Morning Preview: June 13, 2022

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Early Look

Monday, June 13, 2022









S&P 500










U.S. futures are plunging, with S&P 500 hitting 2022 lows (dropped below 3,800, down over 2%) in a mass exodus out of riskier assets ahead of this week’s FOMC policy meeting. Following last Friday’s “hotter” than expected CPI data, where consumer prices hit fresh 40-year highs (showing that inflation has not peaked), markets fear a more aggressive rate hike cycle than previously expected, with some economists calling for a potential 75 bps hike this week and roughly 175 bps in the next 3-meetings combined. That is a far cry from the prior expectation of two 50-bps hikes the next two meetings and then a potential pause in September. Crypto currency stocks tumbling along with broader stock markets, with Bitcoin (BTC) down -18% below $24,000, while Ethereum (ETH) crumbles -26% to $1,250 in a flight across the board out of riskier assets. Treasury yields jumping globally, as the U.S. 10-year rises 7 bps to 3.23% while the German 2-year bond yield climbs above 1%, first since 2011 and Italy’s 10-year government bond yield hits 4% for the first time since January 2014, up 13 Bps on the day. The U.S. Dollar Index (DXY) surged to above 104.70 on Monday, it’s the dollar’s highest level relative to major peers since late 2002. In Asian markets, The Nikkei Index crashes -3% or -836 points to move below 27,000, the Shanghai Index fell -0.89% to 3,255, and the Hang Seng Index plunges -3.39% or 738 points to 21,067. In Europe, the German DAX is down over 2% or -290 points to 13,470, while the FTSE 100 tumbles -1.75% or 130 points to 7,190.


Last week, the S&P 500 and Nasdaq 100 posted their biggest weekly drop since late January: for the week, the S&P fell -5.06%, the Nasdaq shed -5.60% (both down for the 9th time in last 10-weeks) and the Dow lost -4.58% (falling for the 10th time in last 11-weeks) – CNBC noted earlier that is a streak not seen since the Great Depression. This is also the 4th worst start to a year in history for the S&P 500, down 18.2% in the first 111 trading days and its 2.9% drop on Friday marked the 7th 2% drop of the year and we have already seen more large down days in 2022 then all last year.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -116.96 points, or 2.91%, to 3,900.86

·     The Dow Jones Industrial Average fell -880.00 points, or 2.73%, to 31,392.79

·     The Nasdaq Composite tumbled -414.20 points, or 3.52%, to 11,340.02

·     The Russell 2000 Index declined -50.57 points, or 2.73% to 1,800.28


Economic Calendar for Today

·     No Major Economic Data Released


Earnings Calendar:

·     Earnings Before the Open: PETM

·     Earnings After the Close: BRZE, NBEV, ORCL, PFSW, ZDGE


Other Key Events:

·     Oppenheimer Semiconductor & Software Bus Tour (virtual), 6/13-6/16

·     UBS Asian Consumer, Gaming & Leisure Conference (virtual), 6/13-6/15

·     Wells Fargo Streaming & Connectivity Conference, 6/13-6/14, in Texas





















10-Year Note





World News

·     Authorities delayed school reopening in Beijing and suspended dine-in services in most districts in Shanghai, raising concern China may once again employ strict lockdowns to control its outbreak per Bloomberg

·     German 2-year bond yield climbs above 1%, first since 2011

·     Italy’s 10-year government bond yield hits 4% for the first time since January 2014, up 13 Bps on the day


Sector News Breakdown


·     Tesla (TSLA) seeks a three for one stock split; proposal would allow Co. To increase authorized common shares to 6B from 4B

·     The Biden administration intends to pursue a policy requiring tobacco companies (MO, PM) to reduce the nicotine in all cigarettes sold in the U.S. to minimally or nonaddictive levels – WSJ

·     Choice Hotels International, Inc. (CHH) entered into a definitive agreement to acquire the franchise business, operations, and intellectual property of Radisson Hotel Group Americas for approximately $675 million.

·     Marriott International Inc. (MAR) and Southwest Airlines (LUV) should do well if business travel bounces back said Barron’s noting MAR has begun to see consumer demand swing upwards after experiencing devastating pandemic lows. Southwest relies less on corporate travel than competitors, giving it cushion while the business travel sector makes a slow and uneven return



·     Refiners mentioned positively in Barron’s noting analysis shows that oil refiners, a middleman in the supply chain, such as Valero Energy Corp. (VLO), Marathon Petroleum Corp. (MPC) and Phillips 66 (PSX) are the big winners, accounting for 18% of the price at the pump in March. That’s up from the average of 14% from 2012 to 2021

·     BP Plc (BP) has agreed to sell its 50% interest in the Sunrise oil sands project in Alberta, Canada, to Calgary-based Cenovus Energy (CVE). As part of the deal, bp is acquiring Cenovus’s interest in the Bay du Nord project in Eastern Canada, adding to its sizeable acreage position offshore Newfoundland and Labrador.

·     Libya’s oil production almost halted as the North African country’s political crisis leads to more shutdowns of ports and fields – Bloomberg



·     American Express Co. (AXP) mentioned positively in Barron’s calling it among the winners as business travel slowly returns given it has “plenty” of exposure to the sector. Goldman Sachs analyst, said that once there is clarity on the state of the US economy, people could expect the shares to have a meaningful upside.

·     Invesco (IVZ) and T. Rowe (TROW) downgraded at BMO Capital noting ii favors alternative asset managers over traditional players to hedge beta risk against the current macro backdrop

·     Virtus Investment Partners (VRTS) preliminary May 2022 assets under management of $167.2M



·     Bluebird Bio (BLUE) confirmed late Friday an FDA panel voted 13-0 that the benefits of its betibeglogene autotemcel outweigh the risks for the treatment of subjects with transfusion-dependent beta-thalassemia. The day prior, the FDA panel voted 15-0 that the benefits of Bluebird’s elivaldogene autotemcel outweigh the risks for the treatment of any sub-population of children with early active cerebral adrenoleukodystrophy. Watch other gene therapy stocks on the news including AVRO, ORTX, QURE, and RGNX

·     Day One (DAWN) announces positive initial data from pivotal FIREFLY-1 trial of Tovorafenib (DAY101) in relapsed pediatric low-grade Glioma

·     UnitedHealth Group (UNH) and LHC Group (LHCG) have each received a request from the FTC for additional information regarding the former’s acquisition of the latter.

·     Vertex (VRTX) and gene-editing company CRISPR Therapeutics AG (CRSP) announced updated data for geneedited therapy exa-cel on Saturday, highlighting its potential to become a one-time therapy for beta-thalassemia and sickle cell disease. Both have partnered for the development and commercialization of the CRISPR/Cas9-based gene editing therapy


Industrials & Materials

·     Astra Space (ASTR) acknowledged Sunday it failed to deliver payloads for NASA to orbit; said that it had a nominal first stage flight, though the upper stage shut down early and it didn’t deliver the payloads to orbit, according to a twitter post from the company.


Technology, Media & Telecom

·     Apple Inc. (AAPL): The Dutch consumer protection regulator said Apple will allow different methods of payment in dating apps, ending a dispute that saw the tech firm penalized 50 million euros ($53 million) for rule breaking.

·     Cogent Biosciences Inc. (COGT) said it has begun an underwritten public offering of $125 million common shares.

·     Comcast (CMCSA) subsidiary Universal’s “Jurassic World Dominion” won this weekend’s domestic box office with an estimated $143.4M debut from 4,676 locations

·     Google (GOOGL) placed an engineer on paid leave recently after dismissing his claim that its artificial intelligence is sentient, The New York Times reported. The day before his suspension, the employee handed over documents to a U.S. senator’s office, claiming they provided evidence that Google and its technology engaged in religious discrimination.

·     Skillsoft (SKIL) to sell its SumTotal business, a provider of learning and human capital management software for highly regulated industries, to Cornerstone OnDemand (CSOD) for approximately $200M cash


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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