CAPIS Morning Note – 09/23/22: Stocks Lower, Bond Yields Higher and Dollar High Makes For Tough Morning. Retest of June Lows Likely

Overnight Summary: The S&P 500 closed Thursday at 3757.99 (lower by -0.84%) from Wednesday at 3789.93 (lower by -1.73%). The overnight high of 3783 was hit at 8:05 p.m. EDT. The low of 3723 was hit at 7:00 a.m. EDT, a range of 60 points high to low which is well above the recent range…

Overnight Summary: The S&P 500 closed Thursday at 3757.99 (lower by -0.84%) from Wednesday at 3789.93 (lower by -1.73%). The overnight high of 3783 was hit at 8:05 p.m. EDT. The low of 3723 was hit at 7:00 a.m. EDT, a range of 60 points high to low which is well above the recent range of 45. At 7:15 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 -49.

Earnings Out After The Close:

  • Beats: FDX +0.64, AIR +0.04, COST +0.03, CAMP +0.02.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • EDAP: Prices offering of 2,666,667 ADSs at $7.50 per ADS.
    • TRVI :14.25 million shares+warrants offering priced @$1.93 per share.
  • Notes Priced of note:
    • DLR: Pricing of Senior Notes Offering.
    • RCL: Announces pricing of $1 billion offering of senior guaranteed notes and $1 billion offering of senior secured notes to refinance 2023 debt maturities.
  • Common Stock filings/Notes:
    • EDAP: Proposed Public Offering of American Depositary Shares. Jefferies bookmanager
    • SBEV: Announces Proposed Underwritten Public Offering of Common Stock.
    • TRVI: Proposed Public Offering — SVB, Stifel and Opp. bookmanagers.
    • VIRI: Closing of Public Offering.
  • 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):
    • AADI: $72.5 Million Private Placement Equity Financing.
    • SONX: Announces $63 Million Private Placement.
  • Mixed Shelf Offerings:
    •  RTX: Filed Form S-3ASR — 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: CANO +5%, CAMP +4%.
    • Trading Down: EDAP -7%.
    • News Since The Close:
      • Stocks making the biggest moves after hours: COST, DOCU, GWRE, SCHL (CNBC)
      • Boeing to Pay $200 Million to Settle SEC Charges that it Misled Investors about the 737 MAX. (SECFiling)
      • FedEx (FDX) hikes package rates, details cost cutting as demand weakens globally. (CNBC)
      • Raytheon Technologies (RTX) awarded $985 million U.S. Air Force contract for the Hypersonic Attack Cruise Missile.
      • Humana (HUM), CVS (CVS) Circle Cano Health (CANO) as Potential Buyers. (WSJ)
      • Pfizer (PFE), US Revises Contract for Donated Vaccines as World Demand Plummets. (Bloomberg)
      • The New York Stock Exchange and Tokyo Stock Exchange Announce New Collaboration to Support Cross-Border Investment Between the U.S. and Japan.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Babylon (BBLN) Receives Share Price Notice from the New York Stock Exchange (NYSE) and has Secured Shareholder Approval to Implement a Reverse Share Split to Rectify the Matter.
    • DSKE: Appoints Aaron Coley as CFO.
    • Dream Finders Homes (DFH) to transfer the listing of its Class A shares from the Nasdaq Global Select Market to the NYSE.
    • DocuSign (DOCU) Board of Directors Announces Allan Thygesen as new Chief Executive Officer – previously at Google (MarketWatch)
    • Dorchester Minerals (DMLP) CEO to step down.
    • Ennis (EBF) appoints Wade Brewer to COO role.
    • Green Plains (GPRE) transitions Jim Stark to CFO role succeeding Patrich Simpkins who is transitioning to Chief Transformation Officer role.
    • GECC: Lenders Funding Announces Retirement of Chief Operating Officer and Chief Credit Officer, Harvey Friedman and Appointment of John Benkovich.
    • Roku (ROKU) Names Three Executives to New Roles as Presidents of Media, Devices, and Consumer Experience.
    • Dentsply Sirona (XRAY) Appoints Glenn Coleman as Chief Financial Officer.
    • YETI: Announces resignation of Chief Financial Officer Paul Carbone.
  • Buyback Announcements or News:
    • CBTX, Inc. (CBTX) Announces New Share Repurchase Program.
    • Guidewire (GWRE) Announces $400.0 Million Share Repurchase Program.
  • Stock Splits or News: 
    • ATXI: Announces Reverse Stock Split and Provides Regulatory Update for IV Tramadol Including Receipt of Type A Meeting Minutes from the FDA.
    • CSCW: Announces 40-for-1 Reverse Split, effective Monday.
    • CWBR trading r/s price.
    • TOPS trading r/s price. 
    • ATXI trading r/s price.
  • Dividends Announcements or News: None of note.

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

S&P 500 -49, Dow Jones -351, NASDAQ -159, and Russell 2000 -26. (as of 8:07 a.m. EDT). Europe lower and Asia lower.  VIX Futures are at 28.88 from 28 yesterday morning and the VIX closed at 27.35 from 27.99 yesterday. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures lower and Natural Gas higher as well. $ is higher vs Euro, higher vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.807% from 3.567% yesterday morning. Bitcoin is at $18,929 from $19,078 yesterday morning and is lower by -2.11% 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, Industrials, Technology, Financial 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.

Subdued compared to yesterday, but certainly continued the negative tone.  The Markets opened near the Value Line support and stayed there all day.  NASDAQ down 1.37%.  TLT pulled back 2.55%.

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)

  • 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: CANO +6%, CORT +4%, LPLA +4%.
  • Gap Down: EDAP -6%, SCHL -4%, IONS -4%, BJ -4%.

Insider Action: BRP, KNTK, MEDP, BRZE 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: FDX COST BA ALLY  CAMP  RTX (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Truss’s Economic Plan sends UK Markets into Meltdown, Pound Falls 2%. (Bloomberg)
  • Bloomberg Most Read Story: Japan to provide Visa Free Travelas Covid-19 fears reside. (Bloomberg)
  • European stocks sink 2.8% on weaker Eurozone data. (CNBC)
  • British Pound breaks $1.111 on tax cuts. (CNBC)
  • Russian President Putin nuclear threats raise the risk of an unprecedented disaster. (CNBC)
  • Hong Kong ends quarantine policy for travelers. (WSJ)
  • Dow Jones Industrial Average crashing down 350 from 150 earlier this morning as 10 year yields hit 3.80% while 2 year yields at 4.25%. (CNBC)
  • Senate will vote on a continuing resolution next Tuesday to fund the government with no money for Covid-19 or Monkeypox. Money for Ukraine but Energy permitting remains a question mark. (Politico)
  • Goldman Sachs cuts S&P 500 2022 target to 3,600 from 4,300. (CNBC)
  • Storm in Caribbean could evolve into Hurricane Hermine and impact Gulf of Mexico next week. (The Washington Post)
  • Apple (AAPL) will replace Pepsi (PEP) as the sponsor of the halftime show at the Superbowl. (CBS News)

Moving Average Update:

  • Third day in a row red.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 8:00 a.m. EDT
    • The President departs the White House en route Democratic National Committee event, 12:25 p.m. EDT
    • The President arrives at a Democratic National Committee event, 12:30 p.m. EDT
    • The President delivers remarks at a Democratic National Committee event, 1:00 p.m. EDT
    • The President departs Democratic National Committee event en route the White House, 1:45 p.m. EDT
    • The President arrives at the White House, 1:50 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:30 p.m. EDT
    • The President and The First Lady host and deliver remarks at a musical performance by music legend and global humanitarian, Sir Elton John, 8:00 p.m. EDT

Economic: 

  • PMI Composite Flash 9:45 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Research Chair Jerome Powell 2:00 p.m. EDT
    Federal Research Board of Governors Lael Brainard and Federal Research Board of Governors Michelle Bowman 2:05 p.m. EDT.

M&A Activity:

  • American Water Works (AWK) subsidiary acquires City of Villa Grove water and wastewater systems for $11 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Moffett Nathanson Digital Banking Immersion Conference
    • Truist Securities Employer Digital Health Benefits Summit
      • Previously posted and ongoing conferences:
        • 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)
        • DA Davidson Diversified Industrials & Services Conference (09/22/22-09/23/22)
        • Peters Capital Canada Growth Conference
        • SVB Securities 11th Annual Healthcare Summit 2022 (09/21/22-09/23/22)
        • 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)
  • Company Meetings: GIA
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AERI
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Itron (ITRI) inspire 2022.
  • Industry Meetings:
    • Ion Implantation Technology (IIT) 2022 (09/25/22-09/29/22)
    • International Conference on Biofabrication 2022 (09/25/22-09/28/22)
      • Previously posted and ongoing conferences:
        • 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)

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: