Mid-Morning Look: February 10, 2021

Mid-Morning Look

Wednesday, February 10, 2021






DJ Industrials




S&P 500








Russell 2000






Stocks climb initially as major indexes hit new intraday records again (every day this week intraday) with the Nasdaq topping the 14K level S&P above 3,900, Russell above 2,300 and the Dow also making new bests – though major averages just saw sharp pullback. What can take this market down remains the question as there remains no justification for selling pressure at this point due to the broader macro narrative including: go big stimulus hopes out of Washington DC (a 3rd round after two under Trump administration), vaccine rollout, an accommodative Fed (Powell speaks later today) and growing earnings (estimates rising for quarters). Valuations remain stretched, there certainly appear to be pockets of bubble concerns (SPAC’s, Bitcoin leveraged names, cannabis, EV space, IPOs still surging, etc.), but that hasn’t phased investors in the least to this point. Asian markets jumped overnight with another spike in the Shanghai index while the Hang Seng topped the 30,000 level. Inflation remains tame as U.S. consumer prices rose moderately in January as an increase in the cost of gasoline was blunted by a slump in airline fares. CPI increased 0.3% last month after a downwardly revised 0.2% gain in December. In the 12 months through January the CPI rose 1.4% after advancing by a revised 1.3% in December. Earnings winners today include TWTR (new record highs), LYFT and UAA, while Dow component KO posted earnings beat and that it expects its 2021 organic revenue to grow by a high-single-digit percentage. Comments from Federal Reserve Chairman Jerome Powell, scheduled for 2 p.m. ET, are also likely to be closely scrutinized for any hints on the economy.


Economic Data

·     January Consumer Price Index (CPI) rose +0.3%, in-line with consensus and vs. +0.4% prior, while core CPI (ex: food & energy) was flat vs. +0.2% consensus and +0.1% prior; Jan CPI year-over-year +1.4% vs. est. +1.5% and core YoY +1.4% vs. est. 1.5%







WTI Crude















10-Year Note





Sector Movers Today

·     Auto sector; GM beats Q4 adj. profit est. on strong demand for trucks and SUVs during the COVID-19 pandemic, but posts weaker-than-expected FY21 outlook, citing a shortage of chips used in car production; Electric vehicle startup Rivian Automotive aims to go public as early as September with a valuation of $50 billion or more, Bloomberg reports, citing unnamed people familiar with the matter. The company, backed by AMZN and Ford (F), has been speaking with bankers about possible plans, Bloomberg said; LYFT reported revenue and EBITDA that were 2% and $33m above consensus and sounded optimistic on the recovery in 2021 – still being impacted by Covid-19 as January ride share rides -51% YoY; PAG Q4 EPS $2.49 vs. est. $2.13 and revenue $5.81B vs. est. $5.74B as EBITDA $317.8M vs. est. $279.4M

·     Consumer Staples; KO Q4 adj EPS 47c vs. est. 42c; Q4 sales $8.6B vs. est. $8.63B; Q4 global unit case volume down -3%; sees FY21 adjusted EPS growth high single digits to low double digits; sees FY21 organic revenue percentage growth of high single digits; LMB 1.784M share Secondary priced at $12.00; BG posted stronger-than-expected Q4 earnings and said its full-year adjusted profit would top estimates due to strong demand and tight commodity supplies; PM set a target of at least $1 billion in net revenue for its “beyond nicotine” products by 2025 (goal was announced ahead of the company’s investor event on Wednesday); HAIN upgraded to Overweight from neutral at Piper and raise tgt to $50 from $42 as believe some key growth drivers still have a long runway (e.g. innovation, distribution gains, productivity); COTY upgraded to buy at Evercore/ISI saying capacity to turnaround is no longer in question; it’s a question of when, in our view, and tough to play it cute

·     Metals & Materials; Steel producer Thyssenkrupp raised its full-year outlook, boosted by a recovery at its steel unit that could strengthen the case for a spin-off. Thyssenkrupp’s steel division expects to nearly break even this fiscal year, compared with a low triple-digit million euro loss previously expected; SON raises divided by 5%; CCK posted Q4 adj. profit of $1.50 above the $1.27 estimate and Q4 revenue of $2.9B above views driven by increased canned beverage and food volumes globally

·     Software movers; AYX shares tumble early reported F4Q results that were largely in-line with its pre-announcement, in which ARR slightly missed its guidance – Piper noted despite a $7.4M ARR shortfall, reported ASC 606 revenue upside benefited from an increase in average contract duration, which in turn drove meaningful operating margin leverage that climbed to 30.6%; QLYS downgraded to UW from EW with $110 tgt at Morgan Stanley; EA announced that it has agreed to sell $750 million in aggregate principal amount of its 1.850% Senior Notes due 2031; CDAY reported a solid quarter, but the guide was worse than expected

·     Asset managers; WDR preliminary assets under management of $74.3 billion for the month ended January 31, 2021, compared to $74.8 billion on December 31, 2020; LAZ preliminary assets under management (“AUM”) as of January 31, 2021 totaled approximately $255.2 billion. The month’s AUM included market depreciation of $1.2 billion, foreign exchange depreciation of $1.1 billion and net outflows of $1.1 billion; APAM assets under management as of January 31, 2021 totaled $156.5 billion; VRTS reported total assets under management (AUM) as of January 31, 2021 of $132.9 billion; TROW preliminary assets under management of $1.46T at Jan. 31, 2021 declines 0.4% from $1.47T at Dec. 31, 2020.



·     BPTH +281%; as U.S. Patent and Trademark Office grants third patent to company’s DNAbilize platform technology

·     EGOV +15% after being acquired by TYL in $2.3B deal; EGOV shares holders to receive $34 in cash https://on.mktw.net/3jzFODs

·     HEAR +5%; as guides Q4 Non-GAAP EPS between $0.73-0.82 vs. a consensus of $0.47; sees adjusted EBITDA between $21M and $23M vs. $16.6M in last year’s quarter

·     LYFT +10%; reported revenue and EBITDA that were 2% and $33m above consensus and sounded optimistic on the recovery in 2021 – still being impacted by Covid as Jan ride share rides -51% YoY

·     MODN +17% after earnings beat and news that JNJ agrees to migrate its US Pharma business to Revenue Cloud, in MODN’s largest ever deal

·     THS +19%; after Bloomberg reported Jana Partners, which confirmed this morning a 7.5% activist stake, has called on the company to launch a strategic review, including exploring a potential sale https://bit.ly/3dctPLd

·     TWTR +9%; reported revenue and EBITDA that were 8% and 21% above consensus and guided above for 1Q/results showed solid usage growth and healthy participation in the rising digital ad-spend tide

·     UAA +7%; posts a surprise holiday-quarter profit and tops revenue estimates on strong online demand for its apparel and accessories and higher Asia-Pacific sales but sees 2021 revenue growth below estimates even as it sees profit in line with expectations



·     AKAM -8%; slides after earnings and guidance while also splitting into two new business groups, Security Technology and Edge Technology (downgraded at both JPMorgan and Hallum citing its 2021 outlook)

·     AYX -14%; shares tumble early reported F4Q results that were largely in-line with its pre-announcement, in which ARR slightly missed its guidance

·     CDAY -9%; reported a solid quarter, but the guide was worse than expected

·     CSCO -3%; FQ2 strength came from better parts within the core IP business (datacenter switching, wireless, SD-WAN), Cloud Security, and WebEx, especially within the non-Enterprise verticals but Piper notes the Apps business trajectory is becoming concerning as competitors are taking share

·     GLPG -13%; and GILD announced the decision to halt the ISABELA Phase 3 clinical studies with the investigational autotaxin inhibitor ziritaxestat in patients with idiopathic pulmonary fibrosis

·     PBLA -21%; after saying independent data safety monitoring board recommended its experimental drug, SBP-101, be held for patients in trial, while it obtains additional safety information

·     SPCE -3%; downgraded to Neutral from Buy at UBS saying the near-term catalyst path appears largely priced in



·     Adicet Bio (ACET) 9.231M share Spot Secondary priced at $13.00

·     Autolus Therapeutics (AUTL) 14.29M share Secondary priced at $7.00

·     Babcock & Wilcox (BW) 25.6M share Spot Secondary priced at $5.85

·     Ballard Power (BLDP) 9.46M share Spot Secondary priced at $37.00

·     Biophytis (BPTS) 1.2M share IPO priced at $16.75

·     Enlivex Therapeutics (ENLV) 2.3M share Spot Secondary priced at $20.00

·     Fluor (FLR) 13.7M share Block Trade priced at $18.35

·     Lightspeed POS (LSPD) 8.4M share Secondary priced at $70.00

·     Limbach Holding (LMB) 1.784M share Secondary priced at $12.00

·     Mereo BioPharma (MREO) 34.5M share Spot Secondary priced at $2.90

·     Vallon Pharmaceuticals (VLON) 2.25M share IPO priced at $8.00

·     Viant (DSP) 10M share IPO priced at $25.00

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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.