Morning Preview: October 28, 2022

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Early Look

Friday, October 28, 2022









S&P 500










Stock futures looking lower by -20 points or 0.67% around 3,800 (overnight high 3,813 and low 3,776.75) after AMZN falls -12% on missed earnings and a weak holiday sales outlook, while AAPL rises about +1% after its results. It has been a week to forget for technology giants as earnings have disappointed one day after the next, starting with SNAP, then GOOGL, MSFT, TXN, followed by META and last night with AMZN. Investors have rotated into other sectors including Energy (continues to be the 2022 winner), Financials, Healthcare, Industrials (good results from CAT, HON yesterday), and Small Caps as the Russell 2000 index is up nearly 4% for the week compared to a -0.6% decline for the Nasdaq this week. Declining Treasury yields this week amid hopes of a less aggressive Fed rate hike cycle going forward (market still expects 75-bps rate hike next week) has also proved beneficial for major averages. The Dow Jones Industrial Average comes into Friday riding a 5-day win streak and on track for its best monthly return since 1987 (up 11.5% MTD so far). Energy giants Chevron (CVX) and Exxon (XOM) are both edging higher after better earnings results this morning (energy again been a leader for earnings this quarter). In Asian markets, The Nikkei Index falls -240 points to 27,105, the Shanghai Index drops -2.25% to 2,915, and the Hang Seng Index tumbles -3.6% to 14,863. In Europe, the German DAX is down about -75 points to 13,135, while the FTSE 100 falls -0.4% to 7,045.

Economic Calendar for Today

·     8:30 AM ET            Personal Income M/M for Sept…est. +0.3%

·     8:30 AM ET            Personal Spending M/M for Sept

·     8:30 AM ET            PCE Price Index M/M for September

·     8:30 AM ET            PCE Price Index Y/Y for September

·     8:30 AM ET            Core PCE Price Index M/M for September…est. +0.5%

·     8:30 AM ET            Core PCE Price Index Y/Y for September…est. +5.2%

·     8:30 AM ET            Employment Cost Index (ECI) for Q3…est. +1.2%

·     10:00 AM ET          University of Michigan Confidence, Oct-F…est. 59.8

·     10:00 AM ET          Pending Home Sales M/M for September…est. (-5.0%)

·     1:00 PM EST           Baker Hughes Weekly rig count data


Earnings Calendar:



Market Closing Prices Yesterday

·     The S&P 500 Index dropped -23.30 points, or 0.61%, to 3,807.30

·     The Dow Jones Industrial Average rose 194.17 points, or 0.61%, to 32,033.28

·     The Nasdaq Composite tumbled -178.32 points, or 1.63%, to 10,792.68

·     The Russell 2000 Index edged higher 1.99 points, or 0.11% to 1,806.32





















10-Year Note





Sector News Breakdown


·     Amazon (AMZN) shares fall -12%; 3Q EPS $0.28 vs est. $0.22 on revs $127.1B vs est. $127.5B; guides 4Q revs $140.0-148.0B vs est. $155.15B; 3Q advertising services net sales +25%, says encouraged by steady progress making on lowering costs in stores fulfillment network

·     Columbia Sportswear (COLM) Q3 EPS $1.80 vs. est. $1.67; Q3 revs $955.0M vs. est. $962.7M; backs FY22 EPS view of $5.00-$5.40 (est. $5.16) and backs FY22 revenue view of $3.44B-$3.50B; qtrly inventories increased 47% to $1,056.9B, compared to $720.9M as of september 30, 2021

·     Decker’s Outdoors (DECK) 2Q EPS $3.80 vs est. $2.68 on revs $876Mm vs est. $806.5Mm, comps +38.2%, sees FY net sales $3.45-3.5B vs est. $3.5B, gross margin 50.5%, SG&A exp approx 33%, effective tax rt 22%, EPS $17.50-18.35 vs est. $18.12

·     Mohawk Industries (MHK) Q3 adj EPS $3.34 vs. est. $3.35; Q3 revs $2.92B vs. est. $3.02B; guides Q4 adjusted EPS $1.40-$1.50, below consensus $2.38 saying it is challenging to predict either the duration of the current economic conditions or their impact on our industry

·     SkyWest (SKYW) Q3 EPS $0.96 vs. est. $0.75; Q3 revs rose 6% y/y to $789M vs. est. $807M; Operating expenses were $714 million in Q3 2022, up 2% from $698 million in Q3 2021.

·     Texas Roadhouse (TXRH) Q3 EPS $0.93 vs. est. $0.89; Q3 revs $993.3M vs. est. $975.09M; Comparable restaurant sales increased 8.2% at company restaurants and increased 6.7% at domestic franchise restaurants

·     VICI Properties (VICI) 3Q AFFO/shr $0.49 vs est. $0.49 on revs $751.5Mm; sees FY AFFO/shr $1.91-1.92 vs est. $1.91



·     Chevron (CVX) Q3 adj EPS $5.56 vs. est. $4.81; Q3 revs $66.64B vs. est. $58.22B; reports Q3 U.S. upstream earnings $3.4B and reports Q3 U.S. downstream earnings $1.29B; worldwide net oil-equivalent production was 3.03 mln barrels per day in q3 2022; Q3 Permian basin unconventional production totaled over 700,000 barrels of oil equivalent per day, up over 12% from last year

·     Exxon Mobil (XOM) Q3 adj EPS $4.45 vs. est. $3.79; Q3 revs $112.07B vs. est. $115.6B; raises quarterly dividend to 91c per share; company spent $5.73 billion on new oil and gas projects last quarter, up 24% from a year ago, and remains on track to hit an investment target of $21B-$24B

·     First Solar (FSLR) Q3 EPS loss (-$0.46) vs. est. loss (-$0.27); Q3 revs $628.93M vs. est. $748.61M; reports YTD net bookings of 43.7 GWDC; cuts FY22 EPS view to loss of (65c)-(35c) from (25c)-25c vs. est. loss (-$0.10) and narrows FY22 rev view to $2.6B-$2.7B from $2.55B-$2.8B (est. $2.62B); sees FY22 capital expenditures $800M-$1B

·     Pioneer Resources (PXD) Q3 adj EPS $7.48 vs. est. $7.50 as profit rose nearly 90% y/y; Q3 revs $6.09B vs. est. $4.57B; 3Q Cash Flow from Operating Activities $3B; expects 2022 Total Cap budget of $3.6B-$3.8B; expects 2022 oil production of 350 to 365 thousand barrels of oil per day; sees 4Q Oil Production to Avg Between 346.5 to 361.5 MBOPD

·     Southwest Energy (SWN) 3Q adj EPS $0.32 vs est. $0.31; net production 443 Bcfe, generated $797Mm net cash from operating activities, adj EBITDA $824Mm



·     Capital One Financial (COF) 3Q adj EPS $4.20 vs est. $5.04 on net revs $8.8B vs est. $8.6B; NII 6.8% +26bps sequential, NII $7.0B vs est. $6.8B; qtrly provision increased to $1.7B (+$584Mm sequential)

·     Hartford Financial (HIG) Q3 core EPS $1.44 vs. est. $1.24; Q3 revs $5.58B vs. est. $5.53B; Q3 book value per diluted share ex. AOCI $52.63 vs. $49.64 last year; raises qtrly dividend to 42.5c; Property & Casualty (P&C) written premiums rose 9% in third quarter 2022

·     LPL Financial (LPLA)

·     Principal Financial (PFG) Q3 adj EPS $1.69 vs. est. $1.45; Assets under management (AUM) of $608B managed by PFG, which is included in assets under administration (AUA) of $1.4 trillion



·     Although Eisai and Biogen’s (BIIB) experimental Alzheimer’s drug, lecanemab, was shown recently to slow cognitive decline, it may have contributed to the death of a patient, STAT’s Jason Mast reports. The death, which was in May, was caused in part by bleeding in the brain. An investigator believes it was linked to lecanemab; documents obtained by STAT show – STAT News

·     Dexcom (DXCM) 3Q adj EPS $0.28 vs est. $0.24 on revs $769.6Mm vs est. $750.9Mm; reiterating FY 22 guide for adj op margin and adj EBITDA margin, sees FY revs approx $2.88-2.91B vs est. $2.89B

·     Edward Lifesciences (EW) 3Q adj EPS $0.61 vs est. $0.62 on revs $1.32B vs est. $1.33B, guides 4Q reported sales and adj EPS like 3Q; sees FY total sales at low end of prior guide range $5.35-5.55B vs est. $5.47B with TAVR sales at low end of range $3.5-3.7B, continue to estimate global TAVR opportunity to reach $10B by 2028

·     Gilead Sciences (GILD) 3Q adj EPS $1.90 vs est. $1.43 on revs $7.0B vs est. $6.1B; sees FY total product sales $25.9-26.2B vs est. $25.25B, sees $22.5-12.8B ex Veklury; sees FY adj EPS $6.95-7.15 vs est. $6.54

·     Vertex Pharma (VRTX) 3Q adj EPS $4.01 vs est. $3.39 on revs $2.3B vs est. $2.26B; guides FY revs $8.8-8.9B vs est. $8.77B


Industrials & Materials

·     Carlisle (CSL) Q3 EPS $5.66 vs. est. $5.43; Q3 revs rose 36.4% y/y to $1.8B vs. est. $1.79B; increased annual dividend 39% to $3.00; now expect full year 2022 sales to exceed 20% y/y

·     Casella Waste (CWST) 3Q adj EPS $0.45 vs est. $0.36 on revs $295.3Mm vs est. $269.9Mm, adj EBITDA $75Mm vs est. $68.8Mm; guides FY revs $1.065-1.08B vs prior $1.035-1.05B and est. $1.038B, adj EBITDA $245-248Mm vs prior $238-242Mm and est. $238.4Mm

·     Eastman Chemical (EMN) Q3 adj EPS $2.05 vs. est. $2.00; Q3 revs $2.71B vs. est. $2.57B; slashes FY22 EPS view to $8.05-$8.35 from $9.50-$10.00 (est. $8.75)

·     Hub Group (HUBG) Q3 EPS $2.61 vs. est. $2.46; Q3 revs $1.4B vs. est. $1.44B; sees FY22 EPS $10.40-$10.60 vs. est. $10.37; sees FY22 revenue approximately $5.5B vs. est. $5.61B

·     L3 Harris (LHX) Q3 EPS $3.26 vs. est. $3.41; Q3 revs flat y/y to $4.25B vs. est. $4.43B and up 3% y/y on organic basis; cuts FY22 EPS view to $12.75-$13.00 from $13.35-$13.65 (est. $13.48) and lowers FY22 revenue view to $16.8B from $17.3B-$17.7B (est. $17.4B)

·     Republic Service Group (RSG) 3Q adj EPS $1.34 vs est. $1.22 on revs $3.6B vs est. $3.53B, adj EBITDA margin 29.2%

·     U.S. Steel (X) Q3 adj EPS $1.95 vs. est. $1.93; Q3 revs $5.2B vs. est. $4.95B; Steel shipments 3.70 million tons vs. 4,123 y/y, est. 3.9 million; Q3 flat-rolled steel average realized price per ton $1,232, -7% y/y, est. $1,209 US Steel Europe average realized price per ton $1,021, -11% y/y

·     Terex (TEX) Q3 EPS $1.20 vs. est. $1.04; Q3 revs $1.1B vs. est. $1.07B; raises 2022 EPS view to $4.00-$4.20 from $3.80-$4.20 (est. $3.96) while narrows 2022 rev view to $4.3B from $4.1B-$4.3B (est. $4.22B); Total backlog grew 33% year-over-year to $3.9 billion; Operating profit margin of 10.8% improved 330 bps year-over-year

·     Weyerhaeuser (WY) 3Q EPS $0.42 vs est. $0.37 on revs $2.3B vs est. $2.26B, adj EBITDA $583Mm vs est. $560.6Mm; sees 4Q earnings and adj EBITDA below 3Q22


Technology, Media & Telecom

·     Apple Inc. (AAPL) Q4 EPS $1.29 vs. est. $1.17 and Q4 revs rose 8.1% y/y to $90.10B vs. est. $88.90B; Q4 products revs rose 9% y/y to $70.96B (better), iPhone revs rose 9.7% to $42.63B (in-line); Mac revs rose 25% y/y to $11.51B (better), iPad revs fell -13% y/y to $7.17B, wearables, home and accessories rose 9.8% y/y to $9.65B (better) and services revs +5% y/y to $19B; cash and cash equivalents down -32% y/y to $23.65B

·     Twitter (TWTR) officially taken private buy Elon Musk as the $44B deal was completed. The deal gives Musk sole control of the platforms. He also fired CEO Parag Agarwal and CFO Ned Segal, with the WSJ reporting that they were escorted out of the company’s headquarters.

·     Intel Corp. (INTC) Q3 adj EPS $0.59 vs. est. $0.32; Q3 revs $15.3B vs. est. $15.25B; cuts FY22 adjusted EPS view to $1.95 from $2.30 (est. $2.15) and guides Q4 EPS $0.20 below est. $0.66 and revs $14B-$15B vs. est. $16.25B; says focused on driving $3B in cost reductions in 2023

·     Monolithic Power (MPWR) 3Q adj EPS $3.53 vs est. $2.50 on revs $495.4Mm vs est. $491.2Mm; sees 4Q revs $450.0-470.0Mm vs est. $486Mm

·     Pinterest (PINS) Q3 adj EPS $0.11 vs. est. 0.06; Q3 revs rose 8% y/y to $685M vs. est. $666.71M; global monthly active users (MAUs) were flat at 445 million but above est. 434.7M; global average revenue per user rose 11% to $1.56; said it was expecting revenue growth in mid-single-digit percentage in Q4 due to slightly greater forex headwinds than in Q3

·     SS&C Technologies (SSNC) Q3 adj EPS $1.15 vs. est. $1.18; Q3 revs $1.32B vs. est. $1.35B; Q3 2022 organic growth was 1.6%; sees FY22 adj EPS $4.62-$4.70 below consensus $4.82 and sees FY22 revenue $5.253B-$5.303B vs. est. $5.37B

·     T-Mobile (TMUS) 3Q adj EBITDA $6.7B vs est. $7.04B on total revs $19.48B vs est. $19.99B; total net adds 1.7Mm, qtrly postpaid phone ARPU $48.89, postpaid phone churn 0.88%; raising merger synergies guide to $5.7-5.8B in FY22; sees FY postpaid net customer adds $6.2-6.4Mm

·     Verisign (VRSN) increases share repurchases by about $803M


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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