/10:00 EST: EU Flash Consumer Confidence (Feb.)


• 15:00 GMT/10:00 EST: US Existing Home sales (Jan.)


• 15:15 GMT/10:15 EST: Fed's Evans (2023 Voter, Dove) & Waller (Voter, Hawk) speaking on New Policy Strategy


• 16:00 GMT/11:00 EST: Fed's Williams (Voter, Neutral) speaking on the Economic Outlook


• 18:00 GMT/13:00 EST: US Baker Hughes Rig Count


• 18:30 GMT/13:30 EST: Fed’s Brainard & ECB's Panetta speaking on CBDC


• Full Newsquawk Calendar available here.
  


• Full Newsquawk Earnings Calendar available here.

STOCK SPECIFICS

Technology

• CHIPS: Intel (INTC) CEO says co. would be interested in participating in a chip industry consortium to invest in Arm if there is one; says there has been chatter about a consortium to own Arm even before the deal with Nvidia (NVDA). Adds, Tower Semiconductor (TSEM) acquisition does not change its investment plans in Europe. (Rtrs)


• Intel (INTC) CFO guides 2022 (USD): EPS 3.50 (exp. 3.54), revenue 76bln (exp. 73.35bln), and Gross Margin 52%, net capital spending 27bln. Sees long term growth in mid-high single digits for 2023 and 2024, rising to 10-12% by 2026. (Rtrs)


• Norton Life Lock (NLOK) revised its timeline to close the merger with Avast to April 4th, 2022. (PR Newswire)


• DropBox (DBX) beat on EPS and revenue although revenue guidance for Q1 and FY22 was light; Q4 2021 (USD): EPS 0.41 (exp. 0.378), revenue 565mln (exp. 558mln). Q1 revenue view 557-560mln (exp. 562mln), OM view 330-32%. FY22 revenue view 2.32-2.33bln (exp. 2.36bln). FY22 GM view 81%, OM view 29%. FY22 FCF view 760-790mln. (Businesswire)


• Cathie Wood's Ark Invest sold 4.8mln shares of Palantir (PLTR) Thursday after a disappointing report

Real Estate

• Digital Realty (DLR) earnings were more or less inline but leaning on the softer side with a weaker than expected FY22 core FFO forecast; Q4 21 (USD): Core FFO 1.67 (exp. 1.68), revenue 1.1bln (exp. 1.1bln). FY22 core FFO view 6.80-6/90 (exp. 6.90), revenue 4.7-4.98bln). (PR Newswire)

Consumer Discretionary

• Amazon (AMZN) ordered to pay contract drivers a minimum rate in Australia’s New South Wales. (Rtrs)


• Tesla (TSLA) recalls 26k China-Made Model 3 and Y vehicles, according to China market regulator. (Rtrs)


• Shake Shack (SHAK) posted a smaller loss per share than expected while revenue was inline, but guidance disappointed. Q4 21 (USD): EPS -0.11 (exp. -0.17), revenue 203mln (exp. 203mln). Same Shack Sales +20.8% Y/Y. Q1 revenue view 196-201mln (exp. 211mln). (Businesswire)


• Host Hotels (HST) Q4 2021 (USD): FFO 0.29 (exp. 0.19). RevPAR +13% Q/Q). (Host Hotels)

Industrials

• Air Lease (AL) Q4 2021 (USD): Adj. EPS 1.75 (before tax) (exp. 0.84), revenue 597mln (exp. 533mln). Announces USD 150mln share buyback programme. (Businesswire)

Communication

• Roku (ROKU) Q4 2021 (USD): EPS 0.17 (exp. 0.07), revenue 865mln (exp. 894mln), Q1 revenue view 720mln (exp. 749mln). Gross profit view 360mln, adj. EBITDA view 55mln (Exp. 78mln). In Q4, reached 60.1mln accounts, net increase of 8.9mln Y/Y. FY22 revenue view 2.765bln (exp. 2.79bln). (Businesswire)


• Snap (SNAP) CFO sold 26.1k shares of common stock for USD 1.04mln. (SEC)


• Liberty Global (LBTYA) Q4 2021 (USD): Q4 2021 (USD): Revenue 1.92bln (exp. 1.93bln). Adj. EBITDA -46.8% Y/Y to 690mln. FY22 adj. EPS growth seen up mid-single digits. (Businesswire)

Materials

• DuPont (DD) is close to selling its mobility and materials business for USD 11bln to Celanese, deal could be announced as soon as Friday, according to sources. (BBG)


• Sherwin Williams (SHW) has named Heidi G Petz as COO from March 1st. Petz served in senior leadership roles in The Americas Group. (PR Newswire)

Industrials

• Northrop Grumman (NOC) has been awarded a USD 252mln hybrid contract from the Navy. (DoD)

Utilities

• Consolidated Edison (ED) Q4 21 (USD): Adj. EPS 1.00 (exp. 0.85), revenue 3.42bln (exp. 2.76bln). FY22 adj. EPS 4.40-4.60 (exp. 4.48). (PR Newswire)

Health Care

• Abbott (ABT) voluntarily recalls powder formulas manufactured at one plant, including Similac, Alimentum, and EleCare, manufactured at the Sturgis, Michigan, plant. (PR Newswire)

Consumer Staples

• Pilgrims Pride (PPC) lower after Brazil’s JBS backs down from plans to acquire the remaining shares of PPC. (Rtrs)

SPAC

• Digital World Acquisition Corp (DWAC) Former US President Trump’s new social media application opens to hundreds of testers ahead of expected launch. (Rtrs)

18 Feb 2022 - 10:07- Fixed IncomeResearch Sheet- Source: Newsquawk