CAPIS Morning Note – 01/06/22: Can Stocks Recover From Yesterday’s FOMC Minutes Selloff?

Overnight Summary:  The S&P 500 Futures continued lower until midnight at 4668 and now are at 4695 at 7:30 a.m. EST. They briefly touched 4700. NASDAQ 100 futures are off their lows as well but still negative at 15702. Asia and Europe followed U.S. late afternoon selling due to FOMC minutes are well. 10 Year…

Overnight Summary:  The S&P 500 Futures continued lower until midnight at 4668 and now are at 4695 at 7:30 a.m. EST. They briefly touched 4700. NASDAQ 100 futures are off their lows as well but still negative at 15702. Asia and Europe followed U.S. late afternoon selling due to FOMC minutes are well. 10 Year yields blew through 1.70% this morning and are at 1.74%.

Earnings Out After The Close:

  • Beats:  RGP +0.09  
  • Flat: None.
  • Misses: None.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched:
    • None of note.
  • Secondaries Priced: 
    • AFCG priced 3,000,000 shares of common stock at $20.50.
    • CNM priced 20 million shares of common stock at $26 a share.
  • Notes Priced of note:  of note.
  • Common Stock filings/Notes:
    • ARAV: Public Offering of 4,545,455  share of common stock.
  • Pricing of Over-Allotment: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • FRT files mixed shelf securities offering.
  • Note Offerings Filed: EGHT of note.
  • Convertible Offering & Notes Filed: 

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

News After The Close:

  • After The Close Biggest Winners & Losers:
      • Trading Up: SLGC +9% DDOG +4% ROIV +4%
      • Trading Down: BLI -25% STRO -11%  Hear -4%
  • News After The Close:
      • MarketAxess (MKTX) sees December trading volume total $528.1 billion.
      • Datadog (DDOG) announces partnership with Amazon Web Services (AWS) for observability and security.
      • Berkeley Lights (BLI) guides FY 21 revenues below consensus. CEO Eric Hobbs to step down.
      • Turtle Beach (HEAR) sees FY21 revenue at low end of prior guidance.
      • Costco (COST) sees December sales up 11.5% and net sales year over year up 16.2%.
      • Frontier Communications (FYBR) adds 45,000 broadband customers in Q4.
      • Riot Blockchain (RIOT) produced 425 Bitcoin up 334% from a year ago.
      • CDC recommends Pfizer (PFE) booster for 12-15 year olds.
      • Telephone Data (TDS) Board member Gary Sugarman resigns from board as disagrees with company strategic direction.
  • Exchange/Listing/ Company Reorg and Personnel News
      • GoDaddy (GDDY) names Roger Chen as COO effective Monday.
      • Hasbro (HAS) names Chris Cocks as CEO and Eric Nyman as COO.
      • Fidelity National (FNF) names Mike Nolan as CEO on 2/1.
      • Cricut (CRCT) sees CFO transition with retirement of Marty Peterson on 9/30.
      • Zymeworks (ZYME) names Kenneth Galbraith as Chair and CEO on or before 2/1.
  • Buyback Announcements
      • West Pharm (WST) to buyback up to 650,000 shares of common stock.
  • Stock Splits:
      • A miracle another stock split!

What’s Happening This Morning:

S&P 500 -5, Dow Jones -25, NASDAQ -76 and Russell 2000 -4. Asia mixed and Europe lower. VIX Futures are at 19.10 from 18.80 yesterday morning. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures higher. Natural Gas is lower. $ is higher vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury price is at $128.50 from $129.36 yesterday with yields at 1.746% from 1.651%  yesterday morning. Bitcoin at $42,690 from $46,160yesterday morning and -3.30%. As of 8:10 a.m. EST.

Tuesday’s Action – 1/5 Close:  

  • Daily Positive Sectors: None of note as all lower.
  • Daily Negative Sectors: All lower led by Technology, Communication Services and Healthcare.
  • One Month Winners: Materials, Consumer Defensive and Energy of note.
  • Three Month Winners: Materials, Consumer Defensive and Real Estate of note.
  • Six Month Winners: Energy, Technology and Utilities of note.
  • Twelve Month Winners: Energy, Real Estate, and Technology of note.
  • Year to Date Winners: Energy, Financials and Consumer Defensive of note.

Selling into the close brought the major indexes down for the day with the exception of the Dow. Stocks sold off post the FOMC announcement yesterday. Other assets sold off as well.  Updated 1/5 close.

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

  • Thursday After the Close: DCT PSMT WDFC of note.
  • Friday Before the Open: AYI GBX of note.

Earnings of Note This Morning:

  • Beats: HELE +0.54 WBA +0.34 LNN +0.25.
  • Flat: None.
  • Misses: ANGO -0.02
  • Still to Report: None.

Erlanger Research Advance/Decline Chart: Updated through 1/5 close. Both the S&P 500 and the Daily Market A/D Line were lower yesterday.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: OPFI +10%, OBSV +7%, SLGC +6%, DDOG +3%
  • Gap Down: BLI -31%, STRO -15%, HEAR -4%

Insider Action: Insider action of note this morning with heavy short selling where the short get it wrong THO CDLX and CRCT with no history.

Rags & Mags: Highlighted Stories may be clicked through to the original story.  Repeated stories from prior days never listed, i.e. “rehashed news”.

  • Stocks Making the Biggest Moves: FL UA WMG  (CNBC)
  • Covid cases rose to 717,765 cases from 431,567 a week ago. Hospitalizations rise to 85,423 from 64,756. (CDC)
  • Saudi Arabia lowers price of oil for Asian buyers. (Bloomberg)
  • Italy mandates vaccine for those over 50. (NY Times)
  • Today is the one year anniversary of the Capitol Insurrection.
  • Supreme Court to hear Vaccination Mandate case tomorrow. (Bloomberg)
  • NFL may move Superbowl to Texas from California due to restrictions on Covid-19 in California.
  • CBOE Global Markets (CBOE) saw 2021 volume of 3 billion contracts up 19% from 2020.
  • Buckle (BKE) saw December comparable store sales up +17.7%  from a year ago.
  • WarnerMedia (T) and Viacom (VIAC) considering a sale of CW Network. (WSJ)
  • Airlines cancelled another 1000 flights. (WSJ)
  • Nike (NKE) sues Lululemon (LULU) over patent infringement.

Moving Average Update:

  • Score fell to 36% from 90%. Updated 1/5 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President is due to deliver a speech this morning on the Capitol Insurrection a year ago today. No time yet though we have heard 9:00 a.m. EST.

Economic:

Weekly Jobless Claims are due out at 8:30 a.m. EST.

November Factory Orders are due out at 10:00 a.m. EST and are expected to rise to 1.2% from 1.0%.

December Non-ISM Manufacturing Index is due out at 10:00 a.m. EST and is due to fall to 67.1% from 69.1%.

Weekly Natural Gas Inventories are due out at 10:30 a.m. EST.

Federal Reserve Speakers:

  • Federal Reserve St. Louis President James Bullard speaks at 1:15 p.m. EST and is the hawk. Will he walk back yesterday’s FOMC minutes?

M&A Activity: 

  • Sterling Construction (STRL) to buy Petillo for $195 million.

Meeting & Conferences of Note:

  • Sellside Conferences: Goldman Sachs Healthcare CEOs Unscripted Conference, Goldman Sachs Energy and Clean Technology Symp
    • Previously Posted and Ongoing Conferences:
      • Citigroup AppsEconomy Conference
      • RBC Capital Market New Years Previews  
  • Company Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ALGT AVTX CFMS NNDM MX
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings: 
    • Previously Posted and Ongoing Conferences:
      • Consumer Electronic Show (CES) (1/3-1/7).

Top Tier Sellside 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 should be intepreted as actual recommendations from CAPIS or its employees.

Today’s Upgrades & Downgrades