Mid-Morning Look: May 02, 2022

Mid-Morning Look

Monday, May 02, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are looking to recover after posting one of its worst weeks in years, seeing a strong early recovery as the Nasdaq rises over 1% and the S&P posting a 0.75% advance. Investor focus remains on the Federal Reserve meeting this week where policymakers are widely expected to raise interest rates, but the outlook is much less clear given the recent stock market pullback. The S&P 500 index traded below its February 24 intraday low of 4,114.65, and at its lowest level since May 19, 2021, before recovering. Meanwhile, the U.S 10-Year Treasury yield hit 2.992%, which is a fresh high back to December 2018. The Nasdaq hit its lowest level since Nov 2020 (fell -4.2% Friday) and has undergone lots of damage with more than 45% of stocks in the Comp down 50%, more than 22% of stocks down 75%. The U.S. Treasury 30-year bond yield hits highest since March 2019, last up 8 bps at 3.026%; gold prices tumbling, down -2.68% or over $50 to $1,860 an ounce; silver prices down -2.86% to $22.43 an ounce as precious metals slump. Not much to talk about early as it seems like a generally broad bounce to start as investors look to buy the dip…and hope it holds this time after dip buying has failed over the last 2-weeks. The war in Ukraine and a Covid-19 outbreak in China also remain market factors along with the Fed and earnings. Note the S&P 500 fell 8.8% and the Dow declined nearly 5% in April, the worst monthly performance since March 2020. The Nasdaq Composite retreated more than 13% last month, its worst showing since October 2008. Tech stocks are particularly sensitive to higher interest rates.


Economic Data

·     S&P Global April final manufacturing PMI at 59.2 (vs flash 59.7) and vs final March 58.8; sector final output index for April at 57.6 vs flash reading 57.4 and final March 56.1; sector final output prices index for April at 76.3 vs flash reading 78.4 and final March 69.7

·     ISM Manufacturing PMI Actual 55.4 below forecast 57.6 and prior 57.1; new orders Index Actual 53.5 vs. previous 53.8; prices paid actual 84.6 vs. previous 87.1; employment Index actual 50.9 below previous 56.3

·     Construction Spending for March MoM Actual 0.1% below forecast 0.8% and previous 0.5%







WTI Crude















10-Year Note





Sector Movers Today

·     Auto sector; monthly China EV delivery data out: LI delivers 4,167 Li ONEs, down 62% M/M; reported 5,539 deliveries in April 2021; overall deliveries of Li ONE have reached 159,971 since the vehicle’s market debut in 2019; NIO delivers 5,074 vehicles in April down from 9,985 in March, however YTD deliveries of 30,842 vehicles is up 13.5% Y/Y; overall deliveries reached 197,912 vehicles; XPEV delivers 9,002 Smart EVs in April 2022, representing a +75% Y/Y and down- 41.6% M/M; YTD total deliveries reached 43,563, up 136% Y/Y; LAD shares could rise 65%, good reason to buy, according to Barron’s saying Lithia is growing fast, while margins, which shot higher because of shortages, might be more resilient than the market is giving it credit for; INVZ said it has been selected to become the direct lidar supplier to “one of the largest vehicle manufacturers in the world” without specifying

·     Financial Services & Lending: MCO shares slide after EPS, revs miss and lower guide as sees adjusted EPS $10.75 to $11.25, down from prior $12.40 to $12.90 (ahead of comp SPGI to report tomorrow); in mortgages, Wedbush lowers ests and tgt on ZG, RDFN, OPEN but keep Buy ratings as lower outlook on our residential real estate technology coverage noting investor sentiment is materially bearish, and we are likely going to see downward estimate revisions at least this quarter and possibly in the coming quarters; crypto assets active after Warren Buffett and Charlie Munger talked negatively (again) on Bitcoin (BTC) and crypto in general

·     Bitcoin, FinTech & Payments; GPN reports slightly better Q1 EPS and in-line revs of $1.95B and raises FY22 operating margin expectations, while maintained rev outlook; WU was downgraded to Sell at Citigroup citing several factors that impact their decision; Mizuho Updating models & PTs following the first week of 1Q Payment’s earnings, which were broadly marked by top-line beats and mostly positive stock reactions. Increasing PT for ADP from $235 to $250. WEX from $220 to $235. Lowering PT for PYPL from $175 to $120 and lowering PT for HOOD from $19 to $14; BKKT and GPN announced a strategic alliance

·     Retailers; AMZN hits near 2-year lows early, extending last week earnings related losses; BBWI upgraded to Outperform at Cowen as they like BBWI’s solid brand positioning coupled with a robust product innovation pipeline and see upside to Street’s FY22 and FY23 estimates; GIII to acquire remaining 81% stake in Karl Lagerfeld for $210 mln in cash, becoming sole owner of Parisian fashion brand; bullish comments by Wells Fargo on UAA into the NTM, as the brand makes headway on its turnaround into FY23



·     APRN +30%; as co’s top holder RJB Partners invests $20M through a private placement at $12/share and has committed to invest another $20M, expected to close on May 30 and CEO Linda Findley also invests $500,000 through private placement

·     ATVI +2%; as Berkshire Hathaway Inc. revealed it started buying more shares of since MSFT announced its plan to acquire the videogame maker in January and now has a 9.5% stake, Warren Buffett said Saturday at Berkshire’s annual meeting

·     AXSM +3%; failed to receive FDA approval for AXS-07 for the acute treatment of migraine, receiving a Complete Response Letter (CRL) which identified the need for additional CMC data but said no clinical efficacy or safety issues raised

·     EPAM +1%; upgraded to Overweight at Piper as recent checks indicate that the demand environment remains healthy for Digital IT Services and EPAM’s operational impact appear to be manageable

·     ON +3%; posts Q1 beat on EPS and revenue and better guidance as sees EPS $1.20-$1.32 vs. est. $1.05 on revs $1.97B-$2.07B vs. est. $1.92B

·     QCOM +2%; after German daily Handelsblatt reports car maker Volkswagen has set up a years-long partnership with company to use its SoC, developed specifically for automated driving, across all brands worldwide starting in 2026 – Handelsblatt https://reut.rs/3s7T482



·     AFI -77%; after the company warned it has yet to reach a deal to sell itself and the company will likely seek bankruptcy protection

·     GPN -9%; reports slightly better Q1 EPS and in-line revs of $1.95B and raises FY22 operating margin expectations, while maintained rev outlook

·     JELD -12%; after Q1 EPS miss $0.16 vs. est. $0.33 saying earnings impacted by surging material, freight, and labor costs

·     MCO -4%; after EPS, revs miss and lower guide as sees adjusted EPS $10.75 to $11.25, down from prior $12.40 to $12.90 – reminder comp SPGI to report tomorrow

·     PFE 2%; oral antiviral pill Paxlovid was not effective at preventing coronavirus infection in people living with someone infected with the virus

·     SAVE -9%; rejected a $3.6 billion cash takeover bid from JBLU saying a deal likely can’t be completed, and that Spirit is sticking with plans to merge with rival budget carrier ULCC

·     VRTX -4%; announced the VX-880 Phase 1/2 study has been placed on clinical hold in the U.S. by the FDA due to a determination that there is insufficient information to support dose escalation with the product


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.