Morning Preview: October 12, 2022

Early Look

Wednesday, October 12, 2022









S&P 500










U.S. futures are pointing to a higher open, rising roughly +0.6%, but things can change quickly with the September producer price index (PPI) inflation reading due at 8:30 AM ET, the first of two key inflation reports this week. The S&P 500 swung between gains and losses on Tuesday but finished lower as investors await the data and the beginning of earnings season. Market appetite for risk crumbled after Bank of England Governor Andrew Bailey urged investors to finish winding up positions that they can’t maintain, saying the central bank will halt intervention in the market as planned in three days. Fed Bank of Cleveland President Loretta Mester reiterated said officials need to keep raising interest rates and cannot get complacent. She also said the Fed is monitoring financial conditions including the dollar, which provided some support to stocks. Treasury yields are moving higher with the 10-year back to within a few bps of 4% ahead of the data. In corporate news, Pepsi (PEP) reported a beat on the top and bottom line and raised guidance this morning. Back to the data, Sept Producer Price Index (PPI) is expected to show rise of +0.2% m/m overall and +8.4% y/y while core PPI m/m est. to rise +0.3% and y/y to rise +7.3%. In Asian markets, The Nikkei Index dipped only a few points to 26,396, the Shanghai Index jumped 45 points to 3,025, and the Hang Seng Index fell -131 points to 16,701. In Europe, the German DAX is up 15 points to 12,234, while the FTSE 100 is down a few points to 6,878.


Governor Andrew Bailey said that the BoE would stop buying bonds as planned on Oct. 14, which would leave pension schemes scrambling after a surge in yields to meet a collective cash call estimated to be at least 320 billion pounds ($355 billion) without a buyer of last resort. The central bank had on Tuesday made its fifth attempt in just over two weeks to restore order in markets. UK bond-yield cash curve steepens, led by the long end amid heightened volatility and confusion around the BOE’s bond-buying program. The pound climbs to $1.10, outperforming G-10 peers as dollar softens. Yen is the weakest performer among peers, trading above the 146 level, a fresh 24-year high.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -23.69 points, or 0.66%, to 3,588.70

·     The Dow Jones Industrial Average rose 35.78 points, or 0.12%, to 29,238.66

·     The Nasdaq Composite tumbled -115.91 points, or 1.10%, to 10,426.19

·     The Russell 2000 Index edged higher 0.98 points, or 0.06% to 1,692.90


Economic Calendar for Today

·     7:00 AM ET           MBA Mortgage Applications Data

·     8:30 AM ET           Producer Price Index (PPI) m/m for September…est. +0.2%

·     8:30 AM ET           Producer Price Index (PPI) y/y for September…est. +8.4%

·     8:30 AM ET           PPI Ex: Food & Energy (core) m/m for September…est. +0.3%

·     8:30 AM ET           PPI Ex: Food & Energy (core) y/y for September…est. +7.3%

·     1:00 PM ET           US Treasury to sell $32B in 10-year notes

·     10:00 AM ET        Fed’s Kashkari Takes Part in Town Hall Discussion

·     10:30 AM ET        Weekly DOE Inventory Data

·     2:00 PM ET           FOMC Meeting Minutes from Sep 21


Earnings Calendar:

·     Earnings Before the Open: AYR PEP

·     Earnings After the Close: DCT





















10-Year Note





Sector News Breakdown


·     Pepsi (PEP) Q3 core EPS $1.97 vs. est. $1.84; Q3 revs $21.97B vs. est. $20.84B; raises FY22 core EPS view to approx. $6.73 from $6.63 (est. $6.69); raises FY22 core constant currency EPS growth view to 10% from 8%; now expects to deliver 12% organic revenue growth, up from its prior view of 10%

·     El Pollo Loco (LOCO) board of directors declares special dividend of $1.50 per share and approves 20 million share repurchase program

·     Bassett (BSET) comments on proposal by CSC Generation Holdings as rejected both proposals by CSC saying it “significantly undervalued the company”

·     iRobot (IRBT) announced that Administrative Law Judge Maryann McNamara issued an initial determination in favor of iRobot in the company’s patent infringement action against SharkNinja Operating LLC and its related entities at the International Trade Commission


Energy, Industrials and Materials

·     Cameco Corp. (CCJ) and Brookfield Renewable Partners (BEP) along with institutional partners, are planning to buy Westinghouse Electric Co. The companies said Tuesday that they are forming a strategic partnership to acquire the nuclear services business. The total enterprise value for Westinghouse is roughly $7.88 billion, the companies said.

·     Australian coal miner Coronado Global Resources (CRN.AX) confirmed it was in confidential discussions with Peabody Energy Corp (BTU) regarding a potential “combination transaction”. The Australian, citing sources, reported on Tuesday that discussions were happening in New York, but said there was no clarity on the nature of these talks.

·     Gatos Silver (GATO) reports record quarterly production for Q3, increases production guidance and lowers cost guidance for 2022; qtrly silver production was 2.7 mln ounces of silver, an increase of 59% compared to q3 of 2021

·     General Electric (GE) announced the filing of the Form 10 registration statement with the U.S. SEC for the planned spin-off of its Healthcare division, to be called GE HealthCare



·     Allstate (ALL) upgraded to Outperform from Market Perform at Keefe Bruyette

·     CME Group (CME) upgraded to Buy from Hold at Deutsche Bank

·     AllianceBernstein L.P. (AB) preliminary assets under management decreased to $613 billion during September 2022 from $667 billion at the end of August. Market depreciation coupled with net outflows across each channel resulted in an 8% AUM decrease.

·     Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of September 30, 2022, totaled $120.6 billion. Artisan Funds and Artisan Global Funds accounted for $57.8 billion of total firm AUM

·     Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,323.3 billion, a decrease of 6.5% versus previous month-end.

·     Victory Capital Holdings Inc. (VCTR) reported AUM of $147.3 bln as of September 30, 2022, and average assets under management for q3 period of $158.9 bln

·     Virtus Investment Partners, Inc. (VRTS) prelim assets under management of $145.0 billion as of September 30, 2022. The decrease from June 30, 2022, primarily reflected market depreciation and net outflows in open-end funds, institutional accounts, and retail separate accounts



·     Cooper Companies (COO) downgraded to Hold from Buy at Jefferies

·     Eagle Pharmaceuticals (EGRX) files $200M mixed securities shelf


Technology, Media & Telecom

·     Intel Corp (INTC) is planning a major reduction in headcount, likely numbering in the thousands, in the face of a slowdown in the personal computer market, Bloomberg News reported

·     TripAdvisor (TRIP) Chief Financial Officer (CFO) will retire at the end of the month and be succeeded by the current finance chief at Noom Inc.

·     DocuSign (DOCU) upgraded to Neutral from Underperform at Wedbush


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.