CAPIS Morning Note – 03/24/23: Stocks Futures Lower As Bank Concerns Spread To Deutsche Bank

Overnight Summary: The S&P 500 closed Thursday higher by 0.30% at 3948.72 from Wednesday lower by -1.65% at 3936. The overnight high of 3998.25 was hit at 3:50 a.m. EDT. The low was hit at 3948.25 at 5:56 a.m. EDT, a range of ~50 points high to low.  At 7:20 a.m. EDT, the S&P 500…

Overnight Summary: The S&P 500 closed Thursday higher by 0.30% at 3948.72 from Wednesday lower by -1.65% at 3936. The overnight high of 3998.25 was hit at 3:50 a.m. EDT. The low was hit at 3948.25 at 5:56 a.m. EDT, a range of ~50 points high to low.  At 7:20 a.m. EDT, the S&P 500 (mini) was lower by -31.25 points which is +0.85%.

Earnings Out After The Close

  • Beats: HRTX +0.20, OXM +0.16, CURV +0.03 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:
    • HRYU: Announces Filing of Registration Statement for Proposed Initial Public Offering.
    • MGRX: Announces Closing of $5 Million Initial Public Offering.
  • New SPACs launched/News:
    • dMY Technology Group, Inc. VI (DMYS) Announces Intention to Transfer to Nasdaq Upon Completion of Business Combination with Rainwater Tech.
    • Graf Acquisition Corp. IV (GFOR) and NKGen Biotech announce letter of intent for a business combination.
    • Rocket Internet Growth Opportunities Corp. (RKTA) Announces Expected Redemption Price for Public Shares.
  • Secondaries Priced:
    • ETNB $275M offering. 16.93 Million shares at $16.25 per share.
  • Notes Priced of note:
    • MDT: Announces Pricing of $2.0 Billion of Senior Notes.
    • NTR: Prices Offering of an Aggregate of US$1.5 Billion of 5-Year and 30-Year Senior Notes.
  • Common Stock filings/Notes:
    • AFMD: Filed Form 424B5.. $100,000,000 Common Shares
    • AUUD: Filed Form S-1.. Files to sell units
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of ote.
  • Private Placement of Public Entity (PIPE):
    • CMCL: Announces private placement of $10 million.
    • NYXH: Announces a $15 Million Private Placement Financing.
  • Mixed Shelf Offerings:
    • ALTG: Files for $300 million mixed securities shelf offering.
    • CBAY: Files mixed shelf securities offering.
    • DHT: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes:
    • SLCA: Completes Amendment and Restatement of $1.1 Billion Credit Agreement,
  • 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: CURV +15%, HRTX +12%, ADMA +6%, HROW +5% of note.
    • Trading Down: SCHL -14%, OXM -6%, TALO -4% of note.
  • News After The Close:   
    • Credit Suisse (CS), UBS Among Banks Facing DOJ Russia-Sanctions Probe. (Bloomberg)
    • JPMorgan (JPM), Citi (C) tell staff not to poach clients from banks under stress -source, memo. (FinancialPost)
    • General Dynamics (GD) awarded $1.8 billion U.S. Army contract.
    • Raytheon Technologies (RTX) awarded $320 million U.S. Air Force contract.
    • Motorola Solutions (MSI) awarded $340 million U.S. Air Force contract.
    •  Fed:
      • Discount-window Loans Fall To $110.2b From $152.9b Week Ago.
      • BTFP At $53.7 Billion On March 22 Vs. $11.9 Billion On March 15.
      • Loans To FDIC Bridge Banks Rise To $179.8b From $142.8b.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Albany International (AIN) Announces CFO Transition.
    • Centerspace (CSR) Announces Ceo Transition Of Mark Decker, Jr. To Anne Olson.
    • Intellia Therapeutics (NTLA): Director Caroline Dorsa intends to resign from the Board.
    • Joby (JOBY) Board approves increase to size of the Board from eight to nine members.  Appoints Former FAA Administrator and Delta Board Member Michael Huerta to the Company’s Board of Directors.
    • MiMedx Group (MDXG) CFO Peter Carlson to leave to pursue other opportunities
    • Purple Biotech (PPBT) Reports Temporary Medical Leave of CEO Gil Efron.
    • PTCT Stuart Peltz to Retire as CEO.
    • WW Chairman Raymond Debbane resigns.
    • WiSA Technologies (WISA) Regains Compliance with Nasdaq Continued Listing Requirements.
  • Buyback Announcements or News:
    • Moving iMage Technologies (MITQ) Board of Directors Renews $1 Million Share Repurchase Program Authorization for 12 Months.
    • Eneti (NETI) announces share purchase.
    • Scholastic (SCHL) to launch $50 Million buyback program.
  • Stock Splits or News:
    • Allarity Therapeutics (ALLR) Announces Reverse Stock Split of Common Stock.
    • BK Technologies (BKTI) Announces Reverse Stock Split.
    • Helius Medical Technologies, Inc. (HSDT) Announces Distribution of Series B Preferred Stock to Holders of its Class A Common Stock Intended to Facilitate a Reverse Stock Split, if Necessary.
  • Dividends Announcements or News: 
    • Oxford (OXM): Owner of Tommy Bahama, Lilly Pulitzer and Johnny Was Increases Quarterly Dividend 18%.
    • STMicroelectronics (STM) Announces Dividend Proposal.

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

S&P 500 -36, Dow Jones -333,  NASDAQ -67, and Russell 2000 -25. (as of 7:53 a.m. EDT).  Asia and Europe lower. VIX Futures are at 25.65 from 23.05 yesterday.  Gold and Silver higher with Copper lower. WTI Crude Oil and Brent lower with Natural Gas higher. US 10-year Treasury sees yields at 3.287% from 3.477% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $28,026 from $27,720 yesterday, lower by -0.56%.

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

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

U.S. stocks edged higher Thursday as investors weighed the future path of interest rates following the Federal Reserve’s quarter-point raise.  The S&P 500 ticked up 11.75 points, or 0.3%, to 3948.72. The Dow Jones Industrial Average added 75.14 points, or 0.2%, to 32105.25. The tech-heavy Nasdaq Composite rose 117.44 points, or 1%, to 11787.40.  The major indexes bounced back from a tumultuous session Wednesday in which the broad stock index lost -1.6%.  (WSJ – edited by QPI)

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Upcoming Earnings Of Note: (From Chartroom Softwaresorted 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: None of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: None of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CURV +14%, HRTX +11%, ADMA +8%, LPLA +5%, NETI +5%, HROW +4% of note.
  • Gap Down: SCHL -13%, CMCL -8%, CS -6%, UBS -5%, NNI -4%, TALO -4%, GSK -4%, OXM -4% of note.

Insider Action: SWX sees Insider buying with dumb short selling.  BRT sees Insider buying with smart short sellers.

Rags & MagsRepeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

  • Stocks making the biggest moves premarket: DB, COIN, SQ, BAC, MRO, SCHL (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: Deutsche Bank Shares Slump as Credit Default Swaps Surge.  (Bloomberg)
  • Bloomberg Most Read Story: Jack Dorsey’s Block Vows to Fight Back After Hindenburg Says It’s Short the Stock.  (Bloomberg)
  • European Stocks led lower by banks, Dollar up: Market Wrap. (Bloomberg)
  • Five Key Moments from TikTok CEO’s combative hearing in Congress. (Bloomberg)
  • Banks are still drawing cash from the Fed, to the tune of $164 billion. (Bloomberg)
  • Treasury yields fall as concerns over global banking system grow once again. (CNBC)
  • Tether says it has $1.6 billion of excess cash to back its stablecoin. (CNBC)
  • Utah passes legislation that bans those under 18 from having social media account without parental permission. (NYT)

Moving Average Update:

  • Score goes to 51% from 40%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 9:00 a.m. EDT
    • The President participates in an official welcome ceremony and book signing, 11:10 a.m. EDT
    • The President participates in a bilateral meeting with Prime Minister Justin Trudeau of Canada, 11:30 a.m. EDT
    • The President participates in an expanded bilateral meeting with Prime Minister Justin Trudeau of Canada, 11:45 a.m. EDT
    • The President addresses the Canadian Parliament; The First Lady attends, 2:00 p.m. EDT
    • The President and Prime Minister Justin Trudeau of Canada hold a joint press conference, 3:45 p.m. EDT
    • The President and The First Lady arrive at a Gala Dinner hosted by Prime Minister Justin Trudeau and Mrs. Sophie Grégoire Trudeau of Canada, 6:15 p.m. EDT
    • The President and The First Lady attend a Gala Dinner hosted by Prime Minister Justin Trudeau and Mrs. Sophie Grégoire Trudeau of Canada, 6:30 p.m. EDT
    • The President and The First Lady depart Ottawa, Canada en route to New Castle, Delaware, 9:25 p.m. EDT
    • The President and The First Lady arrive in New Castle, Delaware, 10:40 p.m. EDT

Economic:

  • February Durable Orders due out at 8:30 a.m. EDT and is expected to rise to 1.6% from -4.5%.
  • PMI Composite Flash 9:45 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT
  • The latest NYSE and NASDAQ Short Interest is due out after the close for the period 2/24 through 3/13 and the S&P 500 fell -2.78% .

Federal Reserve / Treasury Speakers:

  • Federal Reserve St. Louis President James Bullard 9:30 a.m. EDT

M&A ActivityNone of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • SG Societe Generale Spring Consumer Staples Days 2023
      • Previously posted and ongoing conferences:
        • Bank of America EMEA Real Estate CEO Conference 2023 (03/22/23-03/24/23)

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: