CAPIS Morning Note – 02/20/24: Stocks Start The Week Lower

Overnight Summary: The S&P 500 closed Friday lower by -0.48% at 5005.57 from Thursday higher by 0.58% at 5029.73. The overnight high was hit at 5028.75 at 9:50 a.m. EST Monday while the overnight low was hit at 4994.25 at 6:05 p.m. EST. The range overnight was 35 points as of 7:25 a.m. EST. The…

Overnight Summary: The S&P 500 closed Friday lower by -0.48% at 5005.57 from Thursday higher by 0.58% at 5029.73. The overnight high was hit at 5028.75 at 9:50 a.m. EST Monday while the overnight low was hit at 4994.25 at 6:05 p.m. EST. The range overnight was 35 points as of 7:25 a.m. EST. The 10-day average of the overnight range is at 22.65 from 20.85.  The average for May-January average was 20.88 from 20.87 during May-November. Currently, the S&P 500 is lower by -21.75 points at 7:25 a.m

Executive Summary: The stock market has continued Friday’s selling as most indexes ex the Russell 2000 and Mid Cap S&P 400 were lower. Markets will be paying attention tomorrow to Nvidia’s (NVDA) earnings as any disappointment could continue the selling. Watch this closely.
  • January Leading Indicators are due out at 10:00 a.m. EST and is expected to fall to -0.30% from -0.1%.

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:
    • Acri Capital Acquisition Corporation (ACAC) Announces Definitive Business Combination Agreement with Foxx Development Inc.
    • Digital World Acquisition Corp. (DWAC) Announces Date of Special Meeting of Stockholders and Record Date.
  • Secondaries Priced:
    • IOVA $211 Million offering. 23 Million shares at $9.15 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ADC: Files $1.0 billion at-the-market offering.
    • DUOT: Filed FORM RW.
    • IDAI: Filed Form S-3.. Up to 3,600,000 Shares of Class A Common Stock.
    • IMNM: Closing of Public Offering and Full Exercise of Underwriters’ Option to Purchase Additional Shares.
    • LICN:  Form RW Filed.
    • LXP: Filed a prospectus supplement covering the sale of up to $350,000,000 aggregate offering price of shares of beneficial interest classified as common stock of the Trust.
    • OCUP: Filed Form 424B3 .. Up to $50,000,000 of Shares of Common Stock.
    • Whirlpool (WHR) subsidiary Whirlpool Mauritius executed the sale of 30.4 million equity shares of Whirlpool India via an on-market trade.
  • Direct Offering:
    • LEXX: announces Closing of $3.6 Million Registered Direct Offering Priced At-The-Market Under Nasdaq Rules.
  • Selling Shareholders of note:
    • CURV: Files for 90,000,000 shares of common stock by selling shareholders. (see mixed shelf)
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • CURV: Files $600 million mixed shelf securities offering.
    • IP: Files mixed shelf securities offering.
    • O: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes:
    • SYF: Filed Form 424B5.. 20,000,000 Depositary Shares Each Representing a 1/40th Interest in a Share of 8.250% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B.
  • Tender Offer:
    • CNX: Announces Pricing Terms of Cash Tender Offer for its 7.250% Senior Notes due 2027.
  • Convertible Offering & Notes Filed:
    • ASPI: Proposed Offering of Convertible Notes by Quantum Leap Energy.
    • BILI: Announces repurchase right notification for 1.375% convertible senior notes due 2026.
    • GPN: Announces Proposed Offering of $1.75 Billion of Convertible Senior Notes due 2031.

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 Weekend:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: SGMO 140.3%, PLCE 132.9%, SBNY 119.8%, LXRX 33.1%, CAMP 30.8%, PEGA 29.9%, INSG 29.9%, HCSG 28.9%, SLDB 28.8%, OMER 28.0%, REZI 26.5%, CBAY 25.3%, DNOW 25.2%, MCY 25.0%, TTD 24.7%, QRTEA 23.7%.
    • Trading Down: EBIX -49.2%, SSRM -48.6%, GTHX -47.5%, QDEL -38.7%, EXPR -33.9%, CAR -33.5%, HLF -33.1%, AUPH -29.4%, SABR -28.5%, TRUP -25.4%, ROKU -24.8%, DBX -24.4%, TDC -23.7%, NUS -22.2%, MTW -21.5%.
  • News Items After the Close:
    • Carl Icahn wins seats on JetBlue (JBLU) board after taking stake in airline. (CNBC)
    • JPMorgan Chase (JPM) in 10-K: To pay penalties of approximately $350 mln over trading venues investigation by U.S. regulators.
    • Leidos (LDOS) awarded $249 million U.S. Army contract.
  • News Items Over the Weekend:
    • The Score: Stocks That Defined the Week – LYFT, HOOD, NKE, FANG, EDR, JBLU, DASH (WSJ)
    • Capital One (COF) Weighs Acquisition of Discover Financial (DFS). (Bloomberg)
    • Apple (AAPL) Music Beta Tests Seamless Playlist Import from Spotify (SPOT) with SongShift Integration, Aiming to Simplify Service Switching for Users.
    • INTC Reports Say Biden Administration In Talks To Confer More Than $10 Billion Subsidies To Company.
    • China cuts benchmark 5-year lending rate for the first time since June. (CNBC)
    • SPX Goldman Ignores the Fed and Lifts Target for S&P 500 Stocks Goldman Sachs raised its target for the S&P 500 for the second time since December. It doesn’t mention the Federal Reserve in its reasoning. With the index currently near a record high above 5,000, the investment bank now sees it ending 2024 at 5,200, up from its last estimate of 5,100 in December. Two months ago, the upgrade from 4,700 was based on the outlook for lower interest rates and a dovish Fed.
    • NVDA HSBC “We remain LT bullish on Nvidia’s dominant AI strategy as we expect its competitive moat will enable Nvidia to remain significantly ahead of any competitors. However, we expect the momentum of its 2023 quarterly earnings beat and raise to likely peak starting this quarter. Given Nvidia’s share price rally year-to-date of +46% (vs Nasdaq index +8% year-to-date), we believe overall market expectations have risen significantly as consensus earnings are now approaching our forecasts. Hence, we see limited room for further earnings upside in 2024 relative to the sales and earnings surprise that we saw in 2023. Despite this, we remain bullish on further re-rating emerging from new TAMs.”
    •  Barron’s:
      • Positive View: LHX, PHIN, ATO, SWX, NJR, NI, OGS, SR, NWN of note.
      • Cautious View: None of note.
      • Mixed View: None of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

  • Exchange/Listing/Company Reorg and Personnel News:
    • Aurora Cannabis (ACB) announces that Simona King, a former executive of Bristol Myers-Squibb (BMY), has been appointed as Chief Financial Officer of the Company.
    • Beyond, Inc. (BYON) appoints Marcus Lemonis as Executive Chairman of the board of directors.
    • Fisker (FSR) Receives Continued Listing Standard Notice From NYSE.
    • Finance of America (FOA) Receives Continued Listing Standard Notice from the NYSE.
    • KULR Receives Non-Compliance Notice from NYSE American.
    • LFCR: Announces Receipt of Nasdaq Notice of Delisting and Intention to AppealNotice of Delisting Will Not Immediately Result in the Suspension or Delisting of the Company’s Securities.
    • Malibu Boats, Inc. (MBUU) Announces Leadership Changes. Jack Springer will be departing as CEO.
    • Olin (OLN) appoints Kenneth Lane as President and CEO.
    • Origin Agritech (SEED) Regains Compliance with Nasdaq Listing Standards.
    • PNC appoints Michael Lyons as President of the corporation and its wholly owned banking subsidiary, PNC Bank.
    • Zhihu (ZH) appoints new Chief Financial Officer.
  • Buyback Announcements or News: 
    • Donnelley Financial (DFIN) authorized up to $150 million for repurchases.
    • Perion Network’s (PERI) Board of Directors has authorized a program to repurchase up to $50 mln of its ordinary shares.
    • STMicroelectronics (STM) Announces Status of Common Share Repurchase Program.
  • Stock Splits or News:
    • Lucy Scientific Discovery Inc. (LSDI) Announces 1-for-10 Reverse Stock Split to Regain Compliance with Nasdaq Minimum Bid Requirement.
    • Reverse split Stocks for today VCNX 1/14 ACB 1/10 JZ 1/3.
  • Dividends Announcements or News:
    • Armada Hoffler Properties (AHH) increases quarterly cash dividend 5% to $0.205 per share from $0.195 per share.
    • Bayer to Slash Dividend by 95% as It Wrestles With Roundup Woes. (Bloomberg)
    • Harley-Davidson (HOG) increases its quarterly dividend by 4.5% to $0.1725 per share.
    • Home Depot (HD) increases dividend 7.7%.
    • KBR Board approved an 11% quarterly dividend increase to $0.15.
    • Walmart (WMT) raises annual dividend 9 percent to $0.83 per share, the largest increase in over 10 years, marking 51st consecutive year of dividend increases.

What’s Happening This MorningFutures value reflects the change with fair value.

S&P 500 -17 , Dow Jones -138, NASDAQ -82 , and Russell 2000 -14 .  (as of 7:54 a.m. EST).  Asia is lower while Europe is higher ex Germany this morning. VIX Futures are at 15.20 from 14.90 Friday morning.  Gold higher with Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil are lower with Natural Gas lower as well. US 10-year Treasury sees its yield at 4.27% from 4.261% Friday morning. The U.S. Dollar is lower versus the Euro, higher versus the Pound and higher against the YenBitcoin is at $52,371 from $52,248 higher by 0.99% this morning.

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

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

The stock-market rally hit speed bumps this past week when government data showed that prices rose more than expected last month and suggested that the Federal Reserve’s fight against inflation may not end as easily as some investors expected.  All three major U.S. stock indexes fell Friday after wholesale prices via PPI came in hotter than expected, confirming the signal sent Tuesday when CPI rose beyond economists’ expectations.  On Friday, interest-rate-sensitive technology and real-estate stocks led indexes lower. The tech-heavy Nasdaq Composite Index lost 0.8%. The S&P 500 shed 0.5%. The Dow Jones Industrial Average fell 0.4%, or 145 points. Each index ended the week lower, the first weekly decline for any of them since early January.  Both the Dow and the S&P 500 had hit record highs earlier in the week.  (WSJ – edited by QPI)

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

  • Tuesday After the Close:

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: MIDD +0.21, AWI +0.18, TPH +0.17, WMT +0.16, ETRN +0.16, MDT +0.15, FLR +0.11, CHH +0.09, ALLE +0.09, HD +0.05, CAMT +0.04, OMI +0.03, SPNS +0.02, DFIN +0.02 of note.
  • Flat: OIS +0.00, DBRG +0.00, CNP +0.00, KBR +0.00 of note.
  • Misses: LGIH (0.35), NPO (0.19), WLK (0.18), VC (0.18), PGTI (0.11), ALE (0.08), IDYA (0.05), DAN (0.04), SCL (0.04), MD (0.01), AVNS (0.01) of note.
  • Still to Report: EXPD, UFPI of note.

Company Earnings Guidance:

  • Positive Guidance: SPNS, MDT, MDT, CAMT of note.
  • Negative Guidance: THSN, HSTM, CHH, VC of note.

Erlanger Research Advance/Decline Chart:  

Gap Ups & Down In Early Pre-Market:

  • Gap Up: QBTS +35%, DFS +13%, BCS +7%, GFS +7%, IHG +5%, PERI +4%, ASPI +4% of note.
  • Gap Down: COF -5% 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.

  • What You Need To Know To Start Your Day. (Bloomberg)
  • 5 Things To Know Before the Stock Market Opens Today. (CNBC)
  • Bloomberg Lead Story: Capital One (COF) to buy Discover (DFS) for $35 Billion in Year’s Biggest Deal (Bloomberg)
  • Bloomberg Most Shared Story:  Largest Covid vaccine study finds link to health conditions.(Bloomberg)
  • Chinese Banks cut most on record to support property units. (Bloomberg)
  • Market starts to speculate if next Fed rate move is not up instead of down. (Bloomberg)
  • 5 Charts that show Americans in better place “economically and pschologically”. (CNBC)
  • Home Depot (HD) beats estimates even as consumers take on smaller projects. (CNBC)
  • Walmart (WMT) offers muted earnings guidance, sees cautious consumer. (Bloomberg)
  • Walmart (WMT) to buy Vizio for $2.3 billion in move to grow its ad business. (CNBC)
  • Bloomberg: Big Take: Investors have sky high hopes for AI. Can tech deliver? (Podcast)
  • Marketplace: Would you trust a cancer screening by AI? (Podcast)
  • Wealthion:  The Fed’s Fatal Errors. (Podcast)

Moving Average Update: Score settles in at 88% from 100%.


  • President’s Public Schedule:
    • The President departs the White House en route to Joint Base Andrews, 12:40 p.m. EST
    • The President departs Joint Base Andrews en route to Los Angeles, California, 1:00 p.m. EST
    • Press Secretary Karine Jean-Pierre will speak aboard Air Force One en route to Los Angeles, California, 2:00 p.m. EST
    • The President arrives in Los Angeles, California (3:10 PM Local), 6:10 p.m. EST
    • The President departs en route to Santa Monica, California (3:20 PM Local), 6:20 p.m. EST
    • The President arrives in Santa Monica, California (3:30 PM Local), 6:30 p.m. EST
    • The President participates in a campaign reception (7:15 PM Local) [Note: Location source: Los Angeles Times], 10:15 p.m. EST


  • January Leading Indicators are due out at 10:00 a.m. EST and is expected to fall to -0.30% from -0.1%.
  • E-Commerce Retail Sales 10:00 a.m. EST
  • 4-Week Bill Announcement 11:00 a.m. EST
  • 3-Month Bill Auction 11:30 a.m. EST
  • 6-Month Bill Auction 11:30 a.m. EST
  • 52-Week Bill Auction 1:00 p.m. EST

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News

  • Cadre Holdings (CDRE) has entered into a definitive agreement to acquire Alpha Safety Intermediate for $106.5 million.
  • Discover Financial Services (DFS) to be acquired by Capital One (COF) in all-stock transaction valued at $35.3 billion.
  • S&P Global (SPGI) agrees to acquire Visible Alpha.
  • Walmart (WMT) Agrees to Acquire VIZIO HOLDING CORP. for $2.3 billion to Facilitate Accelerated Growth of Walmart Connect through VIZIO’s SmartCast Operating System.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • BAC Financial Services Conference
    • Citi’s Global Industrial Tech and Mobility Conference
    • Kotak’s Chasing Growth
    • Winter Wrap Up MicroCap Rodeo Virtual Conference
      • Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings: AUPH BTO DLA HI HPI 
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AMD HXL GHT
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • AMD: Arete Investor Webinar
  • Industry Meetings:
    • CAGNY Conference
    • Heart Valve Society Meeting
    • National Neonatology Meetings
    • Western Veterinary Conference
        • Previously posted and ongoing conferences: None of note

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 is 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: