CAPIS Morning Note – 02/16/23: More Economic Data This Morning, Stocks Slump Into The Red Ahead of Data

Overnight Summary: The S&P 500 closed Wednesday higher by 0.28% at 4147.60.  Tuesday lower by -0.03% at 4136.13 in a wild trading session. The overnight high of 4168.25 was hit at 9:20 p.m. EST. The low was hit at 4149 at 7:15 a.m. EST, a range of ~19 points high to low.  At 7:20 a.m….

Overnight Summary: The S&P 500 closed Wednesday higher by 0.28% at 4147.60.  Tuesday lower by -0.03% at 4136.13 in a wild trading session. The overnight high of 4168.25 was hit at 9:20 p.m. EST. The low was hit at 4149 at 7:15 a.m. EST, a range of ~19 points high to low.  At 7:20 a.m. EST, the S&P 500 (mini) was lower by -6.50 points which is -0.16%.

Earnings Out After The Close: 

  • Beats:  AR +1.42, CYH +1.18, PEGA +0.67, CPA +0.45, TNET +0.42, NUS +0.35, QDEL +0.34, KAI +0.31, TWLO +0.30, ALSN +0.27, ALB +0.25, SGEN +0.24, AMED +0.18, MSA +0.17, TXG +0.17, NEX +0.17, ZG +0.15, CF +0.15, SNPS +0.13, RGLD +0.11, RSG +0.11, WH +0.10, SHOP +0.09, AIG +0.08, UPWK +0.07, ATCO +0.07, MFC +0.07, AEE +0.06, VECO +0.06, TRUP +0.06, PLMR +0.06, FSLY +0.05, FARO +0.04, MRO +0.03, ET +0.02, HST +0.02, AWK +0.02, CSCO +0.02, KGC +0.02, ROKU +0.01, INVH +0.01, RNG +0.01, WELL +0.01, WCN +0.01, AMPL +0.01, AVTA +0.01, SPWR +0.01 of note.
  • Flat: ROL +0.00, RPT +0.00, ROIC +0.00, STAG +0.00 of note.
  • Misses: SAM (1.58), HCC (0.87), NTR (0.55), EQIX (0.43), TROX (0.29), AJRD (0.25), REZI (0.16), EQT (0.10), TYL (0.09), ZD (0.09), SUM (0.05), AM (0.02), PGRE (0.02), QS (0.01), FCPT (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.

 

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • FAST Acquisition Corp. II (FZT) Issues Letter to Shareholders Regarding Proposed Business Combination with Falcon’s Beyond, S-4 Filing, and Extension of Termination Date.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • CD: Announces Pricing of $300 million Senior Notes due 2026.
  • Common Stock filings/Notes:
    • SNCY: Announces Launch of Secondary Public Offering of Common Stock and Concurrent Share Repurchase – 5,250,000 shares. (BCS Bookmanager)
    • URG: Filed Form 424B5 — Common stock and warrants offering.
    • ZBH: Filed Form 424B5.. 1,059,992 Shares Common Stock.
  • Direct Offering:
    • SQL: Closing of $1.8 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • ALVR: Filed Form S-3.. 31,359,683 Shares by selling stockholders.
    • LOCO: Filed Form S-3.. 16,818,465 Shares of Common Stock by Selling Stockholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ALB: Filed Form S-3ASR – Mixed Shelf.
  • Debt Filing/Notes:
    • WHR: Filed Form 424B5.. $300,000,000 5.500% Senior Notes Due 2033.
  • Tender Offer:
    • PARR: Announces Cash Tender Offers for Any and All of its Subsidiaries’ Outstanding 7.750% Senior Secured Notes Due 2025 and 12.875% Senior Secured Notes Due 2026.
  • Convertible Offering & Notes Filed:
    • IQ: Announces Repurchase Right Notification for 2.00% Convertible Senior Notes due 2025.

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:  CYH +19%, TWLO +12%, EBS +12%, ROKU +10%, PEGA +8%, TXG +6%, SGEN +5%, STAG +4% of note.
    • Trading Down: QS -14%, RNG -10%, SHOP -10%, NUS -10%, SAM -9%, TRUP -8%, UPWK -8%, AMPL -7% TROX -6%, SNCY -5%HCC -4% of note.
  • News After The Close:   
    • Stocks making the biggest moves after hours: ROKU, CSCO, TWLO, SNPS, SAM, ZG, SHIP (CNBC)
    • Cisco (CSCO) beats earnings and revenue estimates, boosts full-year guidance. (CNBC)
    • Apple (AAPL) Pushes Back Mixed-Reality Headset Debut Two Months to June. (Bloomberg)
    • EBS: FDA advisors recommend over-the-counter use of life-saving opioid overdose treatment Narcan. (CNBC)
    • Shopify (SHOP) stock falls 5% as forecast disappoints amid escalating Amazon rivalry, price increases. (MarketWatch)
    • Nu Skin (NUS) stock falls 9% after Q4 sales miss. (MarketWatch)
    • RingCentral (RING) stock plunges 10% as sales forecast disappoints. (MarketWatch)
    • McDonald’s (MCD) to launch McPlant nuggets made with Beyond Meat (BYND) in Germany. (CNBC)
    • Newcrest Offers Newmont (NEM) Hope After Rejecting $17 Billion Offer. (Bloomberg)
    • WallStreetBets Founder Sues Reddit: Jaime Rogozinski says site ousted him without claim; Reddit calls suit frivolous. (WSJ)
    • General Dynamics (GD) and American Ordnance LLC to compete for $994 million U.S. Army contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Atlassian (TEAM) Announces Promotion of Anutthara Bharadwaj to President.
    • AMC Networks (AMCX) Names Kristin Dolan Chief Executive Officer.
    • Amplitude (AMPL) has appointed former Forescout executive Christopher Harms as the company’s next chief financial officer.
    • Azure Power (AZRE) Receives NYSE’s Grant of Extension Regarding Delayed Filing of 2022 Annual Report.
    • Cenovus (CVE) announces President & Chief Executive Officer succession.
    • Constellium (CSTM) to appoint Jack Guo as Chief Financial Officer following Peter Matt’s decision to leave the Company.
    • Ensysce Biosciences (ENSC) Receives Positive Nasdaq Listing Determination.
    • HF Sinclair (DINO) announces the promotion of Tim Go to the position of Chief Executive Officer and President.
    • Largo Resources (LGO) announces CEO & President Paulo Misk has left the company with immediate effect.
    • LTRY names Mark Gustavson as new CEO.
    • Liminal BioSciences (LMNL) Regains Compliance with NASDAQ Minimum Bid Price Requirement.
    • PBF Energy (PBF) approved the appointment of Karen B. Davis as interim SVP CFO
    • Signature Bank (SBNY) provides update to leadership transition plans, CEO/President, COO.
    • StoneCo (STNE) Announces Board Changes.
    • WNS announces that Mr. Gautam Barai has decided to step down as the company’s Chief Operating Officer.
  • Buyback Announcements or News:
    • Bloomin’ Brands (BLMN) New $125Million Share repurchase program. (see Dividends)
    • DOCN: Increases Share Buyback by $500M.
    • EPAM Announces $500 million Share Repurchase Program.
    • GNS: Votes on buybacks today.
    • The Hershey Company (HSY) Purchases Stock From Hershey Trust Company.
    • Scorpio Tankers (STNG) authorized $250 million stock repurchase program. (see Dividends)
    • Standard Chartered $1 Billion Share Buyback.
    • TriNet Group (TNET) Repurchase authorization increased by $300 million to $545 million.
    • TWLO: Authorized a $1.0 billion share repurchase program.
    • West Pharm (WST) approves new buyback program up to $1.0 billion.
  • Stock Splits or News:
    • SHIP trading r/s price.
  • Dividends Announcements or News:
    • Bloomin’ Brands (BLMN) increases dividend 71% to $0.24.
    • CE Goes ex div tomorrow for $0.70.
    • Cisco (CSCO) has declared a $0.01 increase in quarterly dividend, now $0.39 per common share.
    • Clearway Energy (CWEN) increases quarterly dividend to $0.3745 per share.
    • DT Midstream (DTM) increases dividend 8%.
    • Equinix (EQIX) increases quarterly dividend 10% to $3.41 per share.
    • Gold Royalty (GROY) Declares First Quarter 2023 Dividend And Introduces A Dividend Reinvestment Plan.
    • Humana (HUM) Board Declares Payment of Quarterly Dividend to Stockholders; Increases Per Share Dividend by 12.4%.
    • Kinsale Capital (KNSL) increases cash dividend $0.01 to $0.14 per share.
    • Matador Resources (MTDR) increases quarterly cash dividend $0.05 to $0.15 per share.
    • Manulife Financials (MFC) increases divided by 11% to $0.365 per share.
    • Nu Skin (NUS) increases quarterly cash dividend $0.005 to $0.39 per share.
    • Nutrien (NTR) approved a 10% increase in the quarterly dividend to $0.53 per share.
    • Olympic Steel (ZEUS) increases quarterly cash dividend $0.035 to $0.125 per share.
    • PRU Goes ex div tomorrow for $1.25.
    • Radian Group (RDN) increases quarterly dividend $0.005 to $0.225 per share, a 12.5% bump.
    • Reliance Steel (RS) increases quarterly dividend 14.3%.
    • Royal Gold (RGLD) increased its annual dividend by 7% to $1.50 per share.
    • Scorpio Tankers (STNG) raises dividend $0.10 to $0.20 share.
    • UPS Goes ex div tomorrow for $1.62.
    • Welltower (WELL) Board of Directors declared a cash dividend for the quarter ended December 31, 2022 of $0.61 per share.
    • Wyndham Hotels & Resorts (WY) Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.35 per share.

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

S&P 500 -11, Dow Jones -44,  NASDAQ  -41, and Russell 2000 -8. (as of 8:02 a.m. EST).  Asia and Europe are higher. VIX Futures are at 20.15 from 20.25 yesterday.  Gold higher, Silver lower and Copper higher.  WTI Crude Oil and Brent are higher with Natural Gas lower. US 10-year Treasury sees yields at 3.791% from 3.759% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $24,521 from $22,767  yesterday, higher by  2.15%.

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

  • Daily Positive Sectors: Communication Services, Consumer Cyclical, Industrials, Utilities, Technology of note.
  • Daily Negative Sectors: Energy, Healthcare of note.
  • One Month Winners:  Technology, Consumer Cyclical, Communication Services of note.
  • Three Month Winners: Technology, Consumer Cyclical, Communication Services of note.
  • Six Month Winners: Energy, Basic Materials, Financial of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Consumer Cyclical, Technology, Communication Services of note.

Stocks bobbled Wednesday after data showed a rebound in retail sales, a sign of economic strength that could encourage the Federal Reserve to keep raising interest rates.  The indexes spent much of the day in the red, then turned higher like Tuesday. The Nasdaq Composite Index climbed 110.45 points, or 0.9%, to 12070.59. The S&P 500 rose 11.47 points, or 0.3%, to 4147.60. The Dow Jones Industrial Average bumped up 38.78 points, or 0.1%, to 34128.05.  New data showed retail sales rose 3% in January, bouncing back from recent declines as jobs growth accelerated.  (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)

  • Wednesday After the Close: 

  • Thursday Before the Open:

Earnings of Note This Morning:

  • Beats: ARCH +11.85, H +2.22, RS +1.40, CROX +0.42, WST +0.39, EPAM +0.25, WSO +0.21, TSEM +0.18, ZBRA +0.16, HSIC +0.13, MTRN +0.12, KBR +0.11, ATHM +0.10, DOCN +0.09, ALKS +0.09, FOCS +0.08, DDOG +0.07, SHAK +0.05, BLMN +0.04, DNOW +0.04, VNT +0.03, SYNH +0.03, SCL +0.03, ITGR +0.02, STNG +0.02, BPMC +0.02, SO +0.02, CAMT +0.02, USFD +0.02, HAS +0.02, IRWD +0.01, ETR +0.01 of note.
  • Flat: CBZ +0.00, LXP +0.00, LH +0.00 of note.
  • Misses: PBF (0.57), VC (0.31), ALE (0.26), VMC (0.18), POOL (0.18), CEG (0.17), PARA (0.15), RCM (0.13), WE (0.13), TOST (0.12), KELYA (0.12), SAGE (0.11), OGN (0.10), CVE (0.06), POR (0.06), DTM (0.05), DNB (0.02), IDA (0.01), IRDM (0.01) of note.
  • Still to Report: FUN, LTC, NMRK of note.

Guidance:

  • Positive Guidance: ROKU, EQIX, FSLY, RSG, CSCO, REZI, PEGA, AVTA, VNT, CBZ, HSIC, RS, VC, GVA, CROX, BLMN of note.
  • Negative Guidance: IDCC, SGEN, AMPL, VECO, TXG, AMED, TYL, NUS, WELL, HST, ASPN, NTR, ZD, SYNH, WE, EPAM, HAS, CAMT, ZBRA, DDOG, ALKS, DNB of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CYH +21%, TWLO +14%, EBS +14%, ROKU +11%, PEGA +8%, SGEN +6%, BOWL +6%, RGLD +6%, ORAN +6%, ALSN +5%, ZEUS +5%, ZG +4%, EQIX +4%, CSCO +4%, TXG +4% of note.
  • Gap Down: QS -13%, RNG -12%, NUS -12%, SAM -10%, SHOP -10%, UPWK -9%, AMPL -7%, AMED -7%, SNCY -6%, TROX -5%, ZD -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.

  • 5 things to know before the stock market opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story:  China Hits Back at US With Sanctions on Lockheed and Raytheon After Sales To Taiwan. (Bloomberg)
  • Bloomberg Most Read Story:  America’s Priciest Neighborhoods Are Changing As The Ultra-Rich Move to Florida. (Bloomberg)
  • US Stock Futures Slip Before Next Batch of Economic Data This Morning. (Bloomberg)
  • Federal Debt projections have grown by several trillion since last year. (NYT)
  • Tesla (TSLA) accused of terminating dozens over pro union activity. (Bloomberg)
  • Berkshire Hathaway’s Charlie Munger notes that BYD is so far ahead of Tesla in China “it’s almost ridiculous”. (CNBC)
  • Paramount (PARA) misses on revenues and earnings, stock off -8% in pre-market. Says strength coming in 2024 along with the Easter Bunny. (Yahoo Finance)
  • JP Morgan warns on short term options strategies and another potential “volmageddon”. (MarketWatch)
  • Hasbro (HAS) misses on earnings and revenues, giving downbeat guidance. (MarketWatch)

Moving Average Update:

  • BAM!  Back to 100%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 8:00 a.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre, 12:45 p.m. EST
    • The President hosts a screening of “Till”, 5:00 p.m. EST

Economic:

  • January Housing Starts are due out 8:30 a.m. EST and are expected to drop to 1,355,000 from 1,382,000.
  • January PPI is due out at 8:30 a.m. EST and is expected to come in at 0.4% from -0.5%.
  • February Philadelphia Fed Index is due out at 8:30 a.m. EST and is expected to come in at  -8.0 from -8.9
  • Initial Jobless Claims 8:30 a.m. EST
  • EIA Natural Gas Report 10:30 a.m. EST

Federal Reserve / Treasury Speakers:

  • Federal Reserve Cleveland President Loretta Mester 8:45 a.m. EST
  • Federal Reserve St. Louis President James Bullard 1:30 p.m. EST
  • Federal Research Board of Governors Lisa D. Cook 4:00 p.m. EST
  • Federal Reserve Cleveland President Loretta Mester 6:00 p.m. EST

M&A Activity:

  • Nubia Brand International (NUBI), Honeycomb Battery sign merger agreement.
  • Teck Resources Is Said to Plan Coal Spinoff to Focus on Metals. (Bloomberg)
  • Truist (TFC) to sell minority stake in Truist Insurance Holdings to Stone Point Capital for $14.75 billion.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • AGP Emerging Growth Technology Conference
    • BMO Auto Finance Forum
      • Previously posted and ongoing conferences:
        • Bank of America Securities Financial Services Conference (02/14/23-02/16/23)
        • BTG Pactual CEO Conference (02/14/23-02/16/23)
        • BTIG MedTech, Digital Health, Life Science and Diagnostic Tools Conf (02/14/23-02/16/23)
        • Cowen Aerospace/Defense & Industrials Conference (02/15/23-02/16/23)
        • KBW Winter Financial Services Conference (02/15/23-02/17/23)
        • SVB Securities Global Biopharma Conference 2023 (02/13/23-02/16/23)
        • Wolfe Research Global Auto Auto Tech and Auto Consumer Conference (02/15/23-02/16/23)
  • Company Meetings: SNPX
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ALPMY , BBIO, BC, CARA, DT, INZY, SEMR, SNAP, TIXT
  • 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: