CAPIS Morning Note – 01/05/23: Stocks Flat Into Tomorrow’s Jobs Data

Overnight Summary: The S&P 500 closed Wednesday higher by 0.75% at 3852.97 from  Tuesday lower by -0.40% at 3824.14.  The overnight high of 3883 was hit at 6:55 a.m. EST. The low was hit at 3856.25 at 3:40 p.m. EST, a range of ~27 points high to low.  At 7:20 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Wednesday higher by 0.75% at 3852.97 from  Tuesday lower by -0.40% at 3824.14.  The overnight high of 3883 was hit at 6:55 a.m. EST. The low was hit at 3856.25 at 3:40 p.m. EST, a range of ~27 points high to low.  At 7:20 a.m. EST, the S&P 500 (mini) was +1.75.

Earnings Out After The Close: 

  • Beats: RGP +0.01.
  • Flat: None of note.
  • Misses: SLP (0.06).

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:
    • JNJ: J&J’s Consumer Health Company Kenvue Files for IPO. (Filing)
  • New SPACs launched/News:
    • Alpha Healthcare Acquisition Corp. III (ALPA) Announces Merger with Carmell Therapeutics, a Phase 2 Stage Biotechnology Platform Company Developing Allogeneic Plasma-based Biomaterials for Bone and Soft Tissue Healing.
    • Biotech Acquisition Company (BIOT) Announces Plan for New Sponsor to Make Additional Contributions to Trust Account Upon Approval of Proposed Extension Amendment.
    • Fortress Capital Acquisition Corp. (FCAX) Announces Redemption of Class A Ordinary Shares.
    • Hudson Acquisition I Corp. (HUDA) Regains Compliance with Nasdaq Listing Rule.
    • MultiMetaVerse Inc. and Model Performance Acquisition Corp. (MPAC) Complete Business Combination.
    • Mount Rainier Acquisition Corp. (RNER) stockholders approve business combination with HUB Cyber Security.
    • Pathfinder Acquisition Corp (PFDR): FP Credit Partners II, L.P. and FP Credit Partners Phoenix II, L.P. terminate Pathfinder Acquisition Corporation tender offer.
  • Secondaries Priced:
    • BTMD: Announces Pricing of Secondary Offering of Common Stock.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AMV: Filed Form S-1.. Up to 20,462,624 Shares of Class A common stock.
    • CLLS:  Establishes an At-The-Market (ATM) Program on Nasdaq.
    • GERN: (See Mixed Shelf below) Proposed Public Offering of Common Stock $175 million of shares of its common stock. (GS and Stifel bookmanager)
  • Direct Offering:
    • CYTH: Closing of $4.2 Million Registered Direct Offering Priced At-The-Market under Nasdaq Rules.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • CMRA: Closes $3.6 Million Private Placement Priced At-the-Market under Nasdaq Rules.
    • PALI: Closing of $2.5 Million Registered Direct Offering and Concurrent Private Placement Priced Above Market Under Nasdaq Rules.
  • Mixed Shelf Offerings:
    • GERN: Files Mixed Securities Shelf.
  • Debt Filing/Notes: None of note.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed: None of note.

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: PSNL +10%, RELL +7%, SONX +5%, IPAR +4%, LAZR +4%.
    • Trading Down: GERN -11%, YMAB -7%.
  • News Since The Close:
    • Amazon (AMZN) to Lay Off Over 18,000 Workers, More Than First Planned. (WSJ)
    • U.S. Auto Sales totaled 13.7 million vehicles in 2022, the lowest figure since 2011 and an 8% decrease from the prior year: Wards Intelligence. (WSJ)
    • Tesla (TSLA) Dec China sales 55,796 units vs 100,291 units in November.
    • T-Mobile (TMUS) Delivers Record Customer Growth, Adding an Expected Industry-Best 6.4 Million Postpaid Customers and 2.0 Million Broadband Customers in 2022.
    • Transocean (RIG) announces contract awards or extensions for five of its drilling rigs totaling ~488 million.
    • Mask mandates return at several New Jersey school districts.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Celularity (CELU) Appoints Paul Graves as Chief Communications Officer.
    • Dine Brands Global (DIN) Announces Executive Leadership Changes.
    • Hepsiburada (HEPS) Announces Changes to Its Board of Directors and Executive Management Team.
    • KalVista Pharmaceuticals (KALV) announces Benjamin Palleiko promoted to President.
    • Southern (SO) taps Womack as new President, CEO; Fanning to become executive chair.
  • Buyback Announcements or News:
    • Simulations Plus (SLP) Announces $50 million share buyback authorization.
  • Stock Splits or News:
    • OpGen (OPGN) Announced 1-for-20 Reverse Stock Split.
    • TENX trading r/s price.
  • Dividends Announcements or News:
    • Richardson Electronics (RELL) Declares Quarterly Cash Dividend.

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

S&P 500 +1, Dow Jones -11,  NASDAQ +19,  and Russell 2000 +1. (as of 8:01 a.m. EST).  Asian markets are higher.  Europe markets are trading lower ex the FTSE. VIX Futures are at 22.46 from  23 yesterday.  Gold and Silver lower with Copper higher.  WTI Crude Oil and Brent are higher with Natural Gas lower. $ barely down. US 10-year Treasury sees yields at 3.683% from 3.679% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $16,813 from $16,827  yesterday higher by 0.03%.

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

  • Daily Positive Sectors: Consumer Cyclical, Real Estate, Basic Materials, Financial of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners:  none of note.
  • Three Month Winners: Basic Materials, Industrials, and Energy of note.
  • Six Month Winners: Industrials, Energy, and Basic Materials of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Energy of note.

U.S. stocks finished higher on Wednesday, with both the S&P 500 and Dow Jones Industrial Average turning green for the year, as investors parsed minutes from the previous Fed meeting along with more economic data. The S&P 500 advanced 28.83 points, or 0.8%, to close at 3,852.97. The Nasdaq Composite gained 71.78 points, or 0.7%, to finish at 10,458.76. The Dow gained 133.40 points, or 0.4%, to 33,269.77  (MarketWatch)

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)

  • Thursday After the Close: none of note.
  • Friday Before the Open: GBX of note.

Earnings of Note This Morning:

  • Beats: LNN +0.47, CAG +0.15, HELE +0.15, WBA +0.02, MSM +0.02, SCHN +0.02, SMPL +0.01, NEOG +0.01.
  • Flat: RPM +0.00.
  • Misses: STZ (0.06), ANGO (0.04).
  • Still to Report: LW .

Guidance:

  • Positive Guidance: COLL, PSNL, IPAR, HELE, CAG of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: RNER +26%, ALPA +8%, RELL +7% of note.
  • Gap Down: GERN -10%, YMAB -7%, SLP -5% of note.

Insider Action: No stock 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: WBA, AMZN, WDC, SI, LAZR, COIN, CRWD, WEN, SHOP, AXP (CNBC)
  • 5 things to know before the stock market opens Thursday (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Conservative Revolt Against McCarthy Erupts After Years of Anger. (Bloomberg)
  • Bloomberg Most Read Story: Why Conservatives Are Blocking McCarthy as Speaker. (Bloomberg)
  • What we know about the “Kraken” Covid Variant and why it’s causing concern. (Bloomberg)
  • U.S. Job Growth to slow or even reverse after near-record year. (Bloomberg)
  • Walgreens (WBA) beats estimates as flu season drives sales. (CNBC)
  • Cox Communications, privately held, to launch a national mobile business and compete with rivals Comcast (CMCSA) and Charter (CHTR).
  • Western Digitial (WDC) up 6% on rumors that they have restarted merger talks with KioXia. (MarketWatch)

Moving Average Update:

  • Score jumps to 45% from 20%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EST
    • The President delivers remarks on border security and enforcement; The Vice President attends, 11:15 a.m. EST
    • The President holds a Cabinet meeting; The Vice President attends, 3:00 p.m. EST

Economic: 

  • Challenger Job Cuts 7:30 a.m. EST
  • December ADP Employment Report is due out at 8:15 a.m. EST and is expected to come in at 148,000 from 127,000.
  • Initial Jobless Claims 8:30 a.m. EST
  • Trade Balance 8:30 a.m. EST
  • S&P Global PMI Final 9:45 a.m. EST
  • EIA Natural Gas Report 10:30 a.m. EST
  • EIA Petroleum Report 11:00 a.m. EST

Federal Reserve / Treasury Speakers:

  • Federal Reserve Kansas City President Esther George 8:30 a.m. EST
  • Federal Research Atlanta President Raphael Bostic 9:20 a.m. EST
  • Federal Reserve St. Louis President James Bullard 1:20 p.m. EST

M&A Activity:

  • Forward Air (FWRD) acquires Land Air Express, a privately held full service expedited LTL provider for $56.5 million.
  • Semantix (STIX) Announces the Acquisition of Elemeno.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse 14th ASEAN Conference 2023 (01/05/23-01/06/23)
    • Goldman Sachs Global Energy and Clean Technology Conference (01/05/23-01/06/23)
    • Goldman Sachs 15th Annual Healthcare CEOs Unscripted Conference 2023 (01/05/23-01/06/23)
    • JP Morgan Tech/Auto Forum at CES 2023
    • KeyBanc Capital Markets Self Storage Investment Forum
    • Morgan Stanley 9th Annual Auto 2.0 Conference 2023
      • Previously posted and ongoing conferences:
        • Morgan Stanley China Opportunity Conference (01/04/23-01/06/23)
        • Credit Suisse 9th Greater China Technology and Internet Conference 2023 (01/04/23-01/06/23)
        • Citi Communications, Media and Entertainment Conference 2023 (01/03/23-01/05/23)
        • Daiwa PURE Energy and Healthcare Conference
  • Company Meetings: GHSI, MEIP.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ARBE.
  • Update: SI, CTMX.
  • 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: