CAPIS Morning Note – 04/01/22: Stocks Higher But Job’s Friday At 8:30 a.m. EDT. Will It Hold?

Overnight Summary: The S&P 500 closed Thursday at 4530.61 from 4602.45 on  Wednesday. The S&P 500 now has a two day losing streak. Futures have been moving higher since yesterday’s close. The overnight high was hit at 6:05 a.m. EDT at 4,555.50. The low was just hit at 4,527.50 at 4:05 p.m. EDT. At 7:25…

Overnight Summary: The S&P 500 closed Thursday at 4530.61 from 4602.45 on  Wednesday. The S&P 500 now has a two day losing streak. Futures have been moving higher since yesterday’s close. The overnight high was hit at 6:05 a.m. EDT at 4,555.50. The low was just hit at 4,527.50 at 4:05 p.m. EDT. At 7:25 a.m. EDT the current price is 4550.25.

Key Data Points: April is usually a winning month. (Yahoo) Does Erlanger Seasonality agree? Yes it does.

Earnings Out After The Close:

  • Beats: BB +0.04, DCT +0.03.
  • Flat: NCNO.
  • Misses: BLND (0.13).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • Queen’s Gambit Growth Capital (GMBT) closes combination with Swvl; to trade under symbol “SWVL” starting April 1 .
  • Secondaries Priced:
    • Allete (ALE) prices offering of 3.2 million shares of common stock at $63.00 per share.
    • SLS prices $25 million offering at $5.40 per share with warrants at $5.40.
  • Notes Priced of note:
    • AMH: Pricing of Public Offering of $600 Million of 3.625% Senior Notes due 2032 and $300 Million of 4.300% Senior Notes due 2052.
  • Common Stock filings/Notes:
    • ALE: Offering of Common Stock.. 2,950,000 shares.. JPM and BAC Bookmanagers.
    • ARMP: Closing of Second and Final Tranche of $45 Million Private Placement with Innoviva.
    • ATCX: Filed Form S-3.. 2,078,300 Shares of Class A Common Stock.
    • IIPR: Public Offering of 1,000,000 Shares of Common Stock.. BTIG Bookmanager.
    • SLS: Proposed Underwritten Public Offering.. Leerink and Cantor bookmanager.
    • RIOT: Form 8K.. File to sell up to $500 Million in common stock.
    • YORW: Proposed Public Offering of Common Stock 825,000 shares.. Janney bookmanager.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • Ranger Energy Services (RNGR) files for 18,809,999 share common stock offering by selling shareholders.
    • XpresSpa Group (XSPA) files for 4,696,134 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • REV: Filed Form S-3.. $75 Million Mixed Shelf.
    • VERB: Filed Form S-3.. $100 Million Mixed Security Shelf.
  • Convertible Offering & Notes Filed:
    • Baozun Inc. (BZUN) Announces Repurchase Right Notification for 1.625% Convertible Senior Notes due 2024.
    • O: Prices £600 Million Private Placement Offering of Senior Unsecured Notes.

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: GME +15%, LEV +5%, HYMC +5%, PL +4%.
    • Trading Down: RDW -26%, SPRO -25%, SLS -23%, BLND -15%, DCT -11%, IIPR -5%, ALE -5%, BB -4%.
  • News Since The Close:
    • Goldman Sachs (GS) says broad economic model shows almost no chance of recession in next 12 months, 38% probability of recession in the following year.
    • GameStop (GME) Shares Surge on Plans for Stock Split (Bloomberg)
    • Robinhood (HOOD) Nears Debut of Retirement Accounts Within App. (Bloomberg)
    • Amazon (AMZN) workers in Alabama reject union for second time, but challenged ballots remain. (CNBC)
    • E3 2022 is canceled. EA (The Verge)
    • Authorities are looking into a meeting between Activision Blizzard (ATVI) CEO Bobby Kotick and one of the traders who later made a large bet in ATVI, according to the WSJ CNBC.
    • Raytheon (RTX) Missiles & Defense awarded $651 million to produce SPY-6 radars for next-gen US Navy ships.
    • Lockheed Martin (LMT) awarded $3.2 billion Army contract and $1.3 billion Missile Defense Agency contract modification.
    • F and GM to Suspend Production at Michigan Plant Next Week. (Reuters)
    • Li Auto Inc. (LI) announced that the Company delivered 11,034 Li ONEs in March 2022, up 125.2% year over year. This took the Company’s first quarter deliveries to 31,716, representing a 152.1% year-over-year increase.
    • Hycroft Mining (HYMC): FY21 sales were 56,045 ounces of gold at an averaged realized price of $1,794 per ounce and 397,546 ounces of silver at an average realized price of $25.66 per ounce; will cease mining activities due to losses from operations.
    • Russian/Ukraine News:
      • Ukraine says all Russian soldiers have left the Chernobyl nuclear power plant, ending month-long occupation.
      • Kremlin says Putin’s order of gas payments in Roubles is irreversible.
      • India Finance Minister says we have started buying oil from Russia.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Aterian (ATER) Adds Seasoned Industry Executive To Its Board Of Directors.
    • Exela Technologies (XELA) Announces CEO Transition Effective April 2022.
    • CarLotz (LOTZ) Strengthens Executive Leadership Team.
    • Casella Waste Systems (CWST) Announces Appointment of Kevin J. Drohan as Chief Accounting Officer.
    • Embecta (EMBC) completes spin-off from BD (BDX) and lists on NASDAQ as a global leader in diabetes care.
    • Grindrod Shipping (GRIN) announces retirement of CEO Martyn Wade, effective April 30
    • Ichor (ICHR) appoints Paul Chhabra as COO, effective April 11.
    • Mayville Engineering Company (MEC) announces retirement of CEO Robert D. Kamphuis, effective September 30.
    • Porch Group (PRCH) mutually agreed with CFO Martin Heimbigner to begin a search for his successor.
    • Stem (STEM) COO Mark Triplett will step down effective April 15 for personal reasons.
  • Buyback Announcements: None of note.
  • Stock Splits:
    • Gamestop (GME) intends to implement a stock split through dividend.
  • Dividends Announcements: None of note.

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

S&P 500 +27 , Dow Jones +208, NASDAQ +106, and Russell 2000 +7.  Europe higher and Asian markets higher ex Japan.  VIX Futures are at 22.78 from 22.20 from yesterday morning. Gold, Silver and Copper lower. WTI Crude Oil is lower and Brent Oil Futures higher with Natural Gas lower. $ is higher vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury sees yields at 2.406% from 2.32%. Bitcoin is at $45,291 from $47.213 yesterday morning lower by 0.42% this morning from overnight. As of 8:12 a.m. EDT.

Thursday’s Action – 03/31/22 Close:  

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

All indexes were down as the SPX and NASDAQ notched its largest quarterly drop in two years.   Dow dropped 4.6%, SP 4.9% and NASDAQ fell 9.1% for 1q22.  Numbers could have been worse but March was positive for all indexes, DJIA up 2.3%, SP +3.6% and NASDAQ gaining 3.4% for the month.  Updated 03/31/22 close.

Upcoming Earnings Of Note: (sorted by market cap, highest to lowest with most visible names)

  • Friday After the Close: None of note.
  • Monday Before the Open: None of note.

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: VRRM, NCNO, INDI, BTRS.
  • Negative Guidance: DCT, BLND, VLTA, PNC.

Erlanger Research Advance/Decline Chart: Updated through 03/31/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: GME +14%, XSPA +7%, LI +5%, KOS +5%, BZUN +5%, HITI +4%, HYMC +4%.
  • Gap Down: BLND -25%, SPRO -24%, SLS -24%, RDW -23%, DCT -12%, WEJO -8%, ALE -6%.

Insider Action: JEF sees Insider buying with dumb short selling. JELD sees Insider buying with smart short sellers. 03/31/22 close.

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: GME, AAPL, BB, WYNN  (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Equity U.S. Futures up strongly into Jobs Data. (Reuters)
  • Ukraine has regained control of the Chernobyl nuclear power plant. Negotiations resume today. (NYT)
  • Russia claims that Ukraine helicopter flew into Russia and blew up oil tanks in Belgorod. (Bloomberg)
  • China will give regulators access to auditing reports for questionable Chinese companies listed in the U.S. (Bloomberg)
  • House passes bill to limit the price of insulin. Senate passage unclear. (ABC News)
  • Mondelez (MDLZ) plant in Ukraine was damaged. (Reuters)
  • Robinhood Snacks looks at Formula One move to Las Vegas in 2023. President Biden tries to stop “pump anxiety”, maybe it will work but not likely.

Moving Average Update:

  • Score goes down to 56% from 90% thanks to end of quarter positioning.  Updated 03/31/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President delivers remarks on the March jobs report, 10:45 a.m. EDT
    • The President receives the President’s Daily Brief, 11:15 a.m. EDT
    • Press Briefing with Communications Director Kate Bedingfield, 2:30 p.m. EDT
    • The President departs the White House en route New Castle, Delaware, 3:25 p.m. EDT
    • The President arrives in New Castle, Delaware, 4:20 p.m. EDT

Economic: 

  • March Nonfarm Payrolls is due out at 8:30 a.m. EDT and is expected to fall to 475,000 from 678,000. The unemployment rate is expected to fall to 3.7% from 3.8%.
  • PMI Mfg Final 9:45 a.m. EDT
  • March ISM Manufacturing Index is due out at 10:00 a.m. EDT and is expected to fall to 58.3% from 58.6%.
  • February Construction Spending is due out at 10:00 a.m. EDT and is expected to fall to 1.0% from 1.3%.
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve Speakers:

  • Federal Reserve Chicago President Charles Evans 9:05 a.m. EDT
  • Federal Reserve New York President John Williams 1:00 p.m. EDT

M&A Activity:

  • PPG Completes Acquisition of Arsonsisi’s Powder Coatings Manufacturing Business.
  • Core & Main (CNM) Signs Agreement to Acquire Lock City Supply Inc.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Piper Sandler AI/Machine Learning Conference 2022
    • Wolfe Research SalesForce Test Event 
      • Previously Announced  Conferences:
        • Bank of America Securities Energy & Utilities Conference 2022 (03/31/22-04/01/22)
        • Gabelli Waste & Environmental Services Symposium 2022
        • Goldman Sachs Corporate Day SGX 2022
        • Goldman Sachs Green Tech Symposium
        • Guggenheim Healthcare Talks 2022 (03/16/22-04/01/22)
        • Leerink Biopharma Private Company Connect
        • MedInvest Pharmaceutical and Biotechnology Investor Conference 2022 (03/28/22-04/01/22)
        • Stephens Banks & the Blockchain Field Trip
        • Wedbush Battery Event
  • Company Meetings: FLDM, TBLT.
  • Fireside Chat:None of note.
  • Investor/Analyst Day/Calls: NVST.
  • Update: NFE.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • Annual Scientific Session & Expo 2022 (04/02/22-04/04/22)
    • American Academy of Neurology AAN 74th Annual Meeting 2022 (04/02/22-04/07/22)
    • Experimental Biology Conference 2022 (04/02/22-04/05/22)
    • Wondercon 2022 (04/01/22-04/03/22)
        • Previously Posted and Ongoing Conferences:
          • American College of Sports Medicine (ACSM) 2022 International Health & Fitness Summit 2022 (03/31/22-04/03/22)  
          • ESMOs European Lung Cancer Congress (ELCC) 2022 (03/30/22-04/02/22)
          • 31st Annual Meeting of the Society for Virology 2022 (03/30/22-04/04/22)
          • Academy of Managed Care Pharmacy (AMCP) 2022 (03/29/22-04/01/22)
          • BIO Europe Spring 2022 (03/28/22-04/06/22)

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:

      

Thursday’s Upgrades and Downgrades: