CAPIS Morning Note – 02/01/22: Stock Modestly Lower This Morning.

Please note: Chinese markets are closed for the week because of the Lunar New Year holiday. However, Chinese ETFs and ADRS in the U.S. markets still will trade. Overnight Summary: Asia higher ex Shanghai. Europe higher this morning. Both are following U.S. strength on Monday. S&P 500 futures are now lower by -15. The high…

Please note: Chinese markets are closed for the week because of the Lunar New Year holiday. However, Chinese ETFs and ADRS in the U.S. markets still will trade.

Overnight Summary: Asia higher ex Shanghai. Europe higher this morning. Both are following U.S. strength on Monday. S&P 500 futures are now lower by -15. The high for the night was 4514 at 3:20 a.m. and is now at 4492. The low was at 4482. Update at 7:25 a.m. EST.

Earnings Out After The Close:

  • Beats: NXPI +2.06, CACC +1.89, CRUS +0.40, CBT +0.19, SANM +0.13, KRC +0.09, AGNC +0.07, FN +0.04, GGG +0.03, HLIT +0.03, HP +0.02.
  • Flat: ARE +0.00.
  • Misses: KMPR (1.77), WWD (0.27), JJSF (0.10), HTLF (0.10), AXTA (0.01), PCH (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • SOND: Filed Form S-1.. 159,207,239 Shares of Common Stock.
    • SRRA: Closing of Upsized Public Offering of $135.0 Million of Securities.
  • Pricing of Over-Allotment: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • Veritone (VERI) files for 2,760,188 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • NLY: Filed Form S-3ASR.. Mixed Shelf .
  • Convertible Offering & Notes Filed:
    • ABR: Pricing of Public Offering of Additional Shares of 6.25% Series F Fixed-to Floating Rate Cumulative Redeemable Preferred Stock.
    • XMTR: Proposed $250 Million Offering of Convertible Senior Notes.
  • Note Offerings 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: SPIR +8%, WISH +8%, XOS +7%, SANM +6%, HP +3%.
    • Trading Down: XMTR -6%, INN -4%, WWD -4%, HLIT -4%.
  • News After The Close:
    • Federal Reserve’s Richmond President Thomas Barkin says businesses would welcome higher interest rates. (CNBC)
    • The New York Times (NYT) Buys Wordle for “low seven figures.” (NYT)
    • Investors Sour on Muni Funds. (WSJ)
    • Cybereason, a security startup backed by SoftBank’s Vision Fund 2 and Alphabet Inc’s Google Cloud unit (GOOGL), has confidentially filed for a U.S. initial public offering that could value it at more than $5 billion, according to people familiar with the matter.
    • President Biden is sending more than $1 billion to states to plug abandoned oil and gas wells. (CNBC)
    • Lockheed Martin (LMT) awarded $1.4 billion Air Force contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • BJ Restaurants (BJRI) names to its board Marriott (MAR) executive Julius Robinson .
    • Daimler AG (DDAIF) will become Mercedes-Benz Group AG on February 1, 2022.
    • Electronic Arts (EA) names Chris Suh as CFO on 3/1.
    • Enerpac Tool Group (EPAC) announces departure of CFO Rick Dillon on April 30th.
    • Summit Hotel Properties (INN) Announces Retirement of Craig Aniszewski as Chief Operating Officer.
    • Kaival Brands Innovations Group, Inc. (KAVL) Receives Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • MultiPlan (MPLN) announced that COO Dale White will assume the title of CEO on February 1.
    • Replimune (REPL) Announces the Departure of Dr. Otello Stampacchia from its Board of Directors.
    • Wish (WISH) appoints Foot Locker exec, Vijay Talwar as CEO, effective February 1 replacing founder, Piotr Szulczewski. (MarketWatch)
  • Buyback Announcements:
    • Amerant Bancorp Inc. (AMTB) Announces Successful Completion of Previously Approved Share Repurchase Program and New $50 Million Share Repurchase Program.
    • NXP Semiconductors (NXPI) Announces New 2022 Share Repurchase Program.
    • PulteGroup, Inc. (PHM) Announces $1.0 Billion Increase to Share Repurchase Authorization.
    • SWK $4 billion repurchase program.
    • Bio-Techne (TECH) approves new share repurchase program.
    • UPS share buyback at least $1.0 billion.
  • Stock Splits: None of note.
  • Dividends Announcements:
    • Capital Southwest Corp. (CSWC) increases quarterly dividend to $0.48 per share, a 2.1% increase.
    • NOG (NOG) Declares $0.14 Cash Dividend on its Common Stock, a 75% Increase Over Prior Quarter.
    • NXP Semiconductors (NXPI) Announces Increase of Quarterly Dividend.
    • UPS Declares Quarterly Dividend Of $1.52.
    • Woodward (WWD) Increases Dividend by 17 Percent.

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

S&P 500 -15 , Dow Jones -92, NASDAQ -26 and Russell 2000 -9.75.  Asia higher ex Shanghai and Europe higher. VIX Futures are at 24.85 from 27.65  yesterday morning. Gold, Silver and Copper higher. WTI Crude Oil and Brent Oil Futures lower. Natural Gas is lower. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10 year Treasury price is at $128.28 from $127.39 yesterday with yields at 1.748% from 1.80% from Friday morning. Bitcoin at $38,732 from $37,036.84 yesterday morning and +0.66% this morning. As of 8:15 a.m. EST

Monday’s Action – 01/31/22 Close:  

  • Daily Positive Sectors: Consumer Cyclical, Technology, Communication Services, Utilities, Real Estate, Industrials, Healthcare, Financial. Basic Materials of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners: Energy and Financial of note.
  • Three Month Winners: Energy, Consumer Defensive and Utilities of note.
  • Six Month Winners: Energy, Financial, and Utilities of note.
  • Twelve Month Winners: Energy, Real Estate, and Financials of note.
  • Year to Date Winners: Energy of note.

All indexes were up with the NASDAQ and Russell 2000 marching up 3.41% and 3.05% respectively.  Month end rebalancing seemed to benefit growth stocks.  The SP 500 moved above the 200 day moving average.   Updated 01/31/22 close.

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

  • Tuesday After the Close: GOOG, AMD, SBUX, GILD, CB, GM, EA, EQR, PKI, IEX, DOX, MANH, LFUS, EHC, ASH, UNM, TENB, MSTR, ZWS, HRB, APAM, MRCY, OI, HMN of note.
  • Wednesday Before the Open: ABBV, TMO, NVS, BSX, EMR, HUM, ROP, MPC, IDXX, ODFL, MPLX, DHI, ABC, BIP, CNHI, GIB, AVY, HWM, CHRW, MMP, CPRI, SAIA, NYT, SLAB, EVR, SPR, ATHM, VNE, SR, ATI, SBH, EAT, CRS of note.

Earnings of Note This Morning:

  • Beats: ARCB +0.52, UPS +0.49, LII +0.36, HLNE +0.36, PHM +0.21, MAN +0.18, WAT +0.18, UBS +0.11, XOM +0.11, SWK +0.09, TECH +0.09, PINC +0.08, CTLT +0.07, ENTG +0.07, ST +0.06, AQUA +0.04, PNR +0.02, ALGM +0.01, SIRI +0.01.
  • Flat: None of note.
  • Misses: MDC (0.28), IMO (0.16), SMG (0.15), EPD (0.07), PBI (0.05), BR (0.02).
  • Still to Report: BEN, GFF, NVR.

Guidance:

  • Positive Guidance: CRUS, FN, XMTR, NXPI, CBT, SPIR, XOS, UPS, SWK, ENTG, WAT, CTLT, SIRI, AMC, MAN.
  • Negative Guidance: TT, AXTA, PNR.

Erlanger Research Advance/Decline Chart: Updated through 01/31/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: AWH +27%, SPIR +13%, SI +10%, ST +7%, XOS +7%, UBS +7%, ARCB +7%, UPS +5%, AU +5%, SANM +4%, CBT +4%.
  • Gap Down: HLIT -7%, XMTR -6%, WWD -5%, KMPR -5%, INN -4%, CRUS -4%.

Insider Action: SAFE sees Insider buying with dumb short selling. No stock sees Insider buying with smart short sellers. 01/31/22 close.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”.

  • Stocks Making The Biggest Moves: T, AMC, UPS, XOM, SIRI, UBS, CRUS, NYT, PFE, BNTX, SANM.  (CNBC)
  • 5 Things To Know To Start Your Day. (Bloomberg)
  • Covid-19 Cases no change as Tuesday data partial 524,850 cases from 769,153 cases a week ago while hospitalizations actually fell to 132,044 from 140,498. (CDC)
  • Coronavirus cases in the U.S. drop below 500,000 a day as Omicron wave recedes.
  • Russia responds to U.S. on Ukraine but no one knows what they said. (The Washington Post)
  • FTC to review Microsoft (MSFT) deal for Activision (ATVI). (Bloomberg)
  • California legislature pulls bill to create a single payor healthcare system in the state. (WSJ)
  • OPEC+ may increase output this week. (Bloomberg)
  • HBO Max (T) moves into 15 European countries on 3/8.
  • General Electric (GE) picks up order for Qatar Airways for GE9X Engines for Boeing 777-8 Freighters.
  • Robinhood Snacks looks at Spotifiy (SPOT) and Joe Rogan vs musical artists. FTX coin exchange valued at $32 billion after latest raise.

Moving Average Update:

  • Score shows even more life jumping to 50% from 23%. Updated 01/31/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President and The Vice President receive the President’s Daily Brief, 10:15 a.m. EST
    • Press Briefing by Press Secretary Jen Psaki, 1:30 p.m. EST
    • The President and The Vice President host Senate Judiciary Committee Chair Dick Durbin and Ranking Member Chuck Grassley to consult with them about the forthcoming Supreme Court vacancy, 1:45 p.m. EST
    • Australia’s RBA left rate at 10 basis points and will conclude bond purchases on 2/10.

Economic: 

  • Redbook Sales 8:55 a.m. EST
  • PMI Mfg Final 9:45 a.m. EST
  • January ISM Manufacturing Index is due out at 10:00 a.m. EST and is expected to come in at 57.50% from 58.7%.
  • December Construction Spending is due out at 10:00 a.m. EST and is expected to rise to 0.6% from 0.4%.
  • Job Openings and Labor Turnover Survey (JOLTS) 10:00 a.m. EST
  • API Crude Oil Data 4:30 p.m. EST

Federal Reserve Speakers:

  • None of note.

M&A Activity:

  • Arthur J. Gallagher & Co. (AJG) Acquires Devitt Insurance Services Limited.
  • Equifax (EFX) to Acquire Efficient Hire.
  • Gambling.com Group Ltd. (GAMB) acquires NDC Media for $13 million in cash and stock deal.
  • Silvergate Capital (SI) acquires Diem’s blockchain payment net assets for $182 million in cash and stock.
  • Sony Interactive (SONY) acquires Bungie, an independent videogame developer in the United States.
  • AT&T (T) to spin off interest in WarnerMedia to its shareholders at closing of Discovery (DISCA) transaction.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse Latin America Investment Conference 2022 (02/01/22-02/03/22)
      • Previously Announced  Conferences:
        • Keystone Symposia Conference: Antibodies as Drugs 2022 (01/30/22-02/02/22)
  • Company Meetings: EMR, MCMJ, ROK.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: None of note.
  • Update: PSTX.
  • R&D Day: None of note.
  • Company Event: MicroStrategy World 2022 (MSTR)
  • Industry Meetings:  
      • Previously Posted and Ongoing Conferences:
        • International Mining and Resources Conference (IMARC) (01/31/22-02/02/22)
        • Bloomberg New Energy Finance (BNEF) Summit 2022 (01/31/22-02/01/22)

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:

      

Monday’s Upgrades and Downgrades: