CAPIS Morning Note – 05/15/23: Market Hopes To Put Debt Ceiling In The Rearview Mirror, Stocks Higher.

Overnight Summary: The S&P 500 closed Friday at 4124.08 down by -0.16% from Thursday at 4130.62 down -0.17%. The overnight high of 4156.25 was hit at 4:20 a.m. EDT. The low was hit at 4126.75 at 9:00 p.m. EDT, a range of ~30 points high to low which is a mid-vol night.  At 7:05 a.m….

Overnight Summary: The S&P 500 closed Friday at 4124.08 down by -0.16% from Thursday at 4130.62 down -0.17%. The overnight high of 4156.25 was hit at 4:20 a.m. EDT. The low was hit at 4126.75 at 9:00 p.m. EDT, a range of ~30 points high to low which is a mid-vol night.  At 7:05 a.m. EDT, the current price was 4154 which is 0.39% and 16.00 points. As we move into mid-May we will use a 10-day moving average of overnight ranges.

Earnings Out After The Close: 

  • Beats: None of note
  • Flat: None of note.
  • Misses: None 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:
    • WinVest Acquisition Corp. (WINV) Announces Extension of Termination Date.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • APLT: Filed Form S-3.. $300,000,000 Mixed Shelf .. Up to 31,735,731 Shares of Common Stock for Resale.
    • CANB: Filed Form S-1.. Up to 6,760,336 shares of common stock.
    • RNXT: Filed Form S-3.. Secondary Offering of 1,947,040 Shares of Common Stock Issuable Upon Exercise of Warrants.
    • TRKA: Filed Form S-3.. 10,692,704 Common Stock.
    • ENSC: Announces Closing of $7 Million Public Offering.
    • KTTA: Filed Form S-3.. 16,418,870 Shares of Common Stock.
    • TRX: ATM Offering.
    • WTRG: Filed Form S-3ASR.. 4,500,000 Shares of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • AWIN: Filed Form S-1.. 11,222,357 Shares of Common Stock for Resale by Selling Securityholder.
    • SQNS: Form F-3.. Represented by up to 11,683,493 American Depositary Shares by selling shareholders.
    • VERU: Filed Form S-3.. 5,000,000 Shares of Common Stock by selling shareholder.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • CLSD: Filed Form S-3.. $150,000,000 Mixed Shelf.
    • COCP: Filed Form S-3.. $150,000,000 Mixed Shelf.
    • GNTA: Filed Form F-3.. $100,000,000 Mixed Shelf.
    • HLVX: Filed Form S-3.. $500,000,000 Mixed Shelf.
    • JEF: Filed Form S-3ASR.. Mixed Shelf.
    • MPC: Filed Form S-3ASR.. Mixed Shelf.
    • NVEE: Filed Form S-3ASR.. Mixed Shelf Offering.
    • SRDX: Filed Form S-3 $200 Million Mixed Shelf.
  • Debt/Credit Filing and Notes: None of note.
  • 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 and Over the Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: UXIN 50.0%, FRBK 45.0%, BLBD 37.4%, ARLO 35.1%, SBNY 30.6%, FSLR 28.8%, GT 28.3%, NEO 26.5%, GLYC 24.6%, STIM 23.8%, KRNT 23.3%, TAST 21.6%, EOLS 20.9%, HLIT 20.1%, ARRY 19.6%.
    • Trading Down: PRAA -47.1%, HRTX -42.5%, CHRS -32.9%, CTLT -31.0%, CDXS -29.7%, EGRX -28.7%, SSTI -28.5%, SONO -28.0%, TRUP -26.3%, ATRA -26.3%, TSE -25.6%, BE -25.5%, GDS -24.7%, BOH -24.4%, RYAM -22.8%, CGC -22.4%, PACW -21.9%, UPLD -21.5%, TOUR -20.7%.
  • News Items After the Close:
    • GM to recall nearly 1 million SUVs due to air-bag issue. (MarketWatch)
  • News Items Over the Weekend:
    • Stocks that Defined the Week: DIS, PTON, TSN, IEP, GOOGL, ABNB, PACW  (WSJ)
    • The Week in Business: Trump on TV (NYT)
    • Regional Banks Can’t Catch a Break. (WSJ)
    • Activist Shareholder Plans Proxy Battle at Shake Shack (SHAK) (WSJ)
    • Newmont (NEM) Agrees to Acquire Australia’s Newcrest for $17.5 Billion.  Deal would be the largest ever in the gold-mining industry (WSJ)
    • U.S. Debt Ceiling Talks Tentatively Set For Tuesday. (NBC)
    • Treasury Secretary Janet Yellen says that raising the debt ceiling would be a way to show other nations we are not a “deadbeat country.”
    • Barron’s:
      • Positive View:  BKU, VLY, HOMB, UAL, MAR, MODG, GOOGL of note.
      • Cautious View:  None of note.
      • Mixed View: None of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

  • Exchange/Listing/Company Reorg and Personnel News:
    • AlTi (ALTI) Global to delay 10-Q filing.
    • Masonite (DOOR) Appoints Katie Shellabarger as Vice President & Chief Accounting Officer.
    • Mitek (MITK) Announces Receipt of Notice from Nasdaq.
    • NuCana (NCNA) Announces Receipt of Nasdaq Notice.
  • Buyback Announcements or News:
    • Sandridge Energy, Inc. (SD) Announces a $75 Million Stock Repurchase Program. (see Dividends)
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: 
    • Sandridge Energy, Inc. (SD) Announces One-time $2.00 Per Share Dividend And An On-going Planned Quarterly Dividend Of $0.10 Per Share Planned To Commence In August 2023.

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

S&P 500 +12, Dow Jones +119,  NASDAQ +20, and Russell 2000 +6. (as of 8:00 a.m. EDT).  Asia and Europe are higher. VIX Futures are at 20.30 from 20.35 yesterday.  Gold and Silver lower with Copper higher. WTI Crude Oil and Brent Crude Oil higher with Natural Gas higher as well. US 10-year Treasury sees yields at 3.491% from 3.42% Friday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $27,425 from $26,377 Friday, higher by +2.01%.

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

  • Daily Positive Sectors: Utilities, Energy of note.
  • Daily Negative Sectors: Consumer Cyclical, Financial, Technology of note.
  • One Month Winners: Communication Services, Industrials, Consumer Defensive, Healthcare, Technology of note.
  • Three Month Winners: Communication Services, Technology, Consumer Defensive, Healthcare of note.
  • Six Month Winners: Communication Services, Technology, Consumer Cyclical, Basic Materials of note.
  • Twelve Month Winners: Technology, Industrials, Healthcare of note.
  • Year to Date Winners:  Communication Services, Technology, Consumer Cyclical of note.

U.S. stocks finished lower on Friday, with both the S&P 500 and Dow Jones Industrial Average cementing their second weekly loss in a row. For the S&P 500, this marked the first instance of back-to-back weekly losses since the week ended Feb. 24. The S&P 500 finished down 6.50 points, or 0.2%, (MarketWatch – edited by QPI)

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

  • Monday After the Close: 

  • Tuesday Before the Open:

Earnings of Note This Morning:

  • Beats:  MNDY +0.43 TSEM +0.17 of note.
  • Flat:  of note.
  • Misses: TPG -0.06 of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: None of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: NGMS +119.8%, SD +10%, MMP +8%, VERU +6%, PROC +3%, MNOV +2%, BTI +1%, BHVN +1%, BOC +1% of note.
  • Gap Down: TUR -7%, ALTI -6%, OKE -5%, SRDX -1%, DFS -1%, EIX -1%, JEF -1% of note.

Insider Action:  TWST AAT WAFD  sees Insider buying with dumb short selling.   TFIN DAR sees Insider buying with smart short sellers.

Rags & Mags: Repeated 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: Debt Ceiling Talks Inch Forward Ahead of Biden’s Travel to Asia. (Bloomberg)
  • Bloomberg  Most Shared Story: Tiger Global Seeks to Sell Private Company Stakes Into Secondary Market.  (Bloomberg)
  • Stocks Gain on Hopes For Debt Ceiling Breakthrough: MarketWrap. (Bloomberg)
  • Turkey to hold runoff election as Erdogan does not get the majority. (Bloomberg)
  • Thailand opposition parties agree to coalition after election success against military backed rivals that had been in control. (NYT)
  • Vice Media files for bankruptcy as new owners emerge including Soros and Fortress. (Bloomberg)

Moving Average Update:

  • Score goes down to 54% from 60%.

Geopolitical: 

  • President’s Public Schedule:
    • President Biden travels to Philadelphia for the day, he will be there from 9:40 a.m. EDT to 3:00 p.m. EDT.

Economic:

  • May Empire State Manufacturing Survey is due out at 8:30 a.m. EDT and is expected to fall to -1.8 from 10.8.
  • Treasury Int. Capital 4:00 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Atlanta President Raphael Bostic 8:45 a.m. EDT
  • Federal Reserve Minneapolis President Neel Kashkari 9:15 a.m. EDT
  • Federal Reserve Richmond President Thomas Barkin 12:30 p.m. EDT
  • Federal Reserve Board of Governors Lisa D. Cook 5:00 p.m. EDT

M&A Activity:

  • NeoGames (NGMS) Enters into Definitive Agreement to be Acquired by Aristocrat for $29.50 per Share in Cash.
  • ONEOK (OKE) to Acquire Magellan Midstream Partners (MMP) in Transaction Valued at $18.8 billion.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Guggenheim Radiopharmaceuticals Day
    • D.A. Davidson Annual Financial Institutions Conference (5/15-5/17)
    • JMP Securities Life Sciences Conference (5/15-5/16)
    • Bank of America Global Metals, Mining and Steel Conference. (5/15-5/19)
    • JP Morgan European TMT Conference (5/15-5/16)
      •  Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings:
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: JKHY LSCC ALIT MOH NEM 
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:

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: