Morning Preview: October 05, 2022

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Early Look

Wednesday, October 5, 2022









S&P 500










S&P futures are down -0.75% to 3,775, seeing some profit taking after massive back-to-back gains to start the fourth quarter (highs 3,804.50 and lows 3,763.25). Markets closed sharply higher on Tuesday for a second straight session, with softer U.S. economic data providing hope that the Federal Reserve might soon temper its aggressive fight against inflation. Major averages posted 3% gains, with strength across the board (financials, materials, energy, and discretionary the biggest winners) after U.S. job openings fell by the most in nearly 2-1/2 years in August in another sign the Fed might ease on its mission to tame inflation by tightening policy. After tumbling in much of August and September, the S&P has rebounded 5.7% in the past two days, cutting its loss in 2022 to about 20%. Oil prices are flat after having risen over 10% from last week’s low after reports OPEC+ said they were considering reducing production by as much as 2mn barrels phased in over several months. In stock news yesterday, Twitter (TWTR) shares surged 22.3% after a filing showed Elon Musk wants to go ahead with his original offer of $44 billion to buy Twitter, or $54.20 per share. In Asian markets, The Nikkei Index gained 128 points to 27,120, the Shanghai Index remains closed, and the Hang Seng Index rose 100 points to 18,087. In Europe, the German DAX is lower by -80 points to 12,585, while the FTSE 100 is down over -1% to 7,009.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 112.50 points, or 3.06%, to 3,790.93

·     The Dow Jones Industrial Average rose 825.43 points, or 2.80%, to 30,316.32

·     The Nasdaq Composite surged 360.97 points, or 3.34%, to 11,176.41

·     The Russell 2000 Index advanced 66.90 points, or 3.91% to 1,775.77


Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     8:15 AM ET            ADP Private Payroll data for September…est. 200K

·     8:30 AM ET            International Trade Deficit for Aug…est. (-$67.7B)

·     9:45 AM ET            S&P Global Composite PMI, Sept-F…prior 49.3

·     9:45 AM ET            S&P Global Services PMI, Sept-F…prior 49.2

·     10:00 AM ET          ISM Non-Manufacturing Index for September…est. 56.0

·     10:30 AM ET          Weekly DOE Inventory Data

·     4:00 PM ET             Fed’s Bostic Discusses Inflation


Earnings Calendar:

·     Earnings Before the Open: BYRN HELE KW RPM

·     Earnings After the Close: RELL RGP





















10-Year Note





World News

·     Japan Services PMI Sept-F reported at 52.2 vs. previous 51.9 and the Composite PMI Sept-F at 51.0 from previous 50.9 reading

·     With the surge in energy costs and rising interest rates weakening household demand, exports and imports should increase by just 1% in 2023, down from a previous forecast of 3.4%, the World Trade Organization said


Sector News Breakdown


·     AutoZone (AZO) announces additional stock repurchase authorization of $2.5B

·     Church & Dwight (CHD) upgraded to Buy from Hold at Deutsche Bank with $85 tgt

·     Ford (F) upgraded to Overweight from Equal Weight at Morgan Stanley, while General Motors (GM) reiterated Equal Weight & cut PT to $30 from $42

·     Helen of Troy (HELE) Q2 adj EPS $2.27 tops $2.21 est.; Q2 sales rise 9.7% y/y to $521.4M vs. est. $519M; says “although we reported results in-line with our expectations for the quarter, we see consumers increasingly adjusting their spending patterns in response to rising inflation and the impact of higher interest rates, particularly in our premium segments in some categories.”

·     Amazon (AMZN) freezes corporate hiring in retail business with slowing sales; company to pause recruitment until the end of the year, freeze applies to corporate roles in the Worldwide Amazon Stores division, not the warehouse network


Energy, Industrials and Materials

·     Emerson Electric (EMR) in talks to sell commercial and residential solutions assets to Blackstone valued at up to $10B – Bloomberg

·     RPM (RPM) reports Q1 adj EPS $1.47 vs. est. $1.33; Q1 revs $1.93B vs. est. $1.89B; Q2 outlook calls for sales growth of 9% to 12% and adjusted EBIT growth of 30% to 40%

·     Brazilian mining company Vale (VALE) is in discussions to sell a $2.5bn minority stake in its metals business, as it seeks to boost its copper and nickel output to meet growing demand for the energy transition. per Financial Times

·     ExxonMobil (XOM) estimates that changes in liquid prices will have a negative effect of between $1.4B-$1.8B in Q3 compared with Q2 results; also predicted a favorable effect of $1.8B-$2.2B on results for the recent quarter due to changes in gas prices, compared with Q2

·     Schnitzer Steel (SCHN) guides Q4 adj EPS $0.42-$0.47 well below consensus of $0.90; sees Q4 adj EBITDA to be in the range of $38M-$40M

·     The American Petroleum Institute said weekly crude inventories fell -1.77M barrels, and gasoline inventories fell -3.474M barrels

·     Joby Aviation (JOBY) files $1B mixed securities shelf

·     Laredo Petroleum (LPI) downgraded to Neutral from Overweight at Piper



·     Mizuho Financial Group’s securities business will acquire around 20% of shares in Rakuten Securities from its parent Rakuten Group for about 80 billion yen ($554 million), business daily Nikkei reported on Wednesday.

·     Janus Henderson Group (JHG) downgraded to Underperform at Credit Suisse saying soft fund performance is likely to see fund outflows persist, which leads them to conclude that on the current ~11-12x FY23E P/E (CSe) JHG is expensive

·     Morgan Stanley (MS) downgraded to Neutral from Overweight at Atlantic Equities and the firm also downgraded Goldman Sachs (GS) to Underweight from Neutral



·     Amylyx (AMLX) files to sell 6M shares of common stock

·     Ginkgo Bioworks (DNA) files $500M mixed securities shelf

·     Icosavax (ICVX) announced the initiation of a Phase 1 clinical trial of IVX-A12, a combination bivalent RSV and hMPV VLP vaccine candidate, in older adults


Technology, Media & Telecom

·     SGH Corp. (SGH) Q4 adj EPS $0.80 vs. est. $0.65; Q4 revs fell -6.4% y/y to $438M vs. consensus $440M; sees Q1 adj EPS $0.60, plus or minus $0.15 vs. est. $0.76 and sees Q1 revenue $425M-$475M vs. consensus $455.91M


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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