Mid-Morning Look: April 22, 2022

Mid-Morning Look

Friday, April 22, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are struggling early after yesterday’s methodical all-day market sell-off on rising interest rate fears and hawkish Fed commentary (Daly, Bullard, and Powell), while the S&P 500 failed to overcome its 100 and 200-day Moving average levels and then broke below its 50-day MA support around 4,400. Since then, zero lift for broader averages with the biggest drag thus far in the S&P 500, healthcare sector, as hospitals and services fall behind HCA missing quarterly results and lowered guidance and MedTech behind ISRG which warned about weaker demand from hospitals for installing its surgical robots is in part due to tightening of hospital finances (hitting shares of SYK, BAX, ZBH, BSX, DXCM, MDT). Consumer Staples a bright spot behind KMB results, lifting housing products and comm services amid a rebound in some of the hardest hit names this week (NFLX, MTCH). Industrials, IT, Financials (on falling yields), discretionary (behind GPS lower sales outlook) getting hit early as commodity cost impact and expenses being more prevalent in corporate earnings c/c, raising fears about the upcoming quarter. Not a good start to the day/end of week with commodity prices, stocks falling.







WTI Crude















10-Year Note





Sector Movers Today

·     Housing & Building Products; AZEK upgraded to Buy in building products at Citigroup saying while they acknowledge softening consumer sentiment may pressure some repair & remodel activity in the spring/summer, and continued cost inflation will crimp margins temporarily, view AZEK’s underlying earnings power as intact and top picks in the group are DHI, PHM, and VMC; SWK announced it has signed a definitive agreement for the sale of its automatic doors business, Access Technologies, to ALLE for $900M in cash

·     Transports; several analyst changes after a good week of earnings for the space (AAL, UAL, CSXDAL last week); AAL upgraded to Neutral from Underweight, and United (UAL) upgraded to Overweight from Underweight at JPMorgan; HA, JBLU downgraded to Hold from Buy at Deutsche Bank saying the carrier faces specific headwinds that are likely to limit share price upside; in rails, UNP was downgraded to neutral at UBS and cut tgt to $267 from $283 as expect the current capacity constraints and service issues to weigh on volume performance and these issues also reduce conviction in UNP’s ability to execute on its volume growth strategy

·     Consumer Staples; KMB a winner on day after Q1 beat and raised year revs to 2%-4% from prior view of up 1%-2% and sees organic sales growing 4%-6% from prior 3%-4% view (helps boost shares of PG, CHD early); SAM posted an unexpected quarterly loss on light revs ($430M vs. $445M est.) saying Q1 shipment volume was down 25.1% from the prior year citing decreases in several brands (Truly Hard Seltzer, Twisted Tea, Angry Orchard); BUD said it will sell its stake in its Russian joint venture in a deal, which could result in a $1.1 billion hit; ACI shares fell early after Reuters reported JPMorgan re-offered 15 mln shares at $32.50, 4.1% discount to stock’s close



·     ATEN +11%; to replace Ferro Corp (FOE) in the S&P Smallcap 600

·     CLF +7%; Q1 EPS $1.50 tops est. $1.41 on better revs $6.0B vs. est. $5.37B saying expect to set another free cash flow record in 2022; increasing its full-year 2022 average selling price expectation by $220 to $1,445 per net ton

·     DWAC +6%; after saying Donald Trump’s new media platform, Truth Social, has migrated to video platform Rumble’s cloud platform

·     JD +3%; announced that it is considering a special dividend on or around May 4

·     KMB +9%; beat and raised year revs to 2%-4% from prior view of up 1%-2% and sees organic sales growing 4%-6% from prior 3%-4% view

·     SIVB +12%; big earnings beat ($7.31 vs. est. $5.49) saying they benefited from stronger spread revenue, equity gains, and lower credit costs and boosted its FY22 forecast for loan growth, spread revenue, and core fee income

·     SNAP +1%; mixed results as Daily active users (DAUs) on Snapchat rose 18% y/y to 332M above ests around 330M but growth rate down from 22% y/y and guides Q2 rev growth 20%-25% vs. est. 28%



·     ALV -6%; after Q1 adj EPS misses at $0.45 vs. est. $1.11 on revs $2.12B vs. est. $2.18B as sales declined organically by 1.0% and lowers year organic revenue +12% to +17%, from about +20% and sees adj operating margin 5.5%-7%, below prior view 9.5%

·     CRSR -7%; guides Q1 adj Ebitda $14M-$15M and revs about $380M, well below the $447.4M est. Saying revenue was lower than they expected

·     GMED -11%; reported preliminary Q1 net sales of about $230.5M, compared to consensus estimates of $236.1M, and said CEO Dave Demski resigns

·     GPS -19%; cuts Q1 net sales growth guidance, which is now expected to be low to mid-teens year-over-year declines from its prior guidance of mid to high-single-digit declines, citing macro-economic dynamics as well as execution challenges at Old Navy as CFO exits

·     HCA -15%; missed Q1 EPS ($4.14 vs. est. $4.25) on slightly better revs while Ebitda of $2.94B missed the $3.02B est./lowers year rev view to $59.5B-$61.5B from $60B-$562B prior and EPS at $16.40-$17.60 from prior $18.40-$19.20

·     ISRG -12%; Q1 profit and sales beat but system placements missed consensus estimates by 4% according to one analyst and co said weaker demand from hospitals for installing its surgical robots is in part due to tightening of hospital finances

·     SAP -2%; beat Q1 expectations with revenue growth of nearly 12%, but missed projections with its bottom-line figure – said it expects a total negative revenue impact of around EUR300 million in 2022 from a lack of new business by exiting Russia

·     SCYX -25%; 15M share Spot Secondary priced at $3.00 which overshadowed reports of interim data from two ongoing phase 3 studies of oral ibrexafungerp showed improvement in ~61% of patients with fungal infection

·     VZ -5%; posted Q1 totals that largely met analysts’ expectations, but sees 2022 wireless service revenue growth at lower end of prior 9%-10% view and sees 2022 adjusted EBITDA growth at lower end of prior view of 2%-3%; sees FY adj EPS low end of $5.40 to $5.55, est. $5.43


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.