CAPIS Morning Note – 09/02/22: Jobs Friday. Is Good News Bad News or Can Good News Be Good News?

Please Note: Next publication will be Tuesday September 6.  Happy Labor Day! Overnight Summary: The S&P 500 closed Thursday at 3966.85 (higher by 0.30%) from Wednesday at 3955 (lower by -0.78%). The overnight high of 3974.50 was hit at 4:45 a.m. EDT. The low was hit at 3955.50 at 2:05 a.m. EDT, a range of…

Please Note: Next publication will be Tuesday September 6.  Happy Labor Day!

Overnight Summary: The S&P 500 closed Thursday at 3966.85 (higher by 0.30%) from Wednesday at 3955 (lower by -0.78%). The overnight high of 3974.50 was hit at 4:45 a.m. EDT. The low was hit at 3955.50 at 2:05 a.m. EDT, a range of 20 points high to low which is below the recent range of 45. At 7:20 a.m. EDT the current price was 3964.75 which is -0.10% and -4 points. Currently, at 8:00 a.m. EDT the S&P 500 is now up by +2.5 points.

Earnings Out After The Close:

  • Beats: LULU +0.+34, AVGO +0.18, OXM +0.13, SMAR +0.10, SPWH +0.10, NCNO +0.04, PD +0.04.
  • Flat: None of note.
  • Misses: CVGW (0.18), JOAN (0.15).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BFST: Raises $72.0 Million in Preferred Equity.
    • ELYS: Filed Form S-1.. Up to 3,166,227 Shares of CommonStock Issuable Upon Exercise of Warrants.
    • FREY: see Mixed shelf below.
    • HUMA: Filed Form S-3.. Up to 89,716,840 Shares of Common Stock Up to 5,177,500 Shares of Common Stock Issuable Upon Exercise of Warrants.
    • VVX: Filed Form S-3.. Common Stock Offering.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • AMST: Announces Closing of $2.3 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • FREY: see Mixed shelf below.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ATVI: Filed Form S-3ASR.. Mixed Shelf Offering.
    • BRY: Filed Form S-3.. $500 Million Mixed Shelf.
    • CLR: Filed Form S-3ASR.. Mixed Shelf Offering.
    • EFTR: Filed Form S-3.. $200,000,000 Mixed Shelf.
    • FREY: Filed Form S-3.. $500 Million Mixed Shelf .. 24,625,000 Ordinary Shares Offered by FREYR Battery, 118,968,753 Ordinary Shares 10,250,000 Warrants to Purchase Ordinary Shares Offered by Selling Securityholders.
    • HUMA: Files for $300 million mixed securities shelf offering.
    • INDP: Filed Form S-3.. $200 Million Mixed Shelf.
    • MNTS: Filed Form S-3.. $200 Million Mixed Security Shelf.
    • NBHC: Filed Form S-3ASR — Mixed Shelf Offering.
    • SBUX Starbucks files mixed securities shelf offering.
    • TNGX: Filed Form S-3.. $400,000,000 Mixed Shelf.
  • Debt Filing/Notes: 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:

  • After Hours: 
    • Trading Up: HCP +13%, NCNO +10%, LULU +9%, PD +7%.
    • Trading Down: OXM -6%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: LULU, PD, AVGO  (CNBC)
    • Lululemon (LULU) boosts outlook and guidance, after strong second quarter earnings. (CNBC)
    • Starbucks (SBUX) Names Laxman Narasimhan as Next Chief Executive Officer. (NYTimes)
    • CDC recommends first updated Covid-19 booster with Omicron BA.4 and BA.5 spike protein components. (Release)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Bright Scholar (BEDU) Regains Compliance with NYSE Minimum Price Requirement.
    • Grocery Outlet (GO) announced the retirement of S. MacGregor Read, Jr., Vice Chairman of the Board of Directors.
    • Iterum Therapeutics (ITRM) Regains Compliance with Nasdaq Bid Price Rule.
    • James Hardie (JHX) appoints Aaron Erter as Chief Executive Officer.
    • Liminal BioSciences (LMNL) Announces Listing Transfer to Nasdaq Capital Market.
    • Senseonics (SENS) Announces CFO Transition.
    • SPX (SPXC) Announces Resignation of Jamie Harris, Chief Financial Officer and Treasurer.
    • UTStarcom (UTSI) Announces Management Changes.
    • VBL Therapeutics (VBLT) Receives Nasdaq Notification Regarding Minimum Bid Price Deficiency.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • Stewart Information Services Corporation (STC) announces 20% dividend increase to $0.45 per share and declares third quarter dividend.

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

​S&P 500 +3, Dow Jones +15, NASDAQ -1, and Russell 2000 +2 (as of 8:05 a.m. EDT). Europe lower and Asia lower.  VIX Futures are at 25.60 from 26.17 yesterday morning and the VIX closed at 25.56 from 25.87  yesterday. Gold and Silver higher with Copper lower. WTI Crude Oil and Brent Oil Futures higher with Natural Gas lower. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.256% from 3.20%  yesterday morning. Bitcoin is at $20,013 from $20,002 yesterday morning and is higher by 0.93% this morning.

Sector Action – 09/01/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):  

  • Daily Positive Sectors: Healthcare, Utilities, Communication Services of note.
  • Daily Negative Sectors: Basic Materials, Energy, Technology of note.
  • One Month Winners:  Consumer Cyclical, Industrials, Energy, Basic Materials, Financials, and Utilities of note.
  • Three Month Winners: Consumer Cyclical, Technology, and Industrials 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.

Yields rocketed up causing a shake up in the indexes for the morning before bouncing and ending positive for the day.  TLT closed at 109.60, down 1.83%.  Volume is still below average – reflective of summer/labor day.

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

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

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: PD, NCNO, LULU, OXM, AVGO of note.
  • Negative Guidance: SPWH of note.

Erlanger Research Advance/Decline Chart: Updated through 09/01/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: HCP +12%, LULU +9%, PD +8%, HUMA +8%, RKLB +4%, NCNO +4%.
  • Gap Down: OXM -5%.

Insider Action: No stock sees Insider buying with dumb short selling.  TCDA, TMCI, GRPN sees Insider buying with smart short sellers. 09/01/22 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 premarket: LULU AVGO SBUX PD SHEL RKLB (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Global Bonds In First Bear Market in a Generation. (Bloomberg)
  • Bloomberg Most Read Story: Judge in Elizabeth Holmes trial upholds conviction in a preliminary ruling. (Bloomberg)
  • President Biden stokes the partisan divide in speech last night making no friends among Republicans. (Bloomberg)
  • Swiss Franc no longer a sure thing as ECB looks to a Jumbo Rate Increase. (Bloomberg)
  • China will implement an audit agreement with the U.S. (Reuters)
  • Jobs Preview. (Yahoo)
  • House Minority Leader Kevin McCarthy (R-CA) called on President Biden to apologize for attack on Republican voters. (CNN)
  • Apple (AAPL) now over 50% of U.S. mobile phones. (FT)
  • Hollysys (HOLI) considering going private at $1.8 billion valuation. (Reuters)
  • Robinhood Snacks: Disney (DIS) looks at a Prime-style membership. Petco (WOOF) and Chewy (CHWY) note that consumers are not trading down on pet food despite cost increases.

Moving Average Update:

  • And then there were none.  All indexes below their Moving Averages.  Cue the Rocky Music!  Come on bounce!   Updated 09/01/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 9:00 a.m. EDT
    • The President discusses American Rescue Plan investments to help boost regional economic strategies that lifts all communities; the Secretary of Commerce attends, 11:00 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 11:45 a.m. EDT
    • The President has lunch with The Vice President, 12:00 p.m. EDT
    • The President and The First Lady depart the White House en route Camp David, 3:00 p.m. EDT

Economic: 

  • August Nonfarm Payrolls is due out at 8:30 a.m. EDT and is expected to fall to 300,000 from 528,000. The Unemployment Rate is expected to remain at 3.5%.
  • Factory Orders 10:00 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Allegro MicroSystems (ALGM) Completes Acquisition of Heyday Integrated Circuits.
  • ICF (ICFI) Acquires Blanton & Associates.
  • NortonLifeLock’s (NLOK) Acquisition of Avast to Close September 12, 2022.
  • Ooma (OOMA)Acquires OnSIP, Expanding Ooma’s Base of SMB Customers.
  • Ryerson (RYI) Acquires Howard Precision Metals.
  • Ryder System (R) acquires Baton, a logistics technology start-up.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse 23rd Asian Technology Conference 2022 (09/05/22-09/08/22)
      •  Previously posted and ongoing conferences:
        • Deutsche Bank dbAccess European Technology, Media and Telecommunication Conference 2022 (09/01/22-09/02/22)
        • Morgan Stanley Virtual Asia TMT Conference 2022 (08/31/22-09/02/22)
  • Company Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AZN
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • European Respiratory Society (ERS) International Congress 2022 (09/04/22-09/06/22)
    • IWA World Water Congress & Exhibition 2022 (09/05/22-09/15/22)
      • Previously posted and ongoing conferences:
        • 14th International Conference on Osteogenesis Imperfecta 2022 (08/30/22-09/02/22)

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: