CAPIS Morning Note – 09/22/22: Rates Hikes Outpace Covid-19 Cases, Stocks Lower To Mixed

Overnight Summary: The S&P 500 closed Wednesday at 3789.93 (lower by -1.73%) from Tuesday at 3855.93 (lower by -1.13%). The overnight high of 3833 was hit at 4:50 a.m. EDT. The low was hit at 3766.75 at 9:15 a.m. EDT, a range of 66 points high to low which is well above the recent range…

Overnight Summary: The S&P 500 closed Wednesday at 3789.93 (lower by -1.73%) from Tuesday at 3855.93 (lower by -1.13%). The overnight high of 3833 was hit at 4:50 a.m. EDT. The low was hit at 3766.75 at 9:15 a.m. EDT, a range of 66 points high to low which is well above the recent range of 45. At 7:20 a.m. EDT the current price was 3801.50 which is -4.75 points, -0.12%. Currently, at 7:55 a.m. EDT the S&P 500 is now  -1.

Earnings Out After The Close:

  • Beats: LEN +0.32, KBH +0.19, SCS +0.08, FUL +0.02.
  • Flat: None of note.
  • Misses: TCOM (0.47)

Capital Raises:

  • IPOs Priced or News:
    • AgiiPlus Inc. (AGII) Announces Filing of Registration Statement for Proposed Initial Public Offering.
  • New SPACs launched/News:
    • Presto, One of the Largest Labor Automation Technology Providers for the Hospitality Industry, to Become Publicly Traded Following Business Combination with Ventoux CCM Acquisition Corp. (VTAQ)
  • Secondaries Priced:
    • LPTV: Announces Pricing of $12 Million Public Offering and Uplisting to the NYSE American. 2.4 million shares at $5 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • TOPS: Filed Form F-1.. Up to 2,000,000 Units consisting of Common Shares.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • MELT: Filed Form S-1 — IPO Filing IDEX Announces 151.5 million Share Offering By Selling Stockholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • CIFR: Filed Form S-3.. $500 Million Mixed Shelf Offering.
    • CPHC: Filed Form S-3.. $100 Million Mixed Shelf Offering.
  • Debt Filing/Notes:
    • ESNT: Announces Closing of $237.9 Million Reinsurance Transaction and Related Mortgage Insurance-Linked Notes.
    • RCL: Announces proposed note offerings to refinance its senior guaranteed notes and senior secured notes due 2023.
  • 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: FUL 4%.
    • Trading Down: CIM 3%.
    • News Since The Close:
      • Stocks making the biggest moves after hours: KBH, SCS, LEN, FUL (CNBC)
      • Banks increase prime lending rate to 6.25% from 5.50%.
      • Steelcase (SCS) plans job cuts on ‘lower-than-expected return-to-office trends’ (MarketWatch)
      • United Airlines (UAL) Seeks To Resume Flights To Cuba After Suspending Service In March 2020.
      • DoubleLine Capital CEO Jeffrey Gundlach notes that 2023 recession odds are 75% and Fed needs to slow down interest rate hikes. (CNBC)
      • Barron’s is positive on Generac (GNRC) has broken a triple bottom and could become a short squeeze. (Barron’s)
      • Japan has confirmed it has DIRECTLY INTERVENED in the currency markets to halt the yen’s slide. This is the FIRST TIME in 24 years Japan has done this since it sold dollars at the height of the Asian financial crisis.
      • Dollar Set For Biggest One-Day Fall Against The Yen Since March 2020.
      • Sterling hitting levels not seen in 37 years.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Alnylam (ALNY) Announces New Management Appointments.
    • Bird (BRDS) Announces Executive Leadership Changes to Reinforce Focus on Path to Profitability.
    • Blackbaud (BLKB) Extends President and CEO Mike Gianoni’s Contract.
    • Hedge Fund Ancora Seeks Ouster Of Kohl’s (KSS) CEO, Chairman.
    • Precigen (PGEN) names Rutul Shah as COO.
    • Peloton CIO (PTON) Shobhana (Shobz) Ahluwalia leaves the company.
    • Social Capital Hedosophia Holdings Corp. VI (IPOF) also discloses the NYSE determined to commence proceedings to delist the Company’s warrants from the NYSE – does not intend to appeal the NYSE’s determination.
  • Buyback Announcements or News:
    • ACN: Board of Directors approves $3.0 billion of additional share repurchase authority. (see dividends below)
    • HarborOne Bancorp, Inc. (HONE) Announces a new Share Repurchase Program of 2.4 million shares.
    • Methanex (MEOH) receives approval from TSX for its 5% share repurchase program.
  • Stock Splits or News: 
    • TOP Ships (TOPS) Announces Reverse Stock Split
    • TWO: 1-for-4 reverse stock split of the company’s common stock.
  • Dividends Announcements or News:
    • AMT: Increases quarterly cash distribution to $1.47 per share, a $0.04 increase.
    • ACN: 15% increase in quarterly dividend to $1.12 per share; Board of Directors approves $3.0 billion of additional share repurchase authority
    • Chimera Investment (CIM) lowers its quarterly dividend by 30.3% to $0.23 per share.

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

S&P 500 +1, Dow Jones +56, NASDAQ -8 and Russell 2000 -1. (as of 8:12 a.m. EDT). Europe lower and Asia lower.  VIX Futures are at 28 from 27.10 yesterday morning and the VIX closed at 27.99 from 27.16  yesterday. Gold lower with Silver and Copper higher. WTI Crude Oil and Brent Oil Futures higher and Natural Gas lower as well. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10-year Treasury sees yields at 3.567% from 3.546%  yesterday morning. Bitcoin is at $19,078 from $19,115 yesterday morning and is higher by 0.46% this morning.

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

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

Word of the day is whipsaw.  All was quiet until 2 p.m. EDT and then we got KaPowelled with the 2:30 p.m breifing.  Indexes down across the board.  TLT ended up 1.68% to close at 108.03.

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)

  • Thursday After the Close: COST, FDX, FIZZ, AIR, CAMP of note.
  • Friday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: MANU +0.06, ACN +0.03.
  • Flat: DRI.
  • Misses: FDS (0.08).
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: FDS of note.
  • Negative Guidance: SCS, ACN of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CTIC +4%, STNG +4%.
  • Gap Down: DBVT -12%, CIM -4%.

Insider Action: No stock 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: ACN, DRI, SCS, CRM, KBH, LEN, NVAC, FDS, LLY  (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Putin’s Reserve Callup Makes War a Reality. (Bloomberg)
  • Bloomberg Most Read Story: Putin resumes nuclear threat. (Bloomberg)
  • Turkey cuts rates again as inflation there is over 80%. (CNBC)
  • Bank of England (BOE) cuts rates by 50 basis points in seventh straight hike. (CNBC)
  • Swiss National Bank hikes rates by 75 basis points. (CNBC)
  • Vietnam Central Bank hikes rate to 3.5% for its discount rate. (Bloomberg)
  • Russia arrests 1,300 people that were protesting the mobilization move. (CNBC)
  • Honda (HMC) will cut production by 40% at two Japanese plants. (Reuters)
  • U.S. Government Funding Bill needs to pass October 1st to avoid shutdown. Senator Joe Manchin (D-WV) wants to attach a bill to ease fossil fuel  projects and pipelines but progressives against it. (Politico)
  • Senate passes amendment to legislation that would reduce refrigerant chemicals in air conditioning units. (WSJ)
  • Target (TGT) to hire 100,000 seasonal workers. (CNBC)
  • McDonald’s (MCD) will face a $10 billion racial discrimination lawsuit. (NY Post)
  • Meta (META) trying to reduce costs by 10%. (WSJ)
  • Darden (DRI) stands by outlook after mixed quarterly results. (CNBC)

Moving Average Update:

  • All Index current prices are below all moving averages.  Day 2 of red..

Geopolitical: 

  • President’s Public Schedule:
    • The President hosts a bilateral meeting with President Ferdinand Romualdez Marcos, Jr. of the Republic of the Philippines, 11:00 a.m. EDT
    • The President receives a briefing on Hurricane Fiona’s impact on Puerto Rico and the ongoing federal government response, 2:15 p.m. EDT
    • The President participates in a Democratic National Committee reception, 4:40 p.m. EDT
    • The President departs John F. Kennedy International Airport en route Joint Base Andrews and White House, 6:20 p.m. EDT

Economic: 

  • Initial Jobless Claims 8:30 a.m. EDT
  • Current Account 8:30 a.m. EDT
  • August Leading Economic Index is due out at 10:00 a.m. EDT and is expected to improve to -0.1% from -0.4%.  
  • EIA Natural Gas Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Talos Energy (TALO) to buy EnVen Energy, privately held, for $1.1 billion in cash and stock.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • DA Davidson Diversified Industrials & Services Conference (09/22/22-09/23/22)
    • Janney Water Utilities Conference
    • Jefferies Innovation in Mental Health Summit
    • Jefferies Pet Care and Wellness Conference
    • Peters Capital Canada Growth Conference
    • William Blair What’s Next for Industrials Conference 2022 (09/22/22-09/23/22)
    • Wolfe Research Fall Consumer Conference (09/22/22-09/23/22)
      • Previously posted and ongoing conferences:
        • CIBC Eastern Institutional Investor Conference (09/21/22-09/22/22)
        • Baader Investment Small-Cap Conference 2022 (09/19/22-09/23/22)
        • Bank of America Banking & Insurance CEO Conference 2022 (09/20/22-09/23/22)
        • Jefferies Tech Trek Israel 2022 (09/18/22-09/22/22)
        • JP Morgan Emerging Markets Credit Conference 2022 (09/20/22-09/22/22)
        • JP Morgan Global Clean Energy Action Forum
        • JP Morgan RE+ Conference
        • JP Morgan 13th Annual U.S. All Stars Conference 2022 (09/20/22-09/22/22)
        • Piper Heartland Summit (09/21/22-09/22/22)
        • RBC Capital Markets Energy Disruptors UNITE Summit (09/20/22-09/22/22)
        • SVB Securities 11th Annual Healthcare Summit 2022 (09/21/22-09/23/22)
        • Sidoti Fall Small Cap Conference (09/21/22-09/22/22)
        • Wells Fargo Consumer Conference (09/20/22-09/22/22)
  • Company Meetings: AMAO, CPLP
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: CBAY, COLM, ENTG, GARWF, HSTM, IR, QCOM
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Lantern Pharma (LTRN) Virtual KOL Webinar on the Treatment of Pediatric Cancers.
    • Nvidia (NVDA) GTC 2022  (09/19/22-09/22/22)
    • Salesforce (CRM) Dreamforce
    • BALL 2022 Investor Field Trip (09/21/22-09/22/22)
  • Industry Meetings:
    • Nephron 2nd Annual Physician Enablement Symposium 2022
      • Previously posted and ongoing conferences:
        • Autonomous Vehicles Conference
        • U.S. Department of Energy Global Clean Energy Action Forum 2022 (09/21/22-09/23/22)
        • European Association for the Study of Diabetes (EASD) Annual Meeting 2022 (09/19/22-09/23/22)
        • The 2022 North American International Auto Show (NAIAS) (09/14/22-09/25/22)
        • Denver Gold Forum Americas 2022 (09/18/22-09/23/22)
        • European Conference on Optical Communication (ECOC) 2022 (09/18/22-09/22/22)
        • International HBV Meeting 2022 (09/18/22-09/22/22)
        • Intelligent Transportation Systems (ITS) World Congress 2022 (09/18/22-09/22/22)

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: