Market Review: November 11, 2021

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Closing Recap

Thursday, November 11, 2021





DJ Industrials




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Equity Market Recap

·     Investors seemingly put aside the inflation fears that have hampered markets this week as the S&P and Nasdaq returned to green territory, though they could not top Monday’s record closes that concluded winning streaks of 8 days for the S&P and 11 days for the Nasdaq. Meanwhile, the Dow was unable to join the rebound and closed below 36,000 for the first time since last Monday as it was weighed down by Disney shares trading at their lowest levels of the year following its disappointing earnings and subscriber growth. It was not the only substantial decliner after earnings, as Beyond Meat shares were pressured again and have now lost nearly two-thirds of their value from record highs north of $200 during the late January craze. Overall, though, earnings season appears to be on the verge of wrapping up with over 90% of the S&P 500 having reported and few major companies scheduled tonight or tomorrow. Bond markets were closed today in observation of the Veteran’s Day holiday. The weekly U.S. Investor AAI poll showed Bulls rise to 48% from 41.5%, Neutrals fall to 28% from 32.5% and Bears fall to 24% from 26%.

·     Stock/Sector movers: Dow component DIS tumbles to its lowest levels of 2021 after its Q4 earnings and Dis+ subscribers misses; BYND plunges to its lowest levels since pre-pandemic on its quarterly miss and weak guidance; FinTech space active with earnings again, with AFRM, SOFI, MQ, ROOT soaring with real estate names OPAD, OPEN after each posted strong results, while PSFE plummets to record lows after its miss and guidance cut; several retail/consumer goods names also moved after earnings with DDS surging to its record high, TPR, SBH, HNST soaring along with old meme names FOSL, WISH on beats, while decliners include YETI despite its beat/raise and CRCT on its miss; Healthcare services busy with HIMS sliding after early gains on strong guidance and a Piper upgrade, while GDRX slips on an in-line report, AMWL rolls to record lows on its revenue miss and guidance cut, OSCR dropping sharply on its miss; scrubs makers FIGS also slumps despite its beat and raise; Chinese stocks rallying after DIDI is reportedly planning to re-launch by the end of the year and JD, BABA rising on record Singles Day sales; 2021 IPOs mixed after earnings with ZIP ripping higher on its beat with strong guidance given favorable macro conditions, APP setting its ATH on its revenue beat, DUOL, TASK gaining on revenue beats and raised guidance, but LZ, BMBL both hit record lows after their results.



·     Oil prices rebound off morning lows as WTI crude gains $0.25, or 0.31% to settle at $81.59 per barrel (off morning lows $80,20), while Brent crude gains $0.23 to $82.87 per barrel. OPEC said in a monthly report it expects oil demand to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, down 330,000 bpd from last month’s forecast. The headlines initially weighed on oil prices, along with inflation fears, but prices rebounded.

·     Gold rises for a 6th straight session, advancing $15.60 or 0.8% to settle at $1,863.90 an ounce, pushing to fresh 5-month highs as a recent spike in U.S. inflation pushed investors towards the safety of precious metals as a hedge. Gold, seen as a hedge against inflation, rose the last few days after data showed U.S. consumer prices in October rose at their fastest pace in 31 years. Strength in the metal also came despite the dollar hitting an over 15-month high.


Currencies & Treasuries

·     The U.S. dollar index (DXY) topped the 95 level, moving to its best level since July 2020 after the hottest U.S. inflation reading in 30 years encouraged bets on interest rate hikes. The euro fell below 1.15 to its lowest levels since July as well (1.145), while the buck rose above 114 vs. the Japanese yen as the CPI data raised expectations that the Fed will need to raise rates faster to head off prices getting further out of control. While the U.S. bond market was closed for the Veterans Day holiday, the dollar index posted its second straight day of gains.






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Sector News Breakdown


·     Retailers; FOSL shares surged after reporting Q3 sales rose 13% to $492M and raised its full-year sales growth forecast to 17-19% from 14-17%; DDS Q3 EPS jumps sevenfold to $9.81, well above est. $5.52, with sales jumping 47% to $1.481B vs est. $1.44B, comp sales +48% also crushing est. +25%; TPR posted Q1 adj EPS 82c vs est. 70c on revenue $1.48B vs est. $1.44B, announced authorization for $1B in buyback, and raised FY22 outlooks for EPS and revs; YETI Q3 adj EPS 64c vs est. 59c on sales $362.6M vs est. $356.7M, now sees full-year adj EPS $2.51-2.53 from $2.42-2.46, sales +28-29% from +26-28%; WISH Q3 EPS (10c) was narrower than est. (15c) on better revenue $368M vs est. $353.6M, sees Q4 revs falling vs Q3 despite holidays due to lower ad spend with Oct revenue down ~20% vs the average Q3 month, and CEO Piotr Szulczewski will be stepping down; FIGS Q3 adj EPS 5c vs est. 3c on revenue $102.7M vs est. $98.5M and raised full-year revenue forecast to $410M from $395M and above est. $399M; LVLU 5.75M share IPO priced at $16.00; DG announced a partnership with DASH to offer same-demand delivery service for everyday essential items, including food and cleaning supplies

·     Auto sector; in the EV space, TSLA CEO Elon Musk sold ~$1.1B in stock as he exercised more than 2.1M stock options that he received as part of his compensation package, SEC filings show; RIDE said global technology firm Foxconn bought stock worth $50M; DIDI is preparing to relaunch its ride-hailing and other apps in China by the end of the year in anticipation that Beijing’s cybersecurity investigation into the company will be wrapped up by then, Reuters reported; HYLN downgraded at Barclay’s and cut tgt to $7 from $12 as they see the product at risk of a slower adoption curve; RIVN rises in its second day of trading as the EV player outperforms

·     Housing & Building Products; homebuilder BZH with a beat asQ4 EPS $1.57 vs. est. $0.82; Q4 revs $590.9M vs. est. $578.1M; homebuilding gross margin was 18.9%, up 250 basis points; GRWG misses Q3 profit estimates, reporting earnings of $0.07 vs. est. $0.09 but revs slightly better rising 111% to $111M topping the $114.8M estimate but lower revs for year as sees FY revenue between $435-$440M vs. est. $448.4M; the 30-year fixed-rate mortgage averaged 2.98% with an average 0.7 point for the week ending November 11, 2021, down from last week when it averaged 3.09%

·     Consumer Staples; BYND shares slide after guiding Q4 revs $85-110Mm well below the consensus estimate of $131.6Mm citing weakening demand from grocery stores that sell its plant-based meat products; HNST shares rise as Q3 revs $82.6M tops est. $80.8M saying sales in diapers and wipes (65% of total revenue) grew 16%, while skin and personal care (31% of total revenue) rose 28%; BROS Q3 comps of 7.3% came in ahead of consensus of 5.9%, with ion-line Ebitda and above consensus guidance for Q4; SBH Q4 adj EPS 64c vs est. 51c on sales $990M vs est. $976.5M, same-store sales +2.1% vs est. +1.9%, issued FY22 guidance for sales +3-4%; DSEY 15M share Secondary priced at $15.00; WBEV 1.692M share IPO priced at $13.00; UTZ rises as Q3 adj EPS $0.18 vs. est. $0.15; Q3 revs to $312.7M vs. est. $307.61M; increase in net sales was driven by acquisitions of +25.1% and Organic Net Sales growth of 1.0%

·     Restaurants; RRGB reported 3Q EBITDA of $8.3M, below Raymond James $15.1M estimate, due primarily to lower store margins and slightly lower sales. Importantly, comps improved as the quarter progressed and Delta concerns eased, with comps up ~4% vs. 2019 levels in Sept/Oct.; QSR downgraded from Overweight to Sector Weight at KeyBanc, reflecting concerns over inflation at BK U.S, lagging SSS trends, and a potential reinvestment cycle that could weigh on RBI’s FCF generation over the next few years, while reiterate OW on DIN

·     Casinos, Gaming, Lodging & Leisure sector; EWCZ 5.22M share Secondary priced at $26.25; RSI Q3 loss of (9c) was narrower than expected (13c) on revs $122.9M vs est. $114.6M, guided FY revs $480-500M from $465-495M (est. $484.3M); GNOG Q3 EPS loss (55c) vs. est. loss (11c) on revs $35.6M vs. est. $34.46M; DKNG had its price target cut by Citi and Argus, though both maintained their Buy ratings



·     Energy stock movers; OPEC lowers 2021 world oil demand growth forecast to 5.65 million bpd (down 160,000 bpd from prev. forecast) citing slower demand in China and India, in its monthly report. Lowers Q4 world oil demand forecast by 330,000 bpd to 99.49 mln bpd, citing impact of ‘elevated’ energy prices while keeps 2022 world oil demand growth forecast unchanged

·     Utilities & Solar; U.S. solar names active on news the U.S. will not open an investigation into Asian solar companies. Morgan Stanley said news negative for FSLR, MAXN since these tariffs could have raised prices "meaningfully" for their U.S. competitors, while firm said positive for other US solar players since decision will allow business to move forward more smoothly & lower risks of project delays for large scale developers such as NEE, AES, solar roofers RUN, SPWR component makers SHLS, ARRY, SEDG



·     FinTech & Payments; AFRM shares rebound a day after shares fell -15% as the buy now pay later company posted quarterly revenue that tops estimates, boosted by growth in active consumers, merchants and volume of goods sold while also expanded its relationship with AMZN; PSFE shares plunge after Q3 revenue falls short of expectations, partly due to market and performance challenges in its digital wallet business as now sees FY21 revs of $1.47B-$1.48B vs. the $1.53B-$1.55B it previously expected; MQ reported smaller-than-expected loss for Q3 while revenue rose 56% to $131.5M, topping the $119.6M est. and better Q4 guide $134M-$139M vs. est. $126.3M, driven by strong TPV growth from an increasingly diversified vertical mix

·     Consumer Finance; lending stocks getting a bounce after tumbling yesterday behind disappointing results guidance from UPST, LPRO, EPAY; SOFI posted a strong top-line beat this qtr, lifting shares amid new customer and product momentum as revenues of $277M beat Street’s $252M as lending segment primarily drove the beat

·     Financial Services; OPEN sold 5,988 homes (+72% q/q), generating $2.3B in revenue (+91% q/q), and the Company acquired 15,181 homes (+79% q/q) during the quarter (overall better EPS, revs and guidance); FA 15M share Secondary priced at $20.00; FICO Q3 results came in light on revenue due to noise in the software business, but above consensus on EPS given Scores’ strength and healthy margin leverage; ZIP with better Q3 results and said expects 4Q to return to more normal environment, the company meaningfully raised full year revenue and EBITDA guidance to reflect the increased employer demand; LZ reported 3Q21 revenue/Adj. EBITDA of $148mm/$15mm vs. $146mm/$15mm, but shares slip as Q3 unit volumes missed JMP Securities projections and 4Q guidance calls for increased marketing spend as seasonality; OPAD Q3 eps ($0.13) vs est. ($1.04) on revenue $540.3M vs est. $524.15M; sold 1,673 homes from 749 YoY



·     Pharma movers; GMDA said the U.S. FDA has sought revised analysis of the manufacturing data generated at its commercial manufacturing facility related to omidubicel, its experimental cell therapy; NRXP said the FDA had identified any reason for a clinical hold in response to the company’s previous submission of updated manufacturing information for ZYESAMI; MRTX 3.45M share Secondary priced at $145.00; VAXX 6M share IPO priced at $13.00; EU’s regulator approved two COVID-19 therapies based on monoclonal antibodies, one developed by U.S. biotech firm REGN and RHHBY

·     Med Equipment & Healthcare Services; BHG Q3 net loss of $296.7M, or (-$0.48) which was larger than the $59.3M loss a year ago (ests were for loss of (-$0.14), while revs jumped YoY to $1.08B, but missed ests; GDRX 3Q results were better than expected; OSCR shares slip on larger EPS loss of ($1.02) vs. est. loss (-$0.66), while Medical Loss Ratio of 99.7%, increased 920 bps YoY; AMWL slides as reported mixed results, with revenue coming in below expectations as visit mix shifted from high-ASP specialty care to lower ASP urgent care and lowered guidance for the year; COO announced that it has signed a definitive purchase agreement to acquire Generate Life Sciences, for about $1.6B


Industrials & Materials

·     Aerospace & Defense; BA is said to near sale of up to 80 737 max jets in India, according to Bloomberg; ERJ upgraded to buy from Neutral as our price target increases to $24 from $16 @ UBS; RBC Capital said their favorite ideas for commercial AM exposure are AIR, TDG as initial outlook for the commercial aerospace MRO growth in 2022 is up ~18%, led by Europe and the United States, with engine MRO forecast up ~20% and component MRO up ~15%

·     Metals & Materials; metals group gets a lift early after MT Q3 Ebitda came in slightly below consensus ($6.06B vs. est. $6.15B) while net income came in at a record ($4.62B) and net debt was the lowest since 2008 at $3.87B (as per Jefferies) and co reiterated global steel demand ex-China to rise 12%-13%; shares of FCX, X, NUE and others were active

Technology, Media & Telecom

·     Internet; WIX Q3 EPS loss (21c) vs. est. loss (42c) on revs $320.8M vs. est. $315.19; total collections $373.3M (+33% y/y), raised FY21 revenue view to $1.265B-$1.274B from $1.255B-$1.27B (est. $1.27B); WB Q3 adj EPS 90c vs est. 84c on revs $607.4M vs est. $589.6M with its ad and marketing revenue up 29% boosted by the Olympics; DUOL Q3 EPS (98c) vs est. (96c) on revenue $63.6M vs est. $60.4M, paid subscribers rose +49% to 2.2M at qtr-end, MAUs of 41.7M and DAUs of 9.8M were both records, guided Q4 total bookings $79M-$82M, revenue $66.5M-$69.5M vs est. $65.65M; JD shares rose after setting a company record for sales on Singles Day with BABA also rising on the event; BMBL posted a modest 3Q beat and guide up, but shares weighed down as paying subs disappointed despite better monetization

·     Semiconductors; BRKS reported F4Q Life Science revenue of $137M compared to Keybanc expectation of $129M, representing organic growth of 24% (KBCM – 19.3%), with FY21 revenue of $514M; CCMP delivered revenue and EBITDA upside in 3Q and increased its guidance ranges (again) for the year (but was narrower "beat-and-raise" versus prior quarters); IPGP downgraded to market perform from outperform at Bernstein with $160 tgt saying the timing of the China cycle and the quick expansion of a low-end segment in China justify a lower multiple

·     Software movers; CRCT shares slide after Q3 profit slips ~40% as EPS missed by $0.03, missing estimates as expenses rise (revs beat), while gross margins tumbled; WEAV 5.0M share IPO priced at $24.00; KNBE 7M share Secondary priced at $25.75; DUOL posted a clean Beat & Raise Q3, with Bookings, Revenue, MAU and Subs all solidly ahead of the Street, with MAU to Subs conversion continuing to improve Q/Q

·     Media & Telecom movers; Dow component DIS posted Q4 earnings and revs below consensus ($0.37/$18.53B vs. est. $0.49/$18.78B), while Disney+ subscribers were 118.1Mm, up +1.8% q/q, but missing the estimate of 119.6Mm (Parks revs were a positive data point, rising 26% QoQ to $5.45B); ALLT downgraded to Neutral at Bank America as reported mixed 3Q results and reduced guidance due to delays in Service Provider (CSP) implementations


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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