Early Look

Thursday, April 21, 2022

Futures	Up/Down	%	Last
Dow	215.00	0.62%	35,296
S&P 500	35.25	0.80%	4,491
Nasdaq	159.50	1.14%	14,163

 

 

Stock futures in the U.S. pointing to a higher open, currently trading at overnight highs. After the tech-heavy Nasdaq declined Wednesday following NFLX’s first drop in subscribers in a decade (sending shares down over 35% and pressuring high multiple tech/growth stocks), EV maker TSLA shares surge overnight more than 7% after Q1 results top expectations led by strong margins. Most S&P 500 sectors ended higher on Wednesday, led by Industrials (led by transports), Healthcare and several defensive ones including Utilities, Staples, and REITs. Transports look to a good start today as well after airline UAL provided upbeat profit outlook for next quarter and rail CSX results topped estimates. The U.S. 10-Year Treasury yield hit highs around 2.9810% yesterday, but has since reversed, and is now in the 2.87% area. In Asian markets, Chinese indexes resume slide and yuan hits a fresh 6-month low after President Xi’s speech; the Nikkei Index jumped 335 points or 1.23% to 27,553, the Shanghai Index fell -71 points or 2.26% to 3,079, and the Hang Seng Index fell -262 points or 1.25% to 20,682. In Europe, the German DAX is up 175 points or 1.2% to 14,540, while the FTSE 100 is little changed around the 7,625 level. Another busy day of corporate earnings on deck as we just start heating up, while investors get a moderate doe of economic data with weekly jobless claims, Philly Fed survey and Leading Indicators. Bitcoin prices up 2% to $42,200 in a bounce back week, while the buck takes a breather.

 

Market Closing Prices Yesterday

• The S&P 500 Index dropped -2.76 points, or 0.06%, to 4,459.45
• The Dow Jones Industrial Average rose 249.59 points, or 0.71%, to 35,160.79
• The Nasdaq Composite declined -166.59 points, or 1.22%, to 13,453.07
• The Russell 2000 Index advanced 7.42 points, or 0.37% to 2,038.19

 

Economic Calendar for Today

• 8:30 AM ET          Weekly Jobless Claims…est. 180K
• 8:30 AM EST        Continuing Claims…est. 1.455M
• 8:30 AM ET          Philly Fed Index for April…est. 21.0
• 10:00 AM ET        Leading Indicators m/m for March…est. +0.3%
• 10:30 AM ET        Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

• Earnings Before the Open: AAL. ALK, AN, BANC, BKU, BX, COLB, DGX, DHR, DOW, EWBC, FCX, GPC, HBAN, HOMB, HRI, IIIN, KEY, MMC, NEE, NUE, PM, POOL, SASR, SNA, SNV, SON, STBA, T, TPH, TSCO, UNP, WSO
• Earnings After the Close: ASB, BJRI, CSTR, FE, FOR, GBCI, HTH, ISRG, OZK, PPG, SAM, SIVB, SNAP, UFPI, WAL, XM

 

 

Macro	Up/Down	Last
Nymex	1.13	103.32
Brent	1.13	107.93
Gold	-7.60	1,948.00
EUR/USD	0.0066	1.0916
JPY/USD	0.06	127.93
10-Year Note	+0.039	2.875%

 

 

World News

• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -25 vs -32.6 last week; Bulls rise to 18.9% from 15.8%, Neutrals rise to 37.3% from 35.7% and Bears fall to 43.9% from 48.4%
• China Pres Xi said the global economic recovery is fragile & weak, efforts are needed to stabilize global supply chains, China’s economy is resilient & the sound L/T term trend hasn’t changed, China will still open the economy, countries should stop their cold war mentality & avoid confrontation, China is opposed to 1 sided sanction, a decoupling & shutting off supply with pressure tactics by any country won’t work
• President Vladimir Putin said Russia has “liberated” Ukraine’s Mariupol, apart from the massive Azovstal steel plant, which he ordered blockaded. Kyiv has called for urgent talks to save the lives of the fighters and civilians in Mariupol
• Eurozone March CPI +2.4% for Month; +7.4% on Year; Eurozone March Core CPI +1.2% on Month; +2.9% on Year
• The U.S. Centers for Disease Control and Prevention has asked the Justice Department to move forward with an appeal of a ruling that lifted a travel mask mandate – CNBC

 

Sector News Breakdown

Consumer

• Tesla Inc. (TSLA) shares rise 6%; 1Q EPS $3.22 vs est. $2.26 on revs $18.8B vs est. $17.8B; automotive gross margin 32.9% vs 26.5% year ago; chip shortages and covid been weighing on supply chain; sees factories likely to run below-capacity thru rest of 2022; says over multi-year horizon expects to achieve 50% avg annual growth in vehicle deliveries; Q1 FCF $2.2B (watch shares of other EV stocks NKLA RIVN LCID NIO and charging BLNK CHPT on results)
• Carvana (CVNA) shares fell -5%; Q1 EPS loss ($2.89) vs. est. loss ($1.43); Q1 revs $3.497B vs. est. $3.4B; Q1 retail units sold totaled 105,185 an increase of 14%; expects to close acquisition of Adesa in May; expect to continue to gain significant market share in 2022 through continued growth in retail units and revenue; filed to sell up to $1 bln in stock
• Scotts Miracle-Gro (SMG) downgraded to Equal Weight from Overweight at Barclays
• Sleep Number (SNBR) 1Q EPS $0.09 vs est. $0.33 on revs $537Mm vs est. $534.4Mm, gross margin 57.3%; guides FY EPS $5.00-6.00 vs est. $5.77, sees sales +low-dbl-digit vs est. +7.6%
• United Airlines (UAL) shares rise 3% on upbeat outlook; Q1 EPS loss (-$4.24) and revs fell -21% to $7.6B vs. est. $7.68B; reported Q1 cost per available seat mile of up 21%, and CASM ex of up 18%, compared to q1 2019; expects to return to profitability in q2 on a robust operating revenue outlook; expects to be solidly profitable in q2 with approximate 10% operating margin, despite cost headwinds driven by recent fuel price spike
• Dave & Buster’s Entertainment Inc. (PLAY) said in a filing that Kevin Sheehan will have his current position of interim chief executive extended; said Mr. Sheehan’s term is indefinitely extended until a permanent CEO is appointed, or until the new agreement is terminated

 

Energy

• Chevron (CVX) downgraded to Sector Perform from Outperform at RBC Capital
• Exxon Mobil (XOM) upgraded to Outperform from Sector Perform at RBC Capital
• Kinder Morgan (KMI) Q1 EPS $0.32 vs. est. $0.28; Q1 revs $4.29B vs. est. $3.62B; budgeted to generate 2022 DCF of $4.7B and adjusted ebitda of $7.2B; raises dividend
• Southwestern Energy (SWN) upgraded to Overweight from Neutral at Piper Sandler

 

Financials

• Banner Corp. (BANR) 1Q EPS $1.27 vs est. $1.10 on revs $138.1Mm vs est. $118.67; declares qtrly cash dividend of $0.44/share
• Cohen & Steers (CNS) 1Q adj EPS $1.04 vs est. $1.02 on revs $154.2Mm vs est. $157.3Mm
• Equifax (EFX) Q1 adj EPS $2.22 vs. est. $2.14; Q1 revs $1.36B vs. est. $1.33B; sees Q2 EPS $1.98-$2.08 on revs $1.31B-$1.33B vs. est. $2.15/$1.32B; lowers year EPS view to $8.00-$8.30 (from prior $8.50-$8.80) and vs. est. $8.63 and sees year revs $5.15B-$5.25B vs. est. $5.29B; posts 9^th consecutive quarter of double-digit growth
• First industrial (FR) Q1 FFO $0.53 vs. est. $0.52; guides 2022 FFO $2.10-$2.20 vs. est. $2.15
• Globe Life (GL) 1Q op EPS $1.70 vs est. $1.72; sees FY op EPS $7.85-8.25 vs est. $8.08; expects to incur about $71Mm covid life claims for FY at mid-pint of guidance based on range of $2.5-3.5Mm covid life claims per 10,000 deaths
• KeyCorp (KEY) Q1 EPS 45c vs. est. 49c; Q1 revs $1.7B vs. est. $1.74B; Q1 CET1 capital ratio 9.4%; reports Q1 book value per share $14.43
• Umpqua Holdings (UMPQ) 1Q op EPS $0.36 vs est. $0.39 on NII $228.8Mm vs est. $230.2Mm
• SL Green (SLG) 1Q FFO/share $1.65 vs est. $1.64 on revs $188Mm vs est. $157.5Mm; announced that it has entered a contract to purchase 450 Park Avenue for $445.0 million from Oxford Properties
• Texas Capital Bancshares (TCBI) Q1 EPS $0.69 vs. est. $0.73; non-interest income for the first quarter of 2022 decreased $11.2 million, or 36%, compared to the fourth quarter of 2021; Q1 net intere4st income $183.5M
• Triumph Bancorp (TBK) Q1 EPS $0.93 vs. est. $0.99; Q1 revs $111.2M vs. est. $115.37M; Q1 net charge-offs .03%, Q1 CET1 capital ratio 10.4% and Q1 tangible book value per share $22.75; net interest income $100.1M

 

Healthcare

• Danaher (DHR) Q1 adj EPS $2.76 vs. est. $2.66; Q1 revs $7.7B vs. est. $7.54B; for q2 2022, co anticipates that non-Gaap base business core revenue growth will be in mid-single digit percent range; for full year 2022, company continues to expect non-Gaap base business core revenue growth will be in high-single digit percent range
• Quest Diagnostics (DGX) Q1 adjusted EPS $3.22 vs. est. $2.97; Q1 revs $2.61B vs. est. $2.63B; said off to a good start in 2022, as we drove strong year-over-year growth in our base business, which excludes COVID-19 testing
• Tenet Healthcare (THC) Q1 adj EPS $1.93 vs. est. $1.04; Q1 revs $4.745B vs. est. $4.71B; sees Q2 adjusted EPS $1.18-$1.45 vs. est. $1.54 and revs $4.8B-$5B vs. est. $4.91B; sees FY22 adjusted EPS $5.85-$7.03 vs. est. $6.56 and sees FY22 revs $19.5B-$19.9B vs. est. $19.85B

 

Industrials & Materials

• Alcoa (AA) shares fall -6%; 1Q adj EPS $3.06 vs est. $2.93 on revs $3.3B vs est. $3.45B; says has made alternate plans for securing limited number of materials purchased from Russian suppliers for remainder of 2022 into the future; expects total alumina shipments to remain unchanged between 14.2-14.4Mm metric tons in 2022
• BHP Group (BHP) backs FY22 iron ore output 249-259MT, down 2% to up 2% from last year, while cuts FY22 copper output view to 1,570-1,620kt from 1,590-1,760kt
• CSX Corp. (CSX) Q1 EPS $0.39 vs. est. $0.37; Q1 revs rose 21% to $3.41B vs. est. $3.3B; qtrly operating ratio increased by 150 basis points to 62.4%, including impacts of acquisition of quality carriers and higher fuel prices; targeting full-year double digit revenue and operating income growth, excluding impacts from the Virginia real estate transaction in 2022
• Dow Inc. (DOW) Q1 operating EPS $2.34 vs. est. $2.05; Q1 revs rose 28% to $15.26B vs. est. $14.54B; says looking ahead, we see strong demand across our end-markets; Q1 packaging & specialty plastics segment net sales in quarter were $7.6B, up 25% versus year-ago period and industrial intermediates & infrastructure segment net sales in quarter were $4.5B, up 25% y/y
• Knight-Swift Transport (KNX) 1Q adj EPS $1.61 vs est. $1.26 on revs $1.82B vs est. $1.76B; guides FY adj EPS $5.10-5.30 vs est. $5.24
• Landstar System (LSTR) Q1 EPS $3.34 vs. est. $3.05; Q1 revs rose 53% to $1.97B vs. est. $1.83B; sees Q2 revs $2.0B-$2.05B vs. est. $1.8B; expect revenue per load on loads hauled via truck in q2 2022 to be in a mid-teen percentage range y/y; sees Q2 EPS $3.22-$3.32 vs. Est. $2.78; expect number of loads hauled via truck to increase over the 2021 second quarter in a range of 11%-13%
• Steel Dynamics (STLD) 1Q adj EPS $6.02 vs est. $5.66 on sales $5.6B vs est. $5.32B, qtrly steel shipments 2.9Mm tons; raises 1Q cash dividend by 31% and repurchased $389Mm common stock; remains confident market conditions are in place for domestic steel consumption to continue to be strong this year and into 2023; sees four lines begin operating mid-2023
• Valmont Industries (VMI) 1Q adj EPS $3.07 vs est. $2.44 on revs $980.8Mm vs est. $888.1Mm; qtr end backlog record $1.8B; raises qtrly dividend from $0.50/share to $0.55/share; guides FY adj EPS $13.00-13.50 vs est. $12.66

 

Technology, Media & Telecom

• AT&T (T) Q1 EPS $0.77 vs. est. $0.75; reports rev $38.1B vs. est. $29.5B; Q1 includes about $300 mln in 3g/other timing impacts; total U.S. Wireless net adds of 5.5 mln in qtr; qtrly U.S. Prepaid net additions of 116,000; qtrly U.S. Postpaid net additions of 965,000; fiber subscribers of 6.3 mln; qtrly and fiber ARPU $60.41; HBO max and HBO added 12.8M subs, up 3M sequentially
• Lam Research (LRCX) 3Q adj EPS $7.40 vs est. $7.51 on revs $4.06B vs est. $4.25B; guides 4Q revs $3.9-4.5B vs est. $4.5B
• Crown Castle (CCI) 1Q FFO/share $1.87 vs est. $1.80 on revs $1.74B vs est. $1.69B; guides FY adj FFO/share $7.36 vs est. $4.36
• Spotify (SPOT) – the Obamas to leave Spotify, seek multimillion-dollar deal elsewhere – Bloomberg News reported

 

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

 

***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

 

Early Look

Wednesday, April 20, 2022

Futures	Up/Down	%	Last
Dow	64.00	0.18%	34,905
S&P 500	3.25	0.08%	4,463
Nasdaq	-13.50	0.09%	14,204

 

 

S&P futures are flat to slightly lower, while Nasdaq futures drop more after shares of Netflix (NFLX) lost over 25% after posting an unexpected decline in quarterly subscribers and a mixed quarter. Nasdaq futures still looking much better than overnight, down -0.2% vs. being down as much as down 1%. U.S. Treasuries extend gains; 10-year yield drops 5-bps to 2.88% which is helping sentiment (down from overnight highs of around 2.98%). The U.S. dollar is also pulling back after a recent run to 3-year highs (and more than decade highs vs. the haven Japanese yen). In Asian markets, The Nikkei Index rose 232 points to 27,217, the Shanghai Index fell -1.35% or 43 points to 3,151, and the Hang Seng Index dipped -0.4% to 20,944. In Europe, the German DAX is up over 150 points to 14,310, while the FTSE 100 gains about 30-points to 7,630. U.S. data today includes the Fed’s Beige Book, was well as existing home sales for March. Today’s Fed speakers should be the final round of Fed comments before the media blackout period ahead of the 3-4 May FOMC meeting. Another big day of earnings with PG this morning and Tesla (TSLA) after the close tonight.

Market Closing Prices Yesterday

• The S&P 500 Index jumped 70.52 points, or 1.61%, to 4,462.21
• The Dow Jones Industrial Average rose 499.51 points, or 1.45%, to 34,911.20
• The Nasdaq Composite surged 287.30 points, or 2.15%, to 13,619.66
• The Russell 2000 Index advanced 40.63 points, or 2.04% to 2,030.77

 

Economic Calendar for Today

• 7:00 AM ET         MBA Mortgage Applications Data
• 10:00 AM ET       Existing Home Sales m/m for March
• 10:30 AM ET       Weekly DOE Inventory Data

 

Earnings Calendar:

• Earnings Before the Open: ABT, ANTM, BHLB, BKR, CMA, GATX, HCSG, LAD, MKTX, MTB, NDAQ, PG, USAP, TCBI
• Earnings After the Close: AA, BANR, BDN, CCI, CNS, CSX, EFX, EGBN, GL, GSBC, INBK, KALU, KMI, KNX, LRCX, LSTR, MIND, MMLP, RLI, SEIC, SLG, SNBR, STLD, TBK, TCBI, THC, TSLA, UAL, UMPQ, VMI

 

 

Macro	Up/Down	Last
Nymex	0.75	103.31
Brent	0.88	108.13
Gold	-4.20	1,954.80
EUR/USD	0.0076	1.0862
JPY/USD	-1.06	127.84
10-Year Note	-0.044	2.871%

 

 

World News

• IMF Chief Economist Gourinchas said if inflation is elevated for another couple more months in advanced economies & wages pressures continue to rise, we’ll likely see more aggressive monetary policy tightening; the Russia/Ukraine war is piling onto an already elevated inflation environment
• Fed’s Bostic said yesterday the Fed shouldn’t move so fast that it chokes off growth; Neutral rate could be as low as 1.75%, inflation could be topping; he noted that real incomes adjusted for the cost of living have been falling.
• Fed’s Evans said yesterday the key U.S. interest rate to go to 2.5% — and likely higher ‘; if we get to 2.25% to 2.5% rates by December, we will be able to look at where inflation is; could raise rates by half-point increments a few times this year, with the potential that rates could eventually top 3%.
• Japan March Trade Balance larger deficit: JPY -412.4b vs JPY -100.8b consensus; Japan March Imports higher: +31.2% y/y vs +28.9% consensus; Exports lower: +14.7% y/y vs +17.5% consensus

 

Sector News Breakdown

Consumer

• Lululemon (LULU) outlines fresh 5-year financial targets, sees revenue doubling from 2021 levels by 2026, reaching $12.5 billion. Lululemon also expects to double it men’s business — having already doubled men’s sales from 2018 to 2021.
• Lithia & Driveway (LAD) Q1 adjusted EPS $11.55 vs. est. $10.09; Q1 revs $6.71B vs. est. $6.28B; qtrly used vehicle retail revenues increased 65.2%; qtrly new vehicle retail revenues increased 39.6%; announced $0.42 dividend
• Stride Inc. (LRN) Q3 EPS $1.02 vs. est. $0.84; Q3 revs $421.7M vs. est. $411.1M; Q3 adjusted EBITDA $90.3M vs. $75.0M y/y; raises FY22 revenue view to $1.645B-$1.66B from prior $1.62B-$1.64B and vs. consensus $1.63B
• Tesla (TSLA) CEO Elon Musk revealed that the automaker has now over 100,000 people in its Full Self-Driving (FSD) Beta program – note TSLA to report earnings after the close tonight

 

Energy, Industrials and Materials

• The American Petroleum Institute (API) reported weekly crude draw of -4.496M barrels, Cushing build of +0.093M barrels, gasoline build of +2.933M barrels and distillates draw of -1.652M
• Marten Transports (MRTN) Q1 EPS $0.33 vs. est. $0.26; Q1 revs rose 28.8% to $287.28M vs. est. $261.77M; Operating income improved 49.4% to $35.9 million for the first quarter of 2022 from $24.0 million for the first quarter of 2021

 

Financials

• Credit Suisse Group AG (CS) warned it will make a loss in Q1 from rising litigation costs and loan losses related to Russia; said litigation provisions will be around $740M citing developments in legal cases, and said results will be hit by around $212M in negative revenues and loan-loss provisions stemming from Russia’s invasion of Ukraine
• First Horizon Corp. (FHN) Q1 adj EPS $0.38 vs. est. $0.35; Q1 revs $707M; ROTCE of 13.0% and Adjusted ROTCE of 14.7% with tangible book value per share of $10.46
• Fulton Financial (FULT) Q1 EPS $0.38 vs. est. $0.32; Q1 net interest income was $161.3 million, $4.3 million lower than Q4; net interest margin for the q1 of 2022 increased 1 basis point, to 2.78%, from 2.77% in the fourth quarter of 2021
• Hancock Whitney (HWC) 1Q EPS $1.40 vs est. $1.31, NII $231Mm vs est. $230Mm
• Interactive Brokers (IBKR) Q1 EPS $0.82 in-line w ests; Q1 revs $692M vs. est. $696.1M; said Q1 customer accounts increased 36% to 1.81M, customer equity grew 8% to $355.9B; total DARTs decreased 24% to 2.52M; customer margin loans increased 14% to $48.2 billion; net interest income fell -8% to $282M
• M&T Bank (MTB) Q1 Non-GAAP EPS of $2.73 beats by $0.39, revenue of $1.45B beats by $20M
• PacWest Bancorp (PACW) Q1 EPS $1.01 vs. est. $1.04; tangible book value per share of $18.42 at 1q22; NIM on taxable-equivalent basis 3.43% vs. 3.69% y/y; No Provision for Credit Losses in 1Q22 vs. Benefit of $6M; core Deposits down $1.1B or 3.2%
• Rexford Industrial Realty (REXR) 1Q core FFO/share $0.48 vs est. $0.45; Consolidated Portfolio Net Operating Income (NOI) of $107.2 million, an increase of 40.9% as compared to the prior year quarter; Same Property Portfolio NOI increased 8.0% and Same Property Portfolio Cash NOI increased 11.7% as compared to the prior year quarter; guides year $1.84-$1.88 vs. est. $1.91
• United Community Banks (UCBI) Q1 EPS $0.43 vs. est. $0.54; Q1 revs $179.7M vs. est. $203.18M; Q1 net interest margin up 16-bps to 2.97% mainly due to the impact of the Reliant acquisition and the deployment of cash into securities

 

Healthcare

• Anthem (ANTM) Q1 adj EPS $8.25 vs. est. $7.81; Q1 revs $37.9B vs. est. $37.35B; raises FY22 adjusted EPS view to greater than $28.40 from prior view greater than $28.25 (est. $28.48); Q1 operating gain grew by 13.2% over the prior year quarter to $2.4 billion; Q1 Medical enrollment increased by 3.3M members y/y and 1.4M members sequentially to 46.8M members.
• Teva Pharmaceuticals (TEVA) said the FDA issued a Complete Response Letter (CRL) regarding the New Drug Application (NDA) for TV-46000/mdc-IRM (risperidone extended-release injectable suspension for subcutaneous use) for the treatment of schizophrenia

 

Technology, Media & Telecom

• Netflix (NFLX) shares down -27% after 1^st sub decline; 1Q EPS $3.53 vs est. $2.89 on revs $7.87B vs est. $7.93B; guides 2Q EPS $3.00 vs est. $3.02 and revs $8.05B vs est. $8.2B; says relatively high household penetration (including large number of households sharing accounts) and competition creating rev growth headwinds; said net lost -20K subs in quarter vs est. +2.5Mm; says in near term not growing revs as fast as would like; NFLX also lost subs in EMEA (-300K) and LATAM (-350K), lost 640K subscribers in US/Canada
• IBM Corp. (IBM) 1Q EPS $1.40 vs est. $1.38 on revs $14.2B vs est. $13.85B, op gr margin 52.9%; now sees constant currency revs growth at high end of +mid-single-digit range vs est. +5.8%; continues to expect $10-10.5B consolidated free cash flow for FY22
• Omnicom (OMC) 1Q adj EPS $1.39 vs est. $1.31 on revs $3.41B vs est. $3.29B, op margin 10.4%; says have sold or committed to dispose of all biz in Russia; raises FY22 organic growth view to 6.0%-6.5% from 5%-6%
• ASML (ASML) posted Q1 sales of 3.5 billion euros ($3.80 billion) vs. est. of 3.45 billion euros, while Q1 net income also came in above estimates; Bookings remain strong at 226 billion euros; forecast Q2 sales of 5.1-5.3 billion euros and left a forecast for full year sales growth of 20% unchanged. Net bookings in the quarter were 7 billion euros.

 

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

 

***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

 

 

Early Look

Monday, April 18, 2022

Futures	Up/Down	%	Last
Dow	-87.00	0.25%	34,271
S&P 500	-18.25	0.42%	4,369
Nasdaq	-74.50	0.54%	13,819

 

 

U.S. stock futures are looking lower, with the S&P 500 down about -0.4% to 4,370 (overnight high 4,390 and lo 4,355.50) as traders return from the 3-day holiday weekend after the S&P dropped -2.1% last week, its 2^nd straight weekly decline on rising Treasury yields, inflation and rate hike expectations by the Fed. Investors continue to weigh the prospect of faster policy tightening by the Federal Reserve, signaling a bearish start to the week. Goldman Sachs said today in a note that the Fed’s signaling on rates, which will likely deliver another seven or eight rate hikes this year, has boosted the odds of a near-term recession to around 35%. Meanwhile, U.S. natural gas prices surged to the highest intraday level in over 13 years as robust demand tests drillers’ ability to expand supplies. Last week the S&P finished week down 2.1%, and Nasdaq 100 loses 3% (both 2^nd straight week down). In Asian markets, The Nikkei Index dropped -293 points or over 1% to 26,799, the Shanghai Index dipped about -0.5% to 3,195, and in Hong Kong, the Hang Seng Index was closed. In Europe, stock markets remain closed for holiday (reopen tomorrow). Asian markets dip after China reported annual Q2 GDP of 4.8%, which topped expectations, but was still far from the goal of 5.5% growth. Gold prices hit their highest levels in since mid-March, nearing $2,000 an ounce as rising inflation fears and the uncertainty surrounding the Russia-Ukraine conflict dampens risk sentiment and drives investors towards the safety of the yellow metal. Bitcoin prices are tumbling, down 3.5% below $39,000 and Ethereum declines 4% to $2,900.

Market Closing Prices Yesterday

• The S&P 500 Index dropped -54.00 points, or 1.21%, to 4,392.59
• The Dow Jones Industrial Average fell -113.36 points, or 0.33%, to 34,451.23
• The Nasdaq Composite tumbled -292.51 points, or 2.14%, to 13,351.08
• The Russell 2000 Index declined -20.12 points, or 0.99% to 2,004.98

 

Economic Calendar for Today

• 10:00 AM ET      NAHB Housing Market Index for April

 

Earnings Calendar:

• Earnings Before the Open: BAC, BK, GNTY, SCHW, SNDA, SYF
• Earnings After the Close: CFB, ELS, ENSV, FBK, FNB, HOPE, JBHT, LAKE, NBHC, PNFP, SFBS

 

 

Macro	Up/Down	Last
Nymex	-0.13	106.92
Brent	-0.19	111.51
Gold	20.50	1,995.40
EUR/USD	-0.0015	1.0791
JPY/USD	0.20	126.61
10-Year Note	+0.041	2.849%

 

 

World News

• Goldman Sachs said history suggests that the Fed faces a hard task tightening policy enough to cool inflation without causing a recession, puts the odds of a contraction at about 35% over the next 2 years
• China Q1 2022 GDP beats estimates at 4.8% y/y (4.4% was the expected); China saw a faster-than-expected GDP growth in the first quarter, data released by the National Bureau of Statistics showed Monday, despite parts of the country being hit by Covid lockdowns in March.
• China March 2022 Industrial production beats rising +5.0% y/y (expected 4.5%), while monthly retail sales miss.
• Empire State Manufacturing Index jumped +24.60 vs. 2 consensus and -11.8 prior; new orders index climbed thirty-six points to 25.1, and the shipments index rose forty-two points to 34.5
• March Industrial Production rose +0.9% m/m vs. +0.4% expected and +0.9% prior, while Capacity Utilization was +78.3% vs. +77.8% consensus and +77.7% prior
• China’s central bank cut the amount of cash banks must hold in reserve, as the People’s Bank of China (PBoC) lowered the reserve requirement ratio for most banks by 25 basis points and for smaller banks by 50 basis points
• North Korea fired two short-range projectiles toward the east sea of the Korean Peninsula, as South Korea and the U.S. prepare for a military drill starting Monday.  The missiles were launched at around 6 p.m. Saturday and flew about 110 kilometers (62 miles) at an altitude of 25 km

 

Sector News Breakdown

Consumer

• Didi Global Inc. (DIDI) shares fall -20%; will hold an extraordinary general meeting on May 23 to vote on delisting its shares from the New York Stock Exchange – Bloomberg
• Rivian Automotive Inc. (RIVN) CEO is warning that the auto industry could soon face a looming shortage of battery supplies for electric vehicles — a challenge that he says could surpass the current computer-chip shortage. Car companies are trying to lock up limited supplies of raw materials like cobalt, lithium and nickel that are key to battery making – WSJ
• Mullen Automotive (MULN) said it company’s plans to begin EV battery pack production at California facility

 

Energy, Industrials and Materials

• Southwest Gas (SWX) announced that because of the receipt of an indication of interest well above Carl Icahn’s $82.50 per share offer, the Southwest Gas board has authorized the review of a full range of strategic alternatives to maximize stockholder value
• Utility stocks normally suffer when bond yields are rising, which typically occurs when the economy is strengthening, but the current round of higher yields has helped utility shares, and Barron’s believes their run-up is not over. Today’s higher yields are a result of the Fed trying to slow economic growth, which is scaring investors into utilities
• WTI crude for May delivery rose +2.6% Thursday to settle at a two-week high $106.95 per barrel while June Brent crude ended +2.7% to $111.70/bbl, capping respective weekly gains of 8.8% and 8.7%. U.S. natural rose to $7.30/MMBtu on Thursday, capping a 16% surge for the week, the highest for a front-month contract since October 2008.

 

Financials

• Bank of America’s (BAC) delinquency rate for March slipped to 0.93% from 0.95% in February; net charge-off rate of 1.38% increased from 1.26% in February and compared with 3.17% in the year-ago month
• Citibank (C) credit card net charge-off for March increased to 1.23% from 1.12% in February, still below 2.49% in March 2021; delinquency rate of 0.87% edged up from 0.85% in February and compared with 1.26% in the same month a year ago.
• Discover Financial Services (DFS) credit card delinquency rate 1.09% at March end vs 1.10% at February end; credit card charge-off rate 1.08% at March end vs 1.20% at February end
• JPMorgan Chase’s (JPM) March credit card delinquency rate of 0.71% was little changed from 0.72% in February and stays well below the 0.89% rate in March 2021; net charge-off rate of 1.09% in March 2022, rose slightly from 1.04% in February and compares with 2.03% y/y
• Progressive (PGR) downgraded to Underweight from Neutral at Piper Sandler
• Synchrony Financial (SYF) Q4 EPS $1.73 vs. est. $1.54; Q4 revs $3.38B vs. est. $3.61B; says board approved incremental $2.8B share repurchase authorization; Q4 net interest income $3,789M

 

Healthcare

• TG Therapeutics Inc. (TGTX) shares down -24% after saying late Friday it is pulling its Ukoniq lymphoma treatment from the market after a study showed a possible increased risk of death in patients taking the drug; also said it is withdrawing its application seeking FDA approval of Ukoniq in combo with ublituximab for the treatment of adults with chronic lymphocytic leukemia and small lymphocytic lymphoma.
• Biogen (BIIB) upgraded to Overweight from Equal Weight at Wells Fargo with a price target of $265 from $235 as believes the company’s base-business may be worth more than what Street thinks and sees value at $180-$200/share in sum-of-the-parts scenario
• Progyny Inc. (PGNY), which sells companies infertility care plans for its employees, is profitable and growing fast, according to Barron’s; says although the stock struggled during the height of pandemic, the decline in Covid-19 cases and loosening restrictions presents investors with a buying opportunity.

 

Industrials & Materials

• FedEx Corp.’s (FDX) mentioned positively in Barron’s noting its share price has changed little over the past five years, badly trailing the S&P 500, but with a new CEO set to take over for founder Fred Smith on June 1, and with a focus on improving its ground business, the company could catch up to rival UPS

 

Technology, Media & Telecom

• Twitter (TWTR) announced late Friday that its board of directors has unanimously adopted a limited duration shareholder rights plan following an unsolicited, non-binding proposal to acquire Twitter.
• Twitter Inc. (TWTR) founder Jack Dorsey’s first tweet was converted to a nonfungible token last year and sold for $2.9 million. Now, it may be resold for less than $14,000, a reflection of a maturing NFT market. Sina Estavi, CEO of Malaysia-based blockchain company Bridge Oracle, paid $2.9 million last March for the NFT, a digital certificate that says he owns Mr. Dorsey’s tweet, which reads “just setting up my twttr.” – WSJ https://on.wsj.com/3uOIvZ8
• Intel (INTC) is considering expanding its outsourced backend operations to include PC-use chipsets, and Powertech Technology is expected to become the first Taiwan-based OSAT to win the deal, potentially in the second half of 2023 at the earliest – Digitimes
• Qualcomm (QCOM) downgraded to Neutral from Outperform at SMBC Nikko, lowering estimates, and lowering price target from $215 to $155 as struggle to find many positive catalysts in the next 6-12 months

 

 

 

 

 

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***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

 

 

 

Early Look

Thursday, April 14, 2022

Futures	Up/Down	%	Last
Dow	54.00	0.16%	34,536
S&P 500	-1.25	0.04%	4,440
Nasdaq	-1.50	0.01%	14,219

 

 

U.S. futures are looking mixed to little changed ahead of a slew of earnings results in the banking sector (C, WFC, MS, GS, USB), the European Central Bank (ECB) policy meeting and a surplus of economic data ahead of the long 3-day weekend. In corporate news, Tesla (TSLA) CEO Elon Musk offered to buy 100% of Twitter (TWTR) for $54.20 per share in cash in what he calls his “best and final offer” as the drama from last week continues into the weekend. In Asian markets, The Nikkei Index surged 328 points or 1.22% to 27,172, the Shanghai Index rose 1.22% to 3,225 and the Hang Seng Index climbed 143 points to 21,518. In Europe, the German DAX is up +0.15% to 14,100, while the FTSE 100 is up a few points to 6,580. Also in Europe, Russia threatens new nuclear deployments if Sweden, Finland join NATO. Treasury yields edging lower with 10-yr around 2.7% and oil slips after massive 2-day gain.

Market Closing Prices Yesterday

• The S&P 500 Index jumped 49.14 points, or 1.12%, to 4,446.59
• The Dow Jones Industrial Average rose 344.23 points, or 1.01%, to 34,564.59
• The Nasdaq Composite surged 272.01 points, or 2.03%, to 13,643.59
• The Russell 2000 Index advanced 38.17 points, or 1.92% to 2,025.10

 

Economic Calendar for Today

• 8:30 AM ET          Weekly Jobless Claims…est. 171K
• 8:30 AM EST        Continuing Claims…est. 1.5M
• 8:30 AM ET          Advance Retail Sales m/m for March…est. +0.6%
• 8:30 AM ET          Retail Sales – Less Autos m/m for March…est. +1.0%
• 8:30 AM ET          Import Prices m/m for March…est. +2.3%
• 8:30 AM ET          Export Prices m/m for March…est. +2.2%
• 10:00 AM ET        University of Michigan Confidence, April-P…est. 59.0
• 10:00 AM ET        Business Inventories m/m for February…est. +1.3%
• 10:30 AM ET        Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

• Earnings Before the Open: ALLY, C, GS, MS, PGR, PNC, RAD, STT, UNH, USB, WFC

 

 

Macro	Up/Down	Last
Nymex	-1.22	103.03
Brent	-1.60	107.18
Gold	-11.10	1,973.60
EUR/USD	0.002	1.0905
JPY/USD	-0.32	125.34
10-Year Note	+0.003	2.692%

 

 

World News

• Russia threatens new nuclear deployments if Sweden, Finland join NATO https://cnb.cx/3jFXM8a
• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -32.6 vs -16.7 last week as Bulls fall to 15.8% from 24.7%, Neutrals rise to 35.7% from 33.9%, and Bears rise to 48.4% from 41.4%

 

Sector News Breakdown

Consumer

• Costco (COST) raises quarterly dividend to $0.90 from $0.79
• Copa Holdings (CPA) posted an 8.4% fall in consolidated capacity (available seat miles) to 1.95B for March 2022 when compared with March 2019 numbers; Passenger traffic (revenue passenger miles) declined 6.8% from March 2019 to 1.65B for March 2022.
• Rent The Runway (RENT) Q4 EPS loss (-$0.62) vs. est. loss (-$0.70); Q4 revs $64.1M vs. est. $63.22M; sees FY22 revenue $295M-$305M vs. est. $305.02M and sees FY 22 Adjusted EBITDA margin of (6%) to (5%)
• Simply Good Foods (SMPL) announces $50M addition to share repurchase program

 

Energy, Industrials and Materials

• Grainger (GWW) downgraded to underweight from equal weight at Morgan Stanley as pace of price rises dips, PMI data points to slowing volumes and smaller competitors enter the market
• Libya’s national unity government said in a statement that it has adopted a plan to develop the country’s oil sector with the aim of increasing its output to 1.4 mln barrels per day.
• Kazakhstan said it expects its main oil-export route via Russia to restore full operations in late April.
• Airgain (AIRG) said a major U.S. water utility firm selected AirgainConnect AC-HPUE to improve connectivity of its fleet

 

Financials

• Big morning for earnings coming up with Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C), US Bank (USB), PNC Bank (PNC) and Wells Fargo (WFC) all expected
• US Bank (USB) Q1 EPS $0.99 vs. est. $0.94; Q1 revs $5.6B vs. est. $5.55B; Q1 net interest margin 2.44% vs. 2.50% a year ago; Return on average assets of 1.09% and return on average common equity of 12.7%
• Wells Fargo (WFC) Q1 revenue $17.59B vs. est. $17.77b; Total avg. deposits $1.46 trillion; common equity Tier 1 ratio 10.5%, vs. estimate 11.1%; non-interest expenses $13.87B and recovery of credit losses $787M, estimate provision $149.6M; net interest income $9.22B vs. est. $9.29B; total loans $898B vs. est. $891B; 1q provision includes $1.1b decrease in allowance for credit losses due largely to reduced pandemic-linked uncertainty on loan portfolios

 

Healthcare

• United Healthcare (UNH) Q1 adj EPS $5.49 vs. est. $5.38; Q1 revs $80.15B vs. est. $78.79B; Q1 Optum revenues grew 18.9% to $43.3B and operating earnings grew 19.8% to $3.2B; Q1 medical care ratio was 82% compared to 80.9% last year; Q1 cash flows from operations $5.3B; raises FY22 adjusted EPS view to $21.20-$21.70 from $21.10-$21.60
• OncoCyte (OCX)27M share Spot Secondary priced at $1.33
• Sanofi (SNY) said data from a phase 1/2 of rilzabrutinib to treat adults with heavily pre-treated immune thrombocytopenia (ITP) were published in The New England Journal of Medicine.
• Protagonist Therapeutics (PTGX) shares fell over -30% after announced FDA intent to rescind the Breakthrough Designation, or BTD, for Rusfertide
• Pfizer (PFE) and BioNTech (BNTX) announce data showing high immune response following booster dose of COVID-19 vaccine in children 5 through 11 years of age; booster dose of vaccine increased neutralizing antibodies by 6-fold against SARS-CoV-2 wild-type strain in 140 participants
• Supernus (SUPN) reiterates full year 2022 financial guidance provided on February 28, 2022 and reiterated on April 4, 2022; still sees FY total rev. $640M-$680M (est. $685.5M) and still sees FY operating income $130M to $165M

 

Technology, Media & Telecom

• Twitter (TWTR) shares rise 11%; Elon Musk says on April 13, 2022, delivered a letter to Twitter which contained a non-binding proposal to acquire 100% of Twitter stock not owned by the reporting person for all cash consideration valuing stock at $54.20 per share. Msck says in filing “my offer is my best and final offer”; says if offer is not accepted, “I would need to reconsider my position as a shareholder”
• Taiwan Semi (TSM) said 2022 sales may exceed upper end of the previous guidance of mid-to-high 20% in USD and doesn’t expect change to CAPEX for 2022; expects no impact from material supply Co. has multiple suppliers of gases; plans 2-nm chips production in 2025
• IBM (IBM) upgraded to Overweight from Equal Weight at Morgan Stanley with $150 tgt
• Alibaba (BABA) shares slip -2% after the Chinese Communist Party’s anti-corruption watchdog was among the agencies involved in a recent inquiry into links between billionaire Jack Ma’s Ant Group and state-owned Chinese companies, Bloomberg reported
• Ericsson (ERIC) net profit attributable to shareholders of 2.94 billion Swedish kronor ($310.2 million) compared with SEK3.17 billion a year earlier, missing the SEKSEK4.07 billion expected; Q1 revs rose 11% to SEK55.06 billion, compared with SEK54.14 billion expected
• Cambium Networks (CMBM) announced the departure of Stephen Cumming as CFO, effective immediately. The board has appointed Andrew Bronstein as CFO. Andrew previously served as CFO for Cheetah Digital; guides Q1 revs $61M-$63M, down from prior view of $77.5M-$81.5M and below est. $79.5M; shares fell -12% on guidance
• LivePerson (LPSN): Starboard value – intends to file proxy statement, white proxy card with SEC to solicit votes for its 4 nominees at LivePerson Inc 2022 annual meeting – Reuters
• Western Digital (WDC) and Seagate (STX) both downgraded to Neutral from Positive at Susquehanna

 

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***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research

 

 

 

Early Look

Wednesday, April 13, 2022

Futures	Up/Down	%	Last
Dow	103.00	0.30%	32,241
S&P 500	19.25	0.42%	4,411
Nasdaq	82.50	0.59%	14,027

 

 

Stock futures are looking to rebound following yesterday’s pullback amid a mixed inflation picture, while supply concerns amid Russia’s ongoing invasion of Ukraine helped push oil prices higher. After the prior day’s fall, the yield on 10-year edges higher at 2.73%, and the two-year yield was 2.42% (ahead of $20B auction of 30-year notes today). Oil prices rise another 1% with WTI crude back above the $102 level. Today also marks the unofficial start to earnings season with Dow component and bank giant JPMorgan (JPM) reporting this morning. Stocks fell on Tuesday, after an early morning bounce gave way to selling as investors weighed the latest U.S. CPI inflation data which showed another 40-year high. The data comes ahead of today’s producer price index (PPI) where March headline m/m PPI stands at +1.1% and on a y/y basis, to jump +10.6%; core March PPI m/m (ex food &energy) est. +0.5% and core y/y to rise +8.4%. Meanwhile, China’s race to stop the spread of COVID-19 is clogging highways and ports, stranding workers, and shutting countless factories – disruptions that are rippling through global supply chains. In Asian markets, The Nikkei Index jumped over 500 points or 1.93% to 26,843, the Shanghai Index fell -0.82% to 3,186, and the Hang Seng Index gained about 55 points or 0.26% to 21,374. In Europe, the German DAX is down over -0.9% to 13,993, while the FTSE 100 is flat at 7,575. The U.S. dollar pauses after a 9-day rally, euro falls ahead of ECB meeting tomorrow.

Market Closing Prices Yesterday

• The S&P 500 Index dropped -15.08 points, or 0.34%, to 4,397.45
• The Dow Jones Industrial Average fell -87.72 points, or 0.26%, to 34,220.36
• The Nasdaq Composite slipped -40.38 points, or 0.30%, to 13,371.57
• The Russell 2000 Index advanced 6.61 points, or 0.33% to 1,986.94

 

Economic Calendar for Today

• 7:00 AM ET         MBA Mortgage Applications Data
• 8:30 AM ET         Producer Price Index (PPI) m/m for March…est. +1.1%
• 8:30 AM ET         Producer Price Index (PPI) y/y for March…est. +10.6%
• 8:30 AM ET         PPI: Ex: Food & Energy (core) m/m for March…est. +0.5%
• 8:30 AM ET         PPI: Ex: Food & Energy (core) y/y for March…est. +8.4%
• 10:30 AM ET       Weekly DOE Inventory Data

 

Earnings Calendar:

• Earnings Before the Open: BBBY, BLK, DAL, FAST, FRC, HOFT, JPM
• Earnings After the Close: DLPN, RENT

 

 

Macro	Up/Down	Last
Nymex	1.54	102.16
Brent	1.74	106.38
Gold	6.60	1,982.70
EUR/USD	-0.000	1.0828
JPY/USD	0.64	126.02
10-Year Note	+0.008	2.735%

 

 

World News

• Blinken says that he was not able to confirm that Moscow used chemical weapons in Mariupol. Has credible information that Russia may use chemical agents to weaken and incapacitate entrenched Ukrainian fighters and civilians, as part of the aggressive campaign to take Mariupol.
• The RBNZ raised interest rates 50bps at today’s meeting vs. ests for a 25-bps hike. The RBNZ said ‘’moving the OCR to a more neutral stance sooner will reduce the risks of rising inflation. A larger move now also provides more policy flexibility ahead in light of the highly uncertain global economic environment.”

 

Sector News Breakdown

Consumer

• Delta Airlines (DAL) Q1 adj EPS loss ($1.23) vs. est. loss ($1.27); Q1 revs $9.35B vs. est. $8.92B; march-qtr adj pre-tax loss of $1.0 bln, excluding a net expense of $164M; sees June quarter 2022 non-GAAP total revenue up 93% – 97% vs June quarter 2019; sees June quarter 2022 capacity up about 84% vs June quarter 2019; March month adjusted TRASM inflected to positive versus 2019

 

Energy

• The IEA cuts oil demand forecast as China reimposes lockdowns China consumption estimate reduced by 925,000 b/d in April: global market now seen in balance for much of the year
• The American Petroleum Institute (API) reported crude inventories rose 7.8M barrels in the latest week while inventories at Cushing rose 400K barrels on the week; gasoline inventories fell -5.1M barrels and distillates fell -5.0M barrels
• A fire this past weekend at a San Francisco-area dock could force Valero Energy’s (VLO) Benicia refinery to cut fuel production, which could push sky-high local gasoline prices even higher, Bloomberg reported

 

Financials

• JPMorgan (JPM) Q1 revs $31.59B vs. est. $31.44B; Total deposits $2.56 trillion; provision for credit losses $1.46 billion larger than most ests; non-interest expenses $19.19 billion, estimate $19.46 billion; said lending strength continued, average firmwide loans up 5%
• BlackRock (BLK) Q1 adjusted EPS $9.52 vs. est. $8.84; Q1 revenue $4.7B vs. est. $4.73B; Q1 adj operating margin 44.2% and assets under management $9.67 trillion
• PayPal (PYPL) announces departure of CFO John Rainey (going to WMT); Gabrielle Rabinovitch will serve as interim chief financial officer upon Rainey’s departure
• Manning & Napier (MN) has reported prelim AUM of $20.6B for March, compared with Feb AUM of $20.8B and Jan AUM of $21.4B.
• Victory Capital Holdings (VCTR) preliminary assets under management of $178.1B as of March 31, 2022, increased from $176.0B as of Feb. 28, the company said Tuesday

 

Healthcare

• GlaxoSmithKline (GSK) is acquiring Sierra Oncology (SRRA) in a $1.9B cash deal to bolster its cancer drug portfolio. Under the agreement, outstanding shares of Sierra will be cancelled and converted into the right to receive $55 per share in cash https://bit.ly/378r9h3
• Antares Pharma Inc. (ATRS) rises +46% after the company agreed to be acquired by Halozyme Therapeutics Inc. (HALO) in a cash deal valued at $960 million; Halozyme will pay $5.60 for each Antares share outstanding, which represents a 49.7% premium to Tuesday’s closing price https://bit.ly/3KIVXmU
• Affimed (AFMD)5M share Spot Secondary priced at $4.00
• Crinetics (CRNX)63M share Secondary priced at $22.22
• Liquidia Technologies (LQDA)804M share Spot Secondary priced at $5.10
• Novavax (NVAX) rises as its protein-based COVID-19 shot receives conditional marketing authorization in Switzerland
• Bio-Path Holdings Inc. (BPTH) said the preclinical data support BP1003 combination therapy to treat breast and ovarian cancers.” The data show that BP1003 enhances the efficacy of current standard of care chemotherapies in these difficult to treat solid tumor cancers.”
• NanoString (NSTG) shares fall -20%; cuts Q1 revenue view to $31M from $34M-$38M (est. $35.8M) saying Q1 revenue fell short of expectations, impacted primarily as uneven sales execution resulted in an imbalance between capturing Q4 revenue and developing our Q1 2022 funnel of opportunities. Second, believe this was compounded by the impact of changes made to re-align our expanded commercial team early in the year

 

Industrials & Materials

• Ashland (ASH) guided Q2 adj EPS $1.50c above consensus $1.14 and sees Q2 rev $604M well above consensus $575.31M saying it saw continued strong end-market demand; Disciplined pricing and product mix actions more than offset additional inflation in raw-material
• B. Hunt (JBHT) upgraded to Buy from Hold at Deutsche Bank
• Safe Bulkers, Inc. (SB) entered into an agreement for the acquisition of a 2012-built, Chinese, dry-bulk, 181,000 dwt, Capesize class vessel for $30M

 

Technology, Media & Telecom

• Deutsche Telekom said it has bought additional shares in T-Mobile US (TMUS) from Softbank for $2.4 billion as part of a deal agreed in 2020; the purchase of the 21.2 million shares via a call option raises Deutsche Telekom’s stake in T-Mobile US to 48.4% from below 47%, as planned
• Google (GOOGL) has unveiled its plan to invest about $9.5B across its U.S. offices and data centers in 2022, up from $7B in 2021.
• Nutanix Inc (NTNX) reaffirms Q3 and full year fiscal 2022 financial guidance; appoints Rukmini Sivaraman as chief financial officer
• Squarespace (SQSP) CFO Marcela Martin announced her intention to resign as chief financial officer effective July 31, 2022; said is not a result of a disagreement with co and that she will continue until the anticipated date of departure, while SQSP searches for a new CFO
• Trimble (TRMB) entered into a definitive agreement to sell its Time and Frequency, LOADRITE, Spectra Precision Tools and SECO accessories businesses to Precisional, an affiliate of The Jordan

 

 

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

 

 

***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

 

 

 

 

Early Look

Tuesday, April 12, 2022

Futures	Up/Down	%	Last
Dow	16.00	0.05%	34,235
S&P 500	4.25	0.10%	4,413
Nasdaq	36.50	0.26%	14,036

 

 

S&P futures are edging slightly higher at the 4,413 level, bouncing off overnight lows of 4,382.25 after dropping and settling below its 200-day MA (4,487) and 50-day MA (4408) yesterday amid surging Treasury yields and ahead of key inflation data later this morning. The U.S. 10-Year Treasury yield hit 2.7930%, which was a fresh high back to January 2019, before pushing above 2.83% overnight (highest since 2018). The U.S. dollar meanwhile enters its 9^th straight day of gains ahead of the CPI report amid hawkish rate comments from Fed members over the last 2-weeks expecting more aggressive action. Ahead of today’s consumer price index (CPI) inflation report, a reminder that there’s only been one time since the start of 2021 that headline CPI came in weaker than expected (August 2021 report on 9/14/21), as per Bespoke. Today’s estimate is for March CPI m/m headline to rise +1.2% and y/y to rise +8.4%, while core CPI prices (ex food & energy) expected to rise +0.5% M/M AND +6.6% y/y. U.S. stocks closed sharply lower on Monday as investors started the holiday-shortened week in a risk-off mood, as rising bond yields weighed on growth stocks. WTI crude futures fell to their lowest level since late-February, dragging energy stocks down with it, along with defensive utilities, both big winners last week. Oil prices rise 3% overnight amid ahead of an anticipated Russian offensive, while Kyiv said it was checking reports that Russian forces had used chemical weapons in the besieged port city of Mariupol. In Asian markets, The Nikkei Index tumbled over 480 points or 1.81% to 26,334, the Shanghai Index rose 1.46% to 3,213, and the Hang Seng Index gained 110 points or 0.52% to 21,319. In Europe, the German DAX is down just over 1% to 14,045, while the FTSE 100 is down -0.5% to 7,580.

Economic Calendar for Today

• 6:00 AM ET         NFIB Small Business Optimism for March
• 7:45 AM ET         ICSC Weekly Retail Sales
• 8:30 AM ET         Consumer Price Index (CPI) m/m for March…est. +1.2%
• 8:30 AM ET         Consumer Price index (CPI) y/y for March…est. 8.4%
• 8:30 AM ET         CPI Ex: Food & Energy (core) m/m for March…est. +0.5%
• 8:30 AM ET         CPI Ex: Food & Energy (core) y/y for March…est. +6.6%
• 8:55 AM ET         Johnson/Redbook Weekly Sales
• 2:00 PM ET         Federal Budget for March…est. (-$191B)
• 4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

• Earnings Before the Open: ACI, KMX
• Earnings After the Close: None

 

Other Key Events:

• American Association for Cancer Research (AACR) Annual meeting 4/8-4/13
• Cowen Bitcoin Mining Summit (virtual), 4/12-4/13
• Needham Annual Healthcare Conference (virtual), 4/11-4/14
• Wells Fargo Biotech Forum, 4/12-4/13, in Florida

 

Market Closing Prices Yesterday

• The S&P 500 Index dropped -75.75 points, or 1.69%, to 4,412.53
• The Dow Jones Industrial Average fell -413.04 points, or 1.19%, to 34,308.08
• The Nasdaq Composite plunged -299.04 points, or 2.18%, to 13,411.96
• The Russell 2000 Index declined -14.24 points, or 0.71% to 1,980.32

 

 

Macro	Up/Down	Last
Nymex	3.69	97.96
Brent	3.89	102.37
Gold	11.70	1,960.10
EUR/USD	-0.0017	1.0866
JPY/USD	0.23	125.58
10-Year Note	+0.01	2.792%

 

 

World News

• S. NFIB March Small Business Index 93.2 vs. 95.7 in Feb
• The ZEW survey of financial analyst sentiment pointed to further declines in eurozone’s current and future conditions in April, taking the average of both components to its lowest level since March 2020. Sentiment concerning the economic development of the eurozone decreased 4.3 points in April and currently stands at minus 43.0 points.
• OPEC’s Barkindo says that current crisis in oil markets is beyond the group’s control, Russia losses could exceed 7 million b/d due to current and future sanctions or a boycott by customers.
• The U.S. State Department ordered non-emergency U.S. government workers to leave the consulate in Shanghai due to a surge in COVID-19 cases and China’s measures to control the virus
• Japanese March PPI mixed: 0.8% m/m vs 0.9% consensus and rose 9.5% y/y vs 9.3% consensus; Japanese Fin Min Suzuki said no comment on FX levels; sudden FX moves would be undesirable; would respond to FX moves as appropriate
• Philadelphia is bringing back its indoor mask mandate for schools, day cares, businesses, restaurants, and government buildings. Under the new rules, there will be no vaccine or testing requirements for places that serve food or drink, so all will be subject to the new order.

 

Sector News Breakdown

Consumer

• Tesla’s (TSLA) world’s largest battery has been shut down for months due to investigation, but it is still moving ahead with expansion – Electrek
• Restaurants: DPZ upgraded to Buy from Neutral, but QSR downgraded to Neutral from Buy with $64 tgt, DNUT downgraded to Neutral from Buy with $16 tgt and SBUX downgraded to Neutral from Buy with $91 tgt all at Citigroup
• Lumber futures fell as much as 8.4% to $870 per 1,000 board feet in Chicago on Monday, hovering near four-month lows and extending a slump to 30% since early March

 

Energy, Industrials and Materials

• The Biden administration plans to temporarily allow high-ethanol content gasoline to be sold in the hot summer months in a bid to tame high fuel prices at the pump – WSJ
• Rocket Lab USA (RKLB) breaks ground on Neutron production complex in Virginia

 

Financials

• Deutsche Bank (DB) and Commerzbank (CRZBY) shares dropped after an unnamed investor sold stakes worth a total of 1.75 euros billion ($1.90 billion) in Germany’s two biggest lenders. The investor sold 116 million Deutsche Bank shares at 10.98 euros-a-share and 72.5 million Commerzbank shares at 6.55 euros-a-share – WSJ
• AllianceBernstein L.P. (AB) announced that preliminary assets under management decreased to $735 billion during March 2022 from $740 billion at the end of February. The 0.7% decrease was due to market depreciation and firm-wide net outflows.
• Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of March 31, 2022 totaled $159.6 billion. Artisan Funds and Artisan Global Funds accounted for $76.8 billion of total firm AUM, while separate accounts and other AUM accounted for $82.8B
• Cohen & Steers, Inc. (CNS) reported preliminary assets under management of $102.1 billion as of March 31, 2022, an increase of $3.2 billion from assets under management at February 28, 2022. due to market appreciation of $4.1 billion, partially offset by net outflows
• Franklin Resources, Inc. (BEN) preliminary month-end assets under management (AUM) of $1,477.5 billion at March 31, 2022, compared to $1,486.9 billion at February 28, 2022. This month’s decrease in AUM primarily reflected long-term and cash management net outflows
• Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,555.9B, +1.6% MoM. The firm achieved net long-term inflows of $5.3B this month. Non-management fee earning net inflows were $5.5B and money market net inflows were $8.3B

 

Healthcare

• Aeglea BioTherapeutics (AGLE) shares rose 28% as reported additional data from late-stage trial of its lead drug candidate, pegzilarginase, that supports it as a treatment for Arginase 1 deficiency
• Gilead Sciences (GILD) announced that the U.S. FDA lifted the partial clinical hold placed on studies evaluating its investigational agent magrolimab in combination with azacitidine
• Hoth Therapeutics (HOTH)2M share offering priced at $0.85
• Repare Therapeutics (RPTX) posts updated data from early-to-mid-stage trial of cancer drug candidate RP-3500, with “promising results observed particularly in patients with advanced ovarian cancer”
• While Biogen (BIIB) hasn’t disclosed plans to sue the government, the company has said it doesn’t believe Medicare’s restrictions on reimbursement for Aduhelm would stand up in court. And several legal experts said Biogen might have a shot at challenging the decision – STAT News

 

Technology, Media & Telecom

• Vimeo (VMEO) revenue growth for March 18% YoY; reports March subscribers up 6% and March Avg revenue per User or ARPU up 10% YoY
• Cisco (CSCO) downgraded to sell from neutral at Citigroup citing competition and more difficult year-over-year comparisons for quarters ahead, while upgraded Juniper Networks (JNPR) to Neutral from Sell and raise tgt to $26 from $25
• Hewlett Packard Enterprise (HPE) downgraded to underweight at Morgan Stanley and lowered its industry view for telecom and networking equipment to cautious from in-line, citing demand data; also downgraded shares of FFIV and NTAP to equal-weight from overweight
• Lower Chromebook sales drove a 7.3% decrease in 1Q PC shipments from 1Q 2021, according to preliminary data from Gartner. “After an unprecedented Chromebook surge in 2020 and early 2021, driven by demand from the U.S. educational market, Chromebook growth has tempered.” Excluding Chromebooks, the worldwide PC market grew by a modest 3.3% year-over-year
• Digital ad revenue rose 35% in the U.S. in 2021, Interactive Advertising Bureau report says as Digital ad growth in 2021 was the highest since 2006, IAB – WSJ

 

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

 

 

***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

 

 

Early Look

Monday, April 11, 2022

Futures	Up/Down	%	Last
Dow	-56.00	0.16%	34,557
S&P 500	-22.25	0.48%	4,362
Nasdaq	-143.00	1.00%	14,184

 

U.S. futures are looking lower ahead of a busy week of economic data, including both the CPI and PPI inflation reports this holiday shortened week and the start of earnings season Thursday when big banks kick things off. S&P futures drop -0.5% to 4,462, back below its 200-day MA of 4,487. The yield on the benchmark 10-year U.S. Treasury yield rose above 2.77% on Monday after ending Friday at 2.71%, trading around the highest levels since the end of 2018 and beginning of 2019. The surging yields pressured shares of growth stocks last week. The U.S. dollar index (DXY) touches above the 100-level before paring gains to around 99.65, with more massive gains vs. the Japanese Yen while oil is lower below $96, down 2.48% after last week IEA global release of crude, US SPR release, ongoing Chinese lockdown, and a stronger dollar, all weighing on prices. In Asian markets, The Nikkei Index dropped -0.6% to 26,821, the Shanghai Index slid -2.6% to 3,167 and the Hang Seng Index tumbled -663 points or over 3% to 21,208. In Europe, the German DAX is down -0.4% to 14,225, while the FTSE 100 slips about -0.2% to 7,655. The U.S. Treasury will issue $100B across 3yr, 10yr and 30yr this week, starting off with $46B of 3yr notes today. Earlier, 10yr yields hit 2.7798% for the first time since 2019. Bitcoin prices fall nearly 4% to $41,430. No U.S. economic data today while Fed speakers today include Bostic, Bowman, Evans, and Waller.

 

Stocks are coming off a wild week of volatility as the S&P 500 index fell 1.26%, the Dow lost 0.27%, and the Nasdaq shed 3.86%, with some major support levels breached/tested several times late in the week. The Nasdaq 100 (QQQ) ended the day just below its 50-day MA of $349.50 (down -3.6% this week) and the SPUZ ends the day just below its 200-day MA of 4,486. Surging Treasury yields added to market anxiety as the  30-year yield rose 0.32 bps this week to 2.745% this week, the largest one-week yield gain since Friday, March 13, 2020, the benchmark 10-yr hit its highest yield since Tuesday, March 5, 2019, rising 33 bps on the week to 2.713% up for six consecutive trading days and the 2-yr yield gained 8.8 bps to 2.518%, up for five consecutive weeks and up over 100 bps in 5-weeks on rising rate hike expectations. The Treasury curve continued to steepen Friday following declines sparked by the Federal Reserve’s plan for aggressive monetary-policy tightening. The U.S. dollar gained for a seventh day on Friday, while commodities saw a broad rally as the Russia’s war in Ukraine escalates. Some market concerns heading into the start of earnings season later this week as according to FactSet, the estimated earnings growth rate for the S&P 500 in Q1 is 4.5%, which would be lowest growth rate since Q4 2020.

Market Closing Prices Yesterday

• The S&P 500 Index dropped -11.93 points, or 0.27%, to 4,488.28
• The Dow Jones Industrial Average rose 137.55 points, or 0.40%, to 34,721.12
• The Nasdaq Composite tumbled -186.30 points, or 1.34%, to 13,711.00
• The Russell 2000 Index declined -15.24 points, or 0.76% to 1,994.56

 

Economic Calendar for Today

• No Major Economic Data Released

 

Other Key Events:

• American Association for Cancer Research (AACR) Annual meeting 4/8-4/13
• Needham Annual Healthcare Conference (virtual), 4/11-4/14

 

 

Macro	Up/Down	Last
Nymex	-2.43	95.84
Brent	-2.32	100.46
Gold	16.40	1,962.00
EUR/USD	0.0053	1.0929
JPY/USD	0.99	125.31
10-Year Note	+0.044	2.759%

 

 

World News

• China March CPI higher: flat m/m vs -0.1% consensus while 1.5% y/y vs 1.2% consensus; China March PPI higher: 8.3% y/y vs 7.9% consensus
• First-round French election results showed President Emmanuel Macron with a greater lead than polls had suggested over far-right challenger Marine Le Pen; with ~ 97% of votes counted Macron had 27.35% of vote with Le Pen on 23.97% & Melenchon on 21.7% as per BBC
• Finland & Sweden are set to join NATO as soon as summer, Finland is expected to apply in June with Sweden following; US officials said membership for both Nordic countries was a topic of conversation and multiple sessions during last week’s Foreign Minister talks – Times
• China auto sales plunged in March as the country’s curbs to rein in COVID-19 outbreaks took their toll, while TSLA was among automakers feeling the pain of limits on production

 

Sector News Breakdown

Consumer

• JetBlue Airways Corp. (JBLU) this weekend said it would reduce flights in May and throughout the summer due to staffing limitations, after canceling more than 300 flights over the weekend. Alaska Air Group Inc. (ALK) last week said it would trim spring flying to catch up on pilot training. Meanwhile, other carriers including American Airlines Group Inc. say they are prepared for the summer surge after a monthslong hiring spree.
• Nio (NIO) suspended production on Saturday after China’s measures to contain the recent surge of COVID-19 cases disrupted operations at its suppliers. “Due to the impact of this Nio has had to halt car production.” NIO has also increased prices for three of its model and battery rental service BaaS (Battery as a Service)
• Hyzon Motors (HYZN) to supply 18 of its fuel cell electric trucks to Hylane GmbH, a unit of motor insurer DEVK Versicherung as deliveries expected to begin in late 2022
• China auto sales plunged in March as the country’s curbs to rein in COVID-19 outbreaks took their toll, while TSLA was among automakers feeling the pain of limits on production. TSLA sales tumbled 11.7% in March from a year earlier to 2.23 mln vehicles – its first decline in three months, according to the China Association of Automobile Manufacturers

 

Energy, Industrials and Materials

• Schlumberger (SLB) upgraded to Overweight and tgt raised to $55 from $43 at Piper amid higher OFS estimate; also upgraded shares of ChampionX (CHX)
• Shell Plc (SHEL) and TotalEnergies SE (TTE) will be at the forefront of European efforts to pivot away from Russia and toward renewable energy, according to Barron’s; notes both stocks are cheap with Shell trading at 6.4x projected 2022 earnings while Total trades at just 4.8x
• Star Bulk Carriers (SBLK) files to sell 33.2M shares of common stock for holders
• The average U.S. price of a gallon of regular-grade gasoline dropped 10 cents over the past two weeks to $4.27 per gallon

 

Healthcare

• Affimed N.V. (AFMD) rises after the co updated on a Phase 1/2 study of AFM13 precomplexed with cord blood-derived natural killer cells in lymphoma; Affimed said the data showed a 100% objective response rate and improvement in the rate of complete responses from 38% to 62% after a second cycle in 13 patients were treated at the recommended phase 2 dose.
• Veru’s (VERU) novel COVID-19 drug candidate reduces deaths by 55% in hospitalized patients in interim analysis of phase 3 study; independent data monitoring committee halts study early for overwhelming efficacy; to meet with FDA to seek emergency use authorization
• Pfizer (PFE)/BioNTech (BNTX) and Moderna (MRNA) are expected to dominate the global vaccine market this year with a combined market share of 88%, projected to generate $36.4B and $18.7B in sales, down by 15% and 27% from previous estimates, respectively as per Airfinity. Oxford/AstraZeneca (AZN) and Johnson & Johnson (JNJ), which used a traditional method to develop their COVID-19 shots, are estimated to generate $3B and $2.87B in sales, respectively and Novavax (NVAX) vaccine stands at $2.74B, down ~41% y/y https://bit.ly/37uK853
• BioCryst (BCRX) downgraded to Neutral from Buy at Bank America with a $14 price target
• BeiGene (BGNE) IRC Determines BRUKINSA demonstrates superior overall response rate versus ibrutinib in final response analysis of ALPINE Trial in CLL

 

Technology, Media & Telecom

• Elon Musk decided not to join Twitter Inc.’s (TWTR) board of directors, Chief Executive Parag Agrawal said, a sharp reversal that cast new uncertainty over the relationship between the social-media platform and its largest shareholder. The move comes after Musk revealed a 9.2% stake in Twitter that was made public last Monday
• Thoma Bravo is set to acquire SailPoint (SAIL) for $6.9B, or $62.25 a share, The Financial Times’ reported, citing two people with direct knowledge of the details. The deal is expected to be announced on Monday morning. https://on.ft.com/3LY0X7d
• AT&T Inc. (T) CEO John Stankey says inflation could prompt the wireless and broadband company to raise prices for some core services while it continues to cut costs after getting out of the media business – WSJ. The company on Friday completed the planned separation of its film-and-TV empire into a new publicly traded company called Warner Bros. Discovery. AT&T shareholders will get a 71% stake in the new entity, which will be led by Discovery Inc.’s David Zaslav.

 

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

 

***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

 

 

 

Early Look

Friday, April 8, 2022

Futures	Up/Down	%	Last
Dow	96.00	0.28%	34,586
S&P 500	8.25	0.18%	4,504
Nasdaq	22.50	0.15%	14,558

 

 

U.S. stocks are looking to close out the week on a positive note, with futures edging higher following yesterday’s late day surge, but major averages are still tracking for weekly declines led by sharp pullbacks in transports (-5.8% WTD) and semiconductors (-5% WTD). Stocks rebounded on Thursday, following back-to-back losing sessions, as investors reassessed the Fed’s latest plans to tighten monetary policy and combat rising inflation. Major averages tanked Tuesday/Wednesday on the possibility of more aggressive monetary tightening by the Federal Reserve, as indicated by several Fed speakers this week (Brainard, Harker, Bullard) while minutes from the Fed that showed central bankers considered raising rates by 50-bps at their March meeting (but only did 25bps), raising expectation a 50-bps hike is coming at the May meeting. The benchmark 10-year Treasury hit overnight highs around 2.69% before paring back slightly while the U.S. dollar extends gains. In macro news, China lashed out at House Speaker Nancy Pelosi for reportedly planning a landmark trip to Taiwan that’s been delayed because she has Covid-19, setting up a showdown when her visit to Asia is rescheduled. In Asian markets, The Nikkei Index rose nearly 100-points to end the week at 26,985, the Shanghai Index climbed 0.47% to 3,251, and the Hang Seng Index advanced 0.29% to 21,872. In Europe, the German DAX jumps around 200 points or 1.4% to 14,275, while the FTSE 100 gains nearly 1% to 7,625. No major earnings, or economic data today heading into the weekend.

Market Closing Prices Yesterday

• The S&P 500 Index gained 19.06 points, or 0.43%, to 4,500.21
• The Dow Jones Industrial Average rose 87.06 points, or 0.25%, to 34,583.57
• The Nasdaq Composite edged higher 8.48 points, or 0.06%, to 13,897
• The Russell 2000 Index declined 7.14 points, or 0.35% to 2,009.80

 

Economic Calendar for Today

• 10:00 AM ET                 Wholesale Inventory m/m for February
• 1:00 PM EST                 Baker Hughes Weekly rig count data

 

 

Macro	Up/Down	Last
Nymex	0.54	96.57
Brent	0.53	101.11
Gold	-1.10	1,936.70
EUR/USD	-0.0003	1.0875
JPY/USD	0.16	124.06
10-Year Note	+0.016	2.67%

 

 

World News

• Japan March Consumer Confidence: 32.8 vs 36.8 consensus; Japan Feb Current Account larger surplus: JPY +1.648T vs JPY +1.437T consensus
• Japan Industry Minister Hagiuda said is planning to reduce Russian goal imports gradually while looking for other suppliers

 

Sector News Breakdown

Consumer

• Kura Sushi (KRUS) 2Q adj EPS ($0.19) vs est. ($0.21) on revs $31.3Mm vs est. $30.4Mm; guides FY sales $130-140Mm vs est. $134Mm
• PriceSmart (PSMT) 2Q EPS $1.03 vs est. $1.00 on revs $1.04B vs est. $1.04B, comp net merchandise sales +10.3%
• Tesla (TSLA) CEO Musk delivered the company’s first made-in-Texas vehicles on Thursday, saying the company was entering a new phase and teasing coming products including a dedicated robotaxi.

 

Energy, Industrials and Materials

• Alcoa (AA) downgraded to Neutral from Outperform at Credit Suisse while raise tgt to $82
• Shoals Technologies (SHLS) downgraded to Neutral from OW and tgt cut to $16 from $26 at Piper saying the decision by the U.S. Department of Commerce to investigate anti-dumping and countervailing duty circumvention in certain Southeast Asian countries will cause project delays
• Ithaca Energy is acquiring U.K. North Sea oil-and-gas producer Siccar Point Energy for $1.1 billion plus $360 million in contingent payments. Siccar Point is the operator of the Cambo oil field, of which Shell (SHEL) holds a 30% interest
• WD-40 Co (WDFC) Q2 EPS $1.41 vs. est. $1.01; Q2 revs rose 16% to $130M vs. est. $126.77M; still sees FY sales $522M-$547M (est. $533.5M) and EPS $5.14-$5.27, down vs. prior $5.24-$5.38
• OMV AG said that it would take a 2-billion euro ($2.18 billion) hit in the first quarter from its business in Russia after distancing itself from the country following its invasion of Ukraine.
• China’s worsening Covid-19 outbreak and the extended lockdown in Shanghai has oil analysts cutting their demand forecasts further.
• H. Robinson (CHRW) upgraded to Overweight from Neutral at JPMorgan

 

Financials

• Robinhood (HOOD) downgraded to sell from neutral at Goldman Sachs, saying softening retail engagement levels and profitability concerns will likely limit any outperformance; cuts the price tgt to $13 from $15
• Camden Property (CPT) 9M share Spot Secondary priced at implied $170.00

 

Healthcare

• Medicare finalized its decision to restrict coverage for Biogen’s (BIIB) Aduhelm to patients participating in clinical trials. Under the policy, the government health insurance program will only pay for the drug Aduhelm if a patient is enrolled in a clinical trial
• Genmab (GMAB) said an arbitral tribunal has ruled in favor of Johnson & Johnson’s (JNJ) Janssen Biotech in both matters related to royalty payments under their license agreement related to cancer drug daratumumab.
• Quidel Corp. (QDEL) guides Q1 revs $990M-$1.0B vs. est. $817.3M or growth of 164% to 166% from the first quarter 2021 revenue of $375.M; said COVID-19 product revenues in the first quarter of 2022 are expected to be approximately $836M

 

Technology, Media & Telecom

• ACM Research (ACMR) said subsequent lockdown of Pudong region was imposed in late March, and has impacted operation of Chuansha production facility; now sees Q1 revenue expected to be significantly below previous internal plan; reaffirms year revs of $365M-$405M
• CrowdStrike (CRWD) said it has been granted a Provisional Authorization to Operate (P-ATO) at Impact Level 4 (IL-4) which will enable it to protect information of Department of Defense and Defense Industrial Base customers
• Apple (AAPL) will be hosting its first live sports broadcast. Friday Night Baseball will debut on Apple TV+ with a streaming doubleheader as the New York Mets meet the Washington Nationals at 7 p.m. and the Los Angeles Angels host the Houston Astros at 9:30 p.m. ET
• ChipMOS Technologies (IMOS) reported consolidated revenue increased 4% Y/Y to NT$6.752B or $235M in Q1; revenue for March rose 0.5% Y/Y and 12.3% M/M to NT$2.355B or $82.3M.

 

 

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***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research

Early Look

Thursday, April 7, 2022

Futures	Up/Down	%	Last
Dow	19.00	0.06%	34,418
S&P 500	10.25	0.23%	4,486
Nasdaq	61.50	0.42%	14,566

 

 

After another volatile day on Wall Street Wednesday, which saw huge swings higher and lower (finishing firmly negative a second day), U.S. futures are stabilizing slightly higher, back above the key 200-day moving average support of 4,485 for S&P futures. Oil prices advance after a more than 5% decline yesterday to settle below $97 per barrel, while Treasury yields downtick slightly, as the 10-year stands at 2.58% (below recent 3-year highs of 2.66%). Weekly Jobless claims the main economic data point at 8:30 AM today (est. 200K after 202K last week). In Europe, Ukrainian President Volodymyr Zelensky said a new package of Western sanctions against Russia was too lenient, as he accused Russian forces of seeking to destroy evidence of killings in areas under their control. The U.S. dollar advanced to a fresh two-year high as investors react to details of minutes from the Federal Reserve’s March policy meeting. Fed Governors essentially agreed to reduce the central bank’s $9 trillion balance sheet by $1 trillion a year, selling $95 billion in assets to the market each month, while moving quickly to raise interest rates (50-bps hike possibly at May meeting) to ease the fastest domestic inflation rates in forty years. In Asian markets, The Nikkei Index dropped -1.69% to 26,888, the Shanghai Index fell -1.42% to 3,236, and the Hang Seng Index fell -1.23% to 21,808. In Europe, the German DAX is up over 80 points or 0.6% to 14,235, while the FTSE 100 is little changed at 7,585.

Economic Calendar for Today

• 8:30 AM ET         Weekly Jobless Claims…est. 200K
• 8:30 AM EST       Continuing Claims
• 10:30 AM ET       Weekly EIA Natural Gas Inventory Data
• 3:00 PM ET         Consumer Credit for February

 

Earnings Calendar:

• Earnings Before the Open: ANGO, APOG, CAG, LW, STZ
• Earnings After the Close: KRUS, PSMT, WDFC

 

Other Key Events:

• JPMorgan 11th Annual Napa Valley Biotech Forum,4/5-4/7, in San Francisco
• JPMorgan 8th Annual Retail Round-Up, 4/5-4/7, in NY
• American College of Cardiology 2022 Annual Meeting, 4/2-4/7, in Seattle

 

 

Macro	Up/Down	Last
Nymex	1.71	97.94
Brent	1.83	102.90
Gold	8.10	1,931.20
EUR/USD	0.0002	1.0896
JPY/USD	-0.08	123.71
10-Year Note	-0.017	2.592%

 

 

World News

• Fed speakers include Bullard, Bostic, and Evans. In the U.S. we will get the release of Initial Claims and Consumer Credit data.
• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -16.7 vs 4.4 last week; Bulls fall to 24.7% from 31.9%; Neutrals fall to 33.9% from 40.6%; Bears rise to 41.4% from 27.5%
• Italy PM Draghi said that a gas embargo is not yet on the table, and I don’t know if it will ever be, if there is consensus on banning gas imports, happy to comply
• Fed members broadly agreed in FOMC Minutes that monthly caps about $60 billion for Treasury securities and about $35 billion for agency MBS would likely be appropriate. Many participants said that one or more 50 bps increases in the target range could be appropriate at forthcoming meetings if inflation pressures remained elevated or intensified.
• S. House Speaker Nancy Pelosi announced she would be visiting Taiwan this weekend. Japan PM Kishida is also attending, with the plan to exchange views on Russia’s invasion of Ukraine and the human rights situation in China

 

Sector News Breakdown

Consumer

• Costco Wholesale Corporation (COST) March sales results; Total comp sales +17.2%, vs. est. +11.2% and U.S. comp sales ex: fuel, currencies +12.7% vs. est. +9.2%; for thirty-one weeks ended April 3, 2022, company reported net sales of $130.00B, an increase of 16.7%; net sales of $21.61B for retail month of March, five weeks ended April 3, 2022, increase of 18.7% from $18.21B
• Levi Strauss (LEVI) Q1 adjusted EPS $0.46 vs. est. $0.41; Q1 revs rose 22% to $1.59B vs. est. $1.55B; Q1 adjusted Ebit $238M; sees year revs +11% to +13% and still sees year adj EPS $1.50-$1.56 vs. est. $1.52; global digital net revenues grew about 16% in qtr compared to same period in prior year; global digital net revenues comprised about 25% of q1 fiscal 2022 net revenues
• Wayfair (W) downgraded to underweight from equal weight and cut tgt to $100 from $110 at Wells Fargo in sector note turning more cautious on housing-impacted retailers as cut tgt on HD to $350 from $400, LOW to $260 from $295, FND to $105 from $130, WSM to $140 from $160. Said Inflation is accelerating, the Fed is hawkish, and conventional wisdom suggests a recessionary scenario could render macro-sensitive stocks increasingly difficult to own
• Genius Sports’ (GNUS) shares rose after hours on reports the National Football League is now the largest American owner of equity in Genius Sports as it controls about 7.7% of the business after 4.25 million warrants vested last week, reported Sportico
• Electric vehicles: watch shares of TSLA, RIVN, NKLA, LCID, CHPT, BLNK, etc. after the Biden administration says senior officials held a meeting with Tesla and General Motors bosses to discuss electric vehicles and charging
• Ford (F) and Dana Corp (DAN) downgraded to Equal Weight from Overweight at Barclay’s. Ford tgt to $17 from $23 and DAN to $18 from $24 saying investors are still underestimating risks to the autos and auto parts sector, and particularly to suppliers, from inflation and production pressures as well as the impact of interest rate hikes
• Resources Connection (RGP) Q3 adj EPS $0.65 on revs rose 30.6% to $204.6M vs. est. $195.1M

 

Energy, Industrials and Materials

• Shell PLC (SHEL) said it expects to book accounting charges of up to $5 billion in Q1 related to its decision to exit its Russia operations, including joint ventures with energy giant Gazprom PJSC, in the wake of Russia’s invasion of Ukraine.
• Murphy Oil (MUR) upgraded to Overweight from Neutral at Piper Sandler and raise tgt to $54, up from $38

 

Financials

• Capital One Financial (COF) authorizes buyback of additional $5B of shares
• AvalonBay (AVB) announces offering of 2M shares of common stock
• SoFi Technologies (SOFI) cuts FY22 rev view to $1.47B from $1.57B and below est. $1.53B; lowers FY22 adj EBITDA view to $100M from $180M; says guidance result of President Biden’s directive to extend the federal student loan payment moratorium from May 1, 2022 until August 31, 2022

 

Healthcare

• Vapotherm (VAPO) is withdrawing its previously announced annual revenue, gross margin, operating expense, and adjusted EBITDA guidance for FY22 based on what appears to be the diminishing virulence of COVID-19, as well as a reduction of seasonal hospitalization patterns related to flu and RSV in Q1

 

Technology, Media & Telecom

• Hewlett-Packard (HPQ) shares rise 14% after disclosed that Berkshire Hathaway bought 11.1M shares of common stock on April 4th in a total transaction size of $398.5M, boosting its stake by about 10%
• Samsung (SSNLF) reported an estimated 50% jump in quarterly operating earnings to post its highest first-quarter profit since 2018, beating expectations; put Q1 profit at 14.1 trillion won ($11.6 billion) prelim vs. estimate of 13.3 trillion won as revs likely rose 18% from the same period a year earlier to a record 77 trillion won, also above market expectations.
• Coupa Software (COUP) upgraded to Outperform from In Line at Evercore ISI and raise price tgt to $140 from $75
• Sprinklr, Inc. (CXM) Q4 adj EPS loss (-$0.05) vs. est. loss (-$0.09); Q4 revs $136M vs. est. $130.8M; sees Q1 sub revs between $123M-$125M and overall revs $140M-$142M vs. est. $135.9M; sees year revs $607M-$615M
• Nine senior WarnerMedia (T) executives quit the company ahead of its takeover by Discovery (DISCA), the Financial Times reported
• IronNet (IRNT) slips as reported Q4 revenue above Street’s estimates; however, net loss widened to 45 cents from 18c a year ago; forecast FY23 revenue of about $34M for transactional business
• CCC Intelligent Solutions Holdings Inc. (CCCS) 20M share Spot Secondary priced at $9.70

 

 

 

 

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***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research