CAPIS Morning Note – 06/09/22: Stocks Rebound From Wednesday Selling In Pre-Market. Of Late Strong Opens Have Faded, Today Different?

Overnight Summary: The S&P 500 closed Wednesday at 4115.77 (lower by -1.08%) from 4160.68 (higher by 0.95%) on Tuesday. Futures have trading higher overnight. The overnight high of 4141.50 was hit at 6:35 a.m. EDT. The low was hit at 4101.50 at 9:50 p.m. EDT, a range of 40 points high to low which is…

Overnight Summary: The S&P 500 closed Wednesday at 4115.77 (lower by -1.08%) from 4160.68 (higher by 0.95%) on Tuesday. Futures have trading higher overnight. The overnight high of 4141.50 was hit at 6:35 a.m. EDT. The low was hit at 4101.50 at 9:50 p.m. EDT, a range of 40 points high to low which is near the range of late with 45 the average. At 7:20 a.m. EDT the current price is 4136 which is 0.53% and 22 points.

Breaking News: European Central Bank (ECB) leaves rates unchanged. Does intend raise by 25 basis points in July. Will end its purchase of bonds as well. (CNBC)

Earnings Out After The Close:

  • Beats: OXM +0.74, GEF +0.70, BASE +0.07, ABM +0.05, AVO +0.04, FIVE +0.01, YEXT +0.01.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AYTU: Filed Form S-3.. Up to 867,769 Shares of Common Stock Issuable upon Conversion of Warrants.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • AQST: Closing of $8.5 Million Registered Direct Offering.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • DBVT: Announces Private Placement Financing of $194 Million.
    • SUNW: Filed Form 8-K.. Sales Agreement with Roth Capital and Northland for $26,800,000 of shares.
  • Mixed Shelf Offerings:
    • MMLP: Files for $250 million mixed securities shelf offering; also files for 6,114,532 common unit offering by selling unitholders.
    • NRXP: Filed Form S-3.. $150,000,000 Mixed Shelf Offering.
    • RUBY: Filed Form S-3.. $250 Million Mixed Shelf.
    • PLUG: Files mixed securities shelf offering.
    • TRV: Filed Form S-3ASR.. Mixed Shelf Offering.
  • Convertible Offering & Notes Filed:
    • AVYA: Filed Form 8K.. $500.0 million aggregate principal amount of new secured debt.
    • QVC, Inc. (QRTEA) Announces Cash Tender Offer for Any and All of Its Outstanding 4.375% Senior Secured Notes due 2023.

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: OXM +6%, GEF +4%, AVO +4%.
    • Trading Down: FIVE -6%, CVAC -4%.
  • News Since The Close:
    • Twitter (TWTR) will give Elon data, but it’s not the data he needs. (Axios)
    • Boeing (BA) and Airbus (EADSY) deliveries fell 6% in May amid supply chain pressure.
    • House passes sweeping gun bill to raise assault rifle purchase age to 21; plan faces long odds in the Senate. (CNBC)
    • A wholly owned subsidiary of Apple (AAPL) will extend loans for its Pay Later service. (CNBC)
    • Tech companies are hitting the brakes on record levels of hiring. It’s happening so fast that employers like Coinbase, Redfin and Twitter are rescinding lucrative job offers — a practice last seen widely during the financial crisis. (Axios)
    • Iran to remove 27 nuclear surveillance cameras. (IAEA AFP)
    • Asset Under Management in May: CNS $94.3 billion (down $3.7 billion)
    • Russian/Ukraine News
      • Kremlin Says No More Gas Cuts to European Customers Expected.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Ameresco (AMRC) Announces Departure of Board Member.
    • AXON names Josh Isner as COO.
    • Didi (DIDI) to exit NYSE on June 10 amid uncertainty about China restart: Nikkei.
    • Kennametal (KMT) names Patrick S. Watson Chief Financial Officer.
    • Meta Platforms (FB): Ticker will change to META today.
    • NextDecade (NEXT) announces departure of COO Ivan Van der Walt.
    • Disney’s (DIS) Shanghai Resort To Reopen Some Sections After 2-Month Shutdown.
  • Buyback Announcements:
    • ArcelorMittal (MT) announces the completion of its US$1 billion share buyback program.
    • South State (SSB) says Fed has no objection to stock repurchase plan for 3.75 million shares.
    • Thomson Reuters (TRI) announces plans to repurchase up to $2.0 billion of shares under new normal course issuer bid.
    • William Penn Bancorporation (WMPN) Announces Second Stock Repurchase Program.
    • YEXT 100 million share repurchase.
  • Stock Splits: None of note.
  • Dividends Announcements:
    • Target (TGT) increases quarterly dividend $0.18 to $1.08 per common share.

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

S&P 500 +10, Dow Jones +76, NASDAQ +27, and Russell 2000 +5. Europe lower and Asia lower ex Japan.  VIX Futures are at 24.55 from 24.85 yesterday morning and the VIX closed at 24.35 from 25.07  yesterday. Gold,  Silver and Copper lower. WTI Crude Oil  and Brent Oil Futures lower and Natural Gas lower. $ is lower vs Euro, higher vs Pound and lower vs Yen. US 10 year Treasury sees yields at 3.022% from 3.01% from yesterday morning. Bitcoin is at $30,390 from $30,401.95 yesterday morning and is higher by 0.66% this morning. As of 8:09 a.m. EDT.

Sector Action – 06/07/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):   

  • Daily Positive Sectors: Consumer Cyclical of note.
  • Daily Negative Sectors: Basic Materials, Industrials, Utilities, Financial, Real Estate, Consumer Defensive of note.
  • One Month Winners: Energy and Utilities of note.
  • Three Month Winners: Energy and Utilities of note.
  • Six Month Winners: Energy, Utilities, and Basic Materials of note.
  • Twelve Month Winners: Energy and Utilities of note.
  • Year to Date Winners: Energy, Utilities, and Basic Materials of note.

All eyes are still on Friday CPI, but markets took a chance on pulling back on light volume today.  Russell 2000 was down 1.49%.  FXY took a beating with a 1.22% pullback.  Updated 06/08/22 close.

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

  • Thursday After the Close: DOCU, MTN, SFIX, CMTL of note.
  • Friday Before the Open: none of note.

Earnings of Note This Morning:

  • Beats: SIG +0.48, NIO +0.24.
  • Flat: None of note.
  • Misses: BILI (0.03), FCEL (0.03).
  • Still to Report: none of note.

Guidance:

  • Positive Guidance: BASE, OXM, GEF, BILI, SIG of note.
  • Negative Guidance: VRA, FIVE, NIO, SOND of note.

Erlanger Research Advance/Decline Chart: Updated through 06/08/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: OXM +5%, GEF +4%.
  • Gap Down: BILI -10%, SKIL -9%, FIVE -9%, BKD -6%, DBVT -5%.

Insider Action: HI, CHWY sees Insider buying with dumb short selling.  ARRY sees Insider buying with smart short sellers. 06/08/22 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: NVAX NIO  (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Europe struggled into ECB announcement while U.S. higher. (Bloomberg)
  • Bloomberg Most Read Story: IRS coming after Venmo income. (Bloomberg)
  • China is building testing and quarantine facilities for permanent Covid-19 policy. China starts another lockdown in Shanghai. (FT)
  • Primary elections in California show that Democrats at risk in Midterms on soft on crime. (WSJ)
  • Bluebird Bio (BLUE) shares halted for today and Friday on its gene therapy candidates.  (MarketWatch)
  • Target (TGT) raises dividend by 20% to $1.08 from $0.90 a quarter, ahead of Walmart (WMT). (MarketWatch)
  • Meta (FB) ends production of smartwatch. (Bloomberg)
  • FTC Chair Linda Khan says “high bar” for settlement with Meta (FB) on antitrust matters. (Reuters)
  • Freeport McMoran (FCX) LNG plant closed for three weeks after explosion yesterday. (Reuters)
  • Tesla (TSLA) China production rebounded by 200% in May. (Bloomberg)
  • Robinhood Snacks looks at The Real Real (REAL) CEO Julie Wainwright resignation who handed reigns a corporate veteran. Chicken prices out of control but Americans still buying.

Moving Average Update:

  • Score retreats to 40% from 65%.  Updated 06/08/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President delivers remarks at the IV CEO Summit of the Americas, 2:00 p.m. EDT
    • The President participates in a bilateral meeting with Prime Minister Justin Trudeau of Canada where they will discuss how to strengthen our cooperation on economic development, the pandemic, migration and more, 2:45 p.m. EDT
    • The President and The Vice President will meet with leaders of Caribbean nations, deepening the U.S.-Caribbean partnership, building on the Vice President’s April 29 virtual meeting with Caribbean leaders, 4:30 p.m. EDT
    • The President attends and delivers remarks at the opening plenary of the Ninth Summit of the Americas, 5:00 p.m. EDT
    • The President participates in a bilateral meeting with President Jair Bolsonaro of Brazil where they will reaffirm the importance of our strategic partnership on issues such as combatting the climate crisis and recovery from the COVID-19 pandemic, 6:30 p.m. EDT
    • The President and The First Lady welcome heads of state and government and their spouses for a dinner as part of the Ninth Summit of the Americas, 10:45 p.m. EDT

Economic: 

  • Initial Jobless Claims 8:30 a.m. EDT
  • EIA Natural Gas Report 10:30 a.m. EDT 
  • The European Central Bank (ECB) is out with its latest interest rate decision.
  • The latest NYSE and NASDAQ Short Interest is due out after the close for the period of May 11th through May 26th. During that period, the S&P 500 rose 3.12%.

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Brown & Brown(BRO) Dealer Services acquires Profits Creation.
  • Devon Energy (DVN) purchases Williston Basin assets from RimRock Oil & Gas for cash consideration of $865 million.
  • Eagle Pharmaceuticals (EGRX) Completes Acquisition of Acacia Pharma Group plc, Expanding Acute Care Footprint.
  • ICF (ICFI) to Acquire SemanticBits.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse Private Company FinTech Conference & Networking Event
    • JP Morgan European Capital Goods CEO Conference 2022 (06/09/22-06/10/22)
    • RBC Capital Markets Canadian Investor Sessions for REITs and REOCs
    • RBC Capital Markets Global Mining and Materials Conference 2022 (06/09/22-06/10/22)
    • Rosenblatt 2nd Annual Technology Summit The Age of AI Scaling Part I 2022 (06/09/22-06/10/22)
    • Wells Fargo BDC Power Alley 2022
      • Previously posted and ongoing conferences:
        • Bank of America Securities Energy Credit Conference 2022 (06/08/22-06/09/22)
        • Bank of America Securities 2022 Innovative China Conference(05/30/22-06/10/22)
        • Bank of America Securities Global Technology Conference 2022 (06/07/22-06/09/22)
        • Citigroup Consumer Access Day
        • Credit Suisse Asia Consumer Corporate Day 2022 (06/07/22-06/09/22)
        • Deutsche Bank 13th Annual Global Basic Materials Conference 2022 (06/08/22-06/09/22)
        • Evercore ISI Consumer & Retail Summit 2022 (06/07/22-06/10/22)
        • Goldman Sachs Annual European Financial Services Conference 2022 (06/07/22-06/09/22)
        • Goldman Sachs Global Semiconductor Conference 2022
        • HSBC 16th Annual Transport and Logistics Conference – part of the Future Transport series 2022 (06/06/22-06/10/22)
        • Jefferies Global Healthcare Conference 2022 (06/08/22-06/10/22)
        • JP Morgan Southern Cone & Andean Opportunities Conference 2022 (06/07/22-06/09/22)
        • JP Morgan Chase Silicon Carbide (SiC) & Gallium Nitride (GaN) Week (virtual) (06/07/22-06/09/22)
        • LD Micro Invitational XII 2022 (06/07/22-06/09/22)
        • Piper Sandler Companies Global Exchange / Brokerage / Fintech Conference 2022 (06/08/22-06/09/22)
        • Stifel Virtual Cross Sector Insight Conference CSI 2022 (06/07/22-06/09/22)
        • William Blair 42nd Annual Growth Stock Conference 2022 (06/06/22-06/09/22)
  • Company Meetings: BBY, BKNG, CHK, CRM, FCX, JLL, SBGI, TA.
  • Fireside Chat:
    • Westwater Resources (WWR) Fireside Chat with Water Tower Research
  • Investor/Analyst Day/Calls: AMD, CYBN, DOCN, IFF, MINM, PPL, SOND, WEN, WWR, VRNT.
  • Update:
    • Bluebird Bio (BLUE) Announces Posting of Briefing Documents for Upcoming FDA Advisory Committee Meeting.
    • Nutrien Ltd. (NTR) ESG Stakeholder Update 2022
  • R&D Day: None of note.
  • Company Event:
    • AAPL Annual Worldwide Developers Conference (06/06/22-06/10/22)
    • Cognition Therapeutics Inc. (CGTX )Dry Age-related Macular Degeneration KOL Symposium 2022
  • Industry Meetings:
    • 55th GDLA Annual Meeting Georgia Defense Lawyers Association
    • American Microbiology Society (ASM) Microbe 2022 (06/09/22-06/13/22)
      • Previously posted and ongoing conferences:
        • American Society for Mass Spectrometry’s 70th Annual Meeting
        • S&P Global Ratings 38th Annual Conference 2022 (06/08/22-06/09/22)
        • American Psychiatric Association Annual Meeting (Online version) 2022 (06/06/22-06/10/22)
        • NAREIT REITweek Investor Conference 2022 (06/06/22-06/09/22)

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: