Market Review: April 01, 2021

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Closing Recap

Thursday, April 01, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

Stocks retained their upward momentum into the new month and quarter with the S&P 500 topping 4,000 early in the session and holding its gains throughout the day despite weekly jobless claims unexpectedly rising from last week. The VIX touched its lowest levels since before the pandemic-related selloff in February 2020 with stocks’ latest push higher. The 10-year yield slipped back below 1.68% and the lower rates brought another rotation into growth names, highlighted by the Nasdaq Composite posting its highest close in more than 2 weeks, though the index remains around 4% off its record close from February while the Dow and S&P each achieved their records this week. Energy (MRO, FANG, DVN, HFC) led the S&P as oil prices jumped after OPEC+ announced lifting production cuts. NIO and XPEV both rose in the EV space after reporting record Q1/March deliveries, and TSLA opened the day higher in anticipation of its number but pares gains after failing to report them today. MU’s beat-and-raise and TSM’s announcement that they will invest to meet higher demand lifted other semi stocks (LRCX, AMAT, SIMO, NVDA). Retailers were generally weak as PVH, RL, KSS, CPRI were among the worst performers in the S&P today. UBER soared after Jefferies and Wolfe both initiated coverage with bullish ratings. DKNG, PENN rose on MLB Opening Day. Markets will be closed tomorrow for the Good Friday holiday.

Economic Data

U.S. jobless claims rose to 719,000 in the latest week, higher than the consensus 680,000 and compared to 658,000 the prior week (previous 684,000); the 4-week moving average fell to 719,000 from 729,500 prior week (previous 736,000); continued claims fell to 3.794 mln in latest week vs. est. 3.775 mln (and from 3.840 mln prior week); the U.S. insured unemployment rate unchanged at 2.7% in the latest week

US Markit Manufacturing PMI came in at 59.1, barely missing the forecast that called for 59.2, but slightly improving on February’s 59.0

Construction Spending fell -0.8% from February, which was a smaller decline than the consensus forecast of -1.0% MoM and came down from February’s MoM +1.7% increase

ISM Manufacturing for March was strong, with the reported 64.7 topping the expected 61.5 and improving on last month’s 60.8 number. This was also the highest monthly reading since December 1983.


Commodities, Currencies & Treasuries

Gold prices rose for the second consecutive day, with June gold settles at $1,728.40/oz, up $12.80, or nearly 0.8%.

Treasury yields retreated as the 10-year yield fell back near 1.68% after ending each day this week above 1.7%.

Oil prices finished higher as WTI crude gained $2.29, or 3.87%, to settle at $61.45/bbl, closing out its first weekly increase since the first week of March. Today’s gains came as the OPEC+ meeting concluded with an agreement to gradually lift production cuts starting next month and accelerating production in July.






WTI Crude















10-Year Note








Sector News Breakdown


Retailers; SPWH posted Q4 EPS 75c (est. 44c) on sales $438.2M (est $377M)m and same-store sales +58%; GES reported Q4 adj EPS $1.18, beating consensus $0.56, on revs $648.5M vs est. $659.9M; RGR and SWBI shares moved higher after NICS data showed a record 4.69M criminal background checks in March, a 25% YoY increase and +36% from February

Auto sector; NIO delivered 7,257 vehicles in March, an increase of 373% Y/Y and 30.1% MoM from 5,578 vehicles in February 2021; XPEV delivered a total of 5,102 Smart EVs in March 2021, an increase of 384% YoY and 130% MoM, March deliveries consisted of 2,855 P7s, and 2,247 G3s; F (Ford) Q1 sales 521,334 (+1% YoY), led by truck sales increasing more than 5% from 1Q20 and a record 25,980 EV sales (+74.1% YoY); HMC Q1 sales jumped 16.2% to 347,091, with March contributing over 148k sales, a 92.5% YoY increase, and similarly experienced record EV sales with more than 10k deliveries in March setting a new company benchmark; FCAU reported Q1 sales 469,561 (+5% YoY); GM Q1 sales 642,250 (+4% YoY) with retail deliveries growing 19%; NSANY Q1 sales improved by more than 10% from last year to 28,553; VLDR announces multi-year agreement with AGM systems LLC, launches new Velodyne lidar-based UAV mapping solution for energy companies worldwide; in auto retail, KMX 4Q EPS $1.27 vs. est. $1.26 on revs $5.16B vs. est. $5.17B, qtrly comp used unit sales -2.3%; Barclays initiated FSR at Equal-Weight with a $17 target, though notes there is risk involved with the 180-day post-merger lockup expiring April 27, when up to 43M shares (1/3 of current float) become unrestricted

Restaurants; WING released preliminary updated Q1 sales of $558.9M (+30% YoY), domestic comps +20.7%, company-owned same-store sales +13.4%, and digital sales 63.6% vs 43.3% 1Q20; PLAY Q4 EPS ($1.19) loss was narrower than est. ($1.29) on revs $116.8M (-66.3% YoY) vs est. $101.7M, and they see Q1 rev $210-220M

Casinos, Gaming, Lodging & Leisure sector; in casinos (WYNN, MLCO, MGM), Macau on road to recovery Macau GGR dropped 68% from March 2019, but improved 14% m/m in March, supported by volume pickup even as VIP hold remained below normal – GGR came in lower than expected partly due to continued weak hold in the month; BYD tgt raised to $70 and up ests at Stifel to account for stronger visitation/spending patterns witnessed in 1Q21 (even with a softer February) and our expectations that gaming revenues should continue to recover quickly; CCL was initiated by Citi at Buy with a $30 pt as they see cruise lines benefitting from pent up travel demand and the vaccine rollout; Cowen recommends US domestic airlines (SAVE, ALK, ALGT, LUV, JBLU) in the near-term as they see domestic strength in March and April; UBER was initiated at Wolfe with an Outperform rating and $73 pt, and at Jefferies at Buy with a $75 target as a top reopening play with profitability coming in 4Q21



Energy stock movers; OPEC+ agreed to gradual increase production by 350,000 bpd in May, 350,000 bpd in June and 441,000 bpd in July, and Saudi Arabia will also roll back its 1M bpd cut gradually by 250k bpd in May, 350k bpd in June, and 400k bpd in July

Stifel said it is raising 2021/2022 NYMEX WTI forecasts 17%/15% to $59.58/$56.18 according to NYMEX strip prices as of 3/24/21 and also raising are target prices on most of our E&P universe primarily based on the updated oil price forecast and a lower discount rate for our Smid-cap group; BTIG initiated FTI at Buy with $12 PT as their macro outlook favors subsea equipment providers and this stock has the highest market share in subsea awards and is developing an energy transition portfolio that includes offshore wind and wave power, HLG at Neutral as a way to invest in the upcoming oilfield cycle and offshore wind market, though questions about major contract renewals drives the Neutral rating, and DRQ also at N as they do not see meaningful upside given its expensive valuation amongst peers and questions about if the company can stay relevant; Piper raised their long-term outlook on crude and refining margins, downgraded PSX to Neutral, and maintained relative preference for upstream exposure vs refining with top picks CVX, RDS, COP, VLO

MLP sector JPM said they prefer names with strong FCF generation and they upgraded DCP to OW given its superior FCF generation and recovery torque, remained OW on RTLR given its best-in-class balance sheet and growth opportunities, and HESM as the most attractive comvbination of stability and strong yield, keep TRGP as its pick in its midstream coverage, and downgraded CEQP to Neutral given its appropriate valuation


Bank movers; Treasury yields slipping, weighing on some banking shares early; Wells Fargo increases estimates for most of the 17 large cap banks that we cover by about 20% for 1Q21, 10% for 2021 after prior increases in the past month (BAC, C, JPM) given better than expected economic growth, credit, rates, and efficiency. They place more emphasis on Stage 2 recovery plays of BAC (spread revenues), USB (payments), TFC (merger), and C (buybacks) since Stage 1 factors (reserve releases, capital markets) seem more priced in short-term based on the underperformance of JEF after its record results last week; GS downgraded to Neutral from Buy with $340 tgt at UBS noting shares have substantially outperformed and now seem to reflect a solid mid-teens ROTE, in line with management’s targets and believe the risks are more balanced; OpCo raised its price target on MS, BAC, C, JPM, USB

Insurance; Credit Suisse lifted their target on TRV to 153 from $142 and raised their 2021-22 EPS estimates due to lower core loss ratios and higher reserve release estimates; RBC said AIG may face up to $575M in catastrophe losses in Q1, which includes losses from Winter Storm Uri in Texas and Covid-related losses, and is an increase from their previous estimates for $275M in losses

Consumer Finance; FLT upgraded to Buy from neutral at Citigroup with $310 tgt believing that faster recovery momentum and "buy-back optionality" is not factored yet into consensus estimates or the current multiple – says longer-term, they think WEX likely has a greater degree of earnings power expansion ahead

Payments and FinTech; NCNO reported Q4 EPS (6c) vs est. (9c) on revs $56.6M vs est. $53.3M and sees Q1 rev $59-60M, and Needham reiterated the stock as its top 2021 pick but lowered their price target to $85 from $100 as the market’s valuation for SaaS stocks has moved lower; MA announced new and expanded partnerships, including with LYFT and DASH

Bitcoin; RIOT said Q4 mining revenues rose 116% sequentially to $5.2M (from Q3’s $2.4M), and selling, general and administrative costs rose just 14% quarter-over-quarter (to $2.3M), posted $3.9M in net income on a GAAP basis, vs. a prior-year loss of $3.4M, and a loss of $1.7M in Q3; FTFT announced they will acquire a bitcoin mining farm operated by Nanjing Ribensi for 60 mln yuan ($9.1 mln) located in Yajiang County, Sichuan Province, China with a capacity to operate 30,000 bitcoin mining machines, though shares rolled after announcing a $35M offering; MSTR initiated with a Buy rating and a price target of $850 at BTIG based on his sum-of-the-parts analysis, assuming that the price of bitcoin rises to $95K by year-end 2022

REITs; Mizuho named GLPI as a new Buy with a $47 target as they say gaming REITs have been resilient and this company is a winner as consumer spending and gaming revenues recover

Services; SPGI upgraded to Outperform from Market Perform at Raymond James and introducing a target price of $402 and MCO upgraded to Outperform from Market Perform and introducing a target price of $337; JPMorgan initiated BCOR at OW with a $22 target



Pharma movers; PFE and BNTX topline results from their pivotal Phase 3 study for COVID-19 vaccine with the results indicating that the shot BNT162b2 was 91.3% effective against COVID-19, from seven days through up to six months following the second dose; JNJ said it had found a problem with a batch of drug substance for its COVID-19 vaccine, which did not meet quality standards at EBS production site in Baltimore, Maryland; AZRX shares fall after saying results didn’t consistently meet the primary efficacy endpoint in its Phase 2b OPTION 2 clinical trial, investigating MS1819 in cystic fibrosis patients with exocrine pancreatic insufficiency

Biotech movers; GILD upgraded to Outperform from MP with $80 tgt at Bernstein saying analysis suggests that Trodelvy and magrolimab will likely post positive pivotal results in HR+ breast cancer and AML, respectively, in 2H21; QURE upgraded to Buy at Mizuho as see favorable risk/reward given a positive safety update on the lead HemB program which we see as a de-risking event for the company; UTHR said the FDA approved its drug Tyvaso for treatment of pulmonary hypertension associated with interstitial lung disease; NEXI was initiated at Outperform with a $30 pt by Raymond James; Roth named CMPS as a new Buy with an $88 price target as the leading way to play psychedelic drugs as a treatment for mental illness with plans to complete a large Ph 2b trial by year-end

Healthcare services and providers; CVS announced that its PBM will continue to serve the Government-wide Service Benefit Plan. This contract is an arrangement with carriers of the Federal Employees Health Benefits (FEHB or FEP) program. CVS has served this program since 1993; ICLR upgraded to overweight from equal-weight at Wells Fargo with $235 tgt which reflects a positive view of the proposed acquisition of PRA Health Sciences (PRAH) as well as continued strong pharma/biotech industry trends

MedTech and Equipment; ABT received FDA Emergency Use Authorization for over-the-counter, non-prescription, asymptomatic use of its BinaxNOW COVID-19 Ag Self-Test for detection of coronavirus infection; QDEL QuickVue At-Home OTC COVID-19 test receives emergency use authorization for screening use with serial testing; BDX announced the FDA has granted emergency use authorization, or EUA, for its rapid antigen test to be used for SARS-CoV-2 screening through serial testing of asymptomatic individuals; in diabetes sector, Leerink did deep dive on industry which prompted upgrade of PODD to Outperform and cut SENS to MP; Citi initiated Buy ratings on LUNG with a $60 price target and ISRG with a $862 target


Industrials & Materials

Industrial & Machinery; Baird upgraded AYI to Outperform with a $19 target after the company reported earnings yesterday pre-market and future catalysts, such as its long-term strategy, potential stimulus benefits, and incremental capital deployment; RBC said the infrastructure plan that was proposed yesterday was underwhelming and said PFAS spending would be positive for AQUA, negative for MMM, and list XYL, MWA as beneficiaries of the water infrastructure spending overall, and Bernstein called TRMB, J, PWR as the most attractive ways to play the infrastructure plan; Loop lowered their Q1 forecasts on poor Texas weather but maintained FY21 and 22 forecasts, seeing mid-long term upside on a stronger macro outlook from infrastructure spending and private construction recovery, keeping SUM at Buy as a turnaround story with attractive valuation

Transports; XL Q4 EPS (6c) vs est (9c) on revs $10.9M vs est. $12.1M, and guided Q1 revenue to $1M, well short of consensus $8M

Aerospace & Defense; Raymond James upgraded VSAT to Strong Buy from Outperform and maintained their $67 target as they believe its share performance has become dislocated from fundamental valuation and expect significant growth potential once its ViaSat-3 is launched next year

Metals & Materials; BMO said they remain OW on TROX and raised their PT to $29 after meeting with management, saying risk-reward is dramatically skewed towards the upside with relatively minimal risk

Technology, Media & Telecom

Semiconductors; MU reported results at the high end of its earlier pre-announced range, and guided well above consensus and our estimates (including a +860bps non-GAAP gross margin expansion Q/Q); TSM said it plans to invest $100 billion over the next three years to keep up with demand – TSMC is working closely with our customers to address their needs in a sustainable manner, the world’s largest contract chip manufacturer said in a statement to Reuters; WDC and MU are each exploring a potential deal for Kioxia Holdings Corp. that could value the Japanese semiconductor company at around $30 billion – WSJ

Software movers; Citi said recent volatility in hypergrowth software names could continue in the coming months with rising interest rates and the sector’s valuation vs the S&P 500, though they see MDB, TEAM, DOCU, ESTC as their best ideas as investors look for stocks with company-specific catalysts or revenue reacceleration; Piper flagged ASAN, MDB, TWLO, AVLR, PLAN as cloud software names with the highest upside potential after the average stock is now 29% of its respective 52-week high in the sector despite strong underlying demand fundamentals; Morgan Stanley named AYX as a new Equal-Weight with a $93 price target as the company needs much work to deliver a compelling strategy given heavy competition; VRNT Q4 adj EPS 98c on revs $351M vs estimates 79c, $344.7M in its first earnings report as a standalone company after spinning off CGNT on Feb 1

Media & Telecom movers; MASN and NBC Regional Sports Networks (RSNs) were removed from DISH TV and SLING TV last night, affecting access in 10 states and Washington D.C.; SBGI and BALY have formally rebranded Sinclair’s regional sports networks as Bally Sports; CIBC upgraded TU to Outperform from Neutral and kept their $28 price target $28 following the company’s $1.3B equity raise in support of opportunistically accelerating investments in infrastructure

Hardware & Component news; VRSN signs a deal with Associated British Ports to deploy 5G at the Port of Southampton, marking Verizon’s virst European private 5G deal; Goldman reiterated their Sell rating on AAPL as they see significant downside risk on a slodwon in App Store growth post-Covid

Internet; Piper assumed coverage on NFLX at OW with a $605 target given its consistent subscriber gains, price increases, and original content, and said investors have an attractive entry point after trading sideways since last summer; Wolfe initiated Outperform ratings on SHOP ($1360 pt), GOOGL ($2450 pt), BKNG ($2630 pt), MELI ($1800 pt), SNAP ($65 pt), WIX ($350 pt), GDDY ($92 pt), EBAY ($77 pt), and Peer Perform ratings on CHWY ($80 pt), EXPE ($170 pt), ABNB ($180 pt), FB ($350 pt), SPOT ($260 pt), TRIP ($51 pt),TWTR ($65 pt)


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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