Hammerstone Markets Early Look

By admin | 04/08/2022

Early Look

Friday, April 8, 2022

U.S. stocks are looking to close out the week on a positive note, with futures edging higher following yesterday’s late day surge, but major averages are still tracking for weekly declines led by sharp pullbacks in transports (-5.8% WTD) and semiconductors (-5% WTD). Stocks rebounded on Thursday, following back-to-back losing sessions, as investors reassessed the Fed’s latest plans to tighten monetary policy and combat rising inflation. Major averages tanked Tuesday/Wednesday on the possibility of more aggressive monetary tightening by the Federal Reserve, as indicated by several Fed speakers this week (Brainard, Harker, Bullard) while minutes from the Fed that showed central bankers considered raising rates by 50-bps at their March meeting (but only did 25bps), raising expectation a 50-bps hike is coming at the May meeting. The benchmark 10-year Treasury hit overnight highs around 2.69% before paring back slightly while the U.S. dollar extends gains. In macro news, China lashed out at House Speaker Nancy Pelosi for reportedly planning a landmark trip to Taiwan that’s been delayed because she has Covid-19, setting up a showdown when her visit to Asia is rescheduled. In Asian markets, The Nikkei Index rose nearly 100-points to end the week at 26,985, the Shanghai Index climbed 0.47% to 3,251, and the Hang Seng Index advanced 0.29% to 21,872. In Europe, the German DAX jumps around 200 points or 1.4% to 14,275, while the FTSE 100 gains nearly 1% to 7,625. No major earnings, or economic data today heading into the weekend.

Market Closing Prices Yesterday

• The S&P 500 Index gained 19.06 points, or 0.43%, to 4,500.21
• The Dow Jones Industrial Average rose 87.06 points, or 0.25%, to 34,583.57
• The Nasdaq Composite edged higher 8.48 points, or 0.06%, to 13,897
• The Russell 2000 Index declined 7.14 points, or 0.35% to 2,009.80

Economic Calendar for Today

• 10:00 AM ET                 Wholesale Inventory m/m for February
• 1:00 PM EST                 Baker Hughes Weekly rig count data

World News

• Japan March Consumer Confidence: 32.8 vs 36.8 consensus; Japan Feb Current Account larger surplus: JPY +1.648T vs JPY +1.437T consensus
• Japan Industry Minister Hagiuda said is planning to reduce Russian goal imports gradually while looking for other suppliers

Sector News Breakdown

Consumer

• Kura Sushi (KRUS) 2Q adj EPS ($0.19) vs est. ($0.21) on revs $31.3Mm vs est. $30.4Mm; guides FY sales $130-140Mm vs est. $134Mm
• PriceSmart (PSMT) 2Q EPS $1.03 vs est. $1.00 on revs $1.04B vs est. $1.04B, comp net merchandise sales +10.3%
• Tesla (TSLA) CEO Musk delivered the company’s first made-in-Texas vehicles on Thursday, saying the company was entering a new phase and teasing coming products including a dedicated robotaxi.

Energy, Industrials and Materials

• Alcoa (AA) downgraded to Neutral from Outperform at Credit Suisse while raise tgt to $82
• Shoals Technologies (SHLS) downgraded to Neutral from OW and tgt cut to $16 from $26 at Piper saying the decision by the U.S. Department of Commerce to investigate anti-dumping and countervailing duty circumvention in certain Southeast Asian countries will cause project delays
• Ithaca Energy is acquiring U.K. North Sea oil-and-gas producer Siccar Point Energy for $1.1 billion plus $360 million in contingent payments. Siccar Point is the operator of the Cambo oil field, of which Shell (SHEL) holds a 30% interest
• WD-40 Co (WDFC) Q2 EPS $1.41 vs. est. $1.01; Q2 revs rose 16% to $130M vs. est. $126.77M; still sees FY sales $522M-$547M (est. $533.5M) and EPS $5.14-$5.27, down vs. prior $5.24-$5.38
• OMV AG said that it would take a 2-billion euro ($2.18 billion) hit in the first quarter from its business in Russia after distancing itself from the country following its invasion of Ukraine.
• China’s worsening Covid-19 outbreak and the extended lockdown in Shanghai has oil analysts cutting their demand forecasts further.
• H. Robinson (CHRW) upgraded to Overweight from Neutral at JPMorgan

Financials

• Robinhood (HOOD) downgraded to sell from neutral at Goldman Sachs, saying softening retail engagement levels and profitability concerns will likely limit any outperformance; cuts the price tgt to $13 from $15
• Camden Property (CPT) 9M share Spot Secondary priced at implied $170.00

Healthcare

• Medicare finalized its decision to restrict coverage for Biogen’s (BIIB) Aduhelm to patients participating in clinical trials. Under the policy, the government health insurance program will only pay for the drug Aduhelm if a patient is enrolled in a clinical trial
• Genmab (GMAB) said an arbitral tribunal has ruled in favor of Johnson & Johnson’s (JNJ) Janssen Biotech in both matters related to royalty payments under their license agreement related to cancer drug daratumumab.
• Quidel Corp. (QDEL) guides Q1 revs $990M-$1.0B vs. est. $817.3M or growth of 164% to 166% from the first quarter 2021 revenue of $375.M; said COVID-19 product revenues in the first quarter of 2022 are expected to be approximately $836M

Technology, Media & Telecom

• ACM Research (ACMR) said subsequent lockdown of Pudong region was imposed in late March, and has impacted operation of Chuansha production facility; now sees Q1 revenue expected to be significantly below previous internal plan; reaffirms year revs of $365M-$405M
• CrowdStrike (CRWD) said it has been granted a Provisional Authorization to Operate (P-ATO) at Impact Level 4 (IL-4) which will enable it to protect information of Department of Defense and Defense Industrial Base customers
• Apple (AAPL) will be hosting its first live sports broadcast. Friday Night Baseball will debut on Apple TV+ with a streaming doubleheader as the New York Mets meet the Washington Nationals at 7 p.m. and the Los Angeles Angels host the Houston Astros at 9:30 p.m. ET
• ChipMOS Technologies (IMOS) reported consolidated revenue increased 4% Y/Y to NT$6.752B or $235M in Q1; revenue for March rose 0.5% Y/Y and 12.3% M/M to NT$2.355B or $82.3M.

Please be sure to check out The Hammerstone Feed; News and Analysis for the Informed Trader at https://www.hammerstonemarkets.com/trial

***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Markets (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research