CAPIS Morning Note – 08/04/23: All Eyes On Today’s Jobs Data

Overnight Summary: The S&P 500 closed Thursday lower by -0.25% at 4501.89 from Wednesday lower by -1.38% at 4513.39. Overnight ranges saw the high hit at 4547 at 4:15 a.m. EDT while the low was hit at 4517.50 at 4:05 p.m. EDT. The range overnight was 30 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Thursday lower by -0.25% at 4501.89 from Wednesday lower by -1.38% at 4513.39. Overnight ranges saw the high hit at 4547 at 4:15 a.m. EDT while the low was hit at 4517.50 at 4:05 p.m. EDT. The range overnight was 30 points. The 10-day average of the overnight range is at 25.85 from 25.40 yesterday.  The average for May/June/July average was 18.81 from 19.94 in May/June. Currently, the S&P 500 is higher by 7 points and by 0.15% at 7:22 a.m. EDT.

Earnings Out After The Close: 57

  • Beats: BKNG +8.64, POST +0.58, GH +0.55, WW +0.53, AMGN +0.51, AL +0.47, XNCR +0.43, DKNG +0.39, DVA +0.37, COIN +0.34, TVTX +0.32, IRTC +0.32, RBA +0.32, BIO +0.32, OPEN +0.31, AMZN +0.30, OLED +0.29, DLB +0.27, CRUS +0.26, QLYS +0.25, RGA +0.25, AMN +0.24, CLFD +0.23, ATSG +0.21, RRR +0.18, ABNB +0.18, EOG +0.17, PCTY +0.17, ACA +0.17, AAON +0.17, SYK +0.16, OSUR +0.16, PBA +0.16, PRDO +0.15, MSI +0.14, TEAM +0.13, ICFI +0.12, NTRA +0.12, LOPE +0.12, TMDX +0.10, WK +0.10, RDFN +0.09, SPT +0.09, FOXF +0.08, TTEC +0.08, CHUY +0.08, TRUP +0.08, SXI +0.07, UDMY +0.07, BIGC +0.07, SEM +0.07, AAPL +0.06, AEIS +0.06, BWXT +0.06, LNT +0.06, ZD +0.06, LASR +0.06, OTEX +0.05, BGS +0.05, DBX +0.05, PGNY +0.05, YELP +0.05, GMED +0.04, HTGC +0.04, LTHM +0.04, MTZ +0.04, RLJ +0.04, OPK +0.04, APPN +0.04, CDXS +0.04, FTNT +0.04, TSLX +0.04, SQ +0.03, TMST +0.03, IAS +0.03, KTOS +0.03, MP +0.03, NET +0.03, SWN +0.03, SYNA +0.03, COLD +0.02, CTVA +0.02, LOCO +0.02, REG +0.02, ABCL +0.02, FIGS +0.02, RKT +0.02, POWI +0.02, SKT +0.02, GDOT +0.01, RYAN +0.01, VTR +0.01, GDYN +0.01, ALTR +0.01, GEN +0.01 of note.
  • Flat: CRSR +0.00, CUBE +0.00, ED +0.00, FND +0.00, GPRO +0.00, MCHP +0.00, MCW +0.00, MNST +0.00, MYGN +0.00, PLYA +0.00 of note.
  • Misses: CABO (2.99), PTCT (1.04), COLL (0.88), MERC (0.63), DOCN (0.41), BECN (0.30), GILD (0.30), VIR (0.25), NSTG (0.21), CYTK (0.20), DEN (0.18), RARE (0.16), MODV (0.15), TXG (0.13), REZI (0.12), DM (0.10), PRTA (0.10), STEM (0.09), EXR (0.09), RMD (0.07), WERN (0.06), TNDM (0.05), XPOF (0.05), IGMS (0.03), OUT (0.03), EXPI (0.03), RHP (0.03), BE (0.02), FNKO (0.02), GDDY (0.02), MWA (0.02), AES (0.01), CPT (0.01), DRH (0.01), STEP (0.01), ENV (0.01), SNCY (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: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • QS: Prices offering of 37.5 million shares of common stock for gross proceeds of $300 million.
    • RYI: Announces Pricing of Secondary Offering of 4,000,000 Shares of Common Stock by a Significant Shareholder.
    • TRIN: Announces Pricing of $75.0 Million of Shares of Common Stock at $14.45 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ABC: Registered Public Offering of Common Shares and Common Share Repurchase – 10.5 million shares.
    • GROV: Filed Form S-3.. 714,285 Shares of Class A Common Stock.
    • TRIN: Announces Offering of $75.0 Million of Shares of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • HA: Filed Form S-3.. Warrants to Purchase 1,134,685 Shares of Common Stock 1,134,685 Shares of Common Stock Offered by the Selling Security holder.
    • HAYW: Announces Pricing of Secondary Offering of 22,259,780 Shares of Common Stock by Selling Stockholders.
    • KWR: Files for 4,029,563 shares of common stock by selling shareholder; also files for 3,899 shares of common stock by selling shareholders.
    • MGTX: Filed Form S-3.. 3,742,514 Ordinary Shares Offered by the Selling Shareholder — 9,144,801 Ordinary Shares Offered by the Selling Shareholders.
    • RYI: Announces secondary offering of 4,000,000 shares of common stock by a significant shareholder.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ALK: Filed mixed securities shelf offering and filed prospectus supplements to its automatic shelf registration statement on Form S-3.
    • BKNG: Filed Form S-3ASR.. Mixed Shelf.
    • COP: Filed Form S-3ASR.. Mixed Shelf.
    • DVAX: Files mixed shelf securities offering.
    • GLG: Filed Form S-3.. $100 Million Mixed Security Shelf.
    • XYL: Filed Form S-3ASR.. Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • AVAH: Announces Agreement to Extend its $175 Million Securitization Facility.
    • JBI: Announced a series of related transactions to refinance its debt.
    • TUP: Tupperware Brands Announces Debt Restructuring. (MarketWatch)
  • Tender Offer: None of note.
  • 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: TUP +55%, TEAM +23%, BIGC +12%, DKNG +11%, BKNG +11%, NTRA +9%, AMZN +9%, YELP +9%, NET +7%, OSUR +7%, XPOF +6%, XNCR +6%, CHUY +6%, IRTC +5%, CRUS +5%, ATSG +5%, TVTX +4%, STEM +4%, FIGS +4%, TRUP +4%, KTOS +4%, AGL +4%, MERC +4%, RYAN +4% of note.
    • Trading Down: MODV -19%, DOCN -19%, FTNT -17%, OPEN -15%, TMDX -15%, TNDM -12%, SYNA -12%, CARG -11%, ABCL -11%, SPT -11%, LASR -10%, RDFN -10%, MTZ -10%, REZI -9%, FND -8%, POWI -8%, PANW -7%, MWA -7%, RMD -7%, OUT -6%, TRIN -6%, FOXF -6%, SQ -5%, MCHP -5%, FNKO -5%, TXG -5%, HAYW -5%, RYI -5%, WW -4% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after hours: AMZN, ABNB, AAPL, BKNG, FTNT, DKNG, COIN, DBX, CRSR, SPT, SQ (CNBC)
    • Apple (AAPL) Faces Longest Sales Slowdown in Decades as iPhone Slumps. (Bloomberg)
    • Amazon (AMZN) Delivers Surprisingly Strong Profit as Retail Business Improves. (WSJ)
    • Airbnb (ABNB) reports continued deceleration in nights and experiences booked. (CNBC)
    • Datadog (DDOG), Snowflake (SNOW) stocks rise after Amazon’s upbeat AWS commentary. (MarketWatch)
    • KKR in Advanced Talks to Buy Simon & Schuster for Roughly $1.65 Billion. (WSJ)
    • Robinhood (HOOD) to Start Charging Customers Regulatory Fees for Options Trading. (WSJ)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Clover Health (CLOV) Regains Compliance with NASDAQ Minimum Bid Price Requirement.
    • Despegar.com (DESP) announces that Mr. Amit Singh has been appointed Chief Financial Officer.
    • First Horizon (FHN) announces a five-year employment agreement with Chairman, President and Chief Executive Officer D. Bryan Jordan.
    • IBEX: Names Taylor C. Greenwald Chief Financial Officer
    • KNOT Offshore Partners LP (KNOP) Announces Appointment of New CEO/CFO.
    • Moody’s (MCO) Announces CFO Transition.
    • Nikola Corporation (NKLA) announces Michael Lohscheller will step down as President and CEO effective immediately; Chairman Steve Girsky named new CEO of NKLA.
    • Secoo (SECO) Announces Receipt of Minimum Bid Price Notice from Nasdaq.
    • Terns Pharmaceuticals (TERN) Announces Leadership TransitionSenthil Sundaram Stepping Down as Chief Executive Officer for Health Reasons.
    • Tupperware (TUP) files to delay its 10-Q. (MarketWatch)
    • Xilio Therapeutics (XLO) Announces Promotion of Chris Frankenfield to Chief Operating Officer.
  • Buyback Announcements or News:
    • ABC: Announces Registered Public Offering of Common Shares and Common Share Repurchase.
    • Alpha Metallurgical Resources (AMR) to cease fixed dividend program to focus on buyback program.
    • Cavco Industries (CVCO) Announces New $100 Million Stock Repurchase Program.
    • Carlisle Companies (CSL) Authorizes Repurchase of an Additional 7.5 Million Shares. (see Dividend)
    • GoDaddy (GDDY) announces an incremental $1 billion share buyback authorization through 2025.
    • Missfresh (MF) Announces Entry of Share Purchase Agreements for Financing and Business Acquisition.
    • Resideo (REZI) Announces Share Repurchase Program.
    • PCB Bancorp (PCB) Announces Stock Repurchase Program.
    • Standex International (SXI) Board approved a $1 billion buyback through December 31, 2023.
  • Stock Splits or News:
    • DUO trading r/s price.
    • NCMI trading r/s price.
    • OTMO trading r/s price.
  • Dividends Announcements or News: 
    • Carlisle Companies (CSL) Announces a Dividend Increase, its 47th Consecutive Annual Increase.
    • Dover (DOV) increases quarterly cash dividend to $0.51 per share.
    • EOG Resources (EOG) Board of Directors today declared a dividend of $0.825 per share.
    • LyondellBasell (LYB) increased quarterly dividend by 5% to $1.25 per share.
    • Microchip (MCHP) increases quarterly cash dividend to $0.41 per share.
    • RB Global (RBA) declared a quarterly cash dividend of $0.27 per common share.
    • Sixth Street Specialty Lending (TSLX) Board of Directors has declared a third quarter 2023 base dividend of $0.46 per share.
    • Star Bulk Carriers Corp. (SBLK) Declares Quarterly Dividend of $0.40 Per Share.
    • Sunstone Hotel (SHO) Board of Directors declared a cash dividend of $0.07 per share of common stock, an increase of $0.02 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 +1, Dow Jones -36,  NASDAQ +16, and Russell 2000 -6.  (as of 8:04 a.m. EDT).  Asia higher ex South Korea and Europe higher this morning. VIX Futures are at 16.81 from 16.09   yesterday.  Gold, Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil higher with Natural Gas higher as well. US 10-year Treasury sees yields at 4.182% from 4.134% from 4.078%. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $29,164 from $29,109 yesterday, lower by -0.28%.

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

  • Daily Positive Sectors: Energy, Consumer Cyclical of note.
  • Daily Negative Sectors: Utilities, Real Estate, Industrials, Healthcare, Basic Materials of note.
  • One Month Winners: Communication Services, Financials, Basic Materials 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 edged lower Thursday, extending their recent slide as a jump in bond yields weighed on the market’s appetite for risk.  The S&P 500 fell for a third consecutive day, bringing its losses in the first three days of August to 1.9%. Investors said it made sense that stocks might pull back after a rally that catapulted the broad U.S. index up nearly 20% in the first seven months of the year.  The S&P 500 dropped 0.3%, while the Dow Jones Industrial Average declined 0.2%, or 66.63 points. The tech-heavy Nasdaq Composite slipped 0.1%.  Yields on longer-term U.S. government bonds continued to march higher, prompting investors to take a fresh look at their allocations among asset classes. The yield on the benchmark 10-year U.S. Treasury note climbed to 4.188%, its highest settle since November, from 4.077% Wednesday. The 30-year Treasury’s yield rose to 4.304% from 4.164% a day earlier.  (WSJ – edited by QPI)

 

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

  • Friday After the Close: None of note.
  • Monday Before the Open:

Earnings of Note This Morning:

  • Beats: AMCX +0.49, ACMR +0.45, FLR +0.33, MGA +0.27, CNK +0.26, FLGT +0.25, ENB +0.16, LYB +0.14, TAC +0.13, CRBG +0.11, XPO +0.11, ESNT +0.10, GTN +0.09, TILE +0.07, D +0.06, EVRG +0.04, GNK +0.04, PRLB +0.03, SHO +0.03, FSR +0.02, SSP +0.02, CBOE +0.01, TIXT +0.01 of note.
  • Flat: OMI of note.
  • Misses: GPRE (0.85), AMR (0.53), TDS (0.13), USM (0.04), TU (0.03), FYBR (0.02), BEP (0.01), PNM (0.01), EAF (0.01) of note.
  • Still to Report: AXL, DBRG, GTES, PAA, PPL, RBC, TNC, TWST of note.

Guidance:

  • Positive Guidance: SWI, ITRI, AMGN, DVA, IRTC, MSI, DKNG, TMDX, NET, YELP, OSUR, DLB, CHUY, LOPE, WK, SYK, BWXT, PRDO, QLYS, GH, NTRA, CLFD, GMED, MODV, ATEC, GDYN, APPN, ATSG, DBX, MGA, FLR, FLGT of note.
  • Negative Guidance: COHU, ARW, NSIT, BFLY, IDCC, SNDR, RDFN, WW, GDDY, POWI, GEN, FTNT, DOCN, OPEN, EXR, SNCY, RKT, FOXF, FND, FNKO, ENV, ALTR, MCW, AMN, LASR, UDMY, MWA, TTEC, SPT, REZI, GTN, D of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: TUP +52%, TEAM +22%, BIGC +17%, DKNG +13%, NTRA +12%, BKNG +11%, ORLA +10%, OSUR +9%, NET +9%, AMZN +9%, FLR +8%, OLED +8%, YELP +8%, QLYS +7%, FIGS +7%, XPOF +6%, IRTC +6%, XNCR +6%, STEM +6%, CHUY +6%, BWXT +5%, ATSG +5%, PGNY +5%, DBX +4%, NSTG +4%, WW +4%, MERC +4%, RYAN +4%, TRUP +4% of note.
  • Gap Down: DOCN -23%, MODV -20%, FTNT -19%, TNDM -12%, TMDX -12%, OUT -12%, SYNA -12%, OPEN -12%, SPT -11%, RDFN -9%, ABCL -9%, REZI -8., CARG -7%, QS -7%, TRIN -7%, MWA -7%, RMD -7%, MTZ -6%, LASR -6%, PANW -6%, FND -6%, MCHP -5%, WPP -5%, GDDY -5%, IGMS -5%, MCW -4%, AU -4%, SQ -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 You Need to Know to Start Your Day. (Bloomberg)
  • 5 things to know before the stock market opens Friday. (CNBC)
  • Stocks Moving The Most In Pre-Market: AAPL, SQ, COIN, AMZN, BKNG, NKLA, DKNG, TUP, OPEN, FTNT (CNBC)
  • Bloomberg Lead Story: Slowing US Wage Growth Set Stage for End of Fed Tightening. (Bloomberg)
  • Bloomberg Most Shared Story: Intern Hunger Games in Full Swing With VC Shops. (Bloomberg)
  • Stocks Gain as Treasuries Steady Ahead of Jobs Report: Market Wrap. (Bloomberg)
  • Here’s everything to look at in today’s jobs data. (CNBC)
  • NPR Marketplace: Instead of buying another Porsche, some of the mega-rich are dropping $100,000 on new citizenship. These citizenship by investment programs have gained popularity since the 2020 election and pandemic, especially among bitcoin investors. Today, we delve into “the ultimate hedge” for wealthy Americans. Plus, why an uptick in productivity is good news for the inflation fight, and what to make of a slowdown in manufacturing. (Podcast)
  • BBC Global News: Trump pleads not guilty.  (Podcast) 
  • NY Times The Daily: Why Trump and Biden are Tied. (Podcast)

Moving Average Update:

  • Score notches down to 45% from 48%.  You can see the 50 and 200 are a good amount away and the shorter term MA are bundled together.

Geopolitical: 

  • President’s Public Schedule:
    • The President and The First Lady depart Rehoboth Beach, Delaware at 8:45 a.m. EDT en route to New Castle, Delaware and arrive at 9:20 a.m. EDT.

Economic:

  • July Nonfarm Payrolls is due out at 8:30 a.m. EDT and is expected to fall to 200,000 from 209,000. The unemployment rate is expected to stay at 3.6%.
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers: None of note.

M&A Activity:

  • Amgen (AMGN) discloses FTC update regarding proposed acquisition of Horizon (HZNP).
  • Endava (DAVA) Acquires TLM to Boost its Position in Digital Entertainment.
  • Sprout Social (SPT) announces the acquisition of Tagger Media.

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: