CAPIS Morning Note – 07/26/23: Focus Today Is on the FOMC Announcement at 2:00 p.m. EDT and Presser at 2:30 p.m. EDT

Overnight Summary: The S&P 500 closed Tuesday higher by 0.28% at 4567.46 from Monday higher by 0.40% at 4554.64. Overnight ranges saw the high hit at 4606.75 at 6:05 p.m. EDT while the low was hit at 4586.25 at 6:25 a.m. EDT. The range overnight was 21 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Tuesday higher by 0.28% at 4567.46 from Monday higher by 0.40% at 4554.64. Overnight ranges saw the high hit at 4606.75 at 6:05 p.m. EDT while the low was hit at 4586.25 at 6:25 a.m. EDT. The range overnight was 21 points. The 10-day average of the overnight range is at 14.20 from 13.50 yesterday.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is lower by -7.50 points and by 0.16% at 7:20 a.m. EDT.

Earnings Out After The Close: 

  • Beats: RNR +1.24, KALU +0.80, CB +0.50, CALM +0.43, SNAP +0.23, HA +0.19, CR +0.19, ATRC +0.18, MANH +0.16, TRMK +0.15, VICR +0.15, MSFT +0.14, TXN +0.11, MTDR +0.10, GOOG +0.10, EQT +0.09, TENB +0.09, RNST +0.08, MMSI +0.06, V +0.05, NEX +0.05, PRO +0.05, ENVA +0.04, WSBC +0.04, BDN +0.02, EGP +0.02, EEFT +0.02, ROIC +0.01, CSGP +0.01, FCF +0.01, WFRD +0.01, TDOC +0.01 of note
  • Flat: BANC, HIW of note.
  • Misses: PACW (1.09), WIRE (0.48), VBTX (0.13), RHI (0.13), ASH (0.12), UMBF (0.08), WM (0.04), CNI (0.03), LXFR (0.03), UHS (0.01) of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • Belong Acquisition Corp. (BLNGU) Announces Redemption Amount of its Public Shares.
    • Haymaker Acquisition Corp. 4 (HYAC) Announces Pricing of $200 Million Initial Public Offering.
    • Prime Number Acquisition I Corp. (PNAC) Announces Effectiveness of Proxy Statement/Prospectus and August 15, 2023 Special Meeting of Stockholders to Approve Business Combination with noco-noco Pte. Ltd.
    • TLG Acquisition One Corp. (TLGA) and Electriq Power (to be ELIQ) announce shareholders approved business combination;
  • Secondaries Priced:
    • DXF: Announces Pricing of $1.09 Million Registered Direct Offering.
    • RILY: Announces pricing of $100 million common stock offering at $55.00 PER share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ALTG: Announces Closing of Secondary Offering of Common Stock.
    • RILY: Announces Proposed Public Offering of $100 mln of its common stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • BCBP: Filed Form S-3.. $100,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • HOUS: Announces Commencement of Exchange Offers for Outstanding 5.750% Senior Notes due 2029 and 5.250% Senior Notes due 2030.
  • Tender Offer:
    • Verizon (VZ) announces tender offers for 14 series of debt securities.
  • 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: PACW +36%, BANC +12%, TENB +8%, GOOG +6%, DISH +6%, TDOC +5%, HA +5%, HIW +5%, ABOS +5%, TRMK +4%, LOB +4%, VICR +4%, MANH +4% of note.
    • Trading Down: SNAP -18%, RHI -11%, WIRE -6%, CSGP -5%, WM -5%, NBR -5% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after hours: MSFT, GOOGL, SNAP, TDOC, WFC, RHI, TXN, LUNR (CNBC)
    • Banc of California (BANC) Agrees to Buy PacWest (PCCW) as Regional Lenders Seek Strength Together. (WSJ)
    • Dish Network Corp (DISH) to Start Selling Mobile Service on Amazon This Week. (Bloomberg)
    • MSFT: LinkedIn sheds nearly 200 in Bay Area job cuts. (MarketWatch)
    • Microsoft (MSFT) earnings top estimates, but stock falls as execs detail AI’s costs (MarketWatch)
    • Alphabet (GOOGL) reports better-than-expected quarterly results driven by growth in cloud. (CNBC)
    • Snap (SNAP) Falls After Sales Forecast Misses Estimates on Ad Demand. (Bloomberg)
    • HR company Robert Half (RHI) says that clients held off in hiring new workers, Q2 sales drop. (MarketWatch)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Delisting of Securities from The Nasdaq Stock Market: NantHealth, Inc.; Surgalign Holdings, Inc.; Lordstown Motors Corp.; iMedia Brands, Inc.; Crescera Capital Acquisition Corp.; Better World Acquisition Corp.; Tattooed Chef, Inc.; and Alpine Summit Energy Partners, Inc.
    • Alphabet (GOOG) CFO Ruth Porat will assume newly created role of President and Chief Investment Officer, will continue to serve as CFO.
    • INFI announces 78% workforce reduction. – Three Board members resign, effective immediately. – Is evaluating to withdraw the appeal it filed over Nasdaq’s decision to delist the company’s stock.
    • NatWest Group plc (NWG) announced that Alison Rose has agreed by mutual consent to step down as Group Chief Executive.
    • SharkNinja (SN-NYSE) expects to list on Monday, July 31.
    • Union Pacific (UNP) Appoints Jim Vena Chief Executive Officer.
    • Waterstone Financial (WSBF) announces that Douglas S. Gordon has notified Waterstone of his intention to retire as Chief Executive Officer of Waterstone Financial and its wholly owned subsidiary, WaterStone Bank.
  • Buyback Announcements or News:
    • DB to buy back up to $497 million in shares.
    • Encore Wire (WIRE) highlights Share Repurchases During Quarter; Board Increases Share Repurchase Authorization.
    • Old Dominion (ODFL) approves $3 billion share repurchase program.
    • Wells Fargo & Company (WFC) Announces New $30 Billion Common Stock Repurchase Program. (see Dividends) (MarketWatch)
  • Stock Splits or News:
    • BNTC trading r/s price.
    • Rush Enterprises, Inc. (RUSHA/RUSHB) Announces Three-For-Two Stock Split and $0.17 Per Share Dividend
    • View (VIEW) Stockholders Approve Reverse Stock Split.
  • Dividends Announcements or News:
    • Crescent Point Energy (CPG) declares CDN$0.035 per share special dividend, keeps quarterly dividend at CDN $0.10.
    • Energy Transfer (ET) increases quarterly cash dividend to $0.31 per share from $0.3075 per share.
    • NexPoint Real Estate Finance, Inc. (NREF) Announces Quarterly and Special Dividends.
    • Omnicom (OMC) Declares Dividend.
    • Rush Enterprises, Inc. (RUSHA/RUSHB) – (see Stock split above)
    • UMB Financial Corporation (UMBF) Board approved the repurchase of one million units of co’s common stock.
    • Wells Fargo & Company (WFC) Increases Common Stock Dividend $0.05 to $0.35 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 -4, Dow Jones -25,  NASDAQ -36, and Russell 2000 +1. (as of 7:56 a.m. EDT).  Asia lower ex Australia (ASX 200) while Europe lower this morning. VIX Futures are at 15.40 unchanged from yesterday.  Gold and Silver higher with Copper lower this morning. WTI Crude Oil and Brent Crude Oil lower as well as Natural Gas. US 10-year Treasury sees yields at 3.887% from 3.898% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $29,193 from $29,188  yesterday, lower by -0.13%.

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

  • Daily Positive Sectors: Basic Materials, Technology of note.
  • Daily Negative Sectors: Real Estate, Financial of note.
  • One Month Winners: Financials, Real Estate, Energy 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.

U.S. stocks climbed Tuesday, with a rally in 3M (MMM) 5.33% increase; green up pointing triangle shares helping lift the Dow Jones Industrial Average to its 12th consecutive day of gains.  On a busy day of earnings, the Dow rose roughly 27 points, or 0.1%, to 35438.07, its highest close since February 2022. The S&P 500 gained 0.3%, while the tech-heavy Nasdaq Composite climbed 0.6%.  Coming earnings reports from big technology companies and the start of a two-day Federal Reserve meeting loomed over trading Tuesday. But investors still had plenty to digest as earnings rolled in.  (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: META, NOW, LRCX, ORLY, CMG, EW, LHX, AMP, VICI, URI, ACGL, AWK, EBAY, AEM, ALGN, RJF, ROL, INVH, ICLR, MOH, MAA, TER, SUI, PTC, TYL, IEX, GGG, UDR, GFL, CSL, FLEX, STX, NLY, CHDN, SEIC, CHE, MAT, AR, NOV, LSTR, STAG, AGI, VMI, FIX, WU, PEGA, HP, QS, CNMD, SLM, ASGN, MC, ENVX, FTAI, PTEN, MEOH, AIN, FIBK, PLXS, MXL, CCS, OII, TROX, EQC, CVBF, PI, CLS, VSTO, GSHD, CASH, STC, CLB, VKTX, EIG, PDM, IMAX, NTGR
  • Thursday Before the Open: MA, ABBV, MCD, CMCSA, HON, SPGI, BMY, AMT, HCA, BSX, NOC, NSC, HSY, STM, VLO, CARR, KDP, AEP, PCG, GWW, XEL, BCS, CVE, MLM, WST, CBRE, RCL, BAX, MT, TSCO, DTE, LUV, WAB, LH, CNP, CMS, RS, LKQ, TXT, MAS, KIM, LECO, LII, AOS, IP, PNR, AGCO, EME, NYCB, KBR, WEX, FTI, CROX, CFR, EXP, FCN, FAF, BC, OSK, OPCH, HOG, EXLS, VLY, NEOG, KEX, FCFS, UBSI, SRCL, LAZ, NVCR, FSS, IART, AVNT, ATHM, MDC, TPH, PRFT, BTU, CNX, ITGR, CRS, CBZ, FBP, XPRO, GFF, PPBI, ARCH, AMBP, NTCT, TOWN, PATK, BFH, SAH, HEES, STRA, PRCT, OSTK, OTLY, TRS, HZO, PDS, SHYF, OIS, TREE

Earnings of Note This Morning:

  • Beats: LAD +1.65, OC +0.97, COOP +0.90, GPI +0.65, GIB +0.46, TMHC +0.43, PAG +0.24, LIVN +0.24, WNC +0.22, AMG +0.21, ALKS +0.15, GD +0.14, PRG +0.14, HES +0.13, TEL +0.11, CHKP +0.10, CME +0.10, RPM +0.08, BA +0.07, KO +0.06, OTIS +0.06, ADP +0.06, HLT +0.05, ALLE +0.04, TDY +0.04, UMC +0.04, TLRY +0.04, FTV +0.04, T +0.03, DGX +0.03, FI +0.02, ODFL +0.02, SLAB +0.01, TNL +0.01 of note.
  • Flat: VIRT of note.
  • Misses: SCL (0.64), EVR (0.30), OMF (0.28), TMO (0.28), CSTM (0.20), UNP (0.17),SF (0.13), RCI (0.09), MNRO (0.07), NAVI (0.06), SLGN (0.06), RES (0.06), HCSG (0.05), TSEM (0.03), PB (0.01) of note.
  • Still to Report: APH, BOKF, BPOP, R of note.

Guidance:

  • Positive Guidance: ATRC, MANH, EGP, TENB, PRO, EDU, HLT, TEL, WNC, ADP, FI, PRG  of note.
  • Negative Guidance: CTS, CSGP, TDOC, LXFR, WM, ASH, RHI, ALLE, TMO, TNL, SLGN, SLAB, FTV of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: PACW +31%, DISH +12%, TENB +12%, BANC +11%, ATRC +8%, TDOC +6%, GOOG +6%, ABOS +5%, VICR +5%, TRMK +4%, HIW +4%, CSTM +4%, MANH +4% of note.
  • Gap Down: SNAP -18%, WIRE -9%, RHI -8%, TMO -5%, WM -5%, TXN -4%, ORAN -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: Powell Has Stopped Handing Gifts To Wall Street On Fed Day. (Bloomberg)
  • Bloomberg Most Shared Story: Delta’s New JFK SkyClub Designed to Avoid Overcrowding. (CNBC)
  • Stocks feel the heat from earnings and rates outlook: Market Wrap. (CNBC)
  • Here’s what to expect from the Federal Reserve meeting. (CNBC)
  • UPS executives blinked say Teamsters, deal done. (Bloomberg)
  • Boeing (BA) beats earnings as deliveries pick up. (CNBC)
  • Coca Cola (KO) raises full year outlook and beats on earnings. (CNBC)
  • Thermo Fisher (TMO) cuts outlook on weak demand for biopharma products. (Reuters)
  • Hilton (HLT) jumps on higher occupancy which led to an earnings beat. (MarketWatch)
  • NPR Marketplace: The CoreLogic Case-Shiller index of existing home prices, which came out Tuesday, showed that values are down from the year before, but the price trends vary across the country. Today, we trace their rise and fall. Then, what’s a fair price for artificial intelligence? And what Milton Friedman’s “long and variable lag” means in 2023. (Podcast)
  • The New York Times Daily: Hunter Biden’s day in court. (Podcast)
  • BBC Global News:  Brussels bombers found guilty. (Podcast)

Moving Average Update:

  • Score jumps to 94% from 82%.  Will we see 100……again!?!?!?

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT

Economic:

  • MBA Mortgage Applications were out at 7:00 a.m. EDT and fell -1.80% from a rise last week of 1.1%.
    • MBA Mortgage Applications: Composite: -1.8%, Purchase: -2.5%, ReFi: -0.4%
    • U.S MBA 30-YEAR MORTGAGE RATE ACTUAL: 6.87% VS 6.87% PREVIOUS
    • U.S MBA MORTGAGE APPLICATIONS (WOW) ACTUAL: -1.8% VS 1.1% PREVIOUS
  • June New Home Sales are due out at 10:00 a.m. EDT and is expected to fall to 722,000 from 763,000.
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • FOMC Announcement 2:00 p.m. EDT
  • Federal Reserve Chair Jerome Powell Press Conf: 2:30 p.m. EDT

M&A Activity:

  • Atlantic Union Bankshares Corporation (AUB) Announces Agreement to Acquire American National Bankshares Inc. (AMNB).
  • CareDx (CDNA) announces the acquisition of MediGO.
  • LPL Financial (LPLA) to acquire financial services provider Crown Capital Securities.
  • PacWest (PACW) and Banc of California (BANC) confirm merger, announce $400 million equity raise.

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: