CAPIS Morning Note – 07/31/23: July Trading Set To End With An Up Morning.

Overnight Summary: The S&P 500 closed Friday higher by 0.99% at 4582.23 from Thursday lower by -0.64% at 4537.41. Overnight ranges saw the high hit at 4618 at 6:45 p.m. EDT while the low was hit at 4595.25 at 12:05 a.m. EDT. The range overnight was 23 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Friday higher by 0.99% at 4582.23 from Thursday lower by -0.64% at 4537.41. Overnight ranges saw the high hit at 4618 at 6:45 p.m. EDT while the low was hit at 4595.25 at 12:05 a.m. EDT. The range overnight was 23 points. The 10-day average of the overnight range is at 18.80 from 17.60 Friday.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is higher by +6.75 points and by 0.15% at 7:25 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: None of note.
  • New SPACs launched/News:
    • Compute Health Acquisition Corp. (CPUH) Stockholders Approve Business Combination with Allurion.
    • Sagaliam Acquisition Corp. (SAGA) Announces Receipt Of Nasdaq Listing Delinquency Letter And Appointment Of Independent Directors.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BSFC: Filed Form S-1.. Common Stock and Warrants.
    • RILY: Closes $115 Million Common Stock Offering Including Full Exercise of Underwriter Option.
    • CARR: Filed Form S-3ASR.. 5,562,325 Shares of Common Stock, Par Value $0.01 Per Share.
    • ID: Filed Form S-3.. 37,889,029 Shares of Class A Common Stock.
    • OKYO: Announces Proposed Public Offering of Ordinary Shares.
    • OKYO: Announces Withdrawal of Public Offering.
    • SONN: Filed Form S-1.. 5,150,000 Shares of Common Stock Issuable Upon Exercise of Outstanding Warrants.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • ENPH: Filed Form S-3ASR.. Common Stock up to 51,895 shares by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • LUV: Files mixed securities shelf offering.
    • NAAS: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes:
    • CCL: Announces anticipated debt pre-payment of $1.2 billion and refinancing transaction..
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • ALVO: Completes $100 Million Convertible Bond Private Placement.

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: TUP 245.5%, URGN 142.2%, MNK 138.2%, RETA 49.9%, NIO 38.4%, FFWM 37.3%, EOLS 37.0%, TLRY 34.8%, TAL 29.0%, CLS 28.6%, BZH 27.0%, AKBA 24.6%, FIXX 24.0%, LOB 24.0%, BZUN 23.8%.
    • Trading Down: TPIC -39.2%, PRFT -32.7%, SNBR -28.5%, EVLO -27.7%, MXL -27.0%, BHVN -25.4%, EEFT -24.1%, SAGE -22.6%, OMER -18.2%, SPWR -17.8%, PI -17.7%, TBI -17.6%, LC -17.5%, IRBT -16.0%, MESO -15.6%, AMG -14.9%, EYE -14.8%.
  • News Items After the Close:
    • J&J (JNJ) Effort to Resolve Talc Lawsuits in Bankruptcy Fails a Second Time. (USNews)
    • Troubles at Barclays (BCS) Prompt a Shake-Up—and Banker Exits. (WSJ)
    • Disney (DIS) loses bid to dismiss or pause DeSantis board’s state case. (CNBC)
    • Funko (FNKO) implements 12-13% workforce reduction. (MarketWatch)
    • U.S. Bank Deposits Rose To $17.336 Trillion From $17.289 Trillion In The Prior Week.
    • U.S. Air Force and Archer (ACHR) Enter Into Contracts Worth Up to $142 Million Representing Landmark Investment In eVTOL Technology by U.S. Military.
  • News Items Over the Weekend:
    • Wall Street to Procter & Gamble (PG), Colgate-Palmolive (CL): Start Moving Units. (WSJ)
    • Why the Drivers of Lower Inflation Matter. (WSJ)
    • Trucking Giant Yellow (YELL) Shuts Down Operations (WSJ)
    • Federal Reserve Minneapolis President Neel Kashkari: I’m not sure when the Fed will be done raising interest rates. We’re making good progress – CBS news interview. We will let the data guide the Fed. We may or may not raise rates in September. The US economy has remained resilient amid various shocks, and we will continue to monitor any future shocks. Right now it appears the US will avoid a recession and I hope that remains true. Overall the inflation outlook is quite positive but can’t prejudge it. It wouldn’t surprise me to see unemployment tick up slightly. (CBSNews)
    • US Homeowner Equity Climbs to a Record High. (Bloomberg)
    • Barron’s:
      • Positive View: LBTYA, AA, GM, PRO, RBC, GWRE, JJSF, AL, EEFT 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:
    • Ceragon (CRNT) names Ilan Rosen as Chairman of the Board.
    • ImmunoGen (IMGN) also announces departure of Anna Berkenblit, Chief Medical Officer.
    • LivePerson (LPSN) approved a retention program for certain key employees and members of the Company’s leadership team (in connection with the Company’s recently announced CEO transition plan).
    • Navidea Biopharmaceuticals, Inc. (NAVB) Announces NYSE American Has Commenced Delisting Proceedings and Intent to Appeal NYSE American Determination.
    • ReWalk Robotics (RWLK) Announces Planned Changes to Board of Directors.
    • SK Telecom (SKM) announces delisting of ADRs on London Stock Exchange.
    • Tarena (TEDU) Announces Receipt of Nasdaq Notification Regarding Minimum Market Value of Publicly Held Shares.
    • Virtu Financial (VIRT) received a Wells Notice from the SEC.
  • Buyback Announcements or News:
    • AER: New $500 million share repurchase program authorized.
    • NatWest Group plc (NWG) commences on market share buyback program.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.
  • Insider Sales Of Note:
    • BlackRock (BLK): CEO sells stock worth $15 million.

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

S&P 500 +7, Dow Jones +52,  NASDAQ +19, and Russell 2000 +1.  (as of 7:57 a.m. EDT).  Asia higher and Europe higher ex Germany this morning. VIX Futures are at 14.90 from 15.30 Friday.  Gold lower with Silver and Copper higher this morning. WTI Crude Oil and Brent Crude Oil higher with Natural Gas higher as well. US 10-year Treasury sees yields at 3.967% from 3.963%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $29,386 from $29,198 Friday, higher by 0.35%.

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

  • Daily Positive Sectors: Communication Services, Consume Cyclical, Technology, Consumer Defensive of note.
  • Daily Negative Sectors: Utilities of note.
  • One Month Winners: Communication Services, Financials, Basic Materials, 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.

Stocks rose Friday with the Dow Jones Industrial Average and S&P 500 closing out their third winning weeks in a row as a measure of inflation closely watched by the Federal Reserve came in at its lowest in nearly two years.  The Dow jumped 176.57 points, or 0.50%, to 35,459.29. The S&P 500 added 0.99% to 4,582.23. The Nasdaq Composite gained 1.90% to 14,316.66.  All three major averages notched weekly gains with the 30-stock average up by about 0.66%. On Thursday, the Dow ended a 13-day win streak, a length not seen since 1987. The S&P advanced 1.01%, and the tech-heavy index is up 2.02%.  This week, investors cheered data showing cooling inflation and stronger-than-expected earnings reports that supported the case the U.S. could avoid a recession.  (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: AER +0.55, APLS +0.33, IMGN +0.11, CBU +0.04, CAMT +0.03, SJW +0.02, SOFI +0.01 of note.
  • Flat: None of note.
  • Misses: CNA (0.01) of note.
  • Still to Report: ON of note.

Guidance:

  • Positive Guidance: IMGN, EGRX, AER of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: APLS +14%, MESO +7%, SOL +4% of note.
  • Gap Down: CTXR -9% of note.

Insider Action: ALLE 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 Premarket:  HAS, ADBE, CVX, F, XPEV, DIS, GDRX, UPS, SBAC, ON (CNBC)
  • Bloomberg Lead Story: Lots of Homeowners Want To Move. They Just Have No Where to Go. (Bloomberg)
  • Bloomberg Second Most Shared Story: Miami’s Overflowing Septic Tanks and Trash Piles Test Appeal to Rich. (Bloomberg)
  • Stocks waver as traders seek rate cues; Yen slumps: Market Wrap. (Bloomberg)
  • Saudi Arabia sees its economy slow on oil cuts, price drops bite into revenues. (CNBC)
  • Euro zone economy shows resilence as GDP beats expectations and inflation slips. (CNBC)
  • Traders brace for $102 billion of Treasury Bond sales. (Bloomberg)
  • Oil inventory drops sets for higher prices. (Reuters)
  • Amazon (AMZN) says it is delivering more products in one day or less than ever. (CNBC)
  • NPR Marketplace: It’s the final tour of Dead & Company, the Grateful Dead’s offshoot band. But what’s to come of the vendors and Deadheads who’ve followed the band for decades? Today, we hear about what a long, strange trip it’s been and what happens now that the show’s over. We’ll also examine the double-edged sword of consumer spending and unpack whether inflation might threaten brand loyalty. (Podcast)
  • BBC Global News: Niger coup leaders given a week to quit. (Podcast) 
  • NY Times Daily:  A look at the current Italian Prime Minister and what it means for Europe. (Podcast)
  • Bloomberg Podcast: DOJ’s Jonathan Kanter on the Bidenomics approach to Antitrust. (Podcast)
  • Wealthion: Will this red-hot rally cool off or sizzle even higher? (Podcast)

Moving Average Update:

  • And just like that, bounces up to 100%.

Geopolitical: 

  • President’s Public Schedule:
    • On Monday, the President has no public events scheduled, Biden Beach House, Rehoboth Beach, DEOut-of-Town Pool

Economic:

  • Chicago PMI 9:45 a.m. EDT
  • Dallas Fed Mfg Survey 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:  None of note.

M&A Activity: None of note.

Meeting & Conferences of Note:

  • Sellside Conferences: None of note.
    • Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ANNX, LPL, PII
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings: None 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: