Mid-Morning Look: May 14, 2021

Mid-Morning Look

Friday, May 14, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks again in rally mode, with major averages paring weekly losses as Treasury yields remain subdued and investors overlook another round of weaker economic data point as monthly retail sales came in well below economist expectations and University of Michigan confidence showed a steep decline. Overall better trading action in growth stocks after a dreadful week, while energy stocks rebound after lagging on Thursday behind oil declines. Reopen stocks (travel, leisure, retail, restaurants) extend gains after the CDC said late yesterday that fully vaccinated people do not need to wear masks outdoors and can avoid wearing them indoors in most places. Bitcoin and other crypto names also staging a massive comeback after plunging Thursday, with Ethereum leading and Bitcoin moving back above the $50K level (after $47K intraday lows yesterday). Worries about a prolonged period of inflation sparked a volatile week of trading after April CPI and PPI data points came in well above expectations and showed the highest levels in over a decade, but a parade of Fed speakers this week has continued to press the point that higher prices are transitory vs. seeing a long-term situation. Wall Street’s major indexes were set for their steepest weekly drop since February (S&P 500 had a weekly loss of about 2.8%; the Nasdaq has lost almost 5% this week and is down about 7% from its record high close on April 26 – all as of Thursday close) – but are looking much stronger today.


Economic Data

·     Import prices MoM for April reported at 0.7% vs. est. +0.6% and export prices rise 0.8% vs. est. 0.6% (both down from higher March figures); April year-over-year import prices +10.6%, export prices +14.4%

·     Retail sales for April unchanged vs. est. up +1.0% (March revised to 10.7% from 9.7%) and retail sales ex-autos MoM fell -0.8% vs. est. +0.7% (March +9.0% vs. est. +8.4% prior)

·     U.S. April industrial output +0.7% vs. est. 1.0% (March +2.4% vs. prior +1.4%); Capacity utilization rate 74.9% vs. est. 75% (March 74.4%, in-line with prior); April motor vehicle assembly rate fell to 9.03 mln units/yr from March 9.46 mln units/yr

·     University of Michigan surveys of consumers sentiment prelim May 82.8 well below consensus 90.4 and April 88.3; consumers expectations index prelim May 77.6 below consensus 85.0 and final April 82.7; current conditions index prelim May 90.8 (consensus 99.6) vs final April 97.2







WTI Crude















10-Year Note





Sector Movers Today

·     Communication & Networks; PLT plunges after downside guidance due to component shortages offset the fiscal Q4 beats (sees Q1 revs $410-430M below consensus: $438.76M and PS $0.35-$0.55 below est. $0.79); VVNT upgraded to Buy at Goldman Sachs after the co reported solid results all-round with a beat on subscribers, revenue, margins, and cash flow vs. their forecasts; ADTN was upgraded to Buy from Hold at Argus noting they posted double-digit revenue growth in Q1, while non-GAAP EPS bounced back from a year-earlier loss

·     Healthcare Services; OSCR reported its first quarter post IPO, with slightly better net premium revenues, better membership growth aided by the Special Enrollment Period (SEP) and better admin expense ratio; APR beat and improving outlook drove another increase in top and bottom-line guidance as sales of $275 were up +2.2% and topped the high end of guidance by $3M; CRL tgt from $340 to $360 and IQV from $255 to $260 at KeyBanc saying leading indicators for the CRO space continue to improve exiting 1Q21; GDRX posts Q1 adj EPS of 7c (in-line) with revs slight miss, as results impacted by fewer physician visits/therapy starts (guides Q2 revs above)

·     Auto sector; FSR rises after saying it is working with Hon Hai Technology Group, or Foxconn, for the joint development and manufacturing related to Project PEAR, which aims to produce a new breakthrough electric vehicles; QS announced that it has entered into an agreement with Volkswagen to select the location of their joint venture, or JV, solid-state battery pilot-line facility by the end of 2021; BLNK reports mostly in-line quarterly results as EV stocks in general seeing bounces after a rough week of selling pressure; autos a little bounce after Reuters reported US senators to unveil proposal for $52B domestic semiconductor investment (the lack of chips has effected auto production for several OEMs)

·     Bitcoin news; COIN reported Q1 EPS $3.05 vs. est. $3.09 on revs $1.8B vs. est. $1.81B, 56M verified users, 6.1M monthly transacting users, and Q1 assets on platform $223B that represent 11.3% crypto asset market share; in FY 2021, expect technology and development expenses and general and administrative expenses between $1.3B-$1.6B; and Piper initiated coverage on the stock at OW with a $335 pt; Dogecoin rallied after Coinbase said it was trying to accelerate its listing of the token to the next 6-8 weeks and Elon Musk tweeted that he was working with the token’s developers to improve transaction efficiency a day after he said Tesla won’t accept Bitcoin for payments anymore because of environmental concerns; NCTY signs three Chia (XCH) cryptocurrency mining machine purchase and cloud service leasing agreements with three unrelated vendors, with the total contract sum of more than $5.7M

·     Consumer Staples; TSN said it would sell its pet treats business for $1.2 billion to GIS, about 11 years after the foods company entered the pet treats business; KMB upgraded to Equal Weight from Underweight at Wells Fargo and raise tgt to $140 as don’t see much case for the stock to keep trading lower; in dining space, the monthly retail sales report showed the food services & drinking places category showed a 116.8% Y/Y gain from a year ago and a 3.0% sales gain from March to stand out as one of the stronger categories for the month



·     CCL +5%; cruise lines all higher by around 4% as reopen stocks again leading market gains after CDC mask guidance restrictions eased late yesterday

·     DASH +13%; upgraded by two analysts (Truist and Wells) after earnings saying they think beat & raise is large enough to offset the rotation to ‘value’ that has afflicted ‘growth’ stocks YTD

·     DDS +24%; said it swung to a profit in the first quarter of $158.2M compared to a loss of $162M the same period a year ago

·     FSR +10%; said it is working with Hon Hai Technology Group, or Foxconn, for the joint development and manufacturing related to Project PEAR, which aims to produce a new breakthrough electric vehicles

·     FTCH +10%; Q1 beats estimates, Q2 guidance above consensus, FY guidance upgraded & implies acceleration on 2y stack for the rest of 2021 said Bank America

·     PLUG +14%; after restating its financial statements for fiscal years 2018 and 2019 and its quarterly filings for 2019 and 2020 and filed Form 10-K for the year ended Dec. 31, 2020, with the U.S. Securities and Exchange Commission.

·     PXD +3%; overall energy complex broadly higher, helping pace the gains in the S&P 500 after selling pressure this week (EOG, APA, MRO, COP, PXD advance

·     SNOW +6%; upgraded from Neutral to Buy at Goldman Sachs with $275 tgt saying it is well positioned to capitalize on a generational shift of data and analytics to the cloud (notes has corrected ~34% compared to an ~11% decline across their broader software coverage)

·     STX +5%; as chip related stocks seeing a bounce after selling pressure this week



·     ACB -3%; after posted Q3 sales 21% below consensus (C$55.2M vs. est. C$68.4M) citing impact of coronavirus-induced restrictions in Canada (shares downgraded to Sell at Canaccord)

·     DIS -4%; posts a big q1 EPS beat (79c vs. est. 27c) but Q1 revs fell -13.3% to 415.61B, missing the $15.87B estimate and said average monthly revenue per paid subscriber for streaming service “Disney+” fell to $3.99 from $5.63

·     GDRX ; posts Q1 adj EPS of 7c (in-line) with revs slight miss, as results impacted by fewer physician visits/therapy starts (guides Q2 revs above) – reverses earlier losses

·     PLT -24%; slides after downside guidance due to component shortages offset the fiscal Q4 beats (sees Q1 revs $410-430M below consensus: $438.76M and PS $0.35-$0.55 below est. $0.79)

·     NEWR ; cautious analyst comments after earnings as BMO said think there is risk in near-term go to market execution with direct sales reps and channel partners (reverses earlier losses)


·     Data Storage (DTST) 1.6M share IPO priced at $6.75

·     Digital Brands (DBGI) 2.41M share IPO priced at $4.15

·     Praxis Precision Medicines (PRAX) 5M share Secondary priced at $18.25

·     Save Foods (SVFD) 1.091M share Secondary priced at $11.00

·     Vera Therapeutics (VERA) 4.35M share IPO priced at $11.00

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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.