CAPIS Morning Note – 04/06/22: Stocks Sell off Into FOMC Minutes Today At 2:00 p.m. EDT

Overnight Summary: The S&P 500 closed Tuesday at 4525.12 from 4582.64 on Monday. Futures have been moving lower after an early morning peak. The overnight high was hit at 2:40 a.m. EDT at 4,528. The low was hit at 4,484 at 7:20 a.m. EDT. At 7:20 a.m. EDT the current price is 4484 down -37…

Overnight Summary: The S&P 500 closed Tuesday at 4525.12 from 4582.64 on Monday. Futures have been moving lower after an early morning peak. The overnight high was hit at 2:40 a.m. EDT at 4,528. The low was hit at 4,484 at 7:20 a.m. EDT. At 7:20 a.m. EDT the current price is 4484 down -37 which is -0.84%.

Earnings Out After The Close:

  • Beats: SGH +0.15.
  • Flat: None of note.
  • Misses: ARRY (0.03).

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: None of note.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • NINE: Filed Form S-3..9,326,080 Shares of Common Stock Offered by the Selling Stockholders.
  • Private Placement of Public Entity (PIPE):
    •  NuScale Power and Spring Valley Acquisition Corp (SV). Announce $15 Million PIPE Investment from Nucor (NUE).
  • Mixed Shelf Offerings:
    • AFCG: Filed Form S-3.. $1,000,000,000 Mixed Shelf.
    • CRDF: Filed Form S-3.. $250 million Mixed Shelf.
    • LGVN: Filed Form S-3.. $50,000,000 Mixed Shelf.
    • MLAB Mesa Laboratories files mixed securities shelf offering.
    • NINE: Filed Form S-3..$250,000,000 Mixed Shelf.
    • YCBD: Filed Form S-3.. $200,000,000 Mixed Shelf.
  • Convertible Offering & Notes Filed:
    • ENTG: Pricing of Private Offering of Notes.
    • HESM: Announces Pricing of Private Offering of Senior Notes Due 2030.

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: ARRY +14%, GOGO +11%, NG +5%, BCEL +4%.
    • Trading Down: None of note.
  • News Since The Close:
    • JetBlue (JBLU) Submits Superior Proposal ($33/share) to Acquire Spirit (SAVE), Positioning America’s Much-Loved Airline as the Most Compelling National Low-Fare Challenger to the ‘Big Four’ Airlines. (MarketWatch)
    • Senate fails to pass procedural vote for $10 billion in COVID-19 funding for vaccines, treatments, and testing by a vote of 47-52.
    • Hedge Fund Manager Leon Cooperman says a chance we see recession in 2023. (CNBC)
    • Twitter (TWTR) Elon Musk officially refiled as active shareholder in 13D disclosure. (MarketWatch)
    • Southwest Gas (SWX) says court rejects Carl Icahn’s proposal to call a special meeting.
    • Uber (UBER) looks to create travel ‘superapp’ by adding planes, trains and rental cars. (CNBC)
    • Russian/Ukraine News:
      • New U.S. sanctions on Russia to target investment, financial institutions, White House says. (MarketWatch)
      • Intel (INTC) announces it has suspended all business operations in Russia; This follows its earlier decision to suspend all shipments to customers in Russia and Belarus.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Alnylam (ALNY) Announces Retirement of Steven Paul, M.D. from Board of Directors.
    • Array Tech (ARRY) appoints Kevin Hostetler as new CEO commencing April 18, 2022.
    • Dollar Tree (DLTR) Board of Directors Announces Corporate Governance Enhancements.
    • GOGO set to Join S&P SmallCap 600.
    • Goosehead Insurance (GSHD) COO Michael Colby to take leave of absence for health reasons.
    • MetLife (MET) Announces Leadership Changes.
    • PS Business Parks (PSB) appoints Stephen W. Wilson as CEO, effective immediately.
  • Buyback Announcements:
    • SMART Global (SGH) beats by $0.15, beats on revs; guides MayQ EPS in-line, revs in-line; authorizes $75 million for share repurchases.
  • Stock Splits: None of note.
  • Dividends Announcements: None of note.

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

S&P 500 -44 , Dow Jones -238 , NASDAQ -233 , and Russell 2000 -19 .  Europe lower and Asian markets mostly lower ex Shanghai.  VIX Futures are at 23.90 from 21.31 from yesterday morning. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures higher with Natural Gas higher. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury sees yields at 2.631% from 2.465%. Bitcoin is at $44,916.30 from $46,610 Tuesday morning higher by 1.74% this morning from Monday trading. As of 8:09 a.m. EDT.

Tuesday’s Action – 04/05/22 Close:  

  • Daily Positive Sectors: Utilities of note.
  • Daily Negative Sectors: Consumer Cyclical, Technology, Basic Materials, Communication Services, Industrials, Energy, Financial 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.

Treasury yields jumped after Federal Reserve Governor Brainard spoke about continue tightening monetary policy.  Markets pulled back led by Tech stocks.  Nasdaq was down 2.26%.  Updated 04/05/22 close.

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

  • Wednesday After the Close: LEVI, RGP, CXM of note.
  • Thursday Before the Open: STZ, CAG, LW, ANGO, APOG of note.

Earnings of Note This Morning:

  • Beats: GBX +0.19, TLRY +0.17, SMPL +0.09, RPM +0.08.
  • Flat: SCHN.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: QUOT, RPM of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart: Updated through 04/05/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ARRY +12%, GOGO +11%, ZYME +5%, IOVA +4%, AFCG +4%.
  • Gap Down: JBLU -4%, ULCC -4%.

Insider Action: No stock sees Insider buying with dumb short selling. JELD sees Insider buying with smart short sellers. 04/04/22 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: TWTR TLRY SAVE OXY (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Futures slide on rate jitters and upcoming FOMC minutes. (Reuters)
  • Mortgage applications drop 40% year over year on rising rates. (CNBC)
  • BMW plants in Shenyang, China have been shut for two weeks. (Bloomberg)
  • Chairman of the Joint Chiefs of Staff General Mark Milley thinks Putin’s War will last years. (CBS News)
  • Senator Joe Manchin (D-WV) notes will not push for electronic vehicle usage that the Biden Administration wants to move forward on. (Washington Examiner)
  • Bank of America (BAC) to return workers to the office on June 1. (Bloomberg)
  • Former Federal Reserve New York President William Dudley says for inflation to fall stocks and bonds need to fall more. (Bloomberg)
  • Robinhood Snacks looks at General Motors (GM) and Honda (HMC) working on a sub $30k electric car. Amazon (AMZN) enters space race for satellite internet worldwide.

Moving Average Update:

  • Score improves to  76% from 60%.  Updated 04/05/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 10:15 a.m. EDT
    • The President addresses thousands of national, state and local building trades leaders from across the country at the North America’s Building Trades Unions Legislative Conference, 12:45 p.m. EDT
    • Press Briefing by Press Secretary Jen Psaki, 2:30 p.m. EDT
    • The President signs into law H.R. 3076, the “Postal Service Reform Act of 2022,” 4:15 p.m. EDT

Economic: 

  • MBA Mortgage Applications released at 7:00 a.m. EDT and fell -6.3% week over week.
  • EIA Petroleum Report 10:30 a.m. EDT
  • The Latest FOMC Minutes are due out at 2:00 p.m. EDT.

Federal Reserve Speakers:

  • Federal Reserve Philadelphia President Patrick Harker 9:30 a.m. EDT

M&A Activity:

  • Afya Limited (AFYA) Announces the Acquisition of CardioPapers for $35 million cash.
  • Dave & Buster’s (PLAY) Announces Acquisition of Main Event for $835 Million; Chris Morris to become CEO of Combined Entity Upon Closing. (MarketWatch)
  • The Joint Corp. (JYNT) Acquires Northern California Regional Developer Territory.
  • Rexford Industrial Realty (REXR) acquires four properties for $83 million within prime infill Southern California submarkets.
  • Tufin (TUFN) Enters Into Definitive Agreement to be Acquired by Turn/River Capital in a $570 million Transaction.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Alliance Global Partners Virtual Energy Conference 2022
    • BMO Biopharma Spotlight Series: Inflammation & Immunology 2022
    • BTIG Global Cannabis Conference (04/06/22-04/07/22)
    • Goldman Sachs & TWSE Virtual Taiwan Corporate Day
    • JP Morgan Retail Round Up (04/06/22-04/07/22)
    • Wells Fargo Software Symposium (04/06/22-04/07/22)
      • Previously Announced  Conferences:
        • Atlassian TEAM 22 User Conference
        • Bradesco BBI 8th Brazil Investment Forum
        • B. Riley & Co. Fortress Biotech R&D Summit (04/05/22-04/06/22)
        • HSBC West Coast Financials Conference 2022 (04/04/22-04/08/22)
        • JP Morgan 11th Annual Napa Valley Biotech Forum 2022 (04/05/22-04/06/22)
        • Lytham Partners Spring Investor Conference 2022 (04/04/22-04/07/22)
        • Scotiabank CAPP Energy Symposium
  • Company Meetings: SLB.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: CSTM, GDYN.
  • Update: JBLU.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • Bitcoin 2022 Conference (04/06/22-04/09/22)
    • 3rd Annual Dermatology Drug Development Summit Europe 2022 (04/06/22-04/07/22)
    • 35th Symposium on Advanced Wound Care (SAWC) 2022 (04/06/22-04/10/22)
    • Moscow Exchange Forum 2022
    • National Kidney Foundation Spring Clinical Meetings 2022 (04/06/22-04/10/22)
        • Previously Posted and Ongoing Conferences:
          • American Burn Association (ABA) Annual Meeting 2022 (04/05/22-04/08/22)
          • ECRM Supplier Diversity Week 2022 (04/05/22-04/08/22)
          • Mines and Money (online) 2022 (04/05/22-04/07/22)
          • Sea Air Space 2022 (04/04/22-04/06/22)
          • American Academy of Neurology AAN 74th Annual Meeting 2022 (04/02/22-04/07/22)
          • 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:

      

Tuesday’s Upgrades and Downgrades: