CAPIS Morning Note – 07/13/22: CPI Inflation Data Due Out. Will The Morning Strength Hold Post The Release?

Overnight Summary: The S&P 500 closed Tuesday at 3818.80 from 3854.43 (-1.15%) on Monday.  Futures are trading higher in the premarket session. The overnight high of 3838.75 was hit at 2:55 a.m. EDT. The low was hit at 3818 at 4:05 p.m. EDT, a range of 20 points high to low which is below the…

Overnight Summary: The S&P 500 closed Tuesday at 3818.80 from 3854.43 (-1.15%) on Monday.  Futures are trading higher in the premarket session. The overnight high of 3838.75 was hit at 2:55 a.m. EDT. The low was hit at 3818 at 4:05 p.m. EDT, a range of 20 points high to low which is below the range of late with 45 the average range. At 7:15 a.m. EDT the current price is 3832.25 which is 0.22% and 8.50 points.

Breaking News: Spirit Airlines (SAVE) Again Delays Shareholder Vote on Merger, Backs Frontier (ULCC) Deal. (WSJ)

Earnings Out After The Close:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • Deep Medicine Acquisition Corp. (DMAQ): Chijet Motor Company entered into a business combination agreement with Deep Medicine Acquisition Corp. to become a public company.
    • Global Synergy Acquisition Corp. (GSAQ) will redeem its Public Shares and will not consummate an initial business combination.
  • Secondaries Priced:
    • AGTC: Announces Pricing of $10 Million Underwritten Public Offering.
    • NCPL: Announces Pricing of Public Offering and Nasdaq Listing.
    • PLRX: Prices $200 million offering. 10.8 million shares at $18.50 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • FCEL: Entered into $75 million Open Market Sale Agreement.
    • MIRO: Filed Form 424B5.. Up to $50,000,000 Common Stock.
    • PETZ: Filed Form RW — Request for Withdrawal of Registration Statement on Form F-3.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • VERO: Form 8K.. $11Million Purchase agreement with Lincoln Park Capital.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • HOOK: Filed Form S-3.. $200,000,000 Mixed Shelf.
    • KNTK: Filed Form S-3.. $400,000,000 Mixed Shelf.
  • 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.

  • After Hours: 
    • Trading Up: SFIX +8%, BRCC +4%.
    • Trading Down: ATRA -31%.
  • News Since The Close:
    • Twitter (TWTR) sues Elon Musk in Delaware court for violating $44 billion merger agreement twitter seeks court order forcing musk to close acquisition at $54.20 per Twitter share. (CNBC)
    • IMF cuts US 2022 GDP Growth Forecast To 2.3% VS June Est. 2.9% – Raises 2022 US Jobless-Rate Est. To 3.7% VS 3.2% In June – Cuts US GDP, Raises Jobless Forecasts On Inflation Risks.
    • Alphabet (GOOG) CEO Sundar Pichai shared message with Google employees – confirms will be slowing the pace of hiring.
    • Mercury (MRCY) received a $56 million contract award from a leading defense prime contractor.
    • Monthly Assets Under Management:
      • BEN $1.38 billion – down 4.6% from May.
      • IVZ $1,390.4 billion – down 4.2%.
      • APAM $130.5 billion.
      • AB AUM 6% decline in June.
      • VRTS $155.4 billion, down 7% from May.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Agios (AGIO) Appoints Brian Goff as Chief Executive Officer.
    • BRC Inc. (BRCC) appoints Roland Smith as Executive Chairman.
    • Desktop Metal’s (DM) CFO resigning to pursue other interests.
    • Fidelity National (FNF) COO Roger Jewkes transitions from his role to the role of Executive VP.
    • InMed Pharmaceuticals (INM) Receives Nasdaq Notification Regarding Minimum Bid Price Compliance.
    • McDonald’s (MCD) Appoints Jill McDonald as Executive Vice President and President, International Operated Markets.
    • Stitch Fix (SFIX): Director discloses 1 million share purchase in filing.
    • Swvl’s (SWVL) Founders, SPAC Sponsor and Certain Pre-Business Combination Investors voluntarily extend lock-up.
  • Buyback Announcements or News:
    • Fastenal Company (FAST) Announces New Share Repurchase Authorization up to 8 million shares.
    • OLB Group (OLB) Authorizes Share Repurchase Program.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: 
    • Clorox (CLX) Increases Quarterly Dividend 2% to $1.18 Per Share.
    • Fastenal Company (FAST) Announces Cash Dividend.

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

S&P 500 +13, Dow Jones +95, NASDAQ +50, and Russell 2000 +7. Europe lower and Asia higher ex Hong Kong.  VIX Futures are at 27.12 from 27.58 yesterday morning and the VIX closed at 27.29 from 26.17  yesterday. Gold higher with Silver and Copper lower. WTI Crude Oil  and Brent Oil Futures higher and Natural Gas higher. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury sees yields at 2.948% from 2.917% yesterday morning. Bitcoin is at $19,776.66 from $19,707.19 yesterday morning and is higher by 1.92% this morning. As of 8:03 a.m. EDT.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Energy, Technology, Healthcare, Basic Materials of note.
  • One Month Winners: Healthcare  of note.
  • Three Month Winners: none of note.
  • Six Month Winners: Energy of note.
  • Twelve Month Winners: Energy and Utilities of note.
  • Year to Date Winners: Energy of note.

All was good trading in a reasonable range ahead of Wednesday’s CPI release.  Then just before 3pm all indexes started a pullback down.  Most indexes were just shy of being down 1%.  TLT continues its march up, closing at $115.12 for a 0.59% gain.  USO pulled back 6.93%.  Updated 07/12/22 close.

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

  • Wednesday After the Close: WAFD of note.
  • Thursday Before the Open: TSM, MS, JPM, FRC, ERIC, CAG, CTAS of note.

Earnings of Note This Morning:

  • Beats: FAST +0.01.
  • Flat: None of note.
  • Misses: DAL (0.28).
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: INMD of note.
  • Negative Guidance: none of note.

Erlanger Research Advance/Decline Chart: Updated through 07/12/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SFIX +8%, SWVL +7%, GEVO +6%, MYGN +5%, GBDC +5%, GOEV +4%.
  • Gap Down: HGEN -55%, ATRA -44%.

Insider Action: No stock sees Insider buying with dumb short selling.  SBOW sees Insider buying with smart short sellers. 07/12/22 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: DAL TWTR SNAP NVAX U SFIX (CNBC)
  • 5 things to know before the stock market opens Wednesday (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Futures, Stocks Mixed Before Key Inflation Data. (Bloomberg)
  • Bloomberg Most Read Story: Fresh U.S. Inflation Peak tp Keep on Aggressive Rate Path. (Bloomberg)
  • Sri Lankan President flees as country moves into disarray. (Bloomberg)
  • Higher Oil prices to persist despite recent drop. (Bloomberg)
  • Demand for big mortgages shrinks as home prices moderate. (CNBC)
  • Hospitalizations for Covid-19 have doubled since May but deaths remain low as Omicron BA.5 sweeps country. (CNBC)
  • The latest NYSE Short Interest rose 1.27% while NASDAQ fell -0.28%. Overall, short interest remains heavy on a historical basis. (Erlanger Research)
  • Google (GOOGL) to slow hiring through 2023. (CNBC)
  • Illumina (ILMN) loses antitrust probe challenge against Grail. (Reuters)
  • Meta (META) ends contract with ABM Industries (ABM). (CNBC)
  • Robinhood Snacks looks at Peloton (PTON) hard pivot to not produce equipment. Gap Inc. (GPS) replaces its CEO as inventory piled up.

Moving Average Update:

  • Score drops to 20% from 34%.  Updated 07/12/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • Press Secretary Karine Jean-Pierre and National Security Advisor Jake Sullivan spoke aboard Air Force One en route Jerusalem, Israel, 6:00 a.m. EDT
    • The President arrives in Tel Aviv, Israel, 8:20 a.m. EDT
    • The President delivers remarks at the arrival ceremony, 8:30 a.m. EDT
    • The President receives a briefing on the Iron Dome and Iron Beam Air Defense Systems, 9:20 a.m. EDT
    • The President departs Tel Aviv, Israel en route Jerusalem, Israel, 9:50 a.m. EDT
    • The President arrives at Yad Vashem, Jerusalem, Israel, 10:25 a.m. EDT
    • The President participates in a Wreath Laying Ceremony, 10:35 a.m. EDT

Economic: 

  • MBA Mortgage Applications fell -1.7% versus -5.4% last week, Purchase: -3.6%, ReFi: +2.2% 
  • June CPI  is due out at 8:30 a.m. EDT and expected to come in at 1.10% from 1.0%. 
  • Atl. Fed Business Inflation 10:00 a.m. EDT
  • EIA Petroleum Report 10:30 a.m. EDT
  • The latest Treasury Budget is due out at 2:00 p.m. EDT and the last one came in at $-66.2 billion.

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • ironSource (IS) higher on reports of merger with Unity Software (U).
  • Kaleyra (KLR) Rejects Unsolicited Proposal to Acquire The Campaign Registry.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Alliance Global Partners Metals & Mining Showcase
    • CyberArk Impact
      • Previously posted and ongoing conferences:
        • CEO Summit with SEMICON West (07/12/22-07/14/22)
        • Demy Colton Biotech CEO Summit
        • Mizuho Securities FORTUNE Brainstorm Tech
        • Needham Virtual AdTech and CTV Measurement Conference 2022 (07/12/22-07/14/22)
        • SVB Therapeutics Forum
        • William Blair Biotech Focus Conference 2022 (07/11/22-07/13/22)\
  • Company Meetings: None of note.
  • Fireside Chat:
    • Talos Energy (TALO) Fireside Chat Hosted by Water Tower Research.
  • Investor/Analyst Day/Calls: PCYO, PHVS, RGLD, SCPH, SNCE, TMUS
  • Update: None of note.
  • R&D Day: None of note..
  • Company Event: Suncor Energy (SU) Oil Sands Operations Presentation.
  • Industry Meetings:
    • Ophthalmology Innovation Source (OIS) Retina Innovation Summit 2022
    • American Society of Retina Specialists (ASRS) 40th Annual Meeting 2022 (07/13/22-07/16/22)
    • 12th London International Cough Symposium (LICS) (07/13/22-07/14/22)
    • Advanced Wound Care Summit 2022 (07/13/22-07/14/22)
    • Hemophilia Investor Event
    • Acute Respiratory Distress Syndrome (ARDS) Drug Development Summit 2022 (07/13/22-07/15/22)
    • Powering the Healthcare Digital Front Door for Improved Patient Engagement.
      • Previously posted and ongoing conferences:
        • Controlled Release Society (CRS) 2022 Annual Meeting & Expo (07/11/22-07/15/22)
        • World Orphan Drug Congress USA 2022 (07/11/22-07/13/22)
        • International Society on Thrombosis and Haemostasis (ISTH) Congress 2022 (07/09/22-07/13/22)
        • Tissue Engineering and Regenerative Medicine International Society (TERMIS) Conference 2022 (07/10/22-07/13/22)

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: