Morning Preview: February 14, 2022

Early Look

Monday, February 14, 2022









S&P 500










S&P futures are rolling lower after Friday’s late day swoon, down roughly -0.7% to 4,390, off overnight lows 4,354 and 4,428 highs as recent hot inflation data sparks fear of quicker interest rate hikes from the Fed and reports a Russian attack on Ukraine could come at any time spooks investors. On Saturday, President Biden warned Russian President Vladimir Putin of “swift and severe costs” if Russia moves against Ukraine, as both Washington and Moscow took actions to reduce their embassy staff in the country. Russia has repeatedly denied having plans to invade, but Moscow has massed some 130,000 troops near the Ukrainian border along with tanks and infantry fighting vehicles. Gold prices rise to three-month highs above $1,850 an ounce as the threat of war in Ukraine sends investors toward safe-haven assets. The Treasury yield curve is flattening more, with the 10-year yield down 3 basis points to 1.92% and the 2-year yield up 1 basis point to 1.53%. In Asian markets, The Nikkei Index tumbled over 600 points or 2.23% to 27,079, the Shanghai Index dropped around 1% to 3,428, and the Hang Seng Index declines -350 points to 24,556. In Europe, the German DAX plunges nearly -500 points or over 3% to 14,940, while the FTSE 100 drops around -150 points or 1.9% to 7,515.


Stocks slid on Friday as increased tensions between Ukraine and Russia sent oil spiking and led investors to dump risky assets like equities as the Dow shed 1.43%, the S&P 500 fell 1.90%, and the Nasdaq sank 2.78%. For the week, the S&P 500 fell 1.82%, the Dow lost 1%, the Nasdaq lost 2.18% (and posted its worst 2-day loss since Sept 2020). The day’s volatility came after the White House said Friday afternoon that the U.S. believes Russian President Vladimir Putin could order an invasion of Ukraine at any time, while Americans were urged to leave Ukraine as soon as possible. The concerns added to inflation concerns late week after CPI data showed that inflation hit 7.5% in January, a four-decade high, raising fresh fears the Federal Reserve might have to tighten monetary policy more aggressively than once thought. In the bond market, meanwhile, the yield on the benchmark 10-year Treasury note retreated, a day after topping 2% for the first time since mid-2019. The yield, which settled Thursday at 2.028%, fell to 1.951% Friday.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -85.44 points, or 1.90%, to 4,418.64

·     The Dow Jones Industrial Average fell -503.53 points, or 1.43%, to 34,738.06

·     The Nasdaq Composite tumbled -394.49 points, or 2.78%, to 13,791.15

·     The Russell 2000 Index declined -21.02 points, or 1.02% to 2,030.15


Events Calendar for Today

·     No Major U.S. Economic Data Today


Earnings Calendar:

·     Earnings Before the Open: AGTC, ALX, HE, KELYA, THS, WEBR






















10-Year Note





World News

·     Goldman Sachs Group Inc. lowered their forecast for U.S. stock returns this year as the prospect of more aggressive monetary tightening weighs on valuations; cut their year-end target for the S&P 500 benchmark index to 4,900 points, down from 5,100 points previously

·     The Los Angeles Rams rallied late to beat the Cincinnati Bengals 23-20 on Sunday to deliver an exciting ending to the Super Bowl, securing the franchise’s first championship since returning to the West Coast six years ago.


Sector News Breakdown


·     Bally’s (BALY) and Caesars Entertainment (CZR) might be a buy in the online gaming sector according to Barron’s saying the growth opportunity could be huge

·     Ford (F) is still a buy according to Barron’s despite its eye- popping gains of 136% last year; notes investors are cooling on the car manufacturer, but it might be too early to sell as Credit Suisse believes the legacy car company can keep improving, and places as $25 price target on the shares

·     Velodyne Lidar Inc (VLDR) files for mixed shelf of up to $300 mln

·     Airlines United (UAL), American (AAL), slide following European peers lower, as growing concerns about geopolitical risks over Ukraine ripple through global markets.


Energy, Industrials and Materials

·     Lockheed Martin (LMT) announced it has terminated its agreement to acquire Aerojet Rocketdyne (AJRD). The decision to terminate the agreement follows the U.S. FTC’s lawsuit filed late last month seeking a preliminary injunction to block the acquisition

·     Aerojet Rocketdyne Inc.’s (AJRD) chairman and three directors asked a judge to block the CEO and her allies on the board from using company resources in a fight for control of the rocket-engine maker – Bloomberg late Friday

·     Raytheon (RTX) said it received a grand jury subpoena in late 2019, as part of a DOJ criminal investigation into purported agreements not to solicit or hire employees in violation of the federal antitrust laws

·     Copa Holdings (CPA) said traffic statistics for January showed consolidated capacity, or ASMs, came in 18% lower than January 2019, while passenger traffic, or RPMs, decreased 22%, which resulted in a 79% load factor

·     Vulcan Materials (VMC) raises quarterly dividend to 40c from 37c per share

·     Alkaline Water (WTER) files $50M mixed securities shelf



·     Allstate (ALL) upgraded to Buy from Neutral at UBS in the insurance sector and Progressive (PGR) downgraded to Neutral from Buy

·     Annaly Capital (NLY) and AGNC Investment (AGNC) both downgraded to Neutral from Buy at Bank America

·     MetLife (MET) is considering selling its U.S. variable annuity book as it looks to free up resources to invest in higher-growth parts of its business – Reuters



·     Cassava Sciences’ (SAVA) treatment for Alzheimer’s disease is likely to drag out for years to come thanks to an FDA decision last week according to STAT News saying the agency denied — on a technicality — several citizen petitions that questioned the integrity of Cassava’s data on its drug and sought to halt ongoing clinical trials. Any resolution to the Cassava debate will now likely have to wait for the results of two Phase 3 trials now enrolling patients. Each is recruiting about 1,000 patients and would follow them for between one year and 18 months, meaning data are unlikely to be ready until well into 2024 at the earliest.

·     Collegium (COLL) to acquire BioDelivery Sciences (BDSI) broadening pain portfolio for $5.60 per share in cash in deal valued around $600M; shares up over 45%


Media & Telecom

·     Disney (DIS) stock once again looks like a buy, according to Barron’s noting quarterly results impressed this week led by streaming and theme parks, as growth in both areas suggests Disney is finding a way to transform itself without losing its century-old identity

·     ViaSat’s (VSAT) planned more than $7B purchase of Inmarsat is said to be facing obstacles with UK approval for the deal, the Daily Mil reported this weekend. ViaSat (VSAT) agreed to acquire Inmarsat in November in a transaction valued at $7.3 billion. ViaSat has pledged to create jobs with the transaction and to keep Inmarsat’s headquarters in the UK, though government sees the promises as too “superficial” and wants more firm commitments



·     Cisco Systems (CSCO) recently made a takeover offer worth more than $20B for Splunk (SPLK) but the companies aren’t currently in active talks, the WSJ reported late Friday. It isn’t clear whether other potential suitors are circling Splunk

·     Synaptics (SYNA) shares have risen 590% since mid-2019. Plus, but Barron’s said Synaptics’ stock is relatively cheap, hitting a recent $21. Once a low-key provider of chips used for PC touchpads, mobile phone screens, and fingerprint scanners, Synaptics has turned itself into a play on the Internet of Things

·     Micron Technology (MU) upgraded to Outperform from Neutral with $120 tgt at Wedbush

·     Activision (ATVI), EA Inc. (EA), take-Two (TTWO), Nintendo (NTDOY): Videogame sales fell year-over-year in January for a third straight month, as a drop-off in content and accessories revenues couldn’t be saved by still-strong hardware sales. Overall sales dipped narrowly, down 2% from January 2021 to $4.684 billion, according to NPD Group, led lower by videogame content sales that fell 4% to $4.109 billion. Accessory sales fell 15%, to $185 million, and hardware sales from Sony and Microsoft rose 22% to $390 million.


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.