Morning Preview: April 06, 2022

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Early Look

Wednesday, April 6, 2022









S&P 500









U.S. futures are pointing to a lower open as the sell-off on Tuesday rolls into Wednesday with the S&P 500 index approaching its key 200-day moving average (MA) support of 4,484. Nasdaq futures now down 1% or 145 points to 14,682 as surging Treasury yields denting sentiment in high growth sectors. In macro news, Russia says foreign bank rejected $649.2M Eurobond payments which comes after the U.S. and its allies said they would ban investments in Russia, announced sanction banks on Wednesday. A follow thru from late yesterday as the U.S. dollar strengthens for fifth straight day as the yen briefly tests 124 and euro dips below the 1.09 level (first time in 3-weeks) while the global bond meltdown intensifies following a flurry of hawkish Fed comments on Tuesday with the 10-year yield up another 9-bps to 2.64% and the 2-yr up 6 bps to 2.56%.


All three major stock indexes end sharply lower, with the Nasdaq down most falling -2.26% or over 300-points, while the Dow Transports declined a 5th straight day, falling over 400-points or 2.8% on recession fears. Consumer discretionary was among the weakest major S&P sectors, while defensive utilities and staples were among the leaders. The dollar hit highest levels since May 2020, while Treasury yields hit highest levels since 2019 as the U.S. 10-Year Treasury yield hits high of ~2.57%. Comments from Federal Reserve Governor Lael Brainard spooked investors about potential aggressive actions by the central bank to control inflation.


In Asian markets, The Nikkei Index fell -1.58% to 27,350, the Shanghai Index was little changed at 3,283, and the Hang Seng Index dropped over -400 points or 1.87% to 22,080. Overnight in Asia, the China’s Caixin services PMI tumbles to a reading of 42.0, well below the 49.7 estimate. In Europe, the German DAX is down -220 points (1.55%) at 14,202, while the FTSE 100 drops -0.3% to 7,590. There are no major U.S. economic data points today while the Fed’s Harker speaks on the economic outlook speaks at 2:30 (note he is a “hawk” and will likely add on to Brainard comments from yesterday).

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -57.52 points, or 1.26%, to 4,525.12

·     The Dow Jones Industrial Average fell -280.70 points, or 0.80%, to 34,641.18

·     The Nasdaq Composite tumbled -328.39 points, or 2.26%, to 14,204.17

·     The Russell 2000 Index declined -49.40 points, or 2.36% to 2,046.04


Economic Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     10:30 AM ET       Weekly DOE Inventory Data


Earnings Calendar:

·     Earnings Before the Open: BYRN, GBX, RPM, SCHN, SMPL

·     Earnings After the Close: CXM, IRNT, LEVI, RELL, RGP, SKIL, SLP


Other Key Events:

·     JPMorgan 11th Annual Napa Valley Biotech Forum,4/5-4/7, in San Francisco

·     JPMorgan 8th Annual Retail Round-Up, 4/5-4/7, in NY

·     Piper Annual Private MedTech Symposium (virtual), 4/5-4/6

·     American College of Cardiology 2022 Annual Meeting, 4/2-4/7, in Seattle





















10-Year Note





World News

·     Chinese Caixin services PMI falls to a 2-year low of 42.0, well below the forecast 49.7 and prior reading of 50.2. The new business sub-index fell in the services sector likely on the back of tightened restriction measures in March according to Caixin

·     China announces +1,415 new cases vs 1,235 previous, and asymptomatic cases +19,199 vs 15,355 previous. The Shanghai Lockdown will continue

·     Credit Suisse cut global GDP growth forecasts to 3.5% from 4% and raised inflation forecasts to 6.4% from 4.4% for 2022


Sector News Breakdown


·     JetBlue Airways (JBLU) has made an offer to acquire Spirit Airlines (SAVE) for roughly $3.6 billion, or $33 per share, throwing a wrench into Spirit’s plan to merge with Frontier Airlines (ULCC). Frontier announced plans in February to buy Spirit for $2.9 billion in cash and stock and become the nation’s fifth-largest airline. JetBlue said its offer is better for Spirit investors, coming in 37% higher than the value of Frontier’s proposal

·     Rivian (RIVN) said it produced 2,553 vehicles at its manufacturing facility in Normal, Illinois in the first quarter and said it delivered 1,227 vehicles in the quarter. Rivian said it believes it is “well positioned” to deliver on the 25,000 annual production guidance given during Q4 earnings

·     Instacart founder approached rivals DoorDash Inc. (DASH) and Uber Technologies Inc. (UBER) about possible deals, according to people familiar with the matter. Instacart’s newly appointed chief executive later tried again, some of the people say. None of the talks resulted in an agreement. The company also considered an IPO last year, people close to the discussions said. By last month, Instacart slashed its valuation – WSJ

·     GOL Linhas Aereas (GOL) said total March demand (RPK) grew 113.9% Y/Y, while total supply (ASK) in Mar. increased 93% Y/Y and load factor was 79.5% vs. 71.8% Y/Y

·     Dave & Buster’s (PLAY) announces acquisition of Main Event for $835 Million; Chris Morris to become CEO of combined entity upon closing


Energy, Industrials and Materials

·     Array Technologies, Inc. (ARRY) 4Q adj EPS $0.06 vs est. ($0.03) on revs $219.9Mm vs est. $213.8Mm; guides FY adj EPS $0.55-0.74 vs est. $0.66 and revs $1.45-1.75B vs est. $1.4B

·     The American Petroleum Institute (API) said weekly crude inventories rose 1.1M barrels, crude inventories at Cushing rose 1.8M barrels, gasoline inventories fell -500K barrels and distillates rose 600K barrels

·     Landstar (LSTR) guides Q1 EPS $3.30-$3.35 on revs $1.96B-$1.98B vs. est. $2.88 and $1.77B

·     Landec (LNDC) 3Q adj EPS ($0.08) vs est. ($0.01) on revs $53.1Mm vs est. $48.4Mm; reiterates FY 22 guide

·     Lithium stocks PLL, LAC, MP, LTHM, ALB, SQM tumbled on Tuesday after Senator Joe Manchin told the LNG Allies’ Transatlantic Energy Security Forum IV event that he “will not sign up” for an aggressive electric vehicle push, which sent lithium industry stocks plunging

·     Nine Energy Service (NINE) files $250M mixed-securities shelf

·     Southwest Gas Holdings, Inc. (SWX) announced that the Delaware Court of Chancery today granted summary judgment in favor of the Company in connection with a lawsuit brought by Icahn Partners LP and Icahn Partners Master Fund LP. On February 11, 2022, the Company filed a motion for summary judgment in the lawsuit regarding Icahn’s Special Meeting Proposal on the basis that the Special Meeting Proposal is not lawful and not consistent with the Company’s organizational documents.



·     CBOE Global Markets (CBOE) said in first-quarter 2022, total volume across its four options exchanges was 830.3 million options contracts, setting a record for the second consecutive quarter. Quarterly average daily volume (ADV) reached a new all-time high of 13.4 million contracts traded per day.

·     Riot Blockchain Inc. (RIOT) in March 2022, Riot sold 200 bitcoin at an average sales price of approximately $47,090



·     GlaxoSmithKline (GSK) and Vir Biotechnology’s (VIR) antibody therapy was no longer authorized as a COVID-19 treatment according to the FDA, with data suggesting it was unlikely to be effective against the dominant Omicron sub-variant in the country.

·     Longeveron (LGVN) files $50M mixed securities shelf

·     United Therapeutics (UTHR) announced the publication of additional clinical and long-term safety data from the BREEZE study evaluating Tyvaso DPI – Treprostinil – in patients with pulmonary arterial hypertension


Technology, Media & Telecom

·     Gogo (GOGO) will replace SPX FLOW Inc. (FLOW) in the S&P SmallCap 600 effective prior to the opening of trading on Friday, April 8. Lone Star Funds has acquired SPX Flow

·     SMART Global (SGH) Q2 EPS $0.87 vs. est. $0.72; Q2 revs $449M vs. est. $435.4M; announces $75M buyback authorization; guides Q3 adj EPS $0.67-$0.83 and sales $435M-$475M vs. est. $0.71 and $454.9M; Q2 non-GAAP gross margin of 26.0%, up 660 basis points versus the year ago quarter

·     Twitter (TWTR) confirms that it has been working on a feature that would permit editing tweets and will test it in the coming months.


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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