CAPIS Morning Note – 09/26/22: Stock Continue To Trade Lower As Markets Remain Oversold As We Enter Fall Trading

Overnight Summary: The S&P 500 closed Friday at 3693.23 (lower by -1.72%) from Thursday at 3757.99 (lower by -0.84%). The overnight high of 3718.25 was hit at 3:45 a.m. EDT. The low of 3671.25 was hit at 5:45 a.m. EDT, a range of 47 points high to low which is around the recent range of…

Overnight Summary: The S&P 500 closed Friday at 3693.23 (lower by -1.72%) from Thursday at 3757.99 (lower by -0.84%). The overnight high of 3718.25 was hit at 3:45 a.m. EDT. The low of 3671.25 was hit at 5:45 a.m. EDT, a range of 47 points high to low which is around the recent range of 45. At 7:15 a.m. EDT the current price was 3681.50 which is -27.50 points, -0.74%. Currently, at 7:55 a.m. EDT the S&P 500 is now -16.

Earnings Out After The Close:

  • Beats: None of note.
  • 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:
    • MBIN: Merchants Bancorp Prices Perpetual Preferred Stock Offering.
    • PLTK: Extends expiration of previously announced tender offer to purchase up to 51,813,472 shares at a price of $11.58 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • CYTO: Filed Form F-3.. 833,334 Common Shares.
    • ISSC: Files for $100 million common stock offering.
    • SFET: Filed Form F-3.. Up to 11,264,440 American Depositary Shares Representing Ordinary Shares.
    • PLTK: Announces Extension of Previously Announced Tender Offer.
    • REI: Filed Form S-3.. 63,888,889 Shares.
  • 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):
    • MGAM: Announces Closing of $5.0 Million Private Placement Priced At-the-Market.
    • DWAC: Received termination notices from PIPE Investors representing approximately $138.5 million of the PIPE.
  • Mixed Shelf Offerings:
    • DUK: Filed Form S-3ASR.. Mixed Security Shelf.
    • FLGC: Filed Form F-3.. $25,000,000 Mixed Shelf.
    • VERV: Filed Form S-3ASR.. Mixed Security Shelf.
    • TCPC: Filed Form N-2.. Mixed Shelf Offering.
  • Debt Filing/Notes:
    • International Paper (IP) Announces Upsizing and Early Results of Cash Tender Offer for up to $497.658 Million Combined Aggregate Principal Amount of its Outstanding Notes.
  • 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 Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: CO 22.95%, HYT 15.60%, ALLK 14.96%, SQQQ 14.62%, FRPT 11.74%, MOGU 7.09%, BBD 6.56%, CALM 6.44%, BEAT 6.23%, ITUB 6.14%, GGB 5.24%, PBF 5.21%, GIS 5.21%, PRTA 4.38%, CIG 4.32%, EBR 4.20%.
    • Trading Down: TELL -39.75%, CASI -37.50%, NVAX -30.98%, AAOI -24.60%, GRTS -24.57%, BPT -24.57%, NBR -24.30%, AVYA -24.07%, MRC -23.79%, KOS -23.60%, ALLO -23.37%, ADAP -23.20%, NVTA -22.96%, PTEN -22.96%, TWOU -22.67%.
  • News Items After the Close:
    • The DJIA, DJTA, SPX and NASDAQ indices have all broken down below the important trend lines connecting the lows of March 2020 and June 2022. The Dow Jones Utility Index has not, even as Treasury yields have exploded higher. A harbinger, perhaps? — (Gundlach)
    • UAW will seek faster recognition in GM’s (GM) U.S. joint-venture battery plants. (Reuters)
    • Raytheon Technologies (RTX) awarded a $770 million modification to a previously awarded US Navy contract.
    • L3Harris (LHX) awarded an $887 million US Army contract for Common Data Link satellite communications program.
  • News Items Over the Weekend:
    • Stocks That Defined the Week: GIS, META, F, COTY, KSS, FDX, MRNA (WSJ)
    • The Week in Business: The Fed Hits the Brakes.  (NYT)
    • Putin to address Parliament on Sept 30 Russian Parliament may vote on annexation Sept 29.
    • Short Sellers Upended a Small Farm Real-Estate Company (FPI). This Is What It Looked Like. (WSJ)
    • Russia’s Moscow Stock exchange is down 11%. (6:30 a.m. EDT)
    • Barron’s:
      • Positive View: BSX, UNH, EW, ABMD, BDX, LLY, ABBV, TECH, INSP, ICLR, EQXR, F, CSSE, PM, CVX, MMC, BDX, ELV, MSFT.
      • Cautious View: None of note.
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Advance Auto Parts (AAP) Announces Leadership Changes.
    • Beyond Meat (BYND) Chief Supply Chain Officer Bernie Adcock is stepping down.
    • Dollar Tree (DLTR) names Michael Creedon, Jr. as COO.
    • Alphabet’s (GOOG) Waymo unit, which focuses on autonomous vehicle technology, names Elisa de Martel as CFO.
    • GlaxoSmithKline (GSK) CFO to retire.
    • InfuSystem (INFU) Appoints R. Rimmy Malhotra to the Board of Directors.
    • Lightning eMotors (ZEV) Appoints Wanda Jackson-Davis to the Board of Directors.
    • Membership Collective Group (MCG) announced that Martin Kuczmarski, its Chief Operating Officer, will leave the Company.
    • PG&E (PCG) and EQT Set to Join S&P 500; ExlService (EXLS) to Join S&P MidCap 400; LESL, CBTX, XPER to Join S&P SmallCap 600.
    • Andrew Bednar Appointed CEO of Perella Weinberg Partners (PWP); Peter Weinberg Will Continue as Chairman of the Board of Directors.
    • UCL Announces Receipt of Nasdaq Notification Regarding Minimum Market Value of Publicly Held Shares.
    • Unilever PLC (UL) CEO announces intention to retire at end of next year.
  • Buyback Announcements or News:
    • Hologic (HOLX) authorized a new share repurchase program with a five-year term to buy back up to $1.0 billion of its common stock.
    • Reliance Global Group (RELI) Announces Share Repurchase Program of Up to 3 Million Shares.
    • Scorpio Tankers (STNG) Announces Repurchases of Its Common Shares.
  • Stock Splits or News: 
    • NLY trading r/s price.
    • CSCW  trading r/s price.
    • Kiora Pharmaceuticals (KPRX) to Implement 1-for-40 Reverse Split.
  • Dividends Announcements or News: None of note.

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

S&P 500 -20, Dow Jones -147, NASDAQ -57, and Russell 2000 -11. (as of 8:08 a.m. EDT). Europe lower ex France and Asia lower.  VIX Futures are at 30.75 from 28.88 yesterday morning and the VIX closed at 32.29 from 27.35 yesterday. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures lower and Natural Gas lower as well. $ is higher vs Euro, higher vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.775% from 3.807% yesterday morning. Bitcoin is at $18,850 from $18,929 yesterday morning and is lower by -0.40% this morning.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Energy, Basic Materials, Consumer Cyclical, Consumer Defensive, Industrials, 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.

Worry of interest rates keeps driving the market down.  SPX and DJIA fell below the June lows but the SPX rallied to close above those lows.  Russell 2000 closed down 2.48%.  USO was down 5.29%.

  

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: MLCO +10%, LVS +7%, CRHC +7%, WYNN +5%, PCG +5%, CSSE +5%, XPEV +4%, VXX +4%.
  • Gap Down: None of note.

Insider Action: MEDP, ALL 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: LVS PLNT PCG LYFT  (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: U.K. Tories look to the Bank of England to stop pound drop. (Bloomberg)
  • Bloomberg Most Read Story: Hedge Fund Manager John Paulson’s take on the housing market. (Bloomberg)
  • Conservative leader Giorgia Meloni will become Italian Prime Minister following the election. (NYT)
  • Traders think there could be an emergency rate increase from the Bank of England as the pound hits a new low. (FT)
  • Iran sees violence at protests as the military fired on the crowd. (The Washington Post)
  • United Arab Emirates to provide liquified natural gas to Germany. (FT)
  • Republicans have a 5 seat lead to control the House. (ABC News)
  • Atlanta Federal Reserve President Raphael Bostic sees the economy absorbing Fed actions without “deep deep” pain. (CBS News)
  • Continuing Resolution in doubt of passing with energy reforms into question which would shut down the government on October 1st. (The Hill)
  • Li Auto (LI) cuts delivery outlook. (CNBC)
  • Apple (AAPL) to break price record as consumers take it higher priced models. (FT)
  • Apple (AAPL) will produce iPhones from India. (Reuters)
  • Florida declares a state of emergency ahead of Hurricane Ian making landfall. (Release)

Moving Average Update:

  • Fourth day in a row red.

Geopolitical: 

  • President’s Public Schedule:
    • The President departs New Castle, Delaware en route Washington, D.C., 9:25 a.m. EDT
    • The President departs Fort Lesley J. McNair en route the White House, 10:25 a.m. EDT
    • The President arrives at the White House, 10:35 a.m. EDT
    • The President welcomes the Atlanta Braves to the White House, 11:45 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:30 p.m. EDT
    • The President delivers remarks at the third meeting of the White House Competition Council highlighting the significant progress made on the competition agenda in the last year and previewing new actions that will save families money and lower costs, 4:15 p.m. EDT

Economic: 

  • Chicago Fed Activity Index 8:30 a.m. EDT 
  • Dallas Fed Mfg Survey 10:30 a.m. EDT 

Federal Reserve / Treasury Speakers:

  • Federal Reserve Boston President Susan M. Collins 10:00 a.m. EDT 
    Federal Research Atlanta President Raphael Bostic 12:00 p.m. EDT 
    Federal Reserve Cleveland President Loretta Mester 4:00 p.m. EDT 

M&A Activity:

  • Focus Financial’s (FOCS) Acora unit to acquire Alpha Property & Casualty.
  • Tetra Tech (TTEK) acquires RPS Group.
  • The Real Brokerage Inc. (REAX) to Acquire LemonBrew Lending.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse 2022 Education & Healthcare Conference (09/26/22-09/30/22)
    • Truist Securities Energy Meeting Circuit
      • Previously posted and ongoing conferences:
        • None of note.
  • Company Meetings: SB
  • Fireside Chat:
    • Climate Action A Fireside Chat with Pfizer (PFE).
  • Investor/Analyst Day/Calls: BBLR, ERIC, GRAB, GRPS.
  • Update: None of note.
  • R&D Day:
    • Anebulo Pharmaceuticals, Inc. (ANEB) Inaugural R&D Day 2022.
  • Company Event: None of note.
  • Industry Meetings:
    • RAS 4th Annual Targeted Drug Development Summit 2022 (09/26/22-09/28/22)
    • NASA DART Impact Event
      • Previously posted and ongoing conferences:
        • Ion Implantation Technology (IIT) 2022 (09/25/22-09/29/22)
        • International Conference on Biofabrication 2022 (09/25/22-09/28/22)

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: