Overnight Summary: The S&P 500 closed Wednesday higher by 1.05% to close at 4119.21 from Tuesday higher by 1.46% at 4076.60. The overnight high of 4161 was hit at 3:35 a.m. EST. The low was hit at 4136.75 at 9:40 p.m. EST, a range of ~40 points high to low. At 7:10 a.m. EST, the S&P 500 (mini) was higher by 17.25 points which is 0.42%.
Great Read: Woman climbs Mount Everest 10th time while working at Whole Foods. How Everest has changed. (NYT)
Earnings Out After The Close:
- Beats: ALGT +2.14, META +0.77, MCK +0.54, CCS +0.28, RRX +0.25, ELF +0.25, ALGN +0.20, AFL +0.19, UGI +0.19, TTEK +0.15, HOLX +0.14, AVT +0.14, AFG +0.13, KLIC +0.13, QRVO +0.12, DXC +0.11, CTVA +0.10, MTG +0.10, SITM +0.09, MTH +0.09, LFUS +0.08, GL +0.07, ENVA +0.05, NTGR +0.05, MOD +0.05, MAA +0.05, EGHT +0.04, CHX +0.04, KRC +0.02, TBI +0.02, CLB +0.01, MXL +0.01 of note.
- Flat: BDN, BHE, THG, LSTR of note.
- Misses: MUSA (1.08), SLM (0.79), CHRW (0.31), ALL (0.20), MET (0.09), PTC (0.04), RYN (0.01) of note.
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.
- IPOs Priced or News:
- Nextracker (FLEX) Announces Launch of Initial Public Offering. Deal expected to consist of 23.26 mln shares and price between $20-$23.
- New SPACs launched/News:
- Goal Acquisitions Corp. (PUCK) Issues Updated Letter to Shareholders Regarding Proposed Combination with Digital Virgo.
- Sizzle Acquisition Corp. (SZZL) Announces Approval of Extension of Deadline to Complete Business Combination to Form Critical Metals Corp.
- Secondaries Priced:
- ADCT: Announces Pricing of Underwritten Offering by a Selling Shareholder. Priced @$5.
- VERA: Prices $100 Million offering. 14.28 Million shares at $7 per share.
- Notes Priced of note: None of note.
- Common Stock filings/Notes:
- ONCS: Filed Form S-1.. 6,188,118 Shares of Common Stock 6,188,118 Pre-Funded Warrants 6,188,118 Common Warrants.
- RNAZ: Filed Form S-1.. 12,000,000 Shares of Common Stock Up to 12,000,000 Pre-Funded Warrants to Purchase Common Stock.
- ROIV: Has commenced an underwritten public offering of $150 million of common shares.
- VERA: Commencement of Public Offering of Class A Common Stock. $75.0 million. (JPM, Cowen and Evercore bookmanager)
- WULF: Announces Proposed Public Offering of Common Stock.
- Direct Offering: None of note.
- Selling Shareholders of note: None of note.
- Private Placement of Public Entity (PIPE): None of note.
- Mixed Shelf Offerings:
- AGIL: Filed Form S-3.. $100 Million Mixed Shelf.
- BEAT: Filed Form S-3.. $100 Million Mixed Shelf.
- INTC: Filed Form S-3ASR — Mixed Shelf Offering.
- TERN: Filed Form S-3.. $400 Million Mixed Shelf.
- WFC: Files for $93 billion mixed securities shelf offering.
- Debt Filing/Notes:
- UNIT: Announces Private Offering of Senior Secured Notes to Redeem a Portion of Outstanding 7.875% Senior Secured Notes due 2025.
- 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: META +18%, ALGN +15%, ELF +13%, AFG +4%, PINS +4% of note.
- Trading Down: VERA -9%, CHX -8%, MOD -8%, MXL -7%, CTVA -5%, ROIV -5%, BHE -4%, GL -4%, QRVO -4%, of note.
- News After The Close:
- Stocks making the biggest moves after hours: META, ELF, ALGN, GOOGL, AMZN, SNAP, HOLX, CHRW (CNBC)
- House Speaker McCarthy post meeting with the president said, “no agreements, no promises”. (NYT)
- META stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss. (MarketWatch)
- DoubleLine Capital’s Jeffrey Gundlach: Odds Of Recession This Year Are Down; Still Over 50% – Odds Of A 2023 Rate Cut Are A “Coin Flip” – We Should All Watch Core Services Ex-Housing. (CNBC)
- Snap (SNAP) Tumbles on Projected Sales Drop in Warning For Meta, Google (Bloomberg)
- Fed Traders See Pivot From Rate Hikes To Rate Cuts In Second Half. (Bloomberg)
- Merck (MRK) Covid Drug Linked to New Virus Mutations, Study Says. (Bloomberg)
- COST: reported net sales of $16.84 billion for the retail month of January, the four weeks ended January 29, 2023, an increase of 6.9 percent from $15.76 billion last year.
- Bed Bath & Beyond (BBBY) Misses Interest Payments Ahead Of Possible Chapter 11. (WSJ)
- FedEx (FDX) is laying off 10% of its officers and directors amid cooling demand. (CNBC)
- Rivian (RIVN) to lay off 6% of its workforce as EV price war concerns grow. (CNBC)
- Boeing (BA) awarded $1.615 billion U.S. Air Force contract for guidance subsystem support.
- Exchange/Listing/Company Reorg and Personnel News:
- Alexander & Baldwin, Inc. (ALEX) Announces Leadership Transition.
- Berry Global (BERY) announces that Thomas E. Salmon will retire as Chief Executive Officer and Chairman of the Board.
- BIT Mining Limited (BTCM) Regains Compliance with NYSE Continued Listing Standards.
- CNH Industrial (CNHI) to delist from Euronext Milan and retain a single listing on the New York Stock Exchange.
- Digihost (DGHI) Regains Compliance With Nasdaq Minimum Bid Price Requirement and Provides Production Update.
- Hepsiburada (HEPS) Regains Compliance with Nasdaq Minimum Bid Price Requirement.
- IVC: NYSE to Suspend Trading Immediately in Invacare Corporation and Commence Delisting.
- AEye (LIDR) Names Tech Leader Matt Fisch as CEO.
- Riot Platforms (RIOT) Chief Commercial Officer Chad Everett Harris is no longer employed.
- SONY: Announces Hiroki Totoki newly appointed as President, COO.
- Vista Outdoor (VSTO) appoints Gary McArthur as interim CEO.
- Waitr Holdings (ASAP) is being delisted from Nasdaq and will trade on the OTC market.
- Buyback Announcements or News:
- META Announced Today $40 Billion Boost In Share Buyback Authorization.
- Quest Diagnostics (DGX) increased share repurchase authorization by $1 billion. (See Dividend too)
- Schneider National, Inc. (SNDR) announces share repurchase program of up to $150 million. (See Dividend too)
- Shell (SHEL) Starts Share Buyback Of $4 billion.
- Stock Splits or News: None of note.
- Dividends Announcements or News:
- American Fincl (AFG) announces special dividend of $4.00 per share.
- Brookfield Infrastructure (BIP) Board of Directors has declared a quarterly distribution in the amount of $0.3825 per unit.
- CME Group (CME) increases quarterly dividend $0.10 to $1.10.
- CMS Energy (CMS) increases quarterly dividend to $0.4875 per share.
- ConocoPhillips (COP) Declares Quarterly Dividend and Variable Return of Cash Distribution.
- CSG Systems (CSGS) increases quarterly cash dividend to $0.28 per share, $0.15 increase.
- Deluxe (DLX) Board of Directors recently approved a regular quarterly dividend of $0.30 per share.
- Eversource Energy (ES) increases quarterly dividend to $0.675 per share, previously $0.635 per share.
- Hawkins (HWKN) increases quarterly cash dividend to $0.15 per share, a $0.01 bump.
- Intercontinental Exchange (ICE) Announces 11% Increase to its Quarterly Dividend.
- Quest Diagnostics (DGX) increases quarterly dividend $0.05 to $0.71 per share.
- Roche Holdings (RHHBY) Board proposes dividend increase to CHF 9.50.
- Schneider National, Inc. (SNDR) increases quarterly dividend $0.01 to $0.09 per share..
What’s Happening This Morning: Futures value reflects the change with fair value.
S&P 500 +20, Dow Jones -102, NASDAQ +181, and Russell 2000 +1. (as of 8:04 a.m. EST). Asian and European markets are trading higher. VIX Futures are at 19.61 from 20.40 from 19.95 yesterday. Gold, Silver and Copper higher. WTI Crude Oil and Brent are lower with Natural Gas higher. US 10-year Treasury sees yields at 3.405% from 3.485% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $23,827 from $23,092 yesterday, higher by 1.22%.
Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):
- Daily Positive Sectors: Technology, Consumer Cyclical, Communication Services, Industrials, Basic Materials of note.
- Daily Negative Sectors: Energy of note.
- One Month Winners: Consumer Cyclical, Communication Services, and Technology of note.
- Three Month Winners: Basic Materials, Real Estate, and Financial of note.
- Six Month Winners: Basic Materials, Energy, and Financial of note.
- Twelve Month Winners: Energy, Basic Materials and Utilities of note.
- Year to Date Winners: Consumer Cyclical, Communication Services, and Technology of note.
U.S. stocks jumped Wednesday, erasing earlier losses, after the Federal Reserve said it had approved raising interest rates by a quarter of a percentage point. Markets’ afternoon rally showed just how confident many investors have become that the Fed will end up lowering interest rates this year. The S&P 500 closed up 42.61 points, or 1%, at 4119.21 after initially falling in reaction to the Fed’s rate decision. The Nasdaq Composite Index advanced 231.77 points, or 2%, to 11816.32. The Dow Jones Industrial Average lagged behind its peers, gaining only 6.92 points, or less than 0.1%, to 34092.96. (WSJ)
Click here for a video explanation of Erlanger Value Lines.
Upcoming Earnings Of Note: (From Chartroom Software – sorted by market cap, highest to lowest with most visible names)
- Thursday After the Close:
Earnings of Note This Morning:
- Beats: ABG +0.91, NJR +0.43, FLWS +0.30, BDX +0.30, PH +0.30, EL +0.25, HSY +0.25, SWK +0.24, LLY +0.24, LEA +0.23, HOG +0.21, SNA +0.21, JHG +0.20, ABB +0.19, CAH +0.18, TT +0.18, VSTO +0.18, FCFS +0.14, WNC +0.12, RCI +0.10, APTV +0.09, BMY +0.09, MRK +0.08, DGX +0.08, WEC +0.05, RACE +0.05, AME +0.05, LSPD +0.05, SBH +0.03, CMS +0.03, PBH +0.03, TW +0.03, HON +0.01, CNHI +0.01, ATI +0.01, MTSI +0.01, DLX +0.01, BERY +0.01, BC +0.01, SIRI +0.01 of note.
- Flat: BIP, BR of note.
- Misses: AVY (0.37), GOOS (0.33), PENN (0.23), WMS (0.22), LANC (0.22), COP (0.19), LAZ (0.12), BALL (0.11), APD (0.06), TECH (0.02), BCE (0.01), ICE (0.01), HBI (0.01) of note.
- Still to Report: ARW, DGII, GWW, ITW, MMP, SNDR of note.
- Positive Guidance: HOLX, ELF, AVT, MCK, GL, ALGN, TTEK, SONY, RACE, TT, BDX, HSY, LLY, WNC, NJR, PH, GWW, ARW of note.
- Negative Guidance: QRVO, MXL, CCS, NTGR, EGHT, BHE, TBI, RYN, CHX, LFUS, CTVA, AFG, SWK, DLX, BCE, BC, MRK, LEA, WMS, AVY, APTV, GOOS, DGX, AME, EL, VSTO, SIRI, HBI, MTSI of note.
Erlanger Research Advance/Decline Chart:
Gap Ups & Down In Early Pre-Market:
- Gap Up: META +19%, ELF +17%, ALGN +14%, ALGT +10%, PINS +5%, MGRC +5%, TTD +4%, SNDR +4%, GOOG +4%, AFG +4% of note.
- Gap Down: VERA -13%, NTGR -10%, MOD -6%, LFUS -6%, ING -4%, MXL -4%, PTC -4%, SWK -4%, ABB -4%, CHX -4%, BHE -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.
- Stocks making the biggest moves premarket: META, ALGN, FDX, MRK, HON, TSLA, ELF, CHRW, QRVO, CTVA (CNBC)
- 5 things to know before the stock market opens. (CNBC)
- 5 Things You Need to Know to Start Your Day. (Bloomberg)
- Bloomberg Lead Story: Stocks, Futures Extend Gains With ECB to Come (Bloomberg)
- Bloomberg Most Read Story: Merck (MRK) Covid Drug, Lagevrio, liked to new mutations, study says. (Bloomberg)
- The Bank of England hiked rates by 50 basis points, sees a much shallower recession than feared. (Bloomberg)
- Iran accuses Israel of launching a drone attack on a weapons facility. (CNBC)
- The U.S. will increase its military presence in the Philippines. (NYT)
- Hedge Fund Manager Ray Dalio says “cash is no longer trash” on CNBC interview as paying over 4%. (CNBC)
- Shell’s (SHEL) profits soar to $42 billion in 2022. (NYT)
- Infineon (IFXGn.DE) lifts margin forecast as car sales see strong demand. (Reuters)
Moving Average Update:
- Day 2 at 100% and the beat goes on.
- President’s Public Schedule:
- The President receives the Presidential Daily Briefing, 7:00 a.m. EST
- The President departs the White House en route the National Prayer Breakfast, 7:30 a.m. EST
- The President delivers remarks at the National Prayer Breakfast; The Vice President attends, 8:00 a.m. EST
- The President arrives at the White House, 9:45 a.m. EST
- The President has lunch with King Abdullah II of Jordan and His Royal Highness Crown Prince Hussein, 12:00 p.m. EST
- Press Briefing by Press Secretary Karine Jean-Pierre, 12:45 p.m. EST
- The President and The Vice President deliver remarks to mark the 30th Anniversary of the Family and Medical Leave Act, 2:15 p.m. EST
- The President and The Vice President meet with Congressional Black Caucus members, 4:30 p.m. EST
- Challenger Job Cut 7:30 a.m. EST
- U.S. Jan. Challenger Job Cuts: 102.943K vs 43.651K prev U.S. Jan. Challenger Job Cuts: +440% y/y, +135.83% m/m
- Initial Jobless Claims 8:30 a.m. EST
- Productivity and Costs 8:30 a.m. EST
- December Factory Orders are due out at 10:00 a.m. EST and are expected to come in at 2.2% from 1.0%.
- EIA Natural Gas Report 10:30 a.m. EST
Federal Reserve / Treasury Speakers: None of note.
- Essent (ESNT) Enters into Agreement to Acquire Title Insurance Operations (a subsidiary of Finance of America (FOA).
- FleetCor (FLT) announces the acquisition of Mina.
- Focus Financial (FOCS): Clayton, Dubilier & Rice communicated proposal for the acquisition of all of the outstanding common stock at $53 per share.
- Sisecam Resources LP (SIRE) to be Acquired by Sisecam Chemicals Wyoming LLC.
Meeting & Conferences of Note:
- Company Meetings: NRXP
- Fireside Chat: None of note.
- Investor/Analyst Day/Calls: ADES, ARCO, BNGO, EPOW, TXN
- Update: None of note.
- R&D Day: None of note.
- Company Event: None of note.
- 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: