Traders Market Weekly: Independence, Precious and Formative

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    Notable conferences in the week ahead include:

    H.C. Wainwright 1st Annual Mental Health Conference,
    Cantor Fitzgerald Technology ESG Conference,
    Wells Fargo’s 2022 Virtual Bricks to Clicks Digital Conference,
    Morgan Stanley’s Putting the Tech in Biotech Conference
    Stifel Virtual Cell Therapy Conference.


    Proxy firm ISS could come out with its recommendation on Healthcare Realty Trust’s (HR) planned acquisition of medical building REIT Healthcare Trust of America (HTA).

    The vote is scheduled for July 15 and ISS generally comes out with their opinion about two weeks prior to a vote.


    On Monday Shareholders with Agrico Acquisition Corp. (RICO) meet to vote on the SPAC deal to combine with vertical farming company Kalera. Shares of Kalera will transition from its current Euronext Growth Oslo listing to a publicly listing on the NASDAQ.

    Kalera joins several other vertical farming companies that have gone public through SPAC deals, including Local Bounti (LOCL), Benson Hill (BHIL), and AppHarvest (APPH).


    Tuesday – June 28

    All day – The two-day FedEx (FDX) investor and analyst meeting will begin with new CEO Raj Subramaniam expected to outline the company long-term strategy and forecast.
    All day – The Shopify (SHOP) 10-for-1 stock split will become effective at the end of the trading day.
    All day – Hewlett Packard Enterprise Company (HPE) will hold its three-day edge-to-cloud HPE Discover conference. CEO Antonoio Neri will give a keynote address.
    All day – The WWD Metaverse Symposium will brings together tech firms, beauty and fashion-industry executives to discuss opportunities in the the metaverse. Speakers will include reps from Roblox (RBLX), Nike (NKE), Accenture (ACN), Meta Platforms (META), and L’Oreal (OTCPK:LRLCF).
    All day – Avalara (AVLR) will host a Virtual Analyst Day event. Shares of Avalara gained 2% the last time the company held an analyst day.
    12:00 p.m. The J.D. Power 2022 U.S. Initial Quality Study will be released covering automobile brands. The study will include Tesla (TSLA) for the first time in its industry average.


    Wednesday – June 29
    All day – The deadline will hit at the end of the day for Nikola (NKLA) shareholders to vote for a proposal to increase the number of shares of the company’s stock. The company’s proposal would increase the number of shares outstanding to 800M from 600M. Nikola’s largest shareholder, founder Trevor Milton, reportedly opposes the measure.
    All day – It is the distribution date of Cryptyde to shareholders of Vinco Ventures (BBIG). BBIG holders will receive one share of Cryptyde (TYDE) common stock for every ten shares of Vinco common stock held. Cryptyde is a crypto upstart focused on leveraging blockchain technologies to disrupt consumer facing industries.
    10:15 a.m. Performance Food Group Company (PFGC) will host an investor day event.


    Thursday – June 30

    All day – The launch window opens for the Virgin Orbit (VORB) LauncherOne two-stage orbital launch vehicle. The mission, which will be Virgin Orbit’s third operational launch, will include carrying seven small satellites for government agencies sponsored by the U.S. military’s Space Test Program.
    All day – Watch IN8bio (INAB), Iovance Biotherapeutics (IOVA), Vor Biopharma (VOR), and Allogene Therapeutics (ALLO) with the companies all lined up to present at the Stifel Virtual Cell Therapy Conference.
    8:00 a.m. Talaris Therapeutics (TALS) will hold a data update conference call on Freedom-1. Shares of Talaris have been active in the past following Freedom-1 updates.
    9:00 a.m. – Spirit Airlines (SAVE) will holder a postponed shareholder vote on its planned sale to Frontier (ULCC). The vote comes after JetBlue (JBLU) raised its latest offer for Spirit to $33.50.
    1:30pm – Sailpoint Technologies (SAIL) will hold a shareholder vote on its planned sale to Thoma Bravo. Investors have focused on the $6.9 billion SAIL deal after the tech PE firm reduced its purchase price for its acquisition of Anaplan.


    Friday – July 1

    All day – Watch for updates on monthly deliveries from Chinese automaker Li Auto (LI), Nio (NIO), and XPeng (XPEV). Tesla (TSLA) could also post its quarterly deliveries report. In the casino sector, the Macau gross gaming revenue report for June is also due out with a disappointing tally expected to be released for the local properties for Las Vegas Sands (LVS), Wynn Resorts (WYNN), and MGM Resorts (MGM).
    All day- Oasis Petroleum (OAS) merger with Whiting Petroleum (WLL) is scheduled to close.


    Barron’s mentions over the weekend:
    Carvana’s (NYSE:CVNA) tower of problems is highlighted in the cover story. The auto retailer is in the spotlight, with some customers complaining about the registration and titling process. In Carvana’s home state, the Arizona Department of Transportation is noted to have received more than 80 complaints about the company over a four-year period.

    The breakdown on Starbucks (NASDAQ:SBUX) in the issue was more positive, with the China business expected to finally turn around. Valuation makes sense to some analysts, with SBUX trading at just over 22X 12-month forward earnings vs. the five-year average of 27.3X. Of note, closing that gap to 25X 2024 earnings would put the stock at $98, up about 30% from the current level. Finally, the question of which are the cheapest stocks for investors to consider is tackled.

    Home builders and steelmakers dominate the list of value plays, led by D.R Horton (DHI), Lennar (LEN), Toll Brothers (TOL), Cleveland-Cliffs (CLF), Nucor (NUE), Stelco Holdings (OTCPK:STZHF), Steel Dynamics (NASDAQ:STLD) and U.S. Steel (NYSE:X).


    The global equity markets are starting the week off strong. S&P Futures are up about 19 points to trade around the 3935 area. The market picked up where it left off on Friday, extending gains. The 3900 zone acted as support with the low print residing at 3895.50. Spoos have eased off the high, established at 3948.00.

    S&P Futures vs Fair Value: +20.0
    10 yr Note: 3.162%
    USD/JPY: 135.13 -0.08
    EUR/USD: 1.0581 +0.0021
    Europe: FTSE: +0.6% DAX: +1.1% CAC: +0.5%
    Asia: Hang Seng: +2.4% Shanghai: 0.9% Nikkei: +1.4%
    Gold (1840.60 +10.30) Silver (21.51 +0.39) Crude (107.13 -0.49)


    In Asia, China rose 0.9% while Japan gained 1.4%. The Shanghai Composite continued its winning ways after a report showed Chinese Industrial Profits shrank at a slower pace in May. There was also chatter from a PBOC advisor suggesting the central bank may introduce special national bonds that would not count as financial deficits. In Japan, the Nikkei took its winning streak to three sessions. Technology names were among the leaders with heavyweights such as SoftBank, Tokyo Electron and Advantest surging 3-5%.

    In Europe, the major bourses are firmly in positive territory. Commodity stocks are on the move higher with metals firming this morning. Miners such as Antofagasta, Glencore and Anglo American are up by 2-3%. Luxury retail names are also hot with the likes of LVMH and Richemont gaining about 2%.


    Equity indices in the Asia-Pacific region began the week on a higher note.

    Some coronavirus-related restrictions were lifted in China.
    Officials from South Korea, Japan, and the U.S. are planning to meet on the sidelines of the NATO summit on June 29.
    The Bank of Japan’s June summary of opinions noted that the recent increase in CPI has been fueled by food and energy and that the upward pressure on yields is likely to remain.
    Japan’s government is considering payments to households that reduce their energy use.

    —Equity Markets—

    Japan’s Nikkei: +1.4%
    Hong Kong’s Hang Seng: +2.4%
    China’s Shanghai Composite: +0.9%
    India’s Sensex: +0.8%
    South Korea’s Kospi: +1.5%
    Australia’s ASX All Ordinaries: +1.9%


    China’s May Industrial Profit 1.0% YTD (last 3.5%)
    Japan’s May Leading Index 102.9 (last 100.8) and Coincident Indicator 0.0% m/m (last 0.5%)
    Hong Kong’s May trade deficit HKD36.70 bln (last deficit of HKD36.60 bln). May Imports 1.3% m/m (last 2.1%) and Exports -1.4% m/m (last 1.1%)


    Major European indices trade on a mixed note while Italy’s MIB (-0.6%) underperforms.

    G7 leaders are expected to announce a ban on imports of Russian gold and are also planning to cap the price of Russian oil.
    French Finance Minister Le Maire said that rent increases in France will be limited to 3.5% for a year.
    The British parliament will vote on a plan to override elements of the Northern Ireland protocol later today.

    —Equity Markets—

    STOXX Europe 600: +0.4%
    Germany’s DAX: +0.6%
    U.K.’s FTSE 100: +0.5%
    France’s CAC 40: -0.2%
    Italy’s FTSE MIB: -0.6%
    Spain’s IBEX 35: -0.2%


    France’s May jobseekers 2.933 mln (last 2.955 mln)
    Spain’s May PPI 43.6% yr/yr (last 45.0%)


    S&P 500 futures are 0.4% above fair value;
    Nasdaq 100 futures are 0.3% above fair value;
    DJIA futures are 0.4% above fair value

    Key factors driving the futures market:

    Rebound momentum carrying over from last week
    Expectation that quarter-end rebalancing will drive further upside
    Russia experiences fist major foreign debt default since 1918
    IMF cuts U.S. 2022 GDP to 2.9% from 3.7%; says U.S. should narrowly avoid recession
    G7 leaders pushing import ban on Russian gold and looking at plan to put price cap on Russian oil
    China loosens some COVID restrictions
    San Francisco Fed President Daly (non-FOMC voter) notes she sees additional tightening beyond the neutral rate
    TSA reports highest traffic levels since early 2020

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