CAPIS Morning Note – 08/11/23: Second Day of Inflation Day Due at 8:30 a.m. EDT with PPI, More Volatility Ahead?

Overnight Summary: The S&P 500 closed Thursday higher by 0.03% at 4468.83 from Wednesday lower by -0.70% at  4467.71. Overnight ranges saw the high hit at 4496.25 at 8:55 a.m. EDT while the low was hit at 4476 at 6:00 a.m. EDT. The range overnight was 20 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Thursday higher by 0.03% at 4468.83 from Wednesday lower by -0.70% at  4467.71. Overnight ranges saw the high hit at 4496.25 at 8:55 a.m. EDT while the low was hit at 4476 at 6:00 a.m. EDT. The range overnight was 20 points. The 10-day average of the overnight range is at 28.30 from 29.20 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 +1 point and by 0.02% at 7:15 a.m. EDT.

Earnings Out After The Close: 

  • Beats: CBAY +0.19, ATGE +0.06, NWSA +0.05, WPM +0.05, FLO +0.05, SVV +0.05, CPRI +0.03, VIAV +0.02, ARLO +0.02 of note.
  • Flat: None of note.
  • Misses: VTYX (0.20), ONTO (0.05), INDI (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:
    • Battery Future Acquisition Corp. (BFAC) Announces Extension of Deadline to Complete Business Combination.
    • MCAA – FC Barcelona’s Content Creation Platform, Barça Media, Enters into Business Combination Agreement with Mountain & Co. I Acquisition Corp (MCAA), for $1 billion pro forma enterprise value.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • CWK: Announces Pricing of $400 Million Senior Secured Notes Offering.
    • GLAD: Prices Public Offering of 7.75% Notes due 2028.
    • SWAV: Prices Upsized Private Offering of $650.0 Million of 1.00% Convertible Senior Notes Due 2028
  • Common Stock filings/Notes:
    • BSFC: Filed Form S-1.. Offering Common Stock.
    • EPD: Form S-3 Filed .. up to $2,538,500,000 of common units.
    • EVLO: Form S-3 Filed .. 13,189,836 Shares.
    • GROM: Filed Form S-1.. Offering Common Stock.
    • SENS: Filed Form S-3.. $106,600,000 Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • ORTX: Filed Form S-3.. 20,825,049 American Depositary Shares Representing 208,250,490 Ordinary Shares Offered by the Selling Securityholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • BZH: Files mixed shelf securities offering.
    • GWRS: Filed Form S-3.. $100Million Mixed Shelf.
    • OPTN: Files $200 million mixed shelf securities offering.
    • THM: Filed Form S-3.. $100 Million Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • VLD: Has entered into a securities purchase agreement with certain affiliated institutional investors for the purchase and sale of up to $105 mln in aggregate principal amount of the Company’s senior secured convertible notes in a registered direct offering.
  • Tender Offer:
    • WYNN: Announces Commencement of Tender Offer for Cash by Wynn Las Vegas, LLC for its 5.500% Senior Notes due 2025.
  • 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: PGY +27%, ACHR +20%, THS +8%, IONQ +6%, RCEL +5% of note.
    • Trading Down: CANO -53%, MAXN -19%, VLD -14%, OPTN -8%, ARLO -7%, VTYX -6%, OABI -5% of note.
  • News Items After the Close:
    • Arlo (ARLO) stock falls after 3% drop in quarterly revenue. (MarketWatch)
    • Archer Aviation (ACHR) stock up 7% after Boeing (BA) investment (MarketWatch)
    • Cano Health (CANO) stock dives 50% on ‘going concern’ warning (MarketWatch)
    • Wall Street’s Hottest CEO Race Is Playing Out at Morgan Stanley (MS) (Bloomberg)
    • Supreme Court Blocks Purdue Pharma’s $6 Billion Sackler Opioid Settlement (WSJ)
    • Sen Joe Manchin (D-WV) Says ‘thinking Seriously’ About Leaving Democratic Party and becoming an independent.
    • Russia says it will halt foreign currency purchases and launch a digital ruble.
    • Monthly Assets Under Management Reporting:
      • AB: $704 billion – up 2%
  • Exchange/Listing/Company Reorg and Personnel News:
    • Delayed 10-Q filings: ADTN, MITK, MDRX, SRG, CANO, INSE, AKBA
    • Bluejay Diagnostics (BJDX) Regains Compliance with Nasdaq Minimum Bid Price Requirement.
    • DHI Group (DHX) announces CFO departure.
    • MercadoLibre (MELI) announces the appointment of Martín de los Santos as its new CFO.
    • Minim Announces (MINM) CFO Resignation and Transition Plan.
    • NN Inc (NNBR) announces the appointment of Tim French, Senior Vice President and Chief Operating Officer.
    • Vista Outdoor (VSTO) to rebrand as The Kinetic Group following spinoff of Vista Outdoor’s Outdoor Products business; post spin, Kinetic will list on NYSE under ticker “HUNT”.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News:
    • MULN trading r/s price.
  • Dividends Announcements or News:
    • J&J Snack Foods (JJSF) increases quarterly cash dividend to $0.735 per share. (MarketWatch)
    • Spirit Realty Capital (SRC) increases quarterly cash dividend to $0.6696 per share.
    • Vinci Partners (VINP) increases quarterly cash dividend 18% to $0.20 per share.
  • Insider Sales Of Note:
    • U.S. Bancorp (USB) CFO sold 26000 shares at $39.75 worth ~$1.03 million.

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

S&P 500 -2, Dow Jones -2,  NASDAQ -20, and Russell 2000 +1.  (as of 7:54 a.m. EDT).  Asia lower ex Japan and Europe lower this morning. VIX Futures are at 17.61 from 17.26 yesterday.  Gold higher with 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 4.102% from 4.00% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $29,363 from $29,492 yesterday, higher by +0.13%.

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

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

U.S. stocks edged higher Thursday after fresh data showing cooling inflation boosted investor optimism about the likelihood of the Federal Reserve pausing its interest-rate increases until Federal Reserve San Francisco President Mary Daly opened her mouth and killed the rally.  The S&P 500 gained less than 0.1%. The Dow Jones Industrial Average added 0.2%, or roughly 50 points. The Nasdaq Composite rose 0.1%.  Price pressures continued easing last month. The consumer-price index in July rose 0.2% from the prior month and 3.2% from a year ago, the Labor Department reported Thursday. That mostly aligned with economist expectations.  (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: SPB +0.27 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: SVV, ONTO, EVLV of note.
  • Negative Guidance: MAXN, VIAV of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ACHR +22%, PGY +16%, INDI +10%, IONQ +7%, ADVM +6%, EPSN +5%, RCEL +5%, BAP +4%, of note.
  • Gap Down: CANO -43%, MAXN -26%, AVAL -8%, VLD -6%, VTYX -6%, OPTN -5%, OABI -4% of note.

Insider Action: MAA sees Insider buying with dumb short selling.  SEAC 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.

  • 5 Things to Know to Start Your Day. (Bloomberg)
  • 5 Things to Know Before the Stock Market Opens Friday. (CNBC)
  • Bloomberg Lead Story: Biden calls China’s economy a ticking time bomb. (Bloomberg)
  • Bloomberg Second Most Shared Story: Jeff Bezos buys a $68 million house on Florida’s Indian Creek Island. (Bloomberg) 
  • Stocks drop as China, Fedspeak unnverve traders: Market Wrap. (Bloomberg)
  • Chinese property company Country Garden in serious trouble. (WSJ)
  • Investors are overconfident about AI, notes a strategist at Morningstar. (CNBC)
  • NPR Marketplace: Many finance-focused artificial intelligence tools seem designed to make the jobs of human financial advisers easier, not replace them. At least for now. Today, we’ll map out how likely it is that AI will manage our money and pick our stocks. We’ll also dig deeper into inflation data for shelter and gas, then examine how aging populations could shake up the global economy. (Podcast)
  • BBC Global News: Iran releases US dual nationals into house arrest. (Podcast) 
  • NY Times The Daily: End of an era for U.S. women’s soccer.  (Podcast)
  • Bloomberg Podcasts of Note: Interview with Paul Krugman of The New York Times. (Podcast)
  • Wealthion: Have we truly dodged a recession this year? (Podcast)

Moving Average Update:

  • Score remains at 34%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • The President departs the White House en route to Rehoboth Beach, Delaware, 6:10 p.m. EDT
    • The President arrives in Rehoboth Beach, Delaware, 7:05 p.m. EDT

Economic:

  • July PPI is due out at 8:30 a.m. EDT and is expected to rise to 0.20% from 0.10%.
  • August University of Michigan Consumer Sentiment is due out at 10:00 a.m. EDT and is expected to fall to 70.90 from 71.60.
  • Michigan Inflation Exp. 10:00 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News:

  • Arco (ARCE) Enters into Agreement to Go Private at a Price of US$14 per Share in Cash.

Meeting & Conferences of Note:

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

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: