Market Review: March 15, 2021

Auto PostDaily Market Report

Closing Recap

Monday, March 15, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     Stocks find their way to highs of the day in the final minutes of trading, as the Dow Jones Industrial Average and Dow Transports each reach record highs while the S&P 500 nears its all-time bests, with markets extending rallies amid absolutely no fear in the stock market. The CBOE Volatility index (VIX), the fear index, traded back near 52-week lows at the 20-level (down from 30 level less than 2-weeks ago), as Treasury yields steady, stimulus checks begin hitting accounts this week, vaccine rollouts continue (closer to herd immunity), economic data remains strong, and the Fed is expected to hold rates at record lows later this week in a busy week of central bank meetings. The “reopen” trade surging of late with massive gains in casinos, airlines, retailers, theme parks and hotels were among the biggest winners in a broad equity rally.

·     In sector/top story news today: LLY falls as the worst S&P performer after it’s trial for Alzheimer’s drug donanemab disappoints; Several stocks move higher following M&A news as STAY to be taken private in $6B deal, GNMK being acquired by Roche in $1.8B deal, SJR to be bought by RCI in $26B telecom deal; casinos hit 52-week highs (WYNN, LVS, MGM) after Las Vegas increases capacity limits to 50% today and Jefferies was positive, and PENN CZR hit record levels in the space after news they will be added to the S&P 500; airlines hitting 52-week highs after strong TSA traveler data over the weekend and upbeat monthly metrics data; Cannabis outperforms (TLRY, CGC) after Gov Cuomo says NY is very close to legalization.

·     Plenty of central bank action later this week as the Federal Reserve, Bank of England, and Bank of Japan are all set to meet and will likely set the tone as to where global rates are headed. U.S. Treasury yields, however, were lower on Monday in line with Europe, ahead of these central bank gatherings. Benchmark 10-year Treasury yields were at 1.61%, down from Friday’s top of 1.6420%, a level last seen in February 2020.

Economic Data

·     Empire manufacturing for March shows current business conditions index at 17.4, above consensus of +14.5 and above the +12.1 in February; New orders index 9.1 in March vs +10.8 in February, prices paid index 64.4 in March vs +57.8 in February, employment index at 9.4 in March vs +12.1 in February and six-month business conditions index 36.4 in March vs +34.9 in February.


Commodities, Currencies & Treasuries

·     Oil prices dipped; WTI crude dipped 22c or 0.34% to settle at $65.39 per barrel, well off earlier lows ($64.13) while Brent crude slipped 34c or 0.49% to settle at $68.88 per barrel. Oil prices slipped finished lower amid concerns about potential U.S. tax increases to pay for infrastructure spending, pulling back off recent 22-month highs.

·     Gold prices rose $9.40 or 0.6% to settle at $1,729.20 an ounce, as prices found support from a decline in Treasury yields to mark the highest settlement in about two weeks and ended higher for the 4th time in the last 5-sessions. The FOMC meeting takes place later this week and could provide a meaningful move for treasuries, the dollar and gold (meeting begins Tuesday and ends with a statement on monetary policy Wednesday)

·     The U.S. dollar gained for a third straight session as the dollar index (DXY) traded near highs of 92, pushing above 109 vs. the Japanese yen and the euro holding well below the 1.20 level, amid the recent rise in U.S. Treasury yields and grew cautious ahead of the FOMC meeting this week.

·     Treasury yields were down slightly as the benchmark 10-year held around the 1.61% level most of the day, down roughly 2 bps from late last week one-year highs above 1.64%. Note that yields have risen some 60 basis points since the last Fed meeting – the consensus view is Fed Chief Jerome Powell will not make changes to policy.






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; DG was upgraded to Overweight at Atlantic Securities and ups tgt to $243 from $228 saying sees recent pullback in valuation as an opportunity to enter into a fundamentally high-quality, long-term growth, defensive retail story; BURL positive mention at Morgan Stanley as sees upside to its $360 tgt as forecast 2021 gross margin will expand 125 bps to 43.0% from 41.8% reported in 2019. Covid-19 accelerated optimization of comp store inventory, which fell 31% at the end of 4Q20 on a 2-year basis; LB ests and tgt raised by several analysts (Bernstein, CSFB, BMO) after the retailer raised it Q1 outlook last week

·     Auto sector; electric vehicle sector is higher after Volkswagen highlighted an even deeper commitment to electrification during its Battery Day event today; RIDE rises after saying it intends to respond as appropriate in due time with regards to a short-seller report written on the company by Hindenburg Research on March 12, 2021 and co remains on track for start of production of its Lordstown Endurance all electric pickup truck in September 2021; AXL downgraded to Neutral from Buy at Citigroup as shares have neared their $13 price target after YTD outperformance; RMBL, an ecommerce company selling vehicles, and powersports dealer RideNow, said they agreed to merge in order to create a powersports dealership platform; CHPT adds to Friday losses post earnings (fell -8.5% Friday)

·     Casinos and Gaming; DKNG announces proposed offering of $1 billion of convertible senior notes; PENN rises as it will be added into the S&P 500 index (along with CZR); MGM upgraded to Buy from Hold and raise tgt to $50 from $36 at Jefferies as expect change in valuation context on improved macro outlook for 2H21-2022, with a steeper recovery trajectory in Las Vegas vs. prior and continued regional strength; LVS tgt to $77 from $68 and WYNN to $157 from $135 at Stifel saying they believe the Macau-centric names could represent some of the most compelling ideas for the remainder of 2021 given the massive underperformance over the last twelve months

·     Lodging & Leisure sector; STAY confirmed an agreement to be acquired by Blackstone Group Inc. and Starwood Capital Group in an all-cash deal valued at about $6 billion, with holders to receive $19.50 for each Extended Stay share they own ; timeshare stocks (HGV, VAC) remain relative bargains according to Barron’s as they are betting heavily on growth with a series of recent acquisitions, confident that they can benefit from the economy’s reopening as the Covid vaccines are rolled out. Barron’s said shares could offer more upside; RMBL said it agreed to buy powersports dealer chain RideNow for up to $575.4Mm in cash and stock with purchase price including $400.4Mm in cash and about 5.8Mm Class B common shares



·     Energy stock movers; oil stocks dipped in a bout of profit taking as oil prices end the day lower; Bank of America downgraded COP, CLR, EOG, and XEC to Neutral from Buy; Piper downgraded COG to Neutral from OW on valuation and a lack of catalyst, and CRK to N from OW as well due to a less favorable risk-reward; INT upped its quarterly dividend by 20% to 12c from 10c; FI was upgraded to Equal-Weight from UW at Barclays

·     Utilities & Solar; Guggenheim lowered its price target on AWK to $146 from $151, though said the stock remains one of the premier utilities under coverage based on its top tier EPS growth, strong line to sustained regulated capital investment through the end of the decade, highly attractive ESG profile, and its well-seasoned management; Gugg also said they continue finding AEP valuation attractive as the recent proposed settlement in its Ohio rate case supports their thesis that its company and rate case would not be affected by Ohio’s audit and investigation of FElifted its FY21 EPS guidance to $1.85-1.95 from $1.55-1.65 and above estimated $1.71



·     Bank movers; Credit Suisse sees potential EPS upside of 5-15% in 2022 for large cap banks (JPM, WFC, Cetc.) given the steeper yield curve and says the upside bias to estimates should be a continuing net positive for bank stocks; Wells increased their price target on JPM to $185 from $170 and upped its 2021 estimates to street-high numbers and its 2022, 2023 are also now well above consensus as they see the bank emerging from the pandemic stronger with better-than-expected share, efficiency, and earnings; Bank of America raised their HWC tgt to $53 from $45 as New Orleans lifting pandemic-related restrictions on Friday should boost investor sentiment, even if a full re-opening and visitor activity is likelier to occur 2H21-1H22; RBNC was upgraded to Outperform with a $30 pt at Raymond James after their investor meetings last week included positive updates on its tech/digital offerings and the company’s growth strategy

·     Monthly Master Trust credit card data; SYF credit card delinquency rate falls to 3.1% in February from 3.2% in January and from 4.5% in February 2020, while the adjusted net charge-off rate is 4.0%, up from 3.1% in January and down from 5.3% in February 2020; DFS credit card delinquency rate falls to 2.01% in February from 2.08% in January and 2.64% in February 2020, while its net principal charge-off rate was 3.15% in February versus 2.57% in January and 3.84% in February 2020; BAC credit card delinquency rate was 1.50% at February end vs 1.55% at January end and credit card charge-off rate was 2.56% in February vs 1.75% in January; Citigroup Inc. (C) credit card charge-offs 2.76% in February vs 2.01% in January

·     Payments and FinTech; Stripe said that it raised $600 million from a group of investors that included Ireland’s National Treasury Management Agency, insurers Allianz SE and AXA SA and investment managers Baillie Gifford & Co. and Fidelity Investments/valued Stripe at $95B, more than 2 1/2 times the valuation in a 2019 fundraising round. ; Mizuho said their survey estimates that 10% of the direct stimulus checks may be used to buy Bitcoin and stocks, with Bitcoin accounting for 60% of total incremental spend which may add 2-3% to its $1.1T market cap, and rank V (Visa) and PYPL as the preferred payment names among check recipients by a wide margin, followed by MA, SQ; Wedbush says the recovery in travel and overall economic activity, as well as the recent stimulus bill, is positive for V (Visa), MA, FIS, PYPL, WNS, and said the street is currently yet to model such a recovery; Wells sees the payments from the stimulus bill as a positive for V, MA as they should have an immediate impact on consumer loan credit, payment rates and spend volumes, boost debit volumes

·     Financial Services; Barron’s said shares of WD are cheap with room to grow as commercial loans for apartment buildings appears to be on the upswing as trends in the residential mortgage market are troubling given concerns of slowing lending activity resulting from rising interest rates; FICO approved stock repurchase program to acquire up to $500M of its outstanding common stock; Credit Suisse bumped its price target on NRZ to $12 from $11 as their earnings are positively impacted by higher interest rates unlike other mortgage originators, and the recent rise in consensus estimates still remain 15% below earnings power

·     REITs; Mizuho raised their price target on AIRC (to $45 from $40), AVB ($189 from $169), CPT ($112 from $103), EQR ($79 from $68), ESS ($305 from $280), MAA ($143 from $128), UDR ($49 from $42) as they say the recovery for apartment/coastal markets is happening quicker than previously anticipated given vaccine distribution ahead of schedule, falling cases, and further federal stimulus; Truist upgraded OFC to Buy as it has not recently rallied with the sector and faces limited pressures from work-from-home, and downgraded BXP after shares have reached their $109 price target; MGP raised its quarterly div to 49.5c from 48.75c; KeyBanc initiated VICI at Sector Weight and MGP, GLPI at OW



·     Pharma movers; LLY shares slide over 9% after the highly anticipated release of data on the company’s experimental Alzheimer’s disease drug (Donanemab) fell short of Wall Street expectations as analysts said the data was promising, but not as strong as investors had believed they would be; AZN said it had conducted a review of people vaccinated with its COVID-19 vaccine which has shown no evidence of an increased risk of blood clots, as per Reuters; OCUP said a Phase 3 registration study of its lead product candidate Nyxol in the reversal of pharmacologically induced mydriasis, or dilation of the pupil for eye exams, met its key endpoints; BTAI said the FDA has granted Breakthrough Therapy designation to its BXCL501; ALT reports additional preclinical data for its single dose intranasal COVID-19 vaccine candidate, AdCOVID; Greenrose Acquisition Corp. (GNRSU), a SPAC created to invest in legal cannabis announced plans to buy four pot firms for a total of $210M.

·     Biotech movers; GILD and MRK rejoining forces to develop a long-acting HIV therapy, and are planning to explore whether a combination of two experimental drugs, which the companies had been researching separately, could treat HIV even if taken every several months, WSJ reported; CHEK shares double in premarket trading after FDA permits co to begin study of its experimental cancer screening test in the U.S.; REGN and SNY said they are stopping a Phase 3 study of their anti-PD-1 cancer drug Libtayo early due to positive results in advanced cervical cancer; NTEC surges as announces merger with Decoy Biosystems as former Decoy stockholders expected to own about 75% of combined co, and NTEC 25%; HSTO rises after announcing that the FDA has removed the clinical hold on its early-stage HST-003 trial

·     MedTech and Equipment; NVTA, RNLX, GTH, ILMN shares active after Friday night, CMS delayed the effective date of its new Medicare Coverage of Innovative Technology (MCIT) pathway (CMS-3372) from a planned ~3/15/21 implementation to 5/15/21, to gather additional public comments; NVTA, RNLX, GTH shares slip after Friday night (3/12/21), CMS delayed the effective date of its new Medicare Coverage of Innovative Technology (MCIT) pathway (CMS-3372) from a planned ~3/15/21 implementation to 5/15/21, to gather additional public comments; GNMK to be acquired by Roche in a deal valued at approximately $1.8 billion, paying $24.05 a share in cash ;


Industrials & Materials

·     Airlines; sector strong with reopen stocks extending gains, and better monthly metrics; yesterday was the first day in 2021 where TSA travelers were > 2020’s date 1,357.111 for 2021 vs. 2020 YoY figure 1,257.823 – ; monthly metrics showed: 1) DAL sees 1q daily cash burn $12M-$14M, operating expenses high end prior view and sees 1q total rev low end of prior guidance; 2) LUV said it saw better leisure demand though business travel continued to lag/said it expects operating revenue to fall 15% to 20% from 2020 and 55% to 60% from 2019, both narrower declines than previously estimated; 3) JBLU said it now expects revenue to decline between 61% and 64% during Q1 YoY; 4) ALK said Q1 expectation for capacity (ASMs) % change versus 2019, down about 33% and Q1 expectation for cash flow from operations $50 mln to $100 mln

·     Metals & Materials; US Steel (X) shares rise in steel sector as sees Q1 adj EPS about $1.02 vs. est. 70c and said Q1 adj EBITDA is expected to be approximately $540M and excludes impacts related to acquiring the remaining stake in Big River Steel; Q1 adj net income is expected to be approximately $160M and excludes impacts related to acquiring the remaining stake in Big River Steel among other costs (note Argus downgraded U.S. Steel after run-up in shares)


Technology, Media & Telecom

·     Internet; BABA slips after the WSJ reported that the Chinese government has asked the company to develop a plan to divest its media assets on concerns about the tech giant’s scope ; CPNG is the largest e-commerce company in South Korea Barron’s noted and Coupang accounts for 4% of the country’s consumer commerce, with a broad of online retailing services, noting the company is getting close to getting profitable

·     Software & Hardware movers; DOMO was upgraded to Buy at UBS as believe the company is poised to benefit from a strong spending outlook for Cloud data platforms in 2021, sales execution has now stabilized, cash burn is under control, estimates remain low, and valuation looks attractive; PSTG upgraded from Outperform to Strong Buy with $30 tgt at Raymond James following fundamental checks and trading analysis noting shares have suffered from unfavorable trading flows, in part a victim of the value rotation from growth; optical stocks active (NPTN, ACIA) after the FCC late Friday included products and services from five Chinese companies on a list of communications equipment and services that pose a threat to national security. The list, names Huawei Technologies Co., ZTE Corp., Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co., and Dahua Technology Co.; NOK said it partnered with GOOGL, MSFT and AMZN’s AWS to develop new cloud-based 5G radio solutions with its radio access network tech

·     Media & Telecom movers; VIAC downgraded to underperform at BMO Capital, while up tgt to $70 ($45 for streaming, $25 for core) vs. $60 previously, but notes stock has run beyond this; SJR shares jumped as RCI agreed to acquire the Telecom company in a $26B deal, paying $40.50 per share in cash, a premium of about 70%, as deal also includes about $6 billion in Shaw debt ; AMC said it is preparing to resume operations at nearly all its 56 California AMC locations on March 19, with 2 of its flagship locations in Los Angeles to reopen on 3/15; NY Times reported TPCO may see a new bidder emerge as hedge fund Alden Global’s agreement to buy the newspaper chain has run into some obstacles 


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.

Live Trading

Open an Account

Paper Trading