Mid-Morning Look: May 03, 2021

Mid-Morning Look

Monday, May 03, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open higher following a round of mixed economic data and ahead of another heavy dose of earnings results this week (roughly 28% of the S&P reports this week) as market momentum remains firmly to the upside. Dow Transports at new record highs above 15,550 (up over 200 points) and looking to make it a 14th straight week of weekly gains (the current 13-win streak longest in over 120-years), while Energy and Materials also outperform. Precious metals surge with gold rising 1.5% approaching $1,800 an ounce and silver prices up over 3%, getting a boost with Treasury yields sliding. The yield on the 10-year Treasury note dropped below 1.59% after weaker economic data, after ended last week at 1.632%, posting its biggest weekly rise since mid-March. Markets continue to cheer signals that economic growth is picking up in most developed countries, with companies’ earnings growth and positive outlook adding to the optimism. Later today, Federal Reserve Chairman Jerome Powell is scheduled to speak at 2:20 p.m. at a virtual conference. In stock news, Estee Lauder shares fall after its quarterly revenue came in below analysts’ estimates.


Economic Data

·     Markit April final manufacturing PMI at 60.5 vs flash 60.6 and final 59.1 in March; manufacturing sector final output index for April at 57.2 vs flash reading 57.2 and final March 55.6 and input prices index for April at 77.2 vs flash reading 78.0 and final March 74.8.

·     ISM U.S. manufacturing activity index reported at 60.7 in April, below consensus 65.0 and the March 64.7 reading while the prices paid index jumped to 89.6 in April (highest level since July 2008) vs. March 85.6; the new orders index 64.3 in April vs. March 68.0; employment index 55.1 in April vs. 59.6 in March.

·     March construction spending rose +0.2%, below consensus for up +1.9% to $1.513 trillion vs. Feb -0.6%; U.S. March private construction spending +0.7%, public spending -1.5%.







WTI Crude















10-Year Note





Sector Movers Today

·     Auto sector; TSLA shares slipped initially on reports is said to delay starting production in its new Germany facility until the end of January; Tesla originally wanted to open the plant on July 1; monthly auto sales data showed: NIO delivered 7,102 vehicles in April, 125% higher than the company’s deliveries tally from a year ago, but 2% below the level seen in March; LI delivered 5,539 Li ONEs in April 2021, representing a 111.3% year-over-year increase and taking the cumulative deliveries to 51,715; XPEV delivered a total of 5,147 Smart EVs in April 2021, representing a 285% increase year-over-year

·     Transports; Dow Transports looking to make it a 14th straight week of weekly gains (the current 13-win streak longest in over 120-years); in a sign of improving demand for air travel (AAL, DAL, UAL, JBLU), the TSA reports U.S. screens nearly 1.63 million people at airports on Sunday, highest number since March 2020; FDX and UPS both upgraded to Outperform at Wolfe Research; FWRD upgrade from Outperform to Strong Buy at Raymond James following stellar 1Q21 results and a robust 2Q21 guide in the wake of one of the toughest PT environments they can recall

·     REITs; RBC upgraded WELL to Outperform and raised their target to $82 as they see near-term improvements from demographic tailwinds as well as the operating environment improving to pre-pandemic levels in 2023-24, and downgraded MPW to Sector Perform with a lower target of $23 as they prefer more aggressive stocks with shorter lease durations and the ability to quickly re-price their portfolio if inflationary trends accelerate more meaningfully; Evercore upgraded AVB to Outperform, double-upgraded ESRT to Outperform from Underperform, and downgraded ESS, VER to in-line; Compass Point downgraded CTO to Neutral with a $55 target

·     Utilities & Solar; WEC reported Q1 EPS $1.61 vs est. $1.47 on revs $2.69B vs est. $2.37B and said it expects to reach the top end of its FY21 EPS guidance range of $3.99-4.03; Wells upgraded PCG to OW with a $15.50 pt from $12 as the stock’s 15% YTD underperformance vs utilities now provided compelling risk/reward; Bank of America downgraded DTE to Underperform with a $131 target and upgraded FSLR to Buy with a $91 target as shares fell following the company’s earnings report last week despite its positive update and medium-term pricing outlook being one of the best; JPMorgan initiated NJR at Neutral with a $43 target as they see shares being fairly valued after its outperformance since November; Scotiabank upgraded ES to Sector Perform with an $87 pt; Roth downgraded REGI to Neutral as the steep appreciation in feedstock prices so far this year has compressed profits and brings the company’s profitability into question



·     BKR +5%; upgraded along with other oil services stocks HAL, WHD, NEX at Barclay’s and upgrade the Oilfield Services & Equipment sector to Positive as believe the sector is poised to outperform over the next several years

·     COIN +1%; seeing strength in several crypto leveraged stocks with big gains in Ethereum and Bitcoin cash, along with a jump in Bitcoin

·     FDX +4%; upgraded to Outperform along with UPS at Wolfe research, as Dow Transports touch another all-time trading high on economic recovery hopes

·     GTBIF +5%; American cannabis names outperform (CURLF, TCNNF, CRLBF) after Barron’s noted American cannabis companies have licenses to operate in states that allow weed under their laws, but the industry has been bedeviled by marijuana’s illegality under U.S. federal law – but now, events are breaking in favor of the American operators

·     MDP +5%; announced a deal to sell its Local Media Group to GTN in a deal valued at $2.7 billion. Under terms of the deal, Meredith will spin off its National Media Group to shareholders, who will receive $14.50 per share in cash and a 1-for-1 equity share in the company after the deal closes. https://on.mktw.net/3eR4JjY

·     MRNA +3%; said it had signed a deal with the international organization Gavi to supply 34 million doses of its Covid-19 vaccine to low- and middle-income countries in Q4 through the vaccine access group COVAX



·     EL -5%; as misses analysts’ estimates for Q3 sales, hurt by weak demand for its premium products (cosmetics and makeup products took a hit during the COVID-19 pandemic) – total net sales rose 16% to $3.86B, missing est. of $3.94B

·     PETS -2%; reports Q4 EPS and sales that fell short of consensus (34c/$71.68M vs. est. 40c/$74M)

·     SWKS -2%; extends last week after earnings decline, leading semis lower

·     TSLA -1%; initially on reports is said to delay starting production in its new Germany facility until the end of January; Tesla originally wanted to open the plant on July 1

·     TWTR -2%; extending last week earnings decline on disappointing sub views

·     VXRT -16%; shares slide after Q1 results missed estimates citing higher R&D costs and a fall in Inavir related royalty revenue which plunged over 80% to $0.51M, mainly due to a reduction in royalty revenue related to Inavir sales in Japan

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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.