Mid-Morning Look: October 08, 2021

Auto PostDaily Market Report

Mid-Morning Look

Friday, October 08, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. markets still searching for direction (after a choppy start) following a notable miss for the September jobs report, coming in 300K below expectations though the unemployment rate dropped and average hourly earnings advanced. The yield on the 10-year yield initially dropped on the miss but has been steadily climbing since, topping the 1.60% level. U.S. markets are trying to build on Thursday’s positive momentum after the Senate raised the debt ceiling by $480 billion until Dec. 3, pulling the U.S. from the brink of a default. The dollar and oil rise (WTI crude tops $80 per barrel for first time since Nov 2014) and gold was steady while Bitcoin popped above $55,000 and Ethereum surpassed $3,600. With the near-term debt crisis averted (but plenty of more drama to come as country only funded to December), and the energy crisis in Europe easing in recent days, market attention could soon turn to earnings, as quarterly results get underway next Friday with big banks starting us off.


Economic Data

·     Nonfarm payrolls increased by 194,000 jobs in September, well below the 500K jobs estimate by economists while data for August was revised to show 366,000 jobs created instead of the previously reported 235,000 positions (so miss and downward revision) as employment remains 5.0 million jobs below its peak in February 2020. The unemployment rate tumbled to 4.8% from 5.1%, while average hourly earnings increased 0.6% (above views of +0.4%)

·     August Wholesale Inventories rose +1.2% to $731.1B vs. +0.6% consensus, +0.6% in July. Aug wholesale sales fell -1.1% vs. est. +1.0% and vs. July +2.1%







WTI Crude















10-Year Note





Sector Movers Today

·     Media & Telecom movers; cable companies Wells Fargo downgraded CHTR and CABO saying the Cable universe is getting riskier with the biggest names in the industry set to see tougher times ahead, including slowing net adds and less FCF growth. CHTR was double downgraded to underweight, as the co is the industry’s biggest pure-play and maintain equal weight for ATUS lowering ests, unlike peers we don’t think shares have far to fall after the recent derating; SIRI was downgraded to Neutral from Overweight at JPMorgan driven by a combo of lower self-pay net add ests, as new auto sales slow, and higher capex from a pull forward of satellite builds

·     Transports; Dow Transports finished Thursday down -0.25% just above the 14,500 level, but slipping below its 50-day MA at 14,515; today JPMorgan with sector call as they downgraded JBHT to Underweight from Neutral with a $150 target as believe spot truckload rates are reaching a plateau and JBHT is currently trading at a record premium to TL equities; while the firm upgraded UNP to Overweight and raise tgt to $247 from $234 at on recent selloff and said for upcoming quarter, would avoid WERN and KNX that are subject to the overhang of TL spot rates near peak, asymmetric risk from a vaccine mandate, and inability to generate organic growth. NSC moves back to the Analyst Focus List

·     Consumer Staples & Restaurants: OTLY upgraded to Overweight from Neutral with a $21 price target at JPMorgan saying with the stock -49% from its 6/11/21 peak (median food -7%), they now view the upside potential (+43% to our price target) as far greater than the downside risk; CAG was downgraded to Neutral at JPMorgan on inflationary concerns, saying they prefer to stay on sideline until it sees greater upside to EPS, also lowers PT to $38 from $41; HRL was upgraded to Overweight at JPMorgan as see a more favorable margin outlook going forward, with earnings to benefit from price increases, Planters accretion, and improved turkey industry fundamentals; Loop Capital said their latest MCD U.S. franchisee checks indicate same-store sales growth came in ahead of expectations in 3Q21

·     Biotech movers; TAK said the Antimicrobial Drugs Advisory Committee of the FDA recommends the use of its investigational drug maribavir as a potential treatment for refractory cytomegalovirus infection; PYXS 10.5M share IPO priced at $16.00; ISO 8.333M share IPO priced at $15.00; BIIB tgt and ests lowered at Jefferies saying the consensus estimates for sales of its controversial Alzheimer’s drug, Aduhelm, may be too high.



·     APA +5%; broad strength in energy after profit taking Thursday in names, benefitting from rising energy prices again as WTI crude tops $80 per barrel for the first time since Nov 2014 (shares of MRO, FANG, OXY, PXD, COP among top gainers in the S&P)

·     CCXI +64%; announces FDA approval of Tavneos (avacopan) in ANCA-associated vasculitis and the company expects to make TAVNEOS available to clinicians and patients in the next few weeks

·     GM +3%; auto sector again outperforms, with gains in Ford, and auto suppliers such as BWA, following bullish company updates from GM

·     NTRS +1%; upgraded to Buy from Neutral at UBS, while trust banks and other financials benefit early given the uptick in Treasury yields, weekly highs above 1.6% for the 10-year

·     QDEL +2%; as guides Q3 revs $505M-$510M vs. est. $186.3M; says covid-19 revenues for Q3 of 2021 expected to be about $406M, compared with $375.7M YoY



·     ALLO -33%; after the FDA halts its off-the-shelf CAR-T studies over safety concern. One patient treated with an Allogene Therapeutics cancer therapy developed what the company called a “chromosomal abnormality,” leading the FDA to place the company’s clinical trials on hold.

·     CHTR -4%; Wells Fargo downgraded CHTR and CABO saying the Cable universe is getting riskier with the biggest names in the industry set to see tougher times ahead, including slowing net adds and less FCF growth

·     HD -1%; and LOW both downgraded to Hold from Buy at Loop Capital as believe their estimates for HD had been too aggressive given challenges the company is facing

·     LW -3%; declines again after its recent earnings miss

·     MRNA -2%; among weakest names in S&P 500 after negative headlines on week (yesterday, Finland joins Sweden and Denmark in limiting Moderna COVID-19 vaccine on potential side effects)

·     OSK -4%; warned that supply-chain and logistics disruptions were hurting its ability to make and ship units, as it lowered guidance for Q4 as now sees adj EPS $0.90-$0.95 on revs $2.05B, both below consensus of $1.77 and $2.14B

·     SWKS -1%; Apple suppliers (CRUS, SWKS, STM) with weakness early after Asian AAPL suppler AAC Technologies dropped in Hong Kong after a profit warning


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