Market Review: June 10, 2021

Auto PostDaily Market Report

Closing Recap

Thursday, June 10, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     Stocks gain as the S&P 500 index finally trades a new record after days of coming up short as it was all about the healthcare industry today, with Pharma, biotech, and medical technology among the top gainers as market leaderships continues to rotate on a day-to-day or week-by-week basis (energy led earlier in the week, Smallcaps/tech last week). The Dow advance was led by healthcare names MRK, AMGN and WBA. Amazingly Treasury prices rallied (yields fell again with 10-year below 1.5%) despite another round of hotter than expected inflation data (CPI) which boosted strength in the tech/high multiple names and weighed on the value related names (Smallcap Russell 2000 pulled back). The May CPI inflation reading came in only moderately higher than what economists had been expecting, not changing the narrative for broader markets, interest rates, of Fed outlook. Headline CPI rose to 5% (highest since 2008) and core prices jumped as well, but only slightly above estimates and failing to raise fears of permanent price hikes (note PPI data is due next Tuesday). Among the jumps in prices in May for consumers used autos rose 7.3%, airlines fares 7.1%, natural gas 1.7%, apparel 1.2% and food 0.4%. The CBOE Volatility index (VIX) falls again (under the 17 level) as stocks surge.

·     In stock/sector news: LLY, BMY, PRGO, BIIB, TMO rises as healthcare industry leads today, with Pharma, biotech and medical technology among the top gainers in the S&P as the index trades to new all-time highs; homebuilders fall after Zelman Associates’ homebuilder survey shows a fourth straight month of weaker-than-seasonal order activity in May and downgraded shares of BZH, CCS, DFH and NVR to hold; GME stumbles, gives up all of its weekly gains despite EPS beat after saying it may offer up to 5M shares and disclosing an SEC investigation without providing guidance; rough day for the “meme” stocks with big declines in AMC, CLNE, CLOV, WKHS and GME; RH and SIG both spike on their beats and raised guidance; Chinese education stocks TAL, GOTU, EDU rally after a local media report was a positive for the names as an after-school tutor ban is now seen as less likely; several stocks announce offerings – PLBY, CAKE, CELH, REVG plummet, HYFM slides, though LESL rebounds to go green on the day.


Economic Data:

·     May Consumer Price Index (CPI) rises +0.6% MoM vs. est. +0.5%; while core CPI MoM (Ex-Food & Energy) rises +0.7% vs. est. 0.5%; May Consumer Prices (CPI) increase 5% YoY (fastest pace since 2008) vs. est. 4.7% while Core CPI YoY rises 3.8% vs. est. 3.4%; May CPI food +0.4%, housing +0.4%; index for used cars and trucks continued to rise sharply, increasing 7.3% in May.

·     U.S. weekly jobless claims fell to 376K in the latest week vs. the consensus 370K and down from 385K last week; the 4-week moving avg fell to 402,500 from 428,000 prior week; continued claims fell to 3.499M in latest week from 3.757M prior and U.S. insured unemployment rate fell to 2.5% from 2.7% prior week

·     U.S. household net worth rose to record $136.9 trln in q1 2021 vs. $131.9 trln in q4 2020 and from $111.4 trln a year earlier, Federal Reserve says in quarterly report



·     Oil prices end higher as WTI crude gains $0.33 or 0.47% to settle at $70.29 per barrel, a day after slipping on data indicating weak U.S. driving season fuel demand. Prices were volatile after reports that the Biden administration lifted sanctions on some former Iranian officials and energy companies. OPEC meanwhile has said the rebound in global oil demand is set to accelerate in the second half of 2021 as the world continues to burn through the supply glut accrued last year.

·     Gold futures edge higher, rising $0.90 to settle at $1,896.40 an ounce, rebounding after falling to lows around $1,870 this morning following the CPI data release showed a jump in inflation. Investors ignored as Treasury yields slide and the dollar rebounded. Gold found good support after the initial dip on the hotter inflation data as markets remain on the same side as the Fed that inflation will cool down in the months ahead.


Currencies & Treasuries

·     Treasury yields end at intraday lows as 10-year slides below 1.46%, down 3 bps on the day (and off highs above 1.53%) which is helping high growth/high multiple stocks/sectors. Treasury yields refuse to rise despite another round of “hotter” inflation as headline CPI came in above 5% for May, the highest reading since 2008 and above consensus as investors appear more comfortable with the message from U.S. Federal Reserve officials that inflationary pressures are temporary as the U.S. economy reopens quickly. Separately, the U.S Treasury sold $24B of 30-year notes at a yield of 2.172% vs. 2.161% when issued prior as the bid-to-cover was 2.29 and indirect bidders awarded 64.04% and directs awarded 17.99%. The U.S. dollar erased earlier gains to finish lower.






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; GME reported Q1 adj EPS loss (-$0.45) narrower than est. loss (-$0.84) on sales $1.3B vs. est. $1.16B, said it may offer and sell up to 5M shares of its common stock, from time to time, in "at-the-market" offerings, hired two Amazon executives with Matt Furlong as CEO and Mike Recupero as CFO, disclosed an SEC request for documents and information concerning an investigation, said that Q2 sales trends continue to reflect momentum; SIG posted Q1 EPS $2.23 vs est. $1.27 on sales $1.7B vs est. $1.62B, sees Q2 revs $1.6-1.65B vs est. $1.33B, and raised its FY guidance to now see comp sales +24-27% vs prior +17-20% and revs $6.5-6.65B from $6-6.14B; OXM Q1 adj EPS $1.89 vs. est. $1.06 on sales $266M vs. est. $233.1M, sees FY adj EPS $4.85-$5.15 and sales $1.015B-$1.05B vs. est. $964.66M; DIBS 5.75M share IPO priced at $20.00; LESL 24.5M share Secondary priced at $27.64; Jefferies reiterated their Buy rating on PUMSY and ADDYY and raised their price target on both as they should benefit from rebuilding European demand and a reload in US wholesale orders; After yesterday’s earnings beat for LOVE, its price target was raised to $98 at BTIG and Canaccord and to $105 at DA Davidson and Stifel; TLYS announces special dividend

·     Housing, building products, home furnishing sector; RH surges as Q1 EPS $4.89 and revs $860.8M both beat consensus ($4.10, $757.6M) and raised its FY rev growth guidance to +25-30% from +15-20%; housing stocks coming under pressure with declines for BZH, DHI, LEN, MTH, PHM after Zelman Associates’ homebuilder survey shows a fourth straight month of weaker-than-seasonal order activity in May and downgraded shares of BZH, CCS, DFH and NVR to hold

·     Restaurants; CAKE announced a proposed offering of convertible senior notes and common stock; WING upgraded to Buy from Neutral at BTIG following a series of franchisee calls that give us confidence that domestic development is accelerating despite record-high wing prices and widely publicized labor shortages; Wedbush said continue to expect TXRH to emerge as one of the primary share gainers within the casual dining category as a post-COVID normalization takes place and checks through May point to Q2 comp store sales growth trending well above 67.3% consensus and in the 100%+ range; SHAK said sees chicken inflation in second half of this year

·     Casinos, Gaming, Lodging & Leisure sector; JPMorgan raising PTs for CZR (to $129) and MGM (to $52) as continue to like the trajectory and operating momentum for Las Vegas Strip operators and see multiple catalysts ahead with these positive trends resulting in 2Q EPS beats; China education stocks (EDU, TAL, GOTU) which have been clobbered the last few weeks bounce after school tutoring ban less likely after newest comments



·     Energy stock movers: OPEC says the rebound in global oil demand is set to accelerate in the second half of 2021 as the world continues to burn through the supply glut accrued last year. In its closely watched monthly market report, OPEC highlighted data showing that the crude inventories of the world’s developed countries had slipped to around 34 million barrels above the average level for the period 2015-2019. Raises forecast for 2021 non-OPEC oil supply growth by 130,000 bpd to 840,000 bpd, cuts q1 2021 world oil demand forecast by 360,000 bpd; OXY announces continued progress on divestment program with the sale of non-strategic Permian basin acreage for $508 million and reaffirms 2021 capital and production guidance

·     E&P and Majors; in research, RBC Capital said they believe the investment proposition for U.S. E&P continues to strengthen with FCF that could amount to most of some companies’ total value over the next several years. We believe the group could have another 50-100% of implied upside if investors continue to ride the wave. Our top ideas are COP, FANG, CRC while they upgraded MRO to Outperform and raise tgt to $18, while downgraded SM, CPE, CLR given relative valuation to rest of the space (raise tgts on several); in the gas space, MKM Partners downgraded shares of RRC and MTDR to Neutral from Buy

·     Pipelines: Blocked by US President Joe Biden, Canada’s TC Energy (TRP) said Wednesday it had officially terminated the Keystone XL Pipeline project, throwing in the towel on a controversial initiative opposed by environmental activists; MMP agrees to sell its independent terminals network to Buckeye Partners for $435M.

·     Utilities & Solar; FCEL shares fell company continued to increase investment into research and development (revs fell 26% to $13.95M from $18.88M and below est. $18.91B); solar space showing strength with early gains in SPWR, FSLR, ENPH, CSIQ early



·     Banks will face the toughest capital requirements for holdings in Bitcoin and other crypto assets under global regulators’ plans to ward off threats to financial stability from the volatile market. The Basel Committee on Banking Supervision said on Thursday that the banking industry faces increased risks from crypto assets because of the potential for money.

·     Asset managers; AB said monthly Assets under management (AUM) increased to $731 billion during May 2021 from $724 billion at the end of April; firmwide net inflows, coupled with market appreciation, drove the 1% increase; APAM monthly AUM totaled $172.9 billion; BEN monthly prelim AUM of $1,543.5 billion at May 31, 2021, compared to $1,529.3 billion at April 30, 2021; IVZ prelim monthly AUM of $1,505.1 billion, an increase of 3.2% versus previous month-end – total net inflows were $31.9 billion; VRTS monthly AUM as of May 31, 2021 of $175.5 billion; TROW preliminary month-end assets under management of $1.59 trillion as of May 31, 2021

·     Bitcoin news; Cryptocurrencies gain after an international group of bank regulators proposes a strict set of regulations for crypto assets – adding to the gains yesterday. COIN said it is expanding the number of states where U.S. customers can borrow cash using bitcoin as collateral and is teaming up with ForUsAll Inc. to provide the option for workers using its 401(k) plans to invest in cryptocurrency, the Wall Street Journal reported. After hitting lows around $32K just a day ago, Bitcoin back above $37K along with bounces in Ethereum and others.



·     Pharma movers; Big bounce sin big pharma/biotech as MRK, WBA, AMGN the top gainers in the Dow while PRGO, LLY, TMO among top gainers in the S&P 500; BMY announces positive topline results from phase 3 transform trial evaluating Breyanzi vs. chemotherapy followed by stem cell transplant in second-line relapsed or refractory large b-cell lymphoma; IOVA upgraded to Market Outperform from Market Perform at JMP Securities with $32 tgt based on a discounted earnings per share and revenue multiple analysis

·     Biotech movers; MRNA files for emergency use authorization for its covid-19 vaccine in adolescents in the United States; OCGN plunges after saying it will no longer pursue an emergency use authorization for its COVID-19 vaccine candidate, Covaxin, in the U.S, but will instead aim to file for a full approval/says it has decided to pursue a full application path, or a biologics license application (BLA), on U.S. FDA feedback

·     Healthcare Services; CLOV downgraded to Underperform from Neutral at Bank America with an unchanged price target of $10 noting the 100% rally in the past week and shares are now trading at a 70% premium to ALHC its closest comp; APR 4.5M share Secondary priced at $27.00; LFST 40M share IPO priced at $18.00; in research, RBC Capital upgraded CYH to Outperform with $21 pt in hospital space as believe the company is now better positioned from an operational and financial perspective, and upgraded PNTG to Outperform, while downgraded ANTM to Sector Perform from Outperform, as trading levels approach their price target of $399 tgt and cut UHS to Sector Perform & raises PT to $165 as see comparatively fewer catalysts for multiple expansion from current levels versus peers – overall maintain positive stance on initial 2021 best ideas list: HCA, SGRY, UNH, HUM, and CVS


Industrials & Materials

·     Transports, Aerospace & Defense; UPS upgraded to Overweight at JPMorgan and boosting our price target to $243 after the 2021 Investor Day provided incremental positives around pricing power, capacity discipline, and the dividend yield; ERJ rises after saying its subsidiary Eve Urban Air Mobility Solutions has entered merger talks with Zanite Acquisition Corp

·     Transports; in airlines, MKM Partners initiated sector with a positive industry view as rising vaccination rates, declining case counts, easing restrictions and a consumer that is flush with capital have led to improved travel trends – said DAL top pick with Buy rating along with buys in LUV, SAVE, ALK and AAL and neutral on ALGT, JBLU, UAL and HA


Technology, Media & Telecom

·     Internet; FSLY downgrade from Outperform to Perform at Oppenheimer noting outages happen to all cloud companies, and FSLY responded rapidly and with candor, but switching costs for CDNs are relatively low, and customers could look for second-source providers (AKAM) and says the shutdown could impact new sales for a while; AMZN faces possible $425M EU privacy fine the WSJ reported/would be the biggest-yet penalty under the bloc’s privacy law 

·     Semiconductors; semiconductor index (SOX) rises to around 3,200 level before paring gains; global semiconductor market will rise from 6.8% in 2020 to 19.7% this year to ~$527B according to World Semiconductor Trade Statistics estimates. For 2022, the global semiconductor market is projected to grow by 8.8% to $573B, driven by double-digit growth of the Memory category; INTC a cautious mention late day by Citigroup saying they are seeing more red flags ahead for PCs and semiconductors citing data points showing May notebook shipments were down 5% on the month and 10% lower than Citi’s expectations

·     Software movers; in research, ZM upgraded to Buy with $440 tgt at Argus after reported a strong quarter in fiscal 1Q22 against an easy prior-year comp/says continues to benefit from the extraordinary growth in its installed base that came with last year’s pandemic lockdowns; NOW upgrade from Buy to Conviction Buy w/ $695 pt at Goldman Sachs as came away incrementally positive on ServiceNow’s improving near-term fundamentals; SE was upgraded to Buy at Bank America as its e-commerce arm Shopee exceeds expectations on growth in SE Asia and is seeing rapid success in efforts to become a meaningful name in Latin America; ASAN shares rise after disclosed that its CEO Dustin Moskovitz bought 500K shares of common stock on June 7th; MNDY 3.7M share IPO priced at $155.00

·     Hardware, Components & Services; MTLS 4M share Spot Secondary priced at $24.00; FFIV upgraded to Outperform at Credit Suisse and increasing our target price to $235 following our NDR with FFIV Mgmt. which included the CEO, CFO, and IR; RBLX shares slip as music publishers including Universal Music Publishing announces lawsuit seeking at least $200 million in damages and alleges company hasn’t licensed music featured in games on the popular platform

·     Media & Telecom movers; PLBY 4.72M share Secondary priced at $46.00; ANGI provides monthly metrics for May – Angi Inc. Total Revenue +7% y/y, Marketplace Service Requests (7%) y/y, Marketplace Monetized Transactions +5% y/y, Marketplace Transacting Service Professionals +16% y/y, and Advertising Service Professionals +7% y/y; NLSN was downgraded to equal-weight at Morgan Stanley as the stock has increased ~100% since Oct31,2020 vs. the S&P 500 of ~30%, leaving limited upside of 8% to our maintained $29 price target; AMC shares fall with profit taking in “meme” names today and after several insider sales last night as per filings (at least four directors sold shares as perf form 4 filing)


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.

Live Trading

Open an Account

Paper Trading