CAPIS Morning Note – 05/03/22: Stocks Reverse Overnight Gains, Now Lower For The Morning. Dollar Lower As Well.

Overnight Summary: The S&P 500 closed Monday at 4155.38 from 4131.93 on Friday up 0.57%.  Futures have traded lower overnight but are off their highs. The overnight high of 4176 was hit at 10:55 a.m. EDT. The low was hit at 4,129 at 6:55 a.m. EDT, a range of 47 points high to low which…

Overnight Summary: The S&P 500 closed Monday at 4155.38 from 4131.93 on Friday up 0.57%.  Futures have traded lower overnight but are off their highs. The overnight high of 4176 was hit at 10:55 a.m. EDT. The low was hit at 4,129 at 6:55 a.m. EDT, a range of 47 points high to low which has been a typical range of late. At 7:25 a.m. EDT the current price is 4136 which is -0.41% and -17 points.

Earnings Out After The Close:

  • Beats: CAR +6.45, CACC +1.79, VNOM +1.47, CC +0.55, OTTR +0.54, FANG +0.53, CLX +0.35, KMPR +0.35, CBT +0.27, CTRA +0.20, MPWR +0.19, CDLX +0.17, KFRC +0.17, FMC +0.17, NXPI +0.17, SANM +0.13, AMKR +0.12, DVN +0.12, NTB +0.11, LEG +0.10, LOGI +0.10, BXP +0.08, CHGG +0.08, EVER +0.08, AGNC +0.08, WMB +0.07, MGM +0.06, INST +0.05, OHI +0.04, HLIT +0.04, OUT +0.04, KMT +0.04, ZI +0.03, ANET +0.03, MED +0.02, VNO +0.02, PLOW +0.02, ORA +0.02, ADUS +0.01, BRX +0.01, EXPE +0.01, VRNS +0.01, MWA +0.01.
  • Flat: BIGC +0.00.
  • Misses: RMBS (0.97), JJSF (0.48), OGS (0.27), RHP (0.25), NE (0.20), WWD (0.16), CNO (0.15), FLS (0.14), SEDG (0.11), NTR (0.08), RIG (0.05), FRPT (0.03), QTWO (0.03), FN (0.02), MOS (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • NuScale Power Completes Merger with Spring Valley Acquisition Corp. (SV) to Create World’s First and Only Publicly Traded Provider of Transformational Small Modular Nuclear Reactor Technology.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • Constellation Brands (STZ) Prices Offering of Senior Notes.
  • Common Stock filings/Notes:
    • DBV Technologies (DBVT) Establishes an At-The-Market (ATM) Program on Nasdaq.
    • EPRT: Filed Form 424B5.. $500,000,000 Common Stock.
    • FRPT: Offering of Common Stock.. $350,000,000 of its common stock.. BAC, Jefferies and Truist bookmanagers .
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • HAYW: Secondary Offering of 22,500,000 Shares of Common Stock by Selling Stockholders and Repurchase of Common Stock.. GS, BAC and Wolfe Bookmanagers.
    • LMDX: Filed Form F-1.. 41,424,528 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • CECE: Filed Form S-3.. $150,000,000 Mixed Shelf.
    • FGBI: Filed Form S-3.. $50,000,000 Mixed Shelf.
    • SMIT: Filed Form S-3.. $100,000,000 Mixed Shelf.
    • WPC: Filed Form S-3ASR.. Mixed Shelf.
  • Convertible Offering & Notes Filed:
    • LMDX: $29,500,000 6.00% Convertible Senior Subordinated Notes due 2027.

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: ASTS +13%, HLIT +10%, CDLX +9%, CAR +7%, MPWR +7%, VNOM +7%, CC +5%, GNW +5%, LMDX +5%, MED +5%, OHI +5%, NTR +4%, VNO +4%, SANM +4%.
    • Trading Down: CHGG -31%, EVER -15%, HAYW -12%, VRNS -10%, FN -8%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: CHGG, CLX, DVN, CAR  (CNBC)
    • Citigroup Inc. (C) is in “active dialog” with potential buyers of its consumer and commercial banking operations in Russia, Chief Executive Officer Jane Fraser. (Bloomberg)
    • GlobalFoundries (GFS) announces $117 million chip supply agreement with US DoD.
    • Russian/Ukraine News:
      • Russia’s Putin signs decree on retaliatory economic measures in response to unfriendly actions of some foreign states. (Kremlin)
      • Russia President Putin bans financial deals with entities under Russia sanctions.
      • Italy’s Prime Minister Tells European Parliament There Is a Strong Risk That Rising Food Prices Due to the Ukrainian Crisis and Reduced Availability of Fertilizers Will Lead to Food Crises. (Reuters)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Biogen (BIIB) says it’s seeking new CEO. (CNBC)
    • China Natural Resources (CHNR) Receives Nasdaq Notification Regarding Minimum Bid Requirements.
    • Computer Programs and Systems (CPSI) announces retirement of CEO Boyd Douglas.
    • Shutterstock (SSTK) appointed Jonathan Oringer, current Executive Chairman of the Board and former CEO.
    • The Vita Coco Company (COCO) Announces co-CEO Mike Kirban to assume title of Executive Chairman.
  • Buyback Announcements:
    • Atkore International (ATKR) Buyback authorization doubled to $800 million.
    • Easterly Government Properties (DEA) has approved a share repurchase plan to repurchase up to 4,538,994 shares of its common stock, or ~5% of its outstanding shares.
    • Devon Energy (DVN) Announces Increases Share-Repurchase Authorization to $2.0 Billion.
    • Genworth Financial (GNW) announces $350 million share repurchase authorization.
    • Granite (GVA) Announces $50 Million Accelerated Share Repurchase Program.
    • Hayward Holdings (HAYW) Announces Repurchase of Common Stock.
    • LP Building Solutions (LPX) Announces an Additional $600 Million Share Repurchase Authorization
    • RBB Bancorp (RBB) Renews Buyback.
    • Sanmina’s (SANM) Board of Directors has authorized the repurchase of up to an additional $200 million of Sanmina’s common stock.
  • Stock Splits: None of note.
  • Dividends Announcements:
    • Bank of N.T. Butterfield & Son (NTB) The Board again declared a quarterly dividend of $0.44 per common share.
    • Baxter (BAX) increases quarterly cash dividend $0.01 to $0.29 per share.
    • CVR Energy (CVI) announces a Cash Dividend of 40 cents.
    • Devon Energy (DVN) Announces First-Quarter Dividend of $1.27 per share.
    • Ellington Residential Mtg (EARN) declares monthly common dividend of $0.08 per share, down $0.02.
    • Hercules Capital (HTGC) Announces Supplemental Cash Distribution of $0.15 per Share for the First Quarter of 2022.
    • Kennametal (KMT) announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share.
    • Main Street Capital (MAIN) declares a supplemental dividend of $0.075 per share.
    • MSA Safety (MSA) increases quarterly dividend $0.02 to $0.46 per share.
    • Otter Tail Corporation (OTTR) Board of Directors Declares Quarterly Dividend of $0.4125 per Share.
    • OUTFRONT Media (OUT) announced on May 2, 2022, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share.
    • Watts Water Tech. (WTS) increases quarterly dividend $0.04 to $0.30 per share.

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

S&P 500 -5, Dow Jones -42, NASDAQ -10,  and Russell 2000 -4.  Europe lower ex France and Asian higher ex Nikkei.  VIX Futures are at 31.30 from 31.60 yesterday morning and the VIX closed at 32.34 from 33.85  on Monday. Gold lower with Silver and Copper higher. WTI Crude Oil and Brent Oil Futures lower with Natural Gas higher. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10 year Treasury sees yields at 2.971% from 2.918%. Bitcoin is at $38,456 from $38704 Monday morning and is lower by -0.01% from Monday. As of 8:09 a.m. EDT.

Sector Action – 05/02/22 Close:  

  • Daily Positive Sectors: Communication Services, Technology, Consumer Cyclical, Energy of note.
  • Daily Negative Sectors: Real Estate, Consumer Defensive, Utilities of note.
  • One Month Winners: Consumer Defensive 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 Consumer Defensive of note.
  • Year to Date Winners: Energy of note.

SP touched a new intraday low for the year but climbed from that as US Treasury notes hit 3% for the first time in more than three years.  The last hour of trading was pivotal as stocks climbed during that period. Updated 05/02/22 close.

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

  • Tuesday After the Close: AMD, ABNB, SBUX, PSA, AIG, PRU, WCN, VRSK, OKE, EXR, EIX, PKI, AKAM, SWKS, PEAK, PAYC, YUMC, CZR, JKHY, LYFT, SCI, AIZ, PEN, MASI, STAG, VOYA, INSP, LSCC, RNR, SRC, LFUS, WK, DEI, THG, MNDT, MSTR, AYX, BTG, HRB, WTS, CRUS, LTHM, CRK, RDN, RVLV, MATX, SPT, ONTO, REZI, MRCY, VIAV, OMI, HLF, BLKB, PTCT, ATRC, EPAY, WERN, IOSP, KAI, GCP, CWH, KAR, FLGT, DOOR, TSLX, PUMP, INFN, IAG, PRO, NVTA, ENVA, CNDT, HURN, VVNT, DHT, VREX, DENN, WTI, DCPH, OSPN, MTW, BNFT, SPNE, EHTH of note.
  • Wednesday Before the Open: CVS, REGN, MAR, EMR, GOLD, IDXX, YUM, LNG, ABC, FTS, BIP, HZNP, CQP, VMC, CDW, TECH, GNRC, XYL, CRL, NI, BRKR, NBIX, BWA, PNW, UTHR, STWD, NYT, MUR, SITE, IONS, CLH, JHG, SPR, APG, LIVN, IS, PSN, SJI, GTES, ATI, ARVN, PCRX, AVA, FUN, WING, WEBR, EXPI, OTLY, THRM, BDC, ODP, EVOP, WOW, VCEL, NWN, SBGI, EAT, CRTO, GEL, AVNS, MFA, ROCK, FDP, DIN, AMRN, BHG, EDIT, ASTE, CSII, TUP, LL, of note.

Earnings of Note This Morning:

  • Beats: ATKR +1.67, WLK +0.93, DK +0.72, IT +0.61, LGIH +0.53, LPX +0.51, AGCO +0.48, WAT +0.46, CMI +0.40, GEO +0.26, SMG +0.23, LEA +0.23, EL +0.23, PEG +0.21, CIGI +0.21, MPC +0.21, ZBH +0.19, SEE +0.19, DD +0.15, BR +0.15, ZBRA +0.14, VSH +0.13, KKR +0.12, TRTN +0.12, HSIC +0.11, ESPR +0.11, CVLT +0.11, CTLT +0.10, TAP +0.10, BPMC +0.10, LDOS +0.08, BP +0.08, HLMN +0.08, PARA +0.08, CMS +0.08, MTOR +0.07, SABR +0.05, TRI +0.05, AME +0.05, PFE +0.05, HLT +0.05, J +0.04, SPNS +0.04, HWM +0.02, NRZ +0.02, QSR +0.02, MPLX +0.02, ETN +0.02, XHR +0.02, RDWR +0.01, FIS +0.01.
  • Flat: TEVA +0.00, ITT +0.00.
  • Misses: BIIB (0.74), ROK (0.66), MLM (0.22), INCY (0.14), AQUA (0.13), ETRN (0.09), SPGI (0.08), SAGE (0.07), HSC (0.05), ARNC (0.04), KYMR (0.04), DEA (0.02), PINC (0.02), CNP (0.01).
  • Still to Report: CNHI , EXPD , BEN , ITW , IPGP , NNN , SMP.

Guidance:

  • Positive Guidance: SANM, KFRC, MPWR, ANET, SEDG, HLIT, ZI, NXPI, NXGN, INST, CBT, MWA, BXP, NTR, OTTR, ATKR, ZBH, TRI, ARNC, BR, AGCO, CMI of note.
  • Negative Guidance: AMKR, CHGG, FLS, KMT, EVER, WWD, FN, ORA, DD, HLT, EL, PFE, AME, HSC, ROK, ZBRA of note.

Erlanger Research Advance/Decline Chart: Updated through 05/02/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ASTS +12%, CC +7%, STOK +6%, CAR +6%, MPWR +6%, AMRC +6%, NTR +6%, HLIT +5%, DVN +5%, MED +5%, GEO +5%, VNOM +5%, LMDX +5%, CACC +5%, CDLX +5%, BP +4%, SANM +4%.
  • Gap Down: CHGG -36%, EVER -15%, HAYW -15%, VRNS -11%, DBVT -6%, JJSF -4%, FN -4%, ORA -4%, LOGI -4%, DD -4%, FRPT -4%.

Insider Action: HCA, UMPQ, GM sees Insider buying with dumb short selling. No stock sees Insider buying with smart short sellers. 04/29/22 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: PARA LOGI CHGG HLT (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • 5 Things to Know Before the Stock Market Opens. (CNBC)
  • Chinese media report that Jack Ma the founder of Alibaba (BABA) has been detained by authorities. (FT)
  • European “Flash Crash” started by a Citicorp (C) Trader but was corrected within minutes. Caused $315 billion in losses at the low point. (Bloomberg)
  • Supreme Court set to overturn Roe v. Wade as opinion paper leaked. (Fox Business)
  • Democrats will try to eliminate the Senate filibuster with reversal of Roe v. Wade. (CNN)
  • SEC doubles crypto cops to fight digital fraud. (WSJ)
  • CNH Industrial (CNHI) workers strike. (WSJ)
  • Molson Coors (TAP) sees biggest sales growth in 10 years. (Market Watch)
  • Estee Lauder (EL) falls 9% as sale outlook lowered. (Market Watch)
  • Robinhood Snacks looks at the rebound in travel stocks but vacation vibes still not present.  Airbnb (ABNB) let’s employees work from home as talent fight continues.

Moving Average Update:

  • Score remains a 2nd day at 0%.  Updated 05/02/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President departs the White House en route Joint Base Andrews and Montgomery, Alabama, 10:30 a.m. EDT
    • The President arrives in Montgomery, Alabama, 12:55 p.m. EDT
    • The President visits a Lockheed Martin facility which manufactures weapon systems such as Javelin anti-tank missiles, 2:10 p.m. EDT
    • The President delivers remarks on the security assistance we are providing to Ukraine, 3:00 p.m. EDT
    • The President departs Montgomery, Alabama en route Joint Base Andrews, 5:15 p.m. EDT
    • The President arrives at the White House, 7:35 p.m. EDT

Economic: 

  • April ADP Employment Report is due out at 8:15 a.m. EDT and are expected to drop to 390,000 from 455,000.
  • April ISM Non-manufacturing Index is due out at 10:00 a.m. EDT and expected to rise to 58.7% from 55.5%.
  • Factory Orders 10:00 a.m. EDT
  • JOLTS 10:00 a.m. EDT
  • API Crude Oil Data 4:30 p.m. EDT

Federal Reserve Speakers:

  • The Federal Reserve Open Market Committee (FOMC) begins a two day meeting.

M&A Activity:

  • First American (FAF) Announces Completion of Acquisition of Mother Lode Holding Company and Its Operating Subsidiaries.
  • Free2move (STLA) Reinforces its Worldwide Leadership in Mobility Business by Acquiring Share Now.
  • Rayonier Advanced Materials (RYAM) sells shares of GreenFirst Forest Products for approx. $43.3 million.
  • RELX’s (RELX) LexisNexis acquires BehavioSec.
  • Truist (TFC) acquires mobile savings gamification pioneer Long Game.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Alliance Global Partners A.G.P. Spring Consumer Cannabis Conference 2022
    • BMO Global Reserve & Asset Managers Conference
    • Credit Suisse Mexico Investment Ideas Conference
    • Goldman Sachs 15th European Small and Mid Cap Symposium 2022 (05/03/22-05/06/22)
    • Oppenheimer 17th Annual Industrial Growth Conference 2022 (05/03/22-05/04/22)
    • Piper Spring Biotech Symposium
  • Previously Announced  Conferences:
    • Bloom Burton & Co. Healthcare Investor Conference 2022 (05/02/22-05/03/22) 
    • Gulf South Bank Conference 2022 (05/02/22-05/03/22) 
  • Company Meetings: ALLY, AXP, BAX, BMY, HII, EVRG, EW, MTW, OMX, XELA.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: BSFC, NXGN, PGR, PSTV, QSR, RVPH.
  • Update: None of note.
  • R&D Day: Panbela Therapeutics Inc (PBLA) Virtual R&D Day 2022.
  • Company Event:
    • Dell Technologies (DELL) World 2022 (05/02/22-05/05/22)
    • Reviva Pharmaceuticals (RVPH) Key Opinion Leader Webinar on Brilaroxazine for Schizophrenia and Other Neuropsychiatric Disorders.
  • Industry Meetings:
    • Planet Microcap Showcase 2022 (05/03/22-05/05/22)
    • SMi 22nd Annual Pain Therapeutics Conference 2022 (05/03/22-05/05/22)
      • Previously Posted and Ongoing Conferences:
        • Blue Cross Blue Shield BCBS National Summit 2022 (05/02/22-05/05/22)
        • Offshore Technology Conference (OTC) 2022 (05/02/22-05/05/22)
        • Geological Society of Nevada- GSN Symposium 2022 Vision for Discovery (05/02/22-05/05/22)
        • ISPA Conference
        • The Association for Research in Vision and Ophthalmology ARVO 2022 (05/01/22-05/04/22)
        • Milken Institute Global Conference 2022 (05/01/22-05/04/22)

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:

Previous Day’s Upgrades and Downgrades: