Hammerstone Markets Early Look

By admin | 03/21/2022

Monday, March 21, 2022

After posting the best weekly return since November 2020, where the S&P 500 rose 6.2%, the Dow rose 5.5% and the Nasdaq rose 8.2%, U.S. futures are looking slightly lower as the dollar gained ground alongside a bounce in commodity prices, as oil jumps 4% after losing ground last week. Stocks pushed passed resistance levels last week, closing at the highs for the last 4-days of the week, undeterred by a more aggressive interest rate outlook from the Fed after raising rates last week for the first time post-pandemic and as the Russia invasion of Ukraine neared the end of its first month with no conclusion in sight. Later today, President Joe Biden will host a call with European leaders to discuss coordinated responses to the war. Overnight a Boeing (BA) 737 passenger plane operated by China Eastern Airlines Corp. carrying more than 130 people has crashed in southern China, the country’s state media reported. China’s President Xi said is “shocked” over the jet crash in China and has ordered a probe into the potential cause. Will markets extend last week gains, as it approaches the 200-day moving average resistance (4,463 for the S&P) or is it a Bear market rally as Morgan Stanley strategist Mike Wilson says, saying the U.S. economy is in late-cycle expansion phase and investors should use strength to position defensively, according to Bloomberg. In Asian markets, The Nikkei Index rose +0.65% to 26,827, the Shanghai Index was up 2 points to 3,253, and the Hang Seng Index slipped -101 points or 0.89% to settle at 21,221. In Europe, the German DAX is down a few points to around 14,400, while the FTSE 100 is up +0.6% to 7,450. Oil popping on reports EU governments will consider whether to impose an oil embargo on Russia over its invasion of Ukraine as they gather this week with U.S. President Joe Biden.

Market Closing Prices Yesterday

·      The S&P 500 Index jumped 51.45 points, or 1.17%, to 4,463.12

·      The Dow Jones Industrial Average rose 274.17 points, or 0.80%, to 34,754.93

·      The Nasdaq Composite surged 279.06 points, or 2.05%, to 13,893.84

·      The Russell 2000 Index advanced 21.12 points, or 1.02% to 2,086.14

Economic Calendar for Today

·      :30 AM ET                   National Activity index for February

Earnings Calendar:

·      Earnings Before the Open: AUID, MRNS

·      Earnings After the Close: AUGX, DAVE, DRIO, FAT, HRT, KERN, NKE, SSKN, TELA

Other Key Events:

·      Piper Annual Energy Conference, 3/21-3/23, in Las Vegas

·      Oppenheimer Transportation Technology Bus Tour (virtual), 3/21-3/22

·      Society of Gynecologic Oncology, 3/18-3/22, in Phoenix

Sector News Breakdown

Consumer

·      General Motors (GM) bought out SoftBank’s stake in self-driving startup Cruise for $2.1 billion on Friday

·      Texas Roadhouse (TXRH) authorizes $300M share repurchase program

·      Wendy’s (WEN) mentioned positively in Barron’s saying the stock may give investors more bang for their buck than its fast-food competitors as its international exposure is limited and with rising food costs, more people might seek inexpensive fast food

Energy

·      European Union governments will consider whether to impose an oil embargo on Russia over its invasion of Ukraine as they gather this week with U.S. President Joe Biden for a series of summits designed to harden the West’s response to Moscow – Reuters

·      Kinder Morgan (KMI) and Enbridge (ENB) have asked the Federal Energy Regulatory Commission not to apply a tough new climate standard to pipeline and liquefied natural gas projects already under review, the Houston Chronicle reports.

·      Murphy Oil (MUR) still sees production 164 to 172 MBoe/d; still sees capital expenditure $840 million to $890 million; says increasing debt reduction goal to $600 million-$650 million in FY 2022 (assumes $85 WTI oil price in FY 2022)

·      Halliburton (HAL) said it’s winding down operations in Russia and will halt future business in the nation

·      Schlumberger (SLB) said it will suspend new investment and technology deployment to its Russian operations

Financials

·      Berkshire Hathaway Inc. (BRK/A) agreed to buy insurer Alleghany Corp. (Y) for about $11.6 billion in cash; Berkshire said it will pay $848.02 a share for Alleghany, a 25.3% premium to Friday’s closing price of $676.75 https://bit.ly/3tt3RLa

·      Coinbase (COIN) was named a new short by Jim Chanos of Kynikos Holdings after the bell on CNBC

·      Brookfield Business Partners LP (BBU) struck a deal late Friday worth around $1.1 billion with institutional partners to buy La Trobe Financial.

Healthcare

·      Moderna (MRNA) signed an agreement with the Swiss Federal Government to supply seven million doses of Moderna’s COVID-19 booster vaccine; delivery of doses is anticipated in 2023; deal also allows an additional option of seven million doses for delivery in 2023 and 2024.

·      Allena Pharmaceuticals (ALNA) shares plunged post-market after the drugmaker decided to terminate the development of its treatment reloxaliase

·      eHealth (EHTH) downgraded to Neutral from Buy at Citigroup and slash tgt to $15 from $37

Industrials & Materials

·      A Boeing (BA) 737 passenger plane operated by China Eastern Airlines Corp. carrying more than 130 people has crashed in southern China, the country’s state media reported. The plane crashed in the southern province of Guangxi on Monday, Xinhua News Agency reported (watch shares of Boeing parts suppliers such as SPR on potential weakness)

·      China’s President Xi is “shocked” over the jet crash in China, in which a Boeing passenger jet carrying 133 people crashed in China’s southwestern province of Guangxi, and has ordered a probe into the potential cause

·      Gatos Silver (GATO) announces that it intends to delay the filing of its annual report on Form 10-K for the year ended December 31, 2021, which includes its audited consolidated financial statements as at and for the year ended December 31, 2021

·      KBR (KBR) won a five-year $640M Ground Systems and Mission Operations-3 contract to support more than 10 NASA exploration missions, including continued efforts on the James Webb Space Telescope, Lunar Reconnaissance Orbiter and Earth Observing System.

Technology, Media & Telecom

·      Anaplan (PLAN) agreed to be acquired by private-equity firm Thoma Bravo for $66 a share, or $10.7 billion, confirming a report overnight by the WSJ https://on.wsj.com/3KZiiMD

·      Nielsen Holdings PLC (NLSN) shares slide -17%; rejected a roughly $9 billion takeover offer from a private-equity consortium. Nielsen said Sunday it wouldn’t proceed with a bid that would have valued the company at $25.40 a share without naming members of the consortium behind the bid. Last week, the WSJ reported Elliott Management Corp. was part of a private-equity group in advanced talks to buy the company for roughly $15 billion including debt.

·      Cyber security named mentioned favorably in Barron’s saying as Russia’s economy crumbles due to sanctions and divestment, state-linked hackers are likely to shift from ransomware crimes to even more destructive attacks, which could be a boon for cybersecurity firms like Palo Alto Networks (PANW), which saw revenue jump 30% in its most recent quarter

·      Walt Disney’s (DIS) Shanghai resort and parks will close temporarily starting March 21 as the Chinese city reports record new COVID-19 infections

Please be sure to check out The Hammerstone Feed; News and Analysis for the Informed Trader at https://www.hammerstonemarkets.com/trial

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