CAPIS Morning Note – 06/07/23: Low Vol Week Continues As Futures Up Slightly

Overnight Summary: Thee S&P 500 closed Tuesday at 4283.85 higher by 0.24% from Monday at 4273.70 lower by -0.20%. The overnight high of 4295.50 was hit at 8:50 p.m. EDT. The low was hit at 4281.50 at 4:15 a.m. EDT, a range of ~14 points high to low which is the third low-vol night.  At…

Overnight Summary: Thee S&P 500 closed Tuesday at 4283.85 higher by 0.24% from Monday at 4273.70 lower by -0.20%. The overnight high of 4295.50 was hit at 8:50 p.m. EDT. The low was hit at 4281.50 at 4:15 a.m. EDT, a range of ~14 points high to low which is the third low-vol night.  At 7:25 a.m. EDT, the current price was 4293 which is 0.08% and +3.25 points. The 10-day average of the overnight range is 20 from 21.10. The average for May was 21.63.

Key Miss Yesterday: We accidentally left off our daily report that the Reserve Bank of Australia (RBA) raised interest rates yesterday morning. This is key as it was not expected. (Reuters)

Replay & Morning Interviews: Treasury Secretary Janet Yellen was interviewed on CNBC (started 8:05 a.m. EDT). Former Hedge Fund Manager Stanley Druckenmiller to be interviewed on Bloomberg at 9:00 a.m. EDT.

Earnings Out After The Close: 

  • Beats: PLAY +0.19, SFIX +0.12, BASE +0.05, YEXT +0.04 of note
  • Flat: None of note.
  • Misses: CVGW (0.19), CASY (0.15) 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:
    • Atlantic Coastal Acquisition Corp. (ACAH) Announces Extension of Business Combination Period and Additional Contribution to Trust Account.
    • Aurora Technology Acquisition Corp. (ATAK) Announces Additional Contribution to Trust Account to Extend Deadline to Consummate Business Combination.
  • Secondaries Priced:
    • COGT prices $125 Million offering. 12.5 Million shares at $12 per share.
    • DAWN: Announces Pricing of Public Offering of Common Stock.
    • KPRX: Announces Closing of $6.3 Million Underwritten Public Offering and Full Exercise of Over-Allotment Option.
    • MOND: Announces Pricing of Secondary Offering of Common Stock by Selling Stockholders.
    • NAMS: Announces Pricing of Upsized Secondary Offering of Ordinary Shares.
    • RHP: Announces Upsizing and Pricing of Common Stock Offering. Prices offering of 3.85 million shares of common stock at $93.25 per share. (see Debt/Credit Filing)
    • RNAZ: Announces Pricing of $7 Million Public Offering.
  • Notes Priced of note:
    • IPG: Prices Offering of $300 Million Aggregate Principal Amount of Senior Notes.
  • Common Stock filings/Notes:
    • ALLR: Form S-1 Filed .. Up to 58,823,000 Shares of Common Stock.
    • COGT: Proposed Public Offering of Common Stock.. $125 Million. (JPM, Jefferies, Piper and Guggenheim Bookmanager)
    • DAWN: Announces Proposed Public Offering of $150 million of common stock.
    • NAMS: Announces Commencement of Secondary Offering of Ordinary Shares.
    • SCKT: Filed Form S-3.. 1,194,027 Shares.
    • VXRT: Proposed Public Offering of Common Stock to grant underwriter option to purchase 15% of shares.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • MOND: Files for 5,250,000 shares of common stock by selling shareholders.
    • STER: Launch of Secondary Public Offering by certain stockholders affiliated with Goldman Sachs (GS) and Concurrent Share Repurchase which it intends to repurchase 1.0 million shares.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • AMCR: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes:
    • RHP: Announces Proposed $300 Million Senior Notes Offering. (see Secondary Pricing)
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • IONS: proposed private placement of $500 million convertible notes.

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: YEXT +12%, CWCO +9%, GDYN +9%, SFIX +7%, PLAY +4% of note.
    • Trading Down: BASE -16%, VXRT -14%,  MOND -14%, CVGW -12%, COGT -9%, CASY -5%, IONS -5% of note.
  • News After The Close:
    • SEC files court documents requesting temporary restraining order to freeze all Binance US assets. (Reuters)
    • Yext (YEXT) stock rallies 15% after company raises guidance for the year. (MarketWatch)
    • Dave & Busters (DAVE) stock rises as earnings beat, revenue misses. (MarketWatch)
    • Casey’s General Stores (CASY) stock falls after hours as results miss. (MarketWatch)
    • Consolidated Water (CWCO) subsidiary signs $204 million agreement with the Honolulu Board of Water Supply to build and maintain a seawater reverse osmosis desalination plant.
    • ICFI: U.S. Department of Justice Awards ICF $22 Million Technical Assistance Contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Actinium Pharma (ATNM) Set to Join Russell 2000® and Russell 3000® Indexes.
    • Allegheny Tech (ATI) announces that Kimberly Fields will become President and COO.
    • AlTi Global (ALTI) announced the resignation of Christine Zhao as Chief Financial Officer.
    • Casey’s General (CASY) elects CEO Darren M. Rebelez to the additional role of Board Chair.
    • AI leader Naresh Soni joins CXApp Inc. (Nasdaq: CXAI) as Chief Technology Officer to accelerate Artificial Intelligence (AI) and Augmented Reality (AR) Innovations.
    • Jeffs’ Brands (JFBR) Announces Receipt of Nasdaq Minimum Bid Price Notification.
    • Lovesac (LOVE) announces Executive Vice President and Chief Financial Officer Donna Dellomo is retiring as CFO with Planned Transition to Senior Strategic Advisor.
    • Marathon Digital Holdings (MARA) Appoints Salman Khan as its Chief Financial Officer.
    • RYVYL (RVYL) Appoints Gene Jones as Interim Chief Financial Officer.
    • SNMP: NYSE American to Commence Delisting Proceedings Against Evolve Transition Infrastructure LP.
    • SomaLogic (SLGC) announces CFO transition.
    • Wayfair (W) announced that Steve Oblak, Chief Commercial Officer, will retire.
  • Buyback Announcements or News:
    • News Corp (NWSA) to buy back up to $1.5 billion shares
    • Post Holdings (POST) Announces New Share Repurchase Authorization of $400 Million.
    • Richmond Mutual Bancorporation, Inc. (RMBI) Announces Increase and Extension of Stock Repurchase Program.
    • Shutterstock (SSTK) Announces Share Repurchase Program, purchase up to $100 million of its common stock.
    • Stellantis (STLA) Announces Launch of Second Tranche of Its Share Buyback Program.
    • STER: See Capital Raises Selling Shareholders.
  • Stock Splits or News:
    • BBLG VTGN trading r/s price.
  • Dividends Announcements or News:
    • New York Mortgage Trust (NYMT) last night declared $0.30 per share quarterly common dividend, down $0.10 from previous quarter.
    • OMC Goes ex div tomorrow for $0.70.
    • TRV Goes ex div tomorrow for $1.00.
    • UnitedHealth Group (UNH) raises dividend by 13.9% to $1.88.

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

S&P 500 +6, Dow Jones +25,  NASDAQ +27, and Russell 2000 +10. (as of 8:04 a.m. EDT).  Asia lower ex the Kospi and Europe is lower ex the FTSE. VIX Futures are at 15.50 from 16.53 yesterday.  Gold lower with Silver and Copper higher from yesterday. WTI Crude Oil and Brent Crude Oil higher with Natural Gas higher as well. US 10-year Treasury sees yields at 3.689% from 3.674% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $26,738 from $25,704 yesterday, lower by -0.77%.

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

  • Daily Positive Sectors: Consumer Cyclical, Financial, Real Estate, Basic materials, Industrials of note.
  • Daily Negative Sectors: Healthcare 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.

U.S. stocks edged up Tuesday as the S&P 500 and Nasdaq Composite each clinched fresh closing highs for the year.  The broad stock-market benchmark gained 0.2%, reaching its highest close since last August. The tech-heavy Nasdaq rose 0.4% to close at its highest level since April 2022. The Dow Jones Industrial Average ticked up less than 0.1%.  Stocks have rebounded recently, with the S&P 500 within striking distance of exiting its longest bear market since the 1940s. The broad index finished less than 10 points shy of entering a new bull market, which would represent a 20% jump from its recent low set in October.  The rally has been powered primarily by a slim cohort of mega-cap technology stocks.  Apple (AAPL), the most heavily weighted stock in the S&P 500, is up 38% this year, while Nvidia (NVDA) has gained 165% as investors flock to AI plays.  (WSJ – edited by QPI)

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

  • Wednesday After the Close: 

  • Thursday Before the Open:

Earnings of Note This Morning:

  • Beats: LOVE +0.13, CPB +0.03, OLLI +0.01 of note.
  • Flat: None of note.
  • Misses: UNFI (0.11) of note.
  • Still to Report:  BF.B of note.

Guidance:

  • Positive Guidance: YEXT, OLLI of note.
  • Negative Guidance: CBRL, ASO, SFIX, BASE, LOVE, UNFI of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: YEXT +17%, SFIX +7%, CWCO +7%, GDYN +5%, PLAY +4% of note.
  • Gap Down: VXRT -18%, BASE -17%, MOND -15%, NAMS -14%, CVGW -10%, IONS -5%, CASY -4% of note.

Insider Action: No stock 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.

  • Stocks making the biggest moves premarket: NFLX, TSLA, COIN, GME, SFIX, NVCR (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg) 
  • 5 Things to Know Before The Market Opens. (CNBC)
  • Bloomberg Lead Story: Crypto Billionaire’s Wealth Crushed By SEC After Big 2023 Bounce.  (Bloomberg)
  • Bloomberg  Most Shared Story: New York Has World’s Worst Air Pollution as Canada Wildfires Rage  (Bloomberg)
  • World economy set for weak inflation-plagued recovery, OECD warns. (Bloomberg)
  • Chinese exports plunged by -7.5% more than expected. (CNBC)
  • Mortgage demand drops despite rates coming off recent highs. (CNBC)
  • $1 Trillion Debt Deluge threatens bond market. (WSJ)
  • Hedge Fund Manager Ken Griffin of Citadel says AI community creating mistake by hyping the technology. (CNBC)

Moving Average Update:

  • Back on top with 100%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • The President and The Vice President have lunch, 12:15 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT

Economic:

  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications: Composite: -1.4%, Purchase: -1.7%, ReFi: -0.7%
    • U.S. MBA 30-year Mortgage Rate Actual: 6.81% Vs 6.91% Previous
    • U.S. MBA Mortgage Applications (Wow) Actual: -1.4% Vs -3.7% Previous
  • April Trade Balance is due out at 8:30 a.m. EDT and is expected to fall to $-75.3 billion from $64.2 billion.
  • EIA Petroleum Report 10:30 a.m. EDT
  • Consumer Credit 3:00 p.m. EDT

Federal Reserve / Treasury Speakers:  Fed Blackout Period.

M&A Activity: 

  • CD gets non-binding going private proposal at $8 per ADS.
  • Pasithea Therapeutics (KTTA) Confirms Receipt of Unsolicited Proposal from Lucy Scientific Discovery Inc.
  • TreeHouse Foods (THS) to acquire Farmer Brothers’ (FARM) Northlake, Texas coffee facility for approximately $100 million.

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: