Mid-Morning Look: November 22, 2021

Mid-Morning Look

Monday, November 22, 2021

Index

Up/Down

%

Last

 

DJ Industrials

253.77

0.71%

35,855

S&P 500

43.43

0.93%

4,741

Nasdaq

131.09

0.81%

16,188

Russell 2000

24.96

1.06%

2,368

 

 

The wild ride for U.S. stock markets continues to start the Holiday shortened week, with the S&P 500 and Nasdaq Composite each hitting fresh record highs as market momentum continues (day after day). The large cap Dow rises over 300 points or 1.9% or its biggest one-day pop since mid-October, while recent lagging Smallcaps are bouncing, with a rebound in the Russell 2000 index. Stocks got a boost this morning after the White House said President Biden intends to renominate Jerome Powell as Fed chair, Lael Brainard as Vice Chair noting Powell has provided steady leadership during an unprecedentedly challenging period, while saying Brainard has played a key leadership role at the Fed. Following the news, stocks extended gains, while gold extends losses, treasury yields and the dollar each advanced. Bank stocks got an early boost behind the pop in yields. Market remains euphoric, with Barron’s noting this weekend the S&P 500 hasn’t’ moved 1% or more in 25 trading days, the longest streak in 2 years – while rising 6% over that same period. No market fear amid situation in Europe after Germany’s chancellor Merkel calls the covid situation dramatic, arguing that stricter controls are required. On the economic calendar, better monthly October existing home sales.

 

Economic Data

·     Existing home sales for October reported at 6.34 mln unit rate (+0.8%), topping the consensus 6.20 mln and above the Sept 6.29 mln; U.S. oct inventory of homes for sale 1.25 mln units, 2.4 months’ worth; the national median home price for existing homes $353,900, +13.1% YoY

 

 

Macro

Up/Down

Last

 

WTI Crude

0.32

76.26

Brent

0.39

79.27

Gold

-36.70

1,817.40

EUR/USD

-0.0038

1.1250

JPY/USD

0.67

114.66

10-Year Note

0.058

1.594%

 

 

Sector Movers Today

·     Aerospace & Defense; BA active on Reuters report South Korea to allow operation of Boeing 737 MAX aircraft from Nov. 22; ASTR rises after the space-transportation company successfully completed its first commercial orbital launch for the U.S. Space Force; said the test payload, launched from its Kodiak Spaceport in Alaska, reached precise orbit in less than 10 minutes; in Aerospace & Defense, Cowen said the setup for lagging defense stocks is improving given escalating U.S.-China tensions and bipartisan support for FY22 DoD add-ons saying pure-play leaders NOC (PT to $420 from $412) & LMT ($365 from $350) should see improving growth

·     Casinos & Online Gaming; in casinos (WYNN, LVS, MGM), JPMorgan forecasts 2022 gross gaming revenue (GGR) in Macau will be just over 50% of the pre-pandemic level seen in 2019 off a 70% recovery in mass and a 24% recovery in VIP. Jefferies incrementally positive on the Macau outlook saying the Macau market could be close to bottoming with current local C-19 outbreaks in China falling to single-digit daily cases and a partial China-Hong Kong border opening possible before year-end; GENI designated as a “preferred programmatic marketing partner” by FanDuel in deal which will include official NFL data content and fan engagement solutions; Truist said October sports betting GGR down on high handle…but overall trends remain strong along w/ iLottery – firm favors omni-channel operators value plays like Buy-rated BALY and PENN

·     Auto sector; TSLA CEO Elon Musk said the Model S Plaid, the car-maker’s high performance luxury sedan, will be made available in China early next year; also in the EV sector, BLNK was downgraded to Market Perform at Cowen following a “torrid run” on renewed EV and EV charging euphoria in which BLNK is up +51% since the start of 4Q and now +1% YTD v. peers; UBER will allow users in Ontario, Canada, to place orders for cannabis on its Uber Eats app, marking the ride-hailing giant’s foray into the sector

·     Pharma movers; PFE, BNTX with follow-up data from phase 3 trial of their covid-19 vaccine support safety and high efficacy in adolescents 12 through 15 years of age; WSJ reported in a bid to take on well-established rivals, NVS is formulating a non-traditional sales strategy to promote the company’s cholesterol-busting therapy Leqvio; BMRN tgt raised to $120 from $103 at Guggenheim after VOXZOGO was approved in children 5 and older with achondroplasia and open growth plates; BGNE initiates first-in-human phase 1 clinical trial of investigational tyk2 inhibitor bgb-23339 – first patient has been dosed in a phase 1 clinical trial of bgb-23339; IMRA announces primary endpoint change in ardent phase 2b clinical trial of tovinontrine (imr-687) in sickle cell disease; AFMD reports results from Phase 1-2 study evaluating cbNK cells pre-complexed with Affimed’s innate cell engager AFM13 for CD30-positive lymphomas

 

Stock GAINERS

·     ASTR +28%; after the space-transportation company successfully completed its first commercial orbital launch for the U.S. Space Force; said the test payload, launched from its Kodiak Spaceport in Alaska, reached precise orbit in less than 10 minutes.

·     BCRX +5%; as RPRX said it acquired additional royalty interests in BCX9930 and Orladeyo from BCRX in transactions totaling $350 million in new funding for BioCryst

·     BLUE +3%; said the FDA has accepted for priority review its marketing application for Beti-cel, gene therapy for patients with Beta thalassemia, a blood disorder that reduces the production of hemoglobin

·     LVS +5%, WYNN +4%; JPMorgan forecasts 2022 gross gaming revenue (GGR) in Macau will be just over 50% of the pre-pandemic level seen in 2019 off a 70% recovery in mass and a 24% recovery in VIP

·     PRVB +18%; provided a regulatory update for the approval pathway of teplizumab in at-risk Type 1 diabetes saying it updated on its efforts to address U.S. FDA considerations cited in an FDA rejection letter.

·     TSLA +4%; another top gainer in the S&P 500 on continued momentum; CEO Elon Musk said the Model S Plaid, the car-maker’s high performance luxury sedan, will be made available in China early next year

·     VG +25%; to be acquired by ERIC for $6.2 billion, paying $21 per share (28% premium to Friday close), https://on.mktw.net/3xbmsLQ

 

Stock LAGGARDS

·     ATVI -2%; after the WSJ reported the CEO Bobby Kotick would consider stepping down if he isn’t able to make meaningful changes to the video game maker’s workplace culture.

·     BABA -1%; continued weakness in U.S. listed Chinese stocks (TCEHY, BIDU, JD)

·     GDDY -2%; said an unauthorized third party accessed 1.2m customers

·     PYPL -2%; extends weakness (in general for payments space, along with MA, Visa and others) after recent earnings

·     RIOT -7%; as names leveraged to Bitcoin extending last week declines on volatile moves in the crypto sector (Bitcoin down over 15% in last week after massive run higher)

·     VTR -3%; downgraded to Neutral at SMBC Nikko as concluded a refresh to forecast into 2022 needed a significant reset based on an adjusted 4Q21 quarterly run-rate.

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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.