Market Review: November 09, 2021

Auto PostDaily Market Report

Closing Recap

Tuesday, November 09, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     U.S. stock averages finish lower, snapping long winning streaks for the S&P, Dow and Nasdaq as equities take a modest pause following a surge throughout October which has carried into November. There wasn’t a main factor for the pullback other than stocks are in overbought territory after the 11-day winning run for the Nasdaq and 8-days for the S&P 500. Treasury yields tumbled across the board while the dollar was little changed, and gold prices advanced for a 4th straight day heading into tomorrow’s consumer price index (CPI) inflation report. Today’s PPI report showed stubbornly high prices, but matched economist estimates. There were several stock and sector moves (see below), but overall just looked like tired markets.

·     Stock & Sector movers: PYPL stumbles back to the $200 level at its lowest levels since last November after issuing weak Q4 revenue guidance that caused the company to lower its FY projections, and initial FY22 outlook also below consensus; GE soars to 3.5-year highs after announcing plans to split into 3 separate companies; meme stocks mixed after earnings – AMC slides despite beating estimates and CLOV also falls despite its revenue beat and in-line guide, while SPCE jumps after its report; Hertz HTZ re-lists on the Nasdaq and opens below its upsized offering priced at $29; in software, FIVN spikes after its quarter/guidance attracts an upgrade from Truist while NEWR flies to ATH after its report draws a double-upgrade from JPMorgan; RBLX surges to record highs after reporting back-to-back quarters where revenue more than doubled YoY and ZNGA outperforms on its bookings beat in video games, while REAL soars and $TDUP rises after earnings in e-commerce; TSLA slides over 10% as the EV space reverses recent gains; KNDI WKHS fall after earnings, NIO red into tonight’s report; BLNK QS CHPT VLTA also pare some of yesterday’s infrastructure bill-related gains.


Economic Data:

·     Inflation data higher, but in-line with estimates: The October Producer Price Index: +0.6% vs. +0.6% consensus and +0.5% prior while on a YoY basis, rose +8.6%, in-line with economist estimates and +8.6% prior. Core PPI (ex food & energy) rises +0.4%, in-line with estimates and +0.2% prior and on a YoY basis, rises 6.8% (also in-line)



·     Oil prices spike as WTI crude rises $2.22, or 2.71% to settle at $84.15 per barrel, its third straight day of gains and a steep rebound off morning lows of $81.78 ahead of weekly inventory data tonight (API) and tomorrow morning (EIA). The U.S. Energy Information Administration cut its 2022 world oil demand growth forecast by 130,000 barrels per day to 3.35 million bpd. In its monthly forecast, the agency raised its oil demand growth estimate for 2021 by 60,000 bpd to 5.11 million bpd. Gold edges higher $2.80 or 0.2% to settle at $1,830.80 an ounce, rising a 4th straight day as the dollar index slips below the 94 level and Treasury yields fall all day ahead of another inflation reading on Wednesday. Nat gas prices fell 44.8c, or 8.3%, to settle at $4.979 per MMBtu, the lowest close for the contract since Sept. 23 and the biggest daily percentage decline since early October when it dropped over 10% – warmer weather, Russian gas flows resumed to Germany weighed on prices.


Currencies & Treasuries

·     Bond yields tumbled across the board as the benchmark 10-year yield fell over 6 bps to 1.43% while the U.S. 30-year yield falls to 1.805%, lowest since July 20. Ironically, some of the decline in yields came after the U.S. Labor Department said producer prices increased solidly in October (generally a situation where yields would rise). The yield on the 10-year rebounded off lows following an ugly auction, as the U.S. Treasury sold $39B in 10-year notes at a yield of 1.444% vs. 1.432% when issued prior with a bid-to-cover at 2.35 (well below prior auction of 2.58) and indirect awarded 71.01% and directs 13.8%.

·     Bitcoin and other crypto assets strong again (BTC highs above $68K before paring gains). Helping matters was Apple CEO Tim Cook revealing in CNBC interview that he owns bitcoin and ether, but says the investment was from a “personal point of view” and that he has no plans to buy either of them for Apple (AAPL). The Treasury Department is scheduled auction of $25 billion worth of 30-year bonds on Wednesday. Wednesday is also the scheduled release date for consumer price index data, which will be closely watched as a gauge of inflation.






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; ahead of earnings, Cowen said they prefer Macy’s (tgt to $37 from $32) into the print vs. KSS on better inventory position, and higher likelihood to beat and raise; TDUP posted another quarter of accelerating growth, resulting in upside to Q3 sales/EBITDA guidance. Specifically, revenues grew 35% (vs. guidance 30-32%), which was an acceleration from Q1’s +15% and Q2’s +27%; PRTY slips as the company misses on revenue but guides Q4 revenue above consensus; said Q3 sales fell 4.4% Y/Y while 3q comp sales +7.5% vs. +8.30% y/y; REAL shares another name rising on better earnings results (upgraded to Buy at BTIG)

·     Auto sector; RIVN 135M share IPO expected (range $72-$74) to price tonight; EVGO expanded its partnership with GM to now deploy 3,250 charging stalls across the country to be the nation’s largest public fast-charging network through 2025, and also expanded its partnership with UBER to provide discounted accounts to drivers based on their Uber Pro status; Credit Suisse initiated FSR at Outperform with a $32 target as its sleek product at a high-volume price point offers a compelling value proposition in an EV market lacking options; Hertz (HTZ) is re-listing on the Nasdaq with its new symbol (was HTZZ) and increased their public offering to 44.5M shares from 37.1M priced at $29.00; KNDI Q3 EPS and revenue miss estimates; LAZR surges as announced today at the NVIDIA GTC conference that its lidar solution has been selected to be part of the sensor suite in the NVIDIA DRIVE Hyperion autonomous vehicle reference platform; WKHS Q3 net loss ($81.1M) was wider than est. ($24.6M) on sales $1.1M vs est. $0.89M, is optimistic it will be prepared to deliver commercial EVs starting in 2023

·     Housing & Building Products; DHI Q4 EPS $3.70 vs. est. $3.40; Q4 revs $8.1B vs. est. $7.94B; consolidated pre-tax profit margin improved 480 basis points to 21.3% and consolidated pre-tax income increased 63% to $1.7B; Q4 net sales orders down 33% to 15,949 homes; sees FY22 revenue $32.5B-$33.5B above consensus $32.22B; TREX 3Q21 results were ahead of expectations for revenue ($336M vs. Street consensus $326M) and adjusted EBITDA ($108M vs. $102M) driven by strong end market demand, inventory build in both DIY & pro-channel and pricing; DOOR 3Q adj EPS $1.99 vs est. $1.87 on revs $652Mm vs est. $675Mm; guides FY adj EPS $7.95-8.25 vs est. $8.13, sees FY sales +15-17% vs est. +18.6%; VMC upgraded to Buy from Hold at Argus as expect the company to benefit from improving economic conditions and from the passage of the Biden administration’s new infrastructure plan; VLDR downgraded to Neutral at Citigroup following weaker Q3 results/2021 guide

·     Consumer Staples; APRN Q3 revenue fell 2% YoY to $109.7m from last year and its loss in Q3 widened to $1.17 per share from 96c a year ago; HAIN Q1 adj EPS 25 matched consensus on sales $454.9M vs est. $443.7M, adj EBITDA $47.3M slightly above consensus, sees 1H22 adj sales to decline in the low-single digits; FRPT Q3 EPS (5c) vs est. 7c profit on revenue $107.6M vs est. $115.5M, lowered full-year outlook for sales to approx. $445M from prior guidance exceeding $445M and adj EBITDA to approx. $50M from prior view above $61M; IPAR Q3 EPS $1.20 vs. est. $0.68 on revs $263M vs. est. $262.69M as Montblanc, Jimmy Choo, Coach, GUESS and Lanvin each performed exceptionally well compared to 3Q19; IFF Q3 EPS $1.47 vs. est. $1.16 on revs $3.07B vs. est. $2.61B, sees FY21 revs $11.55B vs. est. $10B and adjusted operating EBITDA margin 21%; VFF Q3 EPS 1c vs est. (1c), adj EBITDA $6.79M crushed estimate $3.64M, adj EPS 1c million (range $1.35 million to $6.40 million) and was upgraded by Cantor to Overweight as they see them as being a good grower in the cannabis space who will gain market-share with their low price points and trades at a discount vs peers; COTY upgraded to Outperform with a $14 PT at Raymond James who believes they are on more solid footing to offer upside; Gugg upgraded SJM to Buy as management changes have brought improved operational focus, they see favorable growth drivers with more margin protection from cost inflation than other food peers, and attractive valuation; VGR Q3 EPS missed estimates on generally in-line revenues, and was upgraded to Outperform at OpCo after announcing plans to spin-off Douglas Elliman (DOUG) as an independent entity, which they believe unlocks significant value; SYY reported Q1 adj EPS 83c vs est. 87c on sales $16.5B vs est. $15.8B, including a 46.5% increase in food-service sales

·     Restaurants; Panera Brands announced it signed an agreement to go public via traditional IPO with Danny Meyer’s SPAC HUGS as its partner; CAKE tgt cut to $58 from $65 at Argus but stay buy rated as expect the distribution of COVID-19 vaccines to continue to boost comp sales, which management said are solidly outperforming Nap Track and Black Box casual dining indices

·     Casinos, Gaming, Lodging & Leisure sector; SEAS Q3 EPS $1.28 vs est. $1.67 on revenue $521.2M vs est. $536.5M, attendance 7.2M guests from 1.5M YoY and -11% vs 3Q19, and said its results were hurt by limited international and group-related attendance and a record number of weather-impacted days; IGT 3Q EPS 31c vs est. 30c on revs $984M vs est. $981M, guided FY revs $4.1B vs est. $4.0B, sees FY CAPEX below $300M, and reinstated its 20c quarterly dividend; MLCO Q3 EPS (49c) was worse than est. (41c) on revenue $446.4M below est. $515.4M; HGV Q3 EPS 90c vs est. 38c on revs $928M vs est. $357.7M, contract sales $433M vs $117M YoY; TRIP shares fell after reporting Q3 adj EPS 16c vs est. 24c on revenue $303M vs est. $304.4M, adj EBITDA $72M vs est. $79.1M, saying it expects Q4 revenue and profit to be impacted by typical seasonal step-down vs Q3, and that its co-founder and CEO will step down in 2022; RCL CEO Richard Fain to step down after 33 years and remain Chair of the Board with the current CFO replacing him Jan 3;; PLYA 8.4M share Secondary priced at $8.35


Energy, Industrials & Materials

·     Aerospace, Industrial & Machinery; GE shares spike on news to split into three public companies – GE Aviation, GE Healthcare, and the combined GE Renewable Energy, GE Power, and GE Digital businesses to become three industry-leading, global, investment-grade public companies; BA said that deliveries fell to 27 airplanes in October while its 787 remains sidelined but won an order for two 777 freighters for Maersk’s Star Air. October’s deliveries were eight fewer than in September but 14 more than in October last year; SPCE rises after mixed earnings results; UP was initiated at Underweight at Morgan Stanley saying TAM analysis points to an unattractive risk reward/21x more expensive than first class – as shares fell

·     Metals & Materials; in the ag space (DE, AGCO, ADM, MOS), the USDA projects corn yield at 177 bushels per acre, higher than expected by analysts; USDA cuts soybean yield projection to 51.2 bushels per acre, instead of uptick projected by analysts; USDA projection of 21/22 world wheat stockpiles slide more than expected by analysts; USDA projects ethanol consumption of U.S. corn by 50m bushels, outpacing supply uptick; in lithium space, LTHM was downgraded to Neutral at Citigroup saying they prefer SQM and ALB saying upside is limited and the valuation is stretched currently at over 40+ times EV/EBITDA on our 2022E EBITDA; in metals, NUE was downgraded to Neutral at Citigroup saying they are structurally bullish on the steel sector but tactically cautious as flat steel prices appear to have peaked.



·     Bank movers; and financials among top decliners following the continued slide in treasury yields; in FinTech & Payments, PYPL tumbles on mixed Q3 but guidance weighed on shares after the payment co warned it might not meet the expectations for the current quarter’s revenue and earnings; HOOD reported a cyber-attack, in which a hacker gained access to email addresses for ~5M customers and full names of 2M other Robinhood users; LMND slides after the insurtech firm says it will pay for its pending acquisition of MILE, a tech-forward car insurer, with stock.

·     Credit Cards (AXP, COF, MA, V); U.S. consumers are spending more and once again ramping up credit card balances, reversing a shift that happened during the crisis when consumers scaled back spending and substantially paid down credit card debt, according to a report released on Tuesday by the Federal Reserve Bank of New York. After rising by $17 billion in both the second and third quarters, credit card use appears to be returning to pre-pandemic patterns, the researchers said. However, balances were still $123B lower than they were at the end of 2019.

·     REITs; shares of COR spiked after Reuters reported the U.S. data center operator with a market value of more than $8 billion, is working with an investment bank to explore its options after attracting acquisition interest. CoreSite has been approached by companies that include AMT, DLR as well as private equity firms, the sources said. as per Reuters



·     Pharma movers; MRK said the U.S. government will buy 1.4M additional courses of their COVID-19 pill, for about $1B to bring the total purchase commitment to about 3.1M courses for ~$2.2B; BNTX Q3 EPS EUR12.35 topped est. EUR9.35 on revs EUR6.09B vs est. EUR 4.99B, sees FY21 Covid vaccine revenue EUR16-17B on up to 2.5M doses; ALKS shares fell after receiving notices of partial termination of two license agreements with JNJ; NVTA posts Q3 results that missed on the top and bottom line, and they slashed full-year revenue outlook to $450-475M from $475-500M; PFE, BHVN enter strategic collaboration for the commercialization of Rimegepant outside the united states, and BHVN separately reported a narrower Q3 loss than expected on revenue above consensus; PFE and BNTX ask FDA to amend COVID-19 booster eligibility to all adults

·     Biotech movers; INO receives U.S. FDA authorization to proceed with innovate phase 3 segment for its covid-19 vaccine candidate, ino-4800, in the U.S.; AMRS tumbles after its qtrly report missed estimates and it said supply chain challenges impacting near-term performance/posts Q3 revs of ~$48M, missing the $64M estimate and lowers its outlook; BIIB

·     MedTech Equipment; NVRO downgraded to Hold at Truist after reported Q3 results with revenue of $93.2M (-14% Y/Y; -9% Q/Q) and 4Q revenue was guided to $94M to $98M, representing a decline of 11%-14% Y/Y and growth of 1%-5% Q/Q; TCMD slides on Q3 top and bottom line miss and lowers year rev view to $203.5M-$206M from $216.3M-$224.5M prior; CSTL reported 3Q21 results that were ahead of consensus as sales force access and melanoma diagnoses trends during 3Q21 were similar to 2Q levels

·     Healthcare Services; SDC tumbles as quarterly results and outlook fall short of expectations with Q3 revs down 18% yoy to $138M, missing the consensus of $181.9M on a wider loss and sees FY 2021 rev forecast $630-$650 mln is below avg analysts’ estimate of $757.2M; SGRY 6M share Secondary priced at $46.50; CAH slips early as EPS of $1.29, missed the $1.33 estimate on better revs while reaffirmed its year profit outlook; CLOV falls despite its revenue beat and in-line guide


Technology, Media & Telecom

·     Internet; SQSP reported a solid beat with top-line results coming in ~1.6% ahead of the Street (at the lower end of 2-5% preview estimate), likely better than feared; HUYA gains after Q3 EPS beat and revs rose by 5.7% Y/Y, though live streaming revenues decreased by 2.1% primarily due to lower average spending per paying user on Huya Live; NFLX holds up well on reports season two of Squid Games was confirmed by The Verge

·     Semiconductors; the Philly semiconductor index (SOX) pulled back off record highs, with some modest profit taking in some names; AMD, NVDA shares recently soaring to new highs while equipment names strong (AMAT, KLAC, LRCX); SONY said it will invest about $500 million in a joint venture with Taiwan Semiconductor Manufacturing Co’s 2330.TW (TSM) that will build a $7 billion chip plant in Japan.

·     Software movers; RBLX surges as posted bookings that topped analyst estimates and slashed losses, while User growth and engagement were in line with expectations; NEWR Q3 beat and raise with revenue accelerating to 18% y/y from 11% in F1Q and 8% in F4Q, back toward the Company’s 25% industry benchmark (at least six brokerages raise NEWR’s PT a day after the results); FIVN reported strong results with upside to revenue, billings, and EPS of $8M, $6M, and $0.05, respectively. Enterprise Sub growth of 51% LTM (we estimate 46% y/y) was helped by strong International growth; ZNGA announced better-than-expected 3Q21 results, with a slight beat in bookings of $668M and higher-than-expected adj. EBITDA of $198M; PING 10M share Spot Secondary priced at $28.25; PLTR posted better-than-expected Q3 sales growth and boosted its full-year revenue and cash flow targets, but shares slipped

·     Media & Entertainment; MSGE Q1 EPS loss of ($2.55) was wider than est. ($1.15) on revs $294.5M vs est. $281.2M; In movie theaters, AMC Q3 EPS ($0.44) vs est. ($0.53) on revenue $763.2M that also beat est. $708.3M with current liquidity availability over $1.8B and does not anticipate the need to borrow under revolver lines over the next 12 months, NCMI Q3 EPS and revs both missed estimates, Credit Suisse raised their box office expectations after viewing the upcoming film slate and as vaccines have now been authorized for children, and upgraded CNK to Outperform as they view it as the best positioned U.S. pure play theater operator who should gain market share vs pre-pandemic levels


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