CAPIS Morning Note – 05/16/22: Stocks Down Modestly After 61 Point Overnight Range

Overnight Summary: The S&P 500 closed Friday at 4023.90 up 2.39% from 3930.08 on Thursday.  Futures have traded mixed overnight. The overnight high of 4042 was hit at 8:00 p.m. EDT. The low was hit at 3981.75 at 11:25 p.m. EDT, a range of 61 points high to low which is above the typical range…

Overnight Summary: The S&P 500 closed Friday at 4023.90 up 2.39% from 3930.08 on Thursday.  Futures have traded mixed overnight. The overnight high of 4042 was hit at 8:00 p.m. EDT. The low was hit at 3981.75 at 11:25 p.m. EDT, a range of 61 points high to low which is above the typical range of late with 45 the average. At 7:20 a.m. EDT the current price is 4011 which is -0.22% and -8.75 points.

Earnings Out After The Close:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:  
    • Lionheart Acquisition Corporation II (LCAP) Enters into Non-Binding Term Sheets for Forward Purchase Agreement and Committed Equity Facility with Cantor Fitzgerald L.P.
    • Chardan NexTech Acquisition 2 Corp. (CNTQ): Dragonfly Energy to become publicly traded via SPAC deal with CNTQ; will trade under ticker “DFLI”.
    • Digital World Acquisition Corp. (DWAC) and Trump Media & Technology Group Announce Filling of a Registration Statement in Connection with their Proposed Business Combination.
  • Secondaries Priced:
    • Zentalis Pharma (ZNTL) announce the pricing of an underwritten offering of 10,330,000 shares of its common stock at an offering price of $19.38 per share, for total gross proceeds of ~$200.2 million..
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AGRX: Filed Form S-1.. $20 Million Common Stock.
    • ARMP: Filed Form S-3.. 13,500,000 Shares of Common Stock.
    • SOBRsafe (SOBR) Announces Pricing of $10 Million Public Offering and Uplisting to the Nasdaq Capital Market.
    • Starwood Property Trust (STWD) entered into $500 million common stock sales agreement.
    • TRVI: Filed Form 424B5.. Up to $50,000,000 Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • Array Tech (ARRY) files for 13,894,800 share common stock offering by selling shareholders.
    • SilverBow (SBOW) Resources files for 1.3 million share common stock offering by selling shareholder.
  • Private Placement of Public Entity (PIPE):
    • Safehold (SAFE) Closes $150 Million Private Placement of Structured Senior Unsecured Notes Due 2052.
    • Celcuity Inc. (CELC) Announces $100 Million Private Placement.
  • Mixed Shelf Offerings:
    • ALX Oncology (ALXO) files for $450 million mixed securities shelf offering.
    • BLCM: Filed Form S-3.. $200 Million Mixed Security Shelf.
    • DX: Filed Form S-3ASR.. Mixed Shelf Offering.
    • Deluxe (DLX) files mixed securities shelf offering.
    • NS: Filed Form S-3ASR.. Mixed Shelf Offering.
    • TC: Filed Form F-3.. $300 Million Mixed Security Shelf.
  • Convertible Offering & Notes Filed:
    • Albemarle Corporation (ALB) Announces Redemption of All Outstanding 4.150% Senior Notes Due 2024.
    • Avantor (AVTR) Announces Conversion of Mandatory Convertible Preferred Stock.

Capital Raise Summary From The TradeXchange, bringing traders and investors real time news and Squawk Box, and other sources.

News After The Close and Over the Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: BHVN 56%, ITCI 28%, HRB 28%, THS 27%, FOLD 21%, APPN 20%, EOLS 20%, NOMD 19%, RBA 18%, FGEN 18%, NDLS 17%, MBUU 15%, BRFS 15%, OPK 15%, TCDA 14%, PRGO 14%, TREX 13%.
    • Trading Down: TXMD -60%, PRTY -53%, DM -53%, BHC -32%, EVLO -32%, KRNT -31%, SIBN -28%, TUP -27%, AVYA -27%, EYE -26%, INO -25%, FLDM -25%, CRBP -25%, RYTM -24%, FIXX -24%, MTRX -23%.
  • News Items After the Close:
    • India has banned wheat exports with immediate effect, a government notification said. (Hindustan times)
    • Lockheed Martin (LMT) awarded a $398 million US Navy fee modification to a previously awarded contract.
    • XPO Logistics (XPO) Considers Sale of Freight-Forwarding Unit. (Bloomberg)
    • CFTC Settles Enforcement Action Against Kraft (KHC) and Mondelēz (MDLZ) (CFTC Website)
    • 13F Filings: Soros Fund, Starboard Value, Carl Icahn, Baupost Group,
    • Russian/Ukraine News:
      • Russia is to lower the oil export duty to $44.8/ton from June 1.
      • McDonald’s (MCD) Initiates Process to Sell Its Russian Business, Seeks to Include Future Employment for Russian Employees As Part of Terms Intends to Initiate Process of “de-Arching” Restaurants in Russia.
  • News Items Over the Weekend:
    • Stocks that Defined the Week: DIS, TSN, PTON, CVNA, WE, AAPL, TWTR  (WSJ)
    • The Week in Business: Crypto’s “Death Spiral’.  (NYT)
    • Three automakers reinstate mask mandate at some Michigan facilities.
    • Abbott Labs (ABT) tweets “A comprehensive investigation by Abbott, FDA and CDC found no evidence that our formulas caused infant illnesses” after White House “mistakenly said that our formulas were tainted and killed two infants.”
    • President Biden announces new actions to ease the burden of housing costs. (Release)
    • TWTR Bot Sentinel, a platform that monitors millions of Twitter (TWTR) accounts, estimates that 10-15% of all accounts on Twitter are inauthentic. (Disclose tv)
    • Caesars (CZR) Sportsbook Named Official Sports Betting Partner of the Indy 500 and Indianapolis Motor Speedway.
    • JetBlue (JBLU) Urges Spirit (SAVE) Shareholders to Protect Their Interests and ‘Vote No’ on Frontier Transaction at Upcoming Spirit Special Meeting
    •  Barron’s:
      • Positive View: SHEL, PTON, WDC, MU, CFG.
      • Cautious View: COIN.
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Beachbody (BODY) appointed Marc Suidan as the Company’s Chief Financial Officer.
    • Beam Global (BEEM) files to delay its 10-Q.
    • Eargo (EAR) gets Nasdaq non-compliance letter due to delays in quarterly filings.
    • GameStop (GME) Appoints New Chief Operating Officer.
    • NeoGenomics (NEO) Appoints Lynn Tetrault Interim CEO.
    • Republic First (FRBK) appoints Harry Madonna as Interim Chairman.
    • Photronics (PLAB) announceds that Dr. Frank Lee, who was named President on March 14, 2022, has been named Chief Executive Officer and will join the company’s Board of Directors.
    • SGEN Announces Resignation of President, Chairman & CEO Clay Siegall.
    • View, Inc. (VIEW) Receives Expected Notification of Additional Deficiency from Nasdaq Related to Delayed Filing of Quarterly Report on Form 10-Q.
    • Western Asset Mortgage Capital Corporation (WMC) Announces Departure of CFO and Search for Successor.
    • Zentalis Pharmaceuticals (ZNTL) Appoints Oncology Clinical Development Veteran Dr. Kimberly Blackwell as Chief Executive Officer.
  • Buyback Announcements:
    • Ryerson Holding Corporation (RYI) Announces Closing of Secondary Offering of Common Stock by its Principal Shareholder and the Concurrent Stock Repurchase.
    • YOU $100 Million Share Repurchase Authorization.
  • Stock Splits:  None of note.
  • Dividends Announcements: None of note.

What’s Happening This Morning: Futures value reflects the change with fair value.

S&P 500 -11, Dow Jones -32, NASDAQ -55, and Russell 2000 -7.  Europe  and Asian mixed.  VIX Futures are at 29.62 from 32.58 Friday morning and the VIX closed at 28.87 from 32.56 on Friday. Gold lower with Silver higher and Copper higher. WTI Crude Oil and Brent Oil Futures lower with Natural Gas higher. $ is lower vs Euro, higher vs Pound and higher vs Yen. US 10 year Treasury sees yields at 2.913% from 2.908% Friday. Bitcoin is at $30,038 from $30,405 Friday morning and is lower by -0.96% this morning. As of 8:08 a.m. EDT.

Sector Action – 05/13/22 Close:  

  • Daily Positive Sectors: All sectors but on top was Consumer Cyclical, Technology, Energy, Communication Services, Real Estate, Basic Materials of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners: None of note.
  • Three Month Winners: Energy, Utilities and Consumer Defensive Basic Materials of note.
  • Six Month Winners: Energy, Basic Materials, Utilities, and Consumer Defensive of note.
  • Twelve Month Winners: Energy, Utilities, and Consumer Defensive of note.
  • Year to Date Winners: Energy of note.

Stocks ended on a positive note but the week as a whole disappointed. This was the sixth consecutive weekly decline.  NASDAQ was up 3.82%.  TLT dropped 1.48% to close the week at $115.98.  Updated 05/13/22 close.

Upcoming Earnings Of Note: (sorted by market cap, highest to lowest with most visible names)

  • Monday After the Close: TTWO, TME, SHLS, SSYS of note.
  • Tuesday Before the Open: WMT, HD, HD, ONON, HUYA, KC of note.

Earnings of Note This Morning:

  • Beats: YOU +0.05, MNDY +0.05, CGEN +0.01.
  • Flat: None of note.
  • Misses: WEBR (1.20), WRBY (0.26), WIX (0.11), TSEM (0.02).
  • Still to Report: None of note.

Guidance:

  • Positive Guidance:  YOU, WRBY, MNDY of note.
  • Negative Guidance: WIX, WEBR of note.

Erlanger Research Advance/Decline Chart: Updated through 05/13/22 close.

 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CMRX +16%, RTLR +16%, SAVE +10%, CVNA +9%, STRY +5%, KMPH +5%, RCKT +4%.
  • Gap Down: WIX -10%, NUTX -8%, ARRY -5%.

Insider Action: OEC, ELAN, MSTR, TWST, PB, FSK, MS, ICUI sees Insider buying with dumb short selling.  AGM sees Insider buying with smart short sellers. 05/13/22 close.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

  • Stocks Making The Biggest Moves: SAVE CVNA WRBY TWTR RIVN  (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Shanghai to conduct a phased reopening between now and June 1st. (WSJ)
  • Chinese economic activity collapses under zero policy. (Bloomberg)
  • Turkey will not block entry of Finland and Sweden into NATO. (NYT)
  • Russia goes on the offensive in the Donbas region. Russia stops electricity exports to Finland. (NYT)
  • Germany to ban Russian oil imports before year end whether EU approves or not. (Bloomberg)
  • Treasury Secretary Yellen seeks global minimum tax with Europe but such a tax is deadlocked in Congress. (WSJ)
  • Goldman Sachs (GS) says that U.S. companies should prepare for a recession. (Bloomberg)
  • Carlyle Group (GS) looks to potentially buy Mantech International (MAN). (Bloomberg)
  • Robinhood Snacks looks at the stock of a college education. Average salary is $55k for college graduate, many opportunities.

Moving Average Update:

  • Can we change Doris Troy’s song of “Just One Look” to “Just One Row, that’s all it took.”  Score shows a small slimmer of hope with price action moving above 5 Day MA for all indexes.  Score goes from 0% to 20%.  Updated 05/13/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 9:30 a.m. EDT
    • The President awards Public Safety Officer Medals of Valor for “extraordinary valor above and beyond the call of duty”, 11:45 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:30 p.m. EDT
    • The President holds a bilateral meeting with Prime Minister Kyriakos Mitsotakis of the Hellenic Republic, where they will affirm our strong bilateral partnership and celebrate 201 years of Greek independence, 3:30 p.m. EDT
    • The President and The First Lady host a reception in honor of the Prime Minister of the Hellenic Republic and Mrs. Mitsotaki, 5:00 p.m. EDT

Economic: 

  • Empire State Mfg Index 8:30 a.m. EDT
  • Treasury Int. Capital 4:00 p.m. EDT

Federal Reserve Speakers:

  • Federal Reserve New York President John Williams 8:55 a.m. EDT 

M&A Activity:

  • Grey Rock Investment Partners and Executive Network Partnering Corporation (ENPC) Announce Business Combination to Form Publicly Traded Granite Ridge Resources.
  • KKR announces the signing of an agreement to sell C.H.I. Overhead Doors to Nucor Corporation in a transaction valued at $3.0 billion.
  • MDC Holdings (MDC) decides not to proceed with previously announced deal to acquire homebuilding assets of The Jones Company of Tennessee.
  • Carlyle Group (GS) looks to potentially buy Mantech International (MAN).

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Barclays Emerging Payments and FinTech Forum 2022 (05/16/22-05/17/22)
    • Bernstein Packaged Food Pair Trade Pitch
    • JP Morgan Global Hydrogen Week
    • JP Morgan 14th Annual Homebuilding and Building Products Conference 2022 (05/16/22-05/17/22)
    • 34th annual Morningstar Investment Conference 2022 (05/16/22-05/18/22)
    • Microcap Rodeo Spring Into Action Best Ideas Conference 2022 (05/16/22-05/20/22)
    • Needham 17th Annual Technology & Media Conference 2022 (05/16/22-05/19/22)
    • Wells Fargo Meetings – 2022 American Gas Association (AGA) (05/16/22-05/18/22)
      Wolfe QES ESG Conference

      • Previously Announced  Conferences:
        • Canaccord Genuity Global Metals & Mining Conference 2022. (05/15/22-05/17/22)
        • HSBC 9th Annual China Conference 2022 (05/10/22-05/20/22)
  • Company Meetings: ED, RSG, RYAM.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: CC, COHU, DDD, VS.
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Intel (INTC) Network Builders Summit.
    • Wex (WEX) Spark 2022 (05/16/22-05/18/22)
    • Roche Holding (RHHBY) ESG Event Access to Healthcare.
  • Industry Meetings:
    • American Society of Gene and Cell Therapy Meeting (05/16/22-05/18/22)
      • Previously Posted and Ongoing Conferences:
        • American Thoracic Society (ATS) International Conference 2022 (05/13/22-05/18/22)
        • American Urology Association Annual Meeting (AUA) 2022 (05/13/22-05/16/22)
        • ABGSC Life Science Summit (05/15/22-05/19/22)
        • Energy Infrastructure Council (EIC) Investor Conference 2022 (05/15/22-05/18/22)

Top Tier Sell-side Upgrades & Downgrades:

The recommendations listed below in this “Upgrade/Downgrade” section are compiled from what we believe are Tier I, II and III firms. Recommendations posted are taken from a variety of sources each day and we only post upgrades or significant initiations as well as downgrades to underweight or sell. The purpose of this posting it to make the reader aware of market moving recommendations. None of these recommendations should be interpreted as actual recommendations from CAPIS or its employees.

Today’s Upgrades and Downgrades:

Previous Day’s Upgrades and Downgrades: