Mid-Morning Look: June 30, 2022

Mid-Morning Look

Thursday, June 30, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks punished early, down over 2% as end of month, quarter and 1H bring more pain. Stocks falling sharply across the board as the S&P 500 is on pace for its worst first half start since at least 1970 and the Nasdaq posting its worst quarter since 2008 (and worst 1H since 2002 Dot.com bubble) as investors continue to struggle with rising rate fears and stubbornly high inflation. Data on Thursday showed a key gauge of U.S. inflation rose 0.6% in May largely due to the higher cost of gas and food, though there were signs that price pressures were starting to ease. The narrower measure of inflation that omits volatile food and energy costs, known as the core PCE, rose by a relatively modest 0.3% for the fourth month in a row – below estimates. Not many safe-haven assets to hide in with precious metals tumbling and crypto assets seeing further selling pressure as bitcoin breaks $19K, more than 70% from its November peak above $67K. The dollar extends recent gains back to 20-yr highs, while Treasury yields tumble (10-yr now 50-bps off recent decade highs of 3.5%) as investors flock to bonds. More fears about the economy arose last night after home furnishing co RH revised its outlook for FY22, now expecting a 2-5% sales decline (vs. the prior guidance calling for sales flat to up 2% y/y) based on lower-than-expected demand almost 2/3 of the way through 2Q – the comments a sad reminder of more pain potential in the 2H for the economy while the Fed continues to raise rates. Discretionary, Financials, Info tech, healthcare, Industrials, Materials big losses, while Utilities, and Energy fair the best early.


Economic Data

·     Weekly Jobless Claims fell to 231K in latest week from 233K prior (est. 228K); the 4-week moving average rose to 231,750 from 224,500 prior week; continued claims fell to 1.328M from 1.331M prior week and vs. est. 1.310M and U.S. insured unemployment rate fell to 0.9%

·     Personal Income for May rises +0.5%, in-line with estimates and up from +0.4% prior, while Personal Spending for May rises +0.2%, below estimates of +0.4% and down from prior + 0.9%. Real Personal Spending for May fell -0.4%. The savings rate rose to 5.4% from 5.2%.

·     PCE price index for May rises +0.6% vs. est. +0.7% and vs April +0.2% and core PCE price index for May rises +0.3% vs. est. +0.4%. May Y/Y PCE price index +6.3% vs April +6.3% and core PCE Y/Y rises +4.7% vs. est. +4.8%

·     Chicago PMI for June falls to 56.0 from 60.3 prior month and below est. 58 9reading was the lightest since August 2020)







WTI Crude















10-Year Note






·     ASPN +12%; said it won’t proceed with concurrent public offerings of common stock and green convertible senior notes due 2027, which were announced Tuesday.

·     BKR +1%; energy one of the few bright spots again amid broader market pullback – Cowen says quarterly update shows SLB and HAL sound the best, while BKR and CHX may have some downside

·     DLR +1%; rises with EQIX after Jefferies upgraded the data center REIT names saying they have been able to push rents in the current environment, with a return to positive leasing spreads last quarter while achieving record leasing volumes

·     POWW ; reported results that missed expectations, but F2023 outlook was better than expected as the company prepares to transition to a new and expanded production facility



·     ANGN -38%; after it discontinued phase 2 trial of ANG-3070 in patients with kidney disease

·     CGC -20%; after announcing exchanges with holders of ~$198M of convertible notes

·     DCT -24%; as posted Q3 results that beat on the top and bottom lines, but shares fall on management’s cautious outlook for F4Q, and guided FY revs $295-297Mm vs est. $302.4Mm

·     RH -11%; updated its guidance for FY22, cutting sales growth by 450bps at the midpoint and operating margin by 200bps.

·     SGH -20%; posted top and bottom line beat for Q4 ($0.87 vs est. $0.76 on sales $463Mm vs est. $455.2Mm) but sees Q4 sales $420-460Mm vs est. $478.8Mm and EPS $0.55-0.75 vs est. $0.84

·     UHS -5%; cut its full-year guidance because of lower-than-expected patient volumes, revenues and income negatively affecting operations – shares of other hospital operators THC under pressure and MedTech names (MDT ) on slowing procedure fears

·     WBA -4%; Q3 EPS $0.96 vs. est. $0.92 (though earnings fell more than 73% due to its payment of a $683M opioid settlement) on in-line revs above $32B (but down from $34B Y/Y) while backs FY22 EPS outlook


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.