CAPIS Morning Note – 09/06/23: Stocks Modestly Lower Again For Second Day In A Row. S&P 500 Break Below 4500. Will it Regain?

Overnight Summary: The S&P 500 closed Tuesday lower by -0.42% at 4496.83 from Friday higher by 0.18% at 4515.77. Overnight ranges saw the high hit at 4503.75 at 8:20 p.m. EDT while the low was hit at 4486.25 at 3:20 a.m. EDT. The range overnight was 18 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Tuesday lower by -0.42% at 4496.83 from Friday higher by 0.18% at 4515.77. Overnight ranges saw the high hit at 4503.75 at 8:20 p.m. EDT while the low was hit at 4486.25 at 3:20 a.m. EDT. The range overnight was 18 points. The 10-day average of the overnight range is at 20.30 from 21.50  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 7:25 a.m. EDT.

Earnings Out After The Close: 

  • Beats: AVAV +0.74, ZS +0.15, ASAN +0.07, GTLB +0.04 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: None of note.
  • New SPACs launched/News:
    • Andretti Acquisition Corp (WNNR): Zapata AI, an industrial generative AI software company, to go public through business combination with Andretti Acquisition Corp.
    • Mobiv Acquisition Corp (MOBV) Announces Extension of Deadline to Complete Business Combination.
    • Vision Sensing Acquisition Corp. (VSAC) Announces Payment of Fee to Extend Period to Consummate Initial Business Combination to October 3, 2023.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • RPD: Announces Upsized Pricing of $260 Million Convertible Senior Notes Offering.
  • Common Stock filings/Notes:
    • BXRX: Filed Form S-1.. Up to 15,000,000 Shares of Common Stock.
    • ENB: CDN$4.0 Billion Bought-Deal Offering of Common Shares.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • DBGI: Announces Closing of $5.0 Million Private Placement Priced At-The-Market under Nasdaq Rules.
  • Mixed Shelf Offerings:
    • PH: Files mixed shelf securities offering.
    • PTEN: Filed Form S-3ASR – Mixed Shelf Offering.
    • RBT: Filed Form S-3.. $150Million Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • PR: Announces $500.0 Million Private Placement of Senior Notes Due 2032.
  • Tender Offer:
    • CELL: Announces Commencement of Cash Tender Offer by Bruker.
  • Convertible Offering & Notes Filed:
    • CSGS: Announces Proposed Offering 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 Holiday:

  • After Hours: 
    • Trading Up:  MITK +11%, AVAV +10%, GOGO +4%, GTLB +4% of note.
    • Trading Down: ENB -7%, CSGS -4% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after hours: GTLB, ZS, GOGO, ASAN, AVAV (CNBC)
    • JPM: “.. there is now a higher likelihood of a crisis over the next 6 to 12 months, the severity of which could be higher than [markets] anticipate. Risks of an interest rate shock .. are clear: consumer credit .. funding of startups .. impact on employment ..”  Note this analyst has been dead wrong all year but  he is followed by many. ([Kolanovic] CARL Q CNBC)
    • Gitlab (GTLB) reports surprise profit and nudges full-year forecasts higher. (MarketWatch)
    • Asana’s (ASAN) stock rises on revenue, earnings beat. (MarketWatch)
    • FTC Antitrust Suit Against Amazon (AMZN) Set for Later This Month After Meeting Fails to Resolve Impasse. (WSJ)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Adamas One (JEWL) Receives Nasdaq Notification of Non-Compliance with Listing Rule 5250(c)(1).
    • Aramark (ARMK) Board of Directors Approves Spin-Off of Vestis
    • Barnes & Noble Education (BNED) Names Kevin F. Watson as Executive Vice President and Chief Financial Officer.
    • BiondVax Pharmaceuticals (BVXV) changes corporate name to Scinai Immunotherapeutics; to debut tomorrow under Nasdaq ticker symbol ‘SCNI’.
    • C4 Therapeutics (CCCC) Announces Chief Financial Officer Succession.
    • Coda Octopus Group (CODA) Announces the Appointment of New Chief Financial Officer, Mr. John Price.
    • Honest Company (HNST) names Dave Loretta as new CFO.
    • Mersana Therapeutics (MRSN) Announces CEO Anna Protopapas will retire.
    • Novartis (NVS) CCO steps down.
    • Paychex (PAYX) Announces Efrain Rivera Plans to Retire as CFO.
    • Phibro Animal Health Corporation (PAHC) Announces Chief Financial Officer Changes.
    • Schneider National (SNDR) names Darrell Campbell Executive Vice President and CFO.
    • Southern Missouri Bancorp (SMBC) hired Stefan Chkautovich to serve as the Company’s Executive Vice President, Chief Financial Officer and Principal Accounting Officer.
  • Buyback Announcements or News:
    • Civeo Corporation (CVEO) Announces Renewal of Share Repurchase Authorization. (see Dividends)
    • CSG Systems International (CSGS) Announces An Increase in Share Repurchase Authorization.
    • GOGO Announces $50 Million Share Repurchase Program.
    • StoneX Group (SNEX) authorizes up to 1.0 million shares for repurchases for FY24.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:  
    • Civeo Corporation (CVEO) Initiates Regular Quarterly Dividend of $0.25 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 -10, Dow Jones -71,  NASDAQ -37, and Russell 2000 -2.  (as of 7:57 a.m. EDT).  Asia is lower ex the Nikkei while Europe is lower this morning. VIX Futures are at 15.07 from 15.02  yesterday.  Gold, Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil lower with Natural Gas higher. US 10-year Treasury sees yields at  4.244% from 4.23% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $25,750 from $25,740 yesterday, higher by 0.17%.

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

  • Daily Positive Sectors: Technology of note.
  • Daily Negative Sectors: Industrials, Basic Materials, Utilities, Real Estate, Healthcare, Consumer Defensive, Financial of note.
  • One Month Winners: Energy, Communication Services, and Technology 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.

Stocks fell on Tuesday to kick off the first trading day of a holiday-shortened week, weighed down by a jump in crude oil prices.  The Dow Jones Industrial Average lost 195.74 points, or 0.56%, to finish at 34,641.97. The S&P 500 dropped 0.42% to close at 4,496.83. The Nasdaq Composite edged down 0.08% to settle at 14,020.95.   (CNBC – edited by QPI)

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

  • Wednesday After the Close: 

  • Thursday Before the Open:

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: CNM (0.01), PLAB (0.01) of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: HQY, ASAN, GTLB, ZS, ROKU of note.
  • Negative Guidance: ALK of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SST +26%, AVAV +14%, MITK +12%, ROKU +8%, GTLB +7%, CTCX +6% of note.
  • Gap Down: PLAB -9%, ENB -8%, CSGS -6%, LUV -6%, VRNA -4% of note.

Insider Action: No stock sees Insider buying with dumb short selling.  FNKO 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 Before the Stock Market Opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Fed Set To Double Its Economic Growth Forecast After Strong US Data. (Bloomberg)
  • Bloomberg Most Shared Story: United Airlines Resumes US Flights After Temporary Grounding on Software Update Gone Wild. (Bloomberg) 
  • Stocks slide as European stagflation fears mount: Market Wrap. (Bloomberg)
  • UN says the world just endured the hottest summer on record. (CNBC)
  • Secretary of State Antony Blinken arrived in Kyiv this morning to deliver more aid. (NYT)
  • China bans iPhone use for Government workers when at work. (WSJ)
  • EU list multiple tech companies as “gatekeepers” under strict competition rules. (CNBC)
  • Moderna’s (MRNA) latest Covid shot helps with new strain, study shows. (Bloomberg)
  • Disney’s (DIS) wildest ride: Iger, Chapek and the making of a succession mess. (CNBC)
  • Soho House (SHCO) to expand to 20 locations. (Bloomberg)
  • NPR Morning Addition: Live broadcast of what’s happening today. (Podcast)
  • BBC Global News: Ex-Proud Boy leader gets 22 years in jail. (Podcast) 
  • NY Times The Daily: How 100,000 immigrants became a political crisis in New York. (Podcast)
  • Bloomberg: Odd Lots: Mother Nature is staging a climate intervention. (Podcast)
  • Wealthion:  Recession by Q4, 6% unemployment by 2024? (Podcast)

Moving Average Update:

  • Score backtracks from 100% to 68%

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President delivers remarks on the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) finalizing a new contract covering America’s West Coast ports, and continued progress empowering workers and strengthening America’s ports and supply chains, 2:15 p.m. EDT

Economic: 

  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortghage Applications: Composite: -2.9%, Purchase: -2.1%, ReFi: -4.7%
    • U.S MBA Mortgage Applications (WOW) actual: -2.9% VS 2.3% previous
    • U.S MBA 30-year Mortgage Rate actual: 7.21% VS 7.31% previous
  • July Trade Balance is due out at 8:30 a.m. EDT and is expected to fall to $68 billion to $-65.5 billion.
  • Redbook Sales 8:55 a.m. EDT
  • PMI Composite Final 9:45 a.m. EDT
  • ISM Services Index 10:00 a.m. EDT
  • The latest Federal Reserve Beige Book is due out at 2:00 p.m. EDT
  • API Crude Oil Data 4:30 p.m. EDT.

Federal Reserve / Treasury Speakers:

  • Federal Reserve Boston President Susan M. Collins 8:30 a.m. EDT
  • Federal Reserve Bank of Dallas Lorie Logan 3:00 p.m. EDT
  • Senate votes 83-10 to begin debate on nomination of Philip Jefferson to be Fed Vice Chair.

M&A Activity and News: 

  • Abbott Labs (ABT) to acquire Bigfoot, a smart insulin management systems developer.
  • Enbridge (ENB) Announces Strategic Acquisition of Three U.S. Based Utilities to Create Largest Natural Gas Utility Franchise in North America.
  • Magnolia Oil & Gas (MGY) to acquire certain oil and gas producing properties in Giddings for $300 million.
  • NextGen Healthcare (NXGN) Enters into Definitive Agreement to Be Acquired by Thoma Bravo for $23.95 per share in cash.
  • Rockwell Automation (ROK) signs agreement to acquire autonomous robotics leader Clearpath Robotics.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Citi GEM Conference 2023 (09/06/23-09/07/23)
    • DA Davidson Big Sky Summit
    • Evercore ISI Semiconductor & Semiconductor Conf (09/06/23-09/08/23)
    • Jefferies Industrials Conference (09/06/23-09/07/23)
    • Jefferies Asia Forum 2023 (09/06/23-09/08/23)
    • KBW Keefe, Bruyette & Woods Insurance Conference 2023 (09/06/23-09/07/23)
    • Morgan Stanley Industrials CEO’s Unplugged (09/06/23-09/07/23)
    • Raymond James U.S. Bank and Banking on Tech Conferences (09/06/23-09/07/23)
    • Raymond James Sustainable Refrigeration Webinar
    • Scotiabank Financials Summit (09/06/23-09/07/23)
    • Stifel Cross Sector Insight Conference
    • TD Cowen Global Transportation Conference (09/06/23-09/07/23)
    • UBS Chemicals Conference
    • Wolfe Research TMT Conference (09/06/23-09/07/23)
      • Previously posted and ongoing 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)
        • ING Benelux Conference 2023 (09/05/23-09/07/23)
        • UBS Business Services, Leisure and Transport Conference 2023 (09/05/23-09/07/23)
        • Wells Fargo’s Healthcare Conference (09/05/23-09/06/23)
  • Top Shareholder Meetings: CASY, GATO, SAI
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ALGN, ATS, DHR, ESGL, HHH, HUBS, INDI, INTU, RGLD, VLTO, WHD, XPOF
  • Update: None of note.
  • R&D Day: RGLS
  • Company Event:
  • Industry Meetings:
    • SPE Offshore Europe Conference
    • Scoliosis Research Society Annual Meeting 2023 (09/06/23-09/09/23)
    • Society of Hematologic Oncology Annual Meeting (09/06/23-09/09/23)
    • SEMICON Taiwan 2023 (09/06/23-09/08/23)
    • PAINWeek Conference
      • Previously posted and ongoing conferences:
        • 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)
        • 35th International Epilepsy Congress 2023 IEC (09/02/23-09/06/23)

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: