CAPIS Morning Note – 06/20/23: Stocks Begin Week On A Down Note, Fed Chairman Powell To The Hill This Week To Testify

Overnight Summary: The S&P 500 closed Friday at 4409.59 lower by -0.37% from Thursday at 4425.84 higher by 1.22%. Overnight ranges saw the high hit at 4451 at 6:05 p.m. EDT while the low was high at 4432 at 4:55 a.m. EDT. The range overnight was 19 points. The 10-day average of the overnight range…

Overnight Summary: The S&P 500 closed Friday at 4409.59 lower by -0.37% from Thursday at 4425.84 higher by 1.22%. Overnight ranges saw the high hit at 4451 at 6:05 p.m. EDT while the low was high at 4432 at 4:55 a.m. EDT. The range overnight was 19 points. The 10-day average of the overnight range is at 16.50 from 15.80. The average for May was 21.63. Currently, the S&P 500 is lower by -14.75 points and is lower by -0.33% at 7:55 a.m. EDT.

Earnings Out After The Friday Close:

  • Beats:  None 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:
  • New SPACs launched/News:
  • Secondaries Priced: BEEM priced 2.5 million shares at $9.00 a share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • RDNT closing offering of 8.71 million common stock at $29.75 which include an overallotment of 1.14 million shares.
    • EWTX enters into a sales agreement with Bank of America to sell up to $125 million in stock through “at the market offering”
    • ATNF files S-1 common stock offering.
    • EFTR files S-3 for 20,559,865 shares of common stock.
    • FFIE files S-3 $300 million of common stock and warrants.
    • MARK files S-1 15 million shares of common stock.
  • Direct Offering:
  • Selling Shareholders of note:
    • FUSN files for 4,784,689 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • IOVA files a mixed shelf offering.
    • EKX files a mixed shelf offering.
    • DAL files a mixed shelf offering.
    • BKH files a mixed shelf offering.
    • ALBT files a mixed shelf offering.
    • CYTO files a mixed shelf offering.
  • Debt/Credit Filing and Notes:
  • Tender Offer:
  • Convertible Offering & Notes Filed:
    • EOSE files $32 million of Convertible Senior PIK 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:  None of note.
    • Trading Down: None of note.
  • News After The Close:
    • Merck (MRK) completes the acquisition of Prometheus Biosciences (RXDX) and no longer trades.
    • Danos Corp takes a 9.99% stake in Eagle Bulk Shipping (EGLE).
    • S&P 500 rose for its 5th straight week and NASDAQ 100 for its 8th straight week.
  • Weekend News
    • Barrons + UMG WMG ADDYY ORCL KR LEN AMD 
  • Exchange/Listing/Company Reorg and Personnel News:
    • Cano Health CEO (CANO) Dr. Marlow Hernandez steps down immediately.
  • Buyback Announcements or News:
    • Insider Sales of note after the close CSCO WMT ATEC.
    • QFIN to repurchase $150 million shares.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:

S&P 500 -14, Dow Jones -101,  NASDAQ -48, and Russell 2000 -7. (as of 7:55 a.m. EDT).  Asia higher ex the Kospi and Europe are lower ex the FTSE. VIX Futures are at 16.59 from 17.21 Friday.  Gold, Silver and Copper higher from Friday. WTI Crude Oil and Brent Crude Oil higher with Natural Gas higher. US 10-year Treasury sees yields at 3.761% from 3.73% Friday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $26,766 from $25,531 Friday, higher by 0.48%.

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

  • Daily Positive Sectors:  Utilities of note.
  • Daily Negative Sectors:  All others led by Communication Services, Technology and Consumer Cyclicals of note.
  • One Month Winners: Technology, Consumer Cyclical, Industrials, Communication Services of note.
  • Three Month Winners: Technology, Communication Services, Consumer Cyclical of note.
  • Six Month Winners: Technology, Communication Services, Consumer Cyclical of note.
  • Twelve Month Winners: Technology, Industrials, Consumer Cyclical of note.
  • Year to Date Winners:  Technology, Communication Services, Consumer Cyclical of note.

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

  • Tuesday After the Close: FDX LZB of note.
  • Wednesday Before the Open: PDCO KFY WGO of note.

Earnings of Note This Morning:

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

Guidance:

  • Positive Guidance:  of note.
  • Negative Guidance:  of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: DICE +40.2%, VERA +8.8%, FUSN +4.9%, RDNT +3.9%, NKLA +3.4%, SNY +2.7%, MCRB +2.4%, NMG +2.4%, CPRX +2.2% of note.
  • Gap Down: ACLX -18.9%, BEEM -7.4%, RYTM -3%, BABA -2.4%, HEAR -2% of note.

Insider Action:  PFX and SFBC see Insider buying with dumb short selling.  No names see 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 before the bell: BABA DICE CAR MO CCL (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Five Things To Know Before the Stock Market Opens Friday. (CNBC)
  • Bloomberg Lead Story: Alibaba’s Surprise Shakeup of Chairman, CEO Shows Drive to Revive Growth. (Bloomberg)
  • Bloomberg  Most Shared Story: Aircraft Mega Deals Prompt Bubble Warning From Industry Veterans. (Bloomberg)
  • Stocks Drop as Investors Face Gut Check On Rally: Market Wrap. (Bloomberg)
  • Chinese banks lowered lending rates. (WSJ)
  • U.S. Secretary of State Antony Blinken met with Chinese President Xi to improve relations. President Xi praised both sides for making progress. (NYT)
  • U.S. Steel (X) issues upside guidance. (Reuters)
  • Allegheny Tech (ATI) secures $1.2 billion in aerospace and defense sales commitments. (PR Newswire)
  • Raytheon Tech (RTX) reaffirms 2023 outlook at its investor day. (PR Newswire)
  • Boeing (BA) forecasts demand for 42,600 commercial jets over the next 20 years.
  • Regulators are concerned about commercial real estate amid increasing vacancies. (Bloomberg)

Moving Average Update:

  • Friday saw the Russell 2000 break its 5-day moving average. Otherwise, the indexes show extreme strength.

Geopolitical: 

  • President’s Public Schedule:
    • The president receives the daily briefing at 1:00 p.m. EDT.
    • The president discusses his Administration’s commitment to seizing opportunities and managing risks of AI at 4:00 p.m. EDT.
    • The president holds campaign receptions both in Larkspur, CA and San Francisco at 7:15 p.m. EDT and 10:00 p.m. EDT.

Economic:

  • May Housing Starts are out at 8:30 a.m. EDT and expected to come in at 1,400,000 from 1,401,000.

Federal Reserve / Treasury Speakers: Federal Reserve New York President Williams speaks at 11:45 a.m. EDT. Federal Reserve St. Louis President James Bullard speaks at 6:30 a.m. EDT. Federal Reserve Governor Christopher Waller speaks at 7:45 a.m. EDT.

M&A Activity: 

  • Eli Lilly (LLY) to buy Dice (DICE) for $48 a share.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Roth MKM LondonConference
    • Bank of Amercia EV Charging Conference
    • Raymond James Private Healthcare Services Symposium.
    • TD Cowen Radiopharmaceutical Innovation Summit 2023.
    • BAC C-Suite TMT Conference.
    • Cantor Brain Week One
    • Capital One Spatial Biology and Proteomics
    • Jefferis Consumer Conference
    • Jefferies Shipping Conference
    • JP Morgan Mexico Opportunities Conference
    • Maxim Healthcare Conference
    • Truist Securities MedTech
    • Wolfe Low Carbon Transition of Fuels and Molecules Conference
      • Previously posted and ongoing conferences:
        • None of note that carried over from Friday.
  • Top Shareholder Meetings:
  • Fireside Chat:
  • Investor/Analyst Day/Calls: AVNS DCGO RDN ZLAB ALB BSTG ATGE 
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • Industry Meetings:
    • Mining Investment Event of the North
      • Previously posted and ongoing conferences:

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: