Mid-Morning Look: January 21, 2022

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Mid-Morning Look

Friday, January 21, 2022






DJ Industrials




S&P 500








Russell 2000






It is a week to forget for Bulls on Wall Street, with relentless selling-pressure pushing stocks to levels not seen in months, and well below key technical levels with the Nasdaq set for its fourth straight day of declines after a weak forecast from Netflix sent its shares down over 25%, along with other streaming companies lower (DIS, ROKU). However, after one hour of selling pressure, major averages have partially recovered with losses manageable (for now) from where they were (Nasdaq fell below 13,880, S&P 500 tested 4,420 and Russell 2000 fell as much as 18% from its November highs). Seven of the 11 major S&P 500 sectors fell, with communication at an eight-month low. The Nasdaq Composite is set for its worst week since March 2020 (down -5.6%) after having closed more than 10% below its all-time high hit in November, confirming it was in correction territory. Markets have been rattled by the quick about face from the now “hawkish” Federal Reserve (lifting Treasury yields) as expectations of a more aggressive action in controlling inflation hit growth shares (expectations for 3-4 rate hikes in 2022). The central bank’s policy meeting next week will offer more clarity on its fight against surging inflation. Not many places to hide today with growth stocks hammered again, along with commodity names and Bitcoin prices as well – not getting a bounce despite a sharp retrace for Treasury yields. The 10-yr yield down at 1.752%, down 8 bps and 30-yr down 6.6bps to 2.075%; 2-yr down over 5bps to around 1% – big pullback in yields off highs this week (10-yr highs were 1.9% Tuesday night).







WTI Crude















10-Year Note





Sector Movers Today

·     E&P and Majors; SLB Q4 adj EPS 41c vs est. 39c on revenue $6.23B vs est. $6.09B and said they see oil demand exceeding pre-pandemic levels by the end of the year, barring any Covid-related disruption; Goldman downgraded DVN to Neutral and upgraded AR to Buy; JPMorgan upgraded CDEV to Neutral and downgraded CPE to UW based on relative valuation metrics and their 2022 outlook for both companies; Several analysts raised their price target on BKR after yesterday’s earnings

·     Utilities & Solar; SPWR said it sees Q4 adjusted EBITDA at low end of prior guidance range and Q4 revs within prior guidance of $361M-$421M (est. $379.5M); to replace certain connectors within light commercial value-added reseller and commercial & industrial solutions; in alt fuels, Truist reiterates Buys on GPRE, REGI, AMTX, REX saying remain positive on the secular growth trends surrounding our alt. fuels & products group

·     Vaccine names; MRNA upgraded to neutral from Underperform and raise tgt to $180 from $135 at Bank America after being bearish for some time based on what we thought were overly optimistic Street assumptions on C-19 boosters; NVAX was initiated Outperform at Cowen saying it is entering the competitive COVID-19 vaccine market with a differentiated profile with improved tolerability compared to the mRNA options; BNTX tgt cut to $170 from $300 at UBS after taking a detailed look at mRNA pipelines and relative valuations, saying as enter the next chapter for COVID-19, they think the pandemic trade premium baked into BNTX shares has begun to unwind; UBS initiated MRNA with a Neutral and $221 tgt

·     Media & Telecom movers; DIS shares slide on subscriber concerns following the guidance drop off from rival NFLX in overnight (also hit shares of ROKU); VIAC and NXST renew multi-year affiliation agreements which covers CBS affiliated television stations in 39 markets owned by Nexstar and its operating partners; RBBN guides Q4 revs $231M, below est. $248.7M and said its operating loss is expected to be $4M and adjusted EBITDA is expected to be $26M; Considering a 10%-15% pull back to start 2022, Deutsche Bank said they believe Tower stocks screen increasingly attractive (AMT, CCI, SBAC)



·     CLX, CHD, MDLZ, CL; all up 2% early in S&P as investors flock to defensive staples

·     INTC +1%; said it will invest $20 billion in two new plants in Ohio to make advanced chips, the company said on Friday

·     LLNW +10%; 4Q adj EPS ($0.06) vs est. $0.01 on revs $62.9Mm vs est. $61.6Mm; guides FY22 adj EPS loss $0.01-0.06 vs est. loss $0.04, sees FY22 revs $240-250Mm vs est. $241Mm

·     PG +1%; as consumer staples stay strong – PG good earnings this week helping product names

·     PTON +4%; rebounds after yesterday’s plunge as the co reports prelim Q2 revenue $1.14B vs consensus $1.14B and EBITDA ($270M)-($260M) vs guidance ($350M)-($325M) and consensus ($332.5M) saying ending connected fitness subscriptions ~2.77M vs guidance 2.8M-2.85M



·     COIN -11%; tumbles early along with weakness in other stocks leveraged to crypto/Bitcoin including MSTR, RIOT, MARA, SI, SQ, NCTY, OSTK, BITO as Bitcoin, Ethereum, others tumble – Bitcoin hit lows around $37,700, Ethereum below $2,800

·     CSX -4%; Q4 EPS $0.42 vs. est. $0.41, while revenue of $3.427B came in ahead of estimate but was offset by a more challenged OR, which at 60.1% was missed Wells 57.7% estimate leading

·     ECL -5%; said it expects to report a 10% Y/Y sales increase in Q4 but sees earnings coming in below expectations, citing COVID-related effects on broad business activity; guides Q4 EPS $1.26-$1.28, below consensus of $1.41

·     PPG -2%; reported 4Q adj. EPS of $1.26, above consensus of $1.16, though 1Q guidance of $1.02-$1.20 is below views as Mizuho said release a negative given margin pressures will likely drive increasing skepticism

·     NFLX -18% as subscriber outlook misses estimate; 4Q EPS $1.33 vs est. $0.82 on revs $7.7B vs est. $7.7B, net adds 8.28Mm vs est. 8.6Mm; guides 1Q EPS $2.86 vs est. $3.46, sees revs $7.9B vs est. $8.1B, sees 1Q global streaming paid net adds 2.5Mm; shares of other streaming/subscriber co’s DIS, ROKU slipped) – shares downgraded by several analysts

·     RBBN -16%; guides Q4 revs $231M, below est. $248.7M and said operating loss is expected to be $4M and adjusted EBITDA is expected to be $26M

·     SPWR -10%; said it sees Q4 adjusted EBITDA at low end of prior guidance range and Q4 revs within prior guidance of $361M-$421M (est. $379.5M)


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.

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