Market Review: March 01, 2021

Closing Recap

Monday, March 01, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     All eleven S&P sectors climb as the S&P 500 posts its best day in about 9-months and the Nasdaq Composite moved back to within 5% of its all-time highs on February 16th (14,175) after sliding over 5% last week on rising rate fears/Treasury yields potentially impacting growth for higher multiple companies. As remains the case, market participants buy stocks on any pullback, with last weeks declines taking major averages below key technical levels prompting a new wave of buying that registered a massive rally on Monday. Several factors played a hand in the market rally today including: 1) positive vaccine news after JNJ was the 3rd company to receive emergency use approval for its single shot vaccine (which was widely expected); 2) bond yields eased after a swift rise last month on expectations of accelerated inflation due to bets on an economic rebound; 3) better economic data (construction spending rises and ISM activity hits highest levels in 3-years); 4) Biden administration saw the House of Representatives pass its $1.9 trillion coronavirus relief package early Saturday as the bill now moves to the Senate. Gains were broad based today, with strength in reopen stocks, momentum stocks, cyclical stocks, and even defensive stocks. Boeing Co jumped over 5% after United Airlines ordered 25 new 737 MAX aircraft and moved up the delivery of others as it prepares to replace aging jets and meet expected post-pandemic growth in demand, while Apple paced gains in tech. Commodity prices dipped (oil and gold) as the dollar hit 3-week highs. Last week, the Dow fell 1.8%, the S&P 500 declined 2.5% and the Nasdaq sank 4.9% as surging treasury yields boosted rising inflation concerns which could curb global growth – but as of right now, no fear in markets yet again as the Vix index plunged.

Economic Data

·     U.S. manufacturing activity increased to a three-year high in February as the ISM said its index of national factory activity rebounded to a reading of 60.8 last month from 58.7 in January. That was the highest level since February 2018 and above estimate 58.5. ISM U.S. manufacturing prices paid index 86.0 in February (highest since 2008) vs 82.1 in January, new orders index 64.8 in February vs 61.1 in January and employment index 54.4, highest since March 2019.

·     Construction spending for January rises 1.7% vs. est. 0.8% and prior month revised higher to 1.1% for Dec from 1%; private construction spending +1.7% and public spending +1.7%

·     PMI manufacturing slows in February (weak report); as per IHS Markit as February final manufacturing PMI at 58.6 (vs flash 58.5) and below January final 59.2; Sector final input prices index for February at 73.2 vs flash reading 73.2 and final January 65.1 (sector input prices index at highest since April 2011)



·     Oil prices slide, as WTI crude drops $0.86 or 1.4% to settle at $60.64 per barrel despite global stock markets rising across the board. Oil looked to add to last week gains ahead of a key OPEC+ meeting that may see some supply returned to a fast-tightening market, but prices slipped amid a stronger dollar and profit taking as prices have surged to start the year.

·     Gold prices slipped into the close, with April futures down -$5.80 or 0.3% to settle at $1,723 an ounce after rising as much as 1.5% to $1,759.53 earlier in the session, falling for a 5th consecutive session (lowest since June 2020). Prices retreated amid a bounce in the dollar (3-week highs) and as Bitcoin prices extended gains, as investors look to the crypto currency as a hedge against inflation instead of gold. Gold also faced some pressure from gains on Wall Street, driven by optimism over the stimulus and promising updates on vaccines.


Currencies & Treasuries

·     Bitcoin prices jumped over 7%, back above the $49,000 level before paring gains, getting a boost from a note out of Citigroup today saying the recent embrace of the likes of Tesla Inc and Mastercard Inc, Bitcoin could be at the start of a "massive transformation" into the mainstream. Bitcoin, which has risen to $47,000 from $4,700 last March, could in the future become the preferred currency for international trade or face a "speculative implosion," the investment bank said. New York Attorney General Letitia James warned investors to use "extreme caution" when buying cryptocurrencies and to watch out for scams following a recent run-up in bitcoin’s price. MicroStrategy Inc. (MSTR) said Monday it had purchased an additional $15 million worth of bitcoin at an average cost of $45,710 per bitcoin.

·     The U.S. dollar saw strength, as the dollar index (DXY) rose to a three-week high as investors bet on faster growth and inflation in the United States amid rising rates. The euro lagged as the region falls behind in growth expectations, falling around the 1.205 level. The Aussie dollar gained after Australia’s central bank increased its bond purchases in a bid to stem rapidly rising yields. Rising inflation expectations and stronger economic data have bounced the buck the last few sessions and as the administration prepares new fiscal stimulus and vaccinations against COVID-19 become more widespread. Treasury yields were little changed after gyrations last week saw long-dated yields move to their highest levels in over a year. Prices were little changed today






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; ROST mentioned positively in Barron’s saying it offers shoppers a chance to find overlooked "treasures" among a heap of discards and its stock could offer investors the same opportunity; Wayfair (W) was upgraded to Buy at Truist to reflect our expectation for improved LT profitability and a faster/longer growth trajectory vs previously anticipated; HD and LOW positive mention at Cleveland saying sales momentum suggesting 2021 guide may be conservative; overall retailers rallied with broader markets

·     Auto sector; WKHS shares rebounded from last week losses after saying to meet with Postal services on march 3rd (follows losing contract to OSK last week); THRM tops estimates on both lines in its Q4 earnings report, where next year’s revenue guidance is set above market; after jumping over 32% last Friday, FSR shares pared gains while rest of EV space mostly higher

·     Consumer Staples; Online grocery sales in the U.S. are expected to exceed $100 billion for the first time in 2021, according to an eMarketer forecast. The grocery category had lagged behind many others before COVID-19. In 2020, online grocery sales surged 54% to $95.82 billion, equal to 12% of all e-commerce sales and 7.4% of grocery sales. "In 2021, this behavior will go from trial to habit for many shoppers," the eMarketer report said. Emarketer expects online grocery to reach $112.9 billion this year, en route to $187.7 billion in 2024.

·     Leisure and Gaming; NCLH proposing to sell $550 mln of its 5.875% senior notes due 2026 in a private offering and RCL files for mixed shelf offering in cruise space (highly anticipated after CCL offering last week); DKNG rises following better results/guidance Friday, prompting several analysts raise tgt prices today – Loop raised tgt to $105; lodging stocks rally with reopen names (HLT, MAR, H) on hopes for improving economy; PII said it plans to launch an all-new 2022 electric Ranger utility side-by-side in late December for delivery to dealerships in early next year.



·     Energy stock movers; energy stocks have been massive mover as Citigroup noted the Energy sector has appreciated by more than 75% since October 2020 lows vs a 17% S&P 500 gain, as WTI spot prices recovered by 70% over the same time period; stocks remain in upswing but some analysts hitting brakes after rally in shares (Bernstein downgraded APA, PXD); HES files mixed shelf offering; PARR was upgraded to Outperform at Cowen and up tgt to $21 from $13 saying its lower OpEx and limited capex in 2021-2023 provides a peer-leading cost structure that should help delever the balance sheet as the operating environment normalizes in 2022

·     Utilities & Solar; ORA slips after negative call from Hindenburg Research; NRG among top gainers in S&P 500 following Q4 results and upbeat guidance; VST was upgraded to buy at Bank America with a $20 price target, seeing the company’s 2022 outlook substantially unchanged after the isolated Texas severe weather event; PLUG jumped after JPMorgan upgraded to overweight as believe the stock is attractively priced at present, ahead of potential positive catalysts



·     Bank movers; Citigroup (C) tgt raised to $82 from $74 at Wells Fargo today (also positive mention in Barron’s this weekend saying the company is broken-but the U.S. bank finally might have found the woman to fix it, with Jane Fraser stepping in as CEO on March 1; WSFS downgraded at Piper following a significant increase in the share price last week related to WSFS’s addition to the S&P Smallcap 600; IBKR said 3,695 thousand Daily Average Revenue Trades (DARTs)1, 175% higher than prior year and 12% higher than prior month. Ending client equity of $329.9 billion, 94% higher than prior year and 5% higher than prior month

·     Financial services; CSGP sweetened its offer to buy CLGX by adding another $450 million, hoping to triumph over another competing bid by private equity firms (with new deal, CLGX holders would receive $6 per share in cash and 0.1019 shares of CSGP stock, totaling $90 per share);



·     Pharma movers; JNJ single-dose Covid-19 vaccine is expected to reach states and vaccination sites as early as Tuesday, the Biden administration said after the FDA over the weekend authorized its vaccine for emergency use approval; CRMD tumbles after the FDA declined to approve its DefenCath catheter lock solution, citing concerns at its third-party manufacturing facility; Pharmaron Beijing has agreed to acquire Allergan Biologics Limited for $118.7M in cash from ABBV; MRK said the FDA accepted for review the company’s NDA for gefapixant for the treatment of refractory chronic cough or unexplained chronic cough in adults; PRGO rises as reached a definitive agreement to sell its Generic Rx Pharmaceuticals business to Altaris Capital Partners for $1.55B, including $1.5B in cash; ECOR said that it has entered into an agreement with Medistar2 whereby it will serve as the exclusive distributor of the gammaCore Sapphire non-invasive vagus nerve stimulator in Australia; ASLN rises as announces positive interim data from the multiple ascending dose study of ASLAN004 in Atopic Dermatitis

·     Biotech movers; ATNX plunges after receiving a complete response letter (CRL) from the FDA regarding its New Drug Application for oral paclitaxel plus encequidar for the treatment of metastatic breast cancer; REGN Phase II proof-of-concept trial evaluating the investigational antibody cocktail REGN1908-1909 met the primary endpoint of preventing early asthma reactions and also met key secondary endpoints; FLXN announces FDA clearance of investigational new drug application for fx301, a novel formulation of a locally administered nav1.7 inhibitor for post-operative pain; SYNH 7M share secondary priced at $74.95; MRNA falls in reaction to another vaccine on market, as JNJ single shot Covid vaccine receives FDA emergency use approval (was expected)

·     Healthcare services and providers; XRAY Q4 adj. EPS of $0.87 on revenue of $1.08 bln beats estimates for profit of $0.64 on revenue of $995.7 mln and also forecast FY21 adj. profit in the range of $2.60-$2.80 on revenue of between $4-$4.3 bln (well above ests $2.40/$3.86B); OTRK shares plunged after the company disclosed that it is losing its largest customer, Aetna, prompting the company to lower its 2021 revenue outlook

·     MedTech and Equipment; APEN gets FDA Breakthrough Device Designation for the Orbera Intragastric Balloon, for use in treating patients with BMI between 30-40 kg/m2 with noncirrhotic nonalcoholic steatohepatitis (NASH) with liver fibrosis; FLDM receives emergency approval in U.S. for Advanta SARS-CoV test


Industrials & Materials

·     Transports; Dow Transports move back near all-time highs (which stands at 13,698), paced by airline strength on more bullish optimism about the economy resurgence, as UAL, AAL, ALK among top gainers; CAR CFO bought 10,000 shares according to filing (recall last week the CFO bought over 23,000 shares on 2/23)

·     Aerospace & Defense; BA shares jumped after UAL increased its order for 737 Max planes; CAE agreed to buy LHX military training business for $1.05 billion. CAE expects the deal to add to earnings in the first full year after the closing, which is expected to occur in the second half of 2120. Separately, LHX also agreed to sell its combat propulsion systems unit to Renk AG for about $400 million in cash

·     Metals & Materials; in chemicals, ALB upgraded to buy from hold at Loop Capital saying after recent commentary during its 4Q20 conference call firm has become incrementally more positive on the lithium space, and ALB more specifically; gold miners pressured as gold prices reversed lower; OLN rises after Wells Fargo boosted its tgt to $39 saying significant supply impact from winter storm Uri will result in higher pricing and margins


Technology, Media & Telecom

·     Internet; TWTR to offer $1.25 billion convertible senior notes due 2026; GRPN was upgraded to neutral from underweight at JPMorgan with $48 tgt highlighting key takeaways from last week’s Q4 earnings report and management calls, including solid EBITDA and upside gross profit of $179M; large cap mega tech was mixed on day (FB, GOOGL, AMZN, TWTR); ETSY extends last week gains after better earnings, touching new all-time highs

·     Semiconductors; ON upgraded to Buy from underperform with $48 tgt at Bank America on rising auto content and restructuring tailwinds and expect ON’s relatively new CEO and CFO to leverage their past turnaround experience; MU to ($110) and WDC (to $75) tgt raised at Barclay’s to reflect the better pricing environment across DRAM and NAND and also raising our HDD unit forecast but a decline in near-line ASPs more than offset

·     Software & Hardware movers; TWLO confirms an up to $750 million investment in Carlyle Group-owned (CG) mobile messaging marketing company Syniverse; LOGI raises FY21 revenue view to up 63% from up 57%-60; raises long-term sales growth expectations to 8%-10%, up from high single digits

·     Media & Telecom movers; WIFI said that it will be taken private by Digital Colony in $854M deal as shareholders will receive $14 per share in cash, nearly a 23% premium to Friday’s closing ; ATUS to acquire assets of Morris Broadband, a deal that will expand its existing Suddenlink footprint in North Carolina, as deal implies an enterprise value of $310M for Morris Broadband on a debt-free and cash-free basis; LYV, CMCSA, DISCA among names setting all-time highs today as investors still pile into names for economic recovery; MDP shares trade 52-week highs after Benchmark upgraded to Buy and raised tgt to $38 from $29

@media only screen and (max-width: 500px) {
td p.MsoNormal {
text-indent: 0!important;
margin: 0!important;
div[class*=WordSection]>p {line-height: inherit !important;}div[class*=WordSection] a:not([href]) {color: inherit !important;}


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.