June 23, 2022

Stocks Stay Afloat In Light Trading Session

It’s Turnaround Thursday — here’s what you missed.

Stocks swooned midday but rallied back to close near the highs. 📈

In positive news, banks got a thumbs up from the Fed for passing their annual stress test. 👍

Here’s today’s heat map.

7/11 sectors closed green, with utilities leading (+2.34%) and energy falling (-3.77%). 🔻

There were a handful of high-profile earnings reports today, which we recap in a post below. 👇

Guns rights were in focus today as the Supreme Court overturned a New York handgun law, opening the door for almost all law-abiding Americans to carry concealed and loaded handguns in public. Meanwhile, the Senate advanced a new gun safety bill after overcoming the filibuster. ⚖️

Also, the Supreme Court limited the ability to enforce Miranda rights, so make sure you review those if you don’t know them.

In macro news, Mexico’s central bank joined the world in raising rates by 75 bps and signaled more hikes ahead. 🥾

Meanwhile, in the U.S., G&P Global Manufacturing PMI dropped to 52.4, missing expectations of 56 by a wide margin. However, the labor market remains tight as U.S. initial jobless claims edged down to 229,000. 🏭

Sentiment check — Bridgewater is doubling its short wagers in Europe to $10.5 billion. 💰

In crypto news, eBay now has an established NFT marketplace after acquiring KnownOrigin for an undisclosed amount. In addition, Coinbase is shutting down Coinbase Pro to merge its trading services, and Binance landed Cristiano Ronaldo as a partner for its NFT push. ₿

$MO shares rebounded 2.43% as the FDA made the U.S. ban on Juul products official.

$NFLX laid off 300 people (or 3% of its staff) as it continues to cut costs. 📺

Other symbols active on the streams included: $RDBX (-2.48%), $REV (-11.55%), $XBI (+6.18%), $WEBR (+16.34%), $LI (+6.63%), and $MULN (-8.75%). 🔥

Here are the closing prices:

S&P 500	3,796	+0.95%
Nasdaq	11,232	+1.62%
Russell 2000	1,712	+1.27%
Dow Jones	30,677	+0.64%

Policy

Fed Gives Big Banks A Passing Grade

Amid rising fears that central bankers could lose control and send the global economy into a recession, we got some positive news today.

Today we learned that the thirty-three largest banks in the country passed the Federal Reserve’s annual stress test. 👍

The annual stress test scenario included a 40% decline in commercial real estate prices, a 55% drop in stock prices, higher stress in the corporate debt market, and a 10% unemployment rate. 😱

The results and passing grades endorse the strength of the U.S. banking system. 💪

Stricter capital requirements and other Dodd-Frank financial regulations have forced banks to clean up their balance sheets and manage risk more responsibly, leaving them better prepared for major downturns like the ones simulated in the Fed’s test.

Skeptics may point to the silliness of trusting the Fed’s assessment given how behind the curve they’ve been, but we’ll take what we can get these days. 🙃

Bank stocks are more or less unchanged on the news, given this result was largely expected by analysts.

Instead, investors are waiting for Monday, when banks can publicly confirm their stress-capital buffer and will also reveal their shareholder return plans. 💰

Earnings Recaps

Today’s Earnings Recaps

FedEx ($FDX) | EPS: $6.87 vs. $6.86 expected | Revenue: $24.39 billion vs. $24.56 billion expected | Link to Report

Rite Aid ($RAD) | EPS: ($0.60) vs. ($0.70) expected | Revenue: $6.01 billion vs. $5.71 billion expected | Link to Report

Accenture ($ACN) | EPS: $2.79 vs. $2.86 expected | Revenue: $16.2 billion vs. $16.04 billion expected | Link to Report

BlackBerry ($BB) | EPS: ($0.05) vs. ($0.07) expected | Revenue: $168 million vs. $177.25 million expected | Link to Report

Darden Restaurants ($DRI) | EPS: $2.24 vs. $2.21 expected | Revenue: $2.60 billion vs. $2.54 billion expected | Link to Report

Smith & Wesson Brands ($SWBI) | EPS: $0.79 vs. $0.57 expected | Revenue: $181.3 million vs. $168 million expected | Link to Report

Want more EPS?? Check out Stocktwits’ earnings calendar! 📅

Bullets

Bullets From The Day:

👟 Nike eyes full exit from Russia. Three months after suspending its operations in Russia, Nike is making a full exit from the country, joining McDonald’s, Starbucks, and other multinational companies. Like other companies exiting the country, Nike will work to support its employees as it responsibly scales down its operations in the coming months. Read more from Reuters.

🌎 Brookfield raises new climate-focused fund. Canadian firm Brookfield Asset Management raised $15 billion for its first impact fund focused on the global transition to a net-zero carbon economy. The trend of ESG investing has grown in popularity but remains heavily scrutinized over the unclear investing standards and results of funds that label use the label. Reuters has more.

◀️ Cisco wins court reversal due to conflict of interest. The U.S. Federal Circuit Court of Appeals overturned a $2.75 billion award to Centripetal Networks Inc, which had sued Cisco for allegedly copying five cybersecurity patents. The trial judge who found Cisco liable for patent infringement had his independence questioned because he did not disqualify himself from the trial after learning that his wife owned 100 shares of Cisco. More from Reuters.