CAPIS Morning Note – 01/10/23: Markets Await Fed Chair Powell Speech at 9:00 a.m. EST

Overnight Summary: The S&P 500 closed Monday lower by -0.08% at 3892.09 from Friday higher by 2.28% at 3895.08.  The overnight high of 3915.75 was hit at 3:35 a.m. EST. The low was hit at 3897.50 at 7:10 a.m. EST, a range of ~18 points high to low.  At 7:20 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Monday lower by -0.08% at 3892.09 from Friday higher by 2.28% at 3895.08.  The overnight high of 3915.75 was hit at 3:35 a.m. EST. The low was hit at 3897.50 at 7:10 a.m. EST, a range of ~18 points high to low.  At 7:20 a.m. EST, the S&P 500 (mini) was -15.25.

Earnings Out After The Close: 

  • Beats: PSMT +0.16, AZZ +0.09, JEF +0.05, WDFC +0.04 of note.
  • Flat: None of note.
  • Misses: ACCD (0.13) of note.

Unusual Options Activity:

Daily Screen in Erlanger Chartroom that highlights unusual Call and Put Options activity.  It looks for volume outliers relative to the Open interest in Calls or puts.  Usually, the stock price activity reflects the outlier situation (earnings/buyout/announcement), but once in a while, you can uncover stocks prior to a pop or drop.

  

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • AL: Pricing of Public Offering of $700.0 Million of Senior Unsecured Medium-Term Notes.
    • FG: Prices $500 Million Senior Unsecured Notes Offering.
    • LYV: Pricing Of Upsized Convertible Senior Notes Offering.
    • RIG: Pricing of $525 Million of Secured Notes Due 2028.
    • SUI: Prices $400 Million of Senior Notes.
  • Common Stock filings/Notes:
    • BTMD: Announces Closing of Secondary Offering of 8,500,000 Shares of Common Stock Including Full Exercise of the Underwriters’ Over-Allotment Option.
    • HTHT: Announces proposed public offering of american depositary shares.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes:
    • SAFE: New $500 Million Unsecured Revolving Credit Facility.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • LFCR: issued and sold 38,750 shares of convertible preferred stock in private placement for total gross proceeds of $38.75 million.

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

News After The Close:

  • After Hours: 
    • Trading Up: FRO +17%, OSH +26%, ACCD +5%, RGNX +4%, AZZ +4%.
    • Trading Down: BLI -6%, ETWO -5%, PLNT -5%.
  • News Since The Close:          
    • Apple (AAPL) Plans to Drop Key Broadcom Chip and Instead Use In-House Design. (Bloomberg)
    • Urban Outfitters (URBN) holiday sales rise to a record. (MarketWatch)
    • Morgan Stanley (MS) COO Jonathan Pruzan to Retire. (WSJ)
    • Bed Bath & Beyond (BBBY) ‘highly vulnerable’, but S&P gets it out of ‘selective default’. (MarketWatch)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Alcoa (AA) announces restructuring of Executive Leadership Team.
    • ARKO Announces CFO Don Bassell Will Retire.
    • BLDR Appoints Dave Rush as CEO.
    • BeyondSpring (BYSI) Receives Notifications from Nasdaq Regarding Compliance With Listing Rules.
    • Enservco Corporation (ENSV) Receives Notice of Noncompliance from NYSE American Exchange.
    • The First of Long Island Corporation (FLIC) Announces Additional Board Refreshment as Part of Ongoing Commitment to Strong Corporate Governance.
    • FICO Announces Chief Financial Officer Transition.
    • MYR Group Inc. (MYRG) Announces CFO Succession Plan.
    • MeridianLink (MLNK) COO Alan Arnold to resign.
    • NFLX: Names Former Paypal (PYPL) Executive Jeffrey Karbowski As Principal Accounting Officer.
    • New York City REIT (NYC) Announces Change of Name to American Strategic Investment Co.
    • Republic First Bancorp, Inc. (FRBK) Receives Notice of Non-Compliance From Nasdaq.
    • Syneos Health (SYNH) Announces Chief Financial Officer Transition.
    • Texas Roadhouse (TXRH) announces that its Chief Learning and Culture Officer, Gina Tobin, has been promoted to President.
    • Tredegar (TG) Chairman John D. Gottwald retired on January 6; Gregory A. Pratt selected to succeed.
    • Udemy (UDMY) Announces CEO Transition. (MarketWatch)
  • Buyback Announcements or News:
    • Agilent (A) Authorizes $2 Billion Share Repurchase Program. (MarketWatch)
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.

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

S&P 500 -19, Dow Jones -152,  NASDAQ -72,  and Russell 2000 -8. (as of 7:53 a.m. EST).  Asian markets are higher ex the ASX 200.  Europe markets are trading lower. VIX Futures are at 23.41 from 22.14  yesterday.  Gold higher with Silver and Copper lower.  WTI Crude Oil and Brent are higher with Natural Gas lower. $ barely down. US 10-year Treasury sees yields at 3.565% from 3.589%  yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $17.232 from $17,240 yesterday, higher by 0.08%.

Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):  

  • Daily Positive Sectors: Technology, Consumer Cyclical, Utilities of note.
  • Daily Negative Sectors: Healthcare, Consumer Defensive of note.
  • One Month Winners:  Financial, Basic Materials, Industrials of note.
  • Three Month Winners: Basic Materials, Industrials, and Consumer Defensive of note.
  • Six Month Winners: Industrials, Energy, and Basic Materials of note.
  • Twelve Month Winners: Energy and Utilities of note.
  • Year to Date Winners: Basic Materials, Consumer Cyclical, and Financial of note.

U.S. stocks pared some of their early gains Monday, with investors still weighing bets about whether the Federal Reserve might dial back its aggressive pace of increases in interest rates.  The S&P 500 fell 2.99 points, or 0.1%, to close at 3892.09, after rising as much as 1.4% in morning trading. The benchmark index jumped 2.3% Friday after the monthly jobs report pointed to a slowdown in wage growth.  The Dow Jones Industrial Average dropped 112.96 points, or 0.3%, to 33517.65. The tech-focused Nasdaq Composite rose 66.36 points, or 0.6%, to 10635.65.  Stock markets around the world have started 2023 on a positive footing, driven by signs that inflation is abating in the U.S. and Europe. Investors hope that this slowdown will encourage central banks to raise interest rates in smaller increments, which could do less damage to the economy than rapid increases in borrowing costs.  (WSJ)

 

Click here for a video explanation of Erlanger Value Lines.

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

  • Tuesday After the Close: None of note.
  • Wednesday Before the Open: SJR of note.

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: BBBY (0.84).
  • Still to Report: ACI, SNX.

Guidance:

  • Positive Guidance: ATRC, DXCM, INSP, GH, FIVE, OM, TDOC, DHR, AZZ, OSH, PKI, FNA, IMOS, GEHC, CROX, AMRN of note.
  • Negative Guidance: UCTT, CUTR, ACCD, BLI, KIDS, ETWO, ASX, TSM of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SHC +52%, PRE +44%, OSH +32%, FRO +24%, ACCD +5%, RGNX +4%, SOVO +4%, TRIN +4%, AZZ +4% of note.
  • Gap Down: KIDS -5%, BLI -5% of note.

Insider Action: HSKA sees Insider buying with dumb short selling.  No stock sees Insider buying with smart short sellers.

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 premarket: OSH CVAC BA NCLH COIN SHC BMBL. (CNBC)
  • 5 things to know before the stock market opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Markets are Underestimating Inflation Again, Warns Blackrock and Fidelity.  (Bloomberg)
  • Bloomberg Most Read Story: U.S. Safety Agency Considers a Ban on Gas Stoves Amid Health Fears. (Bloomberg)
  • U.S. Consumers Roll Over More Credit Card Debt As Inflation Bites. (Bloomberg)
  • Feds to look at soda pricing. Antitrust issues. (Politico)
  • Pfizer (PFE) may produce Paxlovid in China. (FT)
  • Coinbase (COIN) cuts 20% of its workforce. (CNBC)
  • Microsoft (MSFT) plans to invest $10 billion in ChatGPT. (CNBC)
  • Gold is near an 8-month high and analysts expect more upside. (CNBC)
  • J.P. Morgan (JPM) CEO Jamie Dimon in Fox Business Interview notes that is more positive on the U.S. consumer. (Fox)

Moving Average Update:

  • Score remains at 65%.

Geopolitical: 

  • President’s Public Schedule:
    • Not posted.

Economic: 

  • December NFIB Small Business Optimism is due out at 6:00 a.m. EST and came in last month at 91.90.
    • U.S NFIB SMALL BUSINESS OPTIMISM (DEC) ACTUAL: 89.8 VS 91.9 PREVIOUS; EST 91.5
  • Redbook Sales 8:55 a.m. EST
  • Wholesale Inventories 10:00 a.m. EST
  • API Crude Oil Data 4:30 p.m. EST

Federal Reserve / Treasury Speakers:

  • Federal Research Chair Jerome Powell 9:00 a.m. EST – give speech titled “Central Bank Independence”

M&A Activity:

  • Hometown Food Company (SOVO) Acquires Birch Benders

Meeting & Conferences of Note:

  • Sellside Conferences:
    • ATB Capital Institutional Investor Conference (01/10/23-01/12/23)
    • Bank of America C-Suite SMID Conference (01/10/23-01/11/23)
    • Commerzbank German Investment Seminar
    • Credit Suisse Aircraft Leasing Conference 2023
    • Goldman Sachs Currencies & EM Conference
    • Morgan Stanley Latin America Executive Conference (01/10/23-01/13/23)
    • Raymond James Private Data Center Symposium
    • Seaport Transformation & Sustainability Conference
      • Previously posted and ongoing conferences:
        • Capital One Securities 3rd Annual REIT Conference 2023 (01/09/23-01/10/23)
        • Citi Emerging Europe Conference 2023 (01/09/23-01/10/23)
        • H.C. Wainwright Biotech Conference 2023 (01/09/23-01/13/23)
        • JP Morgan 41st Annual Healthcare Conference 2023 (01/09/23-01/12/23)
        • Needham 25th Annual Growth Conference 2023 (01/09/23-01/12/23)
        • RBC Canadian Bank CEO Conference (01/09/23-01/10/23)
        • UBS Winter Infrastructure & Energy Conference (01/09/23-01/11/23)
        • UBS Greater China Conference 2023 January Main conference (01/09/23-01/12/23)
  • Company Meetings: BRAC, UNFI.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ACST, GNS, TSM
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • Industry Meetings:

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: