CAPIS Morning Note – 05/03/23: All Eyes On The Federal Reserve Announcement and Press Conference Today.

Overnight Summary: The S&P 500 closed Tuesday at 4119.68 lower by -1.16% from Monday at 4167.87 lower by -0.04% . The overnight high of 4147.75 was hit at 3:20 a.m. EDT. The low was hit at 4131.75 at 6:05 p.m. EDT, a range of ~16 points high to low.  At 7:15 a.m. EDT, the current…

Overnight Summary: The S&P 500 closed Tuesday at 4119.68 lower by -1.16% from Monday at 4167.87 lower by -0.04% . The overnight high of 4147.75 was hit at 3:20 a.m. EDT. The low was hit at 4131.75 at 6:05 p.m. EDT, a range of ~16 points high to low.  At 7:15 a.m. EDT, the current price was 4144.50 which is 0.19% and 7.75 points. The overnight session was again amazingly narrow. Three sessions in a row. As we move into mid-May we will use a 10-day moving average of overnight ranges.

Earnings Out After The Close

  • Beats: AIZ +1.17, ARWR +1.02, RNR +0.81, LFUS +0.78, MUSA +0.63, UIS +0.51, OMCL +0.32, MTW +0.31, CLX +0.29, YUMC +0.25, KAI +0.24, UFPI +0.23, UNM +0.22, LTHM +0.22, ATGE +0.22, CHK +0.21, HURN +0.21, F +0.19, CWH +0.17, INSP +0.17, PEN +0.12, ATRC +0.12, EIX +0.11, PAYC +0.10, WK +0.10, BFAM +0.10, LUMN +0.09, HMN +0.09, SBUX +0.09, WU +0.09, VREX +0.08, SPT +0.07, JRVR +0.06, NMIH +0.06, EXPI +0.06, FRSH +0.05, PRO +0.05, OKE +0.05, LOPE +0.04, OHI +0.04, BAND +0.04, AXTA +0.04, AMD +0.04, MRCY +0.03, LUNG +0.03, WELL +0.03, XHR +0.03, KAR +0.03, ANDE +0.02, APAM +0.02, JKHY +0.02, LMAT +0.02, EEFT +0.02, PACB +0.02, PECO +0.02, NRDS +0.02, ET +0.01, LSI +0.01 of note.
  • Flat: CCCS +0.00, DENN +0.00 of note.
  • Misses: CZR (0.69), THG (0.27), PRU (0.26), HLF (0.16), MTCH (0.14), SRPT (0.14), ASH (0.11), SMCI (0.08), SPG (0.07), EXR (0.05), MLNK (0.03), FNV (0.03), AFG (0.02), VOYA (0.02), CRK (0.01), DEI (0.01), MCW (0.01), VIAV (0.01) 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: None of note.
  • New SPACs launched/News:
    • Regentis Biomaterials Ltd to Become Publicly Listed on Nasdaq via Business Combination with OceanTech Acquisitions I Corp. (OTECU).
  • Secondaries Priced:
    • MORF: Prices offering of 5,333,334 shares of common stock at $45.00 per share.
  • Notes Priced of note:
    • THC: Announces Pricing of its $1.350 Billion Private Offering of Senior Secured Notes.
    • DXCM: Prices Upsized Offering of $1.1 Billion of 0.375% Convertible Senior Notes Due 2028.
  • Common Stock filings/Notes:
    • AULT: Announces Change in Exchange Ratio in Pending Exchange Offer to 50 Shares of Common Stock for One Share of Series H Preferred Stock (an increase in consideration to $0.20 per share of Common Stock).
    • GFAI: Proposed Underwritten Public Offering of Ordinary Shares. (Benchmark Bookmanager)
    • LAZR: Filed Form 424B3.. $75,000,000 Class A Common Stock.
    • MORF: Announces Proposed Public Offering.
    • NDRA: Closing of Public Offering and Full Exercise of Underwriter’s Option to Purchase Additional Securities.
    • RNLX: Filed Form F-3.. 18,402,287 Ordinary Shares 3,379,237 Ordinary Shares 7,511,525 American Depositary Shares Representing 15,023,050 Ordinary Shares.
  • Direct Offering:
    • GDC: Downsize of its Registered Direct Offering Priced At-the-Market Under Nasdaq Rules and Private Placement to $9.55 Million.
  • Selling Shareholders of note:
    • COCO: See Mixed Shelf.
    • NRDS: See Mixed Shelf.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ASTR: Filed Form S-3.. $100 Million Mixed Shelf.
    • COCO: Files for $200 million mixed securities shelf offering; ALSO files for 26,585,104 share common stock offering by selling shareholders.
    • NRDS: Files mixed securities shelf offering; ALSO files for Class A and B common stock offering by selling shareholders.
  • Debt/Credit Filing and Notes:
    • ABT: Filed Form S-3ASR.. Debt Shelf.
    • KAR: Offer to Purchase Certain of Its Outstanding 5.125% Senior Notes Due 2025
    • SPWR: Secures $550M Loan Purchase Commitment From KKR
  • 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: SMCI +8%, LTHM +8%, ARWR +6%, LUMN +6%, CWH +5%, LFUS +5%, PRO +4%, ASH +4%, BAND +4% of note.
    • Trading Down: SPT -14%, ANDE -13%, MRCY -9%, AMD -6%, SBUX -5%, HLF -4% of note.
  • News After The Close:   
    • Stocks making the biggest moves after hours: F, SBUX, CLX, AMD, YUMC, MTCH, CZR (CNBC)
    • Nordstrom (JWN) Is Closing All Of Its Stores In Downtown San Francisco. (MarketWatch)
    • Starbucks (SBUX) earnings beat as China reverses same-store sales declines. (CNBC)
    • Ford (F) Posts $1.8 Billion Profit in First Quarter. (WSJ)
    • Short sellers scoring on regional bank tumult emphasizing how many regionals went wild with commercial real estate lending considered increasingly suspect. No idea how pervasive commercial lending is in this sector but banking is a confidence game & confidence is waning. (GASPARINO FBN)
    • Carl Icahn’s Wealth Plunges $10 Billion on Hindenburg Short-Seller Report. (Bloomberg)
    • Unity Software (U) announced the reduction of approximately 600 employee roles. (WSJ)
    • Lockheed Martin (LMT) awarded a $1.44 billion US Navy contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Avista (AVA) names Kevin Christie as CFO.
    • Azure Power (AZRE) appoints Sunil Gupta as CEO and Group CFO.
    • Burford Capital (BUR) to delay 20-F filing.
    • Co. Brasileira (CBD) to delay 20-F filing.
    • Emerson (EMR) Appoints Mike Baughman as Chief Financial Officer.
    • Faraday Future (FFIE) Confirms Receipt of an Additional 180-day Extension From NASDAQ to Meet NASDAQ Minimum Bid Price Requirement.
    • Firsthand Technology Value Fund (SVVC) Receives Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • Galapagos NV (GLPG) announces the departure of Bart Filius, President, COO, and CFO.
    • GOL Linhas Aereas Inteligentes S.A. (GOL) CFO Richard Freeman Lark Jr. has resigned from his positions.
    • Guess (GES) names Markus Neubrand its new CFO (MarketWatch)
    • Herbalife (HLF) Announces Leadership Succession Plan.
    • Leidos (LDOS) announces that Thomas Bell began his tenure as CEO.
    • Morgan Stanley (MS) discloses SEC investigation update in 10Q filing.
    • Predictive Oncology (POAI) Appoints Pharma, Biotech and Digital Health Veteran Veena Rao, PhD, MBA, to its Board of Directors.
    • Stanley Black & Decker (SWK) appoints Chris Nelson as COO.
    • TeraWulf (WULF) files to delay its 10-K; additional time is needed for the completion of the filing.
    • Viracta Therapeutics (VIRX) Announces Departure of Chief Medical Officer.
    • Waldencast plc (WALD) to delay 20-F filing.
  • Buyback Announcements or News:
    • Belden (BDC) Authorized additional $300 mln for repurchases.
    • HHS Announces Share Repurchase Program.
    • Murphy USA Inc. (MUSA) Announces $1.5 Billion Repurchase Program.
    • MYR Group Inc. (MYRG) Announces New $75 Million Share Repurchase Program.
    • NerdWallet (NRDS) approved a share repurchase plan with $20 million authorization.
    • SkyWest (SKYW) authorized to repurchase up to $250 million of the Company’s common stock.
    • Stellantis (STLA) €1.5 billion stock buyback initiated, first €500 million tranche expected to be completed in June 2023.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: 
    • Delek US Holdings (DK) increases quarterly dividend $0.01 to $0.23 per share.
    • Expeditors Intl (EXPD) increases semi-annual cash dividend to $0.69 per share, up $0.02.
    • John B. Sanfilippo & Son, Inc. (JBSS) Declares $1.50 Per Share Special Dividend.
    • Paycom Software (PAYC) announces that its Board of Directors approves initiation of dividend.
    • Pepsi (PEP) raises dividend by 10%. (MarketWatch)
    • SPG: Raises Quarterly Dividend.
    • Watts Water Tech. (WTS) increases quarterly cash dividend 20% to $0.36 per share, a $0.06 bump.

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

S&P 500 +7, Dow Jones +18,  NASDAQ +35, and Russell 2000 +3. (as of 8:01 a.m. EDT).  Asia is lower ex the Nikkei while Europe is higher. VIX Futures are at 19.40 from 18.80 yesterday.  Gold higher with Silver and Copper lower. WTI Crude Oil and Brent Crude Oil lower with Natural Gas lower as well. US 10-year Treasury sees yields at 3.403% from 3.53% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $28,612 from $28,064 yesterday, lower by -0.55%.

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

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

U.S. stocks closed lower on Tuesday, but were well off the session’s lows, a day before the Federal Reserve could be poised to fire off its last interest rate hike of this cycle. The Dow Jones Industrial Average shed about 367 points, or 1.1%, ending near 33,684. The S&P 500 index shed 1.2%, while the Nasdaq Composite Index closed 1.1% lower. Regional bank stocks were hammered on Tuesday, a day after JPMorgan Chase & Co. won an auction for the assets of the failed First Republic Bank. The SPDR S&P Regional Bank ETF KRE, closed down 6.4% on Tuesday.  (WSJ – edited by QPI)


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

  • Wednesday After the Close:

  • Thursday Before the Open:

Earnings of Note This Morning:

  • Beats: SBGI +3.18, BLDR +1.40, INGR +0.79, PSX +0.65, ASTE +0.38, SMG +0.31, FTS +0.30, LPX +0.29, DIN +0.27, MUR +0.26, MBUU +0.25, CRTO +0.22, TKR +0.20, SR +0.19, LIND +0.19, HSC +0.18, CLH +0.17, UTHR +0.15, ROCK +0.15, BDC +0.14, TPB +0.13, GNRC +0.13, CVS +0.11, EMR +0.10, VRSK +0.10, PERI +0.10, DFIN +0.09, JHG +0.08, KHC +0.08, AVNT +0.08, TT +0.07, MTRN +0.06, XRAY +0.05, TRMB +0.05, EAT +0.04, RXO +0.04, LIVN +0.04, EXC +0.04, COCO +0.03, GOLD +0.02, WWE +0.02, NI +0.02, DRVN +0.02, BG +0.02, HBI +0.01, BLKB +0.01, GRMN +0.01, CHEF +0.01, GOGO +0.01, BCRX +0.01 of note.
  • Flat: DCPH +0.00, RDWR +0.00, LXP +0.00, SPNS +0.00, PSN +0.00, TECH +0.00, BIP +0.00, CDW +0.00 of note.
  • Misses: SPR (1.43), NBIX (1.25), AVA (0.43), HZNP (0.37), PUMP (0.23), ALE (0.17), IONS (0.11), ADNT (0.11), SWTX (0.08), BRY (0.07), YUM (0.07), FDP (0.05), EL (0.04), CNDT (0.04), SITE (0.02), CERE (0.01), SHC (0.01), TTMI (0.01), AVNS (0.01), AVDX (0.01) of note.
  • Still to Report: ALGT , DBRG , GFF , MIR , PCRX , SMP , SPWR , WING of note.



Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: FRSH +9%, LTHM +9%, SMCI +8%, UIS +8%, MYRG +6%, ARWR +5%, LFUS +5%, PRO +4%, KAR +4%, BAND +4%, CCCS +4%, CWH +4% of note.
  • Gap Down: SPT -18%, MRCY -9%, ANDE -8%, AMD -7%, AMCR -6%, MORF -5%, SBUX -5%, UFPI -4% of note.

Insider ActionZION sees Insider buying with dumb short selling.  PTMN 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.

  • 5 things to know before the stock market opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg
  • Bloomberg Lead Story: What To Watch As Fed Readies To Pause With One Last Hike. (Bloomberg)
  • Bloomberg  Most Shared Story:  Carl Icahn’s Wealth Plunges $10 Billion on Hindenburg Short Seller Report. (Bloomberg)
  • Oil sinks below $70, US Regional Bank Rout Deepens: Market Wrap. (Bloomberg)
  • Kremlin was attacked by two drones last night, Putin is safe (oh well). (Bloomberg)
  • Democrats may attempt a secret plan to pass the debt ceiling. (USA Today)
  • Wall Street is betting that the Regional Bank Crisis is not over yet. (Bloomberg)
  • Eli Lilly (LLY) drug slows Alzheimer’s disease, study finds. (Bloomberg)
  • Mortgage demand drops as bank failures hit jumbo loan rates. (CNBC)
  • Federal Reserve will likely hike interest rates again, signal a pause in the inflation fight. (USA Today)
  • Apple (AAPL) attracted $1 billion into its high-yield savings account in just 4 days. (Fox Business)
  • BP and other oil stocks fall on demand and interest rates. (Barrons)

Moving Average Update:

  • Score gets beaten down to 48% from 85%.


  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing; The Vice President attends, 11:45 a.m. EDT
    • The President and The Vice President have lunch, 12:45 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President and The First Lady host a dinner for Combatant Commanders, 6:30 p.m. EDT


  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications Composite: -1.2% Purchase: -2% ReFi: +0.8%
  • April ADP Employment Index is due out at 8:15 a.m. EDT and is expected to come in at 142,000 from 145,000
  • Treasury Refunding 8:30 a.m. EDT
  • PMI Compoiste Final 9:45 a.m. EDT
  • April ISM Non-Manufacturing Index is due out at 10:00 a.m. EDT and is expected to rise to 51.90% from 51.2%.
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • The latest Federal Reserve Open Market Committee (FOMC) Announcement is due at 2:00 p.m. EDT and then press conference at 2:30 p.m. EDT. It is likely there is a rate hike of 25 basis points. Whether there will be more rate hikes is the $64,000 question.
  • Federal Reserve Chair Jerome Powell Press Conf. 2:30 p.m. EDT

M&A Activity:

  • Aegion (AEGN) Announces Acquisition of Infraspec Services, Inc.
  • J.P. Morgan (JPM) Completes Acquisition of Aumni.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse eXtreme Ideas Conference
    • RBC Capital US Banks Fixed Income Investor Symposium
      •  Previously posted and ongoing conferences:
        • Aegis Virtual Conference

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: