Mid-Morning Look: April 20, 2022

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Mid-Morning Look

Wednesday, April 20, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. markets are mixed with the tech heavy Nasdaq down sharply, but the Dow, S&P 500, and Russell 2000 moving higher. High growth stocks are seeing the biggest declines today (tech, media) after NFLX tumbles 35% after its earnings disappointment last night (lowest levels since Jan 2018), showing subscriber losses in the quarter in many regions vs. expectations of gains, crushing other streaming names (DIS, ROKU, PARA) as well as high multiple software and Internet names. Semiconductors holding up well, especially semi equipment names after ASML quarterly beat. Financials and Transports, two of the hardest hit sectors in recent weeks, seeing further bounces this week. Defensive, staples names such as ULTA, KO, WMT, GIS hitting new highs as investors look to safety. Nearly every name in utility sector in the S&P higher with shares of EXC FE leading up over 2%. Overall, Nasdaq underperforms broader markets down roughly 1% while S&P off highs, but still flat on day as strength in industrials, financials, healthcare, and defensive utilities, staples, and REITs offsetting the weakness in tech and comm services. One economic data point, no Fed speakers yet and more earnings after the close (including TSLA).


Economic Data

·     Existing Home Sales for March fell -2.7%, reported at 5.77 mln unit rate slightly below consensus 5.80 mln and down from Feb downwardly revised 5.93 mln (vs. 6.02 mln); March inventory of homes for sale 950,000 units, 2.0 months’ worth; the national median home price for existing homes $375,300, +15.0% from March 2021 (highest since 1968)







WTI Crude















10-Year Note





Sector Movers Today

·     Internet, Media & Telecom: NFLX tumbles over 25% after reported disappointing 1Q results and guidance as subscriber growth turned negative in three out of the company’s four major regions – lost subs in EMEA (-300K) and LATAM (-350K), lost (-640K) subscribers in US/Canada; also lower Q2 rev guidance; shares of streaming co’s DIS, ROKU, PARA declined in sympathy; Citigroup said its survey of more than 3,000 internet U.S. users shows elevated levels of user engagement over the internet as top sector picks include AMZN (PT $4,100), SNAP ($50), ABNB (PT $200) and DASH ($155) as all these cos are disrupting their respective industries, focusing on innovation, improving execution and operational rigor, and have a “self-funding mentality”; FB and PINS shares slide on cautious analyst commentary

·     Housing & Building Products; The median monthly asking rent in the U.S. increased 17% year over year to a record high of $1,940 in March, according to a new report from Redfin (RDFN), the largest annual jump since at least February 2020. Meanwhile, the national median monthly mortgage payment for homebuyers rose twice as fast: It climbed 34% year over year to $1,910, also the biggest increase in Redfin’s records; Wayfair (W) announces “Way Day 2022”, invites customers to enjoy best savings of the year for all things home; annual two-day sale will run April 27-28 and feature up to 80% off top-sellers, free shipping on everything, and more; for homebuilders, MBA mortgage applications index fell 5.0% in week ended April 15 after falling 1.3% in prior week. purchases down 3.0% after rising 1.4% in prior week, refis fell 7.7% after falling 4.9% in prior week and the average 30-yr fixed rate 5.20%

·     Bank movers; CS warned it will make a loss in Q1 from rising litigation costs and loan losses related to Russia; CMA Q1 EPS just misses ests as Q1 net income of $189M vs $350M y/y saying deposits in the quarter were impacted by seasonality and customers using balances to fund business activity; FHN core EPS of $0.38 beat consensus of $0.32 driven by a lower provision expense of negative $40M vs. est. -$12M and lower core expenses; PACW reported an in-line quarter which saw better than expected net interest income offset by worse than expected noninterest income; HWC results were relatively positive and its forward outlook is little changed other than the expectation for NIM expansion; FULT EPS beat primarily due to another negative loss provision although pretax pre-provision income was also modestly better than projections



·     ANTM +2%; Q1 adj EPS $8.25 vs. est. $7.81; Q1 revs $37.9B vs. est. $37.35B; raises FY22 adjusted EPS view to greater than $28.40 from prior view greater than $28.25 (est. $28.48); Q1 operating gain grew by 13.2% over the prior year quarter to $2.4 billion

·     ASML +5%; quarterly results lift semi-equipment names as posted Q1 sales of 3.5B euros ($3.80 billion) vs. est. of 3.45B euros, while Q1 net income also came in above estimates; Bookings remain strong at 226 billion euros (lifts shares of equipment names LRCX ahead of earnings)

·     CAR +5%; upgraded to EW from UW and raise tgt to $245 from $164 at Barclays saying they are incrementally constructive on the rental car space in an inflationary environment

·     IBM +5%; following Street beat, optimistic outlook as 1Q operating EPS $1.40 vs $1.39 cons, 1Q Revenue $14.20B vs. est. $13.78B as results were helped by outsized contributions from recent spin-off, Kyndryl, driving strength in both software and consulting segments

·     LAD +3%; Q1 adj EPS $11.55 vs. est. $10.09; Q1 revs rose 54% to $6.71B vs. est. $6.28B; qtrly used vehicle retail revenues increased 65.2%; qtrly new vehicle retail revenues increased 39.6%

·     LULU +1%; outlines fresh 5-year financial targets, sees revenue doubling from 2021 levels by 2026, reaching $12.5 billion. Lululemon also expects to double it men’s business — having already doubled men’s sales from 2018 to 2021

·     OMC +5%; among top leaders in S&P after earnings as 1Q adj EPS $1.39 vs est. $1.31 on revs $3.41B vs est. $3.29B, and raises FY22 organic growth view to 6.0%-6.5% from 5%-6%

·     PG +2%; Q3 profit and sales that beat expectations and raised its organic rev growth view to 6%-7% from prior 4%-5%



·     ABT -2%; after earnings results as EPS beat was all driven by covid tests, and possible reason for reversal as Covid cases slow

·     BKR -8%; misses Q1 revenue and profit estimates saying revs rose 1% to $4.8B, below consensus of $5.02B as results reflected a very volatile market environment

·     CMA -2%; after EPS miss – Q1 net income of $189M vs $350M y/y saying deposits in the quarter were impacted by seasonality

·     NFLX -36%; tumbles after reported disappointing 1Q results and guidance as subscriber growth turned negative in three out of the company’s four major regions – lost subs in EMEA (-300K) and LATAM (-350K), lost (-640K) subscribers in US/Canada; also lower Q2 rev guidance

·     ROKU -6%; along with weakness in other streaming players DIS, PARA after NFLX sub loss

·     TEVA -3%; said the FDA issued a Complete Response Letter (CRL) regarding the New Drug Application (NDA) for TV-46000/mdc-IRM (risperidone extended-release injectable suspension for subcutaneous use) for the treatment of schizophrenia


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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