CAPIS Morning Note – 07/14/23: Earnings Season Kicks Off This Morning With Several Beats.

Overnight Summary:  The S&P 500 closed Thursday at 4510.04 higher by 37.88 from Wednesday at 4472.16 higher by 0.72. Overnight ranges saw the high hit at 4543 at 7:30 p.m. EDT while the low was hit at 4534.50 at 8:30 p.m. EDT. The range overnight was 9 points. The 10-day average of the overnight range is at…

Overnight Summary:  The S&P 500 closed Thursday at 4510.04 higher by 37.88 from Wednesday at 4472.16 higher by 0.72. Overnight ranges saw the high hit at 4543 at 7:30 p.m. EDT while the low was hit at 4534.50 at 8:30 p.m. EDT. The range overnight was 9 points. The 10-day average of the overnight range is at 17.40 from 18.40 yesterday.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is lower by -2.75 points and is lower by -0.06% at 7:00 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:
    • Apogee Therapeutics (Nasdaq – APGE) upsizes and prices 17.65 mln share IPO at $17.00 per share, at the high end of the $15-17 expected range.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • BRF SA (BRFS) approved the pricing of a primary offering of 600,000,000 common shares issued by BRF at R$9.00 per common share following the conclusion of the bookbuilding process, totaling an aggregate offering price of R$5.4 billion.
    • CRBU: Pricing of Upsized $125 Million Public Offering 19,230,769 shares at $6.50.
    • SGMT: Pricing of Upsized Initial Public Offering — 5,312,500 shares @$16
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ADMP: Filed Form S-1.. Up to 4,651,163 Units consisting of 4,651,163 Shares of Common Stock or 4,651,163 Pre-Funded Warrants.
    • CRBU: Proposed Public Offering of Common Stock $100 million of shares. (BAC, Leerink, Evercore and RBC Bookmanagers) (MarketWatch)
    • IOVA: Announces Closing of $172.5 Million Common Stock Public Offering.
    • LILM: Launch of Offering of Class A Shares.
    • PTPI: Announces Capital Raise of $15 Million.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt/Credit Filing and Notes:
    • COTY: Successfully Completes Refinancing of Its Revolving Credit Facility.
  • 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: ACAD +22%, LUNR +14%, AEHR +6% of note.
    • Trading Down: THRX -70%, LESL -19%, LILM -8%, CRBU -7%, TIXT -7%, POOL -5% of note.
  • News Items After the Close:
    • Theseus Pharmaceuticals (THRX) stock plummets after cancer drug development stopped. (MarketWatch)
    • Acadia Pharmaceuticals (ACAD) stock rockets 30% following expanded drug rights. (MarketWatch)
    • Ripple Ruling Deals a Blow to SEC’s Effort to Regulate Crypto. (WSJ)
    • Spacex Has An Agreement With New And Existing Investors To Sell Up To $750 Million In Stock From Insiders At $81 A Share. (CNBC)
    • Federal Reserve Board of Governors Christopher Waller: Favors Raising Rates At July Fomc Meeting – Likely To Need Two More 25 Basis Point Rate Hikes This Year – Cooler CPI Data Welcome But Need To See If It Is Sustained – Inflation Has Shown False Dawns Before – While Job Market Has Slowed Which Remains Very Strong – Jobs, Economic Strength Give Fed Space To Hike Further.
    • Palo Alto Networks (PANW) CEO notes Microsoft has a long way to go to catch up on SASE space when he spoke on Cramer’s Mad Money. (CNBC)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Atossa Therapeutics (ATOS) Regains Compliance with Nasdaq Minimum Bid Price Listing Requirements.
    • Azure Power (AZRE) NYSE to commence delisting proceedings.
    • The Beneficient Company (BENF) discloses in 10-K it received a “Wells Notice” from SEC relating to its association with GWG Holdings.
    • Casa Systems  (CASA) announces appointment of Michael Glickman as new President and Chief Executive Officer.
    • CENTOGENE (CNTG) Regains Compliance With Nasdaq Listing Requirements.
    • FNKO: Brian Mariotti to Take Leave of Absence and Cease Serving as Funko’s CEO. (MarketWatch)
    • Leslie’s (LESL) CFO Steve Weddell stepping down.
    • Neurocrine Biosciences (NBIX) Chief Medical Officer to retire in 2025.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • Aptar (ATR) Announces Quarterly Dividend Increase of 7.9%.
    • KB Home (KBH) Increases Quarterly Dividend to $0.20, up $0.05. (MarketWatch)
    • J.M. Smucker (SJM) approves an increase in the quarterly dividend from $1.02 to $1.06 per common share.
  • Insider Sales Of Note: None of note.

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

S&P 500 +5, Dow Jones +155,  NASDAQ +4, and Russell 2000 -4. (as of 7:51 a.m. EDT).  Asia higher ex Japan and Europe higher ex Germany this morning. VIX Futures are at 15.93 from 15.58 yesterday.  Gold lower, Silver higher and Copper lower this morning. WTI Crude Oil lower with Brent Crude Oil and Natural Gas is higher. US 10-year Treasury sees yields at 3.785% from 3.822% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $31,116 from $30,530.74 yesterday, lower by -1.64%.

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

  • Daily Positive Sectors: Communication Services, Technology, Basic Materials, Consumer Cyclical 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 marched higher Thursday after investors received data—for a second consecutive day—showing that inflation is moderating to its slowest pace in years.  The Labor Department reported the producer-price index rose in June at a weaker clip than economists expected. That followed Wednesday’s report that showed consumer inflation fell to multiyear lows.  Investors continued piling into big tech stocks, encouraged by signs that the worst of the inflation fight is over and the economy remains strong. Amazon.com (AMZN) jumped 2.7% on the back of its Prime Day sale, while chip-maker Nvidia (NVDA) added 4.7%. The 2.3% rise in the communication services segment led the S&P 500, followed by information technology.   (WSJ – edited by QPI)

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

  • Friday After the Close: None of note.
  • Monday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: BLK +0.76, JPM +0.40, ERIC +0.19, UH +0.13, WFC +0.10, STT +0.07 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: C of note.

Guidance:

  • Positive Guidance: AEHR of note.
  • Negative Guidance: INGN, CTAS, LESL, TIXT, ARNC of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ACAD +20%, LUNR +19%, ELAN +11%, AEHR +4% of note.
  • Gap Down: THRX -65%, LESL -29%, OGI -15%, CRBU -10%, ERIC -9%, NOK -8%, LILM -7%, TIXT -6%, POOL -4% of note.

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

  • 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: Wall Street Caps A Week of “Everything Rally”. (Bloomberg)
  • Bloomberg Most Shared Story: How Much Income You Need To Crack America’s Richest 1%. (Bloomberg)
  • Wall Street Caps a Week of ‘Everything Rally’: Markets Wrap. (Bloomberg)
  • Biden Administration forgives $39 billion in student debt for more than 800,000 borrowers. (CNBC)
  • JP Morgan (JPM) beats and lifts. (Bloomberg)
  • Wells Fargo (WFC) raises income guidance on rate hikes. (Bloomberg)
  • Blackrock (BLK) assets rise to $9.4 trillion as company reports. (Bloomberg)
  • United Healthcare (UNH) beat estimates as it overcomes recent questions. (Reuters)
  • Hollywood actors join writers in strike against the studios. (Bloomberg)
  • French Billionaire Pinault in talks to by CAA. (Bloomberg)
  • NPR Most Recent  Business Podcast: Wages are outpacing inflation again, but don’t get too excited. (Listen Here)

Moving Average Update:

  • Day 3 at 100%…the beat goes on…..

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • The President and The First Lady depart the White House en route to Camp David, 1:30 p.m. EDT

Economic:

  • June Import/Export Prices are due out at 8:30 a.m. EDT and last month fell -0.6% and -1.9%.
  • July University of Michigan Consumer Sentiment is due out at 10:00 a.m. EDT and is expected to rise to 65.6 from 64.40.

Federal Reserve / Treasury Speakers: None of note.

M&A Activity:

  • Jamf Holding (JAMF) acquires dataJAR.
  • Korro Bio and Frequency Therapeutics (FREQ) Announce Merger Agreement.

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: