CAPIS Morning Note – 01/05/24: Stocks Lower As Jobs Friday Approaches. Can Markets Reverse. 10 Year Moves Above 4.00%.

Overnight Summary: The S&P 500 closed Thursday lower by -0.34% at 4688.68 from Wednesday lower by -0.80% at 4704.81. The overnight high was hit at 4736.50 at 6:20 p.m. EST while the overnight low was hit at 4711.25 at 6:40 a.m. EST. The range overnight was 25 points as of 7:25 a.m. EST. The 10-day…

Overnight Summary: The S&P 500 closed Thursday lower by -0.34% at 4688.68 from Wednesday lower by -0.80% at 4704.81. The overnight high was hit at 4736.50 at 6:20 p.m. EST while the overnight low was hit at 4711.25 at 6:40 a.m. EST. The range overnight was 25 points as of 7:25 a.m. EST. The 10-day average of the overnight range is at 17.70 from 16.90.  The average for May-December average was 20.87 from 21.43. Currently, the S&P 500 is lower by -11 points at 7:25 a.m. EST.

Executive Summary:

  • December Nonfarm Payrolls are due out at 8:30 a.m. EST and is expected to come in at 132,000 from 150,000. The Unemployment Rate is expected to rise to 3.8% from 3.7%.
  • November Factory Orders are due out at 10:00 a.m. EST and are expected to rise to 1.3% from -3.6%.
  • December Non-Manufacturing PMI is expected to fall to 52.5% from 52.7%.

Earnings Out After The Close: 

  • Beats: FC +0.17 of note.
  • Flat: None of note.
  • Misses:  of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • DYN: Prices offering of 17.15 million shares of common stock at $17.50 per share.
    • KYMR: Announces pricing of $275 million public offering.
    • VYGR: Prices offering of common stock and warrants for gross proceeds of $100 million.
  • Notes Priced of note:
    • AER: Pricing of $1.5 Billion Aggregate Principal Amount of Senior Notes.
    • ENS: Announces Pricing of $300 Million Aggregate Principal Amount of Senior Notes.
  • Common Stock filings/Notes:
    • ANY: Form 8K.. entered into a Share Purchase Agreement.
    • CCCC: Closes previously announced $25 Million stock purchase agreement with a subsidiary of Betta Pharmaceuticals; completed at $4.49 per share.
    • COYA: Filed Form S-3.. 4,689,386 Shares of Common Stock.
    • CPRX: Commences $150 Million public offering of its common stock; subsequent 15% buyback. (BAC, Citi, Piper, Cantor and Truist Bookmanager)
    • KYMR: Announces proposed public offering of $250 Million of common stocks. (MS, JPM and TD Bookmanager)
    • VYGR: Announces proposed public offering of $100 Million of common stocks.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • IMUX: Private Placement of up to $240 Million.
    • PYPD: Private Placement for $16 Million in Gross Proceeds.
  • Mixed Shelf Offerings: None of note.
  • Debt/Credit Filing and Notes:
    • NEXT: $50 Million Senior Secured Revolving Credit Facility and $12.5 Million Interest Term Loan.
    • TTWO: Pricing of Add-On Offering of $350 Million of Senior Notes.
  • 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 Movers: 
    • DRMA: +120% Expands Global Intellectual Patent Portfolio with Issuance of Japanese Patent for DMT410
    • TACT: +7.5% Receives U.S. Approval for BOHA! Terminal 2 from Leading QSR
    • FUSN: +7% Clinical Program and Manufacturing Updates
    • APLT: -29% Topline Results from the ARISE-HF Phase 3 Study of AT-001 in Diabetic Cardiomyopathy
    • MPW: -16% Provides Update on Steward Health Care
    • VYGR: -14% Proposed Public Offering
    • CPRX: -11% Proposed Public Offering of Common Stock
    • FC: -6% Earnings
  • News Items After the Close:
    • EV startup Fisker (FSR) struggling to meet internal sales goals, documents show. (TechCrunch)
    • Money-Market Fund Assets Rise To New All-Time High. (Bloomberg)
    • Amazon’s (AMZN) Five-Year Corporate Hiring Binge, Revealed. (TheInformation)
    • Costco (COST) Reports December Sales Results.. reported net sales of $26.15 billion for the retail month of December, the five weeks ended December 31, 2023 an increase of 9.9 percent from $23.80 billion last year. — SSS +8.1%.
    • Cboe Global Markets (CBOE) reports trading volume for December and full year 2023.
      • Total volume across Cboe’s four options exchanges was 3.7 billion contracts in 2023, the fourth consecutive record-breaking year.
      • Cboe Volatility Index (VIX) options traded a total of 185.7 million contracts, with an ADV of 743 thousand contracts.
      • Trading in SPX options set a new single-day volume record on December 14, 2023 with 4.8 million contracts traded
    • Lockheed Martin (LMT) awarded $1.15 billion U.S. Navy contract modification.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Agilon Health (AGL) announces Tim Bensley to retire as CFO.
    • Akanda (AKAN) Receives Additional 180 Day Extension by Nasdaq to Regain Compliance with Minimum Bid Price Rule.
    • AxoGen (AXGN) CEO Karen Zaderej plans to retire from the Company by January 2025.
    • Boxlight Corporation (BOXL) Board of Directors Announces Leadership Changes.
    • CVS Health (CVS) names Thomas Cowhey as CFO.
    • Illumina (ILMN) announced that Susan Tousi, Chief Commercial Officer, will be leaving the Company effective as of January 5, 2024, and that Bas Verhoef, Head of Region – Europe, will serve as Interim Chief Commercial Officer.
    • Maxeon Solar (MAXN) Chief Revenue Officer Mark Babcock will step down.
    • NMRD Delisted from NASDAQ and will move to OTC Tomorrow 01/05/2024.
    • NUBURU (BURU) Announces Notice of Noncompliance with NYSE American Listing Standards.
  • Buyback Announcements or News: 
    • ANY: Form 8K.. entered into a Share Purchase Agreement.
    • Catalyst Pharma (CPRX) – See Capital Raises Stock Offering.
    • CTO Realty Growth (CTO) Announces 2023 Transaction and Leasing Activity and Provides Share Repurchase Update.
    • Prudential Plc (PUK) will commence a share repurchase program in respect of c. 3.9 million ordinary shares.
  • Stock Splits or News:
    • SABS to trade  1/10 reverse split today.
  • Dividends Announcements or News:  None of note.
  • Insider Sales Of Note: None of note.

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

S&P 500 -13, Dow Jones -85, NASDAQ -59, and Russell 2000 -16.  (as of 7:56 a.m. EST).  Asia is lower ex Japan and Europe is lower this morning. VIX Futures are at 14.90 from 14.65 this morning.  Gold is lower with Silver higher and Copper lower this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas lower. US 10-year Treasury sees its yield at 4.04% from 3.959%  yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $43,978 from $43,174 lower by -0.57% this morning.

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

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

Tech stocks continued to limp through the first week of January.  The Nasdaq Composite notched its fifth consecutive day of losses, following its worst two-day start to the year since 2005. Shares of Amazon.com (AMZN) and Apple (AAPL) weighed on the tech-heavy index, dragging it 0.6% lower with their respective declines of 2.6% and 1.3%. The benchmark S&P 500 slipped 0.3% after pulling back over the first two trading days of the year. The blue-chip Dow Jones Industrials edged up 10 points, or less than 0.1%, on Thursday. Investors often watch stocks’ performance in January as a sign of what’s to come in the year ahead, but some say the rocky start to 2024 is expected after the rally over the past few months.  (WSJ – edited by QPI)

 

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

  • Friday After the Close: None of note.
  • Monday Before the Open:

Earnings of Note This Morning:

  • Beats: STZ +0.18 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: ANGO, GBX of note.

Company Earnings Guidance:

  • Positive Guidance: SCPH, AXGN, PCRX, AUPH, SVV of note.
  • Negative Guidance: AVNS of note.

Erlanger Research Advance/Decline Chart:  

Gap Ups & Down In Early Pre-Market:

  • Gap Up: FUSN +14%, LAB +8%, AXGN +7%, NVCR +5% of note.
  • Gap Down: APLT -29%, TBPH -20%, VYGR -16%, ALLO -16%, MPW -14%, CPRX -12%, AGL -9%, NXT -5%, FC -4%, MTD -4% 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.

  • What You Need To Know To Start Your Day. (Bloomberg)
  • 5 Things To Know Before the Stock Market Opens on Friday. (CNBC)
  • Bloomberg Lead Story: U.S. Jobs Report to Show Hiring Only In A Few Concentrated Sectors. (Bloomberg)
  • Bloomberg  Most Shared Story:  Business Insider says Hedge Fund Manager Bill Ackman’s wife plagarized doctoral thesis. (Bloomberg)
  • Bonds, Stocks extend retreat ahead of Jobs’ Data: Market Wrap. (Bloomberg)
  • Constellation Brands (STZ) lowers outlook. (MarketWatch)
  • Telsa (TSLA) recalls 1.6 million EVs in China. (Fox)
  • Bloomberg Trillions:  U.S. Exchange Traded Funds to watch in 2024. (Podcast)
  • NPR Marketplace:  Tech stories on Tesla and Apple. (Podcast)
  • NY Times Daily:  A confusing new world for college applicants. (Podcast)
  • BBC Global News Daily Podcast:  North Korea provided Russia with missiles for Ukraine War. (Podcast)
  • Wealthion: David Rosenberg looks at Debt Rollovers and how could create an economic shock. (Podcast)

Moving Average Update:  Score settles down to 42% from 48%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EST
    • The President departs the White House en route to Joint Base Andrews, 11:55 a.m. EST
    • The President departs Joint Base Andrews en route to New Castle, Delaware, 12:15 p.m. EST
    • The President and The First Lady depart New Castle, Delaware en route to the Philadelphia area, Pennsylvania, 1:00 p.m. EST
    • The President and The First Lady arrive in the Philadelphia area, Pennsylvania, 1:20 p.m. EST
    • The President delivers remarks at a campaign event; The First Lady attends, 3:15 p.m. EST
    • The President and The First Lady depart the Philadelphia area, Pennsylvania en route to New Castle, Delaware, 5:50 p.m. EST
    • The President and The First Lady arrive in New Castle, Delaware, 6:10 p.m. EST

Economic:

  • December Nonfarm Payrolls are due out at 8:30 a.m. EST and is expected to come in at 132,000 from 150,000. The Unemployment Rate is expected to rise to 3.8% from 3.7%.
  • November Factory Orders are due out at 10:00 a.m. EST and are expected to rise to 1.3% from -3.6%.
  • December Non-Manufacturing PMI is expected to fall to 52.5% from 52.7%.
  • ISM Services Index 10:00 a.m. EST
  • Baker Hughes Rig Count 1:00 p.m. EST

Federal Reserve / Treasury Speakers: 

  • Federal Reserve Bank of Dallas Lorie Logan 11:15 a.m. EST
  • Federal Reserve Richmond President Thomas Barkin 1:30 p.m. EST

M&A Activity and News: None of note.

Meeting & Conferences of Note:

  • Sellside Conferences: None of note.
      • Previously posted and ongoing conferences:
        • Goldman Sachs Energy CleanTech & Utilities Conference
  • Top Shareholder Meetings: GBX, NVEE
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: NOVN
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings: None of note.
      • Previously posted and ongoing conferences:
        • NASH-TAG Conference

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 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.

Today’s Upgrades and Downgrades:

Previous Day’s Upgrades and Downgrades: