Mid-Morning Look: November 18, 2021

Mid-Morning Look

Thursday, November 18, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are weaker overall, with large cap tech again keeping major averages afloat, helped today by strength in semiconductors (again) as NVDA blowout quarterly beat boosts the semi-index (SOX) to yet another all-time high, while names like AMZN, AAPL, MSFT, GOOGL, AMD extend gains (keeping the S&P and Nasdaq from falling). Underlying market metrics very “soft” however, as breadth notably weak (Nasdaq decliners leading advancers 2-1 ratio for a second day), while “reopen” sectors such as travel, cruise and casinos seeing sharp selloffs as a surge in Covid cases in Europe weighs on sentiment. Rates were slightly higher, with the 10-year Treasury yield up 1 basis point to 1.61% 9early (now back below 1.65) after the Philly Fed manufacturing index for November came in much stronger than expected and in-line jobless claims. Energy stocks slide with oil prices on track to decline for a 3rd straight week while the U.S. dollar is flat overall after hitting highest levels since June 2020 this week on rising rate hike expectations. Very few pockets of strength in markets (EV names lower, travel and leisure, energy, housing, solar, A&D, China names, restaurants, and cannabis all down), as technology and consumer discretionary rise following better earnings results today (M, KSS) and this week (HD, LOW, TGT).


Economic Data

·     Weekly jobless claims fell to 268K from a slightly upwardly revised 269K prior week and above the 260K estimate; the 4-week moving average fell to 272,750 from 278,500 prior; continued claims fell to 2.080M from 2.209M prior (est. 2.12M); the U.S. insured unemployment rate fell to 1.5%

·     Philadelphia Fed Business Outlook for Nov jumps to 39.0 (highest since April when it was above 50, which was a 48-year high), topping the 24.0 estimate

·     Oct leading economic indicators +0.9 pct (consensus +0.8 pct)







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer Staples; COTY slightly edged up 2022 EPS guidance and said it is aiming to grow revenue by 6% to 8% annually, after adjustments, through fiscal 2025 during its investor day event; HAIN upgraded to Outperform from In Line at Evercore/ISI and raise base case target to $48 after a recent meeting with the company; OTLY on November 17, 2021, co announced that it has initiated a recall for a limited selection of products in Sweden; separately, OTLY upgrade to Overweight wat Morgan Stanley with $14 tgt despite lower estimates, as valuation has compressed too much; KHC announces offering of 30.6M shares of common stock for holders; shares of Sweetgreen (SG) 13M share IPO priced at $28.00

·     Auto sector; Electric vehicles fare poorly in the latest reliability study from Consumer Reports, with Tesla Inc. and its battery-powered lineup finishing second to last for the second-straight year. Only Ford Motor Co.’s Lincoln division was worse, the publisher said Thursday. But there’s a twist: It’s not the battery or motor that makes EVs less reliable. It’s the glitchy new gadgets (shares of RIVN, NKLA, FSR, among movers on report); TSLA is recalling 7,600 vehicles in the United States because the driver’s air bag cushion may tear during deployment, the National Highway Traffic Safety Administration said

·     Healthcare Services; TDOC introduced guidance at its Investor Day today, seeing FY22 revenue ~$2.6B vs est. $2.58B and is targeting annual sales growth of 25-30% from 2021-24 and greater than $4B in revenue in 2024; WOOF Q3 adj EPS 20c vs est. 18c on revs $1.4B vs est. $1.37B, comps +15% above est. +9%, raised FY21 EPS and rev outlooks; JPMorgan upgraded EVH to OW with a $37 PT as they see a clear path to 20% revenue growth next year and cheap valuation compared to both Healthcare IT peers; Cowen named CNC their Top Value pick in managed care with 40-60% upside on the belief in a path to higher sustainable margins and also reiterated HUM at Outperform as they see a discount of ~15% to the S&P; CVS announced steps to accelerate its omnichannel health strategy, management changes, new store formats beginning Spring 2022, closures of ~300 stores over the next 3 years, and expects an impairment charge in Q4 between $1-1.2B and 56-67c of EPS, lowering its FY EPS view to $5.46-5.67 from $6.13-6.23 while maintaining their adj EPS range $7.90-8; CLOV upsized its secondary offering to 52.17M shares from 35M and priced the offering at $5.75 for a total of $300M; BMO lowered their target on AVAH to $12 from $17 but still sees accelerating growth



·     ALNY +5%; rises following a Bloomberg report that the co may be a potential target for NVS as investor push for the drugmaker to make an acquisition https://bit.ly/3oC6si9

·     BBWI +5%; 3Q EPS of $0.92 beat consensus of $0.60 on sales and gross margin as sales decreased 1% vs 2020 (+53% vs. 2019), beating estimate due to stronger demand and strategic price increases/better guide

·     CRDF +20%; said PFE made a $15 million equity investment in the co, as purchased 2.4M shares for $6.22 per share

·     DRNA +78%; to be acquired by NVO for $38.25 per share in cash, in deal valued at $3.3B, an 80% premium from yesterday

·     M +17%; Q3 adj EPS $1.23 crushed est. $0.31 on sales $5.44B vs est. $5.2B, comp sales +37.2%, raised FY guidance for adj EPS view to $4.57-4.76 from $3.41-3.75 and revenue to $24.12-24.28B from $23.55-23.95B

·     NVDA +9%; reported a strong beat-and-raise quarter, with Gaming growing 42% Y/Y (and 5% sequentially) and Data Center growing 55% (and 24% sequential growth) – overall, sales of $7.1B, GMs of 67% and EPS of $1.17 exceeded expectations and the prior consensus outlook

·     RBLX +7%; extending gains for a 6th straight day, up another 7% (rose over 7% the last 2 days as well) – in follow thru after analyst day this week

·     RCUS +15%; after GILD exercises options to its anti-TIGIT program (domvanalimab and ab308), etrumadenant (a2a/a2b adenosine receptor antagonist) and quemliclustat (small molecule cd73 inhibitor) with Arcus to receive option payments totaling $725 million

·     SONO ; announced that its Board has authorized a new $150mn share repurchase after a Q3 EPS beat an in-line revs result while FY22 Ebitda guidance mid-point above ests on stronger rev growth of 12%-16% YoY

·     VSCO +9%; 3Q EPS of $0.81 beat consensus of $0.69 on better margins which were 39.2%, 100bp better than expected due to significant merchandise margin improvement driven by strong product assortment



·     AFRM -7%; to offer $1.25 bln of convertible senior notes due 2026

·     ATVI -3%; downgraded to Neutral from Overweight at JPMorgan as think recent negative headlines introduce a significant amount of uncertainty into this story

·     BABA -10%; Q3 revenue rose 29% to 200.69 bln yuan ($31.44 bln) in the qtr, below est. of 204.93 bln yuan and forecast 20% to 23% growth in fiscal 2022 revenue, short of the 27% estimate

·     CSCO -9%; after earnings guidance disappoints, reporting Q1 sales of $12.90B (8.1% y/y) vs. $12.98B consensus and lowered F2Q22 guide to 4.5-6.5% y/y growth vs. cons at 7.4% while maintaining FY22 guide at 5-7%

·     KHC -3%; announces offering of 30.6M shares of common stock for holders

·     PENN -5%; among worst performers in S&P 500 as casino, gaming names a big drag (WYNN, CZR)

·     RIVN -10%, LCID -10%; Electric vehicle names seeing profit taking after recent surge

·     ROKU -3%; extends recent declines following cautious analyst comments

·     VIPS -14%; slides on earnings miss, while revs topped ests slightly



·     AG Mortgage (MITT) 7M share Secondary priced at $10.25

·     Certara (CERT) 10M share Secondary priced at $31.00

·     Clover Health (CLOV) 52.17M share Secondary priced at $5.75

·     Definitive Healthcare (DH) 11M share Secondary priced at $36.00

·     DoubleVerify (DV) 8M share Secondary priced at $31.25

·     Northern Oil and Gas (NOG) 10M share Spot Secondary priced at $20.00

·     Sweetgreen (SG) 13M share IPO priced at $28.00

·     Victory Capital (VCTR) 4M share Secondary priced at $34.00

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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.