Mid-Morning Look: March 16, 2022

Auto PostDaily Market Report

Mid-Morning Look

Wednesday, March 16, 2022






DJ Industrials




S&P 500








Russell 2000






Lots of factors driving markets higher, but the aggressiveness of buying ahead of the FOMC rate meeting later today a bit surprising (Nasdaq up 2.9%, S&P 1.85%), especially after stocks jumped on Tuesday, closing at the highs in a broad market rally. The Fed is widely expected to hike rates by 25 bps when their 2-day meeting convenes at 2:00 (Fed Chair Powell speaks at 2:30), but the tone and “dot-plots” of future hikes will be closely watched. Not much fear ahead of the report it appears as tech blasts off, while China issued upbeat news for its markets overnight and the Ukraine situation remains fluid. In a virtual address to U.S. Congress this morning, Ukraine President Zelenskyy invoked the attack on Pearl Harbor and the Sept. 11 terror strikes on America as he pleaded with Congress to get more aid for his embattled country to fight against its invasion by Russia, asking for a “no-fly” zone in Ukraine and calls for additional sanctions on Russia. Signs of progress in Ukraine-Russia peace talks lifted sentiment overnight as Ukraine’s Zelensky said the talks were becoming “more realistic”, while Russian Foreign Minister Sergei Lavrov said there was “some hope for compromise”, with neutral status for Ukraine. The global mood was also lifted by China’s promise to roll out more stimulus for the economy and keep markets stable, fueling a rally in U.S.-listed Chinese shares. European equities rally from the open, supported by optimistic comments from the Russian foreign minister and spillover from Asia. Defensive sectors such as utilities, consumer staples slide along with energy again as oil prices slip.


Economic Data

·     February Retail Sales rose +0.3% vs. est. +0.4% (Jan revised to 4.9% from 3.8%), while retail sales ex-autos rise +0.2% vs. est. +0.9% (Jan revised to 4.4% from 3.3%); Feb cars/parts sales +0.8%

·     Feb export prices rose +3.0% above est. +1.6% (Jan revised to 2.8% form 2.9%) while Feb import prices rise +1.4% vs. est. +1.5% (Jan revised to +1.9% from 2%); Feb year-over-year import prices +10.9%, export prices +16.6%; Feb petroleum import prices +8.1% vs. 7.9% in Jan

·     Business Inventories for January rose +1.1%, in-line with estimates while Dec revised to 2.4% from 2.1%; Jan inventory/sales ratio 1.25 months’ worth vs dec 1.29 months; Jan business sales +3.7% vs Dec -0.5%; retail inventories ex-autos revised to +1.8%

·     March NAHB Housing market index 79 versus 81 in February; index of current single-family home sales 86 versus 89 in February; index of home sales over next six months 70 versus 80 in February; index of prospective buyers 67 versus 65 in February







WTI Crude















10-Year Note





Sector Movers Today

·     Retailers; KSS received a letter from Engine Capital regarding its disappointing guidance and urging the company to sale as the stock’s -12% decline at its last analyst day sent a clear message about its plan; CAL Q4 adj EPS $0.91 vs est. $0.67 on revs $679.3Mm vs est. $677.2Mm, guides FY EPS $3.75-4.00 vs est. $4.03, and added 7Mm shares to repurchase program; SCVL Q4 adj EPS 83c vs est. 44c on revs $313.4M vs est. $280.5M, sees FY22 sales growth 4-7%, adj EPS $3.80-4.10 vs est. $3.85, and upped its div to 9c from 7c; LE Q4 missed on EPS 21c vs est. 31c and revenue $555.4M vs est. $567.7M with weaker FY guidance of EPS $0.71-1.04 vs est. $1.14 on sales $1.68-1.75B vs est. $1.76B; Credit Suisse and Jefferies both lowered their estimates on NKE ahead of Monday’s earnings report due to macro uncertainty and volatility

·     Auto sector; TSLA is suspending production at its Shanghai factory for two days, according to a notice sent internally and to suppliers; Chinese automaker BYD follows Tesla in hiking car prices due to surging raw material costs; SFT 4Q EBITDA was in line with muted expectations and 2022 outlook and issued medium-term Target for EBITDA breakeven/positive by 2024-25; LOTZ soft 4Q results reflected the ongoing difficult environment for the company’s consignment model while also did not provide guidance due to leadership change

·     Pharma movers; ACAD upgraded to Buy from Hold at Canaccord and up tgt to $31 ahead of upcoming regulatory saga on Nuplazid for ADP, other catalysts as like the risk-reward heading into an AdCom, 8/4 action date; MRK and ADAG received FDA clearance to proceed with a phase 1b/2 trial of ADG126 in combo with Keytruda (pembrolizumab) in solid tumors; PRTA announced preclinical data for its dual Aβ/tau vaccine targeted at Alzheimer’s disease; APLS reports long-term data from two late-stage studies testing its drug pegcetacoplan as a potential treatment for geographic atrophy (GA)

·     Transports, Industrial & Machinery; Dow Transports outperform, up over 300 points or 2%, pushing above its 100-day MA resistance of 15,855 (topped 50-day MA yest of 15,400) – broad strength in rails, airlines, truckers (UNP, DAL, JBHT); also broad bounce in industrials with “risk-on” attitude helping equipment and heavy machinery into Fed



·     APLS +12%; as reports long-term data from two late-stage studies testing its drug pegcetacoplan as a potential treatment for geographic atrophy (GA)

·     BABA +19%; along with squeeze higher for U.S. listed Chinese stocks BIDU, BZ, PDD, TCEHY, NTES, DIDI and others as China made a strong push to stabilize financial markets and promise to ease regulatory crackdown overnight

·     JBL +8%; boosted its financial guidance for fiscal 2022 and set out performance expectations for Q3 (now sees FY 22 EPS about $7.25 on revs $32.6B above prior view $6.55 and $31.8B)

·     KSS +5%; received a letter from Engine Capital regarding its disappointing guidance and urging the company to sell

·     MU +7%; was upgraded to Outperform at Bernstein with $94 tgt as sees 28% upside as chip prices will likely rebound later in 2022; also upgraded Samsung, SK Hynix as a correction to the memory market, if any, won’t be prolonged & won’t change the structure.

·     S +13%; reported a mixed Q4 with EPS (27c) wider than est. (18c) on revenue $65.6M vs est. $60.7M and ARR that rose 123% YoY and sees revenue growth of 80% this year at the midpoint of its $366-370M guidance vs est. $346.1M

·     SBUX +7%; said CEO Kevin Johnson is stepping down, handing leadership of the coffee chain back to former longtime CEO Howard Schultz (also upgraded to Overweight at JPMorgan)

·     SMAR +3%; posted Q4 adj EPS (12c) vs est. (15c) on revenue $157.4M vs est. $151.7M with EPS guidance below consensus but better than expected sales forecasts

·     TSP +15%; as Reuters reported the autonomous trucking startup, backed by SINA, is looking to sell its business in China and focus on the U.S. market

·     WYNN +6%; U.S.-listed casino operators with exposure to Macau WYNN, LVS, LVS jump as Asian and European stocks rally after a pledge from China to keep capital markets stable



·     CPB -2%; defensive food stock, consumer staples decline HSY, CHD, SJM

·     LE -2%; Q4 missed on EPS 21c vs est. 31c and revenue $555.4M vs est. $567.7M with weaker FY guidance and files for shelf of up to 17.1 mln shares of common stock by selling stockholders

·     LMT -5%; after the U.S. Department of Defense will request 61 Lockheed Martin F-35 fighter jets in its next budget, 33 fewer than previously planned

·     NLOK -11%; UK regulator cast doubt on NortonLifeLock Inc’s takeover of London-listed cybersecurity peer Avast after finding the combination could reduce competition

·     SLB -1%; weakness in a basket of energy stocks as oil prices slide


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