CAPIS Morning Note – 06/15/22: Stocks Higher In Pre-Market After 5 Day Selloff, FOMC Up At 2:00 p.m. EDT

Overnight Summary: The S&P 500 closed Tuesday at 3735.48 (lower by -0.38%) from 3749.63 (lower by -3.88%) on Monday. Futures have trading higher overnight. The overnight high of 3774.50 was hit at 4:30 a.m. EDT. The low was hit at 3733.50 at 4:20 p.m. EDT, a range of 41 points high to low which is…

Overnight Summary: The S&P 500 closed Tuesday at 3735.48 (lower by -0.38%) from 3749.63 (lower by -3.88%) on Monday. Futures have trading higher overnight. The overnight high of 3774.50 was hit at 4:30 a.m. EDT. The low was hit at 3733.50 at 4:20 p.m. EDT, a range of 41 points high to low which is within the range of late with 45 the average. At 7:20 a.m. EDT the current price is 3764.50 which is 0.39% and 14.50 points.

Breaking News: Treasury Secretary Janet Yellen had been sidelined by the White House on key issues. (Bloomberg)

Earnings Out After The Close:

  • Beats: CMX +0.01.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News:
    • Onfolio (ONFO) downsizes proposed IPO by 44% to $8.5 Million.  ONFO now plans to offer 1.7 Million units priced between $4.50 and $5.50 per unit.
  • New SPACs launched/News:
    • Future Health ESG Corp. (FHLT) announces combination agreement with Excelera Health.
    • Moolec Science to list on Nasdaq through business combination with LightJump Acquisition Corp (LJAQ).
    • Virgin Group Acquisition Corp. II (VGII) shareholders approve previously announced business combination with Grove Collaborative.
  • Secondaries Priced:
    • DAWN: Pricing of Upsized Public Offering of Common Stock.. 10 Million @$15.
    • VECT: Announces Pricing of $30 Million Public Offering of Ordinary Shares.
    • NILE: Announces At the Market Offering of Shares of 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • GOVX: Filed Form S-1.. 21,412,124 Shares of Common Stock.
    • VECT: Launch of Public Offering of Ordinary Shares.. SVB and Piper bookmanager.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • TALO: Filed Form S-3ASR.. 9,641,491 Shares Common Stock by selling holders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • BRT: Filed Form S-3.. $150 Million Mixed Security Shelf.
    • QNRX: Filed Form F-3.. $100,000,000 Mixed Shelf Offering.
  • 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: MOR +15%, ZEN +4%.
    • Trading Down: PL -10%, MEG -5%.
  • News Since The Close:
    • The 30-year US Treasury got to within 1 bp of its 2018 closing high earlier today. It is now at exactly the same year as the 2-year, a situation that will likely change tomorrow post Fed. — Gundlach.
    • China’s Xi Jinping holds phone conversation with Russia’s Putin. (CCTV)
    • Russia’s Putin: Russia supports global security initiative proposed by China, opposes any forces to interfere in China’s internal affairs under pretext of so-called Xinjiang, Hong Kong, Taiwan and other issues, and is willing to strengthen multilateral cooperation with China.
    • Leon Cooperman calls crypto ‘crap’ and predicts 40% drop for S&P 500. This is from CNBC interview yesterday morning but reported late. (NY Post)
    • Raytheon Technologies (RTX) awarded $4.39 billion Navy contract.
    • Raytheon Technologies (RTX) awarded $870 million Missile Defense Agency contract.
    • Lockheed Martin (LMT) awarded $450 million Air Force contract.
    • Montrose Environmental Group (MEG) Issues Statement on Ransomware Attack.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Boxlight (BOXL) to Appoint Greg Wiggins as Chief Financial Officer.
    • BlackSky Technology (BKSY) promoted Henry Dubois to the position of Chief Financial Officer.
    • Five Below, Inc. (FIVE) Announces Election of Bernard Kim to its Board of Directors.
    • Regis Corporation (RGS) Receives Continued Listing Notice From NYSE.
    • Sema4 (SMFR) Announces Chief Financial Officer Transition Plan.
    • Vertex Energy (VTNR) Announces COO Succession Plan.
    • XpresSpa Group (XSPA) Announces the Separation of Service of Chief Financial Officer James Berry.
  • Buyback Announcements:
    • EverCommerce (EVCM) announces $50 million share repurchase program.
    • Five Below, Inc. (FIVE) Announces Share Repurchase Program for up to $100 million of common stock.
    • Hertz Global (HTZ) authorizes new $2.0 billion share repurchase program.
    • Monster Beverage (MNST) Board authorizes $500.0 million share buyback program.
    • Wix.com (WIX) received court approval of its repurchase program pursuant to which up to $500 million of the Company’s ordinary shares and/or convertible notes may be repurchased.
  • Stock Splits:
    • WKEY announces 1-for-2 reverse ADS split.
  • Dividends Announcements:
    • Chicago Atlantic Real Estate Finance (REFI) increases quarterly cash dividend to $0.47 per share, a $0.07 increase.
    • Realty Income (O) increases monthly cash dividend to $0.2475 per share, an increase of $0.0005.  Wow!

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

S&P 500 +37, Dow Jones +243, NASDAQ +139, and Russell 2000 +13. Europe higher and Asia higher ex Japan down -1.14%.  VIX Futures are at 32.60 from 30.80 on Monday morning and the VIX closed at 34.02 from 27.75 yesterday. Gold,  Silver and Copper higher. WTI Crude Oil  and Brent Oil Futures lower and Natural Gas higher. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10 year Treasury sees yields at 3.366% from 3.328% yesterday morning. Bitcoin is at $20,553.10 from $21,957 yesterday morning and is lower by -7.34% this morning. As of 8:02 a.m. EDT.

Sector Action – 06/14/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):   

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

The calm before the storm?  Relative to yesterday is was muted day with COMPQ finishing slightly up and SPX trading down.  We now wait.  Updated 06/14/22 close.

 

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

  • Wednesday After the Close: none of note.
  • Thursday Before the Open: KR, JBL, CMC of note.

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance:KIDS, SCHW, CXM of note.
  • Negative Guidance: MEI of note.

Erlanger Research Advance/Decline Chart: Updated through 06/14/22 close.

 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: MOR +8%.
  • Gap Down: MEI -10%, PL -9%, MEG -5%.

Insider Action:  THO, MSTR sees Insider buying with dumb short selling.  FTHM, AEO, TCDA sees Insider buying with smart short sellers. 06/14/22 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: MSTR BIDU MRNA (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Bitcoin on verge of breaking $20K. (Bloomberg)
  • Bloomberg Most Read Story: President Biden has never been more optimistic. (Bloomberg)
  • Mortgage demand 50% lower than a year ago. (CNBC)
  • Texas power demand hits a new record in heat wave. (CNBC)
  • European Central Bank (ECB) holding an emergency meeting today. (WSJ)
  • Russian oil revenue jumps to $20 billion in May says IEA. (Bloomberg)
  • Republican Mayra Flores wins a special election in south Texas becoming first Republican to win in the majority Hispanic district. (NYT)
  • President Biden may remove some but not all of the tariffs President Trump put in place on China, but not all. (NYT)
  • President Biden to ask Congress for $88 billion for future pandemics. (Bloomberg)
  • President Biden sent letter to U.S. Oil companies saying their margins are too high and ordered an emergency meeting. Biden says will help them increase output. (Bloomberg)
  • West Virginia may ban big banks and Blackrock (BLK) based on climate change investment decisions. (Reuters)
  • U.S. and European regulators to meet on Boeing (BA) and the 777X. (Reuters)
  • U.S. will not push Ukraine into a ceasefire with Russia. (NYT)
  • Caterpillar (CAT) to leave Illinois for Texas. (Bloomberg)
  • Microstrategy (MSTR) has yet to receive a margin call on its Bitcoin position. (Reuters)

Moving Average Update:

  • Score remains at zero and we will need a jolt to get some green again.  See below of the graphical representation of the moving averages with the SPX.  Off 4.5% from just the 5 day moving average.  Updated 06/14/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 9:30 a.m. EDT
    • The President has lunch with The Vice President, 12:15 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 3:00 p.m. EDT
    • The President and The First Lady host a reception and deliver remarks celebrating Pride Month; The Vice President, The Second Gentleman, the Secretary of Interior, and the Secretary of Transportation attend, 4:00 p.m. EDT

Economic: 

  • MBA Mortgage Applications Jun 10: 6.6% (prev -6.5%), Purchases +8.1% vs -7.1% last, Refis +3.7% vs -5.6% last. US MBA 30-Year Mortgage Rate Jun 10: 5.56% (prev 5.40%)
  • May Retail Sales are due out at 8:30 a.m. EDT and are expected to come in at 0.2% which is positive but lower than April’s at 0.9%.
  • June Empire State Manufacturing is due out at 8:30 a.m. EDT and is expected to rise by 3.0 from a drop of -11.6.
  • Import and Export Prices 8:30 a.m. EDT
  • June NAHB Housing Market is due out at 10:00 a.m. EDT and is expected to come in at 68 from 69.
  • Business Inventories 10:00 a.m. EDT
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • The Federal Reserve Open Market Committee (FOMC) is out at 2:00 p.m. EDT with its latest announcement and presser at 2:30 p.m. EDT. Rates are now expected to be raised by 75 basis points.

M&A Activity:

  • Boston Scientific (BSX) Announces Agreement to Purchase Majority Stake of M.I.Tech Co., Ltd from Synergy Innovation Co., Ltd.
  • Excelera to Become Publicly Traded via Merger with Future Health (FHLT).
  • KBR to acquire VIMA Group for up to GBP 75 million.
  • PPG Industries (PPG) divests of Eberle Design to Vance Street Capital.
  • SpartanNash (SPTN) announces acquisition of Shop-N-Save Food Centers.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bernstein Interactive Sports Betting & iGaming Conference
    • Berenberg Thematic Software Conference 2022
    • BMO Fixed Income Financial Services Conference
    • The JMP Securities Life Sciences Conference 2022 (06/15/22-06/16/22)
    • Nomura Virtual Greater China Corporate Day June 2022 in US Part One (06/15/22-06/16/22)
    • Sidoti Summer Small Cap Virtual Conference 2022 (06/15/22-06/16/22)
    • UBS Utility and Clean Energy Summit 2022
      • Previously posted and ongoing conferences:
        • Bank of America Healthcare in Napa Forum
        • Barclays European Internet & Emerging Tech / FinTech Conference (06/10/22-06/14/22)
        • Citi 11th Annual European Healthcare Conference 2022 (06/14/22-06/16/22)
        • Credit Suisse 24th Annual Communications Conference 2022 (06/14/22-06/15/22)
        • Credit Suisse Energy in Transition Conference 2022 (06/14/22-06/15/22)
        • Deutsche Bank 19th annual dbAccess Global Consumer Conference 2022 (06/14/22-06/16/22)
        • Deutsche Bank Global Auto Industry Conference (06/14/22-06/16/22)
        • Evercore ISI Global Clean Energy & Transition Technologies Summit 2022 (06/14/22-06/15/22)
        • Exane BNP Paribas 24th European CEO Conference 2022 (06/14/22-06/17/22)
        • Goldman Sachs 43nd Annual Global Healthcare Conference 2022 (06/13/22-06/16/22)
        • Goldman Sachs Brazil Disruption Conference
        • HSBC 6th Annual Asia Credit Conference 2022 (06/13/22-06/24/22)
        • JP Morgan European Insurance Conference 2022 (06/14/22-06/16/22)
        • Morgan Stanley 13th Annual US Financials Payments & CRE Conference 2022 (06/13/22-06/15/22)
        • Oppenheimer 22nd Annual Consumer Growth and E-Commerce Conference 2022 (06/14/22-06/15/22)
        • SEMICON West
        • Scotiabank ESG Conference and Sustainability Summit 2022 (06/14/22-06/15/22)
        • Wells Fargo Streaming & Connectivity Conference 2022 (06/13/22-06/14/22)
  • Company Meetings: BIIB, CCTC, DKS, GRPN, LBTYA.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AJG, AZEK, BDC, BLKB, IOT, PLMR
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Cisco (CSCO) Live 2022 (06/12/22-06/15/22)
    • Pega (PEGA) World iNspire Conference 2021 (06/12/22-06/14/22)
    • Verint (VRNT)Engage Customer Engagement Conference 2022 (06/13/22-06/16/22)
  • Industry Meetings:
    • American Association of Heart Failure Nurses (AAHFN) 18th Annual Meeting 2022 (06/15/22-06/18/22)
    • 2022 Florida Liability Claims Conference Florida Defense Lawyers Association (06/15/22-06/17/22)
      • Previously posted and ongoing conferences:
        • ISSCR 2022 – International Society for Stem Cell Research Annual Meeting / Conference (06/14/22-06/18/22)
        • 2022 FDLI Annual Conference Food and Drug Law Institute (06/14/22-06/15/22)
        • American Society for Nutrition’s Annual Conference ‘Nutrition 2022’ (06/14/22-06/16/22)
        • 12th International Advanced Automotive Battery Conference (AABC) Europe 2022 (06/13/22-06/15/22)
        • Biotechnology Innovation Organization (BIO) International Convention 2022 (06/13/22-06/16/22)
        • Prospectors & Developers Association of Canada (PDAC) Mining International Trade Show & Conference (In Person) 2022 (06/13/22-06/15/22)
        • Endocrine Society Annual Meeting ENDO 2022 (06/11/22-06/14/22)
        • The 20th International Symposium on Pediatric Neuro-Oncology (ISPNO) Annual Meeting 2022 (06/11/22-06/15/22)
        • Society of Nuclear Medicine and Molecular Imaging (SNMMI) Annual Meeting 2022 (06/11/22-06/14/22)
        • Society for Human Resource Management (SHRM) Annual Conference & Expo 2022 (06/11/22-06/15/22)
        • Vaccine Technology VIII: An Engineering Conferences International (ECI) Conference Series 2022 (06/11/22-06/17/22)

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: