Mid-Morning Look: September 17, 2021

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Mid-Morning Look

Friday, September 17, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open flat on Friday with major technology firms weighing the most before major averages tumbled to lows ahead of quadruple witching options expiration and as a key FDA panel is meeting today to vote on Pfizer and BioNTech’s application to offer booster shots to the general-public. Other factors weighing on market sentiment include uncertainty over higher corporate taxes, and an upcoming Federal Reserve meeting next week (and rising expectations the Fed may hint it is moving toward scaling back monthly asset purchases following strong economic data this week). Treasury yields also weighing on high growth tech stocks as the U.S. 10-year treasury yield rises above 1.385% to touch two-month high; yield last at 1.384%, while the dollar index (DXY) hits fresh three-week highs, sending precious metal prices lower again. A slow steady decline since the open thus far, but volatility likely increases ahead of expiration with major averages testing key technical short-term support levels.


One of the top stores today remains the debate over whether Americans should receive a booster dose of the Pfizer (PFE)/BioNTech (BNTX) COVID-19 vaccine moved to a panel of independent expert advisers to the U.S. FDA on Friday. While U.S. health officials, some other countries and vaccine makers have said boosters are needed, many scientists and vaccine experts disagree. Many of them say that while there is growing evidence that boosters provide increased protection against infection and severe disease to people aged 65 and older, there is not enough evidence that they are needed by younger ages.


Economic Data

·     University of Michigan surveys of consumers sentiment prelim Sept 71.0 (consensus 72.0) vs final Aug 70.3; the current conditions index prelim Sept 77.1 vs final Aug 78.5 and the expectations index prelim Sept 67.1 vs final Aug 65.1







WTI Crude















10-Year Note





Sector Movers Today

·     Retailers; NKE reports earnings next week and Cowen said it raised Q1 sales and EPS estimates above consensus w/inventory likely to be lean, and full price sell through levels and gross margin likely to be robust while lowering FY estimates to account for disruption from COVID, supply chain pressure due to Vietnam exposure and China tensions (cut FY22 Nike sales estimate by 300bps to 9% growth but with a robust recovery expected into FY23); SHOO tgt raised to $59 at BTIG citing strong demand and says production concerns are non-existent as Vietnam accounts for less than 5% of SHOO’s production and its shift of ~50% of production to Mexico/Brazil earlier this year is helping ease some supply chain pressures; ZUMZ approved repurchase of up to an aggregate of $150 mln of its common stock

·     Auto sector; Bank America restacks ratings for auto aftermarket companies in Retailing-Hardlines coverage as upgrade MCW to Buy from Neutral, maintain Buys on AAP and DRVN and downgraded ORLY to neutral; from Buy and SNA from Neutral to Underperform, while maintaining Underperform ratings on AZO and GPC; WPRT said it restates second quarter 2021 financial statements due to accounting error, but sees no impact on gross margin, net income, or the company’s statement of cash flows

·     Casinos and Gaming; for negative analyst sentiment in the casino and gaming sector following the Macau Government’s announcement to tighten its casino regulatory oversight this week; WYNN downgraded to hold from buy at Argus as less optimistic view reflects heightened scrutiny by the Macau government as it begins a 45-day consultation in which it overhauls regulations, reviews the number of casino licenses it will grant and scrutinizes supervisory requirements; LVS downgraded at Jefferies driven by three factors: 1) the persistent restrictions from COVID, which could continue in a zero-tolerance context; 2) the pending uncertainties around the Macau concession and its growth and return prospects; and 3) the divestiture from the fundamentally positive US market without alternative avenues of growth (recall JPMorgan downgraded LVS, WYNN, MLCO yesterday); WYNN gets $1.5B credit line as Macau comes under scrutiny

·     Semiconductors; CREE, CRUS, SNPS downgraded to Underperform as we see limited potential upside relative to our PO compared to other stocks in our coverage – downgrade SNPS (high valuation, prefer semicaps instead), CRUS (content benefits baked in, offset by pricing pressure), CREE (rising capital intensity and competition offsets long term EV benefits) to Underperform; the firm also ups NVDA tgt to $275 from $260, ON to $60 from $55, rising cost/complexity of chipmaking, rising govt. stimulus for re-shoring offset by memory volatility: KLAC top pick (PO to $450 from $425), also like AMAT, LRCX, TER top small-cap top pick (to $125 from $120); the semiconductor index (SOX) pulling back after hitting new all-time highs yesterday of 3,484 with broad weakness on the day.



·     BGNE +4%; after European Medicines Agency’s Committee for Medicinal Products for Human Use recommended approval of Brukinsa for the treatment of adults with Waldenstrom’s macroglobulinemia, a rare type of non-Hodgkin’s lymphoma.

·     FANG +3%; accelerates capital return to stockholders and initiates share repurchase program; announces $2B share buyback

·     IVZ +6%; as WSJ reported the company is in talks to merge with STT’s asset-management business, saying a deal isn’t imminent, and the discussions might not result in an agreement https://on.mktw.net/3ErHusF

·     LNC +2%; announces reinsurance transaction with Resolution Life and significant capital deployment in transaction that will generate approximately $1.2B in capital

·     TMO +7%; as hosts investor day today, as sees FY22 adj. eps $21.16 vs. $19.68 est. and sales $40.3B vs. $34.29B est.



·     MANU -2%; said Q4 loss widened to GBP107.7 million ($149 million) from GBP36.5 million, while revenue climbed 15% to GBP94 million while declined to provide current year guidance

·     MCFT -2%; after cutting its Q1 rev outlook saying growth “approaching” the 30% range, compared with guidance provided two weeks ago of the mid-30% range, citing a temporary delay in the shipment of a key component from an engine parts supplier

·     PTGX -61%; after disclosing its Rusfertide clinical development program has been placed on clinical hold, following the reporting of a non-clinical safety signal in a mouse model study

·     TTWO -1%; downgraded to market perform from outperform at BMO and cut tgt to $150 from $225 saying they have grown less confident in our previously high on the Street earnings estimates after a series of video game release delays.

·     USNA -1%; guides Q3 EPS $1.28-$1.33 vs. est. $1.44 on sales $265M-$270M. below est. $302.9M; said Q3 sales have been softer than anticipated, largely because of increased disruptions and lockdowns due to pandemic

·     X -7%; said it plans to build a new steel mill in the U.S. starting next year, as the company chases rising demand/issued preliminary 3Q21 EBITDA guidance of $2.0B vs. the Street’s $1.9B, and EBITDA of $1.3B in 2Q21/announces $3B investment plans


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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