Mid-Morning Look: February 26, 2021

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Mid-Morning Look

Friday, February 26, 2021






DJ Industrials




S&P 500








Russell 2000






Stocks opened higher as investors attempted to buy yesterday’s weakness, with the Nasdaq Composite rising more than 1.25% initially along with gains for other major averages…but markets quickly turned lower, as the S&P 500 dropped below its 50-day moving average for the first time in a month and the Nasdaq approached its Monday lows of around 13,000 (down about 6% this week). Rising Treasury yields has been the focus of markets, as the 10-year yield moves above the S&P dividend yield (1.5%) as rising yields could cut into future growth for high multiple companies. It again appears there is a concern that despite the Fed saying they are not going to do anything about interest rates, the level of inflation might get away from them, and could have a market impact (fear they remain behind the curve). Precious metals getting hit hard today, with sharp declines in gold and silver prices as Treasury yields recover and the dollar bounces, while oil prices tumble from 13-month highs. Technology and momentum stocks opened higher, trying to recover some of yesterday’s sharp losses, but markets slip after early strength (trying to recover now). Rates are edging higher after easing this morning (touched lows around 1.46% but now back to 1.5% – down from spike yesterday above 1.6%), weighing on tech again a day after the Nasdaq posted its worst day in 3-months. Earnings barrage again overnight and this morning, with several Smallcap biotech, software names leading the charge, but earnings begin to slow down next week, with most of big names behind us for the quarter.


Economic Data

·     Personal income rises +10.0% vs. est. 9.5% and December unchanged at +0.6%; Personal saving rate 20.5% vs. prior month 13.4%; Personal spending rose +2.4% vs. est. 2.5% and Real consumer spending +2.0% vs. prior Dec -0.8%

·     January core PCE price index +0.3% vs. est. 0.2%; Jan overall PCE price index +0.3% from +0.4% in Dec ; Jan PCE price index YoY rose +1.5% vs. Dec +1.3% and core +1.5% vs. est. 1.4%

·     Chicago PMI for February reported at 59.5 below the 61.0 estimate







WTI Crude















10-Year Note





Sector Movers Today

·     Software movers; ADSK beat expectations for Q4, with a 3% beat on rev, 1% beat on op. margin and 3% beat on billings, while FY22 guidance was in line with rev expected to grow 13-15%, but Q1 guidance fell a bit short; VMW posted in-line or better results across most key metrics, including total revs (driven entirely from better on-premise license sales, -2% instead of the -7% we were modeling), OMs (90bps above the guide), cRPO growth (12% versus our 6% estimate); WDAY guided lower than expectations, despite posting better-than-expected 4QF21/Jan cRPO/backlog growth of 19%, well above the total backlog growth guidance of 14-16%; SAIL ‘21 rev guidance was above expectations despite a 12 pt headwind from an increasing SaaS-mix with increased visibility provided into both SaaS revenue and ARR

·     Consumer Staples; BYND posted weaker than expected earnings this quarter as strength in retail was partially offset by weakness in foodservice, but announced strategic partnerships with MCD and YUM following recent product tests to further distribute its plant-based products; MNST posted very strong results with net sales +17.6% (est. +11%) and EPS of $0.88 (est. $0.57) as Jan LC gross sales of 17.2% exceeded RBC expectation for +13-15%; SFM shares rally behind better earnings and WW also advanced despite mixed results (EPS miss, sales beat)

·     Pharma movers; JNJ a focus as markets anticipate emergency use for its Covid-19 one shot vaccine; BGNE announces closing of collaboration with NVS to develop and commercialize anti-pd-1 antibody tislelizumab in North America, Europe and Japan as BeiGene will receive an upfront cash payment of $650 million and is eligible to receive up to $1.3 billion upon the achievement of regulatory milestones, $250 million upon the achievement of sales; GHSI announced a 1 for 6 reverse stock split; ABUS and partner ASMB initiate a mid-stage study in patients with chronic hepatitis B virus (HBV) infection; LLY said the U.S. government agreed to purchase a minimum of 100,000 doses of bamlanivimab 700 mg and etesevimab 1400 mg together; in cannabis, CRON posted a wider-than-expected loss for the fourth quarter, but revenue that beat estimates

·     Utilities; EIX reported an in-line 4th quarter with EPS $1.39 on revs $3.16B and held off from providing 2021 guidance until an ALJ decision on Track 1 of the GRC is received; SRE Q4 adjusted EPS $1.90 vs. estimate $1.60 on revenue $3.17B (+7.7% YoY) vs estimate $3.12B as FY20 EPS $8.03 topped its guidance range $7.20-7.80, and maintain FY21 EPS guidance $7.50-8.10; PNM reported Q4 EPS 15c as FY20 EPS $2.28 was in-line with consensus ($2.16 in FY19), and reaffirmed its FY21 EPS guidance $2.27-2.37; Credit Suisse upgrade NOVA to Outperform and raised their TP to $56 due to the company increasing their customer additions in 2021 by +25%



·     AFI +32%; after selling its production facility, warehouse and real estate property located in South Gate, California to an affiliate of Overton Moore Properties, an industrial developer for $76.7M in cash

·     BYND +2%; posted weaker than expected earnings this quarter as strength in retail was partially offset by weakness in foodservice, but announced strategic partnerships with MCD and YUM

·     CCIV +4%; after positive comments earlier by Barstool’s Dave Portnoy

·     DKNG +2%; boosted FY21 revenue guidance to range of $900M to $1B from a prior range of $750M to $850M which reflects mobile sports betting in Michigan and Virginia

·     ETSY +6%; surges on Q4 beat as revs rise ~129% to $617.4M, beating estimates of $515.6M with +118% 4Q GMS growth and 31.1% EBITDA margin

·     HPQ +3%; posted F1Q21 results well above expectations on WFH and remote learning demand across both PCs and consumer printers

·     RKT +9%; reports total Q4 rev increase of 144% YoY to $4.7B and adj EPS of $1.14 bot above views of $3.9B and 87c and announces special dividend of $1.11 and says formed new partnership with Morgan Stanley to originate and service conforming mortgages



·     CLW -15%; as at the lower end of its pre-announced adj. EBITDA range in 4Q and guided below consensus for 1Q

·     CRI -11%; as posts Q4 adjusted earnings of $2.46 per share, missing the $2.75 estimate on Q4 sales of $989.9M missing expectations of $1.06B noting sales declined in all segments principally due to disruptions related to the COVID-19 pandemic

·     FL -7%; shares slide misses as Q4 sales of $2.19B missed the $2.29B estimate while Q4 profit topped views, but comps disappoint falling (-2.75) vs. est. +4.9%;

·     FLR -15%; tumbles after rising initially post mixed earnings – issued weaker guidance (50c-80c vs. est. $1.09)

·     MRO -5%; seeing some of the shine on energy stocks come off as oil prices pullback from 13-month highs (HAL, SLB, APA, EOG all weak)

·     NKLA -7%; active on earnings and as an internal review conducted by the company following allegations from a Hindenburg short report last year found that at least nine statements made by the company and former CEO Milton were “inaccurate” in part or whole

·     SPCE -16%; after saying it is delaying the next test flight of its SpaceShipTwo suborbital as part of a revamped flight test program that will postpone flights of space tourists out until 2022

·     TCDA -31%; after disclosing the receipt of an Appeal Denied Letter (ADL) regarding the CRL it received for veverimer


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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