Mid-Morning Look: July 06, 2021

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Mid-Morning Look

Tuesday, July 06, 2021






DJ Industrials




S&P 500








Russell 2000






Major U.S. averages slip lower, continuing last week trends as large cap tech outperforms (AMZN, GOOGL, AAPL), helping push the Nasdaq Composite to fresh intraday record highs (though has since pulled lower), while the Smallcap Russell 2000 extends losses, testing near its 50-day moving average support around 2,275. The S&P 500 index drops around -0.5% after briefly touching a record intraday high. Inflation fears subsiding (so it appears) as Treasury yields extending losses with 10-year dipping to lows of 1.355% (falling as much as 7bps). The decline in yields boosting the appeal of precious metals as gold bounced past the key $1,800 level. Stock news relatively quiet following the 3-day holiday weekend, though Chinese ADRs (BIDU, BABA, FUTU, DDL, MF, ZME) pulling back as China said it will step up supervision of domestic firms listed offshore, while shares of last week IPO DIDI drops over 20% after regulators ordered its app be taken down days after its U.S. listing (the CAC also announces probes into truck-hailing firm YMM and online recruitment BZ). WTI oil prices turn lower after nearing a 3-year high earlier of $76.98. Economic data disappoints with ISM service data missing estimates.


Economic Data

·     June ISM Non-Manufacturing Index weaker: reported at 60.1 below the 63.5 consensus and 64.0 prior; business activity 60.4 vs. 66.4 consensus and 66.2 prior; component breakdown showed: Employment 49.3 vs. 55.3 prior and new orders 62.1 vs. 63.9 prior.

·     Markit June final composite PMI at 63.7 (vs flash 63.9) and June final services PMI at 64.6 (vs flash 64.8)







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer Finance; AXP was upgraded to Buy from Neutral and raise tgt to $225 from $185 at Goldman Sachs as it should benefit from a big pick-up in consumer spending in goods & services and travel & entertainment; BMO downgraded SC to Market Perform as they are disappointed in the $39/share offer since they believe it is worth $46, though they see the deal as a harbinger of strong industry trends and move ALLY to their top pick among credit-sensitive FIG coverage; KBW downgraded NAVI to Market Perform with a $20 target; COOP sold its Reverse servicing portfolio, operating under the Champion Mortgage brand, to Mortgage Assets Management

·     Pharma movers; PFE’s vaccine is still highly-effective at preventing severe illness but is less good at halting the delta spread, data from Israel showed this weekend; AZN’s acquisition of ALXN cleared in Europe; LLY and Boehringer Ingelheim GmbH said they achieved the first and only successful trial for heart failure with preserved ejection fraction, with a late stage trial of Jardiance meeting its primary endpoint; MRKR continues to enroll patients in main portion of phase 2 trial with topline data from active disease group expected in q1 2022

·     Aerospace & Defense; GD mentioned positively in Barron’s saying the stock looks set to rise, noting commercial air travel gets all the attention-but investors should start paying attention to private jets. While commercial air travel is slowly returning to life, May business-jet departures, at 275,000, were just 1% below their October 2019 high of 278,000; military shipbuilding firm HII it plans to buy Alion Science and Technology for $1.65 billion in cash from Veritas Capital to boost its security solutions portfolio; SPCE downgraded to Neutral at UBS on valuation after recent advance in the shares of the space vehicle company.

·     Transports; travel space active (UAL, BKNG, EXPE, DAL) on several headlines – Germany eased travel restrictions on individuals from a few counties; the Financial Times reports corporate travel is beginning to rebound; the TSA screened 2.15M people on Thurs which is up 3% from Jul 1, 2019 as per CNBC; WSJ reports the UK to lift most Covid restrictions later this month despite surge in Delta cases; KNX acquired 100% of AAA Cooper Transportation and an affiliated entity for an enterprise value of $1.35B; in rails (UNP, CSX), Cowen adjusting rail models to reflect carloads, mix, fuel, FX, and cost implications as the supply chain remains tight. Acknowledging that 2Q offers the easiest comps, overall carload trends still came in above their expectations



·     AMZN +2%; as large cap tech outperforms

·     AXLA +12%; was initiated with a buy rating and a share price target of $14 at HC Wainwright, indicating upside of about 253% as of Friday’s close

·     CCXI +9%; announces filing of amendment to NDA submission and extension of the PDUFA review period for avacopan in the treatment of anca-associated vasculitis

·     UBX +3%; as announced promising early-stage data for UBX1325 in patients with diabetic macular edema or wet age-related macular degeneration (AMD)

·     WB +8%; rose as much as 30% initially after Reuters reported Weibo chairman, state firm plan to take China’s Twitter private https://bit.ly/3xpdEkL – shares pared gains after the company denied the “going private” report saying it was “not true”

·     WBT +6%; received a revised unsolicited proposal from Ali Holding S.r.l. to acquire all of its outstanding shares of common stock for $24 per share in cash, an increase from the previously disclosed $23 per share cash proposal made by Ali Group on May 25, 2021 https://bit.ly/3jPp3GK



·     AHT -25%; after issuing Q2 RevPAR results – said expects to report RevPAR for all hotels in the portfolio increased approximately 372% for the second quarter of 2021 compared to the second quarter of 2020, and decreased approximately 46% compared to the second quarter of 2019

·     DIDI -23%; just a few days after its market debut following a regulatory order that its app be removed from app stores in China

·     DOYU -14%; after Reuters report that China antitrust regulator will block sale to Huya

·     FANG -4%; pullback in energy stocks as oil pares gains after nearing 3-year highs, with NOV, OXY, HAL among early S&P top decliners

·     PRVB -29%; says U.S. FDA declined to approve its experimental drug, teplizumab, to delay or prevent clinical type 1 diabetes

·     TALO -7%; said it is “very disappointed” with the government’s decision to award the rights to run the potentially lucrative shared Zama oil find to state-owned oil company Pemex, the company said in a statement on Monday.


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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