CAPIS Morning Note – 03/14/23: Futures Are Positive Into CPI Data at 8:30 a.m. EDT

Overnight Summary: The S&P 500 closed Monday lower by -0.15% at 3855.76 from Friday lower by -0.92% at 3882.13. The overnight high of 3912 was hit at 5:05 a.m. EDT. The low was hit at 3887 at 2:20 a.m. EDT, a range of ~25 points high to low.  At 7:05 a.m. EDT, the S&P 500…

Overnight Summary: The S&P 500 closed Monday lower by -0.15% at 3855.76 from Friday lower by -0.92% at 3882.13. The overnight high of 3912 was hit at 5:05 a.m. EDT. The low was hit at 3887 at 2:20 a.m. EDT, a range of ~25 points high to low.  At 7:05 a.m. EDT, the S&P 500 (mini) was higher by +17 points which is 0.44%.

Earnings Out After The Close: 

  • Beats: GTLB +0.11 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 in the S&P 500.  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:
    • AIXI: Announces Closing of Initial Public Offering.
  • New SPACs launched/News:
    • Rocket Internet Growth Opportunities Corp. (RKTA) Announces It Will Redeem Its Public Shares.
    • Silver Spike Acquisition Corp II (SPKB) Announces Redemption of Class A Ordinary Shares.
  • Secondaries Priced:
    • OKYO: Prices $5.3 Million Offering of ADSs.
    • RELI: Announces Pricing of $4.0 Million Private Placement Priced At-the-Market Per Nasdaq Rules.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • IMPP: Announces Termination of At-The-Market Equity Offering Program.
    • NEP: Filed Form S-3.. up to $500,000,000 Common Units.
    • YCBD: Filed Form S-1.. 13,079,394 shares of Common Stock.
  • Direct Offering:
    • NMTR: Announces $5 Million Registered Direct Offering Priced at-the-Market Under Nasdaq Rules.
    • NOVN: Announces $6.0 Million Registered Direct Offering.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • MDVL: Announces Closing of $16 Million Private Placement.
  • Mixed Shelf Offerings:
    • AMLX: Files mixed securities shelf offering.
    • HTCR: Filed Form S-3.. $100 Million Mixed Shelf.
    • NOC: Files Mixed Securities Shelf.
  • Debt Filing/Notes:
    • HUM: Completes Aggregate $1.25 Billion Debt Offering.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • AIMD: Announces US$3 Million Convertible Notes 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:

  • After Hours: 
    • Trading Up:  AMLX +20%, DCGO +10%, CDMO +8%, BG +8%, ASTS +4% of note.
    • Trading Down: GTLB -35%, HEAR -13%, UAL -7% of note.
  • News After The Close:   
    • Stocks making the biggest moves after hours:  GTLB, UAL, FRC, KEY (CNBC)
    • BuzzFeed (BZFD) stock drops on forecast; ‘majority’ of cash at Silicon Valley Bank. (MarketWatch)
    • GitLab (GTLB) loses one-third of its value after software company issues weak revenue forecast. (CNBC)
    • 2-year Treasury yield posts biggest 3-day decline since aftermath of 1987 stock crash. (CNBC)
    • STIFEL: “World isn’t ending .. Fed will pause, and we see inflation slowing in typical lagged effect .. (Mild) recession is more a risk to start in 4Q23E.. but for now resilient albeit flattening EPS..” We see $SPX trading (and largely remaining) in a low-4,000s range in 1H .” (Carl Q Tweet CNBC)
    • FDIC Planning Another Silicon Valley Bank (SIVB) Auction. (WSJ)
    • Federal Reserve Board announces that Vice Chair for Supervision Michael S. Barr is leading a review of the supervision and regulation of Silicon Valley Bank (SIVB), in light of its failure. (Release)
    • Former House Speaker Barney Frank Pushed to Ease Financial Regulations After Joining Signature Bank (SBNY) Board. (WSJ)
    • Tutor Perini (TPC) Awarded $75 Million U.S. Air Force Academy Building Renovations Project.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Index Change:
      • Bunge Limited (BG) will replace Signature Bank (SBNY) in the S&P 500 effective prior to the opening of trading on Wednesday. (MarketWatch)
    • Albany International (AIN) Announces CEO Succession Plan.
    • AMC Networks (AMCX) CEO Kristin Dolan resigned as a director.
    • Amedisys (AMED) Board Appoints Richard Ashworth as New President and Chief Executive Officer.
    • Aspen Group, Inc. (ASPU) Announces Voluntary Delisting from the Nasdaq Capital Market.
    • AUTL CFO to step down.
    • CRISPR Therapeutics (CRSP) Announces Transition of Chief Financial Officer.
    • Five Below (FIVE) CFO Kenneth Bull promoted to COO.
    • Honeywell (HON) Names 34-Year Honeywell Veteran Vimal Kapur To Succeed Darius Adamczyk As CEO On June 1, 2023; Kapur Elected To Company’s Board Of Directors; Adamczyk To Serve As Executive Chairman.
    • HYZON Motors (HYZN) names Parker Meeks as CEO.
    • LF Capital Acquisition Corp. II (LFAC) CEO Scott Reed resigned.
  • Buyback Announcements or News:
    • ODP Corporation (ODP) agrees to repurchase 2 million shares of common stock of the Company from HG Vora Special Opportunities Master Fund, Ltd., at a price per share equal to $44.55, for a total purchase price of ~$89.1 million.
    • OptimizeRx (OPRX) Authorizes $15 Million Share Repurchase Program.
    • Turtle Beach (HEAR) Extends Share Repurchase Program.
    • ZoomInfo (ZI) Announces $100 Million Share Repurchase Program.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.

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

S&P 500 +23, Dow Jones +157,  NASDAQ +67, and Russell 2000 +16. (as of 7:57 a.m. EDT).  Asia lower and Europe higher ex the FTSE. VIX Futures are at 25 from 24.55 yesterday.  Gold, Silver and Copper lower. WTI Crude Oil and Brent lower with Natural Gas lower as well. US 10-year Treasury sees yields at 3.608% from 3.56% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $24,780 from $22,1768 yesterday, higher by  1.89%.

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

  • Daily Positive Sectors: Utilities, Real Estate, Heathcare of note.
  • Daily Negative Sectors: Financial, Energy, Industrials of note.
  • One Month Winners: None of note.
  • Three Month Winners: Technology, Communication Services, Industrials of note.
  • Six Month Winners: Basic Materials, Industrial, Energy of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Technology, Consumer Cyclical, Communication Services of note.

The S&P 500 closed down 5.83 points, or 0.2%, at 3855.76, for its third straight day of losses. The Dow Jones Industrial Average slipped 90.50 points, or 0.3%, to 31819.14. The tech-heavy Nasdaq Composite added 49.96 points, or 0.4%, to 11188.84. Major U.S. stock indexes held relatively steady Monday while investors attempted to assess what newfound stress in the banking system would mean for Federal Reserve policy.  Regional bank stocks plunged, and investors piled into government bonds to seek safety after regulators took extraordinary measures over the weekend to limit the impact of the collapse of Silicon Valley Bank. (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)

  • Tuesday After the Close: 

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: CAL of note.
  • Misses: CVT (0.11) of note.
  • Still to Report: SGHC of note.

Guidance:

  • Positive Guidance: None of note.
  • Negative Guidance: GETY, UAL, CAL of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: PACW +31%, FRC +22%, WAL +21%, MNTV +18%, AMLX +17%, DCGO +15%, HYZN +14%, CDMO +13%, CMA +12%, ZION +11%, BG +7%, UBER +7%, ASTS +6%, LYFT +6%, DASH +6% of note.
  • Gap Down: SIVB -63%, GTLB -31%, HEAR -14%, GETY -7%, UAL -6%, CS -4% of note.

Insider Action: NWL, BXMT 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 Stock Market Opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: First Republic, Pacific West Lead Bank Rebound From Post SVB Rout. (Bloomberg)
  • Bloomberg Most Read Story: Billionaire Charles Schwab Fortune is Slammed by SVB Fallout. (Bloomberg)
  • US Futures Rise, Treasuries Fall Before Economic Data Due out. (Bloomberg)
  • Credit Suisse (CS) finds material control lapses after SEC prompt. (Bloomberg)
  • U.S. should not have bailed out SVB depositors says Hedge Fund Managers Ken Griffin, Cliff Asness and Carson Block. (Bloomberg)
  • Something broke but Fed still expected to go through with rate hikes. (CNBC)
  • United Airlines (UAL) stock drops as first quarter loss. (CNBC)
  • Regulators are still trying to find a buyer for Silicon Valley Bank (SIVB). (CNBC)
  • Moodys puts First Republic (FRC) as well as five other regional banks on downgrade watch. (Bloomberg)

Moving Average Update:

  • Score sees a gimps of green going to 5 from 0.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 11:30 a.m. EDT
    • The President departs San Diego, California en route to Los Angeles, California, 2:00 p.m. EDT
    • The President arrives in Los Angeles, California, 2:40 p.m. EDT
    • The President departs Los Angeles, California en route to El Monte, California, 2:50 p.m. EDT
    • The President arrives in El Monte, California, 3:05 p.m. EDT
    • The President discusses his efforts to reduce gun violence, 3:45 p.m. EDT
    • The President departs El Monte, California en route to Los Angeles, California, 7:10 p.m. EDT
    • The President departs Los Angeles, California en route to Las Vegas, Nevada, 7:35 p.m. EDT
    • The President arrives in Las Vegas, Nevada, 8:40 p.m. EDT
    • The President participates in a reception for the Democratic National Committee, 10:00 p.m. EDT

Economic:

  • NFIB Small Business Index 6:00 a.m. EDT
    • US NFIB business optimism index actual 90.9 (forecast 90.3, previous 90.30)
  • February CPI is due out at 8:30 a.m. EDT and is expected to remain at 0.5%.
  • Redbook Sales 8:55 a.m. EDT
  • API Crude Oil Data 4:30 p.m. EDT

Federal Reserve / Treasury Speakers: None of note as in blackout period into next week’s FOMC meeting.

M&A Activity:

  • Apollo Global (APO) to buy Univar (UNVR) in $8.1B deal, including debt. (WSJ)
  • Cvent (CVT) To Be Acquired By Blackstone in $4.6 Billion Transaction.
  • Momentive Global (MNTV) Enters into Definitive Agreement to Be Acquired by Symphony Technology Group for $1.5 Billion.

Meeting & Conferences 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 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: