CAPIS Morning Note – 01/23/24: Futures Mixed. It’s All About Earnings.

Overnight Summary: The S&P 500 closed Monday higher by 0.22% at 4850.43 from Friday higher by 1.23% at 4829.11. The overnight high was hit at 4885.75 at 3:10 a.m. EST while the overnight low was hit at 4877.50 at 3:45 a.m. EST. The range overnight was 8 points as of 7:15 a.m. EST. The 10-day…

Overnight Summary: The S&P 500 closed Monday higher by 0.22% at 4850.43 from Friday higher by 1.23% at 4829.11. The overnight high was hit at 4885.75 at 3:10 a.m. EST while the overnight low was hit at 4877.50 at 3:45 a.m. EST. The range overnight was 8 points as of 7:15 a.m. EST. The 10-day average of the overnight range is at 22.80 from 24.80.  The average for May-December average was 20.87 from 21.43 during May-November. Currently, the S&P 500 is higher by +1.25 points at 6:20 a.m. EST.
Executive Summary: The Dow Jones Industrial hit a new high despite the fact that only 6 names in the 30 stock index are beating the performance of the S&P 500 while 11 are lagging the S&P 500. We note that 20 names are heavily or moderately short. As such, we like this index the best. Top names include TRV CRM AMGN INTC IBM MRK. Other issue that is almost laughable is the Chinese plan to rescue its stock market. The cost is only $278 billion? Seriously, seems like it would cost a great deal more to bail out the country considering they have lost $7 trillion in value.
  • 2 Year Note Auction at 1:00 p.m. EST. Problems have been with longer duration auctions.

Earnings Out After The Close: 

  • Beats: UAL +0.30, RBB +0.29, AGYS +0.09, BRO +0.05 of note.
  • Flat: None of note.
  • Misses: AGNC (2.00), IBTX (0.04), ZION (0.10), NWBI (0.01) of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • ACET: Prices offering of common stock and warrants.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ACET: Announces proposed public offering of common stock. (Jefferies and Guggenheim Bookmanager)
    • ACON: Filed Form S-1.. Up to 2,500,000 Shares of Common Stock.
    • BETS: vol pop off Form RW Filed.
    • BRSH: Filed Form F-1.. 198,111,489 Common Shares.
    • EVAX: Completion of ADS Ratio Change.
    • HCI: Announced additional offering up to $75 million of stock via ATM facility. (see Mixed Shelf below)
  • Direct Offering:
    • MVIR: Carries out a directed share issue of approx. SEK 20 million.
  • Selling Shareholders of note:
    • CNM: announces launch 19.8 million offering by selling stockholders, and concurrent buyback of 3.13 million shares and 1.87 million partnership interests.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • AIZ: Files mixed shelf securities offering.
    • BCTX: Filed Form S-3.. $200,000,000 Mixed Shelf.
    • HCI: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes:
    • BW: New $150 Million Senior Secured Credit Facility; Reaffirmed Credit Rating of BB+.
    • TALO: Announces Proposed Offering of $1,000 Million of Second-Priority Senior Secured 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: 
    • BETS: +24% Form RW Filed
    • UAL: +7% Earnings
    • BGC: +5% CFTC Approval for FMX Futures Exchange
    • VRM: -56% Wind-Down of Ecommerce Used Vehicle Operations
  • News Items After the Close:
    • Dow Jones Industrial Average closes above 38,000 for the first time in history.
    • United Airlines (UAL) forecasts first-quarter loss due to Boeing 737 Max 9 grounding. (CNBC)
    • Intuit (INTU): FTC issues opinion and final order that INTU engaged in deceptive advertising, violating the FTC Act. (FTCRelease)
    • Netflix (NFLX) Film Chief Scott Stuber Will Leave to Start New Company. (Bloomberg)
    • B Riley (RILY) Franchise Group’s Kahn Steps Down as CEO Amid SEC Queries. (Bloomberg)
    • Tencent’s Riot Games to cut around 530 jobs, or 11% of its workforce. (MarketWatch)
    • General Dynamics (GD) awarded $335 million U.S. Navy contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Advanced Emissions Solutions (ADES) to rebrand as Arq, Inc.; Corporate rebrand and NASDAQ ticker change to “ARQ”.
    • Cedar Fair (FUN) and Six Flags (SIX) received second request for additional information and documentary materials in connection with the DOJ’s review of the Mergers.
    • Centerra Gold (CGAU) promotes Ryan Snyder to CFO.
    • Duluth Trading Co (DLTH) appoints Heena Agrawal as CFO.
    • Jack Henry (JKHY) COO Greg Adelson to become CEO and President on July 1, succeeding David Foss who is becoming Executive Board Chair on June 30.
    • Lantheus Holdings (LNTH) names Brian Markison as CEO.
    • NBT Bancorp (NBTB) announces that John Watt, Jr. will step down as NBT’s President and CEO.
    • Target Hospitality (TH) promotes Jason Vlacich to Chief Financial Officer & Chief Accounting Officer, promotes Troy Schrenk to Senior EVP Operations & Chief Commercial Officer.
  • Buyback Announcements or News: 
    • atai Life Sciences N.V. (ATAI) entered into a Share Purchase Deed.
    • Blackbaud (BLKB) announces the repurchase of up to $500 million of the company’s common stock.
    • Solid Power (SLDP) announces $50 million share repurchase authorization.
  • Stock Splits or News:
    • Reverse split stocks today: DTSS 1/15 MED 1/16
  • Dividends Announcements or News: 
    • Halliburton (HAL) 2024 first quarter dividend increases by $0.01 per share to $0.17 per share.
    • Teradyne (TER) increases its quarterly dividend by 9% to $0.12 per share.
  • Insider Sales Of Note:  None of note.

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

S&P 500 +4, Dow Jones -25, NASDAQ +23, and Russell 2000 +15.  (as of 8:00 a.m. EST).  Asia is higher ex Japan while Europe is lower this morning. VIX Futures are at 13.92 from 14.38  this morning.  Gold, Silver and Copper are higher this morning. WTI Crude Oil and Brent Crude Oil are lower with Natural Gas lower as well. US 10-year Treasury sees its yield at 4.13% from 4.094% Friday morning. The U.S. Dollar is higher versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $38,824 from $40,739 lower by -2.23% this morning.

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

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

Gains in everything from technology heavyweights to Goldman Sachs (GS) shares pushed the Dow Jones Industrial Average past 38000 for the first time.  The Dow Industrials added 0.4% to 38001.81, a record. The S&P 500 added 0.2%, kicking off the week with another high, and the tech-heavy Nasdaq Composite added 0.3%. Shares of small companies in the Russell 2000 outperformed on Monday, jumping around 2% and outpacing peers by a wide margin.  (WSJ – edited by QPI)

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

  • Tuesday After the Close:

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: LOGI +1.53, LMT +0.61, PG +0.14, GE +0.13, MMM +0.11, SYF +0.10, SASR +0.09, IVZ +0.07, HAL +0.06, RTX +0.05, AUB +0.03, JNJ +0.01 of note.
  • Flat: VZ, ERIC of note.
  • Misses: CBU (0.08), DHI (0.05), ONB (0.02), WBS (0.02) of note.
  • Still to Report: EWBC , GATX  , PCAR of note.

Company Earnings Guidance:

  • Positive Guidance: KRO of note.
  • Negative Guidance: ADNT, UAL, MMM, RTX of note.

Erlanger Research Advance/Decline Chart:  

Gap Ups & Down In Early Pre-Market:

  • Gap Up: RBB +11%, UAL +7%, INBX +7%, ACET +5% of note.
  • Gap Down: LOGI -7%, GE -7%, DHI -7%, IBTX -5%, MMM -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.

  • What You Need To Know To Start Your Day. (Bloomberg)
  • 5 Things To Know Before the Stock Market Opens Today. (CNBC)
  • Stocks Making The Biggest Move in Pre-Market:  (CNBC)
  • Bloomberg Lead Story: China Weighs Stock Market Rescue Package Backed by $278 Billion.   (Bloomberg)
  • Bloomberg  Most Shared Story: Same as above. (Bloomberg)
  • Stock Rally stalls as earnings take center stage: Markets Wrap. (Bloomberg)
  • Procter & Gamble (PG) revenues rise 3% but short of expectations. (CNBC)
  • Johnson & Johnson (JNJ) narrowly tops estimates. (CNBC)
  • Netflix (NFLX) to stream WWE Raw in 2025 in biggest jump into live entertainment. (CNBC)
  • Bloomberg Odd Lots: How Boeing’s (BA) corporate culture started to rot. (Podcast)
  • NPR Marketplace: AI reveals unseen human activity across the world’s oceans. (Podcast)
  • NY Times Daily: The Shadowy Story of Oppenheimer and Congress. (Podcast)
  • Wealthion:  Unmasking the 2024 economy on the brink of Federal Chaos and Financial Manipulation, Chris Whalen. (Podcast)

Moving Average Update: Score hits 100%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre and NSC Coordinator for Strategic Communications John Kirby, 12:15 p.m. EST
    • The President and The First Lady depart the White House en route to Manassas, Virginia, 2:50 p.m. EST
    • The President and The First Lady arrive in Manassas, Virginia, 3:05 p.m. EST
    • The President, The First Lady, The Vice President, and The Second Gentleman participate in a campaign event, 4:30 p.m. EST
    • The President and The First Lady depart Manassas, Virginia en route to the White House, 6:55 p.m. EST
    • The President and The First Lady arrive at the White House, 7:10 p.m. EST

Economic:

  • Redbook Sales 8:55 a.m. EST
  • Richmond Fed Mfg Index 10:00 a.m. EST
  • 2-Yr Note Auction 1:00 p.m. EST
  • Money Supply 1:00 p.m. EST

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News: None of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Capital Link’s Corporate Presentation Series
    • Sequire Investor Summit
    • TD Securities Global Mining Conference
    • U.S. Capital Advisors Midstream Corporate Access Day
      • Previously posted and ongoing conferences:
        • Jefferies Consumer Summit
  • Top Shareholder Meetings: BDX, CFFN, CMAX, CYTO, V
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: HRTX, LPTX, PLUG
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • LCA Recycling Circular Design & Sustainable Sourcing for EV Batteries & Carbon Neutral Vehicles USA Congress
      • Previously posted and ongoing conferences:
        • Maui Dermatology
        • Symposium OGM Presentations

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: