CAPIS Morning Note – 09/14/22: More Inflation Data At 8:30 a.m. EDT as PPI Out

Overnight Summary: The S&P 500 closed Tuesday at 3932.69 (lower by -4.32%) from Monday at 4110.41 (higher by 1.06%). The overnight high of 3979.50 was hit at 4:40 a.m. EDT. The low was hit at 3949.50 at 8:45 p.m. EDT, a range of 30 points high to low which is below the recent range of 45….

Overnight Summary: The S&P 500 closed Tuesday at 3932.69 (lower by -4.32%) from Monday at 4110.41 (higher by 1.06%). The overnight high of 3979.50 was hit at 4:40 a.m. EDT. The low was hit at 3949.50 at 8:45 p.m. EDT, a range of 30 points high to low which is below the recent range of 45. At 7:20 a.m. EDT the current price was 3964 which is 0.35% and 13.75 points. Currently, at 7:55 a.m. EDT the S&P 500 is now -4.

Earnings Out After The Close:

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

Capital Raises:

  • IPOs Priced or News:
    • LINKBANCORP, Inc. (LNKB) Announces Pricing of Initial Public Offering of Common Stock.
    • Yoshiharu Global Co. (YOSH) Announces Closing of Initial Public Offering.
  • New SPACs launched/News:
    • Alpha Star Acquisition Corporation (ALSA) signed letter of intent for a business combination with Cyclebit Group.
  • Secondaries Priced:
    • EWTX: Prices offering of 11,627,907 shares of its common stock at $10.32 per share.
    • LRMR: offering $70 million .. $3.15 per share.
    • PNT: Prices offering of 13.9 million shares of common stock at $9.00 per share.
  • Notes Priced of note:
    • SRPT: Prices $1.0 Billion of Convertible Senior Notes Due 2027.
  • Common Stock filings/Notes:
    • AKRO: Proposed Public Offering of Common Stock $175.0 million of shares.. JPM, MS and Jefferies bookmanager.
    • ASLN: Form 6k.. Open Market Sale Agreement $21.5 Million.
    • CSGP: Announces Public Offering of Common Stock in Conjunction with Inclusion into the S&P 500 Index.
    • INM: Announces Closing of $6 Million Private Placement Priced at a Premium to Market.
    • NVOS: Filed Form S-1.. Up to 13,605,442 Units consisting of Common Stock or Pre-Funded Warrants.
    • PNT: Proposed Public Offering of Common Stock.. Piper and Guggenhem Bookmanager.
    • VLCN: Filed Form S-1.. 22,072,464 Shares Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • SDIG: $9 Million Private Placement.
  • Mixed Shelf Offerings:
    • DUO: Filed Form F-3.. $300,000,000 Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • 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:

  • After Hours: 
    • Trading Up: RLGT +5%, TBLA +4%.
    • Trading Down: PNT -10%.
  • News Since The Close:
    • Twitter (TWTR) stockholders approve previously announced merger agreement for Twitter to be acquired by affiliates of Elon Musk for $54.20 per share in cash.
    • Dow tumbles 1,200 points for worst day since June 2020 after hot inflation report (CNBC)
    • Granite Constr (GVA) awarded approximately $20 million construction contract by the Tucson Airport Authority to reconstruct on outboard taxiway.
    • Railroad worker strike is starting to rattle commodity markets.
    • Assets Under Management (AUM):
      • Manning & Napier (MN) $18.7 billion (down 3.1% mom)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Delisting of Securities of Renovare Environmental, Inc.; Endo International plc; Clarus Therapeutics Holdings, Inc.; NewAge, Inc.; and Allena Pharmaceuticals, Inc. from The Nasdaq Stock Market.
    • Eros Media World PLC (EMWP) Files an Appeal with NYSE Staff on Notice of Delisting Determination.
    • Great Panther Mining (GPL) Receives Delisting Notice from NYSE American.
    • MindMed (MNMD) Announces Compliance with Nasdaq Listing Requirements.
    • MANT: Halt – Additional Information Requested by NASDAQ.
    • Western Alliance Bancorporation (WAL) Added to KBW Nasdaq Bank Index for Q3 2022.
  • Buyback Announcements or News:
    • BankUnited (BKU) authorizes the repurchase of up to $150 million of its stock.
    • Johnson & Johnson (JNJ) authorized the repurchase of up to $5 billion of the company’s common stock.
  • Stock Splits or News:
    • Aditxt, Inc.(ADTX) Announces 1-for-50 Reverse Stock Split Effective Pre-Market Opening on September 14, 2022.
    • Stellantis (STLA) and General Motors (GM) to execute a share repurchase transaction.
  • Dividends Announcements or News:
    • Realty Income (O) increases monthly dividend to $0.248 per share from $0.2475 per share.

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

S&P 500 -4, Dow Jones-35, NASDAQ -15, and Russell 2000 -4. (as of 8:08 a.m. EDT). Europe and Asia lower.  VIX Futures are at 26.55 from 23.65 yesterday morning and the VIX closed at 27.27 from 23.87 yesterday. Gold lower with Silver higher and Copper lower. WTI Crude Oil and Brent Oil Futures lower with Natural Gas higher as well. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10-year Treasury sees yields at 3.449% from 3.314% yesterday morning. Bitcoin is at $20,291 from $22,585 yesterday morning and is higher by 0.21% this morning.

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

  • Daily Positive Sectors: ummm…none of note.
  • Daily Negative Sectors: All – but really sticking out was Communication Services, Technology, Consumer Cyclical, Real Estate, Basic materials, Industrials 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.

Stocks turned heel on the “peak” inflation narrative and voted with selling indexes across the board.  SPX gapped WAY below the support line and never turned back.  The 3-4% pullbacks made the original value lines range look insignificant.

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)

  • Wednesday After the Close: None of note.
  • Thursday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: DOOO +0.31.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: DOOO of note.
  • Negative Guidance: AVTR of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: DWIN +18%, EPM +11%, NGM +6%, RLGT +5%, TBLA +4%.
  • Gap Down: PNT -8%.

Insider Action: CABO, CIVI 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: MRK, PANW, SBUX, NUE, SOFI, CSX NKLA MRNA BMY UNP  (CNBC)
  • Five Things To Know Before Market Opens Wednesday. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: U.S. Stocks To Bounce After $1.5 Trillion Rout. (Bloomberg)
  • Bloomberg Most Read Story: U.S. Inflation tops Forecasts, Cementing Odds of a Big Rate Hike. (Bloomberg)
  • European Union Commission President announces plans to deal with the energy crisis in Europe. (Reuters)
  • U.K. inflation drops to 9.9%, yes you read that correctly! (CNBC)
  • There are conflicting thoughts on the appropriate rate path ahead. (Bloomberg)
  • Homebuyer mortgage demand drops 29% year over year as rates move above 6%. (CNBC)
  • 2 Year Bond tops 3.8%. (CNBC)
  • Rail strike set to halt movement of crops and and autos, costing $2 billion a day. (Bloomberg)
  • General Motors (GM) to use its own chip in self driving cars. (Reuters)
  • Google (GOOGL) loses EU antitrust appeal as fine cut to $4.12 billion. (CNBC)
  • Warner Brothers Discovery (WBD) to reduce its ad sales staff. (Deadline)
  • Tencent (TCEHY) receives its first game approval in over a year. (WSJ)
  • Robinhood Snacks: August CPI comes in too hot no “Powell Pause” ahead. Rent The Runway (RENT) cuts 25% of staff as demand for “hybrid wardrobe” falls.

Moving Average Update:

  • Reset button activated.  Score collapses to 0% from 68%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 8:30 a.m. EDT
    • The President departs the White House en route Joint Base Andrews and Detroit, Michigan, 8:45 a.m. EDT
    • The President tours the Detroit Auto Show, 11:15 a.m. EDT
    • The President delivers remarks highlighting the electric vehicle manufacturing boom in America, 1:45 p.m. EDT (WH FACT SHEET)
    • The President participates in a reception for the Democratic National Committee, 3:10 p.m. EDT
    • The President departs Detroit, Michigan en route Joint Base Andrews and the White House, 4:05 p.m. EDT

Economic: 

  • US MBA Mortgage Applications Sep 9: -1.2% (prev -0.8%) – US MBA 30 Year Mortgage Rate Sep 9: 6.01% (prev 5.94%) – U.S. mortgage interest rates top 6% for first time since 2008.
  • August PPI is due out at 8:30 a.m. EDT and expected to come in at -0.1% from -0.5%.
  • Atl. Fed Bus. Inflation Exp. 10:00 a.m. EDT
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Altair (ALTR) to Acquire RapidMiner, Continuing Expansion of Broad Data Analytics Portfolio.
  • Primo Water (PRMW) unit has acquired Eureau Sources and Defeaus, two French companies specializing in the marketing and packaging of spring water.
  • SciSparc (SPRC) Enters Agreement to Acquire Wellution™, Top Seller of American Food Supplements and Cosmetics Brand on Amazon, for $20 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse Carbon Negative 2.0 (09/14/22-09/16/22)
    • Lake Street Capital Markets 6th Annual Best Ideas Growth (BIG6) Conference 2022
    • Morgan Stanley Laguna Industrials Conference (09/14/22-09/16/22)
    • Nomura Korea Corporate Day (09/14/22-09/15/22)
    • NYSE Energy & Utilities Investor Access Day
      • Previously posted and ongoing conferences:
        • Bank of America Global Real Estate Conference (09/13/22-09/14/22)
        • Baird Global Healthcare Conference (09/13/22-09/14/22)
        • Barclays Global Financial Services Conference (09/12/22-09/14/22)
        • Benzinga Cannabis Capital Conference 2022 (09/13/22-09/14/22)
        • Credit Suisse 35th Annual Specialties & Basics Conference 2022 (09/13/22-09/14/22)
        • Goldman Sachs Communacopia + Technology Conference
        • H.C. Wainwright Global Investment Conference (09/12/22-09/14/22)
        • 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 (09/12/22-09/14/22)
        • RBC Capital Markets Global Industrials Conference (09/13/22-09/14/22)
        • Singular Research Midwestern Values Investor Conference 2022
        • Truist Securities Internet Growth Summit (09/12/22-09/16/22)
        • UBS Global Energy Transition Conference 2022 (09/12/22-09/15/22)
  • Company Meetings: DWIN
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: CCRN, CYTO, FRSX,  SNPO
  • Update:
    • DTE Energy Business Update 2022
    • Real Good Food Company Inc (RGF) Business Update.
    • FleetCor Technologies, Inc. (FLT) EV Strategy Update Call.
  • R&D Day: None of note.
  • Company Event:
    • Silicon Labs (SLAB) Works With Conference 2022 (09/13/22-09/15/22)
    • HR Technology (HRT) Conference & Exposition 2022. (09/13/22-09/16/22)
    • Clearwater (CWAN) Connect 2022. (09/14/22-09/15/22)
    • Lattice Semiconductor Virtual Seminar (LSCC) on 5G Network and ORAN Telecom Security Solutions with FPGAs 2022.
    • Royal Gold (RGLD) in the Renmark Financial Communications Virtual Non-Deal Roadshow Series.
  • Industry Meetings:
    • The 2022 North American International Auto Show (NAIAS) (09/14/22-09/25/22)
    • infra/STRUCTURE 2022 (09/14/22-09/15/22)
    • American Orthopaedic Foot & Ankle Society (AOFAS) annual meeting (09/14/22-09/17/22)
    • Mind the Tech NY Conference 2022 (09/14/22-09/15/22)
      • Previously posted and ongoing conferences:
        • The Battery Show and EV Technology Expo 2022 (09/13/22-09/15/22)
        • 3rd Annual Gene Therapy for Ophthalmic Disorders 2022 (09/13/22-09/16/22)
        • Precious Metals Summit Beaver Creek 2022 (09/13/22-09/16/22)
        • 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)
        • 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)
        • SALT New York 2022 (09/11/22-09/14/22)
        • 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: