CAPIS Morning Note – 05/22/23: Markets Focused On Debt Ceiling Resolution, Will Drive Markets This Week. Biden McCarthy Meeting Today.

Overnight Summary: The S&P 500 closed Friday at 4191.98 lower by -0.14% from Thursday at 4198.05 up 0.94%. The overnight high of 4206.25 was hit at 4:30 a.m. EDT. The low was hit at 4186.50 at 6:05 p.m. EDT, a range of ~20 points high to low which is a low-vol night.  At 7:15 a.m….

Overnight Summary: The S&P 500 closed Friday at 4191.98 lower by -0.14% from Thursday at 4198.05 up 0.94%. The overnight high of 4206.25 was hit at 4:30 a.m. EDT. The low was hit at 4186.50 at 6:05 p.m. EDT, a range of ~20 points high to low which is a low-vol night.  At 7:15 a.m. EDT, the current price was 4201 which is -0.09% and -3.75 points. The 10-day average of the overnight range is 20.20 from 19.80.

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:
    • TradeUP Acquisition Corp. (UPTD) Announces Extension of the Deadline for an Initial Business Combination.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • DXR: Announces Proposed Underwritten Public Offering.
    • INSM: Filed Form S-3ASR.. Common Stock and Debt Securities.
    • OMEX: Filed Form S-3.. 3,492,239 Shares.
    • RNAZ: Filed Form S-1 Common stock and Warrants offering.
    • SNAX: Filed Form S-3.. 7,964,550 Shares of Class A Common Stock Issuable Upon Exercise of Warrants.
    • TCON: Filed Form S-1.. 5,000,000 Shares Common Stock.
    • VLCN: Launches Proposed Public Equity Offering.
    • WINT: Filed Form S-3.. 236,836 Shares of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • AUGX: Files for 9,375,342 shares common stock by selling shareholders.
    • H: Files for 9,202,765 share common stock offering by selling shareholders.
    • STXS: see Mixed shelf.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • LSPD: Filed Form F-10 Mixed Shelf.
    • STXS: Files for $100 million mixed securities shelf offering; also files for 91,221,439 share common stock offering by selling shareholders, relates to convertible preferred stock.
  • Debt/Credit Filing and Notes:
    • INSM: See Common Stock.
    • KRYS: Announces $160 Million Private Placement Equity Financing
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • STXS: see Mixed shelf.

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: MNK 128.3%, BHC 45.3%, SRPT 35.4%, CUBI 27.3%, RIGL 27.2%, FRBK 27.0%, FTCH 26.3%, PACW 25.8%, CNDT 24.0%, GRPN 23.3%, SGH 22.9%, GLOB 22.2%, SIEN 20.3%, RMBS 20.0%, AMRX 19.8%, CMA 19.8%, FIVN 19.5%, MXL 19.4%.
    • Trading Down: FL -23.2%, NVTA -22.7%, FOSL -22.3%, NDLS -16.5%, GRTS -16.0%, GOOS -15.7%, NVAX -15.3%, TNDM -14.8%, IAG -14.5%, BLUE -13.6%, PRA -13.2%, MGNX -12.5%, PLCE -12.4%, SA -12.3%, FSLR -12.3%, GTES -11.4%.
  • News Items After the Close:
    • American (AAL), JetBlue (JBLU) alliance in northeastern U.S. blocked by a Judge. (MarketWatch)
    • President Biden to Announce $375 Million Ukraine Military Aid Package. (Politico)
    • Boeing (BA) Awarded Up to $27.5 Million Modification to US Air Force Contract.
  • News Items Over the Weekend:
    • Stocks that Defined the Week: WMT, TSLA, MU, HZNP, HD, WAB, FL  (WSJ)
    • The Week in Business: An Attempt to Ban TikTok (NYT)
    • Icahn Is No Saint, but Illumina (ILMN) Can Still Use a Flawed Savior. (WSJ)
    • Global technology ETF and mutual funds had $3.768 billion worth of inflows last week, according to Goldman Sachs’ Rubner.
    • UNG: Due to wildfires… Over the past couple of weeks, gas flowing from Canada to the U.S. has averaged just 7.1 billion cubic feet per day (bcfd), well below the 8.4-bcfd average exported since the start of 2023 and 9.0-bcfd in 2022, according to Refinitiv.  Alberta On High Alert For Wildfire Upsurge Over Scorching Holiday Weekend.
    • China Commerce Minister Wang Wentao holds forum with US companies, including Johnson & Johnson (JNJ), 3M (MMM), Dow (DOW), Merck (MRK), Honeywell (HON), and others.
    • Barron’s:
      • Positive View:  SHEL, TTE, XOM, FANG, AR, PR, DO, SLB, BUD, NVDA, GOOG, MSFT, AI, PLTR, SOUN, MRVL, MU, CDNS, SNOW, DDOG, PANW, ZS, HUBS 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:
    • Canopy Growth (CGC) Files Revised Proxy Statement, Modifies Canopy USA Structure to Comply with NASDAQ Listing Requirements.
    • Cenntro (CENN) Announces Receipt of Nasdaq Noncompliance Notice Regarding Late Filing of Quarterly Report on Form 10-Q.
    • Ceragon (CRNT) mourns the death of Chairman Zohar Zisapel.
    • Clearmind Medicine (CMND) Announces Receipt of Nasdaq Minimum Bid Price Notification.
    • COMSovereign (COMS) Receives Notice from Nasdaq Regarding Delayed Quarterly Report.
    • Equity Commonwealth (EQC) names CEO David Helfand to serve as the Chair of the Board.
    • EUDA Health Holdings Limited (EUDA) Announces Receipt of Nasdaq Listing Delinquency Letter.
    • Exicure, Inc. (XCUR) Received Nasdaq Delinquency Notice on Late Filing of its Form 10-Q.
    • G Medical Innovations Holdings Ltd. (GMVD) Announces Receipt of Nasdaq Minimum Bid Price Notification.
    • Genco Shipping & Trading (GNK) appoints Peter Allen as CFO.
    • Greenbrook Tms (GBNH) Receives Notifications Regarding Nasdaq Listing Deficiencies.
    • Gray Television (GTN) names Sandy Breland as COO effective today.
    • HUB Security (HUBC) Receives Notice from Nasdaq Related to Delayed Filing of 2022 Annual Report.
    • Ideanomics (IDEX) Announces Receipt of Notice from Nasdaq Regarding Late Filing of Quarterly Report on Form 10-Q.
    • indie Semiconductor (INDI) COO Steven Machuga to retire on June 30.
    • Kymera Therapeutics (KYMR) announces appointment of Jeremy Chadwick as COO.
    • mCloud (MCLD) Receives Nasdaq Notification Regarding Form 20-F Filing.
    • Missfresh (MF) Announces Receipt of Nasdaq Notification Regarding Late Filing of Form 20-F.
    • Nisun International (NISN) Received Notification of Deficiency from Nasdaq Related to Not Timely Filing of Annual Report on Form 20-F.
    • Perpetua Resources (PPTA) Announces Addition to the Russell 2000 Index.
    • SFR: Appreciate Announces Receipt of Notice From Nasdaq Regarding Late Filing of its Form 10-Q.
    • Tingo Group (TIO) Set to Join Russell 3000® Index.
    • WeTrade Group Inc. (WETG) Received a Non-Compliance Notification From Nasdaq.
  • Buyback Announcements or News:
    • Dillard’s, Inc. (DDS) Announces New $500 Million Share Repurchase Program. (see dividends)
  • Stock Splits or News: 
    • ADMP trading r/s price.
    • BHG trading r/s price.
    • Sigilon (SGTX) Announces Reverse Stock Split of Common Stock. 1-for-13 reverse split.
    • TransCode Therapeutics (RNAZ) Announces 1-for-20 Reverse Stock Split.
  • Dividends Announcements or News: 
    • Dillard’s, Inc. (DDS) Declares $0.20 Cash Dividend.

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

S&P 500 +1, Dow Jones +20,  NASDAQ -2, and Russell 2000 +5. (as of 7:57 a.m. EDT).  Asia is higher ex the ASX 200 and Europe is lower. VIX Futures are at 19.75 from 19 Friday.  Gold, Silver and Copper lower from Friday. WTI Crude Oil and Brent Crude Oil higher with Natural Gas lower from Friday. US 10-year Treasury sees yields at 3.667% from 3.65% Friday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $26,801 from $26,852 Friday, higher by 0.42%.

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

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

Major indexes started the day higher but turned negative after Congressional negotiators said they had made little progress in the debt-ceiling talks. The S&P 500 lost 0.1%, the Dow fell 109.28 points, or 0.3%, to end at 33426.63 and the Nasdaq Composite dropped 0.2%.  All three indexes still finished the week in the green, with the S&P and Dow industrials notching their first positive week so far this month. The Nasdaq rose more than 3% for the week.  (WSJ – 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: None of note.
  • Flat: None of note.
  • Misses: GLBE (0.21), IMVT (0.05) 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: OCS +9%, DDS +6%, PACW +4% of note.
  • Gap Down: STXS -6%, MU -5% of note.

Insider Action: BFH sees Insider buying with dumb short selling.  HHC, TPC 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.

  • Stock making the biggest moves in the pre-market AAPL META MU PACW NKE FL DKNG. (CNBC)
  • 5 things to know before the stock market opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg) 
  • Bloomberg Lead Story: Biden McCarthy Meeting on Debt Limit Comes as Time Runs Short.  (Bloomberg)
  • Bloomberg  Most Shared Story: Shootout at Baja Car Rally Leaves 10 Dead, 10 Wounded.  (Bloomberg)
  • China’s $23 Trillion local debt mess is about to get a great deal worse. (Bloomberg)
  • Meta (META) fined $1.3 billion over EU user data transfers to US. (CNBC)
  • JP Morgan (JPM) boosts net interest outlook to $84 billion on First Republic deal. (Bloomberg)
  • Micron (MU) share lower as China declares their chips are a security risk. (Bloomberg)
  • Morgan Stanley’s Wilson says current rally is not the start of a new bull market. (Bloomberg)

Moving Average Update:

  • Score settles at the end of the week at 88% from 94%.

Geopolitical: 

  • President’s Public Schedule:
    • President Biden returns from Japan.

Economic: None of note.

Federal Reserve / Treasury Speakers:

  • Federal Reserve St. Louis President James Bullard 8:30 a.m. EDT
    Federal Reserve Richmond President Thomas Barkin 10:50 a.m. EDT
    Federal Reserve Atlanta President Raphael Bostic 10:50 a.m. EDT
    Federal Reserve San Francisco President Mary Daly 11:05 a.m. EDT

M&A Activity:

  • Chevron (CVX) To Buy PDC Energy (PDCE) For $72 Per Share In All Stock Deal.
  • GoHealth (GOCO) confirms that it has received an acquisition proposal from its two largest shareholders.
  • Ironwood Pharmaceuticals (IRWD) to buy SwissBiotech VectivBio for $1 billion. (MarketWatch)
  • Mizuho To Buy Investment Bank Greenhill (GHL) In $550 Million Deal.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bank of America APAC Financial, Real Estate Equity and Credit Conference 2023
    • Barclays Leveraged Finance Conference
    • Goldman Sachs Eighth Annual Leveraged Finance and Credit Conference 2023 (05/22/23-05/24/23)
    • JP Morgan 51st Annual TMT Global Technology Media and Communications Conference 2023 (05/22/23-05/24/23)
    • JP Morgan CEEMEA Financials & FinTech Conference 2023
    • Morgan Stanley 8th Annual Sustainable Futures Conference 2023 (05/22/23-05/23/23)
    • UBS Global Energy Conference
    • Wells Fargo Medtech Innovation Spotlight Series 2023
        • Previously posted and ongoing conferences:
          • Oppenheimer 24th Annual Israeli Conference 2023 (05/21/23-05/23/23)

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: