CAPIS Morning Note – 07/17/23: Earnings Season Has A Busy Week Ahead, Stocks Modestly Lower Overnight.

Overnight Summary:  The S&P 500 closed Friday at 4505.42 at -0.10% from Thursday at 4510.04 higher by 37.88 up 0.85%. Overnight ranges saw the high hit at 4539.25 at 4:25 a.m. EDT while the low was hit at 4528.75 at 6:20 a.m. EDT. The range overnight was 11 points. The 10-day average of the overnight…

Overnight Summary:  The S&P 500 closed Friday at 4505.42 at -0.10% from Thursday at 4510.04 higher by 37.88 up 0.85%. Overnight ranges saw the high hit at 4539.25 at 4:25 a.m. EDT while the low was hit at 4528.75 at 6:20 a.m. EDT. The range overnight was 11 points. The 10-day average of the overnight range is at 16.70 from 17.40 yesterday.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is lower by -4 points and is lower by -0.09% at 7:15 a.m. EDT.

Earnings Out After The Close: 

  • Beats: None of note
  • Flat: None of note.
  • Misses: WAFD (0.05) 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: None of note.
  • New SPACs launched/News:
    • Andretti Acquisition Corp. (WNNR) extended the date by which the Company must consummate its initial business combination.
    • Genesis Growth Tech Acquisition Corp. (GGAA) Announces Receipt of Nasdaq Delisting Notification.
    • Globus Maritime Limited (GLBS) Announces Receipt of Nasdaq Notice of Deficiency.
    • Prime Number Acquisition I Corp. (PNAC) Announces Extension of the Deadline for an Initial Business Combination.
    • TLG Acquisition One Corp. (TLGA) Announces Updates to its Joint Proxy Statement/Consent Solicitation Statement/Prospectus in Connection with its Proposed Business Combination and its Proxy Statement in Connection with its Extension Meeting.
    • WinVest Acquisition Corp. (WINV) Announces Extension of Termination Date and Additional Contribution to Trust Account to Extend Termination Date.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BCAN: Announces Proposed Underwritten Public Offering.
    • OPGN: Filed Form S-1.. Offering.
    • TIVC – Tivic Health Announces Proposed Public Offering of Common Stock.
    • VERO: Filed Form S-3.. 2,082,426 Shares of Common Stock.
    • VIRI: Form 8K.. entered into a Capital On Demand™ Sales Agreement.
    • VSAT: Form S-3ASR.. 45,427,103 Shares of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • ALVO: Files for 3,664,580 ordinary share offering by selling shareholders.
    • CLEU: Form F-3.. Up to 1,622,017 Ordinary Shares offered by the selling securityholder. (see Mixed Shelf too)
    • DUOT: Filed Form S-1.. 1,333,334 Shares of Common Stock Offered by Selling Stockholders.
    • EDRY: Filed Form F-3.. 1,336,679 of our Common Shares Offered by the Selling Shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • BRKL: Form S-3 Filed –$200,000,000 Mixed Shelf.
    • CLEU: $100 Million Mixed Shelf.
    • FBNC: Filed Form S-3ASR.. Mixed Shelf.
    • GLBS: Filed Form F-3.. $300,000,000 Mixed Shelf .. up to 18,020,587 Common Shares underlying previously-issued warrants.
    • PEV: Filed Form S-3.. $25,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • BPOP: Announces Redemption of Senior Notes Due 2023.
    • BECN: Announces $500 Million Senior Secured Notes Offering.
    • CRGY: Announces Offering of $250 Million Private Placement of Additional 9.250% Senior Notes Due 2028.
  • Tender Offer:
    • SSYS: Board of Directors Unanimously Rejects Nano Dimension’s Revised Partial Tender Offer.
  • Convertible Offering & Notes Filed:
    • FSR: Announces Successful Closing of $340 million Convertible Notes Offering.

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 Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: EVLO 56.9%, UIS 35.9%, ACAD 33.1%, AAOI 27.0%, CVNA 26.0%, TNDM 24.3%, TSE 23.4%, MESO 23.0%, VCYT 21.3%, NVAX 20.9%, MUX 20.9%, TTD 18.7%, DOMO 18.4%, ELAN 18.2%, ROKU 18.0%, NGD 17.8%.
    • Trading Down: FNKO -24.2%, DERM -23.5%, URGN -21.9%, CHRS -17.2%, GOL -16.7%, INGN -14.8%, COMM -13.8%, BLUE -11.4%, TGTX -11.2%, BRFS -10.9%, BKD -10.9%, PGR -10.8%, AZUL -10.8%.
  • News Items After the Close:
    • Paramount’s (PARA) Parent Company in Talks With Creditors After Disclosing Financial Risks. (WSJ)
    • Seagen (SGEN) and Pfizer (PFE) receive a second request from FTC for additional information and documentary materials related to the merger.
    • Federal appeals court denies FTC bid to pause Microsoft-Activision (MSFT/ATVI) deal. (MarketWatch)
    • U.S. Virgin Islands seeks at least $190 million from JPMorgan Chase (JPM) in Jeffrey Epstein case. (WSJ)
  • News Items Over the Weekend:
    • Markets Appear Convinced Fed Can Do a Soft Landing. (WSJ)
    • Russian President Vladimir Putin held a phone call with South African President Cyril Ramaphosa in which they discussed the Black Sea grain deal, due to expire on Monday, and a summit in South Africa next month, the Kremlin said on Saturday.
    • Investors Are Bailing on Cathie Wood’s Popular ARK Fund (ARKK). (WSJ)
    • Tesla’s (TSLA) First Cybertruck Rolls Off Giga Texas Production Line. (WSJ)
    • United Airlines (UAL) pilots reach labor agreement, boost pay. (Bloomberg)
    •  Barron’s:
      • Positive View: TGT, WBD, JBHT, TOST, BIIB, AEE, BDX, UNH, ICE, ORCL, ADBE, TXT, CR, PYBR, CMG of note.
      • Cautious View: None of note.
      • Mixed View: None of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

  • Exchange/Listing/Company Reorg and Personnel News:
    • Compass Diversified (CODI) Announces Appointment of Geoffrey Feil as CEO of The Sterno GroupCraig Carnes to Assume New Role as Chief Customer Officer Until his Retirement.
    • CytomX Therapeutics (CTMX) Appoints Yu-Waye (Wayne) Chu, M.D., as Chief Medical Officer.
    • Lennar (LEN) co-CEO Rick Beckwitt to retire; Stuart Miller to become Co-CEO. (MarketWatch)
    • MAC Limited (MTAL) names Dan Vujcic as Interim CFO.
    • Magnachip (MX) Announces Director Resignation.
    • Metals Acquisition Limited (MTAL) Appoints Dan Vujcic as Interim CFO.
    • Snow Lake Lithium (LITM) Announces Appointment of Chief Executive Officer.
    • Methode Electronics (MEI) COO Joseph Khoury placed on leave.
    • ViewRay (VRAY) Files Voluntary Chapter 11 Petitions.
  • Buyback Announcements or News:
    • Concentrix (CNXC) amends share purchase and contribution agreement.
    • Focus Universal (FCUV) amended stock purchase agreement.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.
  • Insider Sales Of Note: None of note.

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

S&P 500 -9, Dow Jones -106,  NASDAQ -13, and Russell 2000 -4%. (as of 7:55 a.m. EDT).  Asia and Europe lower this morning. VIX Futures are at 15.93 from 15.58 yesterday.  Gold, Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil lower while Natural Gas is higher. US 10-year Treasury sees yields at 3.785% unchanged from Friday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $30,224 from $31,116 Friday, lower by -0.18%.

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

  • Daily Positive Sectors: Healthcare of note.
  • Daily Negative Sectors: Energy, Financial, Basic Materials, Utilities of note.
  • One Month Winners: Consumer Cyclical, Industrials, Real Estate, 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, Basic Materials, Energy of note.
  • Year to Date Winners:  Technology, Communication Services, Consumer Cyclical of note.

The Dow Jones Industrial Average climbed Friday as strong earnings results from some of the biggest banks and companies in the Dow kicked off earnings season.  The 30-stock Dow added 113.89 points, or 0.33%, to close at 34,509.03 and mark its fifth consecutive day of gains. Meanwhile, the S&P 500 dropped -0.10% to close at 4,505.42. The Nasdaq Composite declined -0.18%, ending at 14,113.70. Both the S&P 500 and the Nasdaq touched their highest intraday levels since April 2022.  On a weekly basis, the Dow notched its best performance since March, up 2.3%. The S&P 500 added 2.4%, and the Nasdaq gained 3.3% for the week.  (CNBC – edited by QPI)

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

  • Monday After the Close: 

  • Tuesday Before the Open:

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: None of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ABOS +41%, ARGX +25%, CMPS +5%, ATVI +4% of note.
  • Gap Down: EBIX -19% 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 Cuts China Growth Forecasts As Economy Disappoints. (Bloomberg)
  • Bloomberg Most Shared Story: Dollar’s Busted Bull Run Has Bears Calling End of an Era. (Bloomberg)
  • Ukraine Grain Deal collapses, heightening food supply fears. (Bloomberg)
  • Wheat prices jump as Russia terminates Black Sea grain deal. (CNBC)
  • European Stocks fall on China Slowdown; Bonds Rally: Markets Wrap. (Bloomberg)
  • Media Industry is in turmoil, and that’s not changing any time soon. (CNBC)
  • BridgeBio (BBIO) up 66% on positive results on AATR-CM treatment. (MarketWatch)
  • NPR Most Recent  Business Podcast: Regulate Crypto? Sure. But how? (Listen Here)

Moving Average Update:

  • Day 4 at 100%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 3:00 p.m. EDT

Economic:

  • July Empire State Manufacturing Index is due out at 8:30 a.m. EDT and is expected to fall to -8.0 from 6.6.

Federal Reserve / Treasury Speakers:

  • The Fed Blackout Period has begun. No Fed speakers between now and the FOMC Wed. 07/26.

M&A Activity:

  • Phreesia (PHR) acquires MediFind.
  • Pardes Biosciences (PRDS) Enters into Agreement to be Acquired by MediPacific, Inc. for between $2.02 and $2.19 in Cash per Share Plus Contingent Value Rights.

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: