CAPIS Morning Note – 05/25/23: NASDAQ Rips Higher In Pre-Market By 1.90% On Nvidia Beat

Overnight Summary: The S&P 500 closed Wednesday at 4115.24 lower by -0.73% from Tuesday at 4145.58 lower by -1.12%. The overnight high of 4157 was hit at 6:05 p.m. EDT. The low was hit at 4135.50 at 3:50 a.m. EDT, a range of ~22 points high to low which is a mid-vol night.  At 7:20…

Overnight Summary: The S&P 500 closed Wednesday at 4115.24 lower by -0.73% from Tuesday at 4145.58 lower by -1.12%. The overnight high of 4157 was hit at 6:05 p.m. EDT. The low was hit at 4135.50 at 3:50 a.m. EDT, a range of ~22 points high to low which is a mid-vol night.  At 7:20 a.m. EDT, the current price was 41515 which is 0.61% and 25 points. The 10-day average of the overnight range is 21.10 which is unchanged.

Earnings Out After The Close: 

  • Beats: ENS +0.44, SPLK +0.30, ELF +0.22, GES +0.21, MOD +0.20, NVDA +0.17, RAMP +0.14, SNOW +0.10, PATH +0.09, ZUO +0.05, NTNX +0.01 of note
  • Flat: AEO +0.00 of note.
  • Misses: APPS (0.04), STEP (0.04) of note.

Short Interest – Initial Review:

 

Capital Raises:

  • IPOs Priced or News:
    • APT Satellite (ATS) announces pricing of initial public offering; 6 million common shares at a price of $41 per share.
  • New SPACs launched/News:
    • FGMC Merger Corp. (FGMC) Announces Intention to Extend Deadline to Complete Business Combination.
    • Inflection Point Acquisition Corp. II (IPXX) Announces Pricing of Upsized $220 Million Initial Public Offering.
  • Secondaries Priced:
    • BIOC: Announces Pricing of $5.0 Million Underwritten Public Offering.
    • HASI: Prices offering of 13,043,479 shares of common stock at $23.00 per share.
    • USPH: Announces Pricing of $150 Million Underwritten Public Offering of Common Stock.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ASNS: Filed Form S-3. 1,955,467 Shares of Common Stock.
    • COCP: Filed Form S-3/A.
    • SDGR: Filed Form 424B5.. Up to $250,000,000 Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • BGXX: Closing of $3.5 Million Private Placement.
    • SDGR: Entered into $250 million common stock Sales Agreement with SVB Securities.
  • Mixed Shelf Offerings:
    • VRTS: Filed Form S-3ASR.. Mixed Shelf Offering.
  • Debt/Credit Filing and Notes:
    • DOC: Closes on $400 million term loan maturing May 2028.
  • Tender Offer:
    • EQT: Commences Tender Offer for 6.125% Senior Notes due 2025.
    • NNDM: Launches $18.00 Per Share All-Cash Special Tender Offer to Increase Ownership in Stratasys (SSYS) to between 53% and 55% of Its Outstanding Shares.
  • 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: NVDA +27%, DM +19%, NTNX +16%, ELF +11%, AMD +9%, ZUO +8%, TSM +8%, VNET +8%, SPLK +7%, ARQT +5%, MOD +4% of note.
    • Trading Down: APPS -26%, ANNX -22%, AEO -17%, SNOW -11%, PATH -9%, MRTX -6% of note.
  • News After The Close:
    • Stocks making the biggest moves after hours: NVDA, SNOW, AEO, GES, ELF (CNBC)
    • Inside Wall Street’s Playbook to Prevent Debt-Ceiling Chaos. (WSJ)
    • Nvidia (NVDA) barrels toward rare $1 trillion valuation after putting a dollar figure on AI boost. (MarketWatch)
    • Nvidia’s (NVDA) Results Spark Nearly $300 Billion Rally In Ai Stocks. (Reuters)
    • A Cheaper Way to Bet on AI Than Investing in Nvidia (NVDA). TSM (WSJ)
    • Guess (GES) stock rises after retailer posts narrower quarterly loss. (MarketWatch)
    • American Eagle (AEO) stock tumbles on forecast for sales decline. (MarketWatch)
    • House Republican leadership feels very good about the state of the debt limit negotiations after several days of little progress. (Punchbowl)
    • Florida Governor Ron DeSantis (R-FL) kicked off 2024 White House Bid. (WSJ)
    • Dow futures dip after Fitch puts U.S. credit ratings on ‘ratings watch negative’ as debt-ceiling deadline nears. (MarketWatch)
    • Verizon (VZ) warns customer service employees of impending layoffs. (TheVerge)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Adverum Biotechnologies (ADVM) Announces New Executive Leadership Roles.
    • Arcutis (ARQT) Announces Leadership Transition. COO Ken Lock stepping down.
    • BigCommerce (BIGC) appoints Daniel Lentz as CFO, effective July 1; replaces Robert Alvarez, who is retiring.
    • Brainstorm Cell Therapeutics (BCLI) COO David Setboun to resign.
    • Genius Group (GNS) Receives NYSE Notice of Non-Compliance with Continued Listing Standards.
    • LifeWallet (LIFW) Receives Nasdaq Notification of Non-Compliance with Listing Rule.
    • LTRY: Receives Expected Notice from NASDAQ Stock Market Pertaining to its 10-Q of March 31, 2023
    • NIKE (NKE) Announces Senior Leadership Changes to Deepen Consumer-Led Growth and Marketplace Advantage.
    • NioCorp (NB) Set to Be Added to the Russell 3000 Index.
    • NWTN: Receives Expected Notification from Nasdaq Related to Delayed Annual Report on Form 20-F
    • NXP Semi (NXPI) Founding Chairman Sir Peter Bonfield retires as of the conclusion of the company’s 2023 Annual General Meeting; Julie Southern appointed to serve as Chair, effective immediately.
    • Staffing 360 Solutions (STAF) Receives Nasdaq Notification of Non-Compliance with Listing Rule 5250(c)(1).
    • TREX announces that Dennis Schemm has resigned as CFO.
    • TScan Therapeutics (TCRX) Appoints Gavin MacBeath, Ph.D. as Chief Executive Officer and as a Member of the Board of Directors.
    • Urban One, Inc. (UONE) Receives NASDAQ Notification of Non-Compliance with Listing Rule 5250(c)(1).
    • Vivakor Inc. (VIVK) Receives Notification of Deficiency from Nasdaq.
    • WE: CFO to step down. (MarketWatch)
  • Buyback Announcements or News:
    • Bogota Financial Corp. (BSBK) Adopts and Receives Regulatory Approval of Fourth Repurchase Program.
    • MetLife (MET) Further Increases Share Repurchase Authorization to $4 Billion.
    • U.S. Global Investors (GROW) Announces the Filing of Non-Cash Restatements for Periods Ended June and September 2022, and the Continuation of Dividends and Stock Buybacks.
    • Waterstone Financial, Inc. (WSBF) Authorizes a share repurchase program for up to 2,000,000, or approximately 9.3%, of its outstanding shares.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • Compx (CIX) Announces Regular Quarterly Dividend And Results Of The Annual Stockholder Meeting.
    • Equitable Holdings (EQH) Increases Common Stock Dividend 10% TO $0.22 per share and Declares Preferred Stock Dividends.
    • GROW: See Buyback announcement.
    • Guess? (GES) increases dividend by 33%.
    • Hamilton Lane (HLNE) Declared a quarterly dividend of $0.445 per share of Class A common stock, an 11% increase from the prior fiscal year dividend.
    • Johnson Outdoors (JOUT) Announces Cash Dividend.
    • LYB Goes ex div tomorrow for $1.25.
    • MDT announces dividend increase.
    • NEE Goes ex div tomorrow for $0.4675.
    • NetEase (NTES) announced a dividend increase to $0.4650 per ADS.
    • Universal Corporation (UVV) Announces 53rd Annual Dividend Increase of $0.01 to $0.80 per share and Sets Annual Meeting Date.
    • Weibo (WB) approves special dividend.

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

S&P 500 +24, Dow Jones -101,  NASDAQ +271, and Russell 2000 -5. (as of 7:56 a.m. EDT).  Asia is lower ex Japan and Europe is lower. VIX Futures are at 20.63 from 20.50 yesterday.  Gold and Silver lower with Copper higher from yesterday. WTI Crude Oil and Brent Crude Oil lower with Natural Gas low as well from yesterday. US 10-year Treasury sees yields at 3.763% from 3.684% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $26,257 from $26,710 yesterday, lower by -0.09%.

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

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

U.S. stocks finished lower on Wednesday, with the Dow posting a four-session skid, as the White House and House Republicans continued debt-ceiling talks ahead of a fast-approaching deadline. The Dow Jones Industrial Average fell about 255 points, or -0.8%, ending near 32,800, booking a fourth session in a row of declines, its longest stretch of losses in about two weeks. The S&P 500 index shed -0.7% and the Nasdaq Composite Index closed down -0.6% (MarketWatch – edited by QPI)

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

  • Thursday After the Close: COST, VMW, WDAY, ADSK, MRVL, ULTA, DECK, NTNX, RH, GPS, ME, DOMO
  • Friday Before the Open: BAH, BKE, HIBB, BIG

Earnings of Note This Morning:

  • Beats: NTES +3.03, AMWD +0.68, TITN +0.17, GDS +0.16, CM +0.07, CMCO +0.06, BBY +0.05, HLNE +0.03, MDT +0.02, WB +0.02 of note.
  • Flat: BZUN of note.
  • Misses: GCO (0.49), RY (0.16), TD (0.14), BURL (0.08), DLTR (0.07) of note.
  • Still to Report: RL of note.

Guidance:

  • Positive Guidance:  ELF, SPLK, ZUO, NVDA, NTNX, CMCO of note.
  • Negative Guidance: APPS, MDT, GCO, BURL, FTV, DLTR of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: NVDA +27%, NTNX +15%, RRGB +13%, ELF +12%, ZUO +10%, AMD +9%, SPLK +8%, RVPH +7%, DM +7%, MOD +7%, VNET +6%, TSM +6%, ACLS +4%, SSYS +4%, CM +4% of note.
  • Gap Down: APPS -33%, AEO -18%, ANNX -18%, SNOW -15%, MRTX -8%, PATH -7%, BCLI -6%, STEP -5% of note.

Insider Action: SPB, EVGO sees Insider buying with dumb short selling.  HHC 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.

  • Stocks making the biggest premarket moves: NVDA, BBY, SNOW, CCL, AEO, DISH, DLTR, AI, PLTR, TSM, AMD (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: McCarthy Signals Debt Deal Optimism As US Put on Credit Watch. (Bloomberg)
  • Bloomberg  Most Shared Story: There is Still Scary Stuff in Sunscreen. (Bloomberg)
  • NASDAQ up 1.6% as Nvidia drives tech rally: Market Wrap. (Bloomberg)
  • US Credit Rating at risk of Fitch cut on debt impasse. (Bloomberg)
  • Debt Ceiling Talks make progress but House to leave town with no deal. (CNBC)
  • Nvidia (NVDA) ignites $263 billion AI Rally. (Bloomberg)
  • Best Buy (BBY) higher by 4.5% on earnings beat and positive guidance but revenues down. (MarketWatch)
  • MetLife (MET) announces $19.2 billion risk transfer transaction, with share repurchase increased by $4 billion. (MarketWatch)
  • Burlington Stores (BURL) stock falls on profit and revenue miss, as lower tax refunds and cooler weather weigh on sales. (MarketWatch)
  • Half empty a year ago, cruises are now packed like Sardines. (WSJ)
  • Target (TGT) removes Pride merchandise for LGBTQ Month. (USA Today)

Moving Average Update:

  • Score continues to pulls back, this time to 45% from 57%.

Geopolitical: 

  • President’s Public Schedule:
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President announces his intent to nominate General Charles Q. Brown, Jr. to serve as the next Chairman of the Joint Chiefs of Staff; The Vice President, The Second Gentleman, and the Secretary of Defense, 1:45 p.m. EDT

Economic:

  • Q1 GDP (second update) is due out at 8:30 a.m. EDT and is expected to stay at 1.1%.
  • Initial Jobless Claims 8:30 a.m. EDT
  • Chicago Fed Activity Index 8:30 a.m. EDT
  • Corporate Profits 8:30 a.m. EDT
  • April Pending Home Sales are due out at 10:00 a.m. EDT and expected to improve to -2.9% from -5.2%.
  • EIA Natural Gas Report 10:30 a.m. EDT
  • KC Mfg Index 11:00 a.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Richmond President Thomas Barkin 9:50 a.m. EDT
  • Federal Reserve Boston President Susan M. Collins 10:30 a.m. EDT

M&A Activity:

  • Four Corners Property Trust (FCPT) announces agreement to acquire up to 14 Darden restaurant properties for up to $85 million on initial cash rent of up to approximately $5.35 million.
  • Kubient (KBNT) and Adomni Announce Definitive Merger Agreement.
  • Medtronic (MDT) to acquire wearable insulin patch maker EOFlow.
  • Stratasys (SSYS) to Combine with Desktop Metal (DM) in Approximately $1.8 Billion All-Stock Transaction. (Reuters)

Meeting & Conferences of Note:

  • Sellside Conferences:
  • Top Shareholder Meetings: BNTX, EBS, JLL, LNC, LWLG, MOS, PXD, VOYA, XRX
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ADTN, ANAB, CSAN, EVAX, EVLV, FTV, MVST, NEWR, PCG, SILK, TNET, TGNA, XFLT, ZTS 
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • Industry Meetings:  None of note.

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: