Mid-Morning Look: January 31, 2022

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Mid-Morning Look

Monday, January 31, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open the trading week the way they left it late Friday, with a massive gap up as investors jump back into stocks following a big pullback in January that left stocks more attractive. Treasury yields were little changed as major indexes are still on track to close the month with heavy losses, following a month of volatile trading due to expected interest-rate increases. Despite today’s near 2% bounce, the Nasdaq heads for worst month since 2008 while the S&P 500, Dow eye worst month since March 2020. Stocks have tumbled in January as markets assess how fast the Federal Reserve may raise interest rates in response to heightened inflation and a tight labor market. Some Wall Street firms now expected more than 5-rate hikes this year alone (GS raised ests today). Geopolitical tensions have also added to market uncertainty, with the U.S. threatening Russia with new economic sanctions if it attacks Ukraine. In lone piece of economic data today, January Chicago PMI reported at 65.2 vs. 61.7 consensus and 64.3 prior. We are also in peak earnings season at this point with a flurry of large cap giants expected to report this week (AMZN, GOOGL, FB, AMD among them in tech). Talk about volatility, the Nasdaq is up 5%+ in the last two trading days and still down over 10% on the month!







WTI Crude















10-Year Note





Sector Movers Today

·     E&P and Majors; Truist downgraded CVX to Hold as they see more upside in smaller caps like DVN, OXY, EOG and they also upgraded EOG on their forecast for the company to top consensus expectations in Q4 and 2022-23 driven largely by continued operating efficiencies and contained costs, both driving record margins; Cowen says the escalation in Russia-Ukraine tension is bullish for energy commodities and lists BP, VLO, SLB as equities with the highest Russian exposure and CTRA, EQT, LNG as those with relative upside in the case of a supply disruption

·     MedTech Equipment; ISRG upgraded to Overweight (PT to $310) at Piper saying the co has executed well during the pandemic, has a substantial first-mover advantage, and is making good progress with SP/Ion and see as well-positioned for another year as a beat-and-raise story; DGX aid it will sell 50 common laboratory tests to consumers on Walmart Inc.’s (WMT) website; PODD was upgraded to Outperform at Oppenheimer Following Friday’s FDA approval of its Omnipod 5

·     Casinos, Gaming, Lodging & Leisure sector; Stifel lowered price tgts on SGMS, NGMS in gaming names, while forecasting Q4 earnings beats for EVRI, SGMS, IGT, and inline for AGS (pre-released) as expect game ops and other recurring revenue offerings remained healthy through most of the quarter, though Omicron likely impacted visitation in select markets into year-end; Macau Legend Development’s shares fell almost 20% in Hong Kong after media reports of the arrest of its CEO over the weekend, on suspicion of money laundering and illegal gambling, including operating online casinos; PENN late Friday issued an announcement after the Ontario govt officially opened its market for sports betting/iGaming to private operators April 4th

·     Bitcoin, FinTech & Payments; EFX upgraded to Outperform at RBC who sees favorable long-term risk/reward with the worst currently baked into investor expectations after relative underperformance vs peers despite increasingly positive consumer lending data from recent bank earnings; Barron’s highlighted Visa (V), which was one of their top 10 picks for 2022, saying its strong earnings on Friday make it look even better; HSBC upgraded DLO to Buy and downgraded STNE, PAGS to Hold; Bank of America initiated CCAP at Buy with a $19.50 price objective as an underappreciated middle market lender who is gaining share; BMO lowered their estimates on SYF with their PT going to $50 from $54 due to higher expected costs



·     ALGN +5%; upgrade from Neutral to Buy at UBS while lower tgt to $620 from $800 saying analysis of UBS Evidence Lab data coupled with channel checks suggests the company will beat 4Q consensus estimates by ~4% and grow by ~22% in 2022

·     ANGI +8%; said it is teaming up with Walmart. Angi’s highly rated pros will soon be available in nearly 4,000 Walmart stores across all 50 states and nationwide online.

·     BSET +25%; after Q4 results top views – revs $129.9M vs. est. $122.5M, while JBHT announces it is acquiring the assets of Zenith Freight Lines, a subsidiary of BSET, for approx. $87M

·     BYND +10%; upgraded to Overweight from Underweight at Barclays and tgt raised to $80 from $70 as believe BYND’s growth potential in the U.S. foodservice channel and the international segment is not properly reflected in the current stock price

·     MCHP +4%; upgraded from Neutral to Buy w/ $92 from $82 at UBS and see risk/reward skewed 2:1 to the upside

·     MDGL +3%; after announcing positive topline phase 3 MAESTRO-NAFLD-1 data, as primary and key secondary endpoints from the double-blind placebo-controlled 969-patient MAESTRO-NAFLD-1 safety study were achieved and was well-tolerated

·     NFLX +7%; upgraded to Buy from Neutral and lower tgt to $450 from $595, SPOT upgraded to Buy from Neutral at Citigroup saying subscriber-based stocks have come under significant pressure

·     PODD +3%; was upgraded to Outperform at Oppenheimer following Friday’s FDA approval of its Omnipod 5

·     SPOT +5%; Joe Rogan, responding to objections to his podcast on SPOT, said his show has grown “out of control” and pledged to be more balanced and informed about controversial topics and guests (shares were also upgraded to Buy at Citigroup, along with NFLX)

·     TSLA +5%; upgraded to Outperform from Neutral at Credit Suisse with unchanged $1,025 tgt saying with the market disproportionately punishing growth stocks in the past month, they believe an attractive entry point has emerged for Tesla



·     CTXS -3%; to be acquired by Vista Equity & Evergreen Coast Capital for $104.00 cash per share, 24.3% premium, $16.5 billion

·     DVN -3%; energy stocks, which are the top leaders in 2022 thus far with oil prices surging to 7-year highs, the top decliners today with rebound in tech – MRO, FANG, PXD, HES lower

·     IONS -9%; after PFE announced the discontinuation of development program for vupanorsen (PF-07285557), an investigational antisense therapy that was being evaluated for potential indications in cardiovascular risk reduction and severe hypertriglyceridemia

·     K -4%; downgraded to Market Perform at BMO Capital saying case for aggressively investing in K is less persuasive at current valuations (in line with 5-year averages), the ongoing challenges in US cereal, and industry-wide supply-constraints/inflation

·     LHX -3%; after posting Q4 profit that topped expectations but revenue that missed, as supply chain headwinds and budget uncertainty weighed, and provided a downbeat full-year revenue outlook

·     OTIS ; after slightly better than forecast Q4 EPS and in-line revs but rev growth for FY22 of $14.4B-$14.7B, was below Wall Street expectations of $14.71B while year EPS of $3.20-$3.30 was in line with $3.28 analyst consensus


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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