Morning Preview: September 28, 2022

Early Look

Wednesday, September 28, 2022









S&P 500










The picture looked bleak overnight as S&P futures had made a fresh overnight low for a 7th consecutive session (hit low of 3,613), on track for a 7th straight day of losses before the Bank of England, in desperate need to protect its currency after announcing an aggressive tax plan last week sunk the Pound to record lows, stepped in with some policy intervention. The Bank of England (BoE) said to carry out temporary buys of long-dated UK bonds from September 28 with the purpose to restore orderly market conditions. Says the buy will be carried out on whatever scale is necessary and that auctions will take place from today until 14 October. The announcement was a welcome sight for bond markets as 10Y Gilt yields were down 19bps at 4.224%, versus 4.552% before BOE announcement. The news also eased pressure on US Treasury yields as the 10-year slid below 3.9% after hitting highs above 4% for the first time in over a decade.


Stocks fell again on Tuesday as the S&P 500 notched a fresh bear market low, as the Dow slips more than 100 points, while the benchmark 10-year Treasury yield continuing to climb to levels not seen in at least a decade approaching 4% and mortgage rates hitting 7% for a fixed 30-year (20-year highs). The S&P 500 was down after earlier breaking below the previous bear market intraday low of 3,636 that was set in mid-June. The S&P 500 is now 24.7% below its record set in January, while the Dow is 21.4% below its all-time high. The Nasdaq has fallen more than 33% since hitting a record in November.


In Asian markets, The Nikkei Index tumbled nearly -400 points to 26,173, the Shanghai Index dropped -48 points or 1.58% to 3,045, and the Hang Seng Index sunk -609 points or 3.4% to 17,250. In Europe, the German DAX is lower by -46 points to 12,093, while the FTSE 100 is down -27 points to 6,957. In stock news, shares of Biogen (BIIB) surges after its Alzheimer’s drug lecanemab slowed cognitive and functional decline in a large trial of patients in the early stages of the disease. In tech news, shares of tech giant Apple (AAPL) declines after Bloomberg reported it is dropping plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize. The story is putting pressure on semiconductor chips and tech in general.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -7.75 points, or 0.21%, to 3,647.29

·     The Dow Jones Industrial Average fell -125.82 points, or 0.43%, to 29,134.99

·     The Nasdaq Composite gained 26.58 points, or 0.25%, to 10,829.50

·     The Russell 2000 Index advanced 6.63 points, or 0.40% to 1,662.51


Economic Calendar for Today

·     7:00 AM ET                  MBA Mortgage Applications Data

·     8:30 AM ET                  Advance Goods Trade Balance for Aug

·     8:35 AM ET                  Fed’s Bostic Takes Part in Moderated Q&A

·     10:00 AM ET                Pending Home Sales M/M for Aug

·     10:30 AM ET                Weekly DOE Inventory Data

·     1:00 PM ET                   US Treasury to sell $37B in 7-year notes

·     2:00 PM ET                   Fed’s Evans Speaks at the London School of Economics


Earnings Calendar:

·     Earnings Before the Open: CTAS PAYX SANW THO

·     Earnings After the Close: CNXC EPAC ISR JEF MLKN MTN NAPA


Other Key Events:

·     CNBC 12th annual Delivering Alpha 2022 Agenda set for today

·     Bernstein Pan European Strategic Decisions Conference, 9/28-9/29

·     Cantor Oncology, Hematology Conference, 9/28 in NY

·     Credit Suisse Education & Healthcare Conference, 9/26-9/30 in Brazil

·     9th annual Milken Institute Asia Summit 9/28-9/30

·     Wolfe Utilities, Midstream & Clean Energy Conference 2022, 9/28-9/30 in NY





















10-Year Note





World News

·     Bank of England (BoE) said to carry out temporary buys of long-dated UK bonds from September 28 with the purpose to restore orderly market conditions. Says the buy will be carried out on whatever scale is necessary and that auctions will take place from today until 14 October

·     North Korea fired two short-range ballistic missiles off its east coast on Wednesday, the South’s military said, just a day before U.S. Vice President Kamala Harris is set to arrive in Seoul. After a stop in Japan, Harris is set to arrive in the South Korean capital

·     Japan state defense minister: North Korean short-range ballistic missiles likely flew in irregular trajectory, as per Reuters

·     Hurricane Ian is bearing down on southwest Florida, with a large swath of the state’s Gulf Coast in harm’s way, including the vulnerable Tampa Bay area. Gov. Ron DeSantis said more than 2.5 million residents are under evacuation orders.


Sector News Breakdown


·     Cal-Maine (CALM) 1Q EPS $2.57 vs est. $2.56 on sales $658.3Mm vs est. $617.4Mm; Conventional egg net average selling price per dozen increased to $2.368 compared with $0.990 a year ago; net average selling price for specialty eggs rose 12.2% to $2.101 per dozen, compared with $1.872 per dozen for the first quarter of 2022.

·     Thor Industries (THO) Q4 EPS $5.15 vs. wat. $3.86; Q4 sales $3.82B vs. est. 43.69B; Q4 gross margin 17.5%; said for FY22, net sales eclipsed the $16 billion mark


Energy, Industrials and Materials

·     The American Petroleum Institute said weekly crude inventories with a build of +4.150M barrels, Cushing a build of +0.357M barrels, gasoline with a weekly draw of -1.048M barrels; distillates posted a weekly build of +0.438M barrels

·     CSX Corp (CSX) and Norfolk Southern (NSC) both downgraded to Neutral from Positive at Susquehanna (follows downgrade by UBS of both names yesterday)

·     Lockheed Martin (LMT) downgraded to Underweight from Equal Weight at Wells Fargo and L3Harris (LHX) downgraded to Equal Weight from Overweight in defense sector



·     The SEC announced charges against 15 broker-dealers and one affiliated investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications. The firms agreed to pay combined penalties of more than $1.1B, and have begun implementing improvements to their compliance policies

·     Truist Financial (TFC) upgraded to Overweight from Neutral at Piper Sandler



·     Eisai Co. (ESALY) and Biogen Inc. (BIIB) said their experimental Alzheimer’s disease drug significantly slowed progression in a large study, bolstering the drug’s prospects for approval. Lecanemab reduced cognitive and functional decline by 27%, compared with a placebo, over 18 months in a Phase 3 study of 1,800 patients with early-stage Alzheimer’s. All key secondary endpoints were also met with highly statistically significant results compared with placebo. The drug was also linked to higher rates of brain swelling and small bleeds, though they were rarely symptomatic (watch shares of LLY, PRTA, ABOS which have Alzheimer treatments)

·     Thermo Fisher Scientific (TMO) announces FDA approval of oncomine dx Target test as the first NGS-based companion diagnostic to aid in therapy selection for patients with ret mutations/fusions in thyroid cancers

·     llumina (ILMN) upgraded to Outperform from In Line at Evercore ISI

·     Gamida Cell (GMDA) 12.9M share Spot Secondary priced at $1.55

·     Mind Medicine (MNMD) 7.06M share Spot Secondary priced at $4.25

·     Theravance Biopharma (TBPH) said it will buy as much as $95m of its shares in a tender offer at $9.75 to $10.50 per share.


Technology, Media & Telecom

·     Apple (AAPL) shares down -3%; on reports it is dropping plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize, Bloomberg News report said. AAPL told suppliers to curtail efforts to increase assembly of its flagship iPhone 14 product family by as many as 6 mln units in the second half of this year, report says

·     Blackberry (BB) Q2 adj EPS loss (-$0.05) vs. est. loss (-$0.06); Q2 revs in-line with estimates at $168M; adjusted gross margin 63.7% vs. 64.6% y/y vs. estimate 62.4%

·     Progress Software (PRGS) Q3 EPS $1.00 vs. est. $0.97; Q3 revs $153.1M vs. est. $148.2M; guides Q4 EPS $1.06-$1.10 vs. est. $1.10; raises FY22 EPS view to $4.08-$4.12 from $4.05-$4.11 (est. $4.08), backs FY22 revenue view $609M-$617M, consensus $612.44M

·     Netflix (NFLX) upgraded to overweight from neutral at Atlantic Equities


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.