Market Review: April 28, 2022

Closing Recap

Thursday, April 28, 2022





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     Following a handful of dreadful trading days this week, investors stepped up, pushing stocks broadly higher in one of the best individual daily market returns in months ahead of key earnings reports. Stock futures opened higher this morning, quickly faded back to the key 4,200 support level for the S&P 500, then proceeded to rally 100-straight points as all 11-S&P sectors finished higher. Struggling tech, with the Nasdaq down 20% YTD coming into the day, saw the biggest advance, rising 3.5% for a 500-point recovery off the morning lows. The rally comes ahead of key earnings tonight after the close, with two of the biggest companies by market cap on deck – Apple and Amazon. A story not getting as much attention, the U.S. dollar hitting 20-year highs vs. major currencies as the yen tumbled on easy monetary policy comments overnight. Meanwhile the Fed is expected to raise rates next week by 50-basis points, despite a softer Q1 GDP reading this morning (GDP declined over -1% vs. consensus for a gain of over 1%). Outside of a few individual stocks that tumbled on earnings or guidance, Wall Street finished broadly higher. Oil prices along with gold also finish to the upside and Treasury yields were little changed.


Economic Data:

·     The U.S. economy shrinks at -1.4% annual rate for Q1 GDP vs. estimate rise of +1.1% (vs. prior quarter up +6.9%); Q1 consumer spending +2.7% vs Q4 +2.5%; Q1 business investment +9.2% (Q4 +2.9%), equipment +15.3% (Q4 +2.8%; intellectual property/software +8.1%

·     GDP Inflation reports: Q1 GDP deflator +8.0% vs. est. +7.3% and Q4 +7.1%, Q1 PCE price index +7.0%, Q4 +6.4%; core PCE +5.2% vs. est. +5.4% and above Q4 +5.0%; Q1 year-on-year PCE price index +6.3% vs. Q4 +5.5% and core PCE +5.2% vs. Q4 +4.6%

·     Weekly jobless claims fell to 180,000 in latest week, in-line with estimates and down from 185K last week; the 4-week moving average rose to 179,750 from 177,500 prior week; continued claims fell to 1.408M from prior 1.409M and U.S. insured unemployment Rate unchanged at 1%



·     Oil prices rise with the broader stock market recovery, as WTI crude gains $3.34 or 3.27% to settle at $105.36 per barrel, while Brent crude rose $2.27 or 2.16% to settle at $107.59 per barrel in a solid rebound for commodity related products.

·     Gold prices rise $2.60 to settle at $1,891.30 an ounce, holding up relatively well as an inflation hedge despite the dollar soaring vs. major rivals. Prices bounced after hitting a 10-week trough earlier. Gold has declined about 2.7% this month, which could be its biggest monthly fall since September, on expectations of an aggressive monetary policy tightening by the U.S. Federal Reserve and a stronger dollar


Currencies & Treasuries

·     The surge in the U.S. dollar was among the biggest news stories of the day (yet was still somewhat under the radar regarding media coverage), rising to near 20-year highs around the 103.60 level, ahead of next week’s FOMC meeting where rates are widely expected to jump 50-bps despite a negative GDP reading today. The spike in inflation readings remains the bigger concern for the Fed, still holding near 40-year highs on CPI. The spike followed the dovish bank of Japan statement overnight, stating that "the BOJ will purchase a necessary amount of JGBs without setting an upper-limit so that 10-year JGB yields will remain around 0.0%. To implement the above guideline for market operations, the Bank will offer to purchase 10-year JGBs at 0.25% every business day through fixed rate purchase operations, unless it is highly likely that no bids will be submitted". The British pound tumbled to a 21-month low against a buoyant U.S. dollar that also hit multi-year peaks against both the Japanese yen and euro.






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; MAT with a solid Q1 beat on sales, though margins declined on higher inflation costs and only reiterates year after beat for quarter; PLBY files to sell 30.53M shares of common stock for holders; OSTK slips as Q1 EPS $0.21 vs. est. $0.23; Q1 revs $536M vs. est. $574.54M; Active customers of 7.4 million, a decrease of 26% y/y; 12-months net revenue per active customer of $356, an increase of 26% y/y; orders delivered of 2.4 million, a decrease of 33% y/y; TPX posts Q1 beat at $0.64/$1.24B vs. est. $0.60/$1.2B but lowers year EPS to $3.20-$3.40 from $3.65-$3.85; FLWS tumbles after lowering its full-year guidance for revenue growth and adjusted Ebitda, citing cost headwinds and slower consumer demand growth

·     Auto sector; TSLA falls as investors worry about Musk’s stock sales to finance Twitter deal; Ford (F) Q1 revenue of $34.5B topped estimates of $31.1B while maintains year profit outlook as sees $11.5B-$12.5B in annual operating earnings, despite the war in Ukraine, supply-chain disruptions, inflation, and rising U.S. interest rates; ORLY EPS miss and Q1 missed on comps, top, and bottom line and FY guide was simply reiterated; HTZ 1Q results that handily beat expectations, driven by strong demand, a substantial sequential improvement in monthly revenue per unit and effective cost management; suppliers/retail names also active after quarterly results from VC, ABG SAH

·     Housing & Building Products; PHM slips initially on earnings results while MTH initially jumped (but pared gains); homebuilder sector, along with the housing industry as a whole, has been under pressure with surging mortgage rates and fear of a slowdown; tool maker SWK slides as Q1 adj EPS $2.10 vs. est. $1.70; Q1 revs $4.45B vs. est. $4.65B; cuts FY22 EPS view to $9.50-$10.50 from $12.00-$12.50 citing Access Technologies divestiture, Russia business closure, $600M in commodity and transit inflation, incremental pricing action

·     Consumer Staples; XXII moving higher amid report menthol ban report- MO falls on report Biden administration to advance ban on menthol cigarettes (MO also with earnings); KDP posts top line slight beat, GMs missed and SG&A higher while benefitted from 1-time gains; HSY posts Q1 beat and raise and better-than-expected margins – sees full-year 2022 net sales growth of between 10% and 12%, compared to prior forecast of an 8% to 10% growth; CHD Sales in line but a little light on the guidance; PPC reported 1Q22 adjusted EPS of $1.18, well consensus of $0.65 on better sales and gross margins in the US

·     Restaurants; Dow component MCD mixed comps as overall +11.8% vs. est. +8.73%, with U.S. comparable sales +3.5% vs. est. +3.59% and int’l comps +20.4% after EPS and revs beat ($2.28 vs. $2.17 estimate and revs $5.67B vs. est. $5.57B); DPZ posted lower profit in Q1, as sales fell at U.S. stores and the company dealt with staffing shortages and rising inflation and comp sales fell (-3.6%); CAKE 1Q22 print reflected solid top-line performance, though elevated costs weighed on flowthrough, with comp sales (SSS) of 20.7%, EPS of $0.47 (consensus $0.51) & restaurant margin of 12.8% (consensus 13.5%)

·     Casinos, Gaming, Lodging & Leisure sector; LVS reported a hold adj. EBITDA loss in Macau of – $18m vs. street of $79m. Market wide revenues in Macau took a step down sequentially in the quarter and reported hold adj. EBITDA of $121m at Marina Bay Sands (MBS) vs. street of $129m; CHDN Q1 EBITDA of $128.5M (consensus $123.3M) on sales of $364.1M (est. $344.8M) as top-line beat was broad based, including Live and Historical Racing (+$7.1M), Gaming (+$12.2M); in leisure, HZO shares jump initially after beat and guide above estimates, BC as well



·     Energy stock movers; spread between WTI crude and brent continues to narrow – less than $1 apart today; OPEC+ is likely to stick to its existing deal and agree another 432,000 barrel per day oil output increase for June when it meets on May 5, six sources from the producer group told Reuters on Thursday. The group has been unwinding record output cuts in place since the COVID-19 pandemic took hold in 2020.

·     E&P and Majors; SU rises as Elliott Management is pushing the co to undertake a strategic review of its business and refresh its board, saying its shares have underperformed despite a surge in crude prices to multi-year highs; Nat gas producer EQT Q1 sales volume rises 19% to 492 bcfe while Q1 loss widened; in equipment and services, shares of PTEN, NBR and HP all active following earnings results; refiner PBF posts top and bottom line Q1 beat benefiting from higher demand for fuel and refined products

·     Pipelines: KMI and AM upgraded in MLP sector at Wells Fargo noting Europe’s push to wean itself off Russian energy, inflationary pressure, and a combination of rebounding hydrocarbon demand with a constrained supply response have driven a sustained period of high commodity prices and a reassessment of terminal values for oil and gas assets. Firm is raising price targets by a median of 8.5% to reflect the changes and remain bullish on the midstream sector

·     Utilities & Solar; sector was generally higher, AEP rising one earnings while POR slips on results; in solar, JKS revenue $2.33 billion, +92% y/y, vs. estimate $2.03 billion; in coal, BTU shares tumble after reporting quarterly loss, after group rose recently behind better ARCH results



·     Bank movers; FITB upgraded to Overweight at Wells Fargo given what’s likely the best NII growth in its modern history, among the best core growth in the industry (up est. 1/3 over two years), and FITB’s ability to allow much of these benefits to fall to the bottom line. (Top three picks: BAC, PNC, FITB); Investment banks/advisors; GHL slips as reported revenue for Q1 that missed estimates; LAZ posted Q1 eps beat as operating revenue from the financial advisory business grew 22% to $388M

·     Bitcoin, FinTech & Payments; PYPL shares down over 60% YTD coming into earnings which came in better but the company slashed 2022 guidance to $3.81–3.93 vs. previous $4.60–4.75; in consumer Finance; a day after big beat by Visa, MA Q1 adjusted EPS $2.76 tops estimate $2.19 on better revs rising 24% y/y to $5.2B vs. est. $4.92B, qtrly cross-border volume growth of 53% on a local currency basis and op margin 57.1% vs. 52.9% y/y; LC rises as net revenue of $290mm and Net Income of $41mm easily top consensus as loan Origination Volume came in at $3.2B



·     Pharma movers; LLY EPS $2.62 vs. est. $2.14; Q1 revs $7.81B vs. est. $6.91B; lowers FY22 EPS view to $8.15-$8.30 from $8.50-$8.65 (est. $8.19) while raises FY22 revenue view; LLY also says its experimental drug tirzepatide helped obese and overweight patients lose up to 22.5% of their body weight in a late-stage clinical trial; MRK Q1 sales and earnings top consensus estimates and raises its full-year sales forecast on strong demand for top-selling cancer drug Keytruda, HPV vaccine Gardasil and its COVID-19 antiviral pill molnupiravir

·     Biotech movers; AMGN quarterly results overshadowed by news the IRS has billed Amgen more than $7 billion for taxes it says the biotechnology company owes on operations in Puerto Rico from 2013 to 2015 (which AMGN said it will dispute); MRNA files for authorization of its COVID19 vaccine in young children six months to under; BMRN Q1 rev. was $519MM vs consensus of $482MM with Vimizim, Naglazyme and Voxzogo were ahead of consensus while lower expenses also contributed to non-GAAP EPS 54c vs 50c consensus and increased FY guidance; in research, Credit Suisse initiates SMID Biotech as expect NTLA, ARVN, KYMR to outperform compared to peer growth biotech’s – compelling data readouts, upcoming catalysts, significant market opportunity, and lower risk vs. peers and expect CCCC to underperform – recent disappointing data of only asset in clinical development translate to higher uncertainties/risks than peers

·     MedTech Equipment; ALGN shares slide as much as 20% after missing Q1 expectations saying that the quarter was "tougher than expected" amid COVID lockdowns, weaker consumer confidence, and inflationary pressures; TMO 1Q adj EPS $7.25 vs est. $6.18 on revs $11.82B vs est. $10.63B; BAX files for mixed shelf of up to $10 bln; HOLX slips early despite reporting better than expected financials for 2Q as reached ~$1.4B to exceed forecasts by $150M

·     Healthcare Services; TDOC one of the bigger stories today, falling over 40% overnight as posts Q1 adj EBITDA loss $54.5M vs. profit $56.6M y/y; EPS loss (-$41.58) vs. loss/shr ($-1.31) and Q1 revs $565.4M vs. est. $568.9M on softer guidance


Industrials & Materials

·     Industrial, Aerospace & Defense; NOC Q1 EPS $6.10 vs. est. $5.96; Q1 revs $8.8B vs. est. $8.8B; backs year EPS and rev outlook; CAT Q1 EPS and revs top estimates, but shares slip as profit margins pressured by surging costs which rose 16.5% to $11.73 billion; MMM downgraded to Hold at Argus saying the company is struggling to get back on track to achieve its long-term goals of raising margins and growing earnings; TXT another mover on earnings

·     Transports; CP Q1 earnings miss was largely due to overarching supply chain, weather, labor and fuel issues, as well as the effects of the Omicron variant. Canadian Pacific EPS was around 10% lower than expected; in airlines, LUV beats rev estimates for Q1; CHRW shares jump following its earnings results beat on higher pricing


Technology, Media & Telecom

·     Internet movers: FB came into its earnings last night down -48% YTD, but shares surge in sigh of relief for investors as Q1 daily active users (DAUs) climb 4% to 1.96B, just above the 1.95B est. which overshadowed a rev miss of $27.91B up 7% (slowest rev growth in a decade) vs. est. $28.2B, while EPS beat; PINS posted Q1 revenue up 18% to $575M, slightly above ests $572.5M as it benefits from higher ad spending by businesses, though qtrly global MAUs down 9% y/y to 433M vs. 478M; TWTR (which is in process of being bought by Elon Musk for $44B as confirmed last week), reported Q1 rev miss, but MDAUs rise nearly 16% y/y

·     Media, & Telecom: CMCSA mixed results as earnings and revs beat, but metrics raise red flag as high-speed Internet net change +262,000, -43% y/y (est. +232K), while @peacockTV has generated $1.159 bn of revenue and lost $1.9 bn in EBITDA in the past four quarters for Comcast/NBCU ($3.1 bn of operating expenses); IPG EPS beat on better revs $2.27B while raises year organic rev outlook to +6% from +5%; streaming stocks pressured early again, falling sharply since NFLX earning/sub loss blow-up – PARA, DIS, ROKU, CMCSA (earnings tonight)

·     Semiconductors: QCOM with Q2 top and bottom line beat as guides Q3 revenue between $10.5B-$11.3B above ests $9.98B 9earnings report helped boost the semi sector ahead of AAPL results tonight and impact on supply chain); INSG in collaboration with Qualcomm and Inseego, launches 5g mm-wave high-speed internet service in 10 cities; ATOM entered into a new joint development agreement with a leading foundry partner.

·     Hardware & Software movers; NOW boosted the lower end of its FY subscription revenue outlook after Q1 results top estimates; PI reported strong Q1/22 results ahead of guidance and our estimates, primarily driven by accelerating M700 endpoint volumes and improving system sales; NTGR posts Q1 EPS net loss (-$1.95) on revs $210.6M vs. est. $225.9M; sees Q2 revs $205M-$220M vs. est. $249.3M


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.