CAPIS Morning Note – 09/05/23: Stocks Modestly Lower To Start Week But Off Overnight Lows. Disney Tells Charter Subscribers To Sign Up For Hulu+, Really? Yup.

Overnight Summary: The S&P 500 closed Friday higher by 0.18% at 4515.77 from Thursday lower by -0.16% at 4507.66. Overnight ranges saw the high hit at 4521.50 at 6:05 p.m. EDT while the low was hit at 4500 at 4:20 a.m. EDT. The range overnight was 22 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Friday higher by 0.18% at 4515.77 from Thursday lower by -0.16% at 4507.66. Overnight ranges saw the high hit at 4521.50 at 6:05 p.m. EDT while the low was hit at 4500 at 4:20 a.m. EDT. The range overnight was 22 points. The 10-day average of the overnight range is at 21.50 from 22.40 down from a peak of 31.50 on 8/15.  The average for May-August average was 21.10 from 18.81 in May through July and the August average was 26.21. Currently, the S&P 500 is lower by -9 points which is -0.20% at 7:20 a.m. EDT.

Earnings Out After The Close: 

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None 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:
    • ARM Files For Ipo Of 95.5 million Ads At $47-$51 Each.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • LYRA: Filed Form 8-K.. entered into a Controlled Equity Offering $50Million.
    • MAIA: Form 8-K Filed entered into an “at-the-market” Sales Agreement – up to $7,000,000.
    • POET: Refreshes “At-the-Market” Public Offering in the United States.
    • REPX: Filed Form 8-K.. Equity Distribution Agreement up to $50Million.
    • RGNX: Entered into a $150 mln ATM Equity Offering.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • ALXO: Filed Form S-3.. 18,446,936 Shares of Common Stock by selling shareholders.
    • RIG: Filed Form S-3ASR.. 82,596,498 Shares of common stock by selling shareholder.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • CANF: Filed Form F-3.. $100,000,000 Mixed Shelf.
    • CSR: Filed Form S-3ASR.. Mixed Shelf Offering.
    • CYCC: Filed Form S-3.. $100,000,000 Mixed Shelf.
    • EP: Filed Form S-3.. $350,000,000 Mixed Shelf.
    • INTU: Filed Form S-3ASR.. Mixed Shelf Offering.
    • METC: Filed Form S-3.. $400,000,000 Mixed Security Shelf.
  • Debt/Credit Filing and Notes:
    • OPAL: Announces New $500 Million Credit Facility.
    • OLMA: Announces Combined Financing for Up to $180 Million.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • NAAS: Announces Closing of US$40 Million Private Placement of Convertible Note.
    • RPD: Announces Proposed Private Offering of $250 Million of Convertible Senior Notes.

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: HE 56.0%, UPLD 47.0%, LX 35.2%, MMLP 30.1%, PDD 29.1%, TLRY 27.4%, GCO 25.1%, ESTC 24.5%, CVNA 23.5%, CAL 22.3%, DELL 21.1%, NANO 20.4%, SHOP 20.0%.
    • Trading Down: NVCR -25.2%, RA -24.7%, DG -15.9%, FGEN -13.6%, CARA -13.1%, BOX -12.8%, HAIN -12.0%, MCFT -11.2%, OLN -10.5%, PDCO -10.3%, SQQQ -10.1%, GRPN -9.3%, AMBA -8.9%, LXRX -8.7%, GH -8.7%.
  • News Items After the Close:
    • Airbnb (ABNB), Blackstone (BX) to join S&P 500, while Deere (DE) will replace Walgreens (WBA) in S&P 100. (MarketWatch)
    • Dow closes more than 100 points higher to kick off September, notches best week since July. (CNBC)
  • News Items Over the Weekend:
    • The Score: MMM, BBY, COIN, DG, WBA (WSJ)
    • Wall Street is raising quarterly profit forecasts for the first time in two years. (MarketWatch)
    • The Disappointing Bet That Could Turn Into the Biggest IPO of the Year: SoftBank’s lofty ambitions for chip maker Arm have fallen short. Now the market is about to issue its verdict. (WSJ)
    • Warren Buffett’s Green Cash Washes Over Coal Country. (WSJ)
    • Germany is the ‘sick man of Europe’ — and it’s causing a shift to the right, top economist says. [EWG] (CNBC)
    • Barron’s:
      • Positive View: NFLX of note.
      • Cautious View: WBD, COIN, ALGM of note.
      • Mixed View: None of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

  • Exchange/Listing/Company Reorg and Personnel News:
    • Full Release of SP Dow Jones Quarterly Changes.  Tickers of interest: BX, ABNB, LNC, NEWL, QURE, UVE, DE, WBA, PR, GLPI, GDDY, MORN, ALLY, VST, MTN, ST, WFRD, FNF, OMCL, PZZA, SXT, CATY, ENR, XRX, HIW, TRIP, JBLU, FL, TSE, AAN, NTGR, CHRS, EGHT, OPI, ANGO, VNDA, ONL, ENTA, HASI, BXMT, LBRT, PINC, APLE, FF, RMAX, ZYXI, ANIK, CPSI, RBC, HE  (Release)
    • 1847 Holdings (EFSH) Announces Notification of NYSE American Listing Deficiency.
    • Customers Bancorp (CUBI) Chief Credit Officer to resign.
    • CytoSorbents (CTSO) Announces Resignation of Chief Financial Officer Alexander D’Amico.
    • Enthusiast Gaming (EGLX) Announces Resignation of Bill Karamouzis as President.
    • Genius Group (GNS) Announces Spinoff Ratio.
    • Illumina’s (ILMN) Board Appoints Jacob Thaysen, Ph.D. as its New Chief Executive Officer.
    • Invivyd (IVVD) announces the appointment of William Duke as Chief Financial Officer.
    • Kernel Group Holdings, Inc. (KRNL) Regains Compliance with Certain Nasdaq Listing Requirement.
    • Lightning eMotors (ZEV) Announces Receipt of Notice of Non-Compliance With NYSE Continued Listing Requirements.
    • Mobilicom (MOB) to Trade Exclusively on Nasdaq.
    • Wheeler (WHLR) Regains Compliance With Nasdaq Minimum Bid Price Requirement.
    • Xylem (XYL) announces that President and Chief Executive Officer, Patrick Decker, has announced his plans to retire as CEO at the end of 2023.
  • Buyback Announcements or News:
    • Ardmore Shipping (ASC) authorized a new Share Repurchase Plan.
    • Brady (BRC) authorized an additional $100 million of Class A Common Stock for repurchase under the Company’s share buyback program. (see Dividends)
    • Green Thumb (GTBIF) authorized the Company to spend up to USD $50 million for the repurchase program.
    • KLA Corporation (KLAC) Announces $2 billion Increase in Total Share Repurchase Authorization. (see Dividends)
    • STMicroelectronics (STM) Announces Status of Common Share Repurchase Program.
  • Stock Splits or News: 
    • WeWork Inc. (WE) Announces Completion of 1-for-40 Reverse Stock Split.
  • Dividends Announcements or News:  
    • Brady (BRC) raises annual dividend $0.02 to $0.94 per share.
    • KLA Corporation (KLAC) Announces Increase in Quarterly Dividend Level to $1.45 per share.
    • XP announces cash dividend Friday night.
  • Insider Sales Of Note: None of note.

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

S&P 500 -6, Dow Jones -12,  NASDAQ -50, and Russell 2000 -14.  (as of 7:57 a.m. EDT).  Asia is lower ex the Nikkei while Europe is lower this morning ex the FTSE. VIX Futures are at 15.02 from 14.75 yesterday.  Gold, Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil lower with Natural Gas lower as well. US 10-year Treasury sees yields at 4.23% from 4.106% Friday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $25,740 from $25,976 Friday, lower by -0.53%.

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

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

The S&P 500 rose Friday, finishing its best weekly performance since June.  The broad index gained 0.2%. The Dow Jones Industrial Average added roughly 115 points, or 0.3%. The Nasdaq Composite eased less than 0.1%.  For the week, the S&P 500 advanced 2.5%. The Dow and Nasdaq rallied 1.4% and 3.2%, respectively, each notching their best weeks since July.  (WSJ – edited by QPI)

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

  • Tuesday After the Close: 

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: BRC +0.11 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: CRMT of note.

Guidance:

  • Positive Guidance: None of note.
  • Negative Guidance: NOMB of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: NXGN +11%, DHC +10%, TRVG +6%, ABNB +5%, BX +4% of note.
  • Gap Down: MANU -9%, TCOM -5% 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.

  • Stocks making the biggest moves premarket: ZYXI, CHRS, UVE, APX, ABNB, NXGN, ORCL, BRC, WBD (CNBC)
  • 5 Things to Know Before the Stock Market Opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: China’s Country Garden Narrowly Avoids Default. (Bloomberg)
  • Bloomberg Most Shared Story: Huawei Teardown Shows Chip Breakthrough in Blow to U.S. Sanctions. (Bloomberg) 
  • Stocks retreat on dismal data in China and Europe: Market Wrap. (Bloomberg)
  • First Lady Jill Biden tests positive for Covid, President does not so far. (CNBC)
  • President Biden and Former President Trump are tied at 46% each. (WSJ)
  • Chip design firm Arm sets IPO price between $47 and $51. (CNBC)
  • Walt Disney (DIS) urges Spectrum subscribers to switch to Hulu Live, Disney didn’t just do that did they? (CNBC)
  • Thomo Bravo in discussions to buy NextGen Healthcare (NXGN). (Bloomberg)
  • Manchester United bidders fail to reach asking price. (Daily Mail)
  • NPR Morning Addition:  Tuesday morning’s broadcast. (Podcast)
  • BBC Global News: North Korean President Kim Jong Un to meet Putin for weapons talks in Russia. (Podcast) 
  • NY Times The Daily: Passenger planes nearly collide far more than you know.  (Podcast)
  • Bloomberg: Odd Lots:  The AI investments to avoid at all costs, according to Art Hogan. (Podcast)
  • Wealthion: Is the rally back on? (Podcast)

Moving Average Update:

  • Well…back on top now with 100% score.  Lets see if we can get another streak

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 11:00 a.m. EDT
    • The President awards the Medal of Honor to Captain Larry L. Taylor, United States Army, for conspicuous gallantry, 3:30 p.m. EDT

Economic: 

  • July Factory Orders are due out at 10:00 a.m. EDT and is expected to fall to -2.40% from 2.30%.
  • Investor Movement Index 12:30 p.m. EDT

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News: 

  • Arthur J. Gallagher & Co. (AJG) Acquires Lifesure Group Limited.
  • Brunswick Corporation (BC) announces the acquisition of Fliteboard.
  • Hollysys (HOLI) Receives Notices of Intention to Request Special Meeting of Shareholders and Additionally an Unsolicited Offer to Acquire the Company.
  • Diversified Healthcare Trust and Office Properties Income Trust (OPI) Mutually Agree to Terminate Merger Agreement.
  • Pennant Group (PNTG) acquires southern Arizona hospice provider.
  • Western Midstream (WES) to acquire Meritage Midstream Services II, LLC in an all-cash transaction for a purchase price of $885 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Barclays CEO Energy-Power Conference (09/05/23-09/07/23)
    • Barclays Global Consumer Staples Conference (09/05/23-09/07/23)
    • Citi Biopharma Conference (09/05/23-09/07/23)
    • Citigroup Global Technology Conference (09/05/23-09/08/23)
    • Deutsche Bank dbAccess European Technology, Media and Telecommunication Conference 2023 (09/05/23-09/06/23)
    • Deutsche Bank 13th Annual Aircraft Finance & Leasing Conference and Airline One on One Day 2023 (09/05/23-09/07/23)
    • Goldman Sachs Communacopia & Technology Conf (09/05/23-09/07/23)
    • Goldman Sachs 20th Annual European Medtech and Healthcare Services Conference 2023 (09/05/23-09/07/23)
    • Goldman Sachs, Annual EMEA Credit and Leveraged Finance Conference (London)
    • ING Benelux Conference 2023 (09/05/23-09/07/23)
    • JP Morgan CEO Call Series (September) 2023
    • UBS Business Services, Leisure and Transport Conference 2023 (09/05/23-09/07/23)
    • Wells Fargo’s Healthcare Conference
      • Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings: OTEC
  • Fireside Chat: QTWO
  • Investor/Analyst Day/Calls: F, LUMO, NCR, TSEM
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • Commercial Unmanned Aerial Vehicle (CUAV) Expo (09/05/23-09/07/23)
    • European Public Real Estate Association (EPRA) Annual Conference 2023 (09/05/23-09/07/23)
    • 50th Society of Petroleum Engineers (SPE) Offshore Europe Conference 2023 (09/05/23-09/08/23)
    • MSPO: The International Defense Industry Exhibition 2023 (09/05/23-09/08/23)
    • eCap West Healthcare Conference (09/05/23-09/07/23)
    • World Molecular Imaging Congress (09/05/23-09/09/23)

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: