Mid-Morning Look: November 10, 2022

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Mid-Morning Look

Thursday, November 10, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks surging (an understatement) as U.S consumer prices increased less than expected in October and underlying inflation appeared to have peaked, raising hopes the Federal Reserve can dial back its hefty interest rate hikes. The Fed has raised rates by a whopping 75-bps each of the last 4-meetings, with expectations still for another 50-bps at the December meeting, with hopes the ceiling for hikes capping at around 5% overall by March. WSJ‘s Nick Timiraos (also known as the “Fed whisperer”) said “the October inflation report could keep Federal Reserve officials on track to approve a half-percentage-point interest-rate increase next month, even as they pencil in slightly higher rates next year than they had anticipated previously”. Consumer prices rose 0.4% in October from September. On a year-over-year basis, the consumer-price index decelerated to an 7.7% increase, from 8.2% in September. Core prices rose 0.3% in October from September, and by 6.3% on a year-over-year basis. Following the report, the dollar has tumbled nearly 2% and Treasury yields over 30-bps, with the 2-yr at 4.31% and the 10-yr 3.85%, providing a boost to commodity prices. The S&P and Nasdaq so far having their best trading days since April of 2020 on the inflation report, which is trumping everything currently. Big rally in interest rate sensitive sectors and discretionary names while defensive healthcare and Staples lagging.


Economic Data

·     Consumer Price index (CPI) for October rose +0.4% m/m below the est. +0.6% (from +0.4% prior prior) and y/y headline CPI rises +7.7% vs. +8.0% expected (from 8.2% prior). Core CPI (ex food & energy) rose +0.3% vs. expected rise +0.5% m/m (vs. prior +0.6%) and rises +6.3% y/y vs. +6.5% estimate and (vs. 6.6% prior) – both lower readings for headline and core lifts stocks

·     Weekly jobless claims rose to 225,000 in latest week vs. est. 220K and prior week revised up to 218K; the 4-week moving average fell to 218,750 from 219,000 prior week; continued claims rose to 1.493 mln oct 29 week (con. 1.475 mln) from 1.487 mln prior week and the US insured unemployment rate unchanged at 1%







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer Staples: CELH reported a record quarter driven by expansion across all channels and PEP orders; BYND weak demand and elevated competition in the plant-based meat category continue to weigh on shares, driving soft Q3 results overnight; plenty of earnings in food space as BGS in-line Q3 EPS and slight miss revs as volume declines and cuts annual dividend, UTZ posts top and bottom line Q3 beat and raises FY22 revenue growth view to 17%-19% from 13%-15%, and USFD with mixed Q3 (EPS miss, sales beat), announces $500M buyback and narrows year EPS outlook; MO downgraded to Sell from Neutral at UBS saying the market appears to be pricing in too favorable an outlook for the company as consumers go for cheaper products

·     Retailers; RL topped market estimates for quarterly revenue, as wealthier shoppers unaffected by inflation splurged on the company’s high-end clothing and footwear; CPNG reported EBITDA well above consensus while total expenses grew only 1% YoY with revenues growing at 10% YoY; DDSQ3 EPS and sales easily top consensus; TPR beat Q1 profit estimates as wealthier consumers in Europe and rest of Asia splurge, but cuts its annual sales and profit forecasts; PRPL reported 3Q22 revenue that came in slightly above expectations and EBITDA that far surpassed consensus, but forward-looking guidance was slightly underwhelming following a strong 3Q; HBI downgrade from Outperform to Neutral at Credit Suisse as see other names within coverage that have done more work to stabilize the near-term outlook

·     Asset managers: monthly AUM data released: AB preliminary assets under management increased to $627 billion during October 2022 from $613 billion at the end of September; BEN reported preliminary month-end assets under management (AUM) of $1,318.4 billion at October 31, 2022, compared to $1,297.4 billion at September 30, 2022; TROW preliminary month-end assets under management of $1.28 trillion as of October 31, 2022; VRTS preliminary assets under management of $149.5 billion as of October 31, 2022; APAM preliminary AUM as of October 31, 2022, totaled $125.3 billion; IVZ reports preliminary AUM $1.36T as of October 31, +2.8% MoM; net long-term outflows of $1.1B in the month; LAZ preliminary assets under management (“AUM”) as of October 31, 2022 totaled approximately $204.6 billion

·     FinTech & Payments: after weak results and guidance sent shares lower the day prior, Bank America downgraded UPST to Underperform from Neutral and lower tgt to $15, from $34 (notes co guided to 4Q revs of $125mn-$145mn, below Street at $184mn, on continued negative net interest income and decl. volume); PAY 3Q results featured upside to both net revenue and contribution profit growth (+26% vs Street +21% y/y) and adj EBITDA ($8.0M vs Street $7.3M); MQ 3Q was very strong – and upped the FY guidance



·     AMZN +10%; a bevy of tech related names surging on day on the softer CPI data today – ETSY, GOOGL, NFLX, SHOP, PINS etc. on no news other than relief rally on hopes of slowing rates

·     PHM +13%; homebuilders and other interest rate sensitive sectors seeing a big jump following the sharp reversal in short- and long-term rates – LEN, TOL, MTH rally

·     RIVN +13%; Q3 adj EPS ($1.57) vs. est. loss ($1.82); Q3 revs $536M vs. est. $551.57M but still sees FY production 25k vehicles, reaffirmed EBITDA

·     RNG +21%; better Q3 results, approves a 10% reduction in its full-time employee workforce and raises its FY adj EPS forecast to midpoint $1.97 from $1.93, though lowered sales guidance

·     SIX +4%; Q3 EPS $1.39 misses the $1.60 estimate on revs $505M vs. est. $549.9M as attendance sank 33% to 8.0M missing ests of 8.7M, hurt by an increase in ticket prices, but shares bounce after amending corporation agreement w/ H Partners

·     SIVB +12%; as banks among top gainers – Economy-sensitive big bank stocks advance, tracking gains on Wall Street after October’s inflation data – JPM, BAC, C, WFC



·     BCLI -46%; after receives refusal to file letter from FDA for its New Biologics License Application for NurOwn for the treatment of ALS

·     CANO -29%; Q3 missed across the board on EPS, revs, and Ebitda and cuts FY guidance as revenue guidance decrease primarily driven by lower-than-expected revenue per member per month

·     MCK -2%; as defensive healthcare names lagging broader market rally – CAH, CI, CNC

·     VCSA -37%; said it expects Q4 revenue between $195M-$215M, below analysts’ estimates of $226.9M saying are experiencing some softness and variability in guest bookings

·     VERU -57%; said the FDA advisory committee voted 8-5 against its COVID-19 treatment sabizabulin saying that benefits do not outweigh the risks

·     WE -16%; said it will exit about 40 locations across the U.S. and forecast current-quarter revenue below estimates as the flexible workspace provider faces high expenses and a strong U.S. dollar; reported Q3 revs $817M vs. est. $865M and sees Q4 revs $870M-$890M vs. est. $923M


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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