Mid-Morning Look: April 14, 2021

Mid-Morning Look

Wednesday, April 14, 2021






DJ Industrials




S&P 500








Russell 2000






More of the same for broader U.S. averages, with stocks looking to extend recent gains with the S&P 500 touching new intraday record highs but seeing strength in recent underperformers such as Smallcaps (IWM +1.8%) and biotech (+2.2%) as markets brace for the start of quarterly earnings. Dominant news themes this morning include financials given better-than-expected quarterly results from large cap banks JPMorgan, Goldman Sachs, and Wells Fargo, as well as crypto currency news with Bitcoin topping the $64,000 level (before paring gains) and Coinbase Global (COIN) class A shares indicated to open around $340 after reference price of $250 per share was set last night, However, shares of Bitcoin, and names leveraged to the move in prices (MSTR, MARA, GBTC, RIOT) have since erased gains. Oil prices get a boost following bullish weekly inventory data (3rd straight week of weekly crude draw for EIA), gold prices drop about -0.5% as Treasury yields stay steady around 1.63% and the dollar remains flat. First-quarter earnings for S&P 500 companies are estimated to have risen 25% in the quarter, according to Refinitiv IBES data. Earnings at S&P 500 firms had dropped 12.8% in the first quarter of 2020 and 30.6% in the second, according to IBES data from Refinitiv.


Economic Data

·     U.S. import prices rose more than expected in March, rising 1.2% vs. the 1.0% estimate, while Feb was unrevised at 1.3%; exports for March rose 2.1% vs. est. 1.0% and Feb unrevised at 1.6%. Imports were lifted by higher costs for petroleum products and tight supply chains, the latest indication of inflation heating up as the economy reopens.







WTI Crude















10-Year Note





Sector Movers Today

·     Bank earnings dominate news headlines early; still buys week of results to come: 1) Dow component JPM Q1 earnings beat on strong global investment banking fees and equity market revenue, as EPS of $4.50 topped the $3.10 estimate and revs of $32.3B topped to $30.5B view; 2) Dow component GS with blowout Q1 results as revs rose to $17.7B, easily above the $12.55B estimate and prior year same quarter of $8.74B – investment banking revenue $3.57B, while trading revs rose 47% YoY to $7.58B (above est. $5.3B), FICC sales & trading revs rise 31% YoY to $3.89B (est. $2.9B) and equities sales & trading revs up 68% YoY to $3.69B; 3) WFC reported Q1 EPS of $1.05, topping the $0.70 estimate on revs $18.06B beating the $17.5B estimate; Q1 net interest income (NII) was $8.80B vs. est. $9.08B – firm noted Q1 results included a $1.6 billion pre-tax reduction in the allowance for credit losses (in Q4, it had a negative provision of $179m and in 1Q a year ago, its provision was $4.01B)

·     Housing & Building Products; in home improvement, LOW upgraded from Neutral to Overweight with $240 pt at Atlantic Equities saying sentiment towards hardlines retail has inflected since the start of March, buoyed by government stimulus and optimism regarding the reopening; RH tgt raised to $680 from $600 at Cowen as see upside to FY21 revenue and margin outlook, including raising our 1Q21 sales growth to +58%; in home furnishing, LOVE posts Q4 EPS $1.37 and sales better at $129.7M while gross margins improved in the quarter to 57.9% from 49% a year earlier, in part because the company lowered promotions and reduced inventory levels; DHI tgt raised to $105 at Argus as believe that there is a significant shortage of affordable housing after more than a decade of underbuilding; the MBA said weekly purchases, refinances and applications fell; Wayfair (W) said it will hold its two-day Way Day shopping event on April 28 at 12 a.m. ET.

·     Energy stocks higher with jump in oil prices; Raymond James upgraded XOM to Market Perform after the stock has pulled back about 10% over the past month and its Q1 earnings indicators show improvement; MKM maintained its $32 price target on OXY and upgraded the stock to Buy as it now represents an approximate 30% upside following the stock falling over 20% since early March; Goldman downgraded PBR to Neutral despite trading at a discount to historical valuation multiples, as they say the stock will be pressured on strategic uncertainty until the CEO outlines his plans and investors get clarity on the next presidential election; Wolfe upgraded MMP to Peer Perform as their negative thesis from January on disappointing guidance and EV pressures has played out in the near-term and upside is emerging

·     Chemicals; RBC Capital positive on ag chemicals as reit OP and $42 tgt for MOS as think improvements to Mosaic’s underlying fundamentals remain underappreciated with significantly lower costs, improved operations and better market conditions for phosphate; RBC reit OP and raised tgt on NTR to $62 as believe higher crop prices have supported strong fertilizer demand, which may extend into 2022; Deutsche Bank added DOW, WLK as a Catalyst Call Buy as believe consensus Q2 estimates for both are 15-20% too low versus what we believe will be record Q2 results; firm also adds LYB as believe consensus Q2 estimates for Lyondell are 20-25% too low



·     BIDU +1%; China companies edging higher (JD, BABA) after Chinese internet cos pledge to avoid anti-competitive behaviors, according to a statement from China’s State Administration for Market Regulation

·     CTRN +6%; prelim Q1 EPS $2.75-2.90 vs. est. $0.91 and revs $280M-285M vs. est. $213.6M and comps +74.5% YoY

·     MRNA +4%; as its Covid-19 vaccine was more than 90% effective at preventing Covid-19 disease in people six months after vaccination, an updated analysis of a large clinical trial showed.

·     SAP +2%; raised year view; now expects EUR9.2B-EUR9.5B in adjusted cloud revenue and EUR23.4B-EUR23.8B adjusted cloud and software revenue, compared with its earlier view of EUR9.1B-EUR9.5B and EUR23.3B-EUR23.8B, respectively

·     TV +28%; after the co and Univision announced that they have finalized a deal to combine their content and production assets. Televisa will receive $3B in cash and $1.5B in equity as part of the deal, and SoftBank (SFTBY) will invest $1B in the combined entity. https://on.mktw.net/3dhapnZ



·     BBBY -10%; Q4 EPS and Ebitda beat, but Q1 guidance sinks shares early; Q4 results mixed as adj EPS of 40c beats by 6c while sales fell -16% YoY to $2.62B (vs. est. $2.63B) as comps rose +4% and EBITDA up 13.5% YoY to $168M, but Q1 Rev/EBITDA missed at 40% (vs. 45%) and $80-$90m

·     INTZ -10%; mentioned a short call by White Diamond Research with $4 target

·     LOVE -7%; despite posting Q4 EPS $1.37 and sales better at $129.7M while gross margins improved in the quarter to 57.9% from 49% a year earlier, in part because the company lowered promotions and reduced inventory levels

·     SFIX -4%; announced that its founder and CEO Katrina Lake will be transitioning to the role of Executive Chairperson of the Board effective August 1st as a buying opportunity

·     SYF -1%; falls a second day as Oppenheimer downgraded saying combined with the 4/13 Gap partnership loss ($3.8B of loans/~5% of portfolio) effective 04/30/22, and shifting consumer spending focus, they move to the sidelines

@media only screen and (max-width: 500px) {
td p.MsoNormal {
text-indent: 0!important;
margin: 0!important;
div[class*=WordSection]>p {line-height: inherit !important;}div[class*=WordSection] a:not([href]) {color: inherit !important;}


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.