Mid-Morning Look: April 14, 2022

Mid-Morning Look

Thursday, April 14, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open flat to slightly higher after trading in a narrow range overnight before breaking lower, as Treasury yields spiked across the board and investors took profits heading into the long 3-day holiday weekend (Europe closed for four days, with Monday as well). The Euro tumbles over 1% to 1.0768 vs. the dollar after ECP President Lagarde said earlier fiscal, monetary support remains critical after the ECB leaves benchmark refinancing rate unchanged at 0.00% noting conflict and associated uncertainty are weighing heavily on confidence of businesses and consumers. Treasury yields meanwhile spike with the 10-yr up over 10 bps to 2.79% as top/bottom end of the curve all aggressively higher. In stock news, TWTR shares jump initially after TSLA CEO Elon muck said he made a “best and final” offer to buy the co for $54.20 per share in cash. Leisure and travel stocks getting another boost after DAL upbeat earnings yesterday lifts sentiment. Major sectors mixed early heading into big earnings next week, while financials a drag early given downbeat results from a handful of names (WFC among biggest decliners). Handful of economic data today and tomorrow as well.


Economic Data

·     Retail Sales for March rose +0.5% m/m vs. est. +0.6% expected and upwardly revised +0.8% (from +0.3%) while ex-gas and autos rose +0.2% m/m vs. -0.1% expected and -0.1% prior; retail sales less autos rise +1.1% m/m vs. +1.0% expected and +0.6% prior

·     U.S. Jobless Claims rose to 185K vs. est. 171K while prior week revised to 167K from 166K; the 4-week moving avg rose to 172,250 from 170,250 prior; continued claims fell to 1.475M from 1.523M prior week (est. 1.5M) and U.S. insured unemployment rate unchanged at 1.1%

·     Import prices for March rose +2.6% m/m above the +2.3% expected and upwardly +1.6% prior, while Export prices rose +4.5% m/m vs. +2.2% estimate and +3.0% prior; March Non-Petroleum Import Prices +1.1% and Petroleum Import Prices +16.1%

·     Business Inventories for February rose +1.5% vs. est. +1.3% and vs Jan +1.3%; U.S. Feb business sales +1.0% vs Jan +4.1% and Feb retail inventories ex-autos revised to +1.4% from +1.2%

·     University of Michigan consumers sentiment survey prelim April 65.7 above consensus 59.0 and vs final March 59.4; current conditions index prelim April 68.1 vs final March 67.2 and the consumers expectations index prelim April 64.1 vs final March 54.3







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10-Year Note





Sector Movers Today

·     Bank movers after earnings:

·     Citigroup (C) Q1 profit falls 46%, but Q1 EPS of $2.02 tops estimates of $1.55; Q2 revs decline 2% to $19.2B, while net income fell to $4.3B from $7.9B a year ago; Q1 operating expenses of $13.2B fell 3% q/q and increased 15% y/y; Q1 net credit losses of $872M vs. $866M in Q4 and $1.75B in Q1 2021; Institutional Clients Group revenue of $11.2B vs. $8.91B in Q4

·     WFC Q1 revs of $17.6B missed the $17.8B consensus and fell from $20.9B in Q4 2021 and $18.5B in Q1 2021; noninterest revenue fell 28% from Q4 and 14% from a year ago; Q1 EPS of $0.88 beat by 8c and compared with $1.38 in Q4 2021 and $1.02 in the year-ago quarter; Q1 noninterest income of $8.37B fell from $11.6B in Q4 2021 and from $9.72B in Q1 2021

·     USB Q1 EPS $0.99 vs. est. $0.94; Q1 revs $5.6B vs. est. $5.55B; Q1 net interest margin 2.44% vs. 2.50% a year ago; Return on average assets of 1.09% and return on average common equity of 12.7%

·     PNC Q1 EPS $3.29 vs. est. $2.73; Q1 revs rose 11% to $4.69B vs. est. $4.76B; Net interest margin 2.28% vs. 2.27% y/y, net charge-offs $137 million, -6.2% y/y, non-interest income $1.89 billion, +0.9% y/y, and non-interest expenses $3.17 billion, +23% y/y, estimate $3.12 billion

·     STT Q1 adj EPS $1.59 vs. est. $1.47 and revs rises 4.4% y/y to $3.08B vs. est. $3.04B; said fee revenue rose 3.6% y/y to $2.57B; Net interest income was $509M, compared with $467M a year ago, driven by growth in investment portfolio and loan balances, as well as higher market interest rates

·     GS reported a 43% drop in profit but beat expectations (Q1 GAAP EPS of $10.76 vs. estimate of $8.98 and fell from $18.60 in Q1 2021); consumer and wealth management saw a 21% jump in net revenues to $2.10 billion; total Q1 net revenue of $12.9B vs. $12.6B in the previous quarter and $17.7B in the year-ago quarter; operating expenses $7.72B, down from $9.44B y/y; investment Banking revs down -36% to $2.41B; global markets net revs rise 4% y/y to $7.87B with FICC revenue of $4.72B rising 21% Y/Y and Equities revenue of $3.15B falling 15% Y/Y.

·     MS posted 11% profit drop for Q1 with revs down 6% to $14.80B topping the $14.19B estimate; earned $258M in revenue from its equity underwriting business, down sharply from $1.50B a year ago; brought in $944M in advisory revenues in the quarter, compared with $480M y/y; Wealth management net revenue $5.94B below views

·     Pharma movers; SNY said data from a phase 1/2 of rilzabrutinib to treat adults with heavily pre-treated immune thrombocytopenia were published in The New England Journal of Medicine; PFE and BNTX announce data showing high immune response following booster dose of COVID-19 vaccine in children 5 through 11 years of age; ADGI said it was pausing the submission of an emergency use authorization (EUA) request for adintrevimab (ADG20) with the FDA after the drug was seen to show a lack of neutralizing activity against the Omicron BA.2 variant; SUPN reiterates full year 2022 financial guidance provided on February 28, 2022

·     Industrial & Machinery; ahead of earnings, Deutsche Bank with catalyst calls, recommending buying HON as believe we are entering the sweet spot with respect to timing as company should benefit from its late-cycle end market exposures including Aerospace, Oil & Gas; also catalyst call buy on URI saying expectations are not low, see few clear opportunities for beats and raises this quarter, and a high probability of this for URI; Deutsche with catalyst sell call on ITW saying they already thought the company’s full year EPS guidance looked aggressive post-4Q earnings; GWW was downgraded to underweight from equal weight at Morgan Stanley as pace of price rises dips, PMI data points to slowing volumes and smaller competitors enter the market



·     DAL +3%; travel and leisure names extend gains after positive earnings from DAL yesterday provided upbeat sentiment for the industry/spending

·     HII +3%; upgraded to Outperform at Cowen and raise tgt to $270 from $200 saying defense sector’s improved budget prospects and HII’s severe discount to peers augur substantial upward re-rating headroom

·     IBM +2%; upgraded to Overweight from Equal Weight $150 PT at Morgan Stanley as view it as a defensive play amid growing macro risks, given its negative correlation to PMIs and historical late cycle outperformance

·     RAD +10%; after earnings results and mixed guidance as sees adjusted EBITDA $460M-$500M vs. est. $401M and revs $23.1B-$23.5B vs. est. $23.44B

·     TSM ; said 2022 sales may exceed upper end of the previous guidance of mid-to-high 20% in USD and doesn’t expect change to CAPEX for 2022

·     TWTR +7%; after Tesla CEO Elon Musk made a “best and final” offer to buy the co for $54.20 per share in cash, in a deal valued at about $43 billion (comes a week after revealing a 9% stake)

·     UNH +2%; raised its forecast for the year as double-digit revenue growth and lower operating costs helped beat analysts’ estimates

·     VALN +9% following Britain’s approval of the French firm’s COVID-19 vaccine, a sixth coronavirus shot approved in the country



·     BBBY -8%; after analyst at Telsey downgrades post earnings/guidance yesterday

·     CMBM -24%; guides Q1 revs $61M-$63M, down from prior view of $77.5M-$81.5M and below est. $79.5M and announces the departure of its CFO

·     GWW -4%; downgraded to underweight from equal weight at Morgan Stanley as pace of price rises dips, PMI data points to slowing volumes and smaller competitors enter the market

·     PTGX -25%: after announced FDA intent to rescind the Breakthrough Designation, or BTD, for Rusfertide

·     STX -2%; and WDC both downgraded to Neutral from Positive at Susquehanna noting both are down 28% YTD but argue the extent of deceleration in Cloud CAPEX spend by YE22 and into 2023, and its impact, is still not dialed into expectations

·     TSLA -3%; after CEO Elon Musk makes an offer to buy Twitter Inc for $54.20 in cash just a week after revealing a 9.2% stake

·     WFC -4%; Q1 revs of $17.6B missed the $17.8B consensus and fell from $20.9B in Q4 2021 and $18.5B in Q1 2021; noninterest revenue fell 28% from Q4 and 14% from a year ago


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.