CAPIS Morning Note – 07/19/23: Dow Up 7 Days In A Row, Eighth Day Ahead?

Overnight Summary: The S&P 500 closed Tuesday higher by 0.71% at 4554.98 from Monday which was also higher by 0.39% at 4522.79. Overnight ranges saw the high hit at 4592.75 at 3:15 a.m. EDT while the low was hit at 4582.25 at 6:05 p.m. EDT. The range overnight was 10 points. The 10-day average of…

Overnight Summary: The S&P 500 closed Tuesday higher by 0.71% at 4554.98 from Monday which was also higher by 0.39% at 4522.79. Overnight ranges saw the high hit at 4592.75 at 3:15 a.m. EDT while the low was hit at 4582.25 at 6:05 p.m. EDT. The range overnight was 10 points. The 10-day average of the overnight range is at 15.30 from 16.80 yesterday.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is lower by  -1.50 points and is lower by -0.02% at 7:25 a.m. EDT.

Earnings Out After The Close: 

  • Beats: PNFP +0.16, AIR +0.05, FULT +0.05, HWC +0.01, OMC +0.01 of note
  • Flat: None of note.
  • Misses: JBHT (0.09), UCBI (0.08), IBKR (0.08), WAL (0.01) 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:
    • APGE: Announces Closing of Upsized Initial Public Offering and Full Exercise of the Underwriters’ Option to Purchase Additional Shares.
    • Oddity Prices Closely Watched IPO Above Expectations. (WSJ)
  • New SPACs launched/News:
    • TradeUP Acquisition Corp. (UPTD) Announces Extension of the Deadline for an Initial Business Combination.
  • Secondaries Priced:
    • ABOS: Pricing of Upsized $130 Million Public Offering. Priced @$7.75.
    • ARGX: Prices offering of 1,580,981 ADSs at $490.00 per ADS and 663,918 ordinary shares at €436.37 per ordinary share.
    • AUR: Proposed Public Offering and $600 Million Concurrent Private Placement of Class A Common Stock. (MarketWatch)
    • HROW: Prices $60 Million Public Offering of Common Stock.
  • Notes Priced of note:
    • JEF: Announces Pricing of $1,000,000,000 5.875% Senior Notes Due 2028.
    • PDM: Announces Pricing of Senior Notes Offering.
  • Common Stock filings/Notes:
    • AQMS: Proposed Public Offering of Common Stock.
    • CVNA: Filed Form 424B5.. $1,000,000,000 Class A Common Stock.
    • GOVX: Form 8K – entered into an At The Market Offering Agreement.
    • HPK: Announces Commencement of Underwritten Public Offering of Common Stock.
    • HROW: Announces Proposed Public Offering of Common Stock.
    • WEST: Announces additional $25 mln equity investment.
  • Direct Offering:
    • BPTS: $3.8 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • KRYS: Filed Form S-3ASR.. 1,729,729 shares of common stock by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt/Credit Filing and Notes:
    • COTY: To Offer $600 million of high-yield Senior Secured Notes.
  • Tender Offer:
    • Stratasys (SSYS) Board of Directors Unanimously Rejects Nano Dimension’s (NNDM) $25.00 Revised Partial Tender Offer.
  • 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: SRT +13% of note.
    • Trading Down: AQMS -25%, AMRN -10%, HPK -10%, AUR -10%, CVNA -9%, OMC -6%, UCBI -6%, TSE -5%, KRYS -4%, IBKR -4%, HWC -4%, GTLB -4% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after hours: IBKR, WAL, OMC, JBHT, CVNA (CNBC)
    • McDonald’s (MCD) managers sent explicit images, bullied workers and pressured teens into sex, bombshell report claims (NY Post)
    • J.B. Hunt (JBHT) stock falls as continued weaker demand weighs on results. (MarketWatch)
    • Western Alliance (WAL) stock falls more than 5%; bank seeks to ‘return to normal’ after the banking crisis. (MarketWatch)
    • Interactive Brokers Group’s (IBKR) stock down 4% following Q2 results. (MarketWatch)
    • United Community Banks (UCBI) shares fall as ‘industry-wide deposit price competition’ weighs on results. (MarketWatch)
    • Carvana (CVNA) spooks market by moving up results, stock sunk 9% in after market before rocketing Wednesday morning. (MarketWatch)
    • American Airlines (AAL) pilot deal in ‘jeopardy’ after United’s contract agreement. (Reuters)
    • AAR Corp. (AIR) stock rallies after air-travel rebound lifts sales. (MarketWatch)
    • J&J (JNJ) ordered to pay $18.8M over baby powder cancer claim, jury rules.
    • RTX awarded $256 million U.S. Navy contract modification.
    • Granite Constr (GVA) awarded ~ $23 mln contract by the California Department of Transportation.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Autolus Therapeutics (AUTL) announces appointment of Robert F. Dolski as Chief Financial Officer.
    • Amarin (AMRN) Appoints Patrick Holt as President and Chief Executive Officer.
    • Cracker Barrel (CBRL) stock surges as CEO Susan Cochran announces departure after 12 years in charge. (MarketWatch)
    • CytoSorbents (CTSO) Appoints Alexander D’Amico as Chief Financial Officer.
    • GTLB Names Weber Chris Lee CRO. (MarketWatch)
    • Howard Hughes (HHC) provides update on previously announced holding company structure: will trade under the ticker “HHH” on August 14.
    • Hyperfine, Inc. (HYPR) Announces Promotion of Tom Teisseyre, Ph.D. to Chief Operating Officer.
    • Kenon Holdings (KEN) appoints Deepa Joseph as Interim CFO.
    • LendingTree (TREE) COO John David Moriarty to leave.
    • Sono Group (SEV) Receives Notice of Delisting from Nasdaq.
    • Trinseo (TSE) Announces Executive Leadership Team Changes.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • John B. Sanfilippo & Son, Inc. (JBSS) Declares $1.20 Per Share Special Dividend and a Regular Annual Dividend of $0.80 Per Share.
    • OVBC Announces Cash Dividend.
  • Insider Sales Of Note: None of note.

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

S&P 500 +1, Dow Jones +32,  NASDAQ +23, and Russell 2000 -5. (as of 8:01 a.m. EDT).  Asia higher while Europe higher ex Germany this morning. VIX Futures are at 15.50 from 15.67 yesterday.  Gold, Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil higher while Natural Gas lower. US 10-year Treasury sees yields at 3.762% unchanged from yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $29,973 to $29,979 yesterday, higher by 0.67%.

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

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

Stocks extended recent gains Tuesday, with the major U.S. indexes boosted by banks and shares of artificial-intelligence related companies.  The S&P 500 rose 0.7%, while the Dow Jones Industrial Average added 1.1%, about 367 points, and the Nasdaq Composite advanced 0.8%. The Dow extended a winning streak to seven days, closing at its highest level since April 2022. The Nasdaq is now 37% higher in 2023.  Bank stocks rallied after earnings reports from bellwethers Bank of America (BAC) and Morgan Stanley (MS), among others. Morgan Stanley rose more than 6% after executives said client activity strengthened during the quarter, raising hopes for a return of deal-making activity that has been stalled by higher interest rates. (WSJ – 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: MTB +0.89, ELV +0.26, CBSH +0.08, USB +0.07, BKR +0.06,  NDAQ +0.05, CFG +0.04, ALLY +0.03, HAL +0.02 of note.
  • Flat: None of note.
  • Misses: FHN (0.26), ASML (0.17), GS (0.08), NTRS (0.06) of note.
  • Still to Report: CVNA of note.

Guidance:

  • Positive Guidance: PLD, HROW, ELV of note.
  • Negative Guidance: SCHW, BC, USB of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SRT +14%, LILM +6%, T +5%, WMC +5% of note.
  • Gap Down: AQMS -24%, AUR -14%, AMRN -14%, HPK -9%, UCBI -7%, CVNA -7%, OMC -7%, IPG -5%, IBKR -5%, GP -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)
  • Stocks Making The Biggest Moves: CVNA, GS, JOBY, WAL, JBHT, IBKR, CNK, USB, NDAQ (CNBC)
  • Bloomberg Lead Story: Carvana Soars After Reaching Debt Restructuring Deal (Bloomberg)
  • Bloomberg Most Shared Story: No Testing, No Inspections: Contaminated Eyedrops Blinded and Killed Americans. (Bloomberg)
  • Bonds rally after UK inflation cools; Pound drops: Market Wrap. (Bloomberg)
  • China says that foreign trade faces “extremely severe” situation, blames geopolitics. (CNBC)
  • A $500 billion corporate debt storm builds over the global economy. (Bloomberg)
  • Carvana (CVNA) shares are now up 30% on deal to reduce debt by $1.2 billion. (CNBC)
  • Mortgage refinance demand recovers a bit after rates come off recent highs. (CNBC)
  • Goldman Sachs (GS) misses on earnings as takes hits on real estate and GreenSky. (CNBC)
  • NPR Most Recent Business Podcast:  We talk with experts after today’s new retail sales data. Years of mixed signals mean economists are sometimes just as confused as we are. On today’s show, we’ll get a bit meta and talk with them about it. Plus: What those retail sales numbers and a recent surge in loan rejections mean (or don’t?) for the economy at large. Later, we’ll talk with economics BA, former teen idol and new author Ben McKenzie about why Hollywood fell hard for crypto.(Listen Here)

Moving Average Update:

  • Day 6 at 100%.  Blistering HOT!

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing; The Vice President attends, 12:15 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President convenes a meeting of his Competition Council to announce new actions by his Administration to increase competition in the American economy, lower prices for consumers, and help entrepreneurs and small businesses thrive—a key pillar of Bidenomics, 3:00 p.m. EDT (Release)
    • The President and The First Lady host the White House Congressional Picnic; The Vice President attends, 6:00 p.m. EDT

Economic:

  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications: Composite: +1.1%, Purchase: -1.3%, ReFi: +7.3%
    • U.S MBA 30-YEAR MORTGAGE RATE ACTUAL: 6.87% VS 7.07% PREVIOUS
    • U.S MBA MORTGAGE APPLICATIONS (WOW) ACTUAL: 1.1% VS 0.9% PREVIOUS
  • June Housing Starts are due out at 8:30 a.m. EDT and is expected to fall to 1,475,000 from 1,631,000.
  • EIA petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • The Fed Blackout Period has begun. No Fed speakers between now and the FOMC Wed. 07/26/23.

M&A Activity:

  • ATS Corp (ATS) has acquired Odyssey Validation Consultants Limited.
  • StarTek (SRT) receives takeover offer from CSP Fund at $3.80 per share.

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: