Mid-Morning Look: March 08, 2022

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Mid-Morning Look

Tuesday, March 08, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open lower ahead of an expected potential ban on Russian oil imports by the West over its invasion of Ukraine. That news took oil prices higher yet again with WTI crude topping $130 per barrel a second day and Brent hitting highs above $132.60. Meanwhile gold prices are soaring to near all-time highs, surging above the $2,075 an ounce level and silver also pops 6% along with massive gains in industrial metals such as nickel. Stocks have fallen the last few weeks as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fueled by expectations of the Federal Reserve tightening its monetary policy to fight inflation. U.S. President Joe Biden is expected to announce the ban in remarks later this morning while Politico reported that the United Kingdom would follow suit. Treasury yields jump on inflation worries, along with another 8% move in oil and gold spikes to new highs. Seeing consumer discretionary stocks among the hardest hit early, while energy leads.


Economic Data

·     U.S. Jan trade deficit -$89.7B (vs. consensus -$87.1B) and vs. Dec deficit -$82.0B (vs. prior -$80.73B); U.S. Jan goods deficit $108.9B, services surplus $19.2B – the trade deficit is the widest monthly trade deficit on record.

·     U.S. Jan wholesale sales +4.0% vs. Dec +0.8% and estimate +0.2%; wholesale inventories unrevised at +0.8%; U.S. Jan stock/sales ratio 1.20 months’ worth vs dec 1.24 months







WTI Crude















10-Year Note





Sector Movers Today

·     Energy stock movers; oil prices on the rise again after reports the Biden administration to ban Russian oil without participation of Europe allies, which will include Russian oil, LNG and coal; Goldman Sachs discussed the impact to oil markets from the war in Ukraine; as a result, the bank increased its base-case 2022 oil price forecast to $135 from $98 and sees upside to $175; NINE surges as reported Q4 revenue beat and a lower-than-expected loss; reports smaller Q4 loss and revenue of $105.1 mln beats estimates of $95.8M; SHEL said that it intends to withdraw from Russian oil and gas in a phased manner in response to the Russian invasion of Ukraine, including immediately halting all spot market purchases of Russian crude; oil service stocks SLB, BKR, HAL outperform the rest of the energy complex for a second day

·     Auto sector; EV stocks pressured as the price of Nickel jumped over 60% this morning (extending recent spikes), with Morgan Stanley noting that represents around a $1,000 increase in the input cost of an average EV in the U.S. as it remains a key component to making batteries 9also notes the surge in palladium costs also a material for autos); TSLA sells 56,515 China-made vehicles in February, local deliveries up ~20% sequentially; Auto supplier MGA downgraded to Market Perform from Outperform at BMO Capital and cut tgt to $63 from $89 saying lower industry vehicle production in Western Europe, rising oil and gas prices, commodity headwinds, and a potential supply disruption of neon and palladium are all headwinds amid the Ukraine/Russia war (note auto parts sector down 22% going back to the 22nd of Feb (2 days prior to invasion)

·     Metals & Materials; seeing pullback early in some of the recent market winners in the metals, steels, energy, potash space with MOS, AA, CENX, CLF sliding on profit taking; chemicals SHW, PPG and AXTA lower after Jefferies said the spike in energy and raw-material costs will compress margins more severely than initially anticipated (firm lowered tgt and ests); SMG lowers FY22 adj. EPS view to at least $8.00 from $8.50-$8.90 saying the revised Hawthorne sales outlook means it is unlikely to reach the low end of its guidance for non-GAAP adjusted EPS; precious metal gold/silver miners jump with higher prices AUY, GOLD, AEM, PAAS, NEM



·     CAT +5%; upgraded to Buy from Hold at Jefferies and raise tgt to $260 from $215 saying the Russia-Ukraine conflict has fundamentally altered global commodity markets and is likely to drive a decade of reinvestment

·     CLAR +7%; posted a Q4 beat with adj EPS 45c vs est. 36c on revs $118.2M vs est. $105.8M and sees FY22 sales rising about 25% to $470M vs est. $450.8M

·     DISH +4%; upgraded from Neutral to Buy with $44 tgt at UBS given an attractive risk/reward bounded by spectrum value on the downside and optionality of the next-gen, cloud-based, 5G wireless network on the upside

·     DKS +5%; Q4 adj EPS $3.64 vs est. $3.43 on sales $3.35B vs est. $3.31B, same-store sales +5.9% vs est. +4.4%, sees FY23 adj EPS $11.70-13.10 vs est. $11.31, same-store sales -4%-flat vs est. -3.3%

·     NEM +3%; strength in gold and silver miners as prices surge near record highs for gold; GOLD, AUY, PAAS, CDE, AEM big gains early

·     NINE +70%; reported Q4 revenue beat and a lower-than-expected loss; reports Q4 loss per share of 52c, lower than expectations of 55c loss; revenue of $105.1M beats estimates of $95.8M

·     VYGR +25%; said NVS will be allowed to use its RNA-driven technology for development of gene therapies where VYGR will receive $54M upfront and is entitled to receive up to $37.5M in exercise fees for options for three initial targets along with milestones

·     WOOF +6%; Q4 adj EPS 28c vs est. 25c on revs $1.51B vs est. $1.49B, sees FY22 adj EPS $0.97-1 vs est. $0.89 on sales $6.15-6.25B vs est. $5.79B



·     AA -2%; seeing pullback in some of the recent market winners in the metals, steels, energy, potash space with MOS, AA, CENX, CLF sliding

·     CAG -4%; food stocks CPB, GIS, HSY, KHC weakness as commodity/grain related costs surging for companies, impacting margins/sales

·     FTNT -5%; extends yesterday declines as software space pressured; Fortinet announced it has ceased operations in Russia, which includes sales, support, and professional services (also has large revenue exposure in EMEA

·     ISRG -6%; MedTech the latest sector seeing weakness amid thought surging energy and commodity prices will force people to limit elective procedures (DXCM, ALGN, EW, LH weak)

·     SMG -6%; lowers FY22 adj. EPS view to at least $8.00 from $8.50-$8.90 saying the revised Hawthorne sales outlook means it is unlikely to reach the low end of its guidance for non-GAAP adjusted earnings per share

·     TDUP -4%; reported a Q4 EPS loss of (18c) vs est. (17c) on revenue $72.9M vs est. $70M, active buyers +36% YoY to 1.7M and orders +69% to 1.7M, sees Q1 revenue $70-72M below est. $76.7M


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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