Market Review: July 27, 2022

Closing Recap

Wednesday, July 27, 2022





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     US equities started the morning with a strong rally after MSFT and GOOGL delivered sufficiently-OK quarters and commentary last night relative to expectations and there were no offsetting blow-ups from other megacaps. 

·     The Fed delivered a +75bps hike and a statement about as close to expectations as the market could hope. The hike brings the target rate range to 2.25-2.5%, as forecast, and anticipates ongoing increases as appropriate. Recent indicators of spending and production have softened, but job gains have been robust and unemployment remains low. As we have heard previously, the Fed remains strongly committed to returning inflation to the 2% goal.

·     The reaction in equities was muted with little to surprise traders either up or down prior to Powell’s press conference. Commentary during the press event were balanced and indicated willingness to slow increases as necessary.  Equities liked the balanced, not particularly hawkish tone, and moved to highs with growth outperforming. The Russell 1000 Growth Index finished about +3.8%, while the Value component was roughly +1.9%.

·     Looking across the sectors, Communication Services (XLC), Technology (XLK) and Consumer Staples (XLY) were upside leaders with moves in the +3.5-4.5% area while Utilities (XLU) lagged, finishing only about +0.20%.


Economic Data:

·     Durable Goods for June rose +1.9% vs. -0.5% expected and +0.5% prior (revised from +0.7%), while core durable goods: +0.3% vs. +0.2% expected and +0.5% prior (revised from +0.7%). Durable goods, ex: defense: +0.4% vs. -0.5% expected and +0.7% in May (revised from +0.6%).

·     Wholesale Inventories for June rises +1.9% M/M to $896B vs. 1.5% expected and +1.8% in April (revised from +2.1%); on Y/Y basis, +25.6%

·     International Advance Trade in Goods for June -$98.18B vs. -$103.2B consensus and -$104.04B in May as exports of goods increased $4.4B to $181.5B in June, while imports of goods edged down $1.5B to $279.7B.

·     Wholesale inventories at the end of June were estimated at $896.0B, up 1.9% from May and +25.6% from the year-ago period.

·     US Pending Home Sales Change MoM actual -8.6% vs. forecast -1% and previous 0.7%.



·     WTI crude enjoyed an early pop after EIA data showed a draw of -4.523M vs. the forecast -1.5M and previous -0.446M. Total U.S. crude oil stockpiles, SPR Included, dropped to an 18-year-low, while US SPR crude stocks last week fell to the lowest point since June 1985. NYMEX WTI crude September futures held gains through afternoon to settle at $97.26/bbl, +$2.28 or +2.40%. Brent crude futures also settled higher at $106.62/bbl, +$2.22 or +2.13%.

·     Gold bounced around a bit, but generally held within a fairly tight range, settling +$1.40, or +0.08%, at $1,719.10. Traders were unwilling to make big directional bets ahead of today’s Fed announcement.


Currencies & Treasuries

·     US Dollar staged a small rally early but faded off the Fed announcement to finish lower with DXY slipping back to about $106.50 during Powell’s comments.

·     Bitcoin also enjoyed an early grind higher, moving back above $21,500, before pushing through $22,500 after the Fed move and US Dollar fade.

·     Despite some volatility during Powell’s remarks, the US 10-year yield finished pretty much where it started the day. The implied Fed Funds rates for December 2022 and March 2023 remained generally unchanged versus pre-market levels as well.






WTI Crude















10-Year Note





Top stock movers:

·     In Pharma/MedTech: BMY 2Q adj EPS $1.93 vs est. $1.79 on revs $11.9B vs est. $11.4B; reaffirms FY adj EPS guide; TEVA 2Q revs/EBITDA missed largely from FX and Copaxone, while EPS beat on one-time benefits in financial expense and tax, but shares jumped after saying it had struck a deal with US state and local governments to pay more than $4 billion to settle thousands of lawsuits; BSX gross margins drive beat quarter, raises organic rev growth to 8% to 9%; HUM beat driven by higher revs + lower SG&A, offset by higher MLR and raise guidance

·     MSFT, GOOGL, TXN move higher initially despite mixed earnings/rev results while SHOP hits 52-week lows saying consumers have been favoring discount retailers and reducing spending on other categories due to inflation

·     Dow component BA missed both top and bottom-line estimates, as Q2 net income fell to $160M from $587M, while total revenue fell nearly 2% y/y, but said operating cash flow swung to positive $81M from negative $483M in the year-earlier quarter, and free cash flow improved to negative $182M from $705M

·     In lodging, HLT 2Q adj EPS $1.29 vs est. $1.16, comp RevPAR +54.3% currency neutral; sees FY comp RevPAR +37-43%, adj EBITDA $2.5-2.5B vs est. $2.3B, adj EPS $4.21-4.46 vs est. $4.07; WH Qtr. relatively inline and guide maintained

·     Financial stop movers; PYPL rises after activist investor Elliot Management announced a stake in the company (size undisclosed); Dow component Visa (V) Q2 beats, $1.98 vs $1.75 est. w/higher revenues, lower incentives & taxes, and volume and processing trends in line to better; NAVI Q2 beats, .92c vs .78c as strong NII, higher other income, and lower expenses drove the beat; ZION Q2 missed by 12c tied to a large proactive build in the reserve, higher expenses, and a decline of 15% in deposits; NYCB 3c EPS beat, PB in-line results and ABCB misses by 1c on EPS; asset managers move on IVZ 12c EPS miss and higher expenses, adj op margin miss and outflows

·     Consumer Staples & Restaurants with several earnings results; CMG reports in-line with expectations on a top-line basis, while beating on an operating earnings basis; MDLZ reported EPS beat driven by better-than-expected AMEA and NA revenues.; KHC 2Q adj EPS $0.70 vs est. $0.68 on net sales $6.6B vs est. $6.4B; raises FY organic net sales guide

·     Retailers: TPX qtr. inline but cutting FY again to $2.6-$2.8 from $3.3 prior and $3 consensus; footwear names remained active after ADDYY lower guide yesterday; SKX Beat qtr., lowered Q3, and lowered FY by even more; other results from SHOO as well as auto retailers GPI, GPC PAG; FXLV tumbles on lower guidance ang mgmt. changes

·     SAVA tumbles after reports the U.S. Justice Department opened a criminal investigation into Cassava Sciences Inc involving whether the biotech company manipulated research results for its experimental Alzheimer’s drug, Reuters reported


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.