Early Look

Wednesday, September 21, 2022

Futures	Up/Down	%	Last
Dow	61.00	0.20%	30,862
S&P 500	6.25	0.16%	3,879
Nasdaq	-3.50	0.03%	11,918

 

 

U.S. futures are steady ahead of the Fed rate decision coming this afternoon, where markets are pricing an 80%+ chance of the FOMC boosting the fed funds rate by 75 basis points and less than 20% for 100 bps. Shares of defense stocks (NOC, LMT) and oil and gas stocks (XOM, OXY) rise after Russian leader Putin ordered a partial mobilization to hold on to disputed territories in Ukraine, while travel stocks slip. Treasury yields edge lower after jumping yesterday (2-yr down from near 4% levels and 10-yr off 11-year highs above 3.6% before paring gains). Stocks fell and Treasury yields rose to multiyear highs Tuesday on expectations the Federal Reserve will unveil more forceful monetary tightening to curb inflation this week. The S&P 500 lost 1.1% while the Dow industrials and Nasdaq Composite retreated 1%. All eyes are on the Fed, which is concluding its two-day policy meeting, with results at 2:00 PM today. Stock losses were broad into Tuesday afternoon, hitting all 11 S&P sectors. In Asian markets, The Nikkei Index tumbled -375 points to 27,313, the Shanghai Index edged lower -5 points to 3,117, and the Hang Seng Index declined -336 points to 18,444. In Europe, the German DAX is down -17 points to 12,653, while the FTSE 100 rises 40 points to 7,235.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -43.96 points, or 1.13%, to 3,855.93

·     The Dow Jones Industrial Average fell -313.45 points, or 1.01%, to 30,706.23

·     The Nasdaq Composite tumbled -109.97 points, or 0.95%, to 11,425.05

·     The Russell 2000 Index declined -25.34 points, or 1.40% to 1,787.50

 

Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     10:00 AM ET          Existing Home Sales M/M for August

·     10:30 AM ET          Weekly DOE Inventory Data

·     2:00 PM ET             FOMC Policy Meeting Results – 75bps hike expected to 3%-3.25% range

 

Earnings Calendar:

·     Earnings Before the Open: GIS

·     Earnings After the Close: FUL KBH LEN SCS

 

Other Key Events:

·     FOMC Policy Meeting Results at 2:00 PM ET– 75bps hike expected to 3%-3.25% range

·     Credit Suisse Annual Houston Oil & Gas Conference, 9/20-9/21, in Houston, TX

·     Deutsche Bank Annual Leveraged Finance Conference, 9/19-9/21, in Arizona

·     Roth Capital Annual Solar & Storage Symposium, 9/20-9/21, in Anaheim, CA

·     Salesforce User Conference: Dreamforce 2022, 9/20-9/22, in San Francisco, CA

·     Sidoti Fall Small Cap Conference (virtual), 9/21-9/22

·     Wells Fargo 5th Annual Consumer Conference, 9/20-9/22, in CA

 

 

Macro	Up/Down	Last
Nymex	2.00	85.94
Brent	2.15	92.77
Gold	12.40	1,683.50
EUR/USD	-0.0048	0.9924
JPY/USD	0.14	143.85
10-Year Note	-0.033	3.54%

 

 

World News

·     Russian President Vladimir Putin raised the threat of a nuclear response and ordered Russian reservists to mobilize in an escalation of the war in Ukraine – WSJ

·     The British government unveiled a multibillion-pound bailout to help companies with their energy bills this winter amid soaring prices that threaten to put many out of business.

 

Sector News Breakdown

Consumer

·     Coty (COTY) said it’s on track to double its skincare sales to $500M-$600M by FY25, commenting ahead of its investor day; raises Q1 LFL sales growth view to 8%-9% from 6%-8%

·     Stitch Fix (SFIX) 4Q adj EBITDA ($31.8Mm) vs est. ($30Mm) on revs $481.9Mm vs est. $489Mm; EPS ($0.89) vs est. ($0.63), active clients -9% y/y to 3,795,000; guides 1Q adj EBITDA ($15Mm) to ($10Mm) vs est. ($13.25Mm) and net revs $455-465Mm vs est. $522.7Mm

·     Estee Lauder (EL) upgraded to Buy from Neutral at Goldman Sachs

·     Beyond Meat (BYND) chief operating officer suspended after arrest for allegedly biting man’s nose

 

Energy, Industrials and Materials

·     The America Petroleum Institute said weekly crude oil stockpiles rose 1.035M barrels, with Cushing inventories rising 510K barrels, gasoline inventories jumping 3.225M barrels and distillates with a 1.53M barrel build

·     China has begun running down its crude stockpiles, which could signal that refiners are getting ready to boost fuel exports – Bloomberg

·     US defense stocks Northrop Grumman (NOC), Lockheed Martin (LMT), and Raytheon (RTX) rising after Russian President Vladimir Putin declared a partial mobilization with the Kremlin also moving to annex occupied regions of Ukraine

·     Schlumberger (SLB) rolled out a cloud-based enterprise data solution on Wednesday to deliver the most comprehensive capabilities for subsurface data.

 

Financials

·     Block (SQ) downgraded to Neutral from Outperform at SMBC Nikko

 

Healthcare

·     Aurora Cannabis (ACB) reports Q4 revenue C$50.2M vs. C$54.83M a year ago

·     OraSure (OSUR) wins contract to supply “together take me home,” HIV self-testing initiative sponsored by the centers for disease control and prevention. Under program, CDC will provide $41.5 mln over a five-year period to support community testing

·     Puma Biotechnology (PBYI) announces exclusive license agreement with Takeda (TAK) for the development and commercialization of Alisertib, an investigational Aurora Kinase A Inhibitor

·     Pulse Biosciences (PLSE) announces strategic change of focus in support of significant additional opportunities for medicinal related nano-pulse stimulation

 

Technology, Media & Telecom

·     Take-Two Interactive Software Inc (TTWO) said that a hacker had gained access to the help desk platform of its unit 2K Games and sent a malicious link to certain customers. The company urged users not to open any mails or click on any links received from 2K Games Support account

·     Saga Communications, Inc. (SGA) increases quarterly cash dividend to $0.25 per share and declares a special cash dividend of $2.00 per share

·     Micron (MU) downgraded to Neutral from Buy at Mizuho and cut tgt to $56 from $75

·     Western Digital (WDC) downgraded to Neutral from Buy and tgt cut to $40 from $62 at Mizuho

·     Tencent Music Entertainment (TME) has successfully listed on the Main Board of The Stock Exchange of Hong Kong