Mid-Morning Look: April 12, 2021

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Mid-Morning Look

Monday, April 12, 2021






DJ Industrials




S&P 500








Russell 2000






After posting gains across the board for major U.S. averages last week, stocks are seeing a bout of early profit taking ahead of a busy week of financial/bank related earnings results, a hefty round of Treasury auctions ($96B in 3 and 10-year notes being auctioned later today) and more Fed speaker and economic data. There was no major economic data released this morning in the U.S. however. Stock weakness is broad based early with big cap tech slipping (leaders last week), along with energy, commodities and reopen related stocks as airlines, cruise lines and gaming names among the biggest drags in the S&P. Several healthcare stocks active after updates this weekend at the American Association for Cancer Research Annual (AACR) Meeting 2021 for several names. The Dow Jones Industrial Average, S&P 500 and Dow Transports are all slipping from recent record highs last week, with more weakness in the Smallcap space as the Russell 2000 index underperforms. Bitcoin prices pop back above the $60,000 level while gold prices slide as the dollar and Treasury yields rebound. There were a few big M&A deals to start the week with MSFT buying NUAN $19B deal, while Fed Chairman Powell on Sunday said that the U.S. economy is set to make a turnaround with increased growth that should provide more jobs, however the major risk to the economy is any resurgence in the virus & reopening too quickly, in an interview on “60-Minutes” Sunday night.







WTI Crude















10-Year Note





Sector Movers Today

·     Energy stock movers; Jefferies upgraded XOM to Hold and Eni (E) to Buy as they increase their Brent oil price forecast to $60/bbl for 2021-24E and $58/bbl long term (from $54/bbl and $55/bbl respectively), and they are focused on the return of buybacks heading into earnings and say BP could be the first to announce a program and RDShas the highest shareholder renumeration upside; VEI was initiated with Buy/OW ratings at Bank of America ($21 pt), Citi ($16.50 pt), Credit Suisse ($15 pt), RBC ($17 pt), Capital One ($23 pt), Morgan Stanley ($18 pt), and at Equal-Weight ($14) by Barclays; Roth downgraded EGY to Neutral on uncertainty and its unexpected CEO change (initiated coverage on the stock at Buy on 3/24)

·     Bank movers; big week for banking space with most of the large caps expected to report: SCHW on Tuesday, FRC, GS, JPM, WFC on Wednesday, BAC, BLK, C, TFC, USB on Thursday and ALLY, BK, CFG, MS, PNC, STT on Friday April 16th; GS mentioned positively in Barron’s saying the stock still has room to rise after a strong run during the pandemic, while the IPO and merger trends that propelled its business are still in play while is less exposed to negative impact of low interest rates; CADE announced a deal to merge with BXS in a deal that values the combined company at more than $6 billion and CADE shareholders will receive 0.70 BXS shares for each CADE share held – that values Cadence shares at $22.58 each, a 5.1% premium (Cadence shareholders will also receive a one-time special dividend of $1.25 a share) https://on.mktw.net/3s8QFqQ

·     Semiconductors; QCOM downgraded to in-line from outperform at Evercore/ISI and cut tgt to $150 from $195 as believe the smartphone recovery and 5G tailwind largely reflected in the current valuation; IIVI mentioned positively in Barron’s saying for decades, the laser industry has been a fragmented collection of small players, but a wave of mergers is changing the dynamic, creating long-term opportunities for investors; Citigroup downgraded the Semiconductors & Semi Equipment sector to Market Weight after roughly 625 bps of outperformance thus far this year (and more than 2800 bps over the past 52 weeks); NVDA held its analyst day today

·     Media movers; WWE shares erase early gains as reopen sectors slide (company said both Saturday and Sunday WrestleMania sold out max capacity of over 25K); Credit Suisse raises PT of the media company FOXA by $7 to $34 and reiterates outperform rating saying the near-term concerns have faded as the TV ad market is attracting steam, as the NFL deal is done, the pace of cord cutting is getting stable-to-improve; MTCH upgraded to buy from neutral at BTIG and initiated BMBL with Buy and $77 tgt saying they are going all-in on dating with Key Themes: 1) Attractive category growth/margin profile; 2) Strong 5-yr outlook: 15-20% revenue CAGR, w/40% EBITDA margin; 3) Good set-up w/re-opening & new price tier.

·     Bitcoin; prices jumping on the morning, topping the $60,000 level once again up over 3%; MSTR said its board modified the compensation of non-employee directors, who will receives all of their service fees in bitcoin instead of cash going forward; SOS said it enters into a non-binding letter of intent to acquire the majority equity interest of three us-based power plants aiming to expand its crypto-mining operations into North America; RIOT said in March 2021, Riot produced 187 BTC, an increase of 80% over its pre-halving March 2020 production of 104 BTC



·     BABA +7%; was fined $2.8B by the State Administration for Market Regulation of China as part of the anti-monopoly investigation. Positively, Alibaba does not expect further investigations on this matter, and we believe the removal of this overhang could be a positive for shares

·     CADE +4%; announced a deal to merge with BXS in a deal that values the combined company at more than $6 billion and CADE shareholders will receive 0.70 BXS shares for each CADE share held – that values Cadence shares at $22.58 each, a 5.1% premium https://on.mktw.net/3s8QFqQ

·     CMG +2%; upgraded to Outperform with $1,800 pt at Raymond James as believe the company’s sales have fully participated in strengthening industry trends over the last four weeks

·     EVLO +22%; upgraded to Buy and $18 tgt at Jefferies following strong Co execution and increased momentum in the microbiome space

·     LMNX +11%; rises after Italian diagnostics group DiaSorin said it will buy the company for $1.8 bln in cash, agreeing to pay $37 per share, which represents a 12.3% premium to Friday’s closing price https://on.mktw.net/3s4Kxji

·     NUAN +18%; acquired by MSFT for $56 per share in all cash deal valued at $19.7B (confirms weekend reports my media) – MSFT expects deal to be accretive in FY23 https://on.mktw.net/3tfKsL8

·     SIG +11%; raises its Q1 and full year guidance saying it has seen stronger than expected conversion and average ticket values in the first quarter

·     TSLA +3%; upgraded to Buy from Hold at Canaccord and tgt raised to $1,071 from $419 saying the company is positioned to attack and conquer another trillion-dollar market as its ramps up its focus on energy generation and storage

·     UBER +3%; said its March 2021 total company gross bookings reached highest monthly level in company’s nearly 12-year history and continue to believe that UBER is on track to reach quarterly adjusted Ebitda profitability in 2021



·     AAL -3%; early weakness in airlines, casinos and other “reopen” related sectors

·     AMAT -1%; weakness in the semiconductor chip sector – note Citigroup downgraded the Semiconductors & Semi Equipment sector to Market Weight after roughly 625 bps of outperformance thus far this year (and more than 2800 bps over the past 52 weeks)

·     APHA -13%; shares slide as reported a wider-than-expected fiscal third-quarter loss and revenue that rose less than forecast, citing reduced demand resulting from the COVID-19 pandemic

·     CCL -5%; cruise lines are weak (NCLH, RCL) after being mentioned cautiously in Barron’s saying facing a virtual shutdown and suffering heavy losses, the three-dominant cruise-line operators have raised a total of about $40B through debt and equity sales

·     GME -11%; downgrade to sell at Ascendiant with $10 tgt as remain very concerned about the long term prospects for its video game business

·     IRTC -33%; after Novitas published Medicare reimbursements rates for its ECG monitoring devices this weekend as the reimbursement rates for codes 93243 and 93247 at $103 and $115 respectively are well below the around $300 that Novitas was historically paying https://bit.ly/3dSKB0t

·     SAGE -3%; and BIIB announce topline results from Phase 2 KINETIC study evaluating SAGE-324 in the treatment of people with essential tremor as meets primary endpoint, as reduces muscle tremor but with significant side effects, study results show

·     URBN -2%; after company sales update – said sales in Anthropologie Group have improved substantially, but remain slightly negative; said total retail segment comparable net sales thus far during Q1 have increased by high single-digits

·     X 2%; seeing broad weakness early in industrial metals (copper, aluminum, steel, iron ore)


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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