CAPIS Morning Note – 02/17/23: Stocks Lower As We Approach February Options Expiration. Markets Closed Monday.

Overnight Summary: The S&P 500 closed Thursday lower by 1.38% at 4090.41. Wednesday was higher by 0.28% at 4147.60.  The overnight high of 4101 was hit at 4:10 p.m. EST. The low was hit at 4063.25 at 3:45 a.m. EST, a range of ~38 points high to low.  At 7:05 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Thursday lower by 1.38% at 4090.41. Wednesday was higher by 0.28% at 4147.60.  The overnight high of 4101 was hit at 4:10 p.m. EST. The low was hit at 4063.25 at 3:45 a.m. EST, a range of ~38 points high to low.  At 7:05 a.m. EST, the S&P 500 (mini) was lower by -32 points which is -0.78%.

Reminders:

  • US Stock Market closed for Washington’s Birthday: Monday, Feb. 20.
  • Monthly Options Expiration today.

Earnings Out After The Close: 

  • Beats: SWAV +2.71, RDFN +0.52, KNSL +0.47, EIG +0.33, HUBS +0.29, AMN +0.29, ATR +0.13, APPN +0.12, LOPE +0.12, BJRI +0.11, AMAT +0.11, COHU +0.10, OEC +0.09, TSLX +0.08, CHUY +0.07, PCOR +0.06, COLD +0.05, HTGC +0.05, DKNG +0.05, MNTV +0.04, FBIN +0.03, GLOB +0.02, BFAM +0.01, CGNX +0.01, ED +0.01, DBX +0.01, STEM +0.01, USM +0.01 of note.
  • Flat: AEM +0.00, PACB +0.00 of note.
  • Misses: DASH (0.96), RARE (0.36), MERC (0.18), AEL (0.18), TXRH (0.14), BIO (0.13), CWST (0.05), NWE (0.05), NVRO (0.04), RMAX (0.04), AL (0.03), DLR (0.03), ELME (0.01), INDI (0.01), OIS (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:
    • Deep Medicine Acquisition Corp. (DMAQ) Announces Listing Transfer to the Nasdaq Capital Market.
  • Secondaries Priced:
    • EPRT: Prices Upsized Public Offering of Common Stock offering of 7.7 million shares of common stock at $24.60 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AGIL: Filed Form S-3.. Up to 2,016,129 shares of Class A Common Stock.
    • EPRT: Announces Public Offering of Common Stock.. 7Million shares. (BAC, Citi and WFC Bookmanagers)
    • MOBQ: Announces Closing of $3.75 Million Public Offering.
    • MSTR: Filed Form 424B5.. Up to $500,000,000 Class A Common Stock Amendment.
    • VNRX: Proposed Underwritten Public Offering of Common Stock. (Newbridge bookmanagers)
  • Direct Offering:
    • Lithium Americas (LAC) Announces Initial Closing of $650 Million Investment from General Motors.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes:
    • JNJ Files Debt Securities Shelf.
  • Tender Offer:
    • WYNN: Announces Initial Settlement of Tender Offer for Cash by Wynn Resorts Finance, LLC for Any and All of its 7.750% Senior Notes due 2025.
  • Convertible Offering & Notes Filed:
    • MSI: Filed Form S-3ASR.. $1,000,000,000 1.75% Convertible Senior Notes due 2024 and any Common Stock issuable upon conversion.

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: HUBS +12%, PCOR +6%, OTTR +7%, CMBM +6%, PDFS +6%, DASH +6%, DKNG +5%, SWAV +5%, KNSL +5% of note.
    • Trading Down: VNRX -17%, AMN -9%, XP -9%, CGNX -8%, BIO -8%, STEM -7%, BJRI -6%, MRNA -6%, TXRH -5%, AEL -4%, RMAX -4% of note.
  • News After The Close:   
    • Stocks making the biggest moves after hours: DASH, AMAT, DKNG, MRNA, TXRH (CNBC)
    • DoorDash (DASH) Delivers Some Second Helpings: After solid fourth-quarter results, investors are betting company’s platform advantages can continue to pay off. (WSJ)
    • Applied Materials (AMAT) fiscal Q1 tops views on ‘growing’ service business. (MarketWatch)
    • DraftKings (DKNG) stock gains after record revenue and increased 2023 guidance. (MarketWatch)
    • Moderna (MRNA) stock falls 5% after flu vaccine study results. (MarketWatch)
    • CC Investigates Broadband Providers Over Coverage Claims. (CMCSA, T, CHTR, VZ) (Bloomberg)
    • Curtiss-Wright (CW) receives a $35 million contract to provide aircraft arresting systems support to the French Air and Space Force.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Index Changes:
      • UFP Industries (UFPI) will replace LHC Group (LHCG) in the S&P MidCap 400.
      • Otter Tail (OTTR) will replace UFP Industries in the S&P SmallCap 600.
    • Doordash (DASH) Names Ravi Inukonda As CFO.
    • Harmonic (HLIT) Announces CFO Transition.
    • Hannon Armstrong Sust. Infr. (HASI) names Jeff Lipson President and CEO.
    • Matador Resources Company (MTDR) Names New Chief Financial Officer.
    • Neuronetics (STIM) Announces Elevation of Sara Grubbs to SVP, Chief Revenue Officer.
    • Procore Technologies (PCOR) announces that CFO Paul Lyandres will be transitioning to a newly established role as President of Fintech in early May.
    • Smith & Nephew (SNN) announced that Rupert Soames OBE will succeed Roberto Quarta as Chair of the Company.
    • TXN: Comerica CEO Curtis Farmer joins TI board of directors.
    • View, Inc. (VIEW) Announces Receipt of Nasdaq Notification Letter Regarding Minimum Bid Price Deficiency. (See Splits)
    • Visa (V) Announces Departure of Vice Chair, Chief Financial Officer Vasant Prabhu.
  • Buyback Announcements or News:
    • ASIX announces additional $75 million share repurchase program.
    • Citizens Financial Group (CFG) increases its share repurchase program by an additional $1.15 billion.
    • DASH authorizing $750 million buyback.
    • Mercedes-Benz Group AG (MBGYY) announced a share buyback to repurchase own shares worth up to € 4 billion. (see Dividends)
    • NWG announced 800 million buyback program
    • Oil States (OIS) approved $25.0 million stock repurchase program.
    • PDC Energy (PDCE) Announces $750 Million Increase to Share Buyback Authorization. (see Dividends)
    • Penske Automotive Group (PAG) Announces Additional Securities Repurchase Authority Of $250 Million.
  • Stock Splits or News:
    • VIEW:View to Seek Stockholder Approval of Reverse Stock Split as Part of NASDAQ Compliance Plan.
  • Dividends Announcements or News:
    • Air Lease (AL) board of directors declared a quarterly cash dividend of $0.20 per share.
    • CBL & Assoc (CBL) increases quarterly dividend 50% to $0.375 per share.
    • ChampionX (CHX) increases quarterly dividend $0.010 to $0.085 per share.
    • Covenant Logistics (CVLG) increases quarterly cash dividend $0.03 to $0.11 per share.
    • Enpro Industries (NPO) increases quarterly dividend $0.01 to $0.29 per share.
    • Extra Space Storage (EXR) increases quarterly dividend 8% to $1.62 per share.
    • Louisiana-Pacific (LPX) increases quarterly cash dividend $0.02 to common stockholders to $0.24 per share.
    • Mercedes-Benz Group AG (MBGYY) the Board of Management and the Supervisory Board will propose a dividend of €5.20 per share (2021: €5.00).
    • Merchants Bancorp (MBIN) increases quarterly dividend $0.01 to $0.08 per share.
    • Meritage (MTH) initiates quarterly cash dividend of $0.27 per share.
    • PDC Energy (PDCE) Declares Increased Quarterly Cash Dividend on Common Shares.
    • Qilian International Holding Group Ltd (QLI) Declares Special Cash Dividends to Shareholders.
    • Sixth Street Specialty Lending (TSLX) Quarterly dividend increased by $0.01 to $0.46.  Declared supplemental Q4 dividend of $0.09.
    • Star Bulk Carriers Corp. (SBLK) Declares Quarterly Dividend of $0.60 Per Share.
    • Unity Bancorp (UNTY) Announces 9% Increase in First Quarter Dividend.

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

S&P 500 -23, Dow Jones -129,  NASDAQ  -99, and Russell 2000 -12. (as of 7:55 a.m. EST).  Asia and Europe are lower. VIX Futures are at 21.70 from 20.15 yesterday.  Gold, Silver  and Copper lower.  WTI Crude Oil and Brent are lower with Natural Gas lower. US 10-year Treasury sees yields at 3.886% from 3.791% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at %23,812 from $24,521 yesterday, higher by  2.15%.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Technology, Consumer Cyclical, Communication Services, Healthcare, Industrials, Real Estate 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 fell Thursday after inflation, PPI, and jobs data came in stronger than expected, increasing concerns that the end of the Federal Reserve’s tightening campaign is nowhere near.  The S&P 500 dropped 57.19 points, or 1.4%, to 4090.41, most of the drop came in the 3:00 to 4:00 timeframe. The Dow Jones Industrial Average slipped 431.20 points, or 1.3%, to 33696.85 while the tech-focused Nasdaq Composite lost 214.76 points, or 1.8%, to 11855.83.  PPI rose 0.7% in January from the prior month, the Labor Department said Thursday, the biggest gain since last summer. Economists polled by The Wall Street Journal had expected a 0.4% increase. Meanwhile, Jobless Claims data showed little sign of a cooling in the labor market.  (WSJ – edited by QPI)

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)

  • Friday After the Close: None of note.
  • Monday After the Close: 

 

  • Tuesday Before the Open:

Earnings of Note This Morning:

  • Beats: DE +1.08, AN +0.53, CRBG +0.20, B +0.03 of note.
  • Flat: None of note.
  • Misses: MD (0.02), CNP (0.01) of note.
  • Still to Report: AMCX, AXL, ABR, PPL of note.

Guidance:

  • Positive Guidance: RDFN, APPN, PCOR, COLD, HUBS, AMN, DBX of note.
  • Negative Guidance: NMRK, STEM, CGNX, NVRO, GLOB, MNTV, RMAX of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ISEE +10%, HUBS +10%, JSPR +8%, DKNG +7%, OTTR +7%, SWAV +7%, DASH +6%, OEC +6%, PDFS +5%, PCOR +5%, KNSL +5%, OIS +4, CMBM +4%, CRBG +4% of note.
  • Gap Down: VNRX -16%, XP -11%, STEM -8%, CGNX -7%, DLR -7%, NWG -7%, MRNA -6%, AEL -6%, TXRH -6%, AEM -4%, AMN -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 Pre-Market Moves  DKNG DASH DE AN ROKU AMAT CHRW RDFN TXRH. (CNBC)
  • 5 things to know before the stock market opens Friday. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Star Bankers Disappearance Unnerves Chinese Business Elite. (Bloomberg)
  • Bloomberg Most Read Story:  Tesla Recalls More Than 360,000 Cars Due To Self Driving Risk. (Bloomberg)
  • Singapore posts worst exports (non-oil) in a decade. (CNBC)
  • Pfizer (PFE) and French Company Valneva stop trial in half patients with Lyme Disease. (Reuters)
  • Deere & Co (DE) beats earnings estimates by a wide margin. (MarketWatch)
  • Goldman Sachs expects three more interest rate hikes by the Federal Reserve this year. (Fox Business News)

Moving Average Update:

  • Head fake…..back to 62% from 100%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 10:15 a.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:30 p.m. EST

Economic:

  • Import and Export Prices 8:30 a.m. EST
  • January Leading Indicators are due out at 10:00 a.m. EST and are expected to improve to -0.3% from -1.0%.
  • Baker Hughes Rig Count 1:00 p.m. EST

Federal Reserve / Treasury Speakers:

  • Federal Reserve Richmond President Thomas Barkin 8:30 a.m. EST
  • Federal Research Board of Governors Michelle Bowman 8:45 a.m. EST

M&A Activity:

  • Life Storage (LSI) rejects unsolicited proposal from Public Storage (PSA).

Meeting & Conferences of Note:

  • Sellside Conferences: None of note.
    • Previously posted and ongoing conferences:

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: