CAPIS Morning Note – 08/03/22: Stocks Higher This Morning After Two Days of Selling

Overnight Summary: The S&P 500 closed Tuesday at 4091.19 (lower by -0.67%) from 4188.63 (lower by -0.28%) on Monday.  Futures are trading higher in the premarket session after House Speaker Pelosi left Taiwan. The overnight high of 4113.75 was hit at 7:05 a.m. EDT. The low was hit at 4084.50 at 8:45 p.m. EDT, a range…

Overnight Summary: The S&P 500 closed Tuesday at 4091.19 (lower by -0.67%) from 4188.63 (lower by -0.28%) on Monday.  Futures are trading higher in the premarket session after House Speaker Pelosi left Taiwan. The overnight high of 4113.75 was hit at 7:05 a.m. EDT. The low was hit at 4084.50 at 8:45 p.m. EDT, a range of 31 points high to low which is below the range of late with 45 the average range. At 7:15 a.m. EDT the current price is 4112 which is 0.45% and 18 points. 

Earnings Out After The Close:

  • Beats: PFSI +1.45, ANDE +1.36, CHK +1.14, UNM +0.69, PXD +0.56, TX +0.53, DCP +0.46, SKY +0.46, VOYA +0.45, CWH +0.37, HLF +0.33, FNF +0.30, LPLA +0.29, CRUS +0.29, IOSP +0.22, TEX +0.21, LFUS +0.21, KAI +0.19, MTOR +0.19, MGY +0.17, THG +0.17, EA +0.16, AYX +0.14, PAYC +0.14, OXY +0.13, ABNB +0.13, VRSK +0.12, VREX +0.12, NGVT +0.11, INSP +0.10, NMIH +0.10, VCYT +0.09, EXR +0.09, BLKB +0.08, SBUX +0.08, EXAS +0.07, CTRA +0.07, LTHM +0.07, OI +0.07, AIZ +0.07, GXO +0.06, PYPL +0.06, GILD +0.06, WCN +0.05, FMC +0.05, BCOV +0.05, EVH +0.05, RNG +0.05, SCI +0.05, MCHP +0.03, SPT +0.02, FRSH +0.01, KN +0.01, PEAK +0.01, BFAM +0.01, AMD +0.01, LUNG +0.01.
  • Flat: HOOD +0.00, VRAY +0.00, CZR +0.00, STE +0.00.
  • Misses: MSTR (91.96), SRPT (2.05), MTCH (0.73), PRU (0.59), PUMP (0.59), SEDG (0.45), OSH (0.21), PTRA (0.19), JJSF (0.19), MRCY (0.17), CDLX (0.15), CGNX (0.08), TSLX (0.06), APAM (0.06), CSII (0.04), ATRC (0.03), DENN (0.03), KAR (0.03), MNDT (0.03), CNDT (0.02), SOFI (0.02), CXW (0.02), SPNE (0.01), OSPN (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • ARQT 7.5M shares offering priced @ $20 per share.
  • Notes Priced of note:
    • ABR: prices upsized offering of $250 million aggregate principal amount of its 7.50% Convertible Senior Notes due 2025.
  • Common Stock filings/Notes:
    • ARQT: Proposed Public Offering of Common Stock.. $150.0 million of shares of its common stock.. MS, Cowen and Guggenheim bookmanagers.
    • AXNX: Commences 1.75 million common stock offering.
    • EFSH: Announces Pricing of Public Offering of Common Shares.
    • VNRX: Closing of $6.9 Million Underwritten Public Offering of Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • ASTR: Has entered into a common stock purchase agreement with B. Riley Principal Capital II, LLC.
  • Selling Shareholders of note:
    • PFHC: Files for 1,545,575 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • MERC: Files for $750 million mixed securities shelf offering.
    • SNV: Files mixed securities shelf offering.
    • ARVL: Filed Form F-3.. US$300,000,000 Mixed Shelf.
      PYPL: Filed Form S-3ASR.. Automatic Mixed Shelf Offering AND Common Stock Offering.
    • SNV: Filed Form S-3ASR Mixed Shelf.
  • Debt Filing: None of note.
  • Convertible Offering & Notes Filed:
    • INFN: Proposed $275 Million Convertible Senior 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:

  • After Hours: 
    • Trading Up: AYX 13%, EVH 12%, PYPL 12%, HLF 11%, ANDE 9%, RNG 8%, SOFI 7%, CWH 7%, ARQT 7%, SWIR 7%, GXO 7%, UNM 5%, CRNT 5%, TEX 4%, SPNE 4%.
    • Trading Down: MTCH -22%, CGNX -16%, SEDG -12%, KN -12%, AVID -11%, CDLX -9%, INFN -9%, CNDT -9%, ABNB -8%, SOND -8%, MRCY -7%, BFAM -7%, BMBL -6%, AXNX -6%, AMD -6%, STE -6%, OSH -6%, APAM -5%, DENN -4%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: MTCH, SEDG, PYPL, SOFI, ABNB, AMD, CZR, HOOD, SBUX  (CNBC)
    • MicroStrategy (MSTR) racks up $1 billion loss, says CEO will leave that post. (MarketWatch)
    • HOOD Lays Off 780 People or 23% of Workforce.
    • PayPal (PYPL) stock jumps 12% as company confirms Elliott stake and names EA exec as new CFO amid earnings beat. (MarketWatch)
  • Exchange/Listing/Company Reorg and Personnel News:
    • FB Financial (FBK) appoints Bill Carpenter III chair, succeeding Stuart McWhorter who is stepping down
    • HOOD: Ms. Chennapragada is stepping down as the Chief Product Officer, effective August 2, 2022, and will remain employed in an advisory role to the CEO or his designee through January 2, 2023. In connection with the August 2022 Restructuring described above, our product teams are being reorganized within the GM structure.
    • Modivcare (MODV) Announces Leadership Transition.   CFO Heath Sampson as Interim CEO; Daniel E. Greenleaf is no longer serving as CEO.
    • MicroStrategy (MSTR) Announces Separation of Chairman and CEO Roles and Second Quarter 2022 Financial Results;  Michael Saylor to Assume the Role of Executive Chairman and Phong Le to Serve as Chief Executive Officer.
    • PAYPAL HOLDINGS (PYPL) names Blake Jorgensen as CFO.
    • Sonder Holdings Inc. (SOND) Appoints Chief Operating Officer and Chief Accounting Officer.
    • Tetra Tech (TTEK) Announces Executive Appointments
  • Buyback Announcements or News:
    • Airbnb (ABNB) announces $2 billion buyback program.
    • Cirrus Logic (CRUS) announced that its Board of Directors recently authorized the repurchase of up to an additional $500 million of the company’s common stock.
    • Cedar Fair (FUN) authorizes $250 million unit repurchase program.
    • Moderna (MRNA) announces new $3 billion share repurchase plan.
    • PayPal (PYPL) announces $15 billion share repurchase authorization.
    • RenaissanceRe Holdings Ltd. (RNR) Announces Quarterly Dividend and Renewal of Share Repurchase Program.
  • Stock Splits or News:  None of note.
  • Dividends Announcements or News: 
    • Cedar Fair (FUN) declares cash distribution of $0.30 per limited partner unit.
    • Dorian LPG (LPG) declares special cash dividend of $1.00 per share.
    • Ethan Allen (ETD) Declares Special Cash Dividend and Regular Quarterly Cash Dividend.
    • Gilead Sciences (GILD) Announced that the company’s Board of Directors declared a quarterly dividend of $0.73 per share of common stock for the third quarter of 2022.
    • Littelfuse (LFUS) Board of Directors approved a 13% increase in the quarterly cash dividend from $0.53 to $0.60.
    • Microchip Technology (MCHP) Declares 37.8% Year-Over-Year Quarterly Cash Dividend Increase to 30.1 Cents per Share.
    • Warrior Met Coal (HCC) Declares Special Cash Dividend of $0.80 per share.

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

S&P 500 +21, Dow Jones +165, NASDAQ +67, and Russell 2000 +11. Europe lower and Asia lower.  VIX Futures are at 24.20 from 24.95  yesterday morning and the VIX closed at 23.93 from 24.28 yesterday. Gold, Silver and Copper lower. WTI Crude Oil  and Brent Oil Futures lower and Natural Gas lower. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury sees yields at 2.772% from 2.559% yesterday morning. Bitcoin is at $23,341 from $22,912 yesterday morning and is higher by 1.41% this morning. As of 8:11 a.m. EDT.

Sector Action – 08/02/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):  

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

After avoiding WWIII markets were in ok shape.  Then came SF Fred President Daly to move the markets down.  Fed comments drove yields higher across the yield curve.  Updated 08/02/22 close.

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

  • Wednesday After the Close: BKNG, NTR, MET, FTNT, MCK, O, MELI, LCID, ALL, SLF, ALB, EBAY, ANSS, CLX, IR, FLT, BMRN, ATO, MRO, MGM, WTRG, HST, FICO, GDDY, AFG, APA, LUMN, QRVO, DOX, WES, EQH, LSI, JAZZ, BRKR, NFE, UGI, LNC, CDAY, HOOD, TTEK, STOR, CHNG, PAA, DXC, CFLT, RGLD, PCOR, WU, NVST, PDCE, SRC, VVV, MDU, RUN, RYN, CW, LHCG, SIGI, NSA, BKH, ORA, DNLI, ENSG, WTS, SM, SJI, RPD, MTG, MANT, NARI, MMS, MRTX, ALSN, SGFY, DV, SITM, BTG, PK, ONEM, ATUS, IIPR, AEIS, SFM, TWNK, PTEN, FSR, KLIC, WHD, OUT, TRUP, WLL, WERN, KW, CPA, NUVA, HUBG, QTWO, CPE, GKOS, FROG, ALGT, RVLV, ACLS, MED, DRH, ADTN, TWO, ICFI, ELF, ECPG, PING, TVTY, CODI, UDMY, NVRO, PLMR, FSLY, AVDX, RCII, LPI, TTMI, ALKT, RGR, PACB, ZETA, VMEO, CCRN, UIS, RPT, BHE, CDE, IAG, QNST, SKLZ, FARO, TPIC, SRI, TPC, BAND, UPLD, BNFT, OSUR, YELL, VAPO of note.
  • Thursday Before the Open: LLY, BABA, COP, CI, ZTS, DUK, BDX, FIS, CNQ, ICE, TRI, APD, SRE, BCE, LNG, PH, APO, DDOG, CBRE, K, QSR, BALL, CQP, VMC, BGNE, PWR, PKI, EPAM, PARA, HWM, TECH, IRM, ABMD, WRK, BKI, DISH, NRG, HII, OGN, FRT, ARW, OGE, XRAY, MIDD, NXST, STWD, CHH, ROLL, ITT, WCC, IDA, GIL, PENN, W, TMX, NTLA, MUR, LNTH, STVN, YETI, NJR, PNM, HBI, CROX, APG, KRTX, SR, WD, PRFT, DBRG, NSIT, ENOV, AZEK, ACIW, LXP, PZZA, DEN, KNBE, CVET, PBH, ATI, NVMI, FOCS, FOUR, IBP, INSM, ARVN, NKLA, DSEY, NTCT, UNIT, ITRI, CIM, FTDR, KTB, MGPI, HL, MD, SHAK, IDCC, IRWD, MYGN, TTGT, NWN, AG, DK, ERJ, USPH, TEN, BBIO, ZNTL, PTLO, TVTX, COMM, SBH, FVRR, MODV, MFA, AGIO, BALY, DLX, DGII, DCPH, IMOS, THRY, KROS, TNK, KOP, RIDE, CGEN of note.

Earnings of Note This Morning:

  • Beats: REGN +1.02, CLH +0.93, MRNA +0.75, LAMR +0.67, DFIN +0.65, ETR +0.38, GNRC +0.36, ODP +0.33, SMG +0.26, CVS +0.22, CIGI +0.20, BDC +0.19, BWA +0.19, TUP +0.19, JLL +0.18, DISH +0.16, ROCK +0.16, CRTO +0.15, XHR +0.13, PERI +0.11, BCO +0.10, DNOW +0.09, SITE +0.08, CDW +0.07, SHOW +0.07, ATHM +0.07, BERY +0.07, TT +0.06, ABC +0.06, ACRS +0.05, NYT +0.05, MTRN +0.04, HLMN +0.04, IMXI +0.04, BIP +0.03, SSYS +0.03, SAFE +0.03, CRL +0.03, EDIT +0.02, EVRI +0.01, LIVN +0.01, ALE +0.01, TGI +0.01, DT +0.01, MPW +0.01, TW +0.01.
  • Flat: UAA +0.00, VRT +0.00, ALIT +0.00, NI +0.00, PSN +0.00, EPD +0.00.
  • Misses: UTHR (2.13), ICPT (1.58), SPR (0.96), FUN (0.54), CARS (0.39), PCRX (0.32),  FDP (0.31), HZNP (0.26), DAN (0.17), RCM (0.15), EXPI (0.13), LL (0.10), DTM (0.08), SBGI (0.07), VCEL (0.07), YUM (0.04), AMRN (0.03), SPNS (0.03), EXC (0.02), OMI (0.02), AVA (0.01).
  • Still to Report: NNN, PNW , PPL , SMP , SUN.

Guidance:

  • Positive Guidance: ABNB, PAYC, WCN, SOFI, MCHP, SPT, EXR, SPNE, SRPT, EVH, INSP, AYX, TEX, SWIR, IMXI, CVS, PSN, TT, XHR, DNOW, BERY, BDC of note.
  • Negative Guidance: SWI, ITW, WEC, MRCY, BCOV, CGNX, PYPL, BFAM, MTCH, KN, BLKB, FRSH, STE, KAI, TGI, LIVN, DT, OMI, UAA, DAN, HZNP, CRL, SBGI, SSYS, CARS of note.

Erlanger Research Advance/Decline Chart: Updated through 08/02/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: PYPL +12%, CRNT +11%, AYX +11%, CHRS +10%, SOFI +9%, EVH +9%, ARQT +8%, SWIR +7%, HLF +7%, UNM +7%, RIGL +7%, GXO +6%, ANDE +6%, RNG +5%, CWH +5%, EPD +5%, PFSI +5%, SPNE +4%.
  • Gap Down: MTCH -22%, KN -15%, APAM -12%, SEDG -12%, CGNX -11%, CDLX -9%, AVID -8%, MRCY -7%, ABNB -7%, BFAM -7%, STE -5%, AMD -5%, OSH -5%, EXAS -5%, CNDT -5%, DENN -5%, NGVT -5%, BMBL -4%, EGY -4%, EVRI -4%.

Insider Action: RILY, GWRS, ALDX sees Insider buying with dumb short selling.  TCDA sees Insider buying with smart short sellers. 08/02/22 close.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

  • Stocks Making The Biggest Moves: CVS, UAA, MRNA, SBUX, SWIR, DISH, SOFI, MTCH, ABNB  (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Pelosi vows the U.S. will not abandon Taiwan. (Bloomberg)
  • Bloomberg Most Read Story: The most tracked jet in the world. (Bloomberg)
  • St. Louis Federal Reserve President Bullard said that rates need to be higher for longer if inflation does not drop. (Reuters)
  • Mortgage applications up for the first time in five weeks. (CNBC)
  • Senators may propose legislation to have the CFTC regulate crypto. (WSJ)
  • Apollo (APO) may bid for Atlas Worldwide (AAWW) for $102.50. (Bloomberg)
  • Robinhood Snacks looks at Pelosi’s trip to Taiwan. Uber (UBER) has strong revenues with 122 million users hitting the app.

Moving Average Update:

  • Score notches down 3% to 77%. Updated 08/02/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 9:30 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 12:45 p.m. EDT
    • The President delivers remarks virtually on securing access to reproductive and other health care services at the first meeting of the interagency Task Force on Reproductive Healthcare Access; The Vice President, the Attorney General, the Secretary of Health and Human Services, the Secretary of Veterans Affairs, and the Secretary of Homeland Security attend, 2:00 p.m. EDT

Economic: 

  • MBA Mortgage Applications Index: Actual 1.2%, Prior -1.8%, MBA 30-YEAR MORTGAGE RATE ACTUAL: 5.43% VS 5.74% PREVIOUS
  • PMI Composite Final 9:45 a.m. EDT
  • ISM Services Index 10:00 a.m. EDT
  • June Factory Orders are due out at 10:00 a.m. EDT and expected to come in at 0.90% from 1.60%.
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve St. Louis President James Bullard (on CNBC 8 a.m. EDT)
  • Federal Reserve Philadelphia President Patrick Harker 10:30 a.m. EDT 
  • Federal Reserve Richmond President Thomas Barkin 11:45 a.m. EDT  
  • Federal Reserve Minneapolis President Neel Kashkari 2:30 p.m. EDT 

M&A Activity:

  • Aviat Networks Revises Proposal to Acquire Ceragon Networks (CRNT) to $3.08 Per Share
  • Ingevity (NGVT) to acquire privately-owned Ozark Materials in an all-cash transaction valued at $325 million.
  • SMTC SWIR: a world-renowned Internet of Things (IoT) solutions provider, today announced a definitive agreement under which Semtech will acquire all outstanding shares of Sierra Wireless for US$31 per share in an all-cash transaction representing a total enterprise value of approximately US$1.2 billion, subject to customary closing conditions.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note.
      • Previously posted and ongoing conferences:
        • KBW Keefe, Bruyette & Woods Community Bank Investor Conference 2022 (08/01/22-08/03/22)
  • Company Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: CSII, XERI
  • Update:
    • CURE Pharmaceutical Corporate (CURR) Update.
  • R&D Day: None of note.
  • Company Event:
    • Alliance Investor Summit Q3.
    • The Progressive Corporation (PGR) 2nd Quarter Investor Event 2022.
    • American Resources Corp (AREC) reElement Technologies LLC Virtual Investor Spotlight Event.
  • Industry Meetings:
    • NeoHeart Conference 2022 (08/03/22-08/06/22)
    • 12th China International New Energy Vehicle (NEV) Forum 2022 (08/03/22-08/05/22)
      • Previously posted and ongoing conferences:
        • Alzheimer’s Association International Conference.
        • National Medical Association (NMA) (R) Annual Convention & Scientific Assembly (07/30/22-08/03/22)
        • Alzheimer Association International Conference (AAIC) 2022 (07/31/22-08/04/22)
        • Diggers & Dealers Mining Forum 2022 (07/31/22-08/03/22)

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 it 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: