Morning Preview: July 05, 2022

Auto PostDaily Market Report

Early Look

Tuesday, July 5, 2022









S&P 500










U.S. futures are pointing to a lower open, tracking European markets lower and erasing gains overnight as optimism over U.S./China tariff talks was outweighed by economic downturn worries. Futures were higher following news Monday that the U.S. might soon ease China tariffs but failed to hold. In currency markets, the euro tumbles to 20-year low (December 2002) below 103, putting parity with dollar in sight. Better data in China also failing to lift markets as the Caixin Service PMI data for June was strong at 54.5 vs 41.4 last, and 49.6 expected. A quiet news week expected after the three-day holiday weekend and as markets brace for the start of earnings season in a week or so, as macro developments (rising inflation and interest rates) continue to weigh on market sentiment. S&P 500 and Nasdaq futures are looking lower after the underlying indexes capped their 11th decline in 13 weeks last Friday. For the week, unofficially, the S&P 500 fell 2.21%, the Dow lost 1.28%, the Nasdaq shed 4.13%. For earnings, second-quarter reporting season begins in several weeks, and 130 of the companies in the S&P 500 have pre-announced. Of those, 45 have been positive and 77 have been negative, a weaker negative/positive ratio than a year ago, according to Refinitiv data. In Asian markets, The Nikkei Index rises 1% to 26,423. the Shanghai Index was down slightly at 3,404, and the Hang Seng Index inches higher 22 points to 21,853. In Europe, the German DAX is down nearly 1% to 12,650, while the FTSE 100 slides 1% as well to 7,162.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 39.95 points, or 1.06%, to 3,825.33

·     The Dow Jones Industrial Average rose 321.83 points, or 1.05%, to 31,097.26

·     The Nasdaq Composite climbed 99.11 points, or 0.90%, to 11,127.85

·     The Russell 2000 Index advanced 19.77 points, or 1.16% to 1,727.76


Economic Calendar for Today

·     7:45 AM ET           ICSC Weekly Retail Sales

·     10:00 AM ET         Durable Goods Orders M/M for May

·     10:00 AM ET         Factory Orders M/M for May

·     4:30 PM ET            API Weekly Inventory Data



















10-Year Note





World News

·     Caixin Service PMI data for June, which focuses more on smaller firms, was strong at 54.5 vs 41.4 last, and 49.6 expected. Also, it was reported that China is to set up$75bn state infrastructure fund

·     In Australia, the RBA raised Cash Target rate by 50bps to 1.35% while the RBA added a section on anchoring inflation expectations, and they expect inflation to peak later this year

·     President Biden may announce as soon as this week a cut in some Chinese tariffs as well as a new probe into industrial subsidies that could lead to more duties in strategic areas like technology

·     UK Prime Minister Boris Johnson urged Saudi Arabia to ramp up oil production, seeking to cool record fuel prices in an echo of comments last week from President Biden – Bloomberg

·     The Bank of England says the global economic outlook has “deteriorated materially” as surging commodity prices push up inflation around the world – Bloomberg

·     Germany June new car registrations fell 18.1% to 224,558


Sector News Breakdown


·     Tesla (TSLA) reported Q2 deliveries of 254,695, with 4% subject to operating lease accounting, and production of 258,580 vehicles; the delivery of 254,695 is 17.9% lower than 1Q22 deliveries of 310,048; TSLA delivered 16,162 Model S/X and 238,533 Model 3/Y; said June 2022 was the highest vehicle production month in Tesla’s history

·     ChargePoint Holdings (CHPT) files for mixed shelf of up to $1 bln

·     AutoZone (AZO) and O’Reilly (ORLY) are among good buys in auto parts space, according to Barron’s saying auto parts retailers have outpaced the market for much of the pandemic, and current economic uncertainty should keep the group in the fast lane



·     QatarEnergy signed a deal with Shell (SHEL) for the Gulf state’s North Field East expansion, the world’s largest liquefied natural gas (LNG) project, following agreements with TotalEnergies (TOT), Exxon (XOM), ConocoPhillips (COP) and Eni. Shell will take a 6.25% stake in the North Field East expansion project

·     Antero Resources (AR) upgraded to buy from hold at Truist Securities saying that a recent selloff in the oil company is an opportune entry point given gas and natural gas liquids are likely to remain strong

·     Earthstone Energy Inc. (ESTE) said selling stockholders may offer and sell up to 19.42 mln shares of Class A common stock

·     Crude oil could collapse to $65 per barrel by the end of this year and slump to $45 by end-2023 if a demand-crippling recession hits, Citigroup Inc. warned

·     Oil prices had recovered on Friday as outages in Libya, as well as expected shutdowns in Norway, weighed on supply.

·     Natural gas in Europe rose to the highest level in almost four months as planned strikes in Norway threaten to further tighten a market that’s already reeling from Russia’s supply cuts



·     Toronto-Dominion Bank (TD) is considering a deal to acquire Cowen (COWN), according to a report late Friday afternoon from Bloomberg citing people familiar with the matter

·     Chinese property developer Shimao Group has missed the interest and principal payment of a $1 billion offshore bond due on Sunday – Bloomberg



·     Centessa Pharmaceuticals Plc (CNTA) files for mixed shelf of up to $350 mln

·     Elevation Oncology (ELEV) files $250M mixed securities shelf


Industrials & Materials

·     Canadian National Railway (CNI) and the International Brotherhood of Electrical Workers, the union representing 750 signal and communication workers, said Monday they agreed to enter binding arbitration, ending a two-week strike.


Technology, Media & Telecom

·     Warner Bros Discovery Inc’s (WBD) shares dip after reports of its company unit, HBO Max, will no longer produce originals in Denmark, Sweden, Norway, Finland, Central Europe, the Netherlands and Turkey, entertainment outlet Variety reports

·     Japanese chemicals supplier Showa Denko K.K., a vital TSM supplier, said it expects to further raise prices and cut back unprofitable product lines as it grapples with a barrage of economic challenges confronting the $550B semiconductor industry

·     Digital World (DWAC) said on Friday former the social media firm was served with two separate subpoenas over its merger plans. The development comes days after Digital World said each of its board of directors received subpoenas from federal prosecutors over the SPAC deal with Trump Media & Technology Group (TMTG), the creator of social media platform Truth Social.


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