Mid-Morning Look: April 28, 2022

Mid-Morning Look

Thursday, April 28, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stock futures were strong overnight, with the Nasdaq looking at 2% gains to start…but markets have been slipping since, paring gains across the board as investors digest another round of large cap corporate earnings and on data that showed 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%). The Fed remains between a rock and a hard place ahead of next week’s FOMC policy meeting as the economy has slowed more than expected, while inflation continues to hold near 40-year highs (GDP report showed higher inflation too). Fed fund futures still showing likelihood of a 50-bps rate hike at the May meeting despite the negative GDP print. As for earnings, several mixed bags today impacting several stocks: FB a relief rally early on better daily users (but rev growth slows), CAT with EPS/rev beat (but margins suffer on surging costs), CMCSA beat EPS/revs (but broadband subs plunge y/y), and more. Drug makers LLY and MRK rally on earnings, ORLY, DPZ, SWK, BTU, ALGN and TDOC among some of the biggest losers on results/guidance while all eyes on AAPL and AMZN tonight. Markets continue to fade every pop over the last 2-weeks, with gains not being held on inflationary concerns, and cautious outlooks by several companies. The dollar surging vs. major currencies – yet another leg higher, rising over 2.1% now vs. the Yen above 131 (more than 20-year highs), while the Euro sinks below the 1.05 level.


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%







WTI Crude















10-Year Note





Sector Movers Today

·     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

·     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

·     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

·     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



·     FB +12%; 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

·     LC +17%; as net revenue of $290mm and Net Income of $41mm easily top consensus as loan Origination Volume came in at $3.2B

·     LLY +3%; 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 – says its experimental drug tirzepatide helped patients lose up to 22.5% of their body weight in a late-stage clinical trial

·     PINS +8%; reported 1Q22 revenue in line with its guidance and slightly ahead of consensus, with EBITDA well ahead of expectations; it’s 2Q guidance however was below the Street

·     QCOM +6%; reported strong FQ2/22 results across the board and provided better-than-expected FQ3/22 guidance driven by ongoing content share gains in higher-end Android smartphones and broad-based strength across the entire QCT portfolio

·     SU +10%; 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



·     ALGN -22%; after missing Q1 expectations saying that the quarter was “tougher than expected” amid COVID lockdowns, weaker consumer confidence, and inflationary pressures

·     AMGN -5%; quarterly results overshadowed by news the IRS has billed Amgen more than $7B for taxes it says the biotechnology company owes on operations in Puerto Rico from 2013 to 2015

·     BTU -19%; as Q1 net loss widens to $119.5M from $80.1M a year ago and weaker than expected Q1 adj Ebitda of $327.5M vs estimates of $434.0M

·     CAT -4%; Q1 EPS and revs top estimates, but shares slip as profit margins pressured by surging costs which rose 16.5% to $11.73 billion

·     CMCSA -3%; EPS and revs topped views, but shares slip as broadband unit added 262,000 new customers, down 43% from the same period last year

·     DPZ -5%; as 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%)

·     FLWS -14%; after lowering its full-year guidance for revenue growth and adjusted Ebitda, citing cost headwinds and slower consumer demand growth

·     NTGR -8%; as posts Q1 EPS net loss (-$1.95) on revs $210.6M vs. est. $225.9M; sees Q2 revs $205M-$220M vs. est. $249.3M

·     ORLY -9%; EPS miss and Q1 missed on comps, top, and bottom line and FY guide was simply reiterated

·     SWK -8%; 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

·     TDOC -45%; 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

·     TSLA -4%; selling pressure concerns remain after Elon Musk recently announced purchase of TWTR for $44B


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.