Morning Preview: March 08, 2021

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Early Look

Monday, March 8, 2021









S&P 500










Stocks are looking lower to start the week, led by declines in technology stocks as investors continue to question the high valuations of 2020 high fliers as yields rise and markets prepare for addition stimulus into the economy. The Senate passed President Joe Biden’s $1.9 trillion stimulus package this weekend, sending the amended bill back for a vote in the House followed by the president signing the legislation. The Democratic-controlled Senate voted 50-to-49 to pass the “American Rescue Plan” through reconciliation. Because some provisions were amended in the Senate, the legislation must go back to the House that passed an earlier version of it last week. The Nasdaq Composite closed higher by 1.6% at 12,920.15 on Friday, near its high of the day, rebounding from lows of as much as 2.6% (a more than 500-recovery on the day) for the index’s biggest intraday recovery since March 19, 2020. For the week, the S&P unofficially rose 0.80%, the Dow unofficially added 1.83%, the Nasdaq unofficially shed 2.06%. The Nasdaq is giving back a portion of that this morning, while Dow futures are little changed. In Asian markets, The Nikkei Index fell -121 points to 28,743, the Shanghai Index dropped -80 points to 3,421 and the Hang Seng Index slumped -557 points to 28,540. In Europe, the German DAX is up 175 points to about 14,100, while the FTSE 100 edges higher by about 10 points to 6,640. Oil prices steadied after a Saudi oil terminal was attacked over the weekend.


Optimism around the employment picture, after data showed that the U.S. added 379,000 jobs last month — well above the forecast of 210,000, renewed fears early Friday that high growth tech stocks would wither in the face of the prospect of rising bond yields and inflation. The 10-year Treasury note yield briefly jumped to around 1.62%, before settling about 7 bps lower, helping stock momentum picked up steam. Comments from Federal Reserve Chairman Jerome Powell on Thursday helped to drive bond yields sharply higher, read as showing insufficient concern about inflation as the economy recovers from the COVID-19 pandemic. Meanwhile, U.S. Treasury Secretary Janet Yellen (and former Fed Chair) on Friday said higher long-term Treasury debt yields were a sign market participants were anticipating a stronger recovery, not of increased inflation concerns, echoing recent comments from several Fed participants over the last few days.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 73.47 points, or 1.95%, to 3,841.94

·     The Dow Jones Industrial Average rose 572.20 points, or 1.85%, to 31,496.30

·     The Nasdaq Composite spiked 196.65 points, or 1.55%, to 12,920.15

·     The Russell 2000 Index advanced 45.29 points, or 2.11% to 2,192.321


Events Calendar for Today

·     10:00 AM EST    Wholesale Inventory MoM for January


Earnings Calendar:

·     Earnings Before the Open: NERV, NINE, ONDS, RAND, RDNT, XPEV



Other Key Events:

·     Citigroup Global Property Conference (virtual), 3/8-3/11

·     Deutsche Bank Internet and Telecom Conference (virtual), 3/8-3/10





















10-Year Note





World News

·     The Senate passed President Joe Biden’s $1.9 trillion stimulus package on Saturday, sending the amended bill back for a vote in the House followed by the president signing the legislation


Sector News Breakdown


·     Mytheresa (MYTE) is at a bargain price as more luxury buyers opt for online shopping during the pandemic, according to Barron’s. The company should get a further boost from its expansion in the U.S. and China. It’s trading below its IPO price and at a lower multiple than Farfetch (FTCH) and The RealReal (REAL)

·     Lowe’s (LOW) mentioned positively in Barron’s saying its far more than a pandemic play, noting its turnaround efforts are going well and foot traffic saw bigger increases than peer Home Depot (HD) between November and January. Stock traded at 16 times forward earnings of $9.70

·     Royal Caribbean’s (RCL) newest ship, the Odyssey of the Seas, is stuck at port in Germany after two workers on the ship tested positive for coronavirus, according to a report in the Jerusalem Post

·     Xpeng (XPEV) Q4 EPS (15c) loss on revs $436.99M vs. est. $411.82M as quarterly deliveries were 12,964 vehicles; said Q4 loss narrowed 42% from the same period in 2019


Energy, Industrials and Materials

·      General Electric Co. (GE) is nearing a $30 billion-plus deal to combine its aircraft-leasing business with Ireland’s AerCap Holdings NV (AER), according to people familiar with the matter, the latest in a string of moves by the industrial conglomerate to restructure its once-sprawling operations -WSJ

·     Brent crude oil topped $70 per barrel or the first time since the start of the pandemic, and WTI crude rises to 2-year highs after Saudi Arabia said one of its oil export facilities had been attacked, raising supply concerns

·     First Solar (FSLR) upgraded to Neutral from Underperform at Credit Suisse with an unchanged price target of $70.



·     Lemonade (LMND) upgraded to outperform from perform at Oppenheimer



·     Austrian authorities said Sunday they have suspended the use of one batch of Covid-19 vaccine from AstraZeneca PLC (AZN) as a precautionary measure, after reports of a death and an illness among vaccine recipients. Neither event has been shown to be linked to the vaccine, the authorities added. 

·     Atea Pharmaceuticals (AVIR) presents results from the Phase 1 study of AT-527 in 20 healthy volunteers, randomized 1:1 to receive oral AT-527 550 mg twice daily (BID) or matching placebo for 5 days.

·     Vertex Pharmaceuticals (VRTX) mentioned positively in Barron’s saying the recent pullback in shares after a setback on a new drug can be an opportunity for investors to buy. Notes little has changed for Vertex’s business and the CEO emphasized that its pipeline has “never been stronger.” Some analysts believe the company might become an acquisition target.

·     Merck & Co Inc (MRK) said on Saturday the experimental antiviral drug molnupiravir it is developing with Ridgeback Bio showed a quicker reduction in infectious virus in its phase 2a study among participants with early COVID-19.

·     Adaptive Biotechnologies (ADPT) announced that the U.S. FDA issued an Emergency Use Authorization for T-Detect COVID to confirm recent or prior COVID-19 infection

·     Passage Bio, Inc. (PASG) filed for a common stock offering of up to $125M; also filed for a mixed shelf offering.


Technology, Media & Telecom

·     Coherent Inc. (COHR) said it plans to accept a revised takeover proposal from electronic-components maker II-VI Inc. (IIVI) and scrap its deal to be acquired by rival with Lumentum Holdings Inc. (LITE). Coherent’s board determined that II-VI’s new bid, which includes $170 in cash and 1.0981 shares for each Coherent share, represents a superior proposal to LITE’s $100 cash, 1.1851 stock deal

·     United Microelectronics (UMC) reports February net sales grew 9.9% Y/Y to NT$14.95B; YTD sales up 10% Y/Y to NT$30.48B

·     Evolv Technology is combining with a special-purpose acquisition company to go public in a deal that values the crowd-safety company at about $1.7B, WSJ reports; Evolv is merging with the SPAC NewHold Investment Corp. (NHIC)

·     More than 20,000 U.S. organizations have been compromised through a back door installed via recently patched flaws in Microsoft Corp’s (MSFT) email software, a person familiar with the U.S. government’s response said on Friday, as per Reuters. The hacking has already reached more places than all of the tainted code downloaded from SolarWinds Corp (SWI) and organizations in Asia and Europe were also affected by the sophisticated hack

·     Walt Disney (DIS), Live Nation Entertainment (LYV), SeaWorld (SEAS): California officials said theme parks and stadiums can reopen as soon as April 1 provided, they meet local requirements and take precautions against the coronavirus

·     Cisco Systems (CSCO) and Qualcomm (QCOM) mentioned positively in Barron’s saying investors should balance dividend yield and valuation, and both co.’s meet the criteria. Cisco, which yields 3.3%, was recently trading at 14.3x what it’s expected to earn this fiscal year. Qualcomm has a lower dividend yield of 2% and recently traded at 18.7 times this fiscal year’s profit estimates.

·     Tech companies often prefer stock buybacks to dividends as a way to return capital to shareholders, because they need to offer stock options as a form of compensation. Texas Instruments (TXN), which was recently yielding 2.4%, is a stock that has been returning capital via both dividends and buybacks – Barron’s


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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