Overnight Summary: The S&P 500 closed Tuesday lower by -0.30% at 3970.15. Monday was higher by 0.31% at 3982.24. The overnight high of 3991 was hit at 6:30 a.m. EST. The low was hit at 3956 at 8:05 a.m. EST, a range of ~35 points high to low. At 7:35 a.m. EST, the S&P 500 (mini) was higher by +9.25 points which is 0.23%.
Earnings Out After The Close:
- Beats: JXN +0.78, NVTA +0.45, FATE +0.27, FRG +0.26, VRSK +0.26, OMCL +0.25, RIVN +0.22, AXON +0.19, DUOL +0.18, BGS +0.18, IPAR +0.18, MASI +0.14, HURN +0.13, EXPI +0.12, CARG +0.11, NTRA +0.11, OSPN +0.10, MRTX +0.09, FLGT +0.08, ROST +0.08, AMBA +0.08, AMC +0.08, FSLR +0.08, PUBM +0.07, A +0.06, ICFI +0.06, HCAT +0.06, SHLS +0.06, RGNX +0.05, BLNK +0.05, MYGN +0.05, SILK +0.05, FIGS +0.04, MQ +0.04, ALLO +0.03, DDD +0.02, PAYO +0.02, GDRX +0.02, JAMF +0.02, RKT +0.02, GO +0.02, OSH +0.02, RXDX +0.01, RYAN +0.01, FLYW +0.01, VZIO +0.01, CPNG +0.01 of note.
- Flat: IOVA, LXFR, HPQ of note.
- Misses: NVAX (1.23), EDR (0.91), RVNC (0.75), TALO (0.33), SRPT (0.31), CUTR (0.30), SUPN (0.25), COMP (0.15), NSTG (0.14), CORT (0.13), MNST (0.06), PETQ (0.06), LAZR (0.05), URBN (0.04), SPCE (0.03), CLNE (0.02), KIND (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.
Some interesting spikes on volume:
- IPOs Priced or News: None of note.
- New SPACs launched/News:
- Capitalworks Emerging Markets Acquisition Corp. (CMCA): Lexasure Financial Group signed business combination agreement to go public via combination with Capitalworks Emerging Markets Acquisition Corp.
- Oxbridge (OXBR) Announces Filing of SPAC Business Combination Agreement.
- TPB Acquisition Corporation I (TPBA) completes business combination with Lavoro; to trade on Nasdaq under symbol “LVRO” on March 1.
- Secondaries Priced:
- AWK: Prices offering of 11.0 million shares of common stock at $135.50 per share.
- BRSP: Prices secondary offering of 30,358,213 shares of its Class A common stock by a selling stockholder at $6.00 per share.
- ESMT: Prices secondary offering of 8.0 million shares of common stock at $19.00 per share. (see Common stock AND Selling Shareholders)
- GTY: Prices offering of 3.0 million shares of common stock for gross proceeds of ~$100 million.
- HLMN: Prices secondary offering of 25.0 million shares of common stock at $8.00 per share.
- PWSC: Prices secondary offering of 8.7 million shares of common stock at $21.00 per share.
- TSVT: Prices offering of 10,869,566 shares of its common stock at $11.50 per share.
- TVTX: Prices offering of common stock and pre-funded warrants.
- Notes Priced of note:
- ECPG: Prices offering of $200.0 million of 4.00% convertible senior notes due 2029.
- IQ: Prices offering $600 million of its convertible senior notes due 2028.
- TPIC: Prices offering of $115.0 million of 5.25% convertible senior notes due 2028.
- Common Stock filings/Notes:
- AWK: Common Stock Offering — 9.5 Million shares. BAC, WFC and RBC Bookmanager
- ESMT: Filed Form S-3ASR.. Mixed Shelf and Common Stock Offering. (see Selling Shareholders)
- GTY: Common Stock Offering.. 3 Million shares. BAC and JPM Bookmanager
- ONCS — Filed a Form RW.
- PWSC: Filed Form S-3ASR.. Class A Common Stock.
- TSVT: Proposed Public Offering of Common Stock.. $100Million Shares.. GS, Cowen and CVB bookmanagers.
- Direct Offering:
- XNCR: Entered into $200 million common stock sales agreement.
- Selling Shareholders of note:
- BRSP: Secondary Offering of 30,358,213 Shares of Class A Common Stock by DigitalBridge Group, Inc. JPM and BCS Bookmanagers
- ESMT: Proposed Public Offering of Common Stock by Selling Stockholders — 8 Million shares. GS, JPM, BAC and Citi bookmanagers
- HLMN: Secondary Offering of Common Stock by Selling Stockholders.. 24 Million shares. Jefferies and Baird bookmanager
- PWSC: Announces the commencement of a public offering of 8,700,000 shares of PowerSchool’s Class A common stock by certain selling stockholders associated with Onex Partners Manager LP and Vista Equity Partners as well as Hardeep Gulati.
- RYI: Announces Closing of Secondary Offering of Common Stock by its Principal Shareholder AND Concurrent Stock Repurchase.
- Private Placement of Public Entity (PIPE):
- Enviva (EVA) Entered into definitive agreements with board members and insiders for the issuance and sale of $250 million of equity securities to be priced using the market close price on March 1, 2023.
- Mixed Shelf Offerings:
- ALEC: Filed Form S-3.. $400 Million Mixed Shelf.
- ALT: Filed Form S-3ASR.. Mixed Shelf.
- BDN: Filed Form S-3ASR.. Mixed Shelf.
- LHX: Filed Form S-3ASR.. Mixed Shelf.
- NVDA: Files for $10 billion mixed securities shelf offering.
- NVAX: Filed Form S-3ASR.. Mixed Shelf.
- NYT: Files mixed securities shelf offering.
- PPG: Filed Form S-3ASR.. Mixed Shelf.
- RCUS: Filed Form S-3ASR.. Mixed Shelf.
- RMAX: Files $350 Million Mixed-Securities Shelf.
- Debt Filing/Notes: None of note.
- Tender Offer: None of note.
- Convertible Offering & Notes Filed:
- BAND: Announces additional repurchase agreements of 0.250% convertible senior notes due 2026 to repurchase $65 million aggregate principal amount of the notes at ~22% discount to par value.
- NVTA: Announces Convertible Notes and Share Exchange and New Convertible Notes Issuance.
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: RETA +166%, SRPT +17%, BGS +15%, SDGR +12%, PAYO +11%, GDRX +9%, ARAV +8%, FLYW +8%, DUOL +8%, SHLS +8%, FATE +5%, BLNK +5%, ARCB +4% of note.
- Trading Down: NVAX -25%, MQ -17%, BRSP -14%, FIGS -13%, COMP -12%, CUTR -11%, RIVN -8%, PUBM -8%, CLNE -7%, AMC -7%, TSVT -7%, VZIO -5%, FLGT -5%, AMBA -4% of note.
- News After The Close:
- Stocks making the biggest moves after hours: NVAX, FSLR, RIVN, MNST, AMC, HP (CNBC)
- GM cutting hundreds of executive, white-collar jobs. (DetroitNews)
- Monster Beverage (MNST) stock dives 6% as earnings and sales miss, stock split and price increases planned. (MarketWatch)
- Novavax (NVAX) stock sheds a quarter of its value after hours following revenue miss. (MarketWatch)
- Ambarella (AMBA) stock down sharply after outlook falls short. (MarketWatch)
- FBI director Chris Wray accuses China of trying to ‘thwart and obfuscate’ Covid origin probe. (CNBC)
- Boeing (BA) awarded a not-to-exceed $1.2 billion U.S. Air Force contract.
- Reata Pharmaceuticals (RETA) Announces FDA Approval of SKYCLARYS™ (Omavaloxolone), the First and Only Drug Indicated for Patients with Friedreich’s Ataxia. (up +166% afterhours)
- Cash Is Beating 60/40 Portfolios For First Time Since 2001. (Bloomberg)
- For the month of February: Dow -4.20% S&P: -2.62%, Nasdaq: -1.11%
- Exchange/Listing/Company Reorg and Personnel News:
- Delay 10-K filing: MDRX, FLYW, CUTR, WBS
- ACI Worldwide (ACIW) Boosted Buyback To Up To $200 million.
- Clean Harbors (CLH) has appointed Chief Accounting Officer, Eric Dugas, as EVP and Chief Financial Officer.
- Kezar Life Sciences (KZR) President, Chief Scientific Officer Christopher Kirk, Ph.D. to resign.
- Magnite (MGNI) announces the appointment of David Buonasera as its Chief Technology Officer.
- Omnicell (OMCL) also announced today that Peter J. Kuipers will step down from his role as Executive Vice President, Chief Financial Officer.
- Payoneer (PAYO) appoints John Caplan as CEO.
- Pennant Group (PNTG) announces the appointment of Barry Smith as Chairman of its board of directors and Brent Guerisoli as a member of its board of directors.
- Qurate Retail Group (QRTEA) announces new CFO.
- Quotient (QUOT) appoints Jeff Williams as Chief Retail Officer and Yuneeb Khan as Chief Operating Officer.
- Revance (RVNC) Adds Experienced Pharmaceutical Executive to Board of Directors with Appointment of Dr. Vlad Coric, M.D., as Independent Director
- Sabre (SABR) appoints Kurt Ekert as CEO and President, current CEO Sean Menke transitions to Chair of the board.
- X: Alicia J. Davis Elected to U. S. Steel Board of Directors.
- VYNE Therapeutics (VYNE) Regains Compliance with Nasdaq Minimum Bid Price Rule.
- Buyback Announcements or News:
- ArcBest (ARCB) Increased Share Repurchase Program by $125 million.
- The First Bancshares, Inc. (FBMS) Announces New Share Repurchase Plan.
- Jackson Financial (JXN) authorizes an increase of $450 million to the company’s existing share repurchase authorization. (see dividends)
- PUBM: Board of Directors authorized $75 million share repurchase program.
- Smart Sand, Inc. (SND) Announces Repurchase of All Common Stock Owned by Clearlake Capital.
- Stock Splits or News:
- MNST: Declares Two-For-One Stock Split. (Finally…a real stock split!)
- RKDA: Reverse stock split.
- Dividends Announcements or News:
- Acushnet’s (GOLF) Board of Directors today declared a quarterly cash dividend of $0.195 per share.
- Comerica (CMA) increases quarterly cash dividend 4% to $0.71 per share, a $0.03 bump.
- First Savings Finl (FSFG) increases quarterly cash dividend $0.01 to $0.14 per share.
- FANG Goes ex div tomorrow for $2.15
- GPC Goes ex div tomorrow for $0.95.
- Healthcare Realty (HR) Announces dividend of $0.31 per share.
- Jackson Financial (JXN) increases quarterly cash dividend to $0.62 per share from $0.55 per share.
What’s Happening This Morning: Futures value reflects the change with fair value.
S&P 500 +7, Dow Jones +65, NASDAQ +39, and Russell 2000 +5. (as of 8:03 a.m. EST). Asia higher ex ASX 200 and Europe higher. VIX Futures are at 20.65 from 21.11 yesterday. Gold, Silver and Copper higher. WTI Crude Oil and Brent lower with Natural Gas higher. US 10-year Treasury sees yields at 3.94% unchanged for the past two days. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $23,744 from $23,445 yesterday, higher by 1.56%.
Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):
- Daily Positive Sectors: Basic Materials of note.
- Daily Negative Sectors: Utilities, Energy, Healthcare, Consumer Defensive of note.
- One Month Winners: Technology, Industrials of note.
- Three Month Winners: Consumer Cyclical, Technology, Financial of note.
- Six Month Winners: Basic Materials, 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. stock indexes dropped Tuesday in a relatively quiet session, ending a down month on a disappointing note. The Dow Jones Industrial Average slid 232.39 points, or 0.7%, to 32656.70. The S&P 500 ticked down 12.09 points, or 0.3%, to 3970.15, while the technology-focused Nasdaq Composite slipped 11.44 points, or 0.1%, to 11455.54. The indexes were in the red for the month of February, after charging higher to kick off 2023. The S&P 500 and Nasdaq Composite peaked for the year on Feb. 2. But the gains unraveled as hotter-than-expected economic releases, including data on the labor market and consumer spending, spurred investors to reassess their expectations for inflation and monetary policy. The Dow dropped 4.2% in February and is down 1.5% in 2023. The S&P 500 and Nasdaq declined 2.6% and 1.1%, respectively, for the month. They are hanging on to gains of 3.4% and 9.4% this year. (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)
- Wednesday After the Close:
- Thursday Before the Open:
Earnings of Note This Morning:
- Beats: DY +0.69, HGV +0.24, WB +0.22, ZNTL +0.19, PAR +0.19, ITCI +0.14, HZNP +0.12, RY +0.12, DIN +0.11, YOU +0.10, CLH +0.09, IMGN +0.07, RYTM +0.07, DCI +0.07, LOW +0.07, ODP +0.06, EVRI +0.04, DLTR +0.04, DIBS +0.04, CLVT +0.04, XHR +0.04, NOVT +0.03, HR +0.02 of note.
- Flat: WEN +0.01, STWD +0.00 of note.
- Misses: KSS (3.46), NIO (1.08), IMCR (0.57), TUP (0.46), LL (0.37), XMTR (0.26), QRTEA (0.22), ISEE (0.10), ACIW (0.06), EYE (0.06), ANF (0.05), AVDX (0.04), ASTE (0.04), GOLF (0.02) of note.
- Still to Report: FSS , JACK , MLCO of note.
- Positive Guidance: CBRL, FSLR, DUOL, A, AXON, PAYO, OSPN, GDRX, SILK, FLYW, PETQ, IPAR, ICFI, EDR, HURN, KIND, BLNK, EVRI, YOU, GOLF, ODP, NOTE, ANF of note.
- Negative Guidance: PRFT, GO, ROST, AMBA, MASI, OMCL, CUTR, HCAT, JAMF, MYGN, COMP, NVTA, PUBM, RKLB, MDRX, NIO, LOW, EYE, ACIW, AVDX, KSS, NOVT, DIBS, XMTR of note.
Erlanger Research Advance/Decline Chart:
Gap Ups & Down In Early Pre-Market:
- Gap Up: RETA +164%, RNER +20%, SRPT +20%, BGS +16%, PAYO +11%, SHLS +11%, SDGR +10%, DUOL +10%, ARAV +10%, GDRX +9%, HCAT +7%, ISEE +7%, EC +6%, FLYW +6%, LI +6%, FSLR +6%, EOSE +5%, BLNK +5%, HURN +5%, MASI +4%, AXON +4%, ARCB +4%, MDXG +4%, XPEV +4%, CLDX +4% of note.
- Gap Down: NVAX -24%, MQ -20%, BRSP -15%, TSVT -12%, FIGS -11%, HLMN -10%, CUTR -10%, RIVN -8%, AMC -8%, IQ -8%, PUBM -8%, ESMT -6%, VZIO -5%, NSTG -5%, FLGT -5%, NYT -4%, CARG -4% of note.
Insider Action: FIS 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: RIVN, KSS, NVAX, AMC, SPOT, MNST, HPE, LOW (CNBC)
- 5 Things You Need to Know to Start Your Day. (Bloomberg)
- Bloomberg Lead Story: China’s Leaders Are Surprised By Pace of Economic Rebound. (Bloomberg)
- Bloomberg Most Read Story: Lightfoot is the first Chicago Mayor to Lose Reelection in 40 Years. (Bloomberg)
- Futures rise to start March trading. (Reuters)
- Mortgage Demand drops to a 28 year low. (CNBC)
- Kohl’s (KSS) shares drop after big holiday quarter losses. (CNBC)
- Qualcomm (QCOM) CEO notes that he expects Apple (AAPL) to use its own modems in iPhones in 2024. (CNBC)
- Puma expects margin pressure to persist in 2023. (Reuters)
Moving Average Update:
- Score slips back to 31% from 40%.
- President’s Public Schedule:
- The President delivers remarks on his nomination of Julie Su to serve as the Secretary of Labor; The Vice President, 9:30 a.m. EST
- The President receives the Presidential Daily Briefing, 10:15 a.m. EST
- The President departs the White House en route to Department of Homeland Security, 11:25 a.m. EST
- MBA Mortgage Applications 7:00 a.m. EST
- 30-Yr Mortgage Rate Actual: 6.71% VS 6.62% previous
- Mortgage Applications (WOW) Actual: -5.7% VS -13.3% previous
- Composite: -5.7%, Purchase: -5.6%, ReFi: -5.5%
- PMI MFG Final 9:45 a.m. EST
- February ISM Manufacturing Index is due out at 10:00 a.m. EST and expected to rise to 47.8% from 47.4%.
- January Construction Spending is due out at 10:00 a.m. EST and expected to rise to 0.3% from -0.4%.
- EIA Petroleum Report 10:30 a.m. EST
Federal Reserve / Treasury Speakers:
- Federal Reserve Minneapolis President Neel Kashkari 9:00 a.m. EST
- FCPT Announces Acquisition of a Heartland Dental for $2.2 Million.
- Rockwell Automation (ROK) announces that it acquired Knowledge Lens.
- Westrock Coffee Company (WEST) Announces Strategic Acquisition of Bixby Roasting Co.
Meeting & Conferences of Note:
- Sellside Conferences:
- Bank of America Global Agriculture and Materials Conference 2023 (03/01/23-03/02/23)
- Bernstein TMT & Consumer 1:1 Forum
- Citi Healthcare Services, Medtech, Tools & HCIT Conference 2023 (03/01/23-03/02/23)
- Deutsche Bank’s Shipping Summit
- Piper Sandler Western Financial Services Conference 2023 (03/01/23-03/03/23)
- Wolfe Research Real Estate Conference
- Previously posted and ongoing conferences:
- Bank of America Securities Power, Utilities and Clean Energy Conference (02/28/23-03/02/23)
- Barclays Investment Grade Energy and Pipelines Corporate Days (02/28/23-03/04/23)
- BMO Capital Markets 32nd Global Metals & Mining Conference 2023 (02/26/23-03/01/23)
- Credit Suisse 28th Annual Vail Summit 2023 (02/26/23-03/01/23)
- Credit Suisse Energy Summit
- Credit Suisse London Global Healthcare Conference 2023 (02/28/23-03/01/23)
- Deutsche Bank dbaccess 31st Annual Media, Internet and Telecom Conference 2023 (02/27/23-03/01/23)
- Jefferies Interactive Entertainment Conference
- KBW Fintech Payments Conference (02/28/23-03/02/23)
- Morgan Stanley European MedTech & Services Conference 2023 (02/27/23-03/01/23)
- Morgan Stanley Renewables Conference (02/27/23-03/01/23)
- Wells Fargo West Coast Biotech Tour
- Wolfe Research “March Madness” Software Conference (02/28/23-03/01/23)
- Company Meetings: BRKH
- Fireside Chat: PHUN, LCFY
- Investor/Analyst Day/Calls: AREC, BBIO, HCKT, TBLA, TSLA
- Update: None of note.
- 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: