Mid-Morning Look: September 15, 2021

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Mid-Morning Look

Wednesday, September 15, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are mixed to start, with energy stocks leading the S&P 500 index higher as oil prices jump over 3% behind bullish weekly inventory data, while technology lags, as the Nasdaq tries to snap its 5-day losing streak. U.S. import prices fell for the first time in 10 months in August amid a decline in the costs of petroleum products, further evidence that inflation had probably peaked. Meanwhile Empire manufacturing data was firmly higher in September, and industrial production for Aug missed views. Casino stocks among early decliners (WYNN, LVS, MGM) as U.S. casinos with operations in Macau drop as the China gov’t proposes to revise the city’s gaming law, tightening direct supervision of casinos. Transports rally as the drama in railroad space concludes with CNI scrapping its bid for KSU, which accepted Canadian Pacific offer. Financials also recouping losses from the prior day. Apple (AAPL) shares slide following its lackluster product announcement updates yesterday which failed to wow investors.


Economic Data

·     Empire State Manufacturing Index for Sept rises +34.30 vs. +18.6 consensus and +18.3 prior; new orders index 33.7 in september vs 14.8 in August; prices paid index 75.7 in september vs 76.1 in august; the employment index at 20.5 in September vs 12.8 in august and six-month business conditions index 48.4 in September vs 46.5 in August

·     Import prices for August fell -0.3% M/M vs. +0.3% consensus and +0.4% prior (revised from +0.3%), while export prices rose +0.4% M/M vs. +0.5% consensus and +1.1% prior (revised from +1.3%). U.S. Aug non-petroleum import prices -0.1%, year-over-year +5.9% and U.S. Aug petroleum import prices -2.4% vs July +2.3%

·     Industrial output for Aug +0.4 pct (consensus +0.4%) vs July +0.8% (previous +0.9%) while capacity utilization rate 75.3% (vs consensus 76.4%) vs July 75.2% (previous 76.1%)







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer Finance/Cards; COF reports August net charge-offs 1.54% vs. 1.45% last month and reports August 30-plus day delinquencies 1.79% vs. 1.71% last month; SYF reported August charge-off rate 2.59% vs. 2.24% last month and reports August 30-plus day delinquencies 1.33% vs. 1.37% last month; WEX awarded and entered the state-wide fleet card contract with the State of Minnesota through the NASPO ValuePoint Master Agreement; JPM credit card delinquency rate of 0.62% in August edges down from 0.64% in July and compares with 0.95% in August 2020, while net charge-off rate of 1.25% increases from 1.14% in July, but it’s still down from June’s 1.30% and 2.18% in August 2020; ADS August net charge offs 4.0% vs. 4.2% last month and reports August delinquency ratio 3.6% vs. 3.4% last month

·     Aerospace & Defense; the first all-civilian mission to orbit Earth is set to take off tonight, within a five-hour launch window that opens at 8:02 p.m. ET. SpaceX will power the expedition, known as Inspiration4, using one of its Dragon capsules atop a reusable Falcon 9 rocket; LHX signed armed forces covenant to support Military Community and announces grant for veterans (William Blair said it is only a modest negative that AVAV did not win this Air Force EOD award; RTX CEO said a Morgan Stanley conference that international travel down significantly through the end of this year and probably even into next year

·     Transports; the saga is over in the railroad sector is over as KSU officially terminates CNI M&A deal, enters agreement with CP at $90 in cash and 2.884 shares – Canadian National Railway Co said it would not proceed with its $29.6 billion offer for Kansas City Southern; in truckers, Cowen upgraded shares of KNX, SNDR and WERN to Outperform as consensus appears to be underestimating the industry’s ability to get pricing in ’22 which we see up mid-single digits vs consensus flat to down. We increase our already above-consensus estimates to 9% growth vs consensus ~3% to reflect the aforementioned better pricing and flat fleet growth in ‘22

·     Metals & Materials; uranium producers (CCJ, UUUU, DNN) rise as prices of the metal hit multi-year highs with futures at $44.15 a pound, a nine-year high; Iron ore futures in China sink to nine-month lows, extending the recent selloff as data showed August steel production in the country falling 13% Y/Y; AA upgraded to Buy from Hold with $58 tgt at Argus as view Alcoa as a well-run company with a strong track record in its industry; steel stocks get a boost as STLD with better Q3 guidance as sees EPS $4.88-$4.92 vs. est. $4.33 in steel space saying Q3 steel shipments are expected to be strong across the company’s steel portfolio

·     Casinos and Gaming sector; U.S. casinos with operations in Macau (WYNN, LVS, MLCO, MGM) looking sharply lower for a second straight day as Macau government proposes to revise the city’s gaming law, tightening direct supervision of casinos in the world’s largest gambling hub. Reuters noted Macau’s secretary for economy and finance said there were still some deficiencies in industry supervision. J.P. Morgan downgraded Macau gaming names Galaxy Entertainment (GXYEF), MGM China (MCHVF) SJM Holdings (SJMHY), Melco (MLCO), Wynn Macau (WYNMF) and Sands China (SCHYY) from overweight to neutral or underweight due to heightened scrutiny on capital management and daily operations ahead of license renewals; Wells Fargo initiated the gaming sector: BYD, CHDN, CZR, DKNG, MGM initiated OW, and BALY, LVS, PENN, RSI, WYNN initiated wit EW – CZR and BYD among top picks



·     FANG +5%; energy stocks the top gainers early (APA, COG, COP, HES, MRO) as oil prices rise, boosting sentiment for E&P and equipment names

·     GSKY +52%; as Goldman Sachs Group Inc. is buying the specialty lender for $2.2 billion, striking a deal it hopes will further its reinvention from Wall Street powerhouse to Main Street player. Goldman will pay roughly $12 a share in stock – https://on.wsj.com/3nuS6RI

·     MSFT +1%; board approves new share buyback of up to $60B in shares; raises quarterly dividend 11%

·     REGN +2%; after being awarded a $2.94B modification to a contract for 1.4M REGEN-COV antibody therapeutic doses

·     SAGE +3%; said the U.S. FDA has granted Fast Track Designation to SAGE-718 for development as a potential treatment for Huntington’s disease

·     STLD +4%; after better Q3 guidance as sees EPS $4.88-$4.92 vs. est. $4.33 in steel space saying Q3 steel shipments are expected to be strong across the company’s steel portfolio



·     EA -5%; on reports a Battlefield 2042 delay could in the offing if multiple rumors from respected sources are to be believed, as per GamesRadar https://bit.ly/3hznn2b

·     RBLX -2%; after saying expects bookings to be between $219M-$222M in Aug, down from $221M-$224M in July; estimates average bookings per daily active user (DAU) to be between $4.54-$4.60, – lower than July’s range of $4.75-$4.81

·     TBPH -15%; after saying a late-stage study of its drug candidate, ampreloxetine, did not meet the main goal of improving symptoms of neurogenic orthostatic hypotension (nOH)- a type of low blood pressure; also said will reduce the headcount by ~75%, which will result in annualized operating expense savings of ~$165M in 2022

·     WKHS -3%; voluntarily dismissed on Tuesday its legal challenge against a U.S. Postal Service (USPS) move to award a multibillion-dollar contract to Oshkosh Defense ($OSK) for making postal delivery vehicles, Reuters reported

·     WYNN -8%; U.S. casinos with operations in Macau (WYNN, LVS, MLCO, MGM) fall for a second straight day as Macau government proposes to revise the city’s gaming law, tightening direct supervision of casinos

·     YUMC -5%; says same-store sales in August declined by mid-teens percentage Y/Y, or close to an approximately 20% decline compared to August 2019; said its adjusted operating profit would take a 50% to 60% hit in Q3



·     Academy Sports (ASO) 18.645M share Secondary priced at $44.75

·     BRP Group (BRP) 8M share Secondary priced at $30.50

·     CS Disco (LAW) 5.5M share Secondary priced at $53.00

·     Dice Holdings (DICE) 12M share IPO priced at $17.00

·     Dutch Bros (BROS) 21M share IPO priced at $23.00

·     Leslie’s (LESL) 15.8M share Secondary priced at $22.00

·     Live Nation (LYV) 5.23M share Spot Secondary priced at $86.90

·     On Holding (ONON) 31.1M share IPO priced at $24.00

·     Procept BioRobotics (PRCT) 6.56M share IPO price $25.00

·     Tyra Biosciences (TYRA) 10.8M share IPO priced at $16.00


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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