Mid-Morning Look: December 02, 2020

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Mid-Morning Look

Wednesday, December 02, 2020






DJ Industrials




S&P 500








Russell 2000






Stocks opened to the downside, as the S&P 500 and Nasdaq Composite pulled back from closing record highs the day prior, but again investors take any opportunity to add to positions, with a strong recovery in tech helping pare market losses. Another day, another favorable vaccine related headline lifting spirits as PFE and BNTX Covid-19 rise after the UK became the first to grant emergency-use authorization for a Covid-19 vaccine, clearing a shot to be distributed in limited numbers within days. The two-shot vaccine is also being reviewed by the FDA in the U.S., where a similar authorization could come later this month and a rollout before the end of the year. Commodity prices are higher as oil rises and gold extends its recent bounce as the euro extends yesterday gains to fresh 2 1/2 year highs vs. the dollar as it approaches the 1.21 level (weaker ADP data and rising stocks over the last few weeks reducing appetite for the buck). Treasury yields rise despite a weaker than expected ADP private payroll report. Technology stocks opened weaker after mixed results, guidance from CRM, BOX, HPE, VEEV overnight. Markets also remain hopeful of “some” sort of stimulus deal as talks and conversations have ramped up over the last few days in Washington.


Economic Data

·     U.S. private payrolls rose less than expected in November according to ADP, adding 307K, below the 475K estimate amid Covid-19 infections and business restrictions, adding to signs of slowing economic activity (Oct payrolls revised to 404K from 365K prior)







WTI Crude















10-Year Note





Sector Movers Today

·     Auto sector; WKHS shares fell after Trucks.com reports of further delays in the U.S. Postal Service process to award contracts for new mail trucks – WKHS is one of three teams left competing for the contract https://bit.ly/2VrRE7n ; GPC double-downgraded to Underperform from Buy on valuation at Bank America, which now appears stretched as see more upside in AAP and ORLY; Ford (F) COO says Bronco sport’s launch ahead of schedule and shipping now, bronco on track for spring availability next year; LI announces secondary offering of 47M American depositary shares which follows delivery update of 4,646 Li ONEs in November, +25.8% MoM; FSR filed to offer up to 27.8M shares (weakness broadly in EV space after LI, FSR file to sell shares); LYFT said rides in November were down about 50% from the same period a year ago, and now expects Q4 revenue growth to be at the “lower end” of the previously provided guidance range

·     MedTech and Equipment; IRTC falls following an update from the Centers for Medicare and Medicaid Services posting permanent codes for reimbursement late yesterday; ABT announced its next-generation, sensor-based glucose monitoring technology, FreeStyle Libre 2, received approval by Health Canada for adults and children (4 and older) with diabetes; Goldman Sachs initiates coverage on Life Sciences Tools and Diagnostics stocks with TMO, PKI and DHR top ideas as believes the sector will continue to outperform the overall market due to the combination of resilient business models and multiple secular growth tailwinds (BRKR lone sell rating)

·     Restaurants; PLAY was downgraded to hold at Truist saying remains a “COVID recovery story”, but after a strong move in the stock (+74.6% since 6/11), believe investors can find greater recovery opportunities in BUY-rated DIN, DENN and DRI Raymond James raised tgt prices on TXRH to 88 from 82, RUTH to 20 from 16, FRGI to 14 from 13.50, DRI to 120 from 115, CHUY to 27 from 25 and BLMN to 22 from 21 saying industry sales trends could begin to normalize through Q2 of 2021, with a stronger recovery in H2 on vaccine distribution

·     Retailers; KSS was upgraded to Buy from Hold at Deutsche Bank as yesterday’s announcement of a partnership with Sephora may add up to $1b in incremental sales once fully rolled out; HAS was downgraded to market perform at BMO with $90 tgt as investment thesis has quickly played out, sending shares past their target price; TLRD emerges from Chapter 11 after completing restructuring, eliminating $686M in debt from its balance sheet; WMT will eliminate their $35 shipping minimum on Walmart.com orders for WMT+ members starting Friday in an attempt to make their subscription service more competitive with AMZN; Ahead of earnings next week, Telsey remains bullish and raises their pt on GME, while Piper remains bullish on ULTA and LULU, and BTIG said they are buyers of LULU on expectations of earnings beat with a strong outlook in addition to Black Friday sales providing optimism for QTD commentary; Needham raises their price target on SFIX to a street-high $46 on the company’s positioning; Following yesterday’s completion of its core business spinoff, AAN was initiated at Neutral by Bank of America, Market Perform by Raymond James, and Sector Weight by KeyBank, and downgraded to Hold by Truist



·     ACIW +9%; after Bloomberg first reported activist investment firm Starboard Value LP urges co’s board to explore options including a sale

·     BNTX +8% and PFE rises; as the two have won permission for emergency use of their COVID-19 vaccine in Britain, with two doses three weeks apart required for protection

·     COHU +3%; raises Q4 revenue forecast in the range of $195 mln to $200 mln from prior outlook of $176 mln to $192 mln driven by share gains for co’s RF tester and accelerating demand from automotive segment

·     MESO +8%; said the U.S. FDA has granted Fast Track designation for remestemcel-L, its experimental therapy to treat COVID-19-associated acute respiratory distress syndrome

·     NTAP +8%; beats Street expectations for Q2 rev and adj. EPS, helped by strength in its cloud and memory business and said it sees both Q3 adj. profit and rev above analysts’ estimates

·     PDCO +12%; reported revenues of $1.55B (vs. cons of $1.41B) with Dental revs of $632M (vs. $548M cons) and Animal Health revs of $914M (vs. $865M cons)

·     VNDA +8%; as the FDA approves its drug Hetlioz (tasimelteon) as a treatment for night-time sleep disturbances associated with Smith-Magenis syndrome



·     BOX -7%; posted a q3 EPS and rev beat but shares slipped as forecasts Q4 below views and narrowed its FY 2021 sales guidance as mid-point $768.5M missed est. $769M

·     CRM -10%; reported mildly disappointing 3Q results with weaker than expected cRPO growth excluding the DATA impact and analysts mixed on $27.7B acquisition of WORK

·     FCEL -27%; 34.25M share Spot Secondary priced at $6.50 and also said preliminary FQ4 revenues $16M-$17.5M, below analyst consensus $18.5M

·     IRTC -22%; following an update from the Centers for Medicare and Medicaid Services posting permanent codes for reimbursement late yesterday

·     OVID -54%; after saying its Phase III Neptune clinical trial of OV101 (gaboxadol) for the treatment of Angelman syndrome failed to meet its primary endpoint

·     PLTR -10%; downgraded to Underweight at Morgan Stanley with a $17 price target noting shares are up 155% since coming public with little change in the fundamental story and the risk/reward is now “decidedly negative”

·     WKHS -22%; after Trucks.com reports of further delays in the U.S. Postal Service process to award contracts for new mail trucks – WKHS is one of three teams left competing for the contract



·     Allena Pharmaceuticals (ALNA) 10.4M share Spot Secondary priced at $1.25

·     BeiGene (BGNE) 1.512M share Spot Secondary priced at $225.00

·     Cogent Biosciences (COGT) 10.256M share Secondary priced at $9.75

·     Consolidated Edison (ED) 7.2M share Spot Secondary priced at $76.85

·     FuelCell (FCEL) 34.25M share Spot Secondary priced at $6.50

·     Intellia Therapeutics (NTLA) 4.795M share Secondary priced at $36.50

·     JetBlue (JBLU) 36.5M share Spot Secondary priced at $14.40

·     Reata Pharmaceuticals (RETA) 2M share Spot Secondary priced at $140.85

·     Rexford Industrial (REXR) 6M share Spot Secondary priced at $47.40

·     Syneos Health (SYNH) 6M share Spot Secondary priced at $61.90

·     ZoomInfo (ZI) 12.5M share Secondary priced at $45.00


Market commentary provided by Catena Media Financials US, LLC, 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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