CAPIS Morning Note – 05/20/22: Stocks Higher Into The Open, Will It Hold. Today is Options Expiration.

Overnight Summary: The S&P 500 closed Thursday at 3900.79 (lower by -0.58%) from 3923.28 on Wednesday.  Futures have traded higher overnight. The overnight high of 3950 was hit at 5:20 a.m. EDT. The low was hit at 3889.75 at 4:05 p.m. EDT, a range of 60 points high to low which is above the typical…

Overnight Summary: The S&P 500 closed Thursday at 3900.79 (lower by -0.58%) from 3923.28 on Wednesday.  Futures have traded higher overnight. The overnight high of 3950 was hit at 5:20 a.m. EDT. The low was hit at 3889.75 at 4:05 p.m. EDT, a range of 60 points high to low which is above the typical range of late with 45 the average. At 7:55 a.m. EDT the current price is 3936.25 which is 0.99% and 38 points.

Earnings Out After The Close:

  • Beats: DECK +1.19, PANW +0.11, AINV +0.08, FLO +0.05, GLOB +0.03.
  • Flat: None of note.
  • Misses: AMAT (0.05),  ROST (0.03), VFC (0.02).

Capital Raises:

  • IPOs Priced or News:
    • Visionary Education Technology Holdings Group Inc. (VEDU) Announces Closing of US$17 Million Firm Commitment Initial Public Offering.
  • New SPACs launched/News:  
    • Virgin Group Acquisition Corp. II (VGII) Announces Shareholder Meeting to Approve Business Combination with Grove Collaborative (GROV).
  • Secondaries Priced:
    • EWCZ: prices offering of 4.5 million shares of common stock at $21.50 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AVCT: Filed Form S-3.. 120,000,000 Shares of Common Stock.
    • AGFY: Filed Form S-3.. 6,881,108 Shares of Common Stock.
    • ALLK: Filed Form S-3.. $250 Million Common Stock Offering.
    • GMVD: Filed Form S-1.. Up to 12,000,002 Ordinary Shares.
    • IMPP: Announces Closing of $40 Million Underwritten Public Offering.
    • LIQT: Closing of Public Offering of Common Stock and Pre-Funded Warrants for Gross Proceeds of $26.45 Million.
    • EVFM: Proposed Public Offering.. Piper Bookmanager
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • CERT: files for 43,664,168 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • SWKH: Filed Form S-3.. $200,000,000 Mixed 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:

  • After Hours: 
    • Trading Up: RDUS +18%, DECK +12%, CDXC +11%, PANW +10%, ZS +4%, CRWD +4%.
    • Trading Down: FHTX -28%, ROST -22%, ATRA -14%, BURL -8%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: PANW, DECK, ROST, AMAT, VFC (CNBC)
    • China cuts LPR rates 15 basis points to 4.45%.
    • Palo Alto Networks (PANW) stock jumps after company lifts full-year forecast. (CNBC)
    • Applied Materials (AMAT) whiffs across the board on earnings, stock drops. (MarketWatch)
    • Deckers (DECK) sold $2 billion worth of Uggs  in record year, stock jumps 12%. (MarketWatch)
    • 11 more people in the UK test positive for Monkeypox, raising total to 20.
    • China Forex Regulator Adds New Derivative Tools To Help Companies Better Hedge Currency Risks.
    • China’s Premier Li Keqiang: Chinese central and local governments have taken active measures to help coordinate and solve problems regarding impact of epidemic on production and operation activities of foreign-funded enterprises in China.
    • Federal Reserve Minneapolis President Neel Kashkari:
      • Seeing Some Evidence In Longer-Term High Inflation Regime – If So Fed May Need To Be More Aggressive.
      • It is critical to bring inflation back down.
      • The labor market strong by almost any measure.
      • Inflation must not be ingrained in expectations.
      • I don’t know how high rates need to go to bring inflation down.
      • We are removing accommodation even faster than we added it at start of Covid pandemic.
    • Russian/Ukraine News
      • Russian Ruble trading new 52 week high and multiyear high against USD at $57.92.
      • Russia’s Black Sea Blockade Threatens Global Food Crisis. (FT)
      • Russian gas flow to Finland to be halted on 21 May.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Altisource Asset Management Corporation (AAMC) Announces Departure of Officer.
    • Cloopen (RAAS) Receives Notification from NYSE Regarding Delayed Filing of 2021 Annual Report.
    • Covenant Logistics (CVLG) promotes James “Tripp” Grant to CFO.
    • NYSE to Suspend Trading Immediately in CooTek (Cayman) Inc. (CTK) and Commence Delisting Proceedings.
    • CPI Aero (CVU) Receives NYSE American Delisting Determination Notification.
    • Evolv Technology (EVLV) Appoints New Chief Financial Officer.
    • Kohl’s (KSS): Macellum Issues Statement Regarding the Kohl’s Board’s Apparent Breach of Fiduciary Duty and Failure to Disclose Material Information Prior to 2022 Annual Meeting.
    • LMP Automotive Holdings, Inc. (LMPX) Receives Notification of Deficiency from Nasdaq Related to Delayed Filing of its Quarterly Report on Form 10-Q for the First Quarter of 2022.
    • Lordstown Motors (RIDE) combines roles of Chairman and CEO; current CEO, Daniel Ninivaggi, will serve in this capacity.
    • Maxeon Solar (MAXN) appoints Philippe Costemale as New COO.
    • Myers Industries (MYE) CFO Sonal Robinson to resign to pursue other opportunities.
    • Quhuo (QH) Announces Receipt of Nasdaq Notification Regarding Late Filing of Annual Report on Form 20-F.
    • Republic First Bancorp, Inc. (FRBK) Receives Notice of Additional Filing Delinquency From Nasdaq.
    • SelectQuote (SLQT) Announces Departure of Chief Financial Officer Raff Sadun at end of May.
    • Sotera Health (SHC) announces upcoming departure of CFO Scott Leffler.
    • Tantech (TANH) Received Notification of Deficiency from Nasdaq Related to not timely Filing of Annual Report Form 20-F.
    • Yiren Digital Receives (YRD) Notification from NYSE Regarding Delayed Form 20-F Filing.
  • Buyback Announcements:
    • Amerant Bancorp Inc. (AMTB) Announces Successful Completion of Share Repurchase Program.
    • Chubb Limited (CB) Authorizes New Share Repurchase Program.
    • Bowlero Corp. (BOWL) Completes Redemption of All Outstanding Warrants and Provides an Update on its Share Repurchase Program.
    • Covenant Logistics (CVLG) announces new $75 million stock repurchase authorization.
    • DoorDash (DASH) in filing announces authorization of $400 million common stock repurchase program.
    • Kadant (KAI) Authorizes Share Repurchase.
    • Middleby (MIDD) authorizes repurchase of up to an additional 2.5 million shares on existing share repurchase program.
    • Lear (LEA) Extends Share Repurchase Authorization.
    • LCI Industries (LCII) authorizes new $200 million stock repurchase program.
    • QCR Holdings (QCRH) authorizes share repurchase program for up to 1.5 million shares.
    • South Plains Financial, Inc. (SPFI) Announces Approval of a New Stock Repurchase Program.
  • Stock Splits:
    • Kinetik (KNTK) approves two-for-one split of its common stock.
  • Dividends Announcements: 
    • Apollo Investment (AINV) Board of Directors declared a distribution of $0.31 per share.
    • Chubb Limited (CB) Shareholders Approve 29th Consecutive Annual Dividend Increase; Chubb Limited Board Declares Record Date for First Dividend Installment.
    • Equitable Holdings (EQH) approves an 11% increase in its quarterly dividend to $0.20 per share.
    • Lamar Advertising Company (LAMR) Announces Increase In Cash Dividend on Common Stock $0.10 to $1.20 per share.
    • Lear (LEA) Declares Quarterly Cash Dividend.
    • LCI Industries (LCII) increases quarterly cash dividend $0.15 to $1.05 per share.

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

S&P 500 +48, Dow Jones +302, NASDAQ +199, and Russell 2000 +27.  Europe and Asia higher.  VIX Futures are at 28.35 from 31.90 yesterday morning and the VIX closed at 28.70 from 30.96 yesterday. Gold,  Silver  and Copper higher. WTI Crude Oil  and Brent Oil Futures higher and Natural Gas lower. $ is higher vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury sees yields at 2.873% from 2.842% yesterday morning. Bitcoin is at $30,357 from $29,326  yesterday morning and is higher by 1.36% this morning. As of 8:05 a.m. EDT.

Sector Action – 05/19/22 Close:  

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

Stocks ultimately finished lower in a tighter trading range than normal.  After yesterdays rout, it feels…..ok.  The Dow finished down 0.75% and the Russell 2000 finished…up!  Updated 05/19/22 close.

 

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

  • Friday After the Close: None of note.
  • Monday Before the Open: PLAB of note.

Earnings of Note This Morning:

  • Beats: FL +0.15, DE +0.12, BAH +0.01.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance:  DECK, FLO, PANW of note.
  • Negative Guidance: AMAT, ROST, BAH of note.

Erlanger Research Advance/Decline Chart: Updated through 05/19/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: DECK +13%, CDXC +13%, RDUS +11%, PANW +11%, CRWD +5%, ALLK +5%, ZS +5%, FTNT +4%, NIO +4%, MAXN +4%.
  • Gap Down: ROST -27%, FHTX -25%, BURL -8%.

Insider Action: CWH, W, POOL, NMFC, GBLI, LQDA sees Insider buying with dumb short selling.  RPID sees Insider buying with smart short sellers. 05/19/22 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:  FL, DE, DASH, BA, VFC, DECK (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Russia to annex portions of Southeast Ukraine. (NYT)
  • Russia to halt oil flow to Finland on May 21st. (CNBC)
  • Cracks in U.S. economy starting to become apparent. (Bloomberg)
  • Kohl’s (KSS) weak financials may impact potential sale. (NY Post)
  • Boeing (BA) Starliner has launched into space. (WSJ)
  • United Health (UNH) using TeleHealth services to reduce costs. (WSJ)
  • Subprime customers are falling behind on loan payments. (WSJ)
  • Coinbase (COIN) looks to cut costs and freeze hiring . (The Information)
  • Dr. Scott Gottlieb weighs in on rising Covid-19 cases and notes B2 variant wave peaked in northeast but rising in other places. Expects to drop soon. (CNBC)
  • Robinhood Snacks looks at Klarna and the return of the down round. Congress looks at regulating Big Tech and breaking up Google (GOOGL) ad biz.

Moving Average Update:

  • Day 2 at 0% and in the sea of red.  Updated 05/19/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President arrived in Pyeongtaek, Republic of Korea, 4:05 a.m. EDT
    • The President and President Yoon Suk Yeol of the Republic of Korea visited Samsung Electronics Pyeongtaek Campus, a model for the new Samsung plant being built in Taylor, Texas, 5:10 a.m. EDT
    • The President and President Yoon Suk Yeol of the Republic of Korea delivered remarks; The President makes the case for quickly passing the Bipartisan Innovation Act, which will deliver historic federal investments in U.S. research and development, supply chains, and domestic manufacturing, 6:15 a.m. EDT
    • The President departs Pyeongtaek, Republic of Korea en route Seoul, Republic of Korea, 7:20 a.m. EDT
    • The President arrived in Seoul, Republic of Korea, 7:40 a.m. EDT

Economic: 

  • Quarterly Services 10:00 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT  

Federal Reserve Speakers:

  • None of note.

M&A Activity:

  • Atkore Inc. (ATKR) Announces Acquisition of Talon Products, LLC.
  • Meritor (MTOR) acquires Siemens Commercial Vehicles Electric Propulsion Business for EUR190 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Oppenheimer 23rd Annual Israeli Conference 2022 (05/21/22-05/24/22)
      • Previously Announced  Conferences:
        • Citigroup Regional Tech Conference (05/18/22-05/20/22)
        • HSBC 9th Annual China Conference 2022 (05/10/22-05/20/22)
        • JP Morgan Global Hydrogen Week
        • Microcap Rodeo Spring Into Action Best Ideas Conference 2022 (05/16/22-05/20/22)
        • Needham 17th Annual Technology & Media Conference 2022 (05/16/22-05/19/22)
        • Nomura KAKUSHIN Seminar
  • Company Meetings: M.
  • Fireside Chat: WPRT (w/ Water Tower Research)
  • Investor/Analyst Day/Calls: NNBR, OWL, TFX.
  • Update: None of note.
  • R&D Day: KDNY.
  • Company Event: None of note.
  • Industry Meetings:
    • Florida Hemp Conference 2022 (05/20/22-05/22/22).
    • Annual Digestive Disease Week Meeting DDW 2022 (05/21/22-05/24/22)
    • European Society of Cardiology Heart Failure Conference 2022 (05/21/22-05/24/22)
    • National Restaurant Association Show 2022 (05/21/22-05/24/22)
    • 24th European Congress of Endocrinology ECE 2022 (05/21/22-05/24/22)
    • American Psychiatric Association Annual Meeting (in-person) 2022 (05/21/22-05/25/22)
    • American Association of Orthodontics (AAO) Annual Session 2022 (05/21/22-05/24/22)
    • 16th EILAT Conference on New Antiepileptic Drugs and Devices (05/21/22-05/25/22)
      • Previously Posted and Ongoing Conferences:
        • Society For Investigative Dermatology Annual Meeting (SID) 2022(05/1/22-05/21/22)

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: