CAPIS Morning Note – 03/17/23: Stocks Lower As We Hit Quadruple Witching to Weekend. First Republic and Credit Suisse Prices Sink Further.

Overnight Summary: The S&P 500 closed Thursday higher by 1.76% from Wednesday lower by -0.70% at 3891.93. The overnight high of 4009.25 was hit at 4:30 a.m. EDT. The low was hit at 3983.25 at 7:20 a.m. EDT, a range of ~26 points high to low.  At 7:25 a.m. EDT, the S&P 500 (mini) was lower…

Overnight Summary: The S&P 500 closed Thursday higher by 1.76% from Wednesday lower by -0.70% at 3891.93. The overnight high of 4009.25 was hit at 4:30 a.m. EDT. The low was hit at 3983.25 at 7:20 a.m. EDT, a range of ~26 points high to low.  At 7:25 a.m. EDT, the S&P 500 (mini) was lower by -8 points which is -0.20%.

Day One of March Madness: How the experts missed on UVA and Arizona as easy wins. Good luck as most brackets are busted. (ESPN)

Earnings Out After The Close: 

  • Beats: FDX +0.67, COOK +0.08 of note.
  • Flat:  of note.
  • Misses: PLBY (0.13), BLND (0.05), PRPL (0.04), GRPN (0.02) 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: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • RCRT: Filed Form S-3.. 9,272,796 Shares of Common Stock.
    • SPRB: Filed Form S-3.. 29,603,000 Shares of Common Stock.
  • Direct Offering:
    • NOVN: Closing of $6.0 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • FUSN: Files for 17,648,596 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • AMRS: Files for $1 billion mixed securities shelf offering.
    • BOOM: Files $200 million mixed securities shelf offering.
    • CODX: Filed Form S-3 $150M Mixed Shelf Offering.
    • NHI: Filed Form S-3ASR..Mixed Shelf Offering.
    • SGHT: Files $200 million mixed securities shelf offering.
    • VERU: Filed Form S-3 .. $200,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • APH: Filed Form S-3ASR Senior Debt Securities.
    • WSO: Completes $600 Million Unsecured Credit Facility.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed: None of note.

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:  FDX +12%, LFCR +7%, X +5% of note.
    • Trading Down: DBD -26%, SRPT -20%, FRC -16%, RBBN -9%, PRPL -8%, GRPN -6%, WAL -6%, PACW -6%, BLND -5%, PLBY -4%, RRC -4%, CUTR -4% of note.
  • News After The Close:   
    • Stocks making the biggest moves after hours:  FDX, RRC, MRK (CNBC)
    • Fed’s Discount Window Borrowing Rises To Record $152.9 Billion On March 15, From $4.6 Billion On March 8.
    • FedEx (FDX) hikes 2023 earnings forecast as cost-cutting initiatives bear fruit. (CNBC)
    • Payment Software Maker ACI Worldwide (ACIW) Is in Talks With Buyout Firm Motive Partners. (Bloomberg)
    • Citadel Offered to Buy Circle’s Silicon Valley Bank (SIVB) Deposits Before Regulators Took Control. (WSJ)
    • DoubleLine’s Jeffrey Gundlach:
      • Recession Is Probably Within Four Months At The Most.
      • Liquidity In Treasuries “Bad” – Says Not Interested In Buying Credit At All At These Levels, Particularly Junk Bonds
  • Exchange/Listing/Company Reorg and Personnel News:
    • Delayed 10-K Filings: NTNX (MarketWatch), PRPL, RBBN, HEAR, JBI, TUP, AROW, CUTR, CMAX, DSEY
    • Clearwater Paper (CLW) CFO Michael Murphy to depart.
    • KeyCorp (KEY) appoints Clark H. I. Khayat as CFO.
    • PLBY Group (PLBY) CFO Lance Barton will depart.
    • Range (RRC) Announces CEO Retirement and Succession Plan.
    • SCVL Announces Erik Gast as Chief Financial Officer.
    • Shoe Carnival (SCVL) announces appointment of Erik Gast as Executive Vice President and CFO. (MarketWatch)
    • STAG Industrial (STAG) Executive Chairman Ben Butcher to retire.
    • Taoping (TAOP) Receives NASDAQ Minimum Bid Price Requirement Extension.
    • Thermo Fisher (TMO) appoints Cory Stevenson as Executive Chairman.
    • Wolverine (WWW) announces that its Chairman and retired CEO, Blake Krueger, will be retiring from the Board.
    • Zomedica (ZOM) Appoints New Chief Financial Officer.
  • Buyback Announcements or News:
    • American Public Education (APEI) confirmed it continued to have availability under its existing share repurchase program and authorized the repurchase up to an additional $8.0 mln of shares of the Company’s common stock under this program
    • Eni S.p.A. (E) proposes new buyback program: up to no. 275 millions of shares, to remunerate shareholders; up to no. 62 millions of shares, to set up a share portfolio to serve extraordinary financial transactions.
    • FVCBankcorp (FVCB) Announces Extension of Share Repurchase Program.
    • Huize (HUIZ) Authorizes US$5 Million Share Repurchase Program.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • Algonquin Power & Utilities Corp. (AQN) Declares First Quarter 2023 Common Share Dividend of U.S.$0.1085 (C$0.1495), and Declares First Quarter 2023 Preferred Share Dividends.
    • Equity Residential (EQR) increases quarterly dividend by 6% to $0.6625 per share.
    • FRC: The Bank is focused on reducing its borrowings and evaluating the composition and size of its balance sheet going forward. Consistent with this focus and during this period of recovery, the Bank’s Board of Directors has determined to suspend its common stock dividend.
    • Medifast (MED) increases quarterly cash dividend $0.01 to $1.65 per share.
    • SPY is ex-dividend today.

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

S&P 500 -5, Dow Jones -98,  NASDAQ +27, and Russell 2000 -10. (as of 7:55 a.m. EDT).  Asia higher and Europe lower ex FTSE. VIX Futures are at 25.76 from 25.80 yesterday.  Gold, Silver and Copper higher. WTI Crude Oil and Brent higher with Natural Gas lower. US 10-year Treasury sees yields at 3.50% from 3.481%  yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $26,717 from $25,048  yesterday, higher by 6.86%.

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

  • Daily Positive Sectors: Communication Services, Technology, Consumer Cyclical, Financials Industrials of note.
  • Daily Negative Sectors: None 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.

U.S. stocks finished sharply higher on Thursday, erasing losses from earlier in the session, as a group of big banks deposited $30 billion with troubled lender First Republic Bank. The S&P 500 gained 68.36, or 1.8%, to close at 3,960.28. The Dow Jones Industrial Average rose 371.98 points, or 1.2%, to 32,246.55. The Nasdaq Composite gained 283.22 points, or 2.5%, to 11,717.28.   (MarketWatch – 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  Before the Open:

Earnings of Note This Morning:

  • Beats: ACN +0.02 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: BLDP of note.

Guidance:

  • Positive Guidance: PRPL, FDX, X of note.
  • Negative Guidance: ASO, COOK, BLND of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: HNRG +14%, FDX +11%, LFCR +7%, MARA +6%, BIDU +5%, X +5%, COIN +4% of note.
  • Gap Down: DBD -24%, SRPT -20%, RBBN -8%, AMRS -6%, BLND -5%, GRPN -5%, PRPL -4%, FRC -4%, PLBY -4% of note.

Insider Action: UNM, ENVX sees Insider buying with dumb short selling.  GH 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 moves premarket: NVDA, FRC, CS, FDX, BMBL, WBD (CNBC)
  • 5 things to know before the stock market opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg) 
  • Bloomberg Lead Story: How Dimon and Yellen Helped Secure $30 Billion Lifeline For First Republic. (Bloomberg)
  • Bloomberg Most Read Story: Schwab Clients Shift From Prime Funds To Government Portfolios. (Bloomberg)
  • China cut its reserve requirement to boost the economy. (Bloomberg)
  • US Futures Waver, Bonds Gain as Bank Angst Lingers: Market Wrap (Bloomberg)
  • First Republic (FRC) resumes its slide as investors assess aid. (Bloomberg)
  • Credit Suisse (CS) sheds another 10% as traders digest emergency liquidity. (CNBC)
  • S&P 500 changes sector weightings. (CNBC)
  • Treasury Secretary Yellen noted yesterday that not all bank assets will be protected in future bank failures. (CNBC)
  • Reuters Poll says that Fed will stay with a 25 basis point hike. (Reuters)

Moving Average Update:

  • Lots of green for Saint Patrick’s Day!!!!  Score jumps to 57 from 28.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EDT
    • The President holds a bilateral meeting with H.E. Leo Varadkar, Taoiseach of Ireland, 10:30 a.m. EDT
    • The President departs the White House en route to the Friends of Ireland Caucus St. Patrick’s Day Luncheon, 11:45 a.m. EDT
    • The President attends the Friends of Ireland Caucus St. Patrick’s Day Luncheon, 12:00 p.m. EDT
    • The President hosts H.E. Leo Varadkar, Taoiseach of Ireland, for a Shamrock presentation and reception at the White House; The Vice President and The Second Gentleman, 5:00 p.m. EDT
    • The President departs the White House en route to New Castle, Delaware, 7:30 p.m. EDT
    • The President arrives in New Castle, Delaware, 8:25 p.m. EDT

Economic:

  • February Industrial Production is due out at 8:30 a.m. EDT and is expected to rise to 0.5% from 0.0%.
  • February Leading Indicators are due out at 10:00 a.m. EDT and expected to come in at -0.4% from -0.3%.
  • The March University of Michigan Consumer Sentiment is due out at 10:00 a.m. EDT and expected to come in at 67.20 from 67.
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers: None of note.

M&A Activity: None of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Jefferies MedTech Doctor Day
      • 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: