Morning Preview: August 29, 2022

Early Look

Monday, August 29, 2022









S&P 500










U.S. futures are sharply lower following Friday’s meltdown, which sent the S&P -3.4% lower, the Nasdaq 100 declined -4.1%, both posting their biggest one-day drops since June 13, and the Dow down over 1,000 points. Shares of major U.S. technology and internet stocks pace the losses early, extending last week’s selloff, after Federal Reserve Chair Jerome Powell signaled that the US central bank is likely to keep raising interest rates. The dollar index hit highs around 20-year highs of 109.50 overnight before pulling back over 60 bps to 108.90 after the Fed Chair reaffirmed the Fed’s determination to continue tightening. Powell’s Friday speech at the Jackson Hole central banking symposium warned of the “pain” needed to tame the fastest inflation in more than forty years and signaled further — and possibly larger — rate hikes to come between now and the end of December. Softer-than-forecast U.S. PCE, income, and spending data failed to ease fears. Bitcoin prices drop around 4% back below 20K with the “risk-off” market sentiment. The U.S. 2-Year bond yield rise to 3.466%, the highest since end-2007. Bond yields jumped last week as the 10-year yield rose 0.047 bps to 3.034% this week (now up 4-consecutive weeks, rising roughly 40-bps during that stretch); the 2-year yield rose 0.126 bps to 3.391% this week (also up 4-conseutive weeks, rising roughly 50 bps during that stretch); and the 30-year yield declined 0.022 bps to 3.203% this week, snapping a 3-week winning streak. In Asian markets, The Nikkei Index tumbled over 760 points or 2.66% to 27,878, the Shanghai Index was little changed at 3,240 and the Hang Seng Index slid -146 points to 20,023. In Europe, the German DAX is down -170 points or 1.34% to 12,800, while the FTSE 100 is down roughly -50 points to 7,425.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -141.46 points, or 3.37%, to 4,057.66

·     The Dow Jones Industrial Average fell -1,008.38 points, or 3.03%, to 32,283.40

·     The Nasdaq Composite plunged -497.56 points, or 3.94%, to 12,141.71

·     The Russell 2000 Index declined -64.81 points, or 3.30% to 1,899.83


Economic Calendar for Today

·     10:30 AM ET         Dallas Fed Manufacturing Index for August


Earnings Calendar:

·     Earnings Before the Open: CTLT NSSC SLQT

·     Earnings After the Close: HEI PSEC


Other Key Events:

·     Piper Houston & Midland Texas Energy Tour, 8/29-8/31

·     William Blair MedTech & Life Sciences Trip, 8/29-9/1, in San Francisco





















10-Year Note





World News

·     The Federal Reserve will keep rates higher until there is compelling evidence that inflation is easing, Cleveland Fed President Loretta Mester said, adding that it’s too soon to say whether price growth has peaked. “It’s really premature to say inflation has peaked and that it’s on a downward trend,” she said in an interview on Yahoo! Finance

·     German Economy Minister Robert Habeck expects gas prices to fall soon as Germany is making progress on its storage targets and won’t have to pay the high asking prices currently commanding the market, he said on Monday – Reuters


Sector News Breakdown


·     Walmart (WMT) has offered $377.6M to acquire the 47% of Massmart (MMRTF) shares it does not already own – Reuters.

·     Tesla (TSLA) CEO Elon Musk said he aimed to get self-driving Tesla’s ready by year-end and hopes they could be in wide release in the United States and possibly in Europe, depending on regulatory approval


Energy, Industrials and Materials

·     Alcoa Corp. (AA) mentioned positively in Barron’s saying the company is developing a technology that could rid the aluminum-smelting process of carbon emissions. That’s a potential “game changer,” according to Jefferies analyst

·     American Water Works Co. (AWK), the company is among water-related businesses that were cited by a Barron’s report on water scarcity while other companies highlighted in the article include Danaher Corp. (DHR) and Evoqua Water Technologies Corp. (AQUA)

·     Cleveland-Cliffs Inc. (CLF) and the United Steelworkers union reached a tentative labor agreement that will provide improved wages and other benefits to 12,000 workers in six states

·     Valero Energy (VLO), Phillips 66 (PSX), Marathon Petroleum (MPC), and other refiners in focus after the Biden administration reportedly has sent warnings to top U.S. refiners that it may take “emergency measures” to curb fuel exports, Bloomberg reported on Friday, as stockpiles of gasoline and diesel remain near historically low levels in the Northeast.



·     Cryptocurrency-exposed stocks looking lower after Bitcoin extended its drop below $20,000 as part of a wider market retreat, amid concern about the Federal Reserve’s rate- hike path. Watch shares of Marathon Digital (MARA), MicroStrategy (MSTR), Coinbase (COIN)



·     Abbott Laboratories (ABT) has restarted production of its Similac infant formula at the plant in Sturgis, Michigan at the center of the U.S. baby formula shortage, according to Reuters

·     IDEAYA (IDYA) announces achievement of first milestone in ongoing collaboration with GSK for potential first-in-class pol theta helicase inhibitor development candidate

·     Switzerland’s medicines authority on Monday gave its authorization to Moderna Inc.’s (MRNA) Covid-19 booster vaccine, the company and the authority said


Technology, Media & Telecom

·     Juniper Networks (JNPR) mentioned positively in Barron’s saying shares looks ready to break out — and they probably should. It isn’t just that Juniper is a reasonably priced, it’s that Jupiter now looks to have a found a strategy that could differentiate it from its competitors and drive growth well into the future.

·     Pinduoduo Inc (PDD) reported quarterly revenue above Street’s estimates as total revenue stood at 31.44 billion yuan ($4.55 billion) in the quarter ended June 30, compared with Street’s estimate of 23.68 billion yuan


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.