Overnight Summary & Early Morning Trading: The S&P 500 finished Wednesday higher by 0.61% at 6086.37. Tuesday higher by 0.88% at 6049.24. The overnight high was hit at 6120.25 at 5:55 p.m. EDT and the low was hit at 6101.50 at 5:15 a.m. EDT. The overnight range is 20 points. The current price is lower at 7:05 a.m by -0.15% at +24.75 at 6111.25.
Executive Summary: The S&P 500 has fallen by -1% or more on two days this month. So we are clustering with multiple -1% losses. Chances are still high for losses of more than -1%. The longer we get away from the last loss of more than -1%, the better the odds we are through the turbulence. The last loss of more than -1.00% was on January 10th so we are 7 days removed. The S&P 500 closed yesterday at 6086.37 just of the closing high on December 6th at 6090.27. We need to clear that high on a closing basis otherwise there is a lid on the S&P 500 that it cannot clear.
Articles of Note: “President Trump, Crypto Billionaire” by The Editorial Board of the WSJ. His critics will come after this and they should says WSJ.
*Note that certain articles highlighted may require a subscription. We highlight noted sources like the WSJ or Bloomberg that have wide audiences.
Key Events of Note Today:
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- Weekly Jobless Claims are out at 8:30 a.m. EDT, Natural Gas and Crude Oil Inventories are due out at 10:30 a.m. EDT and 12:00 p.m. EDT.
- 4 Week Bill Auction as 11:30 a.m. EDT.
- 10 Year TIPS Auction at 1:00 p.m. EDT.
Daily Chart Request: Want to see an Erlanger Chart in The Morning Note? Simply send an email to us at [email protected] and we will more than likely show it.
Charles Schwab (SCHW) earnings report came in strong and the shorts are gone so it is rising due to natural buys. Note EVS is strong.
Notable Earnings Out After The Close
- Beats: DFS +1.50, CACI +0.75, ALK +0.50, SLG +0.36, WSBC +0.16, PLXS +0.14, AA +0.09, NBHC +0.07, STLD +0.07, TOWN +0.07, KNX +0.03, CATY +0.02, CVBF +0.02, HXL +0.02, CADE +0.01 of note.
- Flat: None of note.
- Misses: RLI -0.11, KMI -0.04 of note.
- IPOs For The Week: CRGT, FBGL, FCHL, FLOC, HXHX, SLGB,
TOPP - New IPOs/SPACs launched/News:
- IPOs Filed/Priced: None of note.
- Secondaries Filed or Priced:
- EVTL commences an underwritten public offering of $75 million of units.
- LAKE files proposed stock offering.
- QUBT files for 8,489,797 shares of common stock offering by selling shareholders.
- Notes Priced:
- Direct Offering: None of note.
- Exchangeable Subordinate Voting Shares: None of note.
- Selling Shareholders of note:
- TRNS files for 96,006 shares of common stock offering by selling shareholder.
- Mixed Shelf Offerings:
- LEXX: Form S-3.. $50,000,000 Mixed Shelf
- PIPE:
- Convertible Offerings & Notes Filed:
- ASTS to offer $400 mln aggregate principal amount of convertible senior notes due 2032.
- BTG – B2Gold Announces Offering of Convertible Senior Notes
Capital Raise Summary From The TradeXchange, bringing traders and investors real time news and Squawk Box, and other sources.
Biggest Movers Up & Down Yesterday:
- Movers Up: BETR +10.1%, KNX +6%, GWRE +4.4%, ARWR +4.1%, WSBC +4%, ALK +3.1% of note.
- Movers Down: EA -10.6%, PLXS -9.5%, CATY -7.1%, RLI -6.5%, HXL -3.7%, AA -1.7%, NBHC -0.2% of note.
News After The Close:
- Toyota (TM) recalls certain Toyota and Lexus vehicles, expanding previously announced safety recall involving fuel pumps.
- Henry Schein (HSIC) up over +1% after activist investor Ananym Capital Management to launch proxy fight.
- Saleforce (CRM) announces plans to invest $500 million in Argentina over the next five years.
- Warner Brothers Discovery (WBD) down slightly on CNN planning to lay off hundreds of employees this week. (CNBC)
- Index Changes:
- Guidewire (GWRE) will replace Arrowhead Pharmaceuticals (ARWR) in the S&P MidCap 400, and Arrowhead Pharmaceuticals will replace Barnes Group (B) in the S&P SmallCap 600 effective prior to the opening of trading on Monday, January 27, B is being taken over.
- 10K or Qs Delays – none of note.
Exchange/Listing/Company Reorg and Personnel News:
- BLBD appoints John Wyskiel to the position of President and CEO, effective February 17.
- EG appoints Jim Williamson as permanent CEO, effective immediately.
Buybacks:
- MTB authorizes a share repurchase program for up to $4.0 bln of common stock
- BETR approves $25 mln share repurchase program.
Dividends Announcements or News:
- Stocks Ex Div Today: CVS AGX VSEC LTC DX
- Stocks Ex Div Tomorrow: PG PFE PNR BSBR UNM SNX COKE ACI SM SIG LKFN BUSE KALU GOOD GLAD.
- RBCAA increases quarterly cash dividend 11% to $0.451 per share of Class A Common Stock and $0.41 per share on Class B Common Stock.
- OKE increases quarterly cash dividend 4% to $1.03/share.
- AML increases quarterly cash dividend 17% to $0.14/share from $0.12/share.
- CADE increases quarterly dividend to $0.275/sh from $0.25/sh.
What’s Happening This Morning: (as of 8:05 a.m. EDT) Futures S&P 500 -5, NASDAQ -100, Dow Jones +55 and Russell 2000 -14.82. Europe is higher with Asia higher ex Australia. Bonds are at 4.642% from 4.568% on the 10-Year. Crude Oil and Brent are higher with Natural Gas higher. Gold, Silver and Copper are lower. The U.S. Dollar is higher versus the Euro, higher against the Pound and lower against the Yen. Bitcoin is at $101,590 from $105,141 lower by $-2727 down -2.59%. Additional Comments:
- Daily Positive Sectors: Technology and Communication Services.
- Daily Negative Sectors: All others were lower led by Utilities, Real Estate, Energy and Materials.
- One Month Winners: None of note.
- Three Month Winners: Communication Services, Consumer Cyclical, Financials and Technology of note.
- Six Month Winners: Consumer Cyclical, Financials, Communication Services, Utilities and Industrials of note.
- Twelve Month Winners: Technology, Communication Services, Financials, Consumer Cyclical and Utilities note.
- Year to Date Winners: Energy, Healthcare, Communication Services, Materials, Utilities, Industrials and Technology of note.
Upcoming Earnings Of Note: (From Chartroom Software – sorted by market cap, highest to lowest with most visible names)
- Thursday After the Close:
- Friday Before The Open:
Notable Earnings of Note This Morning:
- Beats: HZO +0.39, TCBI +0.34, GE +0.28, AAL +0.20, ORI +0.20, BANC +0.05, FBP +0.05, PPBI +0.04, ELV +0.03, MKC +0.03, of note.
- Flat: None of note.
- Misses: AUB -0.10, VLY -0.01, of note.
- Still to Report: None of note.
Company Earnings Guidance:
- Positive Guidance: of note.
- Negative or Mixed Guidance: of note.
Advance/Decline Daily Update: The A/D fell to major support, bounced, made new lows and now is starting to bounce off that low.
Gap Ups & Down In Early Pre-Market: (+2% or down more than -2%):
- Gap Up: BETR +16.4%, TAL +10.5%, NFBK +10.3%, NBHC +10.2%, KNX +6.6%, PPBI +6.4%, GE +6.4%, ELV +6%, GWRE +4.4%, ARDX +4.2%, BANR +4%, ALK +3.9%, NFE +3.7%, BANC +3.7%, WNS +3%, SLG +2.4% of note.
- Gap Down: EVTL -30.6%, LAKE -15.8%, EA -14.9%, ASTS -13.5%, PLXS -6.6%, OLP -6.5%, CVBF -6.3%, RLI -6.2%, BTG -5.4%, CATY -4.8%, HXL -4.3%, NBBK -4.3%, GLSI -3.9%, TOWN -3.9%, QUBT -3.7%, KMPR -2.7%, WSBC -2.3%, MKC -2.3%, IRON -2.2%, ZLAB -2% of note.
Insider Action: FLWS sees Insider buying with dumb short selling. None see 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.
- Lead Story on Bloomberg: Huge New LA Fire Brings More Evacuations. (Bloomberg)
- Market Wrap: Asian stocks mixed after Wall Street rally. (Bloomberg)
- 5 Things To Know Before the Market Opens. (CNBC)
- Stocks Making The Biggest Moves: AAL GE EA ALK. (CNBC)
- American Airlines (AAL) outlook falls short. (CNBC)
- Microsoft Executive Chris Young resigns. (CNBC)
- Bloomberg Big Take: Trump’s Second Term looms large of Davos. (Podcast)
Economic:
- Weekly MBA Mortgage Applications are out at 7:00 a.m. EDT.
- Weekly API Petroleum Report due out at 4:30 p.m. EDT.
Geopolitical: (Watch our Twitter feed, Bullet86, for any impromptu appearances)
- President Trump’s Daily Schedule yet to publish. Bottomline, he is not playing ball with the press on his day to day.
- Federal Reserve speakers are in the blackout period into next week’s FOMC meeting.
M&A Activity and News:
- CON announces agreement to acquire Nova Medical Centers for $265 mln and guides Q4 revenue slightly above consensus.
- CADE to acquire FCB Financial Corp, the bank holding company for First Chatham Bank.
Moving Average Table: Moves from 94% to 97%.
Meeting & Conferences of Note:
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- Sellside Conferences:
- CIBC Western Institutional Investor Conference
- JP Morgan Hyper Growth Private Technology Company Conference
- Sidoti Micro Cap Conference
- Sellside Conferences:
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- Shareholder Meetings: APD, BCTX, COST, INKT, JBL, SMPL
- Top Analyst, Investor Meetings: AMPY, IGC, TWLO
- Update: None of note.
- Fireside Chat
- R&D Day: None of note.
- FDA Presentation:
- Industry Meetings or Events:
- ASCO Gastrointestinal Cancers Symposium
- National Automobile Dealers Association (NADA) Convention & Expo
- Petercam’s virtual healthcare conference
- Sequire Investor Summit
- SHOT Show
- World Economic Forum in Davos, Switzerland.
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 is to make the reader aware of market-moving recommendations. None of these recommendations should be interpreted as actual recommendations from CAPIS or its employees.
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- Upgrades: OPCH FCCO CHWY
- Downgrades:VEEV GOLF
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