CAPIS Morning Note – 04/25/22: Stocks Continue To Sell Off From Friday Lows, Covid Continues To Spread In China

Overnight Summary: The S&P 500 closed Friday  at 4271.78 from 4293.66 on Thursday down -2.77%. Futures traded lower most of the night. The overnight high of 4267 was hit at 7:35 p.m. EDT. The low was hit at 4,219 at 4:55 a.m. EDT, a range of 48 points high to low. At 7:20 a.m. EDT…

Overnight Summary: The S&P 500 closed Friday  at 4271.78 from 4293.66 on Thursday down -2.77%. Futures traded lower most of the night. The overnight high of 4267 was hit at 7:35 p.m. EDT. The low was hit at 4,219 at 4:55 a.m. EDT, a range of 48 points high to low. At 7:20 a.m. EDT the current price is 4229.75 which is -0.89% and -38.

Breaking News: The Peoples Bank of China is cutting foreign exchange reserve requirements by 1%. (Market Watch)

Earnings Out After The Close:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

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:
    • BSFC: Filed Form S-3.. 4,833,333 Shares of Common Stock.
    • CELZ: Filed Form S-1.. Common stock and warrants.
    • KZIA: Filed Form 424B5.. Up to $35,000,000 American Depositary Shares representing Ordinary Shares.
    • LIFE: Filed Form 424B5.. Up to $65,000,000 Common Stock.
    • REED: Filed Form S-3.. 27,891,860 Shares of Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • LLAP: Filed Form S-1.. Up to 116,916,188 Shares of Common Stock offering by selling shareholders.
    • NVCN: Filed Form F-3.. Up to 15,674,184 Common Shares Offered by the Selling Shareholder.
    • RDW: Filed Form S-1.. 9,127,751 Shares of Common Stock offering by selling shareholder.
    • WBD: Filed Form S-3ASR.. 198,175,592 Shares Series A Common Stock Offered by the Selling Stockholders.
    • XFOR: Filed Form S-3.. 1,666,666 Shares Common Stock Offered by the Selling Stockholder.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • AVY: Filed Form S-3ASR.. Mixed Shelf Offering.
    • GMGI: Filed Form S-3.. $300,000,000 Mixed Security Shelf.
    • ILPT: Filed Form S-3ASR.. Mixed Shelf.
    • WBD: files mixed securities shelf offering.
    • PVBC: files for $100 million mixed securities shelf offering.
  • 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 and Over the Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: CASA 25%, UAL 15%, CAR 13%, HCSG 13%, ATEN 11%, IBM 10%, KMB 10%, TCDA 10%, CHEF 10%, RFP 10%, PLYA 10%, ABM 9%, MTB 9%, RLI 9%, AAON 9%, MLI 8%, SIVB 8%.
    • Trading Down: RUBY -31%, CDXS -26%, NKTR -25%, SIEN -25%, CENX -24%, BTU -23%, AA -23%, TELL -20%, NLS -20%, AVAV -20%, OMER -20%, NVAX -20%, ESPR -19%, ALLK -19%.
  • News Items After the Close:
    • Broadcom (AVGO) is Under Antitrust Scrutiny from the FTC. (The Information)
    • Shanghai Covid Cases Bounce Back as Strict Lockdown Persists. (Bloomberg)
    • Maxar (MAXR) Awarded $202 million in U.S. Government Mission Support Contracts.
    • Russian/Ukraine News:
      • Russian President Putin abandons hopes of Ukraine deal and shifts to land-grab strategy. (FT)
      • An adviser to Ukraine’s presidential office says Russian forces are attacking a steel plant that is the last defense stronghold of Ukrainian forces in the strategic port city of Mariupol.
  • News Items Over the Weekend:
    • The Week in Business: Streaming Hits a Rough Patch.  (NYT)
    • French far-right leader Marine Le Pen concedes defeat in presidential runoff, hands victory to President Emmanuel Macron. (AP)
    • Former U.S. Senator Orrin Hatch (R- UT) passed away over the weekend. (CNBC)
    • Cathie Wood’s Flagship Fund (ARKK) Is Down 45% This Year. Money Is Still Flowing In. (WSJ)
    • Japanese Yen’s (FXY) Drop Raises Potential for Broader Market Trouble. (WSJ)
    • Foxconn Suspends Production At Two Factories In Eastern City Of Kunshan, Putting Apple’s (AAPL) China Supply Chain On Edge. (SCMP)
    • Barron’s:
      • Positive View: UAA, MSFT, C, OUT, XOM, RTX, TMUS, NVDA, TSM, AVGO, ON, GOOG, AAPL, CAT, CVS, FITB, HPQ, MRK, JPM.
      • Cautious View: FB, NFLX, DIS.
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Accel Entertainment (ACEL) announces that Mathew Ellis has been named Chief Financial Officer of Accel, effective May 1, 2022.
    • Allarity Therapeutics (ALLR) Receives Nasdaq Notification of Non-Compliance with Listing Rule.
    • BYSI CFO resigns.
    • Cian PLC (CIAN) announced that Mr. Dmitriy Grigoriev, the Chief Product Officer will assume the position of the CEO effective May 30.
    • Fang (SFUN) Receives NYSE’s Grant of Extension Regarding Delayed Filing of 2020 Form 20-F and 2021 Semi-Annual Financial Information.
    • Genius Group (GNS) appoints Brad Warkins as Chief Operating Officer of the Company, effective April 25, 2022.
    • ION (IO) Receives Non-compliance Notice from NYSE Regarding 10-K Filing Delinquency.
    • Itiquira Acquisition Corp. (ITQ) Receives Notification of Deficiency from Nasdaq Related to Delayed Annual Report on Form 10-K.
    • MEDIROM Healthcare Technologies Inc. (MRM) Regains Compliance with Nasdaq Listing Standard.
    • Puhui Wealth Investment Management Co., Ltd. (PHCF) Announces Receipt of Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • SharpLink Gaming (SBET) Announces Receipt of Notice of Deficiency with Nasdaq Continued Listing Requirements.
    • Smart Power Corp. (CREG) Receives Notice of Filing Delinquency From NASDAQ.
    • Staffing 360 Solutions (STAF) Receives Additional Nasdaq Staff Determination Letter of Delinquency.
    • WW announces plan eliminates COO position; current COO Nicholas Hotchkin to depart on April 22.
  • Buyback Announcements:
    • CANG $50 million share repurchase program.
  • Stock Splits:
    • TBLT 1 for 150 reverse split will be effective on Monday.
  • Dividends Announcements:
    • Cango (CANG) announced the declaration of a special cash dividend of $0.50 per ordinary share.
    • Community Bank (CBU) raises dividend 2.4%.
    • Kimbell Royalty Partners (KRP) raises cash distribution payment to $0.47 per common unit from $0.37 per common unit.
    • Otis Worldwide (OTIS) increases its quarterly dividend 20.8% to $0.29 per share.
    • Portland Gen Elec (POR) approved an increase in the annual dividend of 5.2%, or $0.09 per share, declaring a quarterly common stock dividend of $0.4525 per share.

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

S&P 500 -33, Dow Jones -209, NASDAQ -114,  and Russell 2000 -20.  Europe lower and Asian lower.  VIX Futures are at 28.85 from 22.65 Friday morning and the VIX closed at 29.97 from 22.68 on Thursday. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures lower with Natural Gas lower. $ is higher vs Euro, lower vs Pound and lower vs Yen. US 10 year Treasury sees yields at 2.831% from 2.928%. Bitcoin is at $38,919.14 from $40,536.19 on Friday morning lower by -2.21% this morning. As of 8:04 a.m. EDT.

Friday’s Action – 04/22/22 Close:  

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: ALL sectors of note.
  • One Month Winners: Real Estate, Consumer Defensive, and Utilities of note.
  • Three Month Winners: Energy, Utilities and Basic Materials of note.
  • Six Month Winners: Energy, Consumer Defensive, Utilities of note.
  • Twelve Month Winners: Energy, Utilities, and Real Estate of note.
  • Year to Date Winners: Energy, Utilities, and  Basic Materials of note.

Jitters about rates and slowing corporate earnings accelerated the index losses.  The INDU lost 2.82%.  UNG was down 6.20%.    Updated 04/22/22 close.

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

  • Monday After the Close: PEP, CDNS, SBAC, ARE, AMP, BRO, WRB, PKG, CCK, UHS, WHR, ZION, ACC, CR, AXTA, MEDP, CADE, HXL, SSD, PCH, CATY, IBTX, CALX, ROIC, OI, HTLF, TBI, HSTM, LXFR of note.
  • Tuesday Before the Open: NVS, UPS, RTX, GE, MMM, SHW, UBS, ADM, ECL, CNC, ROP, VLO, PCAR, GLW, DHI, NTRS, ENTG, NVR, AVY, ARCC, HUBB, ALLE, ST, GPK, PII, BPOP, ONB, AWI, JBLU, NSP, FELE, SITC, PPBI, SSTK, ARCH, FBC, FCF, SBSI, AAN of note.

Earnings of Note This Morning:

  • Beats: BOH +0.36, CBU +0.36, LII +0.28, DORM +0.08, KO +0.06, OTIS +0.03.
  • Flat: PHG.
  • Misses: ATVI (0.10).
  • Still to Report: LKFN.

Guidance:

  • Positive Guidance: RHHBY of note.
  • Negative Guidance: HCA, OTIS of note.

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

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ERYP +60%, CANG +21%.
  • Gap Down: VALN -14%, NXE -7%, NKTR -5%, RDW -4%.

Insider Action: No stock sees Insider buying with dumb short selling.  No stock sees Insider buying with smart short sellers. 04/22/22 close.

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

  • Five Things You Need to Know to Star Your Day. (Bloomberg)
  • Chinese markets fall on broader lockdown concerns. (WSJ)
  • Covid-19 is spreading in Beijing undetected. (CNBC)
  • ECB members want a fast end to bond purchases and starting rate hikes in July. (Reuters)
  • Dow and other equity indexes continue sell off from Thursday and Friday. (CNBC)
  • S&P 500 could join other indexes in bear market territory. (CNBC)
  • U.S. Secretary of State Anthony Blinken and Defense Secretary Lloyd Austin visited Kyiv and announce want Russia weakened unable to rebuild weapons lost. (NYT)
  • Twitter (TWTR) met with Elon Musk on Sunday and there may be a deal by end of this week. (WSJ)
  • Credit Suisse (CS) may see changes in its management team. (Reuters)
  • Hyatt (H) ends relationship with Russian business owners. (FT)

Moving Average Update:

  • Score flat lines at 0% from 20%.  Updated 04/22/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President departs New Castle, Delaware en route Washington, DC, 9:55 a.m. EDT
    • The President arrives in Washington, DC, 10:50 a.m. EDT
    • The President receives the President’s Daily Brief, 11:30 a.m. EDT
    • The President welcomes the Tampa Bay Lightning to the White House to celebrate their 2020 and 2021 Stanley Cup championships, 2:00 p.m. EDT
    • Press Briefing by Press Secretary Jen Psaki, 3:00 p.m. EDT

Economic: 

  • Chicago Fed Activity Index 8:30 a.m. EDT
  • Dallas Fed Mfg Survey 10:30 a.m. EDT

Federal Reserve Speakers:

  • None of note.

M&A Activity:

  • Alberton Acquisition Corporation (ALAC) Terminates the Merger Agreement.
  • Owens Corning (OC) signs an agreement with JR Plastics Corporation to acquire WearDeck.
  • Tidewater (TDW) Announces Completion of Swire Pacific Offshore Acquisition.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note.
      • Previously Announced  Conferences:
        • Wells Fargo Sponsored Meetings at the 2022 NAB Forum (04/24/22-04/26/22)
  • Company Meetings: HON, ING.
  • Fireside Chat: HPE w/ Stifel.
  • Investor/Analyst Day/Calls: NKTR, SEEL.
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • AUVSI Xponential Unmanned Systems 2022 (04/25/22-04/28/22)
    • Commercial Real Estate Symposium 2022 (04/25/22-04/26/22)
    • Chardan 6th Annual Genetic Medicines Manufacturing Summit 2022 (04/25/22-04/26/22)
    • CinemaCon Las Vegas 2022 (04/25/22-04/28/22)
    • Supply Chain & Logistics for Cell Therapies Summit (04/25/22-04/27/22)
      • Previously Posted and Ongoing Conferences:
        • National Association of Broadcasters NAB Show 2022 (04/23/22-04/27/22)
        • European Congress of Clinical Microbiology and Infectious Disease (ECCMID) 2022 (04/23/22-04/26/22)
        • Surgical Infection Society (SIS) 2022 Annual Meeting (04/23/22-04/26/22)
        • Center for International Blood & Marrow Transplant Research (CIBMTR) (04/23/22-04/26/22)
        • American Society of Cataract and Refractive Surgery(ASCRS) Annual Meeting 2022 (04/21/22-04/26/22)
        • Pediatric Academic Societies (PAS) Annual Meeting 2022 (04/21/22-04/25/22)

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:

      

Friday’s Upgrades and Downgrades: