CAPIS Morning Note – 09/13/23: Market Focused on CPI At 8:30 a.m. EDT, Estimate 0.6% But Core CPI May Be More Important

Overnight Summary: The S&P 500 closed Tuesday lower by -0.57% at 4461.90 from Monday higher by 0.67% at 4487.46. Overnight ranges saw the high hit at 4518.50 at 3:55 a.m. EDT while the low was hit at 4504.50 at 6:30 a.m. EDT. The range overnight was 12 points. The 10-day average of the overnight range is…

Overnight Summary: The S&P 500 closed Tuesday lower by -0.57% at 4461.90 from Monday higher by 0.67% at 4487.46. Overnight ranges saw the high hit at 4518.50 at 3:55 a.m. EDT while the low was hit at 4504.50 at 6:30 a.m. EDT. The range overnight was 12 points. The 10-day average of the overnight range is at 19.50 from 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 lower by -7.50 points which is -0.17% at 7:25 a.m. EDT.

Earnings Out After The Close: 

  • Beats: None of note.
  • Flat: None of note.
  • Misses: EPM (0.06), INNV (0.05) of note.

Capital Raises:

  • IPOs Priced or News:
    • Arm Holdings Plc:
      • Softbank Group Corp’s Arm Holdings Plc Will Price Initial Public Offering At A Minimum Of $51 Per Share-source.
      • Arm to fetch at least $54.5 billion valuation in IPO -source (Reuters)
    • SIMPPLE LTD. (SPPL) Announces Pricing of US$8.4 Million Initial Public Offering.
  • New SPACs launched/News:
    • Haymaker Acquisition Corp. 4 Announces the Separate Trading of its Class A Ordinary Shares and Warrants, Commencing September 15, 2023.
  • Secondaries Priced:
    • CRNX: Prices $350 Million offering. 11.44 Million shares at $30.59 per share.
    • GRNT: Pricing of Secondary Public Offering of Common Stock. Priced @$5.
    • KULR: Announces Pricing of $2.5 Million Public Offering of Common Stock.
    • RCKT: Announces Pricing of Public Offering of Common Stock.
    • SQSP: Announces Pricing of Secondary Offering of Class A Common Stock.
  • Notes Priced of note:
    • AMT: Prices Senior Notes Offering.
    • BGS Announces Pricing and Upsizing of Offering of Senior Secured Notes.
    • DO: Announces Pricing of $550 Million Upsized Private Placement of 8.500% Senior Secured Second Lien Notes Due 2030.
    • VST: Prices Private Offerings of $650 Million of Senior Secured Notes and $1.1 Billion of Senior Unsecured Notes.
  • Common Stock filings/Notes:
    • BSGM: Form 8K.. Securities Purchase Agreement 990,954 shares.
    • GROM: Announces Closing of $3.0 Million Public Offering.
    • KULR: Announces Proposed Public Offering of Common Stock.
    • NAOV: Filed Form S-3.. 8,956,955 Shares of Common Stock.
    • NB: Completes Issuance and Sale of 70,000 Shares under the Standby Equity Purchase Agreement.
    • RCKT: Proposed Public Offering of Common Stock.. $150 million. (JPM, MS, Leerink and TD Bookmanager)
    • SBOW: Proposed Public Offering of Common Stock .. 3,000,000 shares. (Citi, Mizuho and JohnsonRice bookmanagers)
  • Direct Offering:
    • ARQQ: Announces Closing of $16.2 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • MMAT: Completes $6 Million Common Stock Purchase Agreement with Gregory McCabe.
    • SQSP: Secondary Offering of Class A Common Stock.. 5 Million shares by selling shareholder. (JPM and Citi bookmanager) [see Mixed Shelf too]
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • SQSP: Filed Form S-3ASR.. Mixed Shelf Offering.
    • STBX: Filed Form F-3..$300,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • LII: public offer and sale of $500,000,000 aggregate principal amount of its 5.500% Senior Notes due 2028.
    • VSAT: Announces Proposed Private Placement of $733.4 Million of Senior Notes.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • AEIS: Announces Closing of Offering of $575 Million of 2.50% Convertible Senior Notes With Initial Purchasers’ Option Fully Exercised.
    • VSH: Closes Offering of $750 Million of 2.25% 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: RCKT +30%, JACK +4% of note.
    • Trading Down: LAZY -11%, EPM -11%, SBOW -6 of note.
  • News Items After the Close:
    • T-Mobile (TMUS) to buy up to $3.3 billion in Spectrum from Comcast (CMCSA). (MarketWatch)
    • More Than Half of VinFast (VFS) 2023 EV Sales Are to a Related Party. (Barrons)
    • SEC sues Virtu Financial (VRDN) for misleading customers about security of their information. (Reuters)
    • Binance.US CEO Leaves Embattled Crypto Exchange. (WSJ)
    • AAPL:  We believe Apple’s stock moves higher from here despite Street skepticism and China noise. (Dan Ives Wedbush)
    • Ford Motor (F): F-150 trucks updates – plans to double the mix of hybrid trucks manufactured for the 2024 model year
    • Lockheed Martin (LMT) awarded $841 million U.S. Navy contract modification.
    • Northrop Grumman (NOC) awarded $458 million U.S. Navy contract.
    • RTX awarded $418 million U.S. Army contract.
    • Assets Under Management – MoM Reporting:
      • AB $694 billion (down from $704 billion)
      • APAM $142.8 billion
      • BEN $1.42 trillion vs. $1.45 trillion.
      • IVZ $1,527.7 billion (2.7% decrease)
      • LAZ: $237.3 billion down from $244.4 billion
      • VCTR $161.9 billion (down 2.4%)
      • VRTS $169.4 billion (down 1.5%)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Calumet Specialty Products (CLMT) CFO Vincent Donargo stepping down.
    • 4D Molecular Therapeutics (FDMT) names Uneek Mehra as Chief Financial & Business Officer.
    • Jack In The Box (JACK) announces Tom Rose as Del Taco Brand President.
    • Frontier (FYBR) Relocates Headquarters to Dallas.
    • HASI: Set to Join S&P SmallCap 600.
    • Hertz Global (HTZ) COO/President steps down.
    • Legacy Housing Corporation (LEGH) Names Jeff Fiedelman as Chief Financial Officer.
    • NYSE to Commence Delisting Proceedings Against Northern Star Investment Corp. IV (NSTD).
    • Premier (PINC) promotes Leigh Anderson to COO.
    • Rocky Brands, Inc. (RCKY) Announces Departure of Chief Financial Officer.
    • Viridian Therapeutics (VRDN) announces that CFO Kristian Humer resigned.
  • Buyback Announcements or News:
    • HireRight (HRT) Board of Directors Authorizes Additional $25 Million Share Repurchase Program.
    • LiveOne (LVO) Increases Stock Buyback From $7.5 Million to $8.5 Million.
    • Territorial Bancorp Inc. (TBNK) Completes Twelfth Repurchase Program.
    • Western Midstream (WES) repurchased 5.1 million common units representing limited partner interests.
  • Stock Splits or News:
    • Metavesco (MVCO) Announces Ten-for-One Forward Stock Split.
    • NVO 2:1 stock split effective Sep 20th.
  • Dividends Announcements or News:
    • Philip Morris International Inc. (PM) Increases Dividend by 2.4% to Annualized Rate of $5.20 Per Share.
    • Realty Income (O) increases its monthly cash dividend 0.2% to $0.2560 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 +1, Dow Jones -15,  NASDAQ +10, and Russell 2000 +1.  (as of 7:57 a.m. EDT).  Asia and Europe are lower this morning. VIX Futures are at 14.68 from 14.67 yesterday.  Gold, Silver and Copper lower this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas higher as well. US 10-year Treasury sees yields at 4.306% from 4.29% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $26,186 from $26,095 yesterday, higher by 0.33%.

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

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

U.S. stocks closed lower on Tuesday, with the Nasdaq Composite leading the way down, as Apple’s (AAPL) unveiling of its new iPhone and watch failed to boost appetite for equities. The Dow Jones Industrial Average shed about 16 points, or about 0.1%, to end near 34,647, while the S&P 500 index closed 0.6% lower and the Nasdaq Composite Index slumped 1%. (MarketWatch – 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: SMTC.
  • Thursday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: CBRL +0.18, REVG +0.10 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: REVG of note.
  • Negative Guidance: SAVE, AAL of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: MYNZ +22%, RCKT +17%, RKLB +4% of note.
  • Gap Down: EPM -14%, LAZY -6%, GRNT -5%, AAOI -5%, VIRT -4%, SAVE -4% of note.

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

CDXS, ASAN, FIVE, SWX, OXBR, MIRM, VTS, PSTL, DCOM

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: Soft Core Inflation to Bolster Case Against More Fed Tightening. (Bloomberg)
  • Bloomberg  Second Most Shared Story: Birkenstock files for IPO in further boost to US market. (Bloomberg)
  • US Futures are steady before CPI; Europe falls: Market Wrap. (Bloomberg)
  • Mortgage demand stalls at levels not seen since 1996. (CNBC)
  • Here comes the CPI Report. (Yahoo Finance)
  • Spirit (SAVE) cuts guidance on pullback of promotional activity and fuel cost increase. (MarketWatch)
  • NPR Morning Report Marketplace:  US investors target another English soccer club. (Podcast)
  • BBC Global News:  Rescuers get aid to Libya. (Podcast) 
  • NY Times The Daily: A new Covid shot for a new Covid era. (Podcast)
  • Bloomberg: “Made in Mexico” is the new “Made in China”.  (Podcast)
  • Wealthion: Next crisis to blow your socks off. (Podcast)
  • Goldman Sachs Podcast with Peter Brown of Renaissance. (Podcast)

Moving Average Update:

  • Score comes down to 42% from 71%.

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, NSC Coordinator for Strategic Communications John Kirby, and Chair of the Council of Economic Advisers Jared Bernstein, 1:00 p.m. EDT1:00 p.m. EDT
    • The President convenes a meeting of his Cancer Cabinet; The First Lady participates, 2:30 p.m. EDT
    • The President departs the White House en route to McLean, Virginia, 6:15 p.m. EDT
    • The President arrives in McLean, Virginia, 6:30 p.m. EDT
    • The President participates in a campaign reception, 6:40 p.m. EDT
    • The President arrives at the White House, 8:30 p.m. EDT

Economic:

  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications: Composite: -0.8%, Purchase: +1.3%, ReFi: -5.4%
    • U.S MBA Mortgage Applications (WOW) Actual: -0.8% VS -2.9% Previous
    • U.S MBA 30-YEAR Mortgage Rate Actual: 7.27% VS 7.21% Previous
  • August CPI is due out at 8:30 a.m. EDT and is expected to rise to 0.6% from 0.2%.
  • EIA Petroleum Report 10:30 a.m. EDT
  • The latest Treasury Budget for August is due out at 2:00 p.m. EDT and is expected to come in at $ -221 billion.

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News:

  • T-mobile (TMUS) Us To Buy Spectrum From Comcast (CMCSA) For $1.2 billion To $3.3 billion.

Meeting & Conferences of Note:

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: