Mid-Morning Look: September 23, 2021

Mid-Morning Look

Thursday, September 23, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks extend this week’s rebound following Monday’s sharp decline, as even a hawkish Fed meeting yesterday fails to dent investors optimism as most major averages are now actually higher on the week despite the plunge Monday on China real estate developer Evergrande’s debt crisis. Fear has all but disappeared in just a matter of days as the CBOE Volatility index plunges below 19 after hitting highs around 29 on Monday. Investors also largely brushing off concerns over the Federal Reserve’s plans for tapering and rate hike timetable also moved up, while forecast raises from Accenture and Salesforce added to the positive mood in tech. Financials and Energy also among leaders in the S&P 500, with banks rising on the “hawkish” Fed comments yesterday (but not hurting broader stock markets) and energy as oil prices on track for highest close since early July. Yesterday, Fed officials indicated that they see interest rates seen rising to 1% in 2023, faster than projected by the Fed in its projections in June, and then to 1.8% in 2024.


In other news, Chinese authorities are asking local governments to prepare for the potential downfall of China Evergrande Group, the WSJ reported citing officials familiar with the discussions, signaling a reluctance to bail out the debt-saddled property developer while bracing for any economic and social fallout from the company’s travails. In Washington, the House is supposed to vote as soon as Monday to clear the $550 billion infrastructure measure, but the $3.5 trillion bill, which would include a range of tax increases, is stalled in the Senate over objections from moderate Democrats.


Economic Data

·     Weekly Jobless Claims rose to 351,000 in latest week from upwardly revised 335K (from 332k) and higher than the consensus of 32,000; the 4-week moving average fell to 335,750 in latest week from 336,500 prior week, continued claims rose to 2.845M from 2.714M prior and the U.S. insured unemployment rate rose to 2.1% from 2% prior

·     Aug. U.S. PMI Composite Flash 54.5 vs. 55.5 consensus and 55.4 prior, while the Manufacturing PMI at 60.5 vs. 60.8 consensus and 61.1 prior and Service PMI 54.4 vs. 55.1 est. and 55.1 prior

·     Leading Index Change MoM for Aug, Actual 0.9% (Forecast 0.7%, Previous 0.9%)







WTI Crude















10-Year Note





Sector Movers Today

·     Aerospace & Defense; at Goldman Sachs, NOC upgraded to Neutral from Sell ($350 tgt) and raised GD to neutral from sell with $176 tgt; downgraded LHX to sell ($207 tgt), WWD to sell ($102 tgt), MRCY to neutral ($52 tgt) and LMT to neutral ($402 tgt); also upgraded ERJ and BDRBF to Buy – said an air travel recovery is occurring, but it is uneven. Despite that, many airlines are choosing to re-fleet. Business jet fundamentals are very strong. The defense market growth rate is decelerating; JOBY positive mention at Morgan Stanley pointing to the long-term potentially disruptive nature of eVTOL aircraft in supporting the firm’s Bull case valuation range of $45 to $60 per share; POWW awarded U.S. Department of Defense contract for the development and manufacture of signature-on-target rounds

·     Semiconductors; latest analysis of the NAND Flash market from TrendForce finds that shipments have been below expectations for consumer electronics such as smartphones, Chromebooks, and TVs during this second half of the year. At the same time, demand remains sluggish for retail storage products. NAND flash market will see falling quotes and 0-5% QoQ declines in contract prices for 4Q21, says TrendForce (impact for MU, STX, WDC pt cut from $150 to $135, maintains Positive at Susquehanna saying although recent checks suggest a flattening in blended DRAM/NAND ASPs into YE21 and early 2022, they have decided to reduce estimates to reflect a worst case scenario of down low single digit in Nov-Q and down mid-single digit in Feb-Q; AMD tgt raised to $110 at Piper saying they are comfortable with the company’s ability to procure additional supply in the back half of 2021 and all of 2022 to support strong growth

·     Pharma movers; for PFE and BNTX, the FDA has granted Emergency Use Authorization for a booster dose of their COVID-19 vaccine for those 65 and older, those who work in healthcare settings, and adults at high risk of severe COVID-19. The authorization includes people whose “frequent institutional or occupational exposure to SARS-CoV-2 puts them at high risk of serious complications of COVID-19.” In cannabis space, CURLF agreed to acquire 100% of the outstanding equity interests in Bay, d/b/a Cure Pennsylvania for a total consideration of $90M in cash/stock; NOVN highlights safety data from late-stage SB206 molluscum contagiosum trial; AMHC rises after the SPAC’s shareholders approved the previously announced business combination with Jasper Therapeutics.



·     ACN +1%; Q4 EPS $2.20 vs. est. $2.19; Q4 revs $13.4B in-line; forecasts Q1 revenue above estimates as it anticipates stronger demand for its cloud and security services; sees Q1 revs $13.9B-$14.35B vs. est. $13.51B; raises dividend 10%, approves $3B of additional buyback

·     BB +13%; reported a better-than-expected loss and topped quarterly revenue estimates as Q2 EPS ($0.06) vs est. ($0.07) on revenue $175M vs est. $163.5M

·     CRM +5%; raises FY22 revenue forecast to a range of $26.25B-$26.35B, up from its previous outlook of $26.2B-$26.3B and expects fiscal year 2023 revenue of $31.65B-$31.80B, above analysts’ expectations of $31.47B and guides FY23 op margins to 20.0% vs FY22 guide 18.5%

·     DRI +7%; reported Q1 EPS that beat expectations, announced a new buyback program of $750M and boosted its year outlook for EPS, sales, and comp sales

·     NVAX +10%; and its partner Serum Institute of India have applied to the World Health Organization for an emergency use listing of Novavax’s COVID-19 vaccine, the company said

·     RJF +3%; posted record client assets under administration of $1.21T rose from $945.2B in the year ago period and $1.18T in the prior month

·     ROKU +3%; upgraded to Buy from Neutral at Guggenheim with $396 tgt as expect the connected television (CTV) ad marketplace will continue to grow at a rapid pace and that Roku will be a primary beneficiary



·     ATER -22%; said it has reached an agreement with its lender, High Trail, to pay down its outstanding secured term debt in an aggregate principal amount of $66.3 million plus accrued and unpaid interest,

·     BCO -1%; lowered its full-year revenue outlook, citing the impact of the spread of the delta variant of Covid-19 as sees revs $4.1B-$4.2B, below its prior $4.3B midpoint of guide

·     EAR -69%; after the co issued an 8-K announcing they were informed they are the target of a criminal investigation by the DOJ related to insurance reimbursement claims the company has submitted on behalf of its customers covered by federal employee health plans

·     RAD -7%; reported mixed Q2 with smaller-than-expected loss but revs of $6.11B missed the $6.21B estimate and cuts its year EPS loss view to (90c)-(53c) from (79c)-(24c), worse than the est. loss (63c) and backs its revs outlook of $25.1B-$25.5B

·     TRMB -1%; as Morgan Stanley downgrade to Underweight from Neutral citing a lack of more material upward EPS revisions seen given the supply chain constraints



·     Brilliant Earth (BRLT) 8.33M share IPO priced at $12.00

·     EngageSmart (ESMT) 14.55M share IPO priced at $26.00

·     Grinrod Shipping (GRIN) 1.842M share Spot Secondary priced at $13.50

·     Hyatt (H) 7M share Secondary priced at $74.50

·     Rexford Industrial (REXR) 9.6M share Spot Secondary priced at $58.95

·     Remitly Global (RELY) 12.16M share IPO priced at $43.00

·     Sovos Brands (SOVO) 23.3M share IPO priced at $12.00

·     Safehold (SAFE) 2.2M share Secondary priced at $76.00

·     Sterling Check (STER) 14.285M share IPO priced at $23.00

·     Synlogic (SYBX) 15M share Spot Secondary priced at $3.00

·     Thorne HealthTech (THRN) 7M share IPO priced at $10.00

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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.