Mid-Morning Look: July 07, 2021

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Mid-Morning Look

Wednesday, July 07, 2021






DJ Industrials




S&P 500








Russell 2000






Stocks opened higher with the Nasdaq Composite touching another fresh intraday record highs, but major averages having trouble holding their gains as oil prices tumble (on track for 3rd straight decline), despite another leg lower for Treasury yields as inflationary pressures ease. The lower yields have boosted high growth tech stocks recently with another leg higher for AMZN, AAPL, GOOGL, ORCL, MSFT, etc. But another sharp pullback in energy stocks hurts as oil fails to hold morning gains (WTI crude tumbles about 3% below $72, off morning highs $74.86 per barrel), similar trading action to yesterday with energy stocks among top decliners in the S&P 500 early. Stocks that tend to benefit from low rates/yields (homebuilders) outperform while those that tend to benefit from higher rates/yields (banks/insurance) pressured as Treasury yields fall to fresh 4-month lows (10-year slides to 1.3% ahead of the FOMC minutes later today). Cryptocurrencies advanced with Bitcoin approaching $35,000 and Ethereum nearing $2,400. Biotech (XBI) down for the 6th time in last 7-trading days, a drag on the Nasdaq. Volumes remain light on this holiday shortened trading week. Momentum stocks seeing selling pressure with the old “meme” stocks falling again (AMC, GME, EXPR, BBBY, BB, KOSS among them). The Dollar Index (DXY) rises to 3-month high of 92.845. Much like yesterday, major U.S. averages failing to hold their morning opening highs.







WTI Crude















10-Year Note





Sector Movers Today

·     Utilities & Solar; solar names ENPH, SEDG shares active as analyst weigh in on GNRC acquisition of Chilicon Power with Bank America saying perceive the latest GNRC acquisition as leading to incremental competition for the MLPE market for SEDG/ENPH holding 90-95% of US resi market share and increasing int’l and commercial share penetration; in clean energy space, Raymond James upgraded NOVA from Outperform to Strong Buy, downgraded AQUA and ERII to Market Perform noting that the sector is currently trading in a more rational manner as compared to the ultra-euphoric highs of late 4Q20 / early 1Q21

·     Trading & Exchanges; CBOE June total options volume up 12.8%, June total options adv up 12.8%; June total futures adv down 0.9%; TW reports volume of $23.1 trillion in June and $62.0 trillion in second quarter; Tradeweb Markets Inc says June adv up 34.7% year over year; q2 adv up 25.5% year over year; MKTX recorded $567B in trading volume for June 2021, of which $239.5B was credit volume and $327.5B rates volume; total credit average daily trading volume and total credit trading volume dropped 10.1% Y/Y to $10.89B and $239.52B, respectively.

·     Housing & Building Products; in building products, JPMorgan downgraded MAS to Underweight and upgraded BLD to Neutral saying on stock selection, highlight top picks and Overweight-rated WHR and MHK, as both face comps in 2H21 that are among the easiest across our universe, and also favor OW-rated FBHS, DOOR and IBPhomebuilders active again given the recent plunge n Treasury yields, pushing mortgage rates lower yet again

·     Healthcare Services, MedTech Equipment; for DXCM, Piper notes with the increasingly critical diabetes mobile app downloads climbing higher, we assessed correlations with company performance and found that we could see some nice upside to Q2 consensus estimates for DXCM; PAHC downgraded from Equal weight to Underweight as see recent stock performance (+50% vs. S&P +17% YTD) as being disconnected from fundamentals, which are yet to improve; VVOS jumps as sees positive data for treatment of dental tissue anomalies

·     Software movers; CRNC was downgraded at Raymond James noting shares have eclipsed their prior $115 price target and increased over 6-fold since September 2019 compared to the S&P 500’s 45% return; Lake initiated OSS with a Buy rating and $8 pt; Citi initiated BAND at Neutral/High-Risk with a $155 pt as they are positive on secular trends in the broader communication space but are cautious on potentially less lucrative long-term growth prospects; TTD launched Solimar, its new media trading platform that will help marketers optimize their digital advertising campaigns across the open internet; Piper lists TWLO, U, AVLR, BIGC as their top cloud ideas for 2H as investor sentiment has shifted back in favor of secular growers; SAP was upgraded to Buy at Bank America citing cloud momentum



·     BHVN +8%; as reports preliminary sales of $93M from its migraine drug Nurtec ODT, beating estimates of $54.1M (

·     DARE +35%; after revealed on June 30, entered into an agreement with Bill & Melinda Gates Foundation for development of DARE-LARC1 implant, its experimental user-controlled, long-acting reversible contraceptive (awarded grant of up to $48.95M)

·     GNRC +2%; extends recent gains (up 17 of last 19 trading days – includes today) as analysts note Generac’s ambitions in residential solar continue to grow, as the just-announced acquisition of Chilicon Power indicates

·     ONCS +40%; after announcing last night a collaboration with MRK for a pivotal global Phase 3 study of TAVO, its intratumoral anti-cancer gene therapy, in combination with Keytruda for late-stage Metastatic Melanoma

·     SGH +13%; posted F3Q results and the F4Q (Aug) revenue/EPS outlook significantly above consensus estimates with upside coming from demand for AI systems, data intensive compute requirements, increasing unit demands and growing markets for LED

·     VVOS +20%; as sees positive data for treatment of dental tissue anomalies



·     AMC -7%; while GME also declines as the old “meme” stocks seeing extended pullback over the last week (AMC and GME each down a 4th straight day)

·     CLDR -2%; falls after getting no other offers in go-shop period, deal needs China approval

·     DIDI -7%; shares fall again (dropped over 20% Tuesday) following a regulatory order this weekend that its app be removed from app stores in China – Sunday’s takedown order from the Cyberspace Administration of China (CAC) comes just two days after the regulator announced an investigation into Didi (YMM, BZ also down as Chinese regulators announce investigations into the companies)

·     FANG -3%; another sharp pullback in energy stocks as oil again fails to hold morning gains, similar trading action to yesterday as OXY, PSX, VLO among top S&P decliners

·     MKTX -5%; Raymond James notes MarketAxess’ s 2Q21 volumes finished lower than we had previously modeled as industry-wide volumes and the company’s market share continued to face headwinds in a lower volatility backdrop

·     XBI -2%; biotech space in general very weak as XBI falls for the 6th time in last 7-trading days


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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