Morning Preview: December 12, 2022

Early Look

Monday, December 12, 2022









S&P 500










U.S. futures are pointing to a modestly higher open ahead of a pivotal week for monetary-policy decisions from the Federal Reserve, European Central Bank, and a host of their peers. U.S. stocks finished Friday’s choppy session with modest losses, capping off the worst week for stocks since September after a report on wholesale-price inflation challenged assumptions about slowing inflation in the U.S. The Dow Jones Industrial Average just posted its worst week since September, down -2.8%, as investors look ahead to next week’s consumer price index and the Fed’s interest rate decision. For the week, the S&P fell 3.38%, and the Nasdaq shed 3.99%. The U.S. Dollar Index (DXY) rose, finishing the week up 0.5% if current levels hold, snapping a two-week losing streak (+9.2% year to date). The 10-year yield rose 6.5 bps last week after Friday’s rally to settle at 3.567%, snapping its 4-week losing streak (well off the high of 4.231% reached back on 10/24). In Asian markets, The Nikkei Index fell -58 points to 27,842, the Shanghai Index dropped -27 points to 3,179, and the Hang Seng Index declined -437 points to 19,463. In Europe, the German DAX is down -19 points to 14,350, while the FTSE 100 is down about -7 points to 7,569. In corporate news, several large M&A headlines this morning (see below).


Market Closing Prices Yesterday

·     The S&P 500 Index slumped -29.13 points, or 0.73%, to 3,934.38

·     The Dow Jones Industrial Average fell -305.02 points, or 0.90%, to 33,476.46

·     The Nasdaq Composite dropped -77.39 points, or 0.70%, to 11,004.62

·     The Russell 2000 Index declined -21.63 points, or 1.19% to 1,796.66


Economic Calendar for Today

·     1:00 PM ET           US Treasury to sell $40B in 3-year notes

·     1:00 PM ET           US Treasury to sell $35B in 10-year notes

·     2:00 PM ET           Federal budget for November


Earnings Calendar:

·     Earnings Before the Open: DAKT UTI



Other Key Events:

·     American Society of Hematology (ASH) Annual Meeting & Expo, 12/10-12/12, in New Orleans

·     Cowen Digital Engineering Services Summit (virtual), 12/12-12/13





















10-Year Note





World News

·     U.S. inflation will be much lower by end of 2023, Yellen says ‘; “I believe by the end of next year you will see much lower inflation if there’s not … an unanticipated shock,”; “There’s a risk of a recession. But … it certainly isn’t, in my view, something that is necessary to bring inflation down.” – Reuters


Sector News Breakdown


·     Albertsons Cos. (ACI) was ordered by a Seattle-area judge to keep its $4 billion special dividend on hold until Dec. 19 while Washington’s attorney general asks the state supreme court to halt the payment during a regulatory review of its pending merger with Kroger Co. (KR).

·     Rivian Automotive (RIVN) said it has paused its joint venture to build commercial vans with Mercedes-Benz Group in Europe just three months after it was announced.


Energy, Industrials and Materials

·     US natural gas futures surged to extend an advance into a fourth session, with northern and eastern regions bracing for snow and cold weather that would boost heating demand. Gas for January delivery rose as much as 12% to $7.010/MMBtu; contract closed +4.7% Friday

·     Boeing Co. (BA): NASA has finalized its contract with Boeing for about $3.2 billion to continue manufacturing core and upper stages for future Space Launch System rockets for Artemis missions to the Moon and beyond

·     Helmerich & Payne (HP) boosts 2023 buyback plan to up to 5m shares



·     Artisan Partners Asset Management Inc. (APAM) said its preliminary assets under management as of November 30, 2022, totaled $133.5 billion. Artisan Funds and Artisan Global Funds accounted for $63.0 billion of total firm AUM, while separate accounts accounted for $70.5B

·     Morgan Stanley (MS) plans to slash investment bankers’ annual bonuses by as much as 50% in Asia, said two people with direct knowledge of the matter, as the Wall Street firm reins in costs to tackle tough market conditions that have hit its revenue. – Reuters

·     More pain in the crypto market last Friday after The Block, a media company that says it covers crypto news independently, has been secretly funded for over a year with money funneled to The Block’s CEO from the disgraced Sam Bankman-Fried’s cryptocurrency trading firm, sources told Axios. The news just adds to more concern in the space as tightening monetary policy set off a chain reaction of events in crypto in 2022 – from implosions of projects like Terra, bankruptcy filings of CeFi companies like Celsius Network and the collapse of the FTX exchange.



·     Amgen (AMGN) reached a deal to buy drug company Horizon Therapeutics (HZNP) for $116.50 a share in cash as total value of the deal is valued at about $27.8 billion; the deal represents a premium of about 47.9% to Horizon’s closing price of $78.76 a share on Nov. 29, the day before reports of a possible deal surfaced.

·     CVS Health (CVS) stock looks undervalued, according to Barron’s, saying it trades at 11 times earnings, a steep discount to peers such as UnitedHealth Group Inc. (UNH), which trades at 22 times, and Humana Inc. (HUM), at 20 times.

·     Gracell Biotechnologies Inc (GRCL) said its experimental therapy to treat multiple myeloma, a type of blood cancer, showed promise in an early-stage study

·     Novozymes (NVZMY) and Chr. Hansen have announced a merger combination, with Novozymes paying a large premium of 49% to Chr. Hansen shareholders

·     NovaBay (NBY) files to sell 1.55M shares of common stock for holders


Technology, Media & Telecom

·     Tech-focused private equity firm Thoma Bravo is said in advanced discussions to purchase Coupa Software (COUP) after outbidding rival PE firm Vista Equity, Bloomberg reported, which didn’t include a deal price. The transaction price may be $81 a share, according to a tweet from CNBC’s David Faber.

·     IAC Inc. (IAC) is an undervalued stock that deserves more attention, according to Barron’s saying current CEO Joey Levin sees an “abundance of opportunity” to invest and he’s working to turn around home-services provider Angi, as well as Dotdash Meredith, its publishing business

·     Microsoft (MSFT) said it was investing in the London Stock Exchange in a deal that will see the stock exchange use the software giant’s data and cloud infrastructure; MSFT will buy a 4% stake in the London Stock Exchange valued at £1.5 billion ($1.8 billion)

·     Nasdaq 100 rebalancing: Rivian Auto Inc. (RIVN), Warner Bros. Discovery Inc. (WBD), CoStar Group Inc. (CSGP), GlobalFoundries Inc. (GFS), Baker Hughes Co. (BKR) and Diamondback Energy Inc. (FANG) will join the Nasdaq 100 Index as part of its rebalancing. VeriSign Inc. (VRSN), Skyworks Solutions Inc. (SWKS), Splunk Inc. (SPLK), Baidu Inc. (BIDU), Match Group Inc. (MTCH), DocuSign Inc. (DOCU) and NetEase Inc. (NTES) will be removed from the index effective prior to market open Dec. 19 in in annual reconstitution


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.