Mid-Morning Look: February 11, 2022

Auto PostDaily Market Report

Mid-Morning Look

Friday, February 11, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks edging higher early after a sharp selloff Thursday when soaring inflation numbers raised fears about quicker interest rate hikes from the Federal Reserve. Geopolitical concerns also a factor as U.S. Secretary of State Antony Blinken said today Russia is massing yet more troops near Ukraine and an invasion could come at any time. Economic data today weighs on sentiment as the University of Michigan sentiment index falls to its lowest since October 2011, while one-year inflation expectations are at the highest seen since July 2008. The inflation fears were peaked yesterday as data showed the CPI rose 7.5% in the 12 months through January, marking the biggest year-on-year increase since February 1982 and fueling expectations of a hefty rate hike by the Federal Reserve. Expectations now show a high probability for a 50-bps hike at the March meeting, though some Fed officials have been trying to downplay that notion after Fed President Bullard suggested it as a possibility (he is a voting member). Energy stocks among the top gainers in the S&P 500 with oil prices rebounding, while consumer discretionary and retail among top decliners following disappointing results from UAA. A busy week of earnings behind us, with roughly 360 S& companies reporting thus far in the quarter, with another big week coming up including Dow components WMT and CSCO.







WTI Crude















10-Year Note





Economic Data

·     University of Michigan sentiment index at lowest since October 2011, falling to 61.7 for Feb-P, below consensus 67.5 and the Jan-Final 67.2; one-year inflation expectations are at the highest seen since July 2008; consumers current conditions index prelim Feb 68.5 vs final Jan 72.0 and consumers expectations index prelim Feb 57.4 vs final Jan 64.1


Sector Movers Today

·     Auto sector; AXL secured securing a contract valued at more than $10B for next-gen full-size truck axle programs with multiple customers, but reports a Q4 adj loss of (9c) vs est. 2.5c profit on sales $1.24B vs est. $1.28B; GT Q4 results beat estimates with adj EPS 57c topping est. 32c and sales $5.05B vs est. $4.96B, and their CEO expects inflationary pressures to persist over the next several quarters; auto suppliers MGA Q4 adj EPS $1.30 beat est. $0.85 on sales $9.11B vs est. $8.88B, sees FY22 sales $38.8-40.4B vs est. $40B and expects semiconductor supply constraints to impact production with 1H results being weaker than 2H as a result; GM and Ford (F) said that trucker protests in Canada would cause further production delays at their north American plants with GM completely halting production at a site in Michigan that builds SUV and Ford looking at flying in some auto parts to its Ontario plant

·     Software movers; HUBS rises a 6th straight day after earnings and revs beat for Q4 as recorded a 47% jump in subscription revenue; BL mixed with EPS miss on better revs but a deceleration from 21% q/q, sub revenue growth of 21%, down from 22% q/q, and guidance also disappointing as EPS pressured by spending on the Google Cloud migration; AVLR reported solid 3Q results with revenue, profitability and cash flow exceeding expectations driven by solid new customer growth and continued strong net-dollar-expansion rates; ZEN quarterly top-line outperformance was driven by continued traction with the Zendesk Suite and noted that 90% of new customer bookings and 60% of total bookings during the quarter were on Suite; FROG reported a slight beat and raise with 2% revenue upside to $59.2M (vs. last quarter’s beat of 2%) as total revenue accelerated slightly to 39% y/y (from 38% y/y); COUR reported a solid 4Q with better than expected performance in Consumer/Enterprise and strong ’22 guide

·     Bank movers: after a tremendous run over the last 2-weeks, financials take a breather as the Treasury yield curve flattens on strong expectations of a rate hike; shares of big banks JPM, BAC, WFC, C, MS others slip after a strong run alongside a surge in Treasury yields to highest levels in over 2-years (2-yr jumped over 25 bps yesterday alone to 1.6% and 10-yr to 2.04%). The spread between 2’s and 10’s fell below 40 bps for the first time since August 2020 (narrower spread can have banks take a hit to profitability with a flatter yield curve). RBC Capital said today although the new DFAST scenarios still incorporate a challenging environment, expects all the publicly traded banks to pass the stress test; AB prelim AUM of $751B in January 2022 compared to $779B at the end of December



·     BIO +5%; among top gainers in the S& after guided 2022 well ahead of expectations, with EBITDA margin guidance of 23.5%-23.8% and Life Sciences expected to grow +16-18% YY

·     BKR +4%; early strength in energy complex as oil prices rebound, rotation back into 2022 winners amid fear of Russia invasion of Ukraine – SLB, HES, OXY, DVN rising

·     EXPE +2%; as 4Q21 results beat with revenue/adj. EBITDA of $2.28b/$479mm vs. our $2.14b/$337mm and says impact from covid was less severe and shorter duration than previous waves, qtrly total gross bookings $17.5B

·     HUBS +5%; rises a 6th straight day after earnings and revs beat for Q4 as recorded a 47% jump in subscription revenue

·     MPWR +11%; posted strong results and guidance, which were both solidly above expectations, most notably, GM exceeded consensus estimates by 120 bps

·     NET ; posted strong results with 54% revenue growth that accelerated q/q and solid profitability, mostly driven by enterprise demand with customers >$100K growing 71% and a record NRR of 125% and guidance was ahead

·     NWL +9%; after Q4 top and bottom-line beat though said it expects sales to fall in 2022 while normalized earnings are expected to grow slightly

·     ZG +12%; beat Q4 sales est. ($3.9B vs. est. $2.98B), helped by an 11-fold increase in revenue from its homes segment and as all three reportable segments posted revs that exceeded prior guidance driven by higher-than-anticipated margins in IMT segment



·     AFRM -11%; extends declines after a volatile session Thursday when shares rose 9% after earnings leak on Twitter – only to have shares sink as much as 33% as full earnings release as analysts lower tgt on margin pressure concerns, with increasingly difficult rev growth

·     ASTR -9%; extends slide, downgraded to Underperform at Bank America after a launch failure of its LV0008 rocket late on Thursday

·     CC -12%; as Q4 EPS of $0.81 missed the $0.92 est., while revs rose 18% to $1.60B vs. est. $1.57B; and guides FY 2022 adjusted EPS between about $4.07-$4.70 vs. est. $4.54

·     CLF -2%; announces $1B share buyback program but shares slip as Q4 EPS of $1.69 missed the $2.08 estimate and miss on revs $5.35B vs. est. $5.73B

·     ILMN -4%; reported 4Q21 results that were generally in line with its preliminary results announced last month 2022 guidance also remained largely intact.

·     PRQR -70%; after saying mid-to-late-stage study of experimental drug sepofarsen for a rare genetic eye disease did not meet primary endpoint nor notable secondary endpoints; adds additional analyses will be conducted on the data from the trial

·     UAA -9%; posts Q4 EPS and sales beat and said inventory was down 8% to $811M but forecasts gross margin to shrink 200 bps in the quarter ending March 31, including an about 240 basis point hit due to higher freight expenses

·     UPWK -8%; after mixed quarterly results and guidance


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.

Live Trading

Open an Account

Paper Trading