Mid-Morning Look: September 07, 2021

Mid-Morning Look

Tuesday, September 07, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks kick off the week mostly lower as the S&P 500 and Dow Jones Industrial Average dip, while the Russell 2000 Smallcap index outperforms slightly as traders return from the three-day holiday weekend. Gold prices quick roll to lows down -1.75% under $1,800 an ounce, as Treasury yields extend gains, with the 10-year moving to highs up above 1.38%. The recent uptick in yields has not yet dented large cap tech with NFLX, TSLA, AAPL, AMZN and GOOGL again rising. News flow quiet along with volumes on this holiday shortened week that will be dominated by research conferences this week. Bitcoin prices in the news this weekend after El Salvador became the first country in the world to declare the cryptocurrency as legal tender. Stocks are coming off another winning week last Friday, rising despite a weaker nonfarm payroll report as dovish commentary from Fed Chair Jerome Powell at the Jackson Hole Symposium in late August has helped to support stocks recently. The S&P 500 posted its latest closing high last Thursday, while the Nasdaq ended at a record high on Friday.







WTI Crude















10-Year Note





Sector Movers Today

·     Pharma movers; Morgan Stanley downgraded shares of JNJ, MRK and AMGN to equal-weight from overweight and VRTX to underweight – sys for JNJ, stock has run up in recent months and we see limited news flow in the mid-term to drive JNJ higher; for AMGN more work needs to be done to improve the growth outlook after the mid-decade LOEs of Prolia, XGEVA, and Evenity and for VRTX, competitive concern (despite the high bar for success) is likely to keep VRTX from appreciating and negatively impacts the risk/reward; PLRX reports positive interim results from phase 2a pet imaging clinical trial in patients with idiopathic pulmonary fibrosis; HZNP said the first patient has been enrolled in a Phase 4 trial evaluating the efficacy and safety of Tepezza for the treatment of chronic (inactive) Thyroid Eye Disease; TMDX said the U.S. FDA has granted premarket approval of its OCS Heart System for use with organs from donors after brain death

·     Semiconductors; CRUS upgraded to Overweight from Equal Weight at Barclay’s with a price target of $100, up from $95 as sees a path to further content gains AAPL over the next several years for Cirrus as well as Android opportunities in both Audio and power; QCOM said it will supply a key computing chip for the digital dashboard in a new Renault SA electric vehicle – Reuters; Global semiconductor sales were up 29% on the year in July to $45.4B, a 2.1% increase on the prior month, according to new data from the Semiconductor Industry Association

·     Utilities & Solar; in solar, LNT downgraded to Neutral from Buy on valuation at Guggenheim with shares now trading at a slight premium to our high-quality peer group, and outperforming UTY by over 900bps YTD, while upgraded SO to Buy from Neutral based on our view that Unit 3 HFT and clarity into the ongoing NRC special investigation represent key NT clearing events; BLDP and Quantron AG announce a strategic partnership for the development of hydrogen fuel cell electric trucks; AMZN and Mitsubishi to set up 450 solar power plants in Japan- Nikkei reports; WATT formed a partnership with TAGnology to bring over-the-air wireless power solutions to European customers; SPI announced the launch of a new Solar4America Amazon store.

·     Casinos, Gaming, Lodging & Leisure sector; DOOO upgraded to Outperform at BMO Capital based on a positive outlook for the powersports market, continued strong innovation, a reclamation of market share gains in the key off-road vehicle market after several quarters of decline, and positive initial dealer response to the new Sea-Doo Switch Pontoon; GENI signed a new multi-year agreement with CZR; AMC announced a new Labor Day admissions-revenue record eclipsing the previous admissions-revenue record set during Labor Day weekend in 2013; Morgan Stanley said their U.S. travel agents survey shows a clear deterioration in cruise booking volumes alongside a spike in cancellations, and to a lesser degree weaker pricing, driven predominantly by concerns about the delta variant and stricter protocols (CCL, NCLH, RCL)



·     CRUS +2%; upgraded to Overweight from Equal Weight at Barclay’s with a price target of $100, up from $95 as sees a path to further content gains AAPL over the next several years for Cirrus as well as Android opportunities in both Audio and power

·     CXP +15%; announced an agreement to be acquired by funds managed by Pacific Investment Management Co. LLC (PIMCO) in a deal valued at $3.9 billion. PIMCO will pay $19.30 for each share outstanding, a 16.7% premium https://on.mktw.net/2WVSi1A 

·     ELY +1%; raised its revenue outlook, citing the mitigation of supply chain issues and a better-than-expected performance of its Topgolf business as raises Q3 revenue view $850M-$860M from $775M-$790M and boosts adjusted EBITDA view $105M-$110M from $51M-$58M.

·     MTCH +6%; will replace PRGO in the S&P 500

·     NFLX +2%; tgt raised to street high $780 at Atlantic Equities as expects Netflix to add over 100 million incremental subs by end of 2025

·     NVAX +5%; after Takeda Pharmaceutical Co says Japanese government will purchase 150 mln doses of the COVID-19 vaccine it will produce using NVAX formula

·     RNXT +25%; receives a new 510(k) clearance from the FDA for its proprietary RenovoCath Delivery System

·     TSLA +3%; outperformance in large cap tech early (NFLX, AMZN, AAPL, GOOGL)



·     BA -1%; said one of its biggest customers Ryanair ends jet order talks over a purchase of 737 MAX 10 jets worth tens of billions of dollars due to a price dispute

·     BMRN -5%; after the U.S. FDA has placed a clinical hold on early- to mid-stage study testing BMRN’s experimental gene therapy in patients with phenylketonuria, a genetic disease that manifests at birth and can cause developmental disabilities

·     MRK -2%; among top decliners in the Dow along with JNJ, AMGN after Morgan Stanley downgraded a handful of large cap pharma names

·     PPG -2%; provides sales update and reports worsening supply disruptions and customer parts shortages/sees 3q sales volumes lower by $225M to $275M

·     SEDG, ENPH -1%; solar names weak as SMA Solar said it expects sales between EU980M-EU1.03B, down from prior view of EUR1.075B-EU1.175Band sees 2021 ebitda between EU50M-EU65M from prior EU75M-EU95M (more with guidance)

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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.