Market Review: September 13, 2021

Auto PostDaily Market Report

Closing Recap

Monday, September 13, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     It was a mixed bag for major averages to kick off a week loaded with important economic data, as the S&P snapped its longest losing streak since February (5-days). The Dow Jones Industrial Average was strong throughout, paced by gains in healthcare (AMGN, UNH) and financials (JPM, AXP, TRV), while the S&P top gainers were mostly in the energy sector as oil rose 1%, with large cap growth lagging modestly into tomorrow August CPI inflation data. Among top stories early leading Democrats in the House of Representatives said Monday that they are seeking to raise the nation’s tax rate on corporations to 26.5%, up from the current 21%. House democrats’ plan seeks 3% surtax on wealthiest individuals and plan increases capital gains rate to 25%. The headlines appeared to have no impact over the weekend with U.S. futures looking strong overnight, but stocks slipped throughout the morning. Looking forward to tech tomorrow, ORCL is expected to report earnings after the close while investors await AAPL’s first fall event on Tuesday, September 14th, at 1PM ET / 10AM PT, with expectations for a new iPhone, and updates on other products. European stocks ended higher for the first time in five days, bouncing off earlier 3-week lows as oil, banks and utility shares gained on hopes that a strong euro zone economic recovery would outweigh risks from a global slowdown. Bitcoin traded below $45,000, slipping 0.7% from late Friday, while the dollar gained, and Treasury yields slipped.

·     Stock/sector movers: energy stocks (APA, MRO, OXY) among leaders in the S&P as oil prices climb; NKE slides as BTIG downgraded to neutral on supply chain concerns as impact of Vietnam factory closures comes into focus; UAA also slips on similar concerns; SNAP, TWTR underperform in social media space, Goldman initiated TWTR w sell and $60 tgt, SNAP Buy and $90 tgt; DVAX, VALN decline as the UK gov’t ends a COVID-19 vaccine supply deal with them, alleging a breach of obligations; defensive food stocks (MDLZ, K, CPB) among leaders as stocks pullback off highs; IRTC surges after naming its new CEO this morning, who was formerly COO of DXCM; TROX surged after Reuters reported private equity firm Apollo Global has approached Tronox Holdings Plc with a $4.3 billion all-cash offer; lifted shares of other TiO2 stocks such as CC, VNTR


Commodities, Currencies and Treasuries

·     Oil rose close higher as WTI crude gains $0.73 or 1.05% to settle at $70.45 per barrel, boosted on concerns over shut output in the U.S. following damage from Hurricane Ida, as some forecasting that physical shortages could lead to sharply higher prices. Bank America noted today as well that a cold winter could send oil as high as $100. Brent prices end higher by $0.59 to $73.51 per barrel. Brent has held between $70 and $74 a barrel over the past three weeks. Note the EIA today said output from seven major shale formations is expected to rise by about 66,000 barrels per day (bpd) in October, to 8.1 million bpd, the highest since April 2020.

·     Gold prices rise $2.30 or 0.1% to settle at $1,794.40 an ounce, paring gains as the dollar index rises throughout the afternoon (down off earlier highs around $1,800.20 an ounce). EUR/USD fell to an 11-session low below 1.18 on Monday due to broad based dollar buying driven by rallies in short-term rates and the slide could extend after tomorrows August CPI data where estimates show a possible moderation in price increases from the July result, but still the risk of an upside surprise. The dollar index (DXY) earlier rose to 92.887, its highest level since Aug. 27.

·     The U.S. government on Monday posted a $171 billion budget deficit for August, 15% lower than the $200 billion gap a year ago, as recovery-driven tax receipts grew faster than outlays for COVID-19 pandemic relief programs, the Treasury Department said.






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; NKE downgraded to Neutral from Buy at BTIG based on work they have done across the supply chain coupled with checks, all of which point to severe supply chain disruptions emanating from the COVID driven factory shutdowns in Vietnam that have worsened since the company last reported on June 24th; ASO slips after Private equity firm KKR to sell ~18.7m shares, its remaining 20% stake, per prospectus filing; RVLV upgraded to Buy from Hold and raise tgt to $80 from $65 at Jefferies; AZO tgt raised to $1,750 and raise ests. At Wells Fargo noting shares are -6.6% vs. August peaks (+80bps SPX), and see a solid setup into FQ4 (9/21) with likely upward revisions, modest gross margin expectations, and gradually easing comps; AZO meanwhile downgraded to Neutral from Buy at Davidson with $1,600 tgt

·     Housing & Building Products; LOW files prospectus supplement related to a potential two-part note offering; homebuilders DHI, MDC, MTH still look like relative bargains according to Barron’s saying when it comes to builders book value may no longer be the only metric to look at

·     Consumer Staples; GIS was downgraded to Neutral at Credit Suisse and cut tgt to $63 while maintaining FY22 EPS estimate at the high end of management’s -2% to 0% growth range, in line with guidance as see risk to the back-half of GIS’ fiscal year; CSFB also lowered 2021 and 2022 EPS estimates to $2.98 and $3.24 (from $3.06 and $3.34) for MKC to consider management’s cautious commentary on September 8 about business disruption from Hurricane Ida and accelerating supply chain challenges in distribution; APRN is introducing Heat & Eat, the company’s first-ever prepared, single-serving meal offering, ready in five minutes or less

·     Casinos, Gaming, Lodging & Leisure sector; MGM upgraded from Market Perform to Outperform with $58.90 pt at Bernstein saying their view on co during 2021 has been too conservative and have not given MGM enough credit on the progress made in its interactive strategy through BetMGM (MGM ‘s sports betting and iGaming joint-venture); VAC said most of its resorts have had strong occupancy through the summer. But some properties have had higher levels of cancellations due to the spread of the delta variant as sees Q3 sales low end of range and adjusted EBITDA in Q3 is seen approaching the 2019 levels.



·     Energy stock movers; OPEC lowers Q4 2021 world oil demand forecast by 110k b/d to 99.70mln b/d, citing impact of delta variant, while keeps 2021 full-year oil demand growth forecast virtually unchanged at 5.96mln b/d. OPEC raises 2022 forecast for global demand for its crude by 1.1 mbpd to 28.75 million bpd. In E&P and Majors; energy names among early leaders in the S&P with bounce in oil prices, with EOG, MRO, APA, OXY, FANG leading early in the day. Oil prices got a boost after Bank America physical shortages could lead to sharply higher prices, while a cold winter could send oil as high as $100 per barrel. Citigroup upgraded LBRT to Buy from Neutral with a price target of $13, up from $12 and raised RES to Neutral from Sell

·     Utilities & Solar; The Illinois Energy Legislation appears closer to reality with the House voting out an amended version of the Senate’s SB 2408, according to KeyBanc, which now heads back to the Senate, with the governor stating his intent to sign the bill. Firm said both developments are a net positive for state utilities (AEE, EXC’s ComEd) and merchant generation owners (EXC’s ExGen)



·     Bank movers; SIVB mentioned positively in Barron’s saying while some banks have struggled to grow their loan book over the past year, SVB had 8% QoQ growth in loan balances, reflecting strong activity in the tech and healthcare sectors; KEY sold its $3.2B indirect retail auto loan portfolio to a vehicle managed by a subsidiary of Waterfall Asset Management, and will use capital generated by the sale to buy back some of its stock; PFSI announces proposed private offering of $500 million of senior notes; Dan Gallagher, chief legal officer for HOOD said to CNBC today that he expects U.S. regulators to conclude that the company’s payment-for-order-flow business model is "undoubtedly an amazingly good thing for retail investors."

·     Insurance; GNW said its mortgage insurer Enact Holdings set terms for its IPO on Monday with plans to offer 13.3M shares priced at $19 to $20 each. The company would be valued at $3.3B at the top of that range; VRSK provides insured loss estimates for Hurricane Ida saying insured industry losses will range from $20B-$30B as wind and storm surge losses are estimated to range from $17B-$25B and private -market insured losses from inland flooding of $2.5B-$5B.

·     Asset Managers/Private Equity; monthly AUM data out for some as: 1) LAZ preliminary assets under management (AUM) as of August 31 totaled approximately $282.8B; 2) TROW Assets Under Management $1.68 Trillion at Aug. 31, up +25% YoY; 3) VRTS reported preliminary assets under management as of $183.3 billion and provided services to $3.9 billion of other fee-earning assets that are not included in assets under management; 4) BEN preliminary month-end assets under management (aum) of $1,572.1B at august 31, 2021, compared to $1,557.3B in July; CG was upgraded to Outperform at BMO Capital saying they anticipate a narrowing of the valuation gap relative to capital-lite peers BX and ARES;

·     FinTech & Payments; Beijing wants to break up Alipay, the hugely popular payments app owned by Jack Ma’s Ant Group and create a separate app for the company’s highly profitable loans business, the Financial Times reported on Sunday. The plan will also see Ant turn over the user data that underpins its lending decisions to a new credit scoring joint-venture; TRU agreed to buy information-services company privately held Neustar Inc. for $3.1 billion in cash, from investment group led by Golden Gate Capital

·     Bitcoin news; MSTR said has it has bought 5,050 more bitcoins and as of Sept. 12 held a total 114,042 bitcoins worth more than $3 billion; purchased about 8,957 Bitcoins for $419.9 Million During 3Q and Q3 Average Bitcoin purchase price about $46,875; IBKR launches cryptocurrency trading for its clients through Paxos Trust, a regulated blockchain infrastructure platform.

·     REITs; BTIG upgrading MAA and UDR to Buy and Adjusting PTs for AVB, CSR, and EQR; DOC downgraded to EW, at Morgan Stanley and raise tgt on WELL to $100 tgt and PEAK with $37 tgt saying that valuations don’t screen cheap as consensus NTM multiples of ~19x are 3-4x higher than long-term averages and discounts to the REIT group of ~17 percentage points are in-line to slightly tighter than history, but the market may underestimate the recover



·     Pharma movers; DVAX tumbles as the British government ends a COVID-19 vaccine supply deal with French vaccine maker Valneva SE, alleging a breach of obligations that Valneva denies. Valneva is developing its COVID-19 vaccine, VLA2001, combined with DVAX’s adjuvant or vaccine booster, CpG 1018; LPTX rises after saying it saw positive initial data from its first-line cohort of its Phase 2a clinical trial evaluating its anti-Dickkopf-1 antibody, DKN-01, in combination with tislelizumab and chemotherapy in patients with gastric or gastroesophageal junction cancer; MDXG slides as reports top-line data from two late-stage musculoskeletal trials – results of the Phase 2B trial for KOA did not meet primary endpoints/top-line results from Phase 3 Plantar Fasciitis trial did not meet its primary endpoints; TWST and ACET announced a collaboration to accelerate the discovery of gamma delta T cell therapies against five undisclosed targets.

·     Biotech movers; ahead of this week’s (September 16-21) ESMO Congress, several poster presentation abstracts were released as Stifel said ZYME’s Zanidatamab continues to impress, SBTX’s SBT6050 likely underwhelms Expectations, MGNX conclusions remain TBD; ICPT says entered into agreements with some holders of existing 2023 notes to repurchase $39.9mm of 2023 notes for $38.1mm in cash; LIFE announces positive data from phase 1b/2a clinical trial demonstrating consistent dose response for ATYR1923 in Pulmonary Sarcoidosis; RGNX enters partnership with ABBV to develop and commercialize RGX-314, a gene therapy candidate for treatment of chronic retinal diseases/Regenxbio to get upfront payment of $370M and may potentially receive up to $1.38B in milestone payments; vaccine names slip (MRNA, BNTX) as CDC director says hoping by end of year for Covid19 vaccine for kids under 12, CNBC Meg Tirrell reports. Friday, Reuters reported 2 US health officials said it could be end of Oct for kids 5-11

·     MedTech Equipment; NUVA shares slide after saying expects that net sales in Q3 2021 will be lower sequentially from Q2 2021 of $294.8M (vs. est. $305.55M), which likely will pressure margins; IRTC shares jump after naming former COO of DXCM, Quentin Blackford, as President and CEO, bringing more than 20 years of experience; BAX was upgraded to Outperform at Cowen and raise tgt from $90 to $98 on the strength of its planned acquisition of HRC which has a $40B TAM with a 5%-plus Weighted Average Market Growth complementing and strengthening BAX’s existing $100B TAM with a 3% WAMGR; ITMR to be bought by ZOLL Medical for $31.00 cash per share, 48.8% premium, $538 million

·     Healthcare Services; Stifel noted the Department of Health and Human Services (HHS) announced $25.5 billion of healthcare provider relief including phase 4 of the Provider Relief Fund to be applied for starting September 29. The firm said they think this is particularly positive for assisted living and skilled nursing operators and should support further fundamental recovery (names noted BKD, MF, SGRY)


Industrials & Materials

·     Aerospace & Defense; SPCE shares slipped after saying this weekend that the flight window for Unity 23 will be pushed back to mid-October at the earliest after a third-party supplier flagged a potential manufacturing defect in a component of the flight control actuation system; RKLB mentioned cautiously in Barron’s saying after a strong run for shares, it’s time to think about taking some profits; GILT receives a $12Mm service award for recurring revenues from broadband services in Cusco, Peru; KTOS receives $338M sole source contract award for target drones from U.S. air force; CACI awarded $36Mm task order to advance the U.S. transportation command’s defense personal property system

·     Materials, Industrial & Machinery; MMM said at a Morgan Stanley conference today that inflation is higher than they even thought in Q3, and are seeing inflation outstrip price; TT signed an agreement to acquire Farrar Scientific, a leader in ultra-low temperature control for biopharmaceutical and other life science applications for $250M; Shares of uranium mining companies (CCJ, DNN) surged as retail traders from Reddit’s WallStreetBets forum continue to tout the industry

·     Transports; KSU said on Sunday its Board planned to accept CP’s $27.2 billion cash-and-stock acquisition offer as superior to its $29.6 billion deal to sell itself to CNI. Canadian National now has until the end of Friday to submit a better offer or lose its deal with Kansas City Southern; in airlines, Bank America downgraded Brazilian airlines AZUL, GOL to Underperform; Dow Jones noted North American shipping costs jumped last month as freight volumes and rates increased in a tight transport market. Cass Information Systems says freight expenditures rose 42.2% in August compared to the prior-year period and increased 9.2% from July

·     Chemicals; in the TiO2 sector, TROX shares surged after Reuters reported private equity firm Apollo Global (APO) has approached Tronox Holdings Plc with a $4.3 billion all-cash offer, people familiar with the matter said on Monday. Apollo offered $27 per share to buy the company according to the reports (shares of other TiO2 stocks such as CC, VNTR, KRO rose in sympathy)


Technology, Media & Telecom

·     Internet; Chinese stocks listed in the U.S. slip following the latest crackdown on the sector (BABA, BIDU, JD, TCEHY); the stocks slumped in Asia trading after a report that the Chinese government intends to break up Ant Group’s Alipay business. Authorities in China extended their crackdown on the tech industry Monday with a warning to the country’s biggest companies to stop blocking links to their rivals’ platforms; TRIP partners with Audible, AMZN’s audio storytelling subsidiary, as part of co’s move to expand its $99/year travel subscription service Tripadvisor Plus; TWTR dropped below the $60 level after Goldman initiated sell today and $60 tgt – stock breaks below its 200-day MA ($61.25) – last break was in May

·     Software movers; ORCL earnings expected tonight; TENB agreed to buy Accurics Inc., which said its platform enables the detection and mitigation of risks in the so-called infrastructure as code, for about $160 million in cash; CRWD downgraded to neutral from buy at Goldman Sachs citing the valuation of the cybersecurity company; the high growth software sector saw weakness (ADBE, PANW, SPLK) ahead of key CPI inflation data tomorrow; AI said it is immediately available today on Microsoft azure, Google cloud, AWS, and IBM cloud; PANW hosted its Analyst Day event today as reiterate its guidance for the fiscal first quarter of 2022 as well as the full fiscal year, as shared on August 23, 2021, while updating guidance for adjusted free cash flow margin; RDWR shares jumped late day after CNBC reported Private equity firm Siris Capital in talks to acquire the cybersecurity firm

·     Hardware, Components & Services; Apple (AAPL) first fall event is coming up on Tuesday, September 14th, at 1PM ET / 10AM PT, right around the time when the company typically introduces its latest version of the iPhone. Some reports suggest a potentially less dramatic set of announcements compared to the iPhone 12’s radical flat-edged design. It does seem like the Apple Watch and AirPods could get some serious attention, though. DELL upgraded and added to Conviction Buy List with $137 tgt at Goldman Sachs as believe strong cash flow generation and a clear road map for a debt paydown continue to argue for a multiple on Standalone Dell closer to comps. At current VMW and DELL share prices we calculate that standalone DELL trades at just 6x unlevered free cash flow compared to comps ranging between 8x and 16x.

·     Media & Telecom movers; LYV agreed to proceed with its previously announced acquisition of a 51% controlling interest in OCESA Entretenimiento, a leading promoter in Latin America and owner of Ticketmaster Mexico from CIE, a prominent player in the live entertainment industry in Latin America, and Grupo Televisa (TV), for about $444M; TMUS and WMT launch in 2,300 stores, online starting Oct. 18; DIS Shang-Chi and the Legend of the Ten Rings grossed $35.8M in its second-weekend follow-up, bringing its cumulative domestic box office to $145.6M


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