Mid-Morning Look: November 16, 2021

Mid-Morning Look

Tuesday, November 16, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open higher, taking out yesterday’s best levels following another round of stronger-than-expected economic data as retail sales top views, along with a jump in import and export prices and industrial production. Retail also seeing big gains following beats by Home Depot earnings on better comp sales ahead of a busy week of retail earnings, while WMT slips despite its top/bottom line beat. Treasury yields spiked to highs of 1.635% for the 10-yr before paring gains while the dollar remains at highest levels since July of 2020. In Washington, President Biden spoke with Chinese leader Xi Jinping in a three-hour call. Optimism early in markets heading into the holiday season, with major averages again not far off recent all-time highs despite the recent spike in inflation data, prompting calls for the Fed to raise rates sooner than anticipated (they have already begun paring back monthly asset purchase starting this month to the tune of $15B less per month). Bitcoin and other crypto assets falling early. Once again, market resiliency remains astounding with no fear as the VIX lower again today.


Economic Data

·     Retail sales for October rose +1.7% MoM, topping the +1.0% consensus and +0.8% prior month reading while Retail Sales ex-autos strong up +1.7% MoM, topping the +0.9% estimate (prior month revised to +0.7% from +0.8%); ex-Auto & Gas: +1.4% MoM vs. est. +0.8%; Oct retail sales ex-gasoline +1.5% vs. Sept +0.6%

·     Import Prices for October rise +1.2% vs. est. +1.0% (Sept unchanged at +0.4%); while U.S. Oct export prices rise +1.5% vs. est. +0.9% (Sept +0.4% vs. prior +0.1%); Oct year-over-year import prices +10.7%, export prices +18.0%

·     Industrial Production for October rose +1.6%, topping the consensus estimate of +0.8%; Capacity Utilization +1.2% at 76.4% vs. est. 75.8%

·     Sept Retail inventories ex-autos revised to +0.7% from +0.6%; Sept inventory/sales ratio 1.26 months’ worth vs Aug 1.26 months; Sept business inventories +0.7% 9in-line w ests); Sept business sales +0.9% vs Aug +0.1%







WTI Crude















10-Year Note





Sector Movers Today

·     Transports; CAR was downgraded to Under-weight from Equal-weight at Barclay’s while raise tgt to $217 following the short-squeeze induced run-up post earnings, causing valuations to get overstretched even on our optimistic forecasts; XL reported Q3 revs of ~$3.2M which was in-line with management’s pre-announced guidance earlier this month. Revenue was down ~13% sequentially and down ~49%; in airlines, ALGT upgraded to Buy from Neutral and raise tgt to $250 from $245 at Goldman Sachs while the firm downgraded LUV to Neutral from Buy and cut tgt to $59 from $63; ODFL downgraded from Buy to Neutral at UBS as its strong growth story appears to be fully reflected after an 84% move up in the stock in 2021TD (vs the S&P 500 +25%)

·     Retailers; WMT 3Q adj EPS $1.45 vs est. $1.40 on revs $140.5B vs est. $135.6B, Walmart US comps ex fuel +9.2%, Sam’s comps ex fuel +13.9%, total US comps ex fuel +9.9%, e-comm sales +8%; sees FY adj EPS around $6.40 vs est. $6.33; COOK posted a top- and bottom-line beat, with strong sales offset by a GM miss; Cowen downgraded POSH to Market Perform with a $22 PT from $42 as they expect the stock could be range-bound with a lack of positive catalysts in the near term, and they separately raised FL Q3 estimates and PT to $68 from $61 ahead of results 11/19 and view consensus estimates as conservative at DKS (reports 11/23), LULU (12/8), UAA, DECK, and PUMAB Riley upgraded URBN to Buy and upped their PT to $45 from $36; Wells expects for reports to continue the theme of supply chain headwinds contributing to top-line constraints into the holiday season with rising costs, but they see potential downward revisions at names like GPS, VSCO, BURL, ROSTetc. as many brands have already reported better prints, and their top picks remain SIG, BBWI, TDUP, FTCH (“supply chain” bucket), GPS and CPRI (“too cheap” bucket); ONON posted a quarterly beat in its first earnings as a public company with Q3 sales CHF218M (+67.6%) vs est. CHF183.1M, DTC sales +93% YoY

·     Casinos, Gaming, Lodging & Leisure sector; PTON commenced an underwritten public offering of $1B in shares *priced at $46 per share); IGT released details from investor day which included realigning Digital & Betting into a new legal entity; expected to be completed within 12 months, supporting evaluation of a potential separate public listing of the business and implementing $300M multi-year share repurchase program (first in its history); DKNG announced a collaboration with BHCMC, LLC, a subsidiary of BUKS, manager of Boot Hill Casino & Resort; GMBL slides after 1Q EPS ($0.03) vs est. (0.35) on revs $16.4Mm vs est. $16.4Mm, adj EBITDA ($2.7Mm) vs est. ($5.9Mm); sees FY net revs $100Mm vs est. $95Mm; LTRY Q3 EPS $0.24 on revs $32.2Mm vs est. $22.5Mm, trans/user 12.4 vs 11.2

·     Internet; U.S.-listed shares of Chinese cos (BABA, BIDU, JD, DIDI) active as investors appeared to cheer U.S. President Joe Biden and Chinese leader Xi Jinping’s three-hour meeting; JMIA shares slip early after posting larger Q3 loss as operating loss rose 93% YoY to $64M, while quarterly revs of $42.7M topped estimates; NTES Q3 revs of 22.2 bln yuan ($3.48 bln) beats est. 21.17 bln yuan ($3.33 bln); misses profit estimate, reporting earnings of 5.75 yuan per share (90 cents/share) vs est. 5.97 yuan per share; MELI 1M share Secondary priced at $1550.00; SE rises on better guidance as now expects FY e-commerce revenue to be between $5B-$5.2B from prior view of $4.7B-$4.9B after Q3 revenue more than doubles to $2.69B



·     AXON +7%; Q3 YoY rev growth of 39% to $232M topping the Street estimate of $201M, raises 2022 revenue outlook to $1 billion and sees FY revs. high end of $840M-$850M vs. est. $843.6M

·     HD +4%; Q3 EPS $3.92 vs. est. $3.40; Q3 revs $36.82B vs. est. $35.01B; Q3 comp sales rose 6.1% vs. est. 2.4% and comparable sales in the U.S. increased 5.5% vs. est. 2.3%; Q3 average ticket $82.38; gross margin declined to 34.1% from 34.2%

·     LCID +5%; despite its misses on the top and bottom lines as its reservations totaled 13k at the end of Q3 but have jumped over 30% to more than 17k since the end of the quarter

·     PLBY +16%; reported a strong quarter, above consensus on revenue and adjusted EBITDA; Q3 revs rose 67% to $58.36M vs. est. $57.66M; DTC revs grew 139% YoY to $36.0M

·     RIVN +5%; shares extend gains after IPO last week, rising a 4th straight day

·     RXT +13%; posts a Q3 beat, Q4 bookings that position Rackspace to achieve its full year $1b target (Q4 rev guidance in-line)

·     SE ; on better guidance as now expects FY e-commerce revenue to be between $5B-$5.2B from prior view of $4.7B-$4.9B after Q3 revenue more than doubles to $2.69B



·     BODY -24%; shares tumble, downgraded by several analysts disappointing series of updates which materially reduce visibility into 2022E, with nearly all the top-line Q3 shortfall in Nutrition and Connected Fitness

·     CLOV -10%; shares decline following its 35M share stock offering

·     DM -15%; posted larger-than-expected Q3 loss of (-$0.26) vs. est. loss (-$0.09); Q3 revs $25.4M vs. est. $27.11M as Q3 net loss of $66.9M, including $15.2M of in-process R&D assets related to acquisitions

·     GFF -13%; after quarterly results

·     JMIA -15%; after posting larger Q3 loss as operating loss rose 93% YoY to $64M, while quarterly revs of $42.7M topped estimates

·     MOLN -31%; said a planned futility analysis of ensovibep in an ongoing clinical study hasn’t met the thresholds required to continue enrollment of adults with Covid-19 in a hospitalized setting

·     NCLH -6%; top decliner in the S&P down along with AAL, CCL, LYV as reopen related names/sectors among worst performers early (cruise, airlines)

·     TALK -37%; after weaker Q3 earnings and management shake-up as co-founder Oren Frank steps down from CEO role and from board, while Co-founder and head of clinical services Roni Frank also steps down from role/board (shares downgraded at both Baird and Citigroup today

·     WMT -2%; 3Q adj EPS $1.45 vs est. $1.40 on revs $140.5B vs est. $135.6B, Walmart US comps ex fuel +9.2%, Sam’s comps ex fuel +13.9%, total US comps ex fuel +9.9%



·     Apellis (APLS) 8.75M share Secondary priced at $40.00

·     MercadoLibre (MELI) 1M share Secondary priced at $1550.00

·     Optinose (OPTN) 25M share Secondary priced at $1.60

·     SoFi Technologies (SOFI) 50M share Secondary priced at $21.75

·     Stepstone Groups (STEP) 4.5M share Secondary priced at $52.35

·     Sun Communities (SUI) 3.5M share Secondary priced at $185.00

·     Workiva (WK) 1.3M share Block priced at $152.00

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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.