CAPIS Morning Note – 08/15/22: Stocks See Profit Taking From Last Week’s Gains. Options Expiration Ahead This Week.

Overnight Summary: The S&P 500 closed Friday at 4280.15 (higher by 1.73%) from Thursday at 4207.27 (lower by -0.07%).  The overnight high of 4278.50 was hit at 6:05 p.m. EDT. The low was hit at 4255.75 at 5:40 a.m. EDT, a range of 23 points high to low which is below the range of late…

Overnight Summary: The S&P 500 closed Friday at 4280.15 (higher by 1.73%) from Thursday at 4207.27 (lower by -0.07%).  The overnight high of 4278.50 was hit at 6:05 p.m. EDT. The low was hit at 4255.75 at 5:40 a.m. EDT, a range of 23 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 was 4262.25 which is -0.44% and -18.75 points. Currently, at 8:00 a.m. EDT the S&P 500 is now down -25. 

Earnings Out After The Close:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News:
    • Lucy Scientific Discovery (LUCY): Pricing of $7.35 Million Initial Public Offering.. 980K Units @$7.50.
  • New SPACs launched/News:
    • Renewable Gasoline Company Bluescape Clean Fuels, LLC to Become Publicly Traded on NASDAQ via Business Combination with CENAQ Energy Corp. (CENQ) and be renamed Verde Clean Fuels, LLC.
    • Edoc Acquisition Corp. (ADOC) Announces Termination of Merger Agreement with Calidi Biotherapeutics, Inc.
    • Embrace Change Acquisition Corp. (EMCGU) Announces Closing of $73.9 Million Initial Public Offering.
    • Breeze Holdings Acquisition Corp. (BREZ) and D-Orbit S.p.A. Mutually Agree to Terminate Merger Agreement.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • APGN: Filed Form S-1.. Primary Offering of 3,724,500 Shares of Common Stock Issuable Upon Exercise of Warrants Secondary Offering of 14,434,863 Shares of Common Stock — Up to 17,316,667 shares of common stock.
    • BIOL: Filed Form S-3.. $50,000,000 Aggregate Offering Price.
    • CVLT: Universal Shelf Registration Statement on Form S-3.
    • CVLG: Covenant Logistics Group Announces Filing of Universal Shelf Registration Statement on Form S-3.
    • KRTX: Closing of Public Offering and Full Exercise of Option to Purchase Additional Shares.
    • MIRM: Announces Closing of Public Offering and Full Exercise of Underwriters’ Option to Purchase Additional Shares in Public Offering of Common Stock.
    • MDVL: Filed Form S-3.. 14,117,646 Shares of Common Stock.
    • RKDA: Announces $5.0 Million Registered Direct Offering Priced At-The-Market.
    • SIDU: Filed Form S-1.. Up to 3,373,121 shares of Class A Common Stock.
    • TYDE: Filed Form S-1.. 71,276,725 Shares of Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • CYXT: Filed Form S-3.. $300,000,000 Mixed Shelf 130,263,898 shares Class A Common Stock Offered by the Selling Securityholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • SON: Files mixed securities shelf offering.
    • TCRT: Filed Form S-3.. $200 Million Mixed Shelf.
    • VALN: Filed Form F-3.. $200 Million Mixed Shelf.
  • Debt Filing: None of note.
  • Convertible Offering & Notes Filed:
    • HALO: Announces proposed offering of $500 mln for convertible senior notes due 2028..

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: NVTA 133%, ATRA 70%, HRTX 65%, BBBY 59%, UBX 51%, AGS 49%, PACB 45%, OSUR 44%, TTD 41%, AAOI 40%, CASI 39%, DM 39%, KLXE 34%, AMBC 34%, TGTX 33%, STAA 32%, LIND 32%, ARRY 32%.
    • Trading Down: AMTD -52%, RETA -41%, NVAX -31%, ARGO -30%, SIEN -29%, QRTEB -28%, SONO -26%, QURE -20%, CAE -19%, QUOT -18%, LRN -17%, EGRX -17%, PETQ -16%, AMPH -14%, FRPT -12%, MRC -12%.
  • News Items After the Close:
    • Tesla (TSLA) stops taking Model 3 Long Range orders as backlog extends to 2023. (ELECTREK)
    • Peloton (PTON) slashing 780 jobs, closing stores and hiking prices in push to turn profit. (Bloomberg)
    • Johnson & Johnson (JNJ) Ends Global Sales of Cancer-Causing Baby Powder Amid Increased Scrutiny from Consumer Litigation, Science.
    • Carnival Cruise (CCL) line removes pre-cruise testing for vaccinated guests and welcomes all unvaccinated to sail.
    • US House passes the $430 billion Inflation Reduction Act.
    • Raytheon Technologies (RTX) awarded a $132 million modification to a previously awarded US Air Force contract.
    • Lockheed Martin (LMT) awarded a US Navy $7.6 billion undefinitized modification to a previously awarded advanced acquisition contract.
  • News Items Over the Weekend:
    • Stocks That Defined the Week: DIS, PTON, NVDA, TSN, TSLA, SG, UAL, RIVN (WSJ)
    • The Week in Business: Inflation Moderates.  (NYT)
    • A delegation of U.S. lawmakers is visiting Taiwan, just 12 days after a visit by House Speaker Nancy Pelosi that angered China. China responded to Pelosi’s visit by sending missiles, warships and warplanes into the seas and air around Taiwan.  (WSJ).
    • President Biden “Intends to run” for re-election (Jean-Pierre)
    • In letter to Kim Jong Un, President Putin says Russia and North Korea will expand bilateral relations – (KCNA)
    • Wells Fargo (WFC) Plans Major Retreat From Mortgage Business It Long Dominated. (Bloomberg)
    • Barron’s:
      • Positive View: AES, BE, FCX, PLUG, RUN, AEO, RMBS, QRVO, MCHP, NXPI, ADI, AVGO, COIN
      • Cautious View: RCL, BBBY, PRTY, RAD, WWW, CAL, EXPR
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Akumin (AKU) Announces CFO Transition.
    • Ceragon (CRNT) Appoints Ronen Stein as Chief Financial Officer starting September 21, 2022
    • Ideanomics (IDEX) Receives Anticipated Notice of Additional Filing Delinquency from Nasdaq.
    • Latch (LTCH) receives expected Nasdaq notification of non-compliance.
    • LMP Automotive Holdings (LMPX) Announces Voluntary NASDAQ Delisting and SEC Deregistration.
    • MACOM Technology Solutions Holdings (MTSI) Set to Join S&P MidCap 400.
    • SGLY CEO was just forced to resign. “The Special Committee recommend[ed] that Mr. Jie be suspended immediately as the Company’s CEO, pending the Special Committee’s further investigation into allegations raised in the report of Hindenburg Research” (Hindenburg Research Tweet)
    • Shoals Technologies (SHLS) announced appointment of new Chief Financial Officer.
    • RDUS Halt – Additional Information Requested by NASDAQ.
    • Energous Corporation (WATT) Names Two New Directors.
  • Buyback Announcements or News:
    • Civeo (CVEO) Announces Agreement to Repurchase Approximately 375 thousand Common Shares.
    • QSR to Buy Back Shares Up to $1 billion.
    • Plus Therapeutics (PSTV) announces $2M Share Repurchase Program.
    • Westlake (WLK) Announces $500 Million Expansion of Existing Share Repurchase Program. (see Dividend)
  • Stock Splits or News: 
    • ROOT Reverse Stock Split at 1-for-18 Ratio.
  • Dividends Announcements or News: 
    • Badger Meter (BMI) increases quarterly dividend by $0.025 to $0.225 per share, a 12.5% increase.
    • Embecta Corp. (EMBC) announces quarterly cash dividend.
    • Westlake (WLK) 20% Increase in Quarterly Dividend. (see Buyback)

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

S&P 500 -25, Dow Jones -188, NASDAQ -61 and Russell 2000 -15 . Europe higher ex FTSE and Asia lower ex Nikkei.  VIX Futures are at 23.77 from 23.78 Friday morning and the VIX closed at 19.53 from 20.20 Friday. Gold, Silver and Copper lower. WTI Crude Oil  and Brent Oil Futures lower and Natural Gas lower. $ is higher vs Euro, higher vs Pound and lower vs Yen. US 10 year Treasury sees yields at 2.833% from 2.878% Friday morning. Bitcoin is at $24,187 from $23,771.80 Friday morning  and is lower by -0.38% this morning. As of 8:09 a.m. EDT.

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

  • Daily Positive Sectors: Real Estate, Technology, Consumer Cyclical, Communication Services, Basic Materials, Industrials, Utilities, Financial of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners:  Technology, Consumer Cyclical, Industrials, Energy, Basic Materials, Financials, Utilities, and Real Estate of note.
  • Three Month Winners: Consumer Cyclical, Technology, Industrials, and Real Estate of note.
  • Six Month Winners: Energy and Utilities of note.
  • Twelve Month Winners: Energy and Utilities of note.
  • Year to Date Winners: Energy and Utilities of note.

Big positive day thanks to lower oil prices and positive Michigan Consumer Sentiment numbers.  Stocks opened strong and finished stronger!  Updated 08/12/22 close.

   

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

  • Monday After the Close: WWE, SHLS, FLNC, FN, COMP, NVTS, TDUP of note.
  • Tuesday Before the Open: WMT, HD, ONON, PINC, HUYA of note.

Earnings of Note This Morning:

  • Beats: DOYU +0.36, YOU +0.04.
  • Flat: TWKS.
  • Misses: LI (0.13).
  • Still to Report: WEBR.

Guidance:

  • Positive Guidance: none of note.
  • Negative Guidance: TWKS of note.

Erlanger Research Advance/Decline Chart: Updated through 08/12/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: VRDN +48%, AGS +11%, DOYU +10%, EMBC +4%.
  • Gap Down: TRQ -24%, CLNN -11%, APGN -9%, LI -6%.

Insider Action: IIPR, AAT, KWR sees Insider buying with dumb short selling.  No stock sees Insider buying with smart short sellers. 08/12/22 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: POSH VRM RVLV  (CNBC)
  • 5 Things To Know Before The Stock Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Much of U.S. To Be In An Extreme Heat Beat By 2050. (Bloomberg)
  • Bloomberg Most Read Story: Saudi Billionaire made $500 million on bet at the start of the war. (Bloomberg)
  • China consumer and factory data comes in below estimates this morning. (CNBC)
  • China conducts more military drills near Taiwan after U.S. Congressional delegation visits Taiwan. (Reuters)
  • China still not shaking Covid-19 as 2,000 more cases reported in various regions. (Bloomberg)
  • Aramco sees profits rise 90%. (CNBC)
  • President Biden to sign the Inflation Reduction Act this week. (ABC News)
  • Energy Secretary Granholm believes that clean energy includes nuclear. (Fox News)
  • YouTube (GOOGL) to introduce online streaming store for streaming services. (WSJ)
  • Affirm (AFRM) CEO is confident in lending model. (WSJ)
  • Wells Fargo (WFC) seeks to shrink mortgage business. (Bloomberg)
  • There was a shooting at an Illinois Six Flags (SIX) parking lot with three people hurt. (WSJ)
  • Banks have resumed trading Russian bonds. (Reuters)

Moving Average Update:

  • Score breaks up to 85% with the $MID and $RUT breaking above their 200 Day MA.  Updated 08/12/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • Vacation in South Carolina.

Economic: 

  • August Empire State Manufacturing is due out at 8:30 a.m. EDT and expected to come in at 5 from 11.1.
  • August NAHB Housing Market Index is due out at 10:00 a.m. EDT and expected to remain at 55.

Federal Reserve / Treasury Speakers:

  • Federal Research Board of Governors Christopher Waller 10:50 a.m. EDT

M&A Activity:

  • PlayAGS (AGS) confirms receipt of offer to be acquired at $10 per share.
  • BlueCity (BLCT) Announces Completion of Merger.
  • Boston Scientific (BSX) Announces Acquisition of Obsidio, Inc.
  • Nexstar (NXST) to acquire The CW Network from Paramount Global (PARA) and Warner Bros. Discovery (WBD).

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Needham MedTech & Diagnostics Virtual 1×1 Conference 2022 (08/15/22-08/16/22).
      • Previously posted and ongoing conferences:
        • None of note.
  • Company Meetings: CYBN, DLA, HIMX.
  • Fireside Chat:
    • Cvent Holding Corp (CVT) Fireside Chat with Water Tower Research.
  • Investor/Analyst Day/Calls: LUCD, VS, WES.
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • RE/MAX (RMAX) Broker Owner Conference 2022 (08/14/22-08/16/22).
    • Clene (clnn) to Host VISIONARY-MS Results Call and Webcast 2022
  • Industry Meetings:
    • AFCEA TechNet Augusta 2022 (08/15/22-08/18/22)
    • 14th Annual Bioprocessing Summit (08/15/22-08/18/22)
    • DEF CON 30 Hacking Conference 2022 (08/15/22-08/16/22)
    • SHAREholder Equity Conference (Small Cap) August 2022
      • Previously posted and ongoing conferences:
        • Insight Tech Conference + Expo 2022 (08/14/22-08/17/22)

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: