Overnight Summary: The S&P 500 closed Friday lower by -1.05% at 3970.04 from Thursday higher by 0.53% at 4012.32. The overnight high of 3997.50 was hit at 5:15 a.m. EST. The low was hit at 3973 at 6:20 p.m. EST, a range of ~24 points high to low. At 7:00 a.m. EST, the S&P 500 (mini) was higher by +18 points which is 0.45%.
Chart Comment: Stocks look to close February on a lower level than January closed. Coming into today, the S&P 500 is lower by -2.61% for the month after January rose 6.18%. Key to March are the current retracement levels from the December low. Key is holding the 50% retracement at 3979.97 and the 61.80% retracement at 3929.11.
Earnings Out After The Close:
- Beats: None of note.
- Flat: None of note.
- Misses: None 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:
- GoldMining Inc. (GLDG) announces launch of U.S. GoldMining IPO and application to list on the NYSE American.
- New SPACs launched/News:
- Armada Acquisition Corp. I (AACI) merger partner Rezolve secures $250 million equity funding from Yorkville Advisors in connection with upcoming public listing
- BurTech Acquisition Corp. (BRKH) and CleanBay Renewables announce letter of intent for a business combination.
- Far Peak Acquisition (FPAC) to redeem all Class A shares because co will not consummate an initial business combination by March 7.
- Secondaries Priced: None of note.
- Notes Priced of note: None of note.
- Common Stock filings/Notes:
- APPH: Announces closing of public offering of common stock and full exercise of underwriters’ option to purchase additional shares.
- Direct Offering: None of note.
- Selling Shareholders of note:
- HESM: Filed Form S-3ASR.. Class A Shares Representing Limited Partner Interests Preferred Shares.
- Private Placement of Public Entity (PIPE): None of note.
- Mixed Shelf Offerings:
- AAL: Filed Form S-3ASR.. Mixed Shelf.
- CTRE: Files mixed securities shelf offering.
- DOC: Filed Form S-3ASR.. Mixed Shelf.
- EBAY: Filed Form S-3ASR.. Mixed Shelf.
- JBHT: Filed Form S-3ASR.. Mixed Shelf.
- JPM: Filed Form S-3.. $100 Billion Mixed Shelf.
- LNC: Files mixed securities shelf offering.
- RDN: Files mixed securities shelf offering.
- SHO: Filed Form S-3ASR.. Mixed Shelf.
- VRE: Filed Form S-3ASR.. Mixed Shelf $2.0 billion.
- Debt Filing/Notes:
- CHDN: Announces a $500 Million Senior Secured Term Loan A Financing Transaction.
- DOV: Filed Form S-3ASR.. Debt Securities.
- SALM: Announces Voluntary Redemption of 6.75% Senior Notes due 2024.
- TEVA: Announces $2,250,000,000 Debt Tender Offers for Notes Due 2023-2026.
- Tender Offer:
- TGI: Announces Commencement Of Tender Offer For Any And All Of Its 6.250% Senior Secured Notes Due 2024.
- Convertible Offering & Notes Filed:
- LNT: Proposes offering of $500 million of convertible senior notes due 2026 in a private placement.
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: MTW 25.9%, RRC 21.4%, LNTH 21.0%, APLS 20.8%, QUAD 20.2%, UVE 17.6%, FIX 14.1%, SNBR 14.0%, AROC 14.0%, SBLK 14.0%, EGLE 13.7%, LZB 13.7%, ALTR 13.6%, NEO 13.6%, PLYA 13.1%, TK 12.3%.
- Trading Down: NKTR -52.1%, TCDA -34.0%, INGN -32.1%, UPLD -31.0%, CVNA -30.2%, TILE -22.9%, CYH -20.3%, TOUR -20.0%, ATSG -19.8%, STAA -18.8%, CDXS -18.8%, LASR -18.5%, NVEE -18.1%, DAN -17.6%.
- News Items After the Close:
- U.S. stocks fell sharply Friday, wrapping up their worst week of 2023, after the Fed’s preferred inflation gauge showed a stronger-than-expected increase in prices last month. (CNBC)
- Warner Bros. Discovery (WBD) Looks to Get Out of Regional Sports TV Business. (WSJ)
- MB Issues Hearing Designation Order Related to TEGNA (TGNA) Transaction. Stock down 25%. (FCC)
- Lucira (LHDX) stock more than doubles after hours on FDA OK for COVID-19, flu test. (MarketWatch)
- Tesla (TSLA) Investor Gerber to Drop Bid for Board Seat at EV Maker. (Bloomberg)
- Science Applications (SAIC) awarded $102 million US Navy modification to previously awarded contract.
- News Items Over the Weekend:
- Stocks that Defined the Week: DPZ, W, NVDA, WMT, BBWI, MRNA, NFLX (WSJ)
- The Week in Business: Fraud Charges for a Media Founder (NYT)
- Warren Buffett’s Berkshire Hathaway (BRK.B) Posts Big 2022 Loss in Rocky Market. (WSJ)
- Warren Buffett calls stock buyback critics ‘economic illiterate’ in Berkshire Hathaway (BRK.B) annual letter. (CNBC)
- Investors Are Bracing for Spike in Market Volatility. (WSJ)
- Elon Musk to unveil Tesla’s (TSLA) ‘Master Plan 3’ on Wednesday’s investor day — here’s what to expect. (MarketWatch)
- Lab Leak Most Likely Origin of Covid-19 Pandemic, Energy Department Now Says. (WSJ)
- Americans in Their 30s Are Piling On Debt. (WSJ)
- Positive View: GLW, ENPH, FREY, WAB, MDLZ 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:
- Francesca Reverberi Appointed to Avery Dennison (AVY) Board of Directors.
- Baidu (BIDU) chief strategy officer Mr. Herman Yu has resigned due to personal reasons.
- Exicure, Inc. (XCUR) announces changes to the Board of Directors.
- Intl Flavors (IFF) announces further evolution of its Board of Directors.
- Neptune (NEPT) Announces Receipt of NASDAQ Notification.
- Rogers Corp (ROG) announces agreement with Starboard Value; Two Highly Qualified Independent Directors Have Joined the Board.
- Skillz (SKLZ) Appoints Gaming Industry Executive Alvin Lobo as Chief Financial Officer.
- Stellar Bancorp (STEL) formally changes name to Stellar Bank and launches new brand.
- Union Pacific (UNP) Provides Update on CEO Succession Process.
- Viatris (VTRS) Announces Appointment of Scott A. Smith as CEO Effective April 1, 2023
- Buyback Announcements or News:
- CGI (GIB) announces intent to repurchase 3.34 million of its shares held by CDPQ.
- Stock Splits or News:
- China Pharma Holdings Inc. (CPHI) Announces 1-for-10 Reverse Stock Split.
- Dividends Announcements or News:
- K Goes ex div tomorrow for $0.59.
What’s Happening This Morning: Futures value reflects the change with fair value.
S&P 500 +16, Dow Jones +128, NASDAQ +60, and Russell 2000 +7. (as of 8:00 a.m. EST). Asia lower and Europe higher. VIX Futures are at 21.85 from 21.78 yesterday. Gold higher, Silver lower and Copper higher. WTI Crude Oil and Brent lower with Natural Gas higher. US 10-year Treasury sees yields at 3.95% from 3.91% Friday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $23.410 from $23,898.50 Friday, lower by -0.85%.
Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):
- Daily Positive Sectors: None of note.
- Daily Negative Sectors: Consumer Cyclical, Technology, Real Estate, Communication Services, Healthcare of note.
- One Month Winners: Technology,
Consumer Cyclical, Industrials of note.
- Three Month Winners: Consumer Cyclical, Technology, Financial,
Basic Materials of note.
- Six Month Winners: Basic Materials,
Energy, Financial, Industrial of note.
- Twelve Month Winners: Energy, Industrial, Utilities of note.
- Year to Date Winners: Technology, Consumer Cyclical, Communication Services of note.
U.S. stocks pulled back Friday, notching their worst weekly performance of the year, as hot economic data have rekindled worries about restrictive Federal Reserve policy. The S&P 500 fell 42.28 points, or 1.1%, to 3970.04. The technology-heavy Nasdaq Composite dropped 195.46 points, or 1.7%, to 11394.94. The blue-chip Dow Jones Industrial Average shed 336.99 points, or 1%, at 32816.92. The three indexes all dropped more than 2% in the holiday-shortened week, each logging their biggest weekly declines of 2023. The losses are the latest in a turbulent stretch for the market since the beginning of February. The major indexes climbed to start 2023, with many investors betting that moderating inflation could lead the Fed to cut interest rates later this year, but the outlook has muddied in recent weeks with the latest CPI, PPI and Friday’s PCE Core. (WSJ – edited by QPI)
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Upcoming Earnings Of Note: (From Chartroom Software – sorted by market cap, highest to lowest with most visible names)
Earnings of Note This Morning:
- Beats: LI +0.87, TREE +0.72, FUBO +0.18, VTRS +0.11, HSC +0.08, FRPT +0.02 of note.
- Flat: None of note.
- Misses: AES (1.81), FSR (0.16), NE (0.13), BGNE (0.11), WTRG (0.01) of note.
- Still to Report: ITRI, KOP, PNW, TGNA of note.
- Positive Guidance: NE of note.
- Negative Guidance: FRPT, HSC, TREE, FUBO of note.
Erlanger Research Advance/Decline Chart:
Gap Ups & Down In Early Pre-Market:
- Gap Up: BRMK +21%, UNP +9%, LICY +8%, FREY +7%, SWTX +5%, LI +5% of note.
- Gap Down: TGNA -21%, RC -8%, NAT -4% of note.
Insider Action: No stock sees Insider buying with dumb short selling. HLF 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: UNP, SGEN, BBBY, BRK.B, VTRS, LNT (CNBC)
- 5 things to know before the stock market opens today. (CNBC)
- 5 Things You Need to Know to Start Your Day. (Bloomberg)
- Bloomberg Lead Story: CEO David Solomon Put To The Test At Goldman Sachs. (Bloomberg)
- Bloomberg Most Read Story: Covid-19 Lab Leak Viewed As More Likely by Energy Department. (Bloomberg)
- Turkey says that NATO talks with Sweden and Finland to resume on March 9th. (Bloomberg)
- Russian President Vladimir Putin warns NATO’s nuclear capability cannot be ignored. (CNBC)
- President Biden’s Student Loan Forgiveness Program to be tested before the Supreme Court. (CNN)
- Treasury Secretary Janet Yellen says more work to be done on inflation. (Reuters)
- March Will Bring Bear Market Risks Says Morgan Stanley. (Bloomberg)
- Goldman Sachs (GS) Ups Buyback Pace to $30 billion. (Bloomberg)
- Union Pacific (UNP) CEO to step down after pressure from hedge fund on his performance. (CNBC)
- Li Auto (LI) beat earnings estimates and is higher this morning by 4.5%. (MarketWatch)
Moving Average Update:
- Score comes down to 28% from 37%.
- President’s Public Schedule:
- The President departs New Castle, Delaware en route the White House, 8:05 a.m. EST
- The President arrives at the White House, 8:55 a.m. EST
- The President receives the Presidential Daily Briefing, 11:15 a.m. EST
- Press Briefing by Press Secretary Karine Jean-Pierre, 2:30 p.m. EST
- The President and The Vice President deliver remarks at a reception celebrating Black History Month, 5:00 p.m. EST
- January Durable Orders are due out at 8:30 a.m. EST and expected to drop to -3.9% from 5.6%.
- January Pending Home Sales are due out at 10:00 a.m. EST and expected to drop to 1.0% from 2.50%.
- FDallas Fed Mfg Survey 10:30 a.m. EST
- The latest NYSE and NASDAQ Short Interest from 1/31 through 2/15 is due out after the close.
Federal Reserve / Treasury Speakers:
- Federal Reserve Board of Governors Philip N. Jefferson 10:30 a.m. EST
- LKQ Corporation (LKQ) Enters Into Definitive Agreement to Acquire Uni-Select Inc.
- Molekule (MKUL) to acquire Aura Smart Air for $10M, in an all-stock merger.
- Pfizer (PFE) In Talks With Seagen (SGEN) Over Purchase Worth Possibly Over $30 Billion (WSJ)
- Dr. Reddy’s Laboratories (RDY) Announces Agreement to Acquire Mayne Pharma’s U.S. Generic Prescription Product Portfolio.
- Ready Capital and Broadmark Realty Capital (BRMK) Announce Definitive Merger Agreement.
Meeting & Conferences of Note:
- Sellside Conferences:
- Barclays Select Series: Midstream Corporate Access Day
- BMO Global Metals & Mining Conference
- Credit Suisse Energy Summit
- Deutsche Bank dbaccess 31st Annual Media, Internet and Telecom Conference 2023 (02/27/23-03/01/23)
- Morgan Stanley European MedTech & Services Conference 2023 (02/27/23-03/01/23)
- Morgan Stanley Renewables Conference (02/27/23-03/01/23)
- Truist Securities Texas Bank Summit
- Wedbush Bank Conference
- Previously posted and ongoing conferences:
- Company Meetings: ARGX, FLME, NOGN
- Fireside Chat: None of note.
- Investor/Analyst Day/Calls: BPMC, HSIC, INGN, LICY
- Update: MESO.
- R&D Day: None of note.
- Company Event:
- RE/MAX (RMAX) R4 Convention 2023. (02/27/23-03/01/23)
- 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: