Morning Preview: July 11, 2022

Auto PostDaily Market Report

Early Look

Monday, July 11, 2022









S&P 500










U.S futures pare overnight losses but remain in the red, falling -0.4% for the S&P as investors prepare for the start of earnings season later this week. Also, later this week, key inflation reports due with June CPI and PPI reports likely market catalysts. Global markets slide amid prevailing concerns about the global economy exacerbated by multiple Chinese cities tightening their coronavirus restrictions this weekend amid rising cases. For last week, the Dow advanced +0.8%, S&P 500 up +1.9%, and Nasdaq up +4.6% as stocks rise for a second week. Twitter (TWTR) shares tumble after Elon Musk said late Friday, he’s terminating his $44B deal to purchase the social media company. Oil prices slip as China’s covid resurgence this weekend overshadows tight market. The U.S. dollar/Japanese yen touches 137, the highest since 1998. In Asian markets, The Nikkei Index rose 295 points or 1.11% to 26,912, the Shanghai Index fell over 40 points or 1.27% to 3,313, and the Hang Seng Index plunged -600 points or 2.77% to settle at 21,124. In Europe, the German DAX is down -100 points to 12,915, while the FTSE 100 is down roughly -0.5% at 7,162. Shares of casino stocks stumble (WYNN, MLCO, LVS) after Macau shuts all its casinos to curb Covid cases. Bitcoin -5.8% to $20,600 as crypto prices lose stem this weekend; Ethereum -7.75% to $1,150. Treasury yields drop along with gold prices.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -3.24 points, or 0.08%, to 3,899.38

·     The Dow Jones Industrial Average fell -46.40 points, or 0.15%, to 31,338.15

·     The Nasdaq Composite gained 13.96 points, or 0.12%, to 11,635.31

·     The Russell 2000 Index was little changed down -0.24 points, or 0.01% to 1,769.36


Economic Calendar for Today

·     10:00 AM ET         Employment Trends for June

·     2:00 PM ET            Fed’s Williams Takes Part in Discussion on Libor Transition


Earnings Calendar:

·     Earnings Before the Open: AZZ, GBX

·     Earnings After the Close: ETWO, PCYO, PSMT, VOXX





















10-Year Note





World News

·     China’s consumer price index (CPI) increased 2.5% Y/Y, squeaking past the consensus estimate of 2.4%. CPI increased 2.1% in May.

·     China’s Producer price index (PPI) rose 6.1% Y/Y after a 6.4% rise in May, exceeding consensus of 6.0% growth.

·     Shanghai reported its first case of the BA.5 sub-variant on Sunday, the variant has been found in other cities as well. Covid cases continue to climb in Shanghai sparking fears of a return to its earlier lockdown

·     Morgan Stanley’s Mike Wilson noted why historic dollar strength is a threat to S&P earnings: “For every percentage point increase on a year-on-year basis it’s approximately a 0.5x hit to EPS growth. At today’s 16% YOY level, that translates into an 8% headwind for S&P 500 EPS growth.”

·     Fitch lowered Turkey’s sovereign debt rating to B from B+, saying the government’s policies are contributing to “spiraling inflation” and discouraging capital inflows.

·     Moody’s lowers Mexico sovereign debt rating one level to Baa2, says economic scarring from pandemic won’t be reversed


Sector News Breakdown


·     Lowe’s (LOW) mentioned positively in Barron’s saying the COVID pandemic gave home improvement a boost-but its waning impact, along with a cooling housing market, have hurt Lowe’s shares recently. However, CEO Marvin Ellison, who took the helm in July 2018 says, the retailer can keep winning

·     Wynn Resorts (WYNN), Las Vegas Sands (LVS), MGM Resorts (MGM) decline after the Macao SAR Government has ordered the closure of all commercial and industrial businesses for the next week with limited exceptions for essential services. The decision was made after 71 new COVID cases were reported locally. Note the Macau sector saw its worst monthly gross gaming revenue tally since September of 2020 when GGR fell 62.1% year-over-year in June to 6.54B patacas.

·     Lululemon (LULU) downgraded to underperform and Under Armour (UAA) downgraded to hold by Jefferies in athletic apparel firms, saying buy-rated Nike (NKE) still best-in-class

·     Mattel (MAT) upgraded to Buy from Neutral at Goldman Sachs



·     Oneok, Inc. (OKE), a leading midstream service provider and the operator of a major natural gas liquids (NGL) systems, experienced an explosion at its NGL fractionation facility in Medford on Saturday afternoon, about 85 miles south of Wichita, Kansas that could disrupt the flow of hydrocarbons to energy export hubs on the Texas Gulf Coast.

·     From Gas Buddy data, the average U.S. gas prices have now declined for the 26th straight day and are nearly 36c/gal lower than 26 days ago. National average $4.678/gallon

·     Southwestern Energy (SWN) upgraded to Equal Weight from Underweight, and Range Resources (RRC) upgraded to Overweight from Equal Weight at Wells Fargo

·     Europe on high alert as Russia temporarily halts gas flows via major pipeline. Operator Nord Stream AG confirmed the maintenance works, which are scheduled to run from Monday through to July 21, got underway as planned on Monday morning – CNBC



·     Cryptocurrency lender Celsius Network is said to have hire new advisers to advise on options including a possible bankruptcy filing – WSJ. Celsius had hired lawyers from Kirkland & Ellis to advise on its options, replacing law firm Akin Gump Strauss Hauer & Feld LLP

·     Pzena Investment Management Inc (PZN) prelim total aum as of June 30, 2022 of $45.0 bln



·     Abbott Laboratories (ABT) has reopened its baby formula plant in Sturgis, Michigan, after flooding in the area forced the company to shut its operations last month, a company spokesperson said Saturday

·     Medical Supply and technology names downgraded at Citigroup: PODD and LUNG downgraded to Neutral from Buy, and SILK and BDX to Sell from Neutral, and initiating a Negative Catalyst Watch on TNDM. Stand behind our 2022 Top Picks of BSX, DXCM, and NUVA

·     MacroGenics, Inc. (MGNX) said effective as of July 7, 2022, the Company closed the Phase 2 study (CP-MGA271-06) evaluating the investigational regimen of enoblituzumab in combination with either retifanlimab (anti-PD-1 monoclonal antibody) or tebotelimab in the first-line treatment of patients with recurrent or metastatic squamous cell carcinoma of the head and neck

·     Perrigo Company (PRGO) said its unit has applied to the U.S. Food and Drug Administration (FDA) for approval of an over the counter (OTC) birth control pill.

·     Pliant Therapeutics (PLRX) announces positive safety and efficacy data from phase 2a INTEGRIS-IPF clinical trial of PLN-74809 in patients with idiopathic pulmonary fibrosis


Industrials & Materials

·     Greenbrier (GBX) reports Q3 EPS $0.09 vs. est. $0.59; Q3 revs $793.5M vs. est. $740.67M; new railcar orders for 5,000 units valued at $670M and deliveries of 5,200 units resulted in a book-to-bill of nearly 1.0x; Sees year deliveries 18,500 to 19,500, saw 17,500 to 19,500

·     Watsco (WSO) mentioned positively in Barron’s noting shares of the air-conditioning distributor have cooled off, creating an opportunity for investors to buy the stock. Its wares include new AC units, replacement parts, refrigerants, and even Nest thermostats. It’s a stable business, one that leads to consistent earnings and sales, and it should be attractive to investors


Technology, Media & Telecom

·     Elon Musk said late Friday he’s terminating his $44B deal to purchase Twitter (TWTR). An SEC filing from Musk’s advisers says that on Friday, they sent a letter to Twitter giving formal notification that he’s terminating the merger agreement.

·     Twitter Inc. (TWTR) is said to have hired law firm Wachtell, Lipton, Rosen & Katz LLP as it prepares to sue billionaire Tesla (TSLA) CEO Elon Musk over his termination of the $44 billion deal. Twitter is targeting filing a lawsuit early this week, according to a Bloomberg report

·     News Corp. (NWSA) downgraded to Buy from Conviction Buy at Goldman Sachs

·     Meta Platforms (META) downgraded to Underperform from Hold at Needham

·     China has imposed fines on technology giants Alibaba (BABA) and Tencent (TCEHY) as well as a range of other firms for failing to comply with anti-monopoly rules on the disclosure of transactions, the country’s market regulator said, according to Reuters. The State Administration for Market Regulation released a list of 28 deals that violated the rules


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