Market Review: July 26, 2022

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Closing Recap

Tuesday, July 26, 2022





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     WMT slid after last night’s profit warning and took the broader equities market with it. Also weighing on the market were weak US new home sales, a third consecutive monthly decline in consumer confidence and a global growth forecast cut by the IMF. There were very few places to hide today, but Healthcare (XLV), Utilities (XLU) and Real Estate (XLRE) did manage to finish in the green. As expected, given the WMT comments, Consumer Staples (XLY) was the big laggard of the day, finishing -3.35%. Both growth and value finished lower, with the Russell 1000 Growth index about -1.8% and the Value index roughly -0.65%. Tonight brings earnings from GOOGL and MSFT among others, and we hear from the Fed again tomorrow, so there is every reason to expect recent volatility to continue.


Economic Data:

·     Philadelphia Fed non-manufacturing regional business activity index 0.1 in July vs 4.6 in June; non-manufacturing firm-level business activity index 11.7 in July vs 24.7 in June; non-manufacturing new orders index 3.9 in July vs 15.5 in June

·     US CaseShiller 20 YoY actual came in at 20.5% vs the forecast 20.6% and previous 21.2%. Also on the housing front, US new home sales slid 8.1% (vs expected -5.4%) to 0.590Mm, marking the lowest level since April 2020. Sales slid in the Northeast, West and South, but climbed in the Midwest.

·     US consumer confidence fell for a third consecutive month in July. The Conference Board Consumer Confidence Index slipped to 95.7 vs 98.4 in June, marking the lowest level since February 2021. Both the present situation and expectations components fell, but the spread remained well above traditional recession territory at 76.0. Purchasing intent for cars, homes, and major appliances all slipped in July.

·     IMF now see global growth slowing to 3.2% in 2022 and 2.9% in 2023 and comments a small shock could tip the US into recession and the world also may soon be teetering on the edge of a recession.

·     Richmond Fed Comp. Index Actual 0 (Forecast -14, Previous -11)




·     August gold finished lower for the second consecutive day but was effectively flat. Futures fell $1.40, -0.08%, to settle at $1,717.70 an ounce as US Dollar strength ahead of tomorrow’s Fed decision kept gold movement muted.  September silver gained $0.21, or +1.1%, to settle at $18.535 an ounce.

·     WTI crude settled at $94.98/bbl, slipping $1.72 (-1.78%), while Brent crude also settled lower at $104.40/bbl (-$0.75, or -0.71%). WTI’s discount to Brent widened to the largest since April 2020.

·     Natural gas August futures settled at $8.993/MMBtu, +$0.73 or about +0.74%. Early in the session, prices hit the highest level since 2008 as supply disruption from Russia and temperature-driven energy demand supported gains. 


Currencies & Treasuries

·     DYX gained about $0.75 to move back above $107 as the US Dollar rebounded from yesterday’s weakness ahead of the Fed decision tomorrow.

·     US 10-year yield moved modestly lower ahead of Fed day as expectations continue to hold for a rate hike of +75bps tomorrow and an implied rate of 3.39% by the December meeting with a slight pullback in the implied to 3.32% for March 2023.






WTI Crude















10-Year Note





Top stock stories:

·     In retailers; WMT lowered its Q2 and FY23 outlooks, primarily due to pricing actions aimed to improve inventory levels at Walmart and Sam’s Club in the U.S. and mix of sales; in research, AEO, RVLV both downgraded at Bank America and cut FY22/23 ests by 29%-32% for apparel coverage universe by 29%/32% to reflect our economists’ call for a recession in 2H22; WHR Q2 EPS beat, top line miss, NA EBIT miss, and FY22 cut; AAN shares tumble as 2Q adj EPS ($0.17) vs est. $0.61 on revs $610.4Mm vs est. $607.5Mm; guides FY revs $2.19-2.27B vs est. $2.34B and adj EPS $1.75-2.15 vs est. $2.65; SHOP tumbles as lays off 10% of workers

·     In crypto, COIN slides, dragging crypto currency and Bitcoin prices lower after Bloomberg reported last night the co is facing a US probe into whether it improperly let Americans trade digital assets that should have been registered as securities

·     In consumer Staples, Dow component KO rises early as 2Q adj EPS $0.70 vs est. $0.67 on revs $11.3B vs est. $10.56B, adj organic revs +16%; sees 3Q include approx 9-10% currency headwind; guides FY organic revs +12-13% and FY adj EPS +5-6% vs est. +5.9%; KMB Q1 slight beat but expects FY EPS guide to come in at the low end of the range; ACI qtr is better, guidance EPS raised by 10c at midpoint (beat by 4c), but only small update to strategic review

·     Industrial earnings; MMM posts mixed quarter, lower sales guidance and announces plans to spin off its Health Care business by year-end 2023; GE posted a beat in aviation earnings while cuts FCF; PCAR another mover on earnings; UPS reported a better-than-expected quarterly profit as more expensive deliveries helped the largest U.S. parcel carrier to offset a decline in volumes.

·     In China, BABA will seek a primary listing in Hong Kong, entrenching the financial hub’s status as an alternative to US markets ahead of a potential exodus of Chinese companies from New York

·     In biotech, BIIB shares active after the FDA agrees to review ALS treatment from Biogen, despite inconclusive clinical trial results

·     Ratings agency MCO posted beat for Q2 revs but EPS miss and guides FY2022 adjusted EPS of $9.20-$9.70, down from its previous range of $9.85-$10.35 and vs. estimate of $10.16

·     Tonight, expected earnings results from: GOOGL, MSFT, TXN and Visa (V) in tech

·     In technology, SHOP confirmed a WSJ report that it will lay off about 10% of its global workforce as consumers pull back from pandemic shopping trends.


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.

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