CAPIS Morning Note – 09/12/22: Stocks Continue Gains On Russian Troops Losing Control In Ukraine, But Off Overnight Highs

Overnight Summary: The S&P 500 closed Friday at 4067.38 (higher by 1.53%) from Thursday at 4006.18 (higher by 0.66%). The overnight high of 4115 was hit at 5:25 a.m. EDT. The low was hit at 4080.25 at 12:30 a.m. EDT, a range of 35 points high to low which is below the recent range of 45….

Overnight Summary: The S&P 500 closed Friday at 4067.38 (higher by 1.53%) from Thursday at 4006.18 (higher by 0.66%). The overnight high of 4115 was hit at 5:25 a.m. EDT. The low was hit at 4080.25 at 12:30 a.m. EDT, a range of 35 points high to low which is below the recent range of 45. At 6:45 a.m. EDT the current price was 4105.75 which is 0.95% and 38.50 points. Currently, at 7:55 a.m. EDT the S&P 500 is now up +22 but well off the highs of the morning.

Earnings Out After The Close:

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

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • Nature’s Miracle to be listed on Nasdaq through business combination with Lakeshore Acquisition II Corp (LBBB ).
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • GNS: Filed Form F-1.. 11,572,296 Ordinary Shares.
    • INDP: Filed Form RW.
    • MSTR: Filed Form 424B5.. Up to $500,000,000 Class A Common Stock.
    • NSSC: Filed Form S-3ASR.. 3,830,449 Shares of Common Stock.
    • NUWE: Filed Form S-1.. Class A and B Units consisting of shares of common stock and warrants.
    • QH: Filed Form RW — Request for Withdrawal of Registration Statement on Form F-3.
    • RLAY: Announces Proposed Public Offering of Common Stock.
    • SKYH: Filed Form S-1.. 10,100,000 shares of Class A Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • CSSE: Filed Form S-3.. 7,745,453 shares of Class A common stock and 6,062,500 Warrants offered by Selling Securityholders.
    • UPXI: Filed Form S-3.. 1,118,574 Shares of Common Stock Offered by the Selling Stockholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ADMP: Filed Form S-3 .. $300 Million Mixed Shelf.
    • ANIX: Filed Form S-3 .. $200 Million Mixed Shelf.
    • MIRM: Filed Form S-3ASR .. Mixed Shelf Offering.
    • SDC: Filed Form S-3.. $400,000,000 Mixed Shelf.
    • SHOP: Filed Form F-10 — Mixed Shelf Offering.
    • VLTA: Filed Form S-3.. Mixed Shelf Offering.
    • VGR: Filed Form S-3ASR.. Mixed Security Shelf.
    • VRDN: Filed Form S-3ASR Mixed Shelf Offering.
    • VRM: Filed Form S-3.. $300 Million Mixed Shelf.
    • WETG: Filed Form S-3.. $300 Million Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • Convertible Offering & Notes Filed:
    •  ALNY: Announces Proposed Offering of $900 Million Convertible Senior Notes.
    • CNX: Announces Private Offering of $500 Million of Senior Notes.
    • TCRX: Secures Convertible Debt Facility for up to $60 Million with K2 HealthVentures.

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: ECOM 56.1%, MOGU 46.1%, NVTA 44.6%, RVNC 30.0%, PETQ 28.6%, PRTY 27.1%, PACB 25.2%, AXGN 25.1%, TNDM 24.6%, REGN 24.4%, PEN 24.1%, HRTX 23.2%, COUP 23.2%, SPWR 23.0%, RUN 22.4%, LIND 21.6%, CYH 21.4%, AVAV 20.8%, RUBY 20.5%, QUAD 20.3%.
    • Trading Down:  LLL -12.8%, KFY -12.7%, GLT -12.0%, TUP -11.4%, MERC -11.3%, FOSL -10.9%, TCDA -10.6%, MDGL -9.7%.
  • News Items After the Close:
    • Federal Reserve Cleveland President Loretta Mester:
      • Fed will not meet its 2% inflation target before 2024.
      • One inflation report is not enough to change the views of the Fed on Inflation .. see policy rates rise slightly above 4% by early 2023.
    • Raytheon Technologies (RTX) awarded a $184 million contract for ASARS-2B sensors
    • Russia warns the West: energy price cap will be your undoing; Putin has threatened to freeze Europe. (Reuters)
    • UHAL: Form 8K.. AMERCO (the “Company”) has been made aware of a data security incident involving U-Haul International, Inc.’s (“U-Haul”) information technology network.
  • News Items Over the Weekend:
    • Stocks That Defined the Week: TWTR, BBBY, KR, AAPL, TGT, NFLX, GOOG (WSJ)
    • The Week in Business: A Trump Deal in Limbo.  (NYT)
    • Outlook for Tech Stocks Darkens After Rocky Stretch. (WSJ)
    • The wild card that could sink stocks: What investors need to know about the Fed’s accelerating QT. (MarketWatch)
    • Credit Card Sales at Gun Stores Would be Flagged Under New Code. (NYTimes)
    • Elbit Systems of America (ESLT) Awarded $49 Million ID/IQ Contract to Supply Mortar Systems for the U.S. Army.
    • Barron’s:
      • Positive View: POOL, IHS, VWAGY, POAHY
      • Cautious View: None of note..
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News:
    • AnPac Bio-Medical Sciences (ANPC) Announces Receipt of Staff Delisting Determination from Nasdaq; Intends to Appeal.
    • MSG Sports (MSGS) President and CEO Andrew Lustgarten to Step Down, Effective January 1.
    • MNDT Halt – Additional Information Requested by NASDAQ.
    • Minerva Neurosciences (NERV) Announces Listing Transfer to Nasdaq Capital Market.
    • Statera Biopharma (STAB) Receives Nasdaq Listing Determination; Hearing Requested to Address Filing Delinquency.
    • Lightning eMotors (ZEV) Announces CFO Transition.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.

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

S&P 500 +26, Dow Jones+132, NASDAQ +96, and Russell 2000 +11. (as of 8:11 a.m. EDT). Europe higher and Asia higher.  VIX Futures are at 23.44% from 23.84 yesterday morning and the VIX closed at 22.79 from 23.61 yesterday. Gold, Silver and Copper higher. WTI Crude Oil and Brent Oil Futures higher with Natural Gas higher as well. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.298% from 3.268% yesterday morning. Bitcoin is at $22,154 from $20,973 Friday morning and is higher by 2.52% this morning.

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

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

Market gapped up from the get go and did not let go.  SPX initially tested the established Value Lines resistance after the gap open, but continued to grind higher through the day to close up 1.53%.  NDX was up 2.17%.  USO closed at 71.10 for a 4.42% gain.

Click here for a video explanation of Erlanger Value Lines.

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

  • Monday After the Close: ORCL, BRZE of note.
  • Tuesday Before the Open: None 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: None of note.
  • Negative Guidance: None of note.

Erlanger Research Advance/Decline Chart: 

  

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SPPI +19%, CLVS +15%, CRDF +9%, IMTX +8%, BMY +7%, IDYA +6%, APGN +6%, PNT +5%, EWTX +4%, CSSE +4%, IMAB +4%.
  • Gap Down: LYEL -5%, VCYT -4%.

Insider Action: No stock sees Insider buying with dumb short selling.  AMH 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.

  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Russia Strikes Power Plants As Ukranian Forces Extend Gains. (Bloomberg)
  • Bloomberg Most Read Story: Russian Forces Crumble. (Bloomberg)
  • Russian troops have been moved back to their border and Ukrainian troops have retaken lots of occupied land. (CNN)
  • ECB rate hikes will not be as great as last weeks notes official. (CNBC)
  • White House is expected to tighten chip exports to China. (Reuters)
  • Payment processors adding weapon’s retailer category to their processing, different spin than NYT article above. (WSJ)
  • Walt Disney (DIS) is looking to add a sports wagering app. (Bloomberg)
  • Phone manufacturers to follow Apple (AAPL) plan for satellite emergency communication. (WSJ)
  • Robinhood Snacks: Looks at the state of the current housing market and it is not pretty. Looks at the European winter with scarce energy.

Moving Average Update:

  • Green Wave happening.  Score jumps from 28% to 57%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 9:00 a.m. EDT
    • The President departs the White House en route Joint Base Andrews and Boston, Massachusetts, 9:40 a.m. EDT
    • The President delivers remarks highlighting how the Bipartisan Infrastructure Law is already underway and delivering tangible results for communities across the country, 12:45 p.m. EDT
    • The President departs Boston Logan International Airport en route John F. Kennedy Library and Museum, 1:30 p.m. EDT
    • The President delivers remarks on the Cancer Moonshot and the goal of ending cancer as we know it, John F. Kennedy Presidential Library and Museum, 4:00 p.m. EDT
    • The President participates in a reception for the Democratic National Committee, 6:00 p.m. EDT
    • The President departs Boston, Massachusetts en route Joint Base Andrews and White House, 7:10 p.m. EDT

Economic: 

  • The latest NYSE and NASDAQ Short Interest is due out after the close for the period of August 11th close through August 29th during which the S&P 500 fell -4.20%. This will be a key reading to see if the shorts came back to re-short after some covering during the June to August rally.
  • There will be a 3- and 10-Year Treasury Auction at 1:00 p.m. EDT.

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Dominari Financial, Inc. (AIKI) Executes Definitive Agreement to Buy Broker-Dealer.
  • J.P. Morgan (JPM) to Acquire Renovite Technologies, Inc.
  • Ra Medical Systems (RMED) Enters Into Definitive Merger Agreement with Catheter Precision

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Barclays Global Financial Services Conference (09/12/22-09/14/22)
    • CL King Annual Best Ideas Conference
    • Cowen Cannabis Policy Summit
    • Goldman Sachs European Real Estate Conference
    • H.C. Wainwright Global Investment Conference (09/12/22-09/14/22)
    • Jefferies Fitness & Wellness Summit
    • JP Morgan Mexico Opportunities Conference
    • JP Morgan Finovate Fall Conference
    • Morgan Stanley 25th Annual Latin America Conference 2022 (09/12/22-09/16/22)
    • Morgan Stanley Annual Global Healthcare Conference (09/12/22-09/14/22)
    • Piper Sandler & Co. Growth Frontiers Conference
    • Stifel Baltusrol Executive summit
    • Truist Securities Internet Growth Summit (09/12/22-09/16/22)
    • UBS Global Energy Transition Conference 2022 (09/12/22-09/15/22)
    • Wells Fargo Net Lease REIT
      • Previously posted and ongoing conferences:
        • Goldman Sachs EU Communacopia Conference (09/09/22-09/12/22)
  • Company Meetings: QK
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ALPN, AMGN, DYN, REGN, RLAY
  • Update:
    • IDEAYA Biosciences, Inc. (IDYA) Darovasertib Clinical Data Update.
    • Cardiff Oncology Inc. (CRDF) Clinical and Corporate Update 2022.
  • R&D Day: None of note.
  • Company Event:
    • Workday (WDAY) Rising
  • Industry Meetings:
    • International Manufacturing and Technology Show (IMTS) 2022 (09/12/22-09/17/22)
    • North American Supply Chain Executive Summit (NASCES) 2022 (09/12/22-09/14/22)
    • Military Health System Research Symposium (MHSRS) 2022  (09/12/22-09/15/22)
      • Previously posted and ongoing conferences:
        • American Academy of Otolaryngology Head and Neck Surgery (AAO-HNSF) Annual Meeting and OTO Experience 2022 (09/10/22-09/14/22)
        • International Congress of The Transplantation Society (TTS) 2022 (09/10/22-09/14/22)
        • Annual Meeting of the American Society for Bone and Mineral Research (ASBMR) 2022 (09/09/22-09/12/22)
        • International Broadcasting Conference (IBC) 2022 (09/09/22-09/12/22)
        • SALT New York 2022 (09/11/22-09/14/22)
        • European Society for Medical Oncology ESMO Meeting 2022 (09/08/22-09/13/22)
        • IWA World Water Congress & Exhibition 2022 (09/05/22-09/15/22)

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: