CAPIS Morning Note – 09/11/23: Stocks Higher To Start Week As We Remember 9/11, 22 Years Later.

Overnight Summary: The S&P 500 closed Friday higher by 0.14% at 4457.96 from Thursday lower by -0.32% at 4451.14. Overnight ranges saw the high hit at 4532 at 3:50 a.m. EDT while the low was hit at 4509 at 9:35 a.m. EDT. The range overnight was 23 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Friday higher by 0.14% at 4457.96 from Thursday lower by -0.32% at 4451.14. Overnight ranges saw the high hit at 4532 at 3:50 a.m. EDT while the low was hit at 4509 at 9:35 a.m. EDT. The range overnight was 23 points. The 10-day average of the overnight range is at 18.40 from 18.20  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 higher by +18 points which is 0.40% at 7:20 a.m. EDT.

News Of Note: U.S. marks 22 years since 9/11, from Ground Zero to Alaska. (Yahoo News)

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:
    • Instacart (CART) sets IPO at 22 million shares.  See price range $26-$28.
    • Klaviyo (KVYO) launches IPO of 19.2 million shares, expects to price between $25-$27 per share.
    • SWIN: Announces Closing of Initial Public Offering.
  • New SPACs launched/News:
    • Integrated Rail and Resources Acquisition Corp. (IRRX) Announces Extension.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • BRP: Successful Pricing of $170 Million Incremental Term Loan B.
  • Common Stock filings/Notes:
    • AUID: Filed Form S-1.. 2,904,657 Shares.
    • AYRO: Filed Form S-3.. 7,508,773 Shares of Common Stock.
    • CBAY: Announces Proposed $150 Million Public Offering of Common Stock and Pre-Funded Warrants.
    • JTAI: Filed Form S-1.. Up to 7,763,127 Shares of Common Stock Up to 13,668,781 Shares of Common Stock Issuable Upon Exercise of Warrants.
    • GRNT: Announces Launch of Secondary Public Offering of Common Stock.
    • SJ: Filed Form F-1.. 12,374,736 Class A Ordinary Shares.
    • SYBX: Filed Form S-1.. Shares of Common Stock.
    • TNON: Proposed Public Offering of Common Stock. (Maxim bookmanager)
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • CMPS: Filed Form S-3.. 40,089,163 American Depositary Shares by selling shareholders.
    • GROV: Filed Form S-3.. Up to 6,340,019 Shares of Class A Common Stock by selling shareholder.
    • GSAT: Filed Form S-1.. 37,457,207 Shares by selling shareholders.
    • OVV: Announces Secondary Offering of Common Stock by a Selling Stockholder.
    • REKR: Filed Form S-3.. 2,850,000 Shares of Common Stock Offered by the Selling Stockholder.
    • URGN: Filed Form S-3.. 12,579,156 Ordinary Shares by selling shareholder.
  • Private Placement of Public Entity (PIPE):
    • CLRB: Announces Closing of up to Approximately $103 Million Private Placement Financing.
  • Mixed Shelf Offerings:
    • ASTR: Filed From S-3.. $100,000,000 Mixed Shelf.
    • CPRX: Files for $500 million mixed securities shelf offering.
    • HCI: Filed Form S-3.. $150,000,000 Mixed Shelf.
    • WASH: Filed Form S-3.. $150,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • IBRX: Announces $470 Million Equity and Debt Financing From Founder, Dr. Patrick Soon-Shiong and Nant Entities.
    • WSC: Announces $500 Million Senior Secured Notes Offering.
  • Tender Offer:
    • Moderna (MRNA) Recommends Shareholders Reject “Mini-Tender” Offer by TRC Capital Investment Corporation.
    • SQNS: Renesas (RNECF) commences tender offerfor all outstanding shares and ADSs of Sequans; shareholders to receive U.S. $0.7575 per ordinary share and U.S. $3.03 per ADS in cash.
  • 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 Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: DERM 33.2%, KNOP 24.9%, NXGN 22.3%, AYX 18.7%, GIII 16.8%, INSM 15.8%, AVAV 15.3%, CBAY 14.7%, DK 13.9%, TELL 13.2%, GLT 12.4%, CRON 12.2%, DAKT 11.7%, PEN 10.9%, PBF 10.2%, MTN 9.7%, NVAX 9.7%.
    • Trading Down: TPIC -26.2%, MEI -24.8%, QD -24.6%, KZR -22.6%, OSTK -21.5%, QRTEA -21.5%, TTC -20.6%, TSE -20.3%, CARA -19.6%, AMKR -19.3%, BB -18.9%, RH -18.6%, HRTX -17.8%, PLAB -17.4%, HE -17.0%, NEOG -16.4%, SUM -16.3%.
  • News Items After the Close:
    • S&P 500 snaps 3-day losing streak Friday, suffers first weekly decline in three. (CNBC)
    • Ripple buys crypto infrastructure startup in its second acquisition of 2023. (CNBC)
    • Goodyear (GT) stock ticks higher after company to cut jobs in Europe, Middle East and Africa. (MarketWatch)
  • News Items Over the Weekend:
    • The Score: GME, AAPL, KR. UAL, WBD, GM (WSJ)
    • Treasury Secretary Janet Yellen said she’s increasingly confident that the US will be able to contain inflation without major damage to the job market, hailing data showing a steady slowdown in inflation and a fresh influx of job seekers. (Bloomberg)
    • Goldman Sachs (GS) strategist David Kostin is more positive on the prospects of a soft landing of the US economy and sees the S&P 500 index climbing to 4,700 in the next 12 months.  Morgan Stanley’s (MS) Michael Wilson disagrees, saying US stock investors are in for disappointment as economic growth is set to be weaker than expected this year.  Oppenheimer’s Stoltzfus Says US Stocks Are Likely To Dip Further.
    • The Wall Street Journal Reported Sunday J.M. Smucker (SJM) Was Near ~$5B Deal To Acquire The Twinkies Make (TWNK). (WSJ)
    • BA: Vietnam Air nears $10 billion deal for at least 50 Boeing 737 max jets.
    • HP to move production of millions of PCs to Thailand, Mexico. (Nikkei)
    • META is Acquiring More Nvidia (NVDA) H100 Chips For Its AI Platform. (WSJ)
    • Barron’s:
      • Positive View: K, GIS, CAG, CPB, MDLZ, ENPH, AAR of note.
      • Cautious View: None 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:
    • Aesthetic Medical International (AIH) Announces Receipt of Nasdaq Notification Letter Regarding Minimum Bid Price Deficiency.
    • Altisource Asset Management Corporation (AAMC) Appointment of New CFO.
    • AssetMark (AMK) names Michael Kim as its new CEO.
    • Alibaba (BABA) announces change of Chairman and CEO of Alibaba Cloud Intelligence Group.
    • BRC Inc. (BRCC) announces the appointment of Stephen Kadenacy as Chief Financial Officer.
    • Lovesac (LOVE) to delay 10-Q filing.
    • Mobileye (MBLY) Names Moran Shemesh Rojansky Chief Financial Officer.
    • Momentus (MNTS) Regains Compliance with Nasdaq Minimum Bid Price.
    • New Pacific Metals (NEWP) Announces CEO Transition and New Appointment to the Board.
    • Regeneron (REGN) Provides Update on Planned Chief Financial Officer Transition Robert E. Landry to retire effective February 2024; Christopher Fenimore, long-standing Senior Vice President, Head of Accounting and Controller, to assume CFO role. (MarketWatch)
    • Semtech (SMTC) Appoints Mark Lin As Executive Vice President and Chief Financial Officer. (MarketWatch)
    • Sysco (SYY) Chief Commercial Officer Judith S. Sansone notified the Company of her intention to retire from Sysco.
    • TCX: Lee Matheson and Gigi Sohn Elected to Tucows Board of Directors.
  • Buyback Announcements or News:
    • Aurora (ACB) Repurchases ~US$9.0 Million Principal Amount of Convertible Notes.
    • HF Sinclair (DINO) entered into a Stock Purchase Agreement with REH Company.
    • MeridianLink (MLNK) entered into a privately negotiated transaction to repurchase 1,525,027 shares of common stock at a price per share of $16.43, for an aggregate purchase price of approximately $25 million.
    • Stellantis (STLA) Announces Launch of Third Tranche of its Share Buyback Program.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:  
    • Altisource Asset Management Corporation (AAMC) Reports a Stock Dividend in Lieu of a Stock Split.
    • Everest Group (EG) increases quarterly cash dividend $0.10 to $1.75 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 +23, Dow Jones +74,  NASDAQ +122, and Russell 2000 +7.  (as of 7:53 a.m. EDT).  Asia higher ex Japan and Europe are higher this morning. VIX Futures are at 14.64 from 15.40 Friday.  Gold, Silver and Copper higher this morning. WTI Crude Oil and Brent Crude Oil lower with Natural Gas lower as well. US 10-year Treasury sees yields at 4.298% from 4.254% Friday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $25,643 from $25,836 Friday, lower by -0.39%.

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

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

The S&P 500 ticked lower for the week, weighed down by losses in tech heavyweights Apple (AAPL) and Nvidia (NVDA).  Apple shares ended the week down 6% after China ordered central-government officials to stop using iPhones. Shares of Nvidia, the graphics-chip maker at the heart of the AI boom, dropped 6.1% for the week. Its stock remains up more than 200% this year.  Both tech stocks have a major influence on the broad U.S. stock index. At the end of August, Apple and Nvidia were responsible for almost 30% of the S&P 500’s 2023 total return, including dividends.  The S&P 500 fell 1.3% for the week while the tech-heavy Nasdaq Composite declined 1.9%. The Dow Jones Industrial Average, which includes Apple but not Nvidia, slipped 0.7%.  (WSJ – edited by QPI)

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

  • Monday After the Close:

  • Tuesday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: FCEL +0.02 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

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

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CRNX +66%, TWNK +18%, IMTX +10%, VRNA +9%, VIGL +6% of note.
  • Gap Down: CBAY -4%, CMPS -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: The Mighty American Consumer is About to Hit a Wall, Investors Say.  (Bloomberg)
  • Bloomberg Second Most Shared Story: Even Brief UAW Strike Seen Causing Billions in US Economic Damage. (Bloomberg)
  • Stock Futures gain to start the week, Tesla shares rally. (CNBC)
  • Germany is predicted to be the only major European country to contract this year. (CNBC)
  • North Korea’s Kim Jong Un on a train to meet with Russian President Putin over arms deal. (CNBC)
  • President Biden backs The World Bank for a bigger role on the global stage. (CNBC)
  • G-20 Joint Statement. (Reuters)
  • Fed likely to pause interest rate raise in September. (WSJ)
  • Apple (AAPL) renews chip deal with Qualcomm (QCOM) as Apple’s chip not ready. (Bloomberg)
  • NPR Morning Report Marketplace:  (Podcast)
  • BBC Global News:  Spain’s FA President resigns over kiss. (Podcast) 
  • NY Times The Daily:  U.S. vs Google trial. (Podcast)
  • Bloomberg: What rising rates and surging insurance costs are doing to real estate. (Podcast)
  • Wealthion: Recovery in stocks fizzling or coiling to blast higher?  (Podcast)

Moving Average Update:

  • Score notches up 3% to 34%.

Geopolitical: 

  • President’s Public Schedule:
    • The President meets with Prime Minister Phạm Minh Chính of Vietnam, 7:40 a.m. EDT
    • The President drops by a meeting of CEOs with Prime Minister Phạm Minh Chính of Vietnam, 7:55 a.m. EDT
    • The President meets with President Võ Văn Thưởng of Vietnam, 9:00 a.m. EDT
    • The President participates in a State Luncheon with President Võ Văn Thưởng of Vietnam, 9:30 a.m. EDT
    • The President meets with Chairman Vuong Dinh Hue of the National Assembly of Vietnam, 10:55 a.m. EDT
    • The President visits the John Sidney McCain III Memorial, 11:35 a.m. EDT
    • The President departs Hanoi, Vietnam en route to Anchorage, Alaska, 12:40 p.m. EDT
    • The President arrives in Anchorage, Alaska, 4:05 p.m. EDT
    • The President delivers remarks to service members, first responders, and their families on the anniversary of 9/11, 4:45 p.m. EDT
    • The President departs Anchorage, Alaska en route to Joint Base Andrews, 6:00 p.m. EDT
    • The President arrives at Joint Base Andrews, 12:15 a.m. EDT – Tuesday
    • The President arrives at the White House, 12:35 a.m. EDT – Tuesday

Economic: None of note.

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News:

  • Kaixin Auto Holdings (KXIN) Announces Non-Binding Acquisition Term Sheet with WM Motor.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bank of America Global Real Estate Conference 2023 (09/11/23-09/14/23)
    • Bank of America Global A.I. Conference (09/11/23-09/12/23)
    • Barclays Global Financial Services Conference (09/11/23-09/13/23)
    • Goldman Sachs Asia Pacific Conference (GSAC) 2023 (09/11/23-09/15/23)
    • Goldman Sachs European Communacopia Conference 2023 (09/11/23-09/12/23)
    • Jefferies Home Retail Summit
    • Jefferies Israel Tech Trek 2023 (09/11/23-09/14/23)
    • Morgan Stanley 26th Annual Latin America Conference (London) 2023 (09/11/23-09/13/23)
    • Morgan Stanley Global Healthcare Conference (09/11/23-09/14/23)
    • Piper Sandler Growth Frontiers Conference (09/11/23-09/13/23)
    • Wainwright Global Investment Conference
    • Wells Fargo Net Lease REIT Forum
      • Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: EC, FTNT, MIRA, MLTX, RUN
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • 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: