Mid-Morning Look: April 13, 2021

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Mid-Morning Look

Tuesday, April 13, 2021






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U.S. stocks are mixed to start, rebounding off pre-market declines despite cautious vaccine news related to JNJ’s single shot dose and another higher inflation reading (CPI) as market focus remains the accommodative Fed, an infrastructure bill, and an improving economy due to a strong vaccine rollout. Market resiliency has been astounding to say the least, again recovering off early morning lows following disappointing vaccine news as U.S. health authorities recommended a pause in JNJ’s use of its single-shot Covid-19 vaccine to investigate rare but severe cases of blood clots in six instances. A panel of outside experts will meet Wednesday to review the matter for the CDC, while the FDA will also conduct an investigation. As expected, shares of companies in the U.S. travel sector fell on the vaccine news, as well as cruise lines, hotel and lodging and theme park names (bit have slowly been paring losses). Bespoke noted that the S&P 500 ETF (SPY) has been up from the open to close for a record 12 straight days as the S&P comes into the day around record highs with the Nasdaq and Dow Jones Industrials not far behind either (though Smallcaps have lagged). U.S. consumer prices (CPI) picked up sharply in March as the economic recovery gained momentum. Attention turns to fundamentals shortly with the unofficial start of earnings season kicking off tomorrow with big banks (JPM, GS, WFC). Bitcoin grabbing a lot of attention today, up over 4.5% around the $63,000 level, a new all-time best as momentum picks up.


Economic Data

·     U.S. consumer prices picked up sharply in March as the economic recovery gained momentum, partly reflecting higher gasoline prices. The March Consumer Price Index (CPI) rose 0.6%, topping the 0.5% estimate and 0.4% prior (was largest MoM increase since August 2012). On a YoY basis, CPI rose 2.6% before seasonal adjustment, up from the 1.7% YoY increase in February. Core CPI (ex food & energy) MoM rose 0.3% vs. est. 0.2% and YoY rose 1.6% after rising 1.3% in February.







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Sector Movers Today

·     Retailers; CHWY 6.1M share Block Trade priced at $82.50; Wells reiterated their OW rating on TSCO ahead of earnings next Thursday and raised their Q1 comps estimates to a street-high +28% given the strong consumer from stimulus and savings, healthy category demand, and incremental market share gains; Following yesterday’s announcement that their Q1 comp sales have risen HSD YoY, URBN’s price target was raised at Morgan Stanley, Barclays, Wedbush, FBR, and Telsey; JPMorgan raised their target on AAP to $211 from $199 and raised their Q1 estimates to 16.7% comps from 10.9% ahead of next week’s Analyst Day; ZUMZ chairman sells over 190,000 common shares in filing

·     Auto sector: Ford Motor (F) says to allow its EV customers to use NIO charging network in China; MGA shares active after a report in appleinsider.com saying the LG & Magna partnership is very near to winning Apple Car contract; VRM was added to the Best ideas list at Wedbush because they believe it has nearly overcome recent operational challenges and is in the process of rapidly scaling its business in the booming online used car industry

·     Pharma news, BMY was upgraded to Buy from Hold at Truist and raise tgt to $74 from $66 noting the co has received FDA approval for Abecma and Breyanzi, and also announced positive topline Phase 3 results for deucravacitinib and relatlimab; AMZN said its current CEO would be retiring effective 8/1/21 and current SVP and head of commercial for Europe will assume the CEO role; SUPN upgraded to Buy at Jefferies saying it is on the cusp of a new product cycle that should more than offset Trokendi XR’s LOE in 2023

·     Asset Managers; out with monthly assets under management (AUM) data; AB said preliminary assets under management increased to $697 billion during March 2021 from $688 billion at the end of February; APAM reported that its assets under management as of March 31, 2021 totaled $162.9B; CNS preliminary assets under management of $87.0 billion as of March 31, 2021, an increase of $4.0 billion from assets under management at February 28, 2021; BEN preliminary month-end assets under management of $1,498.9 billion at March 31, 2021, compared to $1,500.5 billion at February 28, 2021; IVZ preliminary month-end assets under management of $1,404.1 billion, an increase of 0.9% versus previous month-end; VRTS assets under management (AUM) as of March 31, 2021 of $168.9 billion

·     Transports; index pulls back from around record highs on Monday, led by weakness in airlines; FDX upgraded to Overweight from Sector Weight at KeyBanc with a $350 price target citing the proprietary Online Parcel Index suggesting that B2C parcel volumes remained strong throughout Q1; AAL said it sees Q1 revs to plunge about 62% compared with the same period in 2019, and to post a loss of about $2.7B-$2.8B (prior rev view decline was for 60%-65%) – also said it now expects its average daily cash burn rate for the quarter to be about $27 million per day compared to its previous forecast of $30 million; JBLU and SAVE were both upgraded at Susquehanna; Tankers/Shipping data; The Baltic Exchange’s main sea freight index dipped 5 points, or 0.2%, to 2,140, as lower panamax vessel rates outweighed a slight gain in the larger Capesize segment



·     DHR +4%; boosted its Q1 non-GAAP core revenue growth forecast including co’s biopharma unit Cytiva to 29%, from mid-to-high-teens growth prior

·     IHRT +4%; double upgraded to Buy from underperform at Bank America as believes that advertising trends will come roaring back over the next several months as small to medium sized businesses and sectors across the country open up as drive times increase

·     MRNA +7%; vaccine makers outperform (BNTX, PFE) after U.S. health authorities recommended a pause in the use of JNJ’s single-shot Covid-19 vaccine

·     NVAX +11%; outperforms in biotech space

·     NVCR +57%; after reporting positive results from their Phase III pivotal trial of Tumor Treating Fields in Stage 4 non-small-cell lung cancer following platinum failure – the data monitoring committee (DMC) recommended a reduced trial duration and patient numbers in its phase III trial

·     RILY +10%; to replace Michaels (MIK) in S&P 600 at open on 4/15

·     RIOT +4%; strength in Bitcoin related names (company’s that mine, invest, etc.) as Bitcoin topped $63,000 for the first time; GBTC, NCTY, MSTR also actively higher early

·     ZUO +4%; tgt raised to $20 from $19 at Canaccord citing a very positive analyst day which included a material upside surprise to the medium-term outlook



·     ATXI -19% and FBIO -13%; after the company said its marketing application for non-opioid painkiller tramadol is still under FDA review

·     BALY -11%; after announced stock, tangible equity unit offerings – also said it estimates Q1 revs of greater than $185.0M vs. $156.6M consensus and adjusted EBITDA greater than $50.0M

·     BEN -4%; preliminary month-end assets under management of $1,498.9 billion at March 31, 2021, compared to $1,500.5 billion at February 28, 2021

·     JNJ -2%; after U.S. health authorities recommended a pause in the use of its single-shot Covid-19 vaccine in order to investigate rare but severe cases of blood clots in six instances

·     SYF -3%; after the WSJ reported that GPS is parting ways with its longtime credit-card issuer (over 20-years) and moving the business to Barclays PLC which will take over Gap’s private-label and co-branded credit cards



·     Chewy (CHWY) 6.1M share Block Trade priced at $82.50

·     Essential Properties Realty Trust (ESRT) 7.15M share Secondary priced at $23.50

·     GFL Environmental (GFL) 17.5M share Spot Secondary priced at $33.95


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.

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