Mid-Morning Look: June 08, 2021

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Mid-Morning Look

Tuesday, June 08, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks again searching for direction, with major averages mixed and pulling back off earlier highs as Treasury yields tumble further with the benchmark 10-year hitting lows around 1.51% while oil prices pullback from over 2-year highs (dragging energy stocks lower). Gold dropped as a firmer dollar countered a slip in U.S. Treasury yields. The U.S. trade deficit narrowed to $68.9 billion in April from $75 billion in March, the Commerce Department said. Bitcoin falls after the U.S. retrieves millions in ransom paid to colonial pipeline hackers, as crypto assets broadly lower (hitting names leveraged to crypto), while the Reddit/WallStreetBets retail crowd turns attention to old and new names (driving shares of several stocks higher). In Washington, the U.S. will target China with a new “strike force” to combat unfair trade practices, the Biden administration said as it rolled out findings of a review of U.S. access to critical products, from semiconductors to EV batteries. One of the top stories this morning included thousands of government, news and social media websites across the globe were coming back online after being hit by a widespread hour-long outage linked to U.S.-based cloud company Fastly Inc. (FSLY).


Economic Data

·     U.S. small-business confidence edged lower last month, the first decline in four months, as a nationwide labor shortage and inflation worries weighed on business owners’ economic outlook, according to a survey released on Tuesday. The National Federation of Independent Business (NFIB) Optimism Index fell 0.2 point to a reading of 99.6 in May after three straight monthly increases. Five of the 10 index components improved, three declined and two were unchanged.

·     U.S. April trade deficit -$68.9 bln (consensus $69.0 bln) vs March deficit $75.0 bln (previous $74.45 bln); U.S. April goods deficit $86.68 bln, services surplus $17.78 bln; April exports +1.1% vs March +7.5%, imports -1.4% vs March +7.1%; April exports $204.99 bln vs march $202.67 bln, imports $273.89 bln vs march $277.69 bln

·     JOLTs Job Openings reported at 9.286M in April, above the prior month reading of 8.288M (again underscores the need by employers for jobs that are not being met)







WTI Crude















10-Year Note





Sector Movers Today

·     Retailers; CHS reported a Q1 EPS loss of (8c) on sales $388M vs est. $280.3M and sees full-year sales improving between 28-34%; JILL posted a Q1 adj EPS 20c on revs $129.1M (+42% YoY) vs est. $117.22M; WWW said it expects 2Q21 rev to exceed 2Q19’s $569M, and reaffirmed its FY revenue guidance range $2.24-2.3B (est. $2.28B); ASO reported Q1 EPS $1.84 and sales $1.58B that both topped estimates ($0.84, $1.51B), same-store sales +38.9%, and sees FY EPS $4.15-4.50 (est. $3.42) and comp sales +6-9%; Argus upgraded ANF upgrade to Buy with a $47 pt due to its improving marketing, strengthening digital and omnichannel capabilities with digital sales now accounting for a majority of revenue, and its transition to smaller stores that can help boost customer engagement; BTIG upgraded SHOO to Buy with a year-end $55 price target (+30% upside) as they see the company taking share from slower rivals and further extending its market share position as the top fast fashion footwear brand in its category; UBS upgraded TGT to Buy with a $265 target from $210 ($300 bull case, $190 bear case) as they believe the company will maintain its momentum in the coming quarters despite tough comps and fading stimulus; GPS rises after co launches its first product in partnership with rapper Kanye West’s Yeezy/new Round jackets priced at $200 were sold out a few hours after the launch

·     Consumer Staples & Restaurants; KDP priced 28M shares of the Company’s outstanding common stock on behalf of MDLZ at $35.65 per share; PM reaffirms FY2021 adjusted diluted EPS outlook, below the consensus ($5.95-$6.05 vs. est. $6.08) and expects FY2021 net revenue growth of approximately 5%-7% on an organic basis; NAPA beat expectations in first earnings report as public company and provided optimistic signals as per CSFB; LW was upgraded to Buy at Jefferies and raised tgt to $100 from $84 saying while foodservice demand is rebounding quickly, still-tight industry capacity and high edible oil costs bode well for a return to pricing power; WEN jumps as the stock drew positive mentions on Reddit’s WallStreetBets forum, joining the long list of recent companies that have jumped on positive social media comments

·     In energy research; TELL and NEXT upgraded to outperform from in line at Evercore ISI, which says it is seeing green shoots for the LNG sales and purchase agreement (SPA) market; Johnson Rice with several changes as upgraded shares of APA, FANG, KOS and downgraded COG, EOG, SWN; JPMorgan positive on energy sector as they upgrade CVE to overweight (joins CNQ, CVX, XOM) saying they think that the current price environment remains a “sweet spot,” with demand recovering from COVID-19 and the OPEC/shale market share war remaining subdued (remain neutral rated on COP and remain Underweight on OXY)

·     REITs; Ahead of the Nareit Conference 2021, WELL revised its Q2 outlook for net income to $0.34-$0.38 per diluted share from previous guidance of $0.31 – $0.36 and normalized FFO to $0.75-$0.79 per diluted share vs. earlier guidance of $0.72 – $0.77, UDR increased its guidance ranges and sees Q2 FFO and AFFO per share to be at the high-end of its previous guidance range of $0.47-$0.49, PSA issued an operating update with occupancy at May 31 of 96.5% (+250bps YoY, +50bps QoQ), rent per SF $18.54 (+6.4% YoY, +2.7% QoQ); Wedbush initiated GEO with a Neutral rating and $7 pt given its historical growth and high level of profitability and cash flow, though the industry faces large headwinds of political opposition and a declining prison population; PEB said operating trends are improving each week, they expect to achieve positive adjusted EBITDA re in 2Q21 given strong leisure demand

·     Aerospace & Defense; BA rises after Southwest to add Boeing’s 34 737 MAX 7 aircraft to its 2022 orders, taking the carrier’s total orders for the MAX 7 aircraft to 234 in 2022; CACI was removed from conviction Buy list with $316 tgt at Goldman Sachs saying CACI book to bill and proposal pipeline have retreated from elevated levels and the Afghanistan withdrawal is a drag on growth next year, while the firm added LDOS to conviction Buy list with $122 tgt saying its growing organically the fastest in our coverage over the next two years; RTX gets five-year, $495M Marine Corps contract



·     CLOV +74%; emerges as the latest target for retail traders on Reddit forums as its shares surge again after rising over 32% Monday and again today

·     DAL +2%; upgraded to Buy with $60 tgt at Jefferies on the next phase of the recovery as the focus shifts from a recovery in domestic and leisure travel to corporate and international

·     DRI +2%; as casual dining and restaurant names outperform (DPZ, SHAK, TXRH)

·     GNRC +6%; upgraded to Overweight with a $400 price target at KeyBanc citing confidence in further Home Standby upside from capacity additions and a meaningful runway in Storage

·     MRVL +5%; posted strong results and guidance as stronger than expected Storage offset slightly weaker Networking due to 5G – F2Q22 revenue guidance coming in above estimate, largely driven by the Inphi business, which is expected to generate $215MM in F2Q22

·     SFIX +9%; 3Q results were strong, with SFIX adding 234K new clients q/q (second highest ever) and posted quarterly revs above prior views and said had 4.1 million active clients in the quarter, up 20% from a year ago; guides FY revs $2.07-2.08B vs. est. $2.04B

·     TSLA +1%; after the China Passenger Car Association said the electric-vehicle maker sold 21,936 made-in-Shanghai vehicles in China in May while exporting 11,527 cars overseas

·     WEN +12%; as the stock drew positive mentions on Reddit’s WallStreetBets forum, joining the long list of recent companies that have jumped on positive social media comments (CLOV)



·     AEP -4%; weakness in utility stocks, leading decliners in the S&P (CMS, WEC, XEL)

·     COIN -3%; the crypto asset and Bitcoin related space under pressure again today after the U.S. retrieves millions in ransom paid to colonial pipeline hackers

·     COUP -8%; forecast that it would post a loss in its 2022 fiscal year and named Tony Tiscornia as its new chief financial officer while reported FQ1 above consensus expectations

·     CVS -1%; Amazon Pharmacy said to offer six-month prescriptions starting at $6

·     FSLY -2%; broad sweeping internet outage that took down several websites earlier this morning: Reddit, AMZN, CNN, NYT, HULU, PYPL, AWS, TGT, TWTR and more as outage was related to CDN provider Fastly (the firm noted the issue and corrected)

·     LESL -7%; files for offering of 24.5M shares of common stock by the selling stockholders

·     VLDR +17%; seeing bounce in several stocks with Russell additions/deletions (VLDR being added to the Russell 2000 Index)



·     FB Financial (FBK) 2.5M share Spot Secondary priced at $41.15

·     Keurig Dr Pepper (KDP) 28M share Spot Secondary priced at $35.65

·     Liberty Oilfield Services (LBRT) 12.3M share Spot Secondary priced at $15.60

·     W.P. Carey (WPC) 5.25M share Spot Secondary priced at implied $75.29

·     Zhangmen Education (ZME) 3.623M share IPO priced at $11.50


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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