Mid-Morning Look: April 18, 2022

Mid-Morning Look

Monday, April 18, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks edge higher in early trading, while the 10-year Treasury yield continued its upward march following a three-day holiday weekend. Weakness early in the defensive asset/sector classes namely consumer staples, utilities, and REITs while some of last week’s “beaten-up” sectors such as semiconductors and banks seeing early strength (outside of SCHW falling on earnings and rev miss). Markets in Hong Kong, Australia and much of Europe were closed for the Easter holiday. Treasury yields extend rebounds as the benchmark 10-year Treasury rises to highs of 2.884% before paring gains (closed last Thursday at 2.808%, its highest level since December 2018) on rising interest rate expectations by the Fed. Markets are pricing in more aggressive interest-rate rises in the coming months by the Federal Reserve, which is trying to bring down elevated consumer-price inflation. The U.S. dollar is on track for a 12th daily gain versus the yen, the longest winning streak on record. Big week of earnings, mainly for large caps with TSLA, NFLX, ANTM, JNJ, TRV, PM, T, UNP, AAL, UAL, ALK, and CSX all expected. Crypto assets lower to start the week, with Bitcoin falling to 1-month lows around $39,000.


Economic Data

·     U.S. April NAHB Housing market index 77 versus 79 in March; April index of current single-family home sales 85 versus revised 87 in March; Index of home sales over next six months 73 versus 70 in March; April index of prospective buyers 60 versus revised 66 in March







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer Finance; in earnings, SYF profit rises as EPS beat by about $0.19 while also approves share buyback program of up to $2.8B; in monthly Master Trust c/c data: 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; Citi (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; 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; 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

·     Auto sector; DIDI shares fall -20% after reports the co will hold an extraordinary general meeting on May 23 to vote on delisting its shares from the New York Stock Exchange; 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, according to a report in the WSJ; APTV downgraded to Underweight at Piper saying they prefer vertically-integrated automakers (TSLA, RIVN); MULN said it will begin electric-vehicle battery pack production out of a facility in California.

·     Pharma movers; cannabis names slip early after Senate Majority Leader Chuck Schumer is delaying the release of his revised cannabis legalization bill until July (was previously expected this month); TGTX shares fall after pulling its Ukoniq lymphoma treatment from the market after a study showed a possible increased risk of death in patients taking the drug; OCGN amends agreement with its Indian partner, Bharat Biotech, to expand commercialization rights of their COVID-19 vaccine Covaxin to Mexico; RXRX downgraded to Neutral from Buy at Bank America

·     Transports; airlines UBS upgraded shares of DAL to Buy from Neutral and raise tgt to $53 from $44 saying the implied 12% improvement in TRASM in 2Q22 vs. 2Q19 is well ahead of the mid-SD they thought possible, while downgraded UAL to Neutral saying the operational picture could be less smoot; FWRD guides Q1 above views as sees EPS $1.52-$1.61 above ests $1.21 and revs $$453M-$481M vs. est. $445.6M; 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; Oppenheimer noted via a Form 4 filing after the 4/14 close, XPO founder, chairman of the board and CEO Brad Jacobs sold 5.447M shares of XPO on 4/13/22. The sale represents approximately half of his remaining ownership position in the company.



·     BAC +2%; Q1 EPS $0.80 vs. est. $0.74; Q1 revs $23.2B vs. est. $23.1B; Q1 provision for credit losses included $362M net reserve release, driven mainly by asset quality improvement, offset by reserve build for Russian exposure, loan growth

·     BIIB +1%; 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

·     CASA +58%; after saying VZ will buy about $40 million worth of shares, taking a nearly 10% stake in the company and said it has also received a multi-year contract from Verizon in which it will provide its 5G Core Network Functions to Verizon.

·     CTRA +3%; along with gains in other energy stocks VLO, MPC, HAL as oil prices remains higher with Russia/Ukraine situation ongoing

·     GPS +2%; upgraded to Equal Weight from Underweight at Morgan Stanley saying the YTD stock decline implies the market appreciates our concerns: broader turnaround uncertainty against recent mis-execution & potentially overly optimistic 2022 EPS guidance

·     NTUS +28%; said it will be bought by an affiliate of ArchiMed, a healthcare-focused investment firm, for about $1.2B with shareholders to receive $33.50 per share in cash, which represents a premium of 28.6% to NTUS’ last closing price

·     SWX +7%; announced plans to explore strategic alternatives, including a sale of the company; said its plan followed the receipt of an “indication of interest well in excess” of the $82.50-per-share cash buyout bid it received from Carl Icahn

·     SYF +6%; profit rises as EPS beat by about $0.19 while also approves share buyback program of up to $2.8B



·     DIDI -9%; after reports the co will hold an extraordinary general meeting on May 23 to vote on delisting its shares from the New York Stock Exchange

·     ETSY -6%; among early top decliners in the S&P 500

·     NKTR -35%; after the co and BMY said are ending a clinical development program for bempegaldesleukin in combination with Opdivo, based on the results of a late-stage study

·     SCHW -9%; after top and bottom-line miss; posted EPS mis at $0.77 vs. est. $0.84 on light revs $4.67B vs. est. $4.81B

·     TGTX -21%; 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

·     WEN -1%; downgraded to Market Perform at BMO Capital and lower tgt to $22 citing the macro backdrop of rising pressures on discretionary spending


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.