Morning Preview: December 19, 2022

Early Look

Monday, December 19, 2022









S&P 500










After U.S. stock markets finished for a second consecutive week, futures are pointing to a modest rebound early after falling to the lowest level since early November on recession fears. Following a more “hawkish” Fed policy meeting last week that saw interest rates rise by 50-bps, and an outlook for longer and deeper hikes in months to come, the S&P 500 is down for two consecutive weeks, having fallen 5.4% over that period. It remains down 19.2% for the year to date. It appears that investor sentiment has finally shifted from believing bad news on the economy was good news for both bonds and equities — because it discouraged central banks from being too aggressive in their policy tightening. In Asian markets, The Nikkei Index slides -289 points to 27,237, the Shanghai Index drops -60 points to 3,107, and the Hang Seng Index slips -97 points to 19,352. In Europe, the German DAX is higher by 80 points to 13,972, while the FTSE 100 rises about 40 points to 7,373. A slower week is anticipated ahead of the Christmas Holiday weekend, with only a handful of major earnings few Fed speakers.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -43.39 points, or 1.11%, to 3,852.36

·     The Dow Jones Industrial Average fell -281.76 points, or 0.85%, to 32,920.46

·     The Nasdaq Composite slumped -105.11 points, or 0.97%, to 10,705.41

·     The Russell 2000 Index declined -11.19 points, or 0.63% to 1,763.42


Economic Calendar for Today

·     10:00 AM ET                NAHB Housing Market Index for December


Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: ARKR HEI SCS





















10-Year Note





Sector News Breakdown


·     Tesla (TSLA) rises 5% after CEO Elon Musk polled users on Twitter over whether he should step down as head of the social-media company, with the result so far leaning toward yes.

·     Uber Technologies Inc. (UBER) New York City drivers are planning a 24-hour strike on Dec. 19 and calling for a passenger boycott after a judge this week temporarily blocked wage increases

·     VF Corp. (VFC) is considering the potential sale of its Jansport backpack business in a transaction that may value it at about $500 million, according to a Bloomberg report from late Friday


Energy, Industrials and Materials

·     L3Harris Technologies (LHX) and Aerojet Rocketdyne (AJRD) together announced the signing of a definitive agreement for L3Harris to acquire Aerojet Rocketdyne for $58 per share, in an all-cash transaction valued at $4.7 billion, inclusive of net debt.

·     Lockheed Martin Corp. (LMT) was awarded a U.S. Navy contract valued at up to $302.2 million.

·     Clearwater Paper (CLW) cuts Q4 adjusted EBITDA view to $28M-$34M from $38M-$48M; said due to higher-than-expected major maintenance related costs at the company’s Lewiston, Idaho mill, and other operational issues, the company now expects lower Ebitda

·     TuSimple Holdings Inc. (TSP) plans to cut po­ten­tially at least half of its work­force next week, people familiar with the matter said, as it scales back efforts to build and test au­tonomous truck-driving sys­tems.

·     KeyBanc notes containerboard prices fall another $20. Linerboard prices are down $40/ton in two months, relative to the $220 increase experienced in 17 months, due to soft demand and elevated inventory. Firm said absent of several large mill closures, see further pricing pressure, noting prices in past downturns fell $110-120 / ton and every $50 decline translating to a 20-30% headwind to EPS for IP, PKG, and WRK (remain Underperform on IP & PKG).



·     Simon Property (SPG) looks like a bargain after brutal year for REITs, according to Barron’s saying some mall REITs look attractive, such as Simon Property Group, which could hold up better than most of its peers due to its exposure to luxury brands



·     Ardelyx (ARDX) slips -8%; said that the FDA may need up to a few more weeks to finalize its response to the company’s appeal over the complete response letter for its new drug application for its kidney disease therapy XPHOZAH

·     Cerevel Therapeutics Holdings Inc. (CERE) said it saw positive results from a Phase 1 trial studying the effect of emraclidine on 24-hour ambulatory blood pressure over an eight-week period in people living with schizophrenia.

·     Moderna (MRNA) upgraded to Buy from Hold at Jefferies

·     Vertex Pharmaceuticals (VRTX) downgraded to hold at Jefferies saying the company continues to offer a good pipeline, but risk/reward and valuation seem balanced

·     PerkinElmer (PKI) upgraded to overweight from sector weight at Jefferies based on transformational sale of analytical instruments business

·     Y-mAbs Therapeutics (YMAB) said the European Medicines Agency’s human medicines committee, or the CHMP, recommended the refusal of a marketing authorization for Y-mAbs’s Omblastys for the treatment of neuroblastoma, a rare type of cancer


Technology, Media & Telecom

·     Standard General, seeking to speed review of its proposed $5.4 billion purchase of broadcaster Tegna (TGNA), said it would waive contractual rights that could have allowed it to impose higher fees on Pay-TV distributors

·     The EU charged Meta (META) with antitrust violations for allegedly distorting competition by tying its online classified ad service to its social network – WSJ

·     AT&T (T) downgraded to Underperform from Market Perform by MoffettNathanson

·     Verizon (VZ) upgraded to Market Perform at MoffettNathanson after underperformance


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.