CAPIS Morning Note – 07/12/23: Market Awaits CPI, Expectations Are For A Low Number.

Overnight Summary: The S&P 500 closed Tuesday at 4439.26 by 0.67% from Monday at 4409.53 higher by 0.24%. Overnight ranges saw the high hit at 4484 at 5:45 a.m. EDT while the low was hit at 4470 at 9:35 a.m. EDT. The range overnight was 14 points. The 10-day average of the overnight range is […]

Overnight Summary: The S&P 500 closed Tuesday at 4439.26 by 0.67% from Monday at 4409.53 higher by 0.24%. Overnight ranges saw the high hit at 4484 at 5:45 a.m. EDT while the low was hit at 4470 at 9:35 a.m. EDT. The range overnight was 14 points. The 10-day average of the overnight range is at 17.80 from 18 yesterday.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is higher by +9.25 points and is higher by 0.21% at 7:20 a.m. EDT.

Earnings Out After The 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:
    • SoftBank-owned Arm is in talks to bring in Nvidia (NVDA) as an anchor investor as it moves ahead with IPO plans in New York as soon as September, Financial Times reports, citing several unidentified people briefed on the talks.
  • New SPACs launched/News:
    • Athena Technology Acquisition Corp. II (ATEK) extended the period of time it has to consummate its initial business combination by one month.
    • Bellevue Life Sciences Acquisition Corp.(BLAC) and OSR Holdings Sign an Exclusive Letter of Intent for a Business Combination.
    • Priveterra Acquisition Corp. (PMGM) Announces Intention to Transfer to NYSE Upon Completion of Business Combination with AEON Biopharma.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • MBOT: Filed Form S-1.. 2,281,626 Shares of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • EH: US$23 Million Private Placement Led by South Korean Strategic Investor Lee Soo Man.
  • Mixed Shelf Offerings:
    • EDBL: Filed Form S-3.. $50,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • KGC: To redeem $500 million in Senior Notes on August 10, 2023.
  • Tender Offer: None of note.
  • 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 and Over the Holiday:

  • After Hours: 
    • Trading Up: None of note.
    • Trading Down: None of note.
  • News Items After the Close:
    • Disney (DIS) Exploring Strategic Options For Star India Business. (WSJ)
    • Caremark (CVS) Customers Face Delays Filling Prescriptions Due to System Issue. (WSJ)
    • DIS WBD PARA: Studio Execs Eye Federal Mediation Over Actor Strike: (Variety)
    • COTY: Kim Kardashian in Talks to Buy Back Stake In Beauty Business From Coty — WSJ *Coty Acquired 20% Stake in What’s Now SKKN BY KIM in 2020 at $1 Billion Valuation. (WSJ)
    • Huntington Ingalls (HII) awarded $84 million contract to continue supporting the National Geospatial Agency’s IT enterprise cloud migration.
    • Assets Under Management (MoM): CNS $80.4 billion (up $2.6 billion)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Airspan Networks Holdings (MIMO) Receives Notice of Non-compliance From NYSE American.
    • BlueLinx (BXC) announces that Andrew Wamser will join company as Senior Vice President and Chief Financial Officer-Elect.
    • Faraday Future (FFIE) Announces Appointment of Jonathan Maroko as Interim Chief Financial Officer and Restatement of Previously Issued Financial Statements. (MarketWatch)
    • Life Storage (LSI) Mourns the Sudden Passing of Alexander Gress, Chief Financial Officer.
    • PeopleS Bancorp (PEBO) inc. announces planned retirement of Chuck Sulerzyski and election of Tyler Wilcox as next CEO.
  • Buyback Announcements or News:
    • Seaboard (SEB) gets stock buyback proposal from founding Bresky family. (MarketWatch)
  • Stock Splits or News:
    • Katapult (KPLT) Announces 1-for-25 Reverse Stock Split of Common StockCommon Stock Expected to Begin Trading on Reverse Split-Adjusted Basis on July 28, 2023.
  • Dividends Announcements or News:
    • Cummins (CMI) increases quarterly dividend by 7% to $1.68 per share.
    • Gladstone Investments (GAIN) declared a monthly dividend of $0.08 per share of common stock for each of July, August and September 2023, and a supplemental distribution of $0.12 per share of common stock in September 2023.
    • Noble Corporation (NE) initiates a quarterly dividend of $0.30 per share. (MarketWatch)
    • Terex (TEX) Raises Dividend 13% to $0.17 per share.
  • Insider Sales Of Note:
    • None of note.

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

S&P 500 +11, Dow Jones +57,  NASDAQ +58, and Russell 2000 +13. (as of 7:55 a.m. EDT).  Asia is higher ex the Nikkei while Europe higher this morning. VIX Futures are at 15.28 from 15.45 yesterday.  Gold, Silver and Copper higher this morning. WTI Crude Oil higher with Brent Crude Oil lower and Natural Gas lower. US 10-year Treasury sees yields at 3.954% from  3.97% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $30,728.02 from $30,438 yesterday, higher by 0.57%.

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

  • Daily Positive Sectors: Energy, Real Estate, Basic Materials, Utilities, Financial, Communication Services, Industrials of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners: Consumer Cyclical, Industrials, Technology  of note.
  • Three Month Winners: Technology, Consumer Cyclical, Communication Services of note.
  • Six Month Winners: Technology, Communication Services, Consumer Cyclical of note.
  • Twelve Month Winners: Technology, Industrials, Energy of note.
  • Year to Date Winners:  Technology, Communication Services, Consumer Cyclical of note.

Stocks rallied for a second day in a row on Tuesday as investors waited on an inflation update due Wednesday from the June CPI. The Dow Jones Industrial Average posted a nearly 317-point gain, advancing 0.9%, to end near 34,260. That marks its biggest daily percentage gain since June 15. The S&P 500 index closed up 0.7%, while the Nasdaq Composite Index gained 0.6%. Stocks have been on the upswing ahead of a key inflation reading for June, with CPI expected to show further progress in retreat from its peak above 9% last summer. The Federal Reserve has indicated it likely has a few more rate hikes on tap this year to help bring inflation down toward its 2% annual target. Investors also will be tuning into second-quarter earnings, which kick off in earnest later in the week with results from some of the nation’s biggest banks.  (MarketWatch – 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:  of note.
  • Flat: ANGO of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

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

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: GDRX +4% of note.
  • Gap Down: SILK -25%, ACHC -5% of note.

Insider Action: No stock sees Insider buying with dumb short selling.   sees Insider buying with smart short sellers.

None of note.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

  • Five Things to Know Before The Stock Market Opens This Morning (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Pivotal US CPI Report To Show Lowest Core Inflation Since 2021. (Bloomberg)
  • Bloomberg Most Shared Story: Poisoned Cough Syrup Killed Kids. Authorities Cut the Investigation Short (Bloomberg)
  • Dollar drops, Stocks gains before US Inflation Data: Market Wrap. (Bloomberg)
  • Illumina (ILMN) fined $476 million for closing Grail deal without EU approval. Will appeal. (CNBC)
  • U.S. Mortgage Rate tops 7% for the first time since last fall. (CNBC)
  • Large automakers reach a deal on battery metals to be used. (WSJ)

Moving Average Update:

  • Score bounces up to 100% from 74%.

Geopolitical: 

  • President’s Public Schedule:
    • The President attends the Meeting of the North Atlantic Council at the level of Heads of State and Government, with Sweden, Indo-Pacific Partners, and the EU, 3:15 a.m. EDT
    • The President attends the Meeting of the NATO-Ukraine Council at the level of Heads of State and Government, with Sweden, 6:00 a.m. EDT
    • The President participates in a family photo with G7 leaders, 8:10 a.m. EDT
    • The President participates in a bilateral meeting with President Volodomyr Zelenskyy of Ukraine, 8:45 a.m. EDT
    • The President delivers remarks highlighting how the United States, alongside our allies and partners, are supporting Ukraine, defending democratic values, and taking action to address global challenges, 12:45 p.m. EDT
    • The President departs Vilnius, Lithuania en route to Helsinki, Finland, 2:10 p.m. EDT
    • The President arrives in Helsinki, Finland, 3:25 p.m. EDT

Economic:

  • MBA Mortgage Applications were out at 7:00 a.m. EDT and came in at 0.9% increase from a drop of -4.4% last week.
    • MBA Mortgage Applications: Composite: +0.9%, Purchase: +1.8%, ReFi: -1.3%
    • U.S MBA 30-YEAR MORTGAGE RATE ACTUAL: 7.07% VS 6.85% PREVIOUS
    • U.S MBA MORTGAGE APPLICATIONS (WOW) ACTUAL: 0.9% VS -4.4% PREVIOUS
  • June CPI is due out at 8:30 a.m. EDT and is expected to rise 0.3% from 0.1%.
  • May Factory Orders are due out at 10:00 a.m. EDT and are expected to climb to 0.3% from 0.1%.
  • Atlanta Fed Business Expectations 10:00 a.m. EDT
  • EIA Petroleum Report 10:30 a.m. EDT
  • The Latest Federal Reserve Beige Book is due out at 2:00 p.m. EDT.
  • The Latest Short Interest Data for the NYSE and NASDAQ from June 15th through June 30th on a settlement date basis. During this period, the S&P 500 rose a paltry 0.18%.

Federal Reserve / Treasury Speakers:

  • Federal Reserve Richmond President Thomas Barkin 8:30 a.m. EDT
  • Federal Reserve Minneapolis President Neel Kashkari 9:45 a.m. EDT
  • Federal Reserve Atlanta President Raphael Bostic 1:00 p.m. EDT
  • Federal Reserve Cleveland President Loretta Mester 4:00 p.m. EDT

M&A Activity:

  • Broadcom (AVGO) Gets EU Green Light For $61 Billion VMware (VMW) Deal.
  • NexPoint Sends Demand Letter for Books and Records to Paratek Pharmaceuticals (PRTK) in Connection with Proposed Acquisition by Gurnet Point Capital.
  • Wildcat Capital Management Issues Letter to Consolidated Communications’ (CNSL) Special Committee Urging it to Reject the Recent “Take Private” Proposal at $4.00 Per Share. (Reuters)

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 is 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:

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