Mid-Morning Look: February 09, 2022

Mid-Morning Look

Wednesday, February 09, 2022






DJ Industrials




S&P 500








Russell 2000






No fear being exhibited by U.S. stock markets ahead of tomorrow’s CPI inflation data, with major averages moving sharply higher amid another broad-based rally extended from Tuesday’s session. High-growth stocks gain as a recent rally in Treasury yields paused (10-yr dips to 1.92% from 1.97% highs yesterday), while investors took comfort from upbeat earnings reports and signs of easing tensions in Ukraine. The Nasdaq outperforms for a second day as investors continue to buy the January tech dip. Global stock markets also with big gains in Asia and Europe overnight as well. Growth and technology companies have been hit hard this year on rate hike fears that prompted investors to move away from companies with rich valuations (Nasdaq remains down over 9% YTD despite today spike). Hotel, leisure, and travel names again helping pace market gains (along with tech) as Omicron variant/COVID fears ease on sharply declining cases and loosening restrictions around the world in recent weeks (NY today expected to announce the end of her state’s mask mandate for most indoor public places, according to a NY Times report). A strong two-days of gains for stocks as investors look to erase a miserable January. More big earnings tonight with Dow component Disney (DIS) after the close.







WTI Crude















10-Year Note





Sector Movers Today

·     Auto sector; GM downgraded to Neutral from Buy at Nomura (a day after Morgan Stanley downgraded) and lowers PT to $56 from $66 saying GM’s lowered forward guidance because of EV transition limits bottom line growth; XPEV shares rise after saying its Class A ordinary shares have been included as eligible stocks in the Shenzhen-Hong Kong Stock Connect, effective on Feb. 9 ; the NHTSA said TSLA is recalling as many as 26,681 vehicles due to a software issue that could cause inadequate windshield defrosting; TM lowered its sales forecast by 3.5% for the FY saying semiconductor shortages dampened production (now sees 8.5M cars produced down from its prior forecast of 9M) while revenue last quarter fell 4.5% y/y; Foxconn will launch an $8 billion investment in Indonesia in the third quarter of this year to manufacture electric vehicles (EVs) and batteries, an Indonesian minister; auto retailers LAD, PAG also out with earnings

·     Semiconductors: Per latest Mercury CPU data, AMD continued its unit share gains vs. INTC on the server side, though ceded some share to Intel on the client side on a q/q basis. In servers, AMD gained further share on both a q/q basis and on a y/y basis. On the client side, in desktops, Intel gained share on both a q/q and a y/y basis; GFS Q4 revenue and profit topped ests in Q4 (18c/$1.85B vs. est. 11c/$1.81B)and said in past year it entered into 30 “significant” long-term customer agreements that provide revenue visibility; IIVI 2Q adj EPS $0.92 vs est. $0.87 on revs $807Mm below est. $817Mm and guides 3Q revs $785-825Mm below est. $831.1Mm; AMD upgraded to buy from outperform at Daiwa Securities

·     FinTech & Payments; FLT Q4 adj EPS $3.72 vs. est. $3.60 on $802.3M vs. est. $766.9M, sees Q1 adj EPS $3.45-$3.55 vs. est. $3.52 on revs $740M-$760M vs. est. $746.1M; IIIV Q1 adj EPS 35c vs est. 32c on revenue $73.9M vs est. $70.1M, and raised its FY guidance for adj EPS to $1.28-1.42 from $1.25-1.40 and revs to $288-304M from $280-300M; XP posted a quarterly beat with AUC and active clients both +23% YoY; JKHY Q2 EPS $1.30 vs est. $1.13 on revenue $493.9M vs est. $468M and upped its guidance, now seeing FY adj EPS $4.75-4.82 from prior $4.64-4.73 and adj revs $1.889-1.892B from prior $1.87-1.875B; Mizuho said the fear in SQ after AAPL introduced a Tap to Pay feature on iPhones is unwarranted and the move is potentially more beneficial in the long-term, echoing Barclays’ reaction yesterday

·     Media & Telecom movers; Dow component DIS is expected to report earnings after the close tonight; FOXA reported higher revenue in Q4 to $4.44B vs. est. $4.27B on better EPS as advertising sales continued to improve, rising about 6% y/y due to pricing strength at its Fox network, as well as from live sports and Tubi, Fox’s entertainment streaming platform; MSGE quarterly results miss as revs of $516.4M misses the $544M estimate; in advertising, OMC shares jump on big earnings beat (ahead of IPG earnings tomorrow)

·     Metals & Materials; VALE upgraded to Outperform from Neutral at BNP Paribas; iron ore futures in China plunged more than 6% on Wednesday, snapping a five-session rally, after authorities pledged to strengthen supervision of the market and crack down on any irregularities; MP upgraded to Buy from Hold with $47 tgt at Benchmark; CCK reported 4Q adj EPS of $1.66 vs. est. of $1.54, with the beat largely driven by increases in BevCan and transit packaging sales unit volumes; in chemicals, FMC reported 4Q adjusted EPS/EBITDA of $2.16 / $377mm, above ests as ’22 guidance of ~7% revenue growth is a solid positive, though EPS guidance of $6.80- $8.10 (without buybacks) is wide range



·     CGC +8%; as the cannabis company reported a smaller-than-expected quarterly loss

·     CMG +6%; reports Q4 EPS and sales above consensus as comparable sales growth of 15.2% for Q4 was above est. 14.8%, helped by higher online sales while qtrly digital sales +3.8% (41.6% of sales)

·     DOCS +24%; Q3 results exceeded expectations, with a preliminary FY23 outlook that also comes in well above consensus as mgmt noted momentum with large customers (top 5 growing 90% y/y; 4 customers adding $5 million in incremental sales)

·     ECOL +67%; as RSG agreed to buy the company for $48 per share in cash, or a total value of about $2.2B, including debt as deal represents a 70% premium to Tuesday close https://bit.ly/3GxNTlX

·     ENPH +12%; posts EPS beat on stronger revenue and margins, shipping 1,082 MW DC in inverter capacity and just over 100 MWh in energy storage capacity (sees Q1 revenue $420M-$440M vs est. $409M)

·     NCR +13%; as Q4 adj EPS $0.76 vs. est. $0.70; Q4 revs $2.03B vs. est. $2.07B; said Board has unanimously approved commencing a comprehensive strategic review process

·     OMC +12%; Q4 EPS $1.95 vs. est. $1.73; Q4 revs rose 2.6% to $3.86B vs. est. $3.68B; Operating profit of $622.5 million increased 1.3%

·     TEVA +8%; posted Q4 profit that topped expectations but rev that missed, as COVID-19 continued to impact patient behavior and prescribing patterns

·     XPEV +6%; after saying its Class A ordinary shares have been included as eligible stocks in the Shenzhen-Hong Kong Stock Connect, effective on Feb. 9



·     ATGE -13%; after lowered its full-year forecasts for adjusted revenue and earnings per share.

·     BIG -5%; downgraded to Underweight at JPMorgan and cut tgt to $31 as lower FY22 EPS to $4.34 or ~23% below Consensus at $5.60

·     CVS -3%; shares slip as beat on top and bottom line for Q4 but only reaffirmed its year forecast

·     LBRT -4%; reported $q4 EPS loss (-$0.31) vs. est. loss (-$0.17), while revenues rose 5% Q/Q to $684M, slightly above ests and Q4 net loss after taxes totaled $57M, compared to a $39M net loss in Q3

·     LYFT -1%; reported a mixed quarter with revenue and revenue per rider beating consensus while active riders and EBITDA margins missed, and guided 1Q well below expectations with Covid again pressuring ridership and growth (UBER results expected tonight)

·     NEWR -24%; as qtrly revenue grew 22% y/y, accelerating from 18% in the September quarter and 8% in the year-ago quarter, but Q4 guide implies rev y/y growth of 19%, decelerating from the 22% growth in the December (guidance weighs on shares)

·     TCS 29%; shares sink on weaker Q1 outlook as guides Q4 EPS $0.24 vs. est. $0.30 and sees Q4 sales decline about 11% y/y (overshadows Q3 beat)


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.