Morning Preview: August 31, 2022

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Early Look

Wednesday, August 31, 2022









S&P 500










U.S. futures up slightly as the S&P enters today with a 3-day losing streak, its largest 3-day decline (5.2%) since mid-June ahead of key private payroll data later this morning. Major averages are down over 2% this week, extending last Friday losses in the wake of Fed Chairman Jerome Powell’s speech at Jackson Hole, where he said that interest rates must be raised further until inflation is under control, despite higher recession risk. Geopolitical concerns are also weighing on investor sentiment after Taiwanese soldiers fired shots to ward off civilian drones flying close to islands controlled by Taipei near China the day prior. Treasury yields are higher, with the 2-yr hitting 14-year highs of 2.5% yesterday, while the euro falls back below parity vs. the dollar and commodity prices tumble further with gold and oil prices weakening as worries over the economic outlook and energy demand outweigh concerns over tight supplies. In Asian markets, The Nikkei Index fell -104 points to 28,091, the Shanghai Index dropped -25 points to 3,202, and the Hang Seng Index was little changed, up 5 points to 19,954. In Europe, the German DAX is down -70 points to 12,888, while the FTSE 100 slides -90 points to 7,268. Euro zone inflation rose to another record high of 9.1% this month from 8.9% a month earlier, beating expectations. Oil prices extend yesterday losses, falling another 3% (after a 5% drop on Tuesday). Volumes remain light and are expected to stay so into the holiday weekend.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -44.45 points, or 1.10%, to 3,086.16

·     The Dow Jones Industrial Average fell -308.12 points, or 0.96%, to 31,790.87

·     The Nasdaq Composite slumped -134.53 points, or 1.12%, to 11,883.14

·     The Russell 2000 Index declined -27.35 points, or 1.45% to 1,855.59


Economic Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     8:00 AM ET          Fed’s Mester Discusses Economic Outlook

·     8:15 AM ET          ADP Private payroll data for July

·     9:45 AM ET          Chicago PMI for August

·     10:30 AM ET        Weekly DOE Inventory Data

·     6:30 PM ET           Fed’s Bostic speaks on role of fintech in financial inclusion


Earnings Calendar:

·     Earnings Before the Open: BF/B BNED CHS DBI DCI EXPR VRA



Other Key Events:

·     Deutsche Bank 2022 Technology Conference, 8/31-9/1, in Las Vegas

·     Mizuho Storage & AI Conference (virtual), 8/30-9/1

·     Piper Houston & Midland Texas Energy Tour, 8/29-8/31

·     Piper Texas Bank Tour, 8/30-9/1, in Dallas

·     William Blair MedTech & Life Sciences Trip, 8/29-9/1, in San Francisco

·     China Caixin Manufacturing PMI for Aug





















10-Year Note





World News

·     Euro zone inflation rose to another record high of 9.1% this month from 8.9% a month earlier, beating expectations and staying well clear of the European Central Bank’s (ECB) 2% target.

·     China Aug Manufacturing PMI index reported at 49.4 vs 49.2 consensus and China Aug Non-Manufacturing PMI index reported at 52.6 vs 53.8 previous

·     Japanese July Industrial Production (prelim) 1% m/m vs -0.5% cons; 1.8% y/y vs -2.4% cons


Sector News Breakdown


·     Chinese electric-vehicle maker BYD fell nearly 8% in Hong Kong, hitting their lowest level since mid-May, after Warren Buffett’s Berkshire Hathaway disclosed it had pared its shareholding.

·     Bed Bath & Beyond (BBBY) shares slide around 20% after files automatic common stock offering

· (CHWY) Q2 net sales rose 12.8% y/y to $2.43B vs. est. $2.48B; Q2 gross margin of 28.1% expanded 60 bps y/y; adj EBITDA of $83.1M up from $59.8M y/y; active customers only grew 2.1% during the quarter; said sales per active were up 14.4% to $462 and the number of Autoship customers increased 17.3% to over 1.77M; guides year revs $9.9B-$10.0B from prior $10.2B-$10.4B consensus

·     ChargePoint (CHPT) Q2 EPS loss (-$0.28) vs. est. loss (-$0.22); Q2 revs rose 93% y/y to $108.3M vs. est. $103.97M; backs FY23 revenue view $450M-$500M vs. est. $476.47M; backs FY23 adjusted gross margin view 22%-26%

·     PVH Corp. (PVH) Q2 adj EPS $2.08 vs est. $2.02; Q2 revs fell -8% y/y to $2.132B vs. est. $2.21B; guides Q3 EPS $2.10-$2.15 and revs to decline 4%-5%; plans to reduce people costs in its global offices by approximately 10%; inventory increased 19% qtr end compared to prior year period; cuts FY22 EPS view to about $8 from about $9 and backs FY22 revenue decline view 3%-4%

·     Lightning eMotors (ZEV) said it signed a purchase agreement and registration rights deal for up to $50M with Lincoln Park Capital Fund

·     NewAge (NBEV) shares fell after hours Tuesday after it filed for chapter 11 bankruptcy proceedings in Delaware after completing a strategic review



·     The American Petroleum Institute said weekly crude oil inventories rose 593K barrels in latest week, Cushing inventories fell -599k barrels, gasoline a drawdown of -3.41M barrels and distillates a drawdown in stockpiles of -1.726M barrels

·     Donaldson (DCI) Q4 adj EPS $0.84 in-line with consensus on revs $890M vs. est. $880.24M; sees FY23 EPS $2.91-$3.07 vs. est. $3.03; full-year 2023 net sales are projected to increase between 1% and 5% versus the prior year

·     Venezuelan oil minister said that progress to restart Chevron’s (CVX) operations in the country under U.S. sanctions will depend on licenses from the White House, Reuters reports

·     Russia’s seaborne crude shipments to Asia have fallen by more than 500k b/d in the past three months, with flows to the region falling to the lowest since March – Bloomberg



·     Visa (V) August U.S. Payments volume on a year-over-year basis was up 11%, flat with July; August credit and debit grew 17% and 7%, respectively, both up 1 point from July

·     Ocwen Financial Corp (OCN) files for stock shelf of up to 2.1 mln shares of common stock by the selling shareholders

·     Robinhood (HOOD) downgraded to Underweight from Equal Weight at Barclays

·     PayPal (PYPL) upgraded to Buy from Neutral at Bank America with a $114 price target



·     Amgen Inc. (AMGN) said that the company’s KRAS G12C inhibitor Lumakras met the primary endpoint over standard of care chemotherapy with statistical significance in a late-stage trial for non-small cell lung cancer (NSCLC)

·     EyePoint Pharmaceuticals (EYPT) received an unsigned version of a subpoena from the U.S. Attorney’s Office for the District of Massachusetts seeking production of documents related to sales, marketing, and promotional practices, including as pertain to DEXYCU

·     Sorrento Therapeutics (SRNE) announces Scilex granted fast track designation for SP-103


Industrials & Materials

·     Sonoco (SON) said due to continued inflationary pressure on the business it will raise prices by 70EUR/ton or 60 GBP/ton for the UK on all tube and core grades sold in the Company’s EMEA regions. The increase is in direct response to the continued escalation of its cost base and will be effective for all shipments made on or after September 1, 2022


Technology, Media & Telecom

·     Ambarella (AMBA) Q2 adj EPS $0.20 vs. est. $0.19; revs $80.9M vs. est. $80.21M; guides Q3 revs between $81M-$85M vs. est. $84.7M

·     Crowdstrike (CRWD) Q2 adj EPS $0.36 vs. est. $0.27; Q2 revs rose 58% y/y to $535.2M vs. est. $515.42M; said ending ARR surpassed the $2B milestone, net new ARR reached a record $218M and net new subscription customers reached a record 1,741 in the quarter; raises FY23 EPS view to $1.31-$1.33 from $1.18-$1.22 (est. $1.20) and boosts FY23 revenue view to $2.223B-$2.232B from $2.1905B-$2.2058B (est. $2.2B)

·     Hewlett-Packard (HPQ) Q3 EPS $1.04, in-line with estimates and Q3 revs $14.66B, below consensus $15.74B; guides Q4 EPS $0.79-$0.89 vs. est. $1.06; lowers year adj EPS to $4.02-$4.12 from prior $4.24-$4.38 (est. $4.30) and cuts FY FCF to $3.2B-$3.7B from at least $4.5B

·     Hewlett-Packard Enterprises (HPE) Q3 adj EPS $0.58 vs. est. $0.48; Q3 revs $6.95B also in-line with estimates; lowered top end of year EPS view to $1.96-$2.04, from prior $1.96-$2.10 (est. $2.02) and sees free cash flow $1.7B-$1.9B from prior $1.8B-$2.0B; reiterates fiscal 2022 revenue growth of 3-4% adjusted for currency

·     Snap (SNAP) downgraded to Neutral from Buy at Citi with a price target of $10, down from $16.

·     Snap (SNAP), Meta (META): California Passes Bill on Social-Media Apps. The bill would for the first time in the U.S. require the makers of social-media apps such as Facebook, Instagram and TikTok to consider the physical and mental health of minors when designing their products – WSJ


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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