Market Wrap – Euro and Bond Volatility Flows Through to Smack Stocks Lower June 8, 2022

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    Affirm (AFRM 23.30, -1.05, -4.3%): Wedbush initiates with Underperform rating; price target $15
    Spirit Airlines (SAVE 22.35, -0.32, -1.4%): postpones special meeting of stockholders related to Frontier (ULCC) buyout proposal until June 30 as company wants to continue discussions with stockholders, Frontier, and JetBlue (JBLU)


    Thor Industries (THO 81.60, +5.37, +7.0%): beats by $1.47, beats on revs
    Ollie’s Bargain Outlet (OLLI 47.21, -3.78, -7.4%): misses by $0.11, misses on revs; guides Q2 EPS in-line, revs above consensus; guides FY23 EPS below consensus, revs below consensus
    Scotts Miracle-Gro (SMG 88.69, -13.49, -13.2%): Sees FY22 (Sep) EPS of $4.50-5.00, which is well below the current consensus estimate


    S&P 500 futures are 0.3% below fair value;
    Nasdaq 100 futures are 0.3% below fair value;
    DJIA futures are 0.3% below fair value

    Key factors

    WTI crude futures up 1.0% to $120.58/bbl
    General growth concerns as OECD slashes 2022 global GDP view to 3.0% from 4.5%, Reserve Bank of India raises key rate by larger-than-expected 50 bps to 4.90%, and Atlanta Fed’s GDPNow model estimate for Q2 gets lowered to 0.9% from 1.3%
    Credit Suisse (CS) issues Q2 profit warning, citing volatile market conditions among other things
    10-yr note yield back above 3.00% (currently +4 bps to 3.01%)
    Ukraine President Zelenskyy says full sovereignty is still the goal for Ukraine, according to FT
    Mortgage purchase applications down 7% wk/wk and 21% yr/yr
    Novavax (NVAX) up 8% after FDA Advisory Committee recommends EUA of its COVID-19 vaccine for people 18 years and older
    Scotts Miracle-Gro (SMG) plunges 13% after issuing FY22 (Sep) EPS forecast well below current consensus estimate


    Brokerage research calls of note:
    Upgrades: Nothing of note
    Downgrades: MO, CGC, BROS, MCO, TGT


    S&P Futures vs Fair Value: +15.0

    10 yr Note: 3.029%
    USD/JPY: 133.65 -0.61
    EUR/USD: 1.0717 -0.0002
    Europe: FTSE: -0.3% DAX: -0.5% CAC: -0.2%
    Asia: Hang Seng: -0.7% Shanghai: -0.8% Nikkei: 0.0%
    Gold (1850.60 -5.90) Silver (21.97 -0.12) Crude (122.06 -0.05)

    The global equity markets are mildly mixed. S&P Futures are up about 15 points to trade around the 4130 area. The market has edged higher following a test of support near the 4100 zone with 4101.50 representing the ultimate low. The range expanded when Europe got underway and spoos are sitting just off the high of 4131.75.


    The S&P 500 futures are 0.1% above fair value; the Nasdaq 100 futures are 0.1% below fair value; and the DJIA futures are 0.1% above fair value

    Key factors driving the futures market:

    Tesla (TSLA) up 3.0% after UBS upgrades to Buy from Neutral and sets $1100 price target
    ECB leaves rates unchanged today, but says it intends to raise by 25 basis points at July meeting and to end its net asset purchase program on July 1; also raised its inflation projections
    Report that southwest neighborhood in Shanghai has been locked down for COVID testing
    Indecision ahead of Friday’s CPI report
    Chinese regulators deny report that they are considering moving forward with Ant Group IPO
    Biden Administration proposes new standards for 500,000 EV charging stations across the country by 2030
    EU votes to ban sale of new gas and diesel-powered cars and vans from 2035
    Five Below (FIVE) sinks 7.7% after beating Q1 EPS estimate but issuing EPS and revenue warnings for Q2 and FY23
    Signet Jewelers (SIG) jumps 8.2% after easily topping Q1 estimates and issuing FY23 guidance above current consensus estimate
    Target (TGT) announces 20% increase in quarterly dividend to $1.08 per share; TGT up 0.7%


    Another volatile day for energy with Natural Gas extreme volatility falling from 9.40 to under 8 to over 9 in less than 24 hours. The ECB meeting set
    [See the full post at: Market Wrap – Euro and Bond Volatility Flows Through to Smack Stocks Lower June 8, 2022]

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