Closing Recap

Monday, June 28, 2021

Index	Up/Down	%	Last
DJ Industrials	-151.56	0.44%	34,282
S&P 500	9.88	0.23%	4,290
Nasdaq	140.12	0.98%	14,500
Russell 2000	-12.06	0.52%	2,322

 

Equity Market Recap

·     U.S. stocks finish mixed as the Nasdaq surges to another all-time high behind strength in tech and biotech, the S&P 500 posts another record high as well, the Dow slipped behind weakness in Boeing shares, and the Smallcap Russell 2000 declined on energy stock weakness as markets await key jobs data later this week. European stocks fell amid restrictions prompted by variant Covid-19 strains, with weakness carrying over to the U.S. as airlines, cruise lines, theme parks and casinos (“reopen” industry) declined. Hong Kong also banned flights from the UK starting July 1st and new COVID restrictions in other parts of the world (Australia lockdowns) also weighed on sentiment. Britain recorded 22,868 new coronavirus infections on Monday, up from 14,876 a day earlier, and three deaths, lower than the 11 reported on Sunday. While Covid fears played a part today, focus may now shift to positioning for month-end, quarter-end on Wednesday. 

·     Nasdaq got a pop to fresh highs late day, led by big cap tech after headlines U.S. judge grants dismissal of FTC lawsuit against social media giant Facebook without prejudice, saying amended complaint should be filed by end of July – but mega cap tech giant GOOGL later slips after headlines Biden’s justice department probing Google’s display ad business. Stocks looked to build on last week gains when the S&P 500 on Friday logged its best weekly performance in 20 following a bipartisan agreement on a $1.2 trillion infrastructure spending deal and waning concerns about a sooner-than-expected policy tightening from the Federal Reserve. Going into the final trading week of the 1H, the S&P 500 is up roughly 14%, the Russell 2000 up 18%, the Nasdaq Comp up 11.5% and the Dow up about 12.5%.

·     Stock/sector mover: Banks maybe active after the close as investors anticipate capital allocation announcements after the close following last week’s Fed stress tests; NTLA surges to record highs after the interim data from a phase 1 trial of a CRISPR candidate show the ability to genetically edit cells inside a liver; other gene editing stocks jumped in reaction (CRSP, EDIT, DTIL, BEAM) and sends the IBB to its highest in more than 5 months; BA stumbles after the FAA warned the company’s 777X plane is not ready for a significant certification step and warns it will not certify it for another 2 years; reopen plays underperformed with cruises (CCL, RCL, NCLH), online travel (EXPE, BKNG) all among the top S&P decliners on concerns over the delta variant with the UK reporting the highest daily cases since late January; energy (MRO, BKR, HAL, FANG, SLB was also weak on profit-taking and crude’s pullback); crypto rebounds after tumbling over the weekend – as Bitcoin jumps as much as 16% and Ethereum bounces more than 23% off Saturday’s lows; electric vehicles (NIO, WKHS, CHPT, TSLA) and solar (CSIQ, JKS, SPWR, RUN, NOVA) soar.

 

Commodities

·     Oil price end lower, as WTI crude slides-$1.14 or 1.54% to settle at $72.91 per barrel after hitting more than 2-1/2-year highs earlier in the session, as a spike in COVID-19 cases in Asia put a brake on their rally before this week’s OPEC+ meeting. Gold prices edge higher, with August gold rising $2.90 or 0.2% to settle at $1,780.70 an ounce, trading in a roughly $10 range most of the day and adding to last week gains (which was the first advance in four weeks).

 

Currencies & Treasuries

·     Treasury yields tumble back near last week lows around 1.47% (after posting its biggest weekly gain since March last week), as both stocks and bonds were mostly higher on the day. Investors await the monthly job report the tail-end of the week with ests for payrolls to have increased just under 700K jobs after rising 559K in May. The U.S. dollar edged higher, with the buck bouncing vs. the euro and other currencies – having bounced off multi-year lows since the outcome of the FOMC meeting a few weeks ago, as Fed officials penciled in two rate hikes for 2023.

Upcoming Weekly IPO Calendar (busy week of Holiday weekend):

·     Acumen Pharma (ABOS) 8.3M share IPO (price range $14-$16) – trade date7/1

·     Aerovate Therapeutics (AVTE) 7.15M share IPO (price range $13-$15 – trade date 6/30

·     Atour Lifestyle Holdings (ATAT) 19.7M share ADS (price range $13.50-$15.50) – trade date 7/1

·     Clear Secure (YOU) 13.2M share IPO (price range $27-32) – trade date 6/30

·     CVRx, Inc. (CVRX) 6.25M share IPO (price range $15-$17) – trade date 6/30

·     Didi Global (DIDI) 288M share ADS (price range $13-$14) – trade date 6/30

·     EverCommerce Inc. (EVCM) 19.1M share IPO (price range $16-$18) – trade date 7/1

·     Intapp, Inc. (INTA) 10.5M share IPO (price range $25-$28) – trade date 6/30

·     Krispy Kreme, Inc. (DNUT) 26.7M share IPO (price range $21-$24) – trade date 7/1

·     LegalZoom.com, Inc. (LZ) 19.1M share IIPO (price range $24-$27) – trade date 6/30

·     SentinelOne, Inc. (S) 32M share IPO (price range $26-$29) – trade date 6/30

·     Torrid Holdings, Inc. (CURV) 8M share IPO (price range ($18-$21) – trade date 7/1

•  Xometry, Inc. (XMTR) 6.875M share IPO (price range ($38-$42) – trade date 6/30

 

 

Macro	Up/Down	Last
WTI Crude	-1.14	72.91
Brent	-1.50	74.68
Gold	2.90	1,780.70
EUR/USD	-0.0007	1.1926
JPY/USD	-0.24	110.53
10-Year Note	-0.056	1.48%

 

 

Sector News Breakdown

Consumer

·     Retailers; GME has made it into the Russell 1000 index; DBGI Q1 net loss widens to $4.55 per share from $2.87 per share last year due to delays caused by COVID-19 pandemic while saying Q2 results also expected to be adversely impacted; in gun sector, Barron’s positive on SWBI saying the stock is poised to pop as gun sales face more scrutiny, while AOUT ests raised at Lakestreet given the strong outdoor consumer trends; LEVI tgt raised at $36 at UBS on view its capitalizing on the denim category resurgence and also many self-help initiatives

·     Auto sector; TSLA announced a recall to address a safety issue in more than 285,000 passenger vehicles in China, including more than 90% of locally made vehicles sold by the company, associated with their cruise-control system, the country’s market regulator said; electric vehicle stocks (XPEV, FSR, NKLA, NIO, LI) extend recent gains in space

·     Restaurants & Consumer Staples; FAT agreed to buy Global Franchise Group, the company behind five quick-service restaurant brands, for $442.5M in cash and stock from Serruya Private Equity Inc. and Lion Capital LLP; BYND and DASH introduce limited edition summer grilling kits for on-demand delivery; couple of food names with earnings this week (GIS on 6/30, SMPL on 7/1, and MKC on 7/1); Barron’s positive on DRI as a way to play a recovery in middle income spending

·     Casinos, Gaming, Lodging & Leisure sector; several stocks hit on the day (SIX, SEAS, WYNN, BKNG) after Hong Kong banning flights from the UK on July 1st and new COVID restrictions in other parts of the world weighing (Australia lockdowns); CCL said to sell up to $500M in stock while travel related names seeing pressure early behind new restrictions overseas amid the highly contagious delta variant of Covid-19; SEAS appoints Tom Iven as COO effective today after Walter Bogumil’s employment was terminated effective Jun-27^th

 

Energy

·     Energy stock movers; the sector was among the biggest decliners on the day, led by services (SLB, HAL, BKR) and E&P/big oil (XOM, FANG, MRO, APA) after oil prices hit more than 2-1/2-year highs earlier in the session, as a spike in COVID-19 cases in Asia put a brake on their rally before this week’s OPEC+ meeting.

·     Refiners: Wells Fargo said it views the U.S. Supreme Court’s 6-3 decision as a positive outcome for the refiners. Notes the case directly applied to HFC and CVI refining units, but has broader positive implications for other small refinery operators within coverage, including DK and CLMT and said PBF and several other refiners should be indirect beneficiaries of this ruling

·     Utilities & Solar; CSIQ and JKS say they each submitted application documents for a potential IPO and listing of shares on the Shanghai Stock Exchange’s Sci-Tech innovation board, the "STAR Market." NRG added to Goldman Sachs Americas Conviction list following its analyst day & emerge even more positive saying cash inflows in 2021 should recover materially and we expect robust FCF in 2022-2023, driven by NRG’s retail business; solar stocks in general (NOVA, ENPH, RUN, JKS) outperform as well amid heatwave across country – rising use/need for solar battery packs, as well as Washington push for clean energy.

 

Financials

·     Insurance; Mortgage insurers viewed positively in Barron’s saying shares still looks cheap noting higher home prices mean more buyers will need mortgage insurance, and historically low rates mean fewer defaults which could benefit the industry and stocks of three companies (ESNT, MTG and NMIH); PFG announces results of strategic review with new incremental share repurchase authorization of $1.2B, says to discontinue sales of all U.S. retail fixed annuities and consumer life insurance products and to pursue strategic alternatives for related in-force blocks

·     FinTech & Payments; Cowen said in iGaming / Payments, which they see being a TAM of $33-49B by 2025 with a 45% CAGR equating to a material opportunity for payments providers NVEI, PSFE and PYPL; SQ shares advance behind strength in crypto space with Bitcoin rebounding

·     Bitcoin news; cryptocurrency-exposed stocks climb with Bitcoin and other digital currencies higher as bulls in the market take encouragement in Bitcoin’s failure to breach the $30,000 support level over the weekend after last week’s volatility (MARA, MSTR, RIOT, COIN active); the bounce come after a stream of reports last week regarding China’s renewed crackdown on cryptocurrency mining on June 21, as bitcoin briefly dropped below $30,000 last week. Along with it, top cryptocurrencies by market value, including ether, were also hit.

 

Healthcare

·     Gene editing sector top story on the day after NTLA shares surge after the co (along with REGN) released interim data from a phase 1 trial of a CRISPR candidate showing the ability to genetically edit cells inside a liver. Chardan raises tgt to $130 from $85 saying data from the 1st phase I trial of a systemic CRISPR therapy, NTLA-2001 in hATTR, demonstrates a clean safety profile and a mean reduction in the circulating TTR biomarker of 87% after a 1-time dosing at 0.3 mg/kg: this is what it looks like when preclinical data translate (CRISPR technology stands for Clustered Regularly Interspaced Short Palindromic Repeats) – shares of other gene editing stocks jumped in reaction including CRSP, EDIT, BEAM, DTIL

·     Pharma movers; EXEL shares slip (along w partner Ipsen) after results of its Phase 3 COSMIC-312 pivotal trial in patients with previously untreated advanced liver cancer (trial met one of the primary endpoints, demonstrating significant improvement in PFS, but missed stat sig in OS and the probability would be low that it would hit by the final analysis); SNDX says U.S. FDA granted fast-track designation for its experimental drug, SNDX-5613, for treatment of patients with relapsed or refractory acute leukemias or blood cancers; MDWD rises after Japan’s Kaken Pharmaceutical said it has submitted a new drug application for manufacturing and marketing approval of KMW-1 for the removal of burn eschar; TEVA and Bioeq entered into a strategic partnership for the exclusive commercialization of Bioeq’s FYB201, a biosimilar candidate to Lucentis® (ranibizumab) in Europe, Canada, Israel and New Zealand; JNJ announced a settlement agreement with the State of New York and its participating subdivisions, including Nassau County and Suffolk County, resolving their opioid-related claims against the company; AVXL says its ANAVEX 2-73 meets main and secondary goals of trial to treat for treatment of patients with Parkinson’s disease dementia/says efficacy data will be submitted to U.S. FDA later this year

·     Biotech; BIIB active on reports two House committees plan to investigate the FDA approval and pricing of its Alzheimer’s drug Aduhelm. Rep. Carolyn B. Maloney (D-N.Y.), Chairwoman of the Committee on Oversight and Reform, and Rep. Frank Pallone (D-N.J.), Jr., Chairman of the Committee on Energy and Commerce said the committees will investigate the FDA approval; GILD announces its Kite unit said Yescarta® car t-cell therapy improved event-free survival by 60% over chemotherapy plus stem cell transplant in second-line relapsed or refractory large b-cell lymphoma; ABUS announces AB-729 and AB-836 data in chronic hepatitis B virus infection at the EASL International Liver Congress (announced the presentation of five abstracts during an international congress by the EASL); MNKD rises after Medicare policy change will lift restrictions for diabetes patients and allow them to select both Afrezza and continuous glucose monitors; CVM tumbles after mixed results from its nine-and-a-half-year pivotal Phase 3 study for its immunotherapy Multikine leukocyte interleukin injection in the treatment of advanced primary squamous cell carcinoma of the head and neck.

 

Industrials & Materials

·     Aerospace & Defense; BA slips as the FAA told the company that its planned 777X is not yet ready for a significant certification step and warned it "realistically" will not certify the airplane until mid- to late 2023 according to a Reuters report; GD tgt raised from $225 to $230 at Cowen saying Bizjet demand metrics show broad vigor which still has runway since Fortune 500 and foreign buyers have yet to return; SPCE pulls back after having risen 38% Friday after receiving regulatory approval to fly customers into space – Bernstein had said the license was an important regulatory hurdle, although they did not find it a major surprise

·     Transports; rental-car industry (CAR) is benefiting from a domestic US travel surge and a vehicle shortage this summer to raise prices; Hertz Global Holdings (HTZGQ) a positive mention in Barron’s saying shares may climb when the company emerges from bankruptcy this week, as it will have a healthy balance sheet with little or no net corporate debt; XL added to membership of Russell 3000® and U.S. small cap Russell 2000® indexes; XPO plans to make registered underwritten offering of 5 mln shares of common stock; airlines also soft despite big weekend TSA checkpoint results (again on travel concerns)

·     Metals & Materials; AA said it completed the sale of its former Eastalco site in Frederick County, Maryland to a joint venture of Quantum Loophole and TPG Real Estate Partners for $100 million in cash and expects to book a gain of about $90 million in the second quarter; GLNCY to buy out partners BHP, Anglo in Cerrejon coal mine for $588M; in paper, IP upgrade from Equal weight to Overweight at Stephens to reflect the very substantial value creation potential of the upcoming separation into two companies.

·     Industrial & Machinery; GTLS mentioned positively in Barron’s saying the company offers opportunity to bet on hydrogen, natural gas; IR said it had acquired Maximus in all-cash transaction, valued at C$135.4M/upon closing acquisition in Q3, Maximus will join the PST segment; Citi continues to see ROK entering a period of accelerated topline and EPS growth that we think could be relatively more durable/sustainable than some investor expectations

Technology, Media & Telecom

·     Internet; FB spikes late day after a U.S. judge grants dismissal of FTC lawsuit against Facebook without prejudice, says amended complaint should be filed by end of July – but mega cap tech giant GOOGL then pressured the space after headlines Biden’s justice department probing Google’s display ad business; ETSY signed a definitive agreement to acquire privately held marketplace – Elo7 for $217M in cash, based on certain adjustments for Elo7’s working capital, transaction expenses, cash and indebtedness; E-Commerce: Barclays assumes group with MELI at Overweight; CHWY and SHOP at Equal-Weight; GRPN, YELP, and ZG at Underweight; online travel stocks (BKNG, EXPE) hit hard on rising fear of new restrictions overseas prompted by the spread of the highly contagious delta variant of Covid

·     Semiconductors; NVDA surges over 4.5% (record highs), leading the Philly semi-index (SOX) up 2% above 3,300 (all-time highs at 3,314); according to the UK Sunday Times, AVGO, MediaTek, and MRVL have become the first customers of Arm to publicly support a NVIDIA takeover; MU earnings later this week – shares have been rallying ahead of results

·     Software movers; QADA to be acquired by Thoma Bravo for $2 Billion with shareholders to Receive $87.50 per share in cash https://bit.ly/3xZikO1 ; PERI shares higher as raises FY21 revenue view to $410M-$430M from $390M-$410M (est. $400.21M) and raises FY21 adjusted EBITDA view to $49M-$51M from $39M-$41M (also sees Q2 revs $105M vs. est. $95.9M)

·     Hardware, Components & Services; 3D names broadly higher on the day, with advances for SSYS, DDD, DM and XONE (recall last week, DDD with new bioprinting collaboration with Israeli regenerative and aesthetic medicine company CLGN "to deliver bioprinted solutions for improved breast reconstruction treatments – today, SSYS has grown its GrabCAD(R) Software Partner Program to six companies in its first six months with the addition of Teton Simulation today; in Media & Telecom movers, VIAC shares outperformed no specific news; GLW announced on 6/22 that it will moderately increase display glass substrate prices in 3Q21—its second increase in LCD glass prices this year (Opco tweaks ests in reaction)