CAPIS Morning Note – 09/22/23: Terrible, Horrible No Good Week Ends, S&P 500 Lower By -2.70% So Far.

Overnight Summary: The S&P 500 closed Thursday lower by -1.64% at 4330 from Wednesday lower by -0.94% at 4402.20. The overnight high was hit at 4384.75 at 6:55 a.m. EDT while the low was hit at 4366 at 8:35 p.m. EDT. The range overnight was 18 points. The 10-day average of the overnight range is at…

Overnight Summary: The S&P 500 closed Thursday lower by -1.64% at 4330 from Wednesday lower by -0.94% at 4402.20. The overnight high was hit at 4384.75 at 6:55 a.m. EDT while the low was hit at 4366 at 8:35 p.m. EDT. The range overnight was 18 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 higher by +7 points which is +0.16% at  7:15 a.m. EDT.

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:
    • Alibaba’s (BABA) logistics unit Cainiao plans to raise at least $1B via Hong Kong IPO.
    • Davis Commodities Limited (DTCK) Announces Closing of Initial Public Offering Including Full Exercise of Over-Allotment Option.
    • Turbo Energy, S.A. (TURB): Pricing of Initial Public Offering – 1,000,000 American Depositary Shares @$5.
  • New SPACs launched/News:
    • Athena Consumer Acquisition Corp. (ACAQ) Announces  Extension of Deadline to Complete Initial Business Combination.
  • Secondaries Priced:
    • NEPT: Announces Pricing of US$4.5 Million Public Offering.
  • Notes Priced of note:
    • OII: Announces Pricing of Private Offering of $200 Million of Senior Notes.
  • Common Stock filings/Notes:
    • AVGR: Determined again to increase the amount available for sale under the ATM Agreement, up to an additional aggregate offering price of $320,507.
    • LUNR: files for 9,411,766 shares of common stock issuable upon exercise of warrants; also files for 14,117,649 shares of common stock, relates to warrants.
    • SNAL: Filed Form S-1.. 8,913,312 Shares of Class A Common Stock.
    • TBLT: Announces Distribution of Series H Preferred Stock to Holders of its Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • CMP: Files for 7,034,609 shares of common stock by selling shareholder.
    • SCLX: Announces the Consummation of the Previously Announced Purchase of all of the Scilex Common Shares, Preferred Shares and Warrants Owned by Sorrento Therapeutics, Inc.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • BUSE: Filed Form S-3ASR — Mixed Shelf.
    • FULT: Filed Form S-3ASR — Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • GTLS: Announces Favorable Repricing of Term Loan Facility.
    • ORMP: Announces $101,875,000 Short-Term Senior Secured Note Transaction with Scilex Holding Company.
    • PKOH: Announces Extension of Credit Agreement.
  • Tender Offer: 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 and Over the Holiday:

  • After Hours: 
    • Trading Up: HPK +5% of note.
    • Trading Down: SCHL -12% of note.
  • News Items After the Close:
    • Canada’s Stelco Holdings Is Said to Weigh Bid for US Steel (X) (Bloomberg)
    • Qualcomm (QCOM) Slashes Jobs In China And Taiwan Amid Smartphone Slump. (Nikkei)
    • Oracle (ORCL) recommits to $65 billion in revenue by fiscal 2026. (MarketWatch)
    • Scholastic (SCHL) shares dive after hours on worse-than-expected quarterly loss. (MarketWatch)
    • Apple (AAPL) Retail Stores Issue Pay Increases Of Roughly 4% This Year — Smaller Than Last Year.
    • Federal Reserve Chair Jerome Powell will host a town hall with educators on September 28 that will also be webcast live, and he will take questions from the audience, the central bank said on Thursday.
  • Exchange/Listing/Company Reorg and Personnel News:
    • 3D Systems (DDD) Announces CFO Transition: 3D Systems’ Executive Vice President, Andrew Johnson to Serve as Interim Chief Financial Officer.
    • INNOVATE Corp (VATE) COO Suzi Herbst to resign.
    • KIDPIK (PIK) Granted 180-Day Extension to Meet Nasdaq Minimum Bid Price Requirement.
    • Masco (MAS) announces election of Richard Westenberg as Vice President, CFO.
    • Mission Produce (AVO) COO Timothy A. Bulow to depart.
    • Psychemedics Corporation (PMD) Appoints Shannon Shoemaker as Chief Revenue Officer.
    • Purple Innovation (PRPL) appoints Tod Vogensen as CFO.
    • Sunshine Biopharma (SBFM) gets 180-day extension to achieve Nasdaq compliance.
    • The Lovesac Company (LOVE) Announces Notification from Nasdaq Related to Delayed Form 10-Q Filing.
    • United Airlines (UAL) promotes Michael Leskinen to CFO.
    • WFC: Thomas R. Nides to Join Wells Fargo as Vice Chairman.
  • Buyback Announcements or News:
    • Anterix’s (ATEX) Board authorized new $250 mln share repurchase program.
      Faraday Future (FFIE) Announces Management Stock Purchase Plan.
    • Mondee (MOND) Announces Inaugural Share Repurchase Program of Up to $30 Million Program Intended to Enhance Shareholder Value.
    • Star Bulk (SBLK) Announces the Repurchase of 10 Million of Its Common Shares.
  • Stock Splits or News:
    • Cepton’s (CPTN) 1-for-10 Reverse Stock Split Becomes Effective.
    • PRPO trading reverse split price.
    • SASI trading reverse split.
  • Dividends Announcements or News:
    • Shoe Carnival (SCVL) increases quarterly cash dividend 12% to $0.12 per share. (MarketWatch)
    • TXN: Increases dividend 5%, marking 20 consecutive years of increases.
  • Insider Sales Of Note:

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

S&P 500 +8, Dow Jones +15,  NASDAQ +55, and Russell 2000 +4.  (as of 7:53 a.m. EDT).  Asia is lower ex Australia and Europe are lower ex the FTSE this morning. VIX Futures are at 17.41 from 16.91 yesterday.  Gold, Silver and Copper are higher this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas higher as well. US 10-year Treasury sees yields at 4.484% from 4.41% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $26,611 from $26,711  yesterday, higher by +0.08%.

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

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

The highest bond yields in more than a decade prompted another stock-market selloff Thursday, as the possibility of a prolonged higher interest-rate environment sank in across Wall Street.  The S&P 500 fell 1.6% on Thursday, as all 11 sectors finished the day lower. The tech-heavy Nasdaq Composite fell 1.8%, while the blue-chip Dow Jones Industrial Average dipped 1.1%, or around 370 points. All three indexes are on pace to finish the week in the red.  A selloff in government bonds, prompted by surprisingly strong economic data, sent yields higher. The yield on the 30-year Treasury bond rose to 4.55%, the highest level since 2011 and its largest one-day increase since June 2022. The 10-year Treasury yield settled at 4.479%, the highest since 2007. The two-year yield rose to 5.148%, its highest reading since 2006.  (WSJ – edited by QPI)

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

  • Friday After the Close: None of note.
  • Monday 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: FFIE +5%, HPK +5% of note.
  • Gap Down: SCHL -19%, AVGR -7% of note.

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.

  • 5 Things to Know Before the Stock Market Opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg) 
  • Bloomberg Lead Story: UAW to Expected to Announce More Auto-Plant Strikes on Friday. (Bloomberg)
  • Bloomberg Most Shared Story: The Hidden Threat to U.S. Energy Security. (Bloomberg)
  • U.S. Futures signal some respite after bruising week: Markets Wrap. (Bloomberg)
  • House recesses after Defense Bill and government funding plan implode. (CNBC)
  • McDonald’s (MCD) plans to up royalty fees from 4% to 5% for new locations. (CNBC)
  • Uncertainty about Walt Disney (DIS) ability to sell ABC. (NY Post)
  • Apple (AAPL) iPhone 15 launches in China as people flock to store. (CNBC)
  • Bank of America says investors flee stocks as hard landing signs grow. (Bloomberg)
  • NPR Morning Report Marketplace: Activision deal back on. (Podcast)
  • BBC Global News:  Biden tells Zelensky that U.S. will pay for air defense upgrades in Ukraine. (Podcast) 
  • NY Times The Daily:  New tougher laws on fentanyl turn overdose into a murder case. (Podcast)`
  • Bloomberg: Geopolitics is shaking up economic alliances. (Podcast)
  • Wealthion:  Markets tremble as Fed walks back “soft landing” odds (released at 10:00 a.m. EDT). (Podcast)

Moving Average Update:

  • Score remains at 14%.

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 and Representative Lucy McBath, 1:30 p.m. EDT
    • The President and The Vice President deliver remarks on gun safety, 2:45 p.m. EDT

Economic:

  • September S&P Global U.S. Manufacturing PMI is due out at 9:45 a.m. EDT and came in last month at 47.90.
  • September S&P Global U.S. Services PMI is due out at 9:45 a.m. EDT and came in last month at 50.50.
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Board of Governors Lisa D. Cook 9:50 a.m. EDT

M&A Activity and News: 

  • Salesforce (CRM) to acquire Airkit.ai, a creator of AI powered customer service applications.

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: