Morning Preview: March 22, 2021

Early Look

Monday, March 22, 2021









S&P 500










Tech heavy Nasdaq futures are looking higher, getting a lift as Treasury yields slip, dipping back below the 1.7% level while the Dow Jones futures look slightly lower, pulling back after touching all-time highs on multiple occasions last week. The S&P fell 0.77% last week, the Dow lost 0.46%, the Nasdaq declined 0.79%. In Asian markets overnight, The Nikkei Index tumbled -617 points (over 2%) to 29,174, the Shanghai Index gained 38 points to 3,443, and the Hang Seng Index slipped -105 points to 28,885. In Europe, the German DAX is up about 20 points to 14,645, while the FTSE 100 is little changed around the 6,700 level. U.S. stock markets have thus far taken President Biden’s new tax plan in stride, not really shaking up markets. Partially aiding markets is that some stimulus checks are likely finding their way into various sectors of the market as last week, Bank America noted that U.S. equity inflows hit a weekly record of $56.76B in the week ending March 17, up sharply from $16.83B a week earlier. Financial sectors dropped on Friday after the Federal Reserve declined to extend exemption on a leverage rule that eased capital requirements for big banks. Friday’s decision means banks will have to resume holding an extra layer of loss-absorbing capital against those assets. In Europe, watch banking stocks after the Turkish Lira collapsed more than 15% following the abrupt termination of its central bank chief as President Tayyip Erdogan’s announced his decision to replace hawkish bank head Naci Agbal following a big rate hike the week prior. In vaccine news, AstraZeneca PLC‘s (AZN) Covid-19 vaccine was shown to be safe and 79% effective in preventing symptomatic disease in U.S. clinical trials involving more than 32,000 people.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -2.36 points, or 0.06%, to 3,913.10

·     The Dow Jones Industrial Average fell -234.33 points, or 0.71%, to 32,627.97

·     The Nasdaq Composite gained 99.07 points, or 0.76%, to 13,215.24

·     The Russell 2000 Index advanced 19.96 points, or 0.88% to 2,287.55


Events Calendar for Today

·     8:30 AM EST      National Activity Index for February

·     10:00 AM EST    Existing Home Sales MoM for February…est. 0.6%


Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: BLFS, DSP, GHLD, NEWT, RAVN, SNX


Other Key Events:

·     Piper Energy Vegas Conference (virtual), 3/22-3/23

·     Fed’s Powel takes part in BIS Panel on Central Bank innovation

·     Fed’s Barkin speaks with Maryland Bankers Association

·     Fed’s Daly speaks about the future of education





















10-Year Note





World News

·     The Turkish Lira collapsed more than 15% following the abrupt termination of its central bank chief as President Tayyip Erdogan’s decision to replace Naci Agbal was announced – Turkey’s central bank last week hiked interest rates by 2 percentage points to 19%, a full percentage point more than expected. Turkish stocks extend losses, wiping nearly $4.5 billion from their market cap, while shares in European banks exposed to Turkey slide


Sector News Breakdown


·     Brazilian airlines AZUL, CPA both downgraded to underweight form neutral at JPMorgan with an overall cautious view for the sector noting Latin America airline stocks have “rallied massively” since last year on the vaccine news without a significant shift on business fundamentals

·     E.L.F. Beauty (ELF) mentioned positively in Barron’s saying the stock will benefit from the return to work and play, after demand for makeup products crashed during the pandemic. The company sells inexpensive stylish products and has seen online success during lockdown, with loyalty program growing 40% year-over-year to 2.3 million members

·     Hilton Worldwide Holdings (HLT) files for mixed shelf, size not disclosed



·     Saudi Aramco lowered its guidance for 2021 cap-ex to around $35 bln from a range of $40-$35 bln previously, (capital spending in 2020 was $27 bln); the world’s largest oil exporter said net profit fell 44.4% to 183.76 bln riyals ($49 bln) for the year ended from 330.69 bln YoY

·     The U.S. SEC has directed ConocoPhillips (COP) and Occidental Petroleum (OXY) to hold shareholder votes on far-reaching new emissions targets, the Financial Times reported on Saturday.



·     Credit Suisse Group AG (CS) replaced the head of its asset-management as it deals with the collapse of a U.K. financial firm tied to several of its funds, which are currently being liquidated; CSFB hired a veteran from rival UBS Group AG and put the unit more directly under the control of its chief executive, the bank said.

·     Coinbase pushed back its direct listing on the Nasdaq by a couple of weeks to April, according to Bloomberg; the delay follows the CFTC’s $6.5M fine against the company on wash trading charges and for filing false reports



·     AstraZeneca PLC’s (AZN) Covid-19 vaccine was shown to be safe and 79% effective in preventing symptomatic disease in U.S. clinical trials involving more than 32,000 people; the co said it will request an emergency use authorization from the FDA; the U.S. trials identified no increased risk of serious blood clotting

·     Acer Therapeutics (ACER) enters into agreement with Relief Therapeutics Holding for worldwide development and commercialization of its experimental metabolic disorders treatment ACER-001; Relief to potentially pay ACER up to $36 mln and royalties

·     BioMarin Pharmaceutical (BMRN) announced new Phase III data from an open-label long-term extension study to support the lasting treatment benefit of vosoritide in children with achondroplasia

·     Reckitt Benckiser Group (RBGPF) intends to sell its infant formula business in Greater China, in a deal that could value the business at more than $2B – Reuters reported

·     Roche Holding AG (RHHBY) said that a Phase III study on its monoclonal antibody drug Tecentriq met the primary endpoint of providing disease-free survival to lung cancer patients; said the drug showed a statistically significant improvement in disease-free survival for patients suffering non-small-cell lung cancer after surgery and chemotherapy.


Industrials & Materials

·     Canadian Pacific Railway Ltd (CP) agreed to buy Kansas City Southern (KSU) for $25 billion in a cash-and-share deal with KSU holders to receive 0.489 of a CP share and $90 in cash which values Kansas City Southern at $275 per share, representing a 23% premium to create the first rail network connecting the U.S., Mexico, and Canada

·     Lockheed Martin (LMT) mentioned positively in Barron’s saying it might be the safest way to bet in space, saying its seen as a defense stock and a legacy player in the “old space,” Lockheed has dropped about 9% in the past six months. But it owns 50% of United Launch Alliance, which has run successful launch missions with Boeing (BA), and is an investor in Rocket Lab

·     Barron’s also noted new companies have emerged with hopes of taking on SpaceX, as favors the soon-to-be publicly traded Rocket Lab USA, which will offer smaller, low-cost rockets that can be launched at cheaper prices. Its current valuation is $5.5 billion, based on its merger with Vector Acquisition (VACQ). The number and diversity of satellites will rise as the industry remains a $20 billion to $30 billion business a year, meaning risks could increase for companies like Maxar Technologies (MAXR) and Iridium Communications (IRDM).


Technology, Media & Telecom

·     Splunk (SPLK) mentioned positively in Barron’s saying the software company that helps customers improve computing systems, could be a win for investors after its late and painful transition to the cloud. The CFO said revenue is a misleading measure of its growth noting as it shifts to subscriptions its spread over the life of the contract, rather than recognized upfront.

·     Global online video service subscriptions have crossed the 1-billion mark, the Motion Picture Association says; but it’s still taking second place among markets to cable television, it hastens to add; the market for U.S. home/mobile subs rose 21% to $30B, and the global online video industry’s revenue jumped 23% as well, to $68.8B.

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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.