CAPIS Morning Note – 06/06/23: Stocks Move Into a Quiet News and Economic Release Period Rest of Week. Stocks Mixed.

Overnight Summary: Thee S&P 500 closed Monday at 4273.70 lower by -0.20% from Friday at 4282.37 up 1.45%. The overnight high of 4285 was hit at 3:35 a.m. EDT. The low was hit at 4273.75 at 5:20 a.m. EDT, a range of ~12 points high to low which is a second low-vol night.  At 7:25…

Overnight Summary: Thee S&P 500 closed Monday at 4273.70 lower by -0.20% from Friday at 4282.37 up 1.45%. The overnight high of 4285 was hit at 3:35 a.m. EDT. The low was hit at 4273.75 at 5:20 a.m. EDT, a range of ~12 points high to low which is a second low-vol night.  At 7:25 a.m. EDT, the current price was 4277 which is -0.09% and -4 points. The 10-day average of the overnight range is 21.10 from 21.90. The average for May was 21.63.

Earnings Out After The Close: 

  • Beats: GTLB +0.08, CXM +0.05 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:
    • Metals Acquisition Corp. (MTAL) shareholders approve proposed business combination to acquire the CSA Mine and proposed merger with Metals Acquisition Limited.
    • Power & Digital Infrastructure Acquisition II Corp. (XPDB) contributions to trust account in connection with proposed extension.
    • TNL Mediagene, a leading Asian digital-media company, agrees to become publicly listed company on Nasdaq through merger with Blue Ocean Acquisition Corp (BOCN).
    • Worldwide Webb Acquisition Corp. (WWAC) Announces $5 Million PIPE Subscription Agreement Executed.
  • Secondaries Priced:
    • ATAT: Prices secondary offering of 4.8 million ADS by entities affiliated with Legend Capital.
    • CDRE: Prices secondary offering of 1.5 mln shares of common stock at $19.00 per share.
    • CLS: Announces Pricing of Secondary Offering of Subordinate Voting Shares by Onex Corporation.
  • Notes Priced of note:
    • DG: Corporation Announces Pricing of $1,500,000,000 of Senior Notes.
    • RGA: Pricing of Senior Notes.
  • Common Stock filings/Notes:
    • LXRX: Closing of Public Offering and Concurrent Private Placement, Including Full Exercise of Options to Purchase Additional Shares.
    • RHP: Files common stock offering.
    • SMFL: Filed Form S-3.. 7,940,835 Shares Common Stock.
    • VNRX: Announces Closing of $16.5 Million Underwritten Public Offering of Common Stock.
    • WE: Filed Form S-.3 — Up to 90,755,488 Shares of Class A Common Stock.
  • Direct Offering:
    • EZGO: Announces $8.5 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • AIG: Launch of Secondary Offering of Corebridge Financial, Inc. (CRBG) Common Stock.
    • ATAT: Announces Proposed Registered Secondary Offering of American Depositary Shares by Legend Capital.
    • BLBD: Announces launch of secondary public offering of 5 mln shares by affiliates of Coliseum Capital Management LLC and American Securities LLC.
    • CDRE: Announces Launch of Secondary Offering 1,500,000 shares of Common Stock by selling shareholder.
    • CLS: Proposed Secondary Offering of Subordinate Voting Shares by Onex Corporation.
    • CRBG: Files for 65,000,000 shares of common stock by selling shareholder.
    • GEHC: Commences Secondary Offering of 25,000,000 Shares common stock by selling shareholder. (Evercore, MS, BAC, Citio and GS Bookmanagers)
    • MBLY: Secondary Offering of Shares of Class A Common Stock 35,000,000 shares by selling shareholder (INTC). (GS and MS Bookmanager) (Bloomberg)
    • ROL: Filed Form S-3.. 249,014,176 shares of Common Stock offered by the Selling Stockholders — $1,500,000,000 Mixed Shelf.
    • RPHM: Filed Form S-3.. 625K shares of common stock by selling shareholders.
    • SKWD: Files for 3,850,000 shares of common stock by selling shareholders.
  • Private Placement of Public Entity (PIPE):
    • LRCX: see common stock note.
    • MARA: Announces $14.25 Million Private Placement.
    • TBIO: Announces Closing of $28.0 Million Private Placement of Preferred Stock And Warrants to Purchase an Additional $46.2 Million of Common Stock.
  • Mixed Shelf Offerings:
    • ATRO: Filed Form S-3.. $150,000,000 Mixed Shelf.
    • BJDX: Filed Form S-3.. $25 Million Mixed Shelf.
    • ROL: see Selling Shareholder.
    • TWST: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes:
    • PLCE: Announces the Expansion of Its Revolving Credit Facility From $350 Million to $445 Million.
    • ZURA: Completes $80 million financing with the focus on advancing ZB-106.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • CRGY: To increase public float to 46% through conversion of class B private shares.

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: GTLB +23%, ERAS +6%, HQY +5% of note.
    • Trading Down: CDRE -11%, BLBD -9%, SKWD -5%, MBLY -4%, NVRO -4%, CRBG -4%, LVWR -4% of note.
  • News After The Close:
    • Stocks making the biggest moves after hours:  (CNBC)
    • Tesla (TSLA) Loses Key Supply Chain Executive to Electric Truck Rival Rivian (RIVN). (TheInformation)
    • The $3,499 Vision Pro headset, iOS 17, and everything else Apple (AAPL) just announced at WWDC.  (MarketWatch)
    • Former ByteDance Executive Claims Chinese Communist Party Accessed TikTok’s Hong Kong User Data. (WSJ)
    • Bed Bath & Beyond (BBBY) in Talks to Sell Buybuy Baby to Owner of Janie and Jack. (WSJ)
    • Snap (SNAP) scoops up Google (GOOGL) veteran for senior role. (MarketWatch)
    • Raytheon Technologies (RTX) awarded $2.02 billion U.S. Navy contract modification.
  • Exchange/Listing/Company Reorg and Personnel News:
    • CC: Sameer Ralhan Resigns as Chemours Chief Financial Officer.
    • Leonardo DRS (DRS) Set to Join the Russell 2000® and Russell 3000® Indexes.
    • LiveWire Group (LVWR) appoints Karim Donnez as CEO, effective Jun 12; succeeds CEO Jochen Zeitz who will remain as Chairman.
    • MOTS: Announces Appointment of Ravit Ram as CFO.
    • PolyPid (PYPD) Announces 180-Day Extension to Regain Compliance with Nasdaq Minimum Bid Requirement and Transfer of its Listing to the Nasdaq Capital Market.
    • Quotient (QUOT) announces board refreshment plan.
    • SNDL: Appoints New Chief Financial Officer.
  • Buyback Announcements or News:
    • EDU: Extends Share Repurchase Program.
  • Stock Splits or News:
    • Greenlane (GNLN) Announces Effectiveness of Previously Announced Reverse Stock Split.
    •  VIEW Announces Plans for Reverse Stock Split.
  • Dividends Announcements or News:
    • BLK Goes ex div tomorrow for $5.00.

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

S&P 500 -1, Dow Jones -16,  NASDAQ +9, and Russell 2000 -1. (as of 7:56 a.m. EDT).  Asia higher ex ASX 200 and Europe is lower. VIX Futures are at 16.53 from 17 on  Friday.  Gold and Silver higher with Copper lower from yesterday. WTI Crude Oil and Brent Crude Oil lower with Natural Gas lower as well. US 10-year Treasury sees yields at 3.674% from 3.747%  yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $25,704 from $26,787 yesterday, lower by -1.54%.

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

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

Stocks fell Monday, leaving the S&P 500 just shy of entering a new bull market.   The tech-heavy Nasdaq Composite fell 0.1%. The blue-chip Dow Jones Industrial Average slipped 200 points, or 0.6%. The S&P 500 fell 0.2% to close 4273.79, just about 19 points below a bull market, or a 20% rise from the low set last October.  The broad-based index has been in bear-market territory for 245 trading days, the longest such stretch since 1948, according to Dow Jones Market Data. It climbed for the three consecutive weeks ended Friday, driven by the tech sector. The Nasdaq has posted six straight weeks of gains.   The euphoric rally in technology shares, powered in part by excitement surrounding the rise of artificial intelligence technology, has helped obscure a growing sense of uncertainty in the market. Investors have lately been expressing a cautious outlook: Net assets in both institutional and retail money-market funds are just below record lows reached in April, according to Bank of America strategists.  (WSJ – edited by QPI)

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

  • Tuesday After the Close: 

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: THO +1.17, MOMO +0.58, GIII +0.23, SJM +0.23, CIEN +0.13, ABM +0.04, FERG +0.04, CNM +0.03 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: ASO, CBRL of note.

Guidance:

  • Positive Guidance: CXM, GTLB, MOM, TMO, ALKS, SJM of note.
  • Negative Guidance: LUMN, NVRO, PM of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ZURA +27%, GTLB +26%, CHRS +6%, BTBT +6%, HQY +6%, MOMO +5%, LVWR +5%, RARE +4% of note.
  • Gap Down: CDRE -12%, NVRO -7%, BLBD -7%, MBLY -6%, CRBG -4%, CLS -4% of note.

Insider Action: PLNT, MTB, FBK sees Insider buying with dumb short selling.  No stock 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 You Need to Know to Start Your Day. (Bloomberg) 
  • 5 Things to Know Before The Market Opens. (CNBC)
  • Bloomberg Lead Story: Ukraine Dam Blast Blamed on Russia Tips War Into New Phase. (Bloomberg)
  • Bloomberg  Most Shared Story: A Wall Street Titan Scores One of the Best Real Estate Trades Ever.  (Bloomberg)
  • Apple Declines, Oil Retreat Drags Stocks Lower: Market Wrap. (Bloomberg)
  • Wheat jumps on Ukraine dam blast. (Bloomberg)
  • J.M. Smucker (SJM) beat estimates and put up a decent quarter. (MarketWatch)

Moving Average Update:

  • Score notches down to 97%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 11:45 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President holds a Cabinet meeting; The Vice President participates, 2:15 p.m. EDT

Economic:

  • Redbook Sales 8:55 a.m. EDT
  • API Crude Oil Data 4:30 p.m. EDT

Federal Reserve / Treasury Speakers:  Fed Blackout Period.

M&A Activity: 

  • CBZ acquires information security consulting firm, Pivot Point Security, of Hamilton, NJ.

Meeting & Conferences 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: