Morning Preview: August 22, 2022

Auto PostDaily Market Report

Early Look

Monday, August 22, 2022









S&P 500










U.S. stocks look lower, extending last weeks losses as investors take a more defensive tone ahead of an important week for the Fed amid concerns of soaring inflation. An energy crisis in Europe has added to the muted investor sentiment as Citigroup said this morning that UK inflation is on track to rise above 18% for the first time in almost half a century next year as energy prices rocket. U.S. stocks ended lower on Friday, snapping the four-week stretch of gains for the S&P 500 and Nasdaq Composite, as investors remain unsure on how aggressively the Federal Reserve will need to move interest rates higher to slow inflation. For weeks, many investors had been feeling confident that inflation had possibly peaked and that the central bank would soften the magnitude of its future interest-rate increases. But ahead of its Jackson Hole meeting later this week where Fed Chairman Powell speaks and following comments in recent days from other central bank officials, the possibility of continued aggressive rates was back in focus. On Thursday, Federal Reserve Bank of St. Louis President James Bullard said he would lean toward a 0.75 bps increase in September. On the week, the S&P 500 dropped -1.2%, the Dow Jones Industrial Average slipped -0.2% and the Nasdaq Composite fell -2.6%. The yield on the 10-year U.S. Treasury note rose to 2.987% from 2.879% Thursday. In Asian markets, The Nikkei Index declined -135 points to 28,794, the Shanghai Index rose 19 points to 3,277, and the Hang Seng Index fell -116 points to 19,656. In Europe, the German DAX is down about -200 points or 1.47% to 13,346, while the FTSE 100 slips -0.25% to 7,530. China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to last week’s easing measure. Bitcoin fell as low as $20,909.50 before edging higher to trade at $21,135 and Ethereum down -7% to $1,560. Lots of concerns about rates and Fed QT impacting markets last week and carrying over this week as the QT cap rises from $47.5 billion to $95B in Sept., $60B for Treasuries & $35B for mortgage-backed securities (MBS). Since June, monthly cap has been $47.5B. Last month, the Fed only ran down portfolio by $22B.

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -55.26 points, or 1.29%, to 4,228.48

·     The Dow Jones Industrial Average fell -292.30 points, or 0.86%, to 33,706.74

·     The Nasdaq Composite tumbled -260.13 points, or 2.01%, to 12,705.22

·     The Russell 2000 Index declined -43.38 points, or 2.17% to 1,957.35


Economic Calendar for Today

·     8:30 AM ET                  National Activity Index for July


Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: BSEM FLXS MICS NDSN PANW TPCS VVOS


Other Key Events:

·     Davidson Big Sky Tech Summit, 8/21-8/22 in Montana

·     Truist Texas Bank Summit, 8/22-8/23, in Dallas, TX





















10-Year Note





World News

·     China cut its benchmark loan prime rate as its one-year loan prime rate, which is offered to banks’ best clients, was lowered to 3.65% from 3.7%, while the five-year LPR was cut to 4.3% from 4.45%, the People’s Bank of China said in a monthly release

·     China plans $29 bln in special loans to troubled developers, Bloomberg reported


Sector News Breakdown


·     AMC Entertainment Holdings Inc. (AMC) shares tumbled 33% premarket Monday, ahead of the start of trading for its AMC Preferred Equity Units, or Apes, which were declared by the company as a special dividend to class A common shareholders earlier in August.

·     Ford (F) said this weekend it will appeal a $1.7B verdict against it involving a pickup truck crash that killed a Georgia couple

· Inc. (AMZN) is among the bidders for healthcare company Signify Health Inc. (SGFY), joining other heavy hitters vying in an auction for the home-health-services provider, according to people familiar with the matter – WSJ

·     VF Corp. (VFC) downgraded to Market Perform on guidance risk at Cowen


Energy, Industrials and Materials

·     Amerco (UHAL) declared a special cash dividend on its common stock of $0.50 per share

·     UPS (UPS) downgraded to In Line from Outperform, Schneider National (SNDR) upgraded to Outperform from In Line, Canadian National (CNI) downgraded to In Line from Outperform and Saia (SAIA) downgraded to In Line from Outperform all at Evercore ISI

·     General Electric (GE), Raytheon Technologies (RTX), Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC) have been awarded an ID/IQ contract with a program ceiling of $975M; Work is expected to be complete by July 11, 2032

·     OPEC+ produced 2.892 million barrels per day (bpd) below their targets in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output – Reuters



·     Credit Suisse Group AG (CS) said that it has appointed Dixit Joshi as its new chief financial officer to replace David Mathers, who is stepping down after more than a decade in the job. Joshi would take over in October after serving as group treasurer at Deutsche Bank AG for the past five years.

·     Wall Street banks are said to be closing in a $1 billion settlement with regulators over traders alleged used of banned messaging apps such as Meta Platform’s (META) WhatsApp. The payments from several banks are expected to exceed $1 billion and are likely be announced by the end of next month, according to a WSJ report late Friday.

·     PNC Financial (PNC) is one of the best-positioned regional banks in the U.S. It has the scale to compete with industry leaders like Bank of America (BAC) and JPMorgan Chase (JPM) but isn’t burdened with the stiff capital requirements of the banking giants said Barron’s



·     Haleon Plc (HLN), a consumer healthcare business spun out of UK pharma giant GSK, mentioned positively in Barron’s saying it offers investors a chance to get into an emerging, and recession-resistant, category at a bargain price

·     Insulet Corp. (PODD) said U.S. regulators have cleared its tubeless automated insulin delivery system for individuals aged two years and older with type 1 diabetes.

·     Novavax Inc.’s (NVAX) Covid-19 vaccine, which became available in the U.S. in July for adults, has received expanded emergency use authorization from the FDA for people ages 12 through 17.

·     Intra-Cellular (ITCI) downgraded to Neutral from Buy at Goldman Sachs

·     Tonix Pharmaceuticals (TNXP) files $300M mixed-securities shelf

·     Teleflex Incorporated (TFX) said it has entered into a definitive agreement to acquire Standard Bariatrics, Inc. for an upfront cash payment of $170 million at closing, with additional consideration of up to $130 million payable upon the achievement of certain milestones

·     Bruker (BRKR) upgraded to Buy from Neutral at Citi


Technology, Media & Telecom

·     Coupa Software (COUP) downgraded to Underperform from Sector Perform at RBC Capital

·     DocuSign (DOCU) downgraded to Sector Perform from Outperform at RBC Capital

·     Intel (INTC) has disclosed plans to hike its CPU prices by 10-20% starting October, but AMD is not expected to follow suit amid the waning terminal market demand, according to industry sources.

·     Display panel makers, to cope with decreased demand and high inventory levels, have reduced production since June 2022 and low utilization rates are likely to continue until first-quarter 2023, according to industry sources – Digitimes


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