CAPIS Morning Note – 02/07/22: Will The Volatility Continue This Week As CPI Is Released on Thursday?

Please Note: CAPIS to Hold its February Research Briefing on Feb 17th with Fairlead Strategies’ Katie Stockton. Register here Erlanger Research – Chart of The Day: Below we look at weekly rotation. Improvements of note Consumer Services and Transportation. Deterioration of note Food Beverage  & Tobacco, Capital Goods and Household & Personal Products. Overnight Summary:…

Please Note: CAPIS to Hold its February Research Briefing on Feb 17th with Fairlead Strategies’ Katie Stockton. Register here

Erlanger Research – Chart of The Day: Below we look at weekly rotation. Improvements of note Consumer Services and Transportation. Deterioration of note Food Beverage  & Tobacco, Capital Goods and Household & Personal Products.

Overnight Summary: S&P 500 futures hit a low at 11:00 p.m. at 4471. They are now at 4497 at 7:30 a.m. EST up +5. Asia was mostly higher post the return to trading in China with Japan lower. Europe is higher in morning trading.

Earnings Out After The Close:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

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:
    • DRMA: Filed Form S-1.. 4,444,444 Shares of Common Stock or Pre-Funded Warrant to Purchase.
    • FREE Whole Earth Brands files for 2,829,200 share common stock offering by selling shareholders.
    • FTCI: Filed Form S-1.. 37,277,987 Shares of Common Stock.
    • GOVX: Filed Form S-1.. 6,134,968 Shares of Common Stock.
    • HCYT: Filed Form S-1.. 12,150,722 shares of common stock.
    • NBY: Filed Form S-1.. 37,500,000 Shares of Common Stock.
    • INM: Filed Form S-3.. 2,050,000 Common Shares and $50 Million Mixed Security Shelf.
    • ISIG: Filed Form S-3.. 699,713 Shares Common Stock and $100 Million Mixed Shelf.
  • Pricing of Over-Allotment: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ADBE: Filed Form S-3ASR — Automatick Mixed Security Shelf.
    • AKTS: Filed Form S-3.. $150,000,000 Mixed Shelf.
    • BCAB: Filed Form S-3ASR — Mixed Shelf Offering.
    • LVO: Filed Form S-3.. $150Million Mixed Security Shelf.
  • Convertible Offering & Notes Filed: None of note.
  • 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 and Over the Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: BPT 52%, EPZM 43%, SENS 39%, FIXX 26%, MDGL 26%, ATI 25%, UXIN 24%, DXC 22%, GTE 22%, NGL 22%, FUN 22%, RES 21%, GHL 20%, EOLS 19%, EAT 19%, AMD 18%, ATHN 18%
    • Trading Down: PYPL -23%, SKYW -21%, PBI -18%, BRFS -17%, CLX -15%, GRPN -15%, CHRW -14%, TRHC -14%, RFP -13%, PAGS -13%, DLB -12%, RYAM -12%, EHTH -12%, ESPR -11%, RCII -11%, KMPR -10%, THS -10%, EXPO -10%
  • News Items Over the Weekend:
    • Stocks That Defined the Week: FB, SPOT, XOM, UPS, AMC, SBUX, SNAP  (WSJ)
    • Amazon (AMZN), Other Potential Suitors Explore Peloton (PTON) Deal (WSJ)
    • Amazon (AMZN) Breaks Record for One-Day Gain in Market Cap (WSJ)
    • The Week in Business: A Strong Jobs Report (NYT)
    • Yellen Says ‘No Plans to Leave’ With Goals Far From Accomplished (Bloomberg)
    • A Big Tech Trade Is Losing Its Luster. (FB, AAPL, AMZN, NFLX, GOOG) (WSJ)
    • China companies try to list in US in test for regulators after clampdown. [BABA, BIDU, JD, TCEHY]  (FT)
    • Unilever (UL) investors want split or new chair amid rumbling discontent. (FT)
    • Kohl’s (KSS) Rejects $9 Billion Takeover Bid, Adopts Poison Pill (WSJ)
    • Barron’s:
      • Positive View: SAM, BKNG, CVX, ISRG, MCD, RTX, UPS, COIN, TDOC, ROKU, ZM, VNW, HPE, DELL, IBM.
      • Negative View: FB.
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Baosheng Media Group Holdings Limited (BAOS) Receives Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • Butterfly Network (BFLY) – Stephanie Fielding, CFA, CFO to step down effective April 30 to pursue opportunities outside of the company.
    • Century (CENX) Announces Departure of Chief Financial Officer; Senior Vice President, Finance to Assume Responsibilities of Principal Financial Officer During Search for Replacement.
    • Solo Brands, Inc (DTC) Announces CFO Transition Plan.
    • ION (IO) receives continued listing standard notice from the NYSE.
    • Qualys (QLYS) Chief Accounting Officer Saikat Paul to resign.
    • Team, Inc. (TISI) receives continued listing notice from NYSE.
  • Buyback Announcements:
    • Genesco (GCO) announces $100 million increase to its share repurchase authorization.
    • RenaissanceRe Holdings Ltd. (RNR) Announces Renewal of Share Repurchase Program.
  • Stock Splits: None of note.
  • Dividends Announcements:
    • Allegion (ALLE) increases its quarterly dividend by 14% to $0.41 per share.
    • HAS increases the quarterly cash dividend 3% to $0.70 per common share.
    • PriceSmart (PSMT) raised annual dividend by 22.9% to $0.86 per share.
    • RenaissanceRe Holdings Ltd. (RNR) Announces Twenty-Seventh Consecutive Annual Increase in Quarterly Dividend.
    • Harley Davidson (HOG) to increase dividend to $0.1575 from $0.15.

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

S&P 500 +13, Dow Jones +78, NASDAQ +70 and Russell 2000 +2.  Asia higher ex Japan and Europe higher. VIX Futures are at 23.70 from 25.10 yesterday morning. Gold and Silver higher with Copper lower. WTI Crude Oil and Brent Oil Futures lower. Natural Gas is lower. $ is lower vs Euro, higher vs Pound and lower vs Yen. US 10 year Treasury with yields at 1.923% from 1.822%.  Bitcoin is at $42,749 from $37,972 up +2.61%. As of 8:20 a.m. EST

Friday’s Action – 02/04/22 Close:  

  • Daily Positive Sectors: Consumer Cyclical, Energy, Technology, Financial, Communication Services of note.
  • Daily Negative Sectors: Consumer Defensive, Real Estate, Industrials, Utilities 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 Consumer Defensive of note.
  • Twelve Month Winners: Energy, Real Estate, and Financials of note.
  • Year to Date Winners: Energy and Financial of note.

OH SNAP! (and Amazon!) helped the markets level out after the META disaster.  Nasdaq finished up 1.58% on Friday.  The surprising jump in January employment numbers kept a lid on things.  Updated 02/04/22 close.

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

  • Monday After the Close: AMGN, SPG, PFG, TTWO, NUAN, ACM, THC, LEG, SSD, TDC, VRNS, CHGG, KMT, RMBS, PDM, ACLS, KFRC, SNCY, SLQT, AOSL, DHT of note.
  • Tuesday Before the Open: PFE, BP, SPGI, FISV, KKR, TRI, CNC, CARR, SYY, TDG, CVE, IT, CNHI, INCY, MAS, AGCO, ARMK, COTY, VIRT, HOG, NRZ, AVNT, TMHC, VSH, HAE, MBUU, CTS of note.

Earnings of Note This Morning:

  • Beats: TSN +0.94, HAS +0.33, AMG +0.29, SAVE +0.23, ENR +0.09, ULCC +0.08, CRNC +0.08.
  • Flat: None of note.
  • Misses: CNA (0.03), ZBH (0.03).
  • Still to Report: GTES, ON.

Guidance:

  • Positive Guidance: TWST, BFLY.
  • Negative Guidance: ZBH, CRNC.

Erlanger Research Advance/Decline Chart: Updated through 02/04/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: PTON +24%, SAVE +11%, FTCI +3%.
  • Gap Down: AKTS -4%, OBSV -3%.

Insider Action: VFC sees Insider buying with dumb short selling. No stocks sees Insider buying with smart short sellers. 02/04/22 close.

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

  • Stocks Making The Biggest Moves: SAVE, PTON, ENR, ZBH, HAS, TSN, BMBL, F, SPOT, SNOW. (CNBC)
  • 5 Things To Know To Start Your Day. (Bloomberg)
  • Russia is getting close to invading Ukraine and would result in 50,000 civilian deaths and Kiev falling to Russia within two days. (The Washington Post)
  • National Security Advisor Jake Sullivan validates the above story. (The Hill)
  • House to pass short term funding this week to keep the government going.
  • Covid cases at 289,747 from 524,850 with hospitalizations at 111,165 from 132,944. (CDC)
  • Trans Pacific Partnership will not be renewed. (WSJ)
  • Legislation targeting APP stores on mobile phones unlikely to become law. (Bloomberg)
  • CDC finds booster doses did not help younger people and only benefited those that are older. (NYT)
  • New Jersey to end school mask mandate for teachers and students. (NY Times)
  • Facebook (FB) may ban advertising during the days ahead of the mid terms. (Bloomberg)
  • Potential bid for Peloton (PTON) by Amazon (AMZN) may hit regulatory roadblocks. (Bloomberg)
  • Nike (NKE) may also want to bid for Peloton (PTON).

Moving Average Update:

  • The score improves from 23% to 30%.  Updated 02/04/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President and The Vice President receive the President’s Daily Brief, 10:15 a.m. EST
    • The President participates in a bilateral meeting with H.E. Olaf Scholz, Chancellor of the Federal Republic of Germany, 1:30 p.m. EST (White House Release)
    • Press Briefing by Press Secretary Jen Psaki, 1:45 p.m. EST
    • The President and H.E. Scholz participate in a joint press conference, 3:15 p.m. EST

Economic: 

  • Investor Movement Index 12:30 p.m. EST
  • Consumer Credit 3:00 p.m. EST 

Federal Reserve Speakers:

  • None of note.

M&A Activity:

  • Brown & Brown (BRO) to acquire the general insurance operating companies of BdB.
  • Carrier (CARR) Signs Agreement to Acquire Toshiba’s Global VRF and Light Commercial HVAC Business.
  • Everi (EVRI) to acquire ecash Holdings Pty Ltd.
  • Fiserv (FISV) to acquire Finxact remaining ownership interest for approximately $650 million.
  • ULCC SAVE: Frontier To Buy Spirit At Implied Value Of $25.83 per share.
  • Walker & Dunlop (WD) to acquire leading commercial real estate technology company GeoPhy.
  • Frontier Airlines (ULCC) to merge with Spirit Airlines (SAVE) and Frontier to have majority position.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Stifel Biopharma Ski Summit
      • Previously Announced  Conferences:
        • Citi’s Psychedelic Drug Call Series 2022 (02/02/22-02/08/22)
  • Company Meetings: CYRN.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: IMBI, PFSW, VLNS, ZBH.
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • BiotechGate Digital Partnering 2022 (02/07/22-02/11/22) 
    • Family Farms Group Winter Conference 2022
    • 18th Annual WORLD Symposium 2022 (02/07/22-02/11/22) 
    • Summit For Clinical Ops Executives (SCOPE) 2022 02/07/22-02/10/22)
      • Previously Posted and Ongoing Conferences:
        • Otolaryngology (ARO) 45th Annual Mid-Winter Meeting 2022 (02/05/22-02/09/22)

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:

      

Friday’s Upgrades and Downgrades: