CAPIS Morning Note – 09/27/23: Stocks Look To Rebound From A Terrible, Horrible, No Good Day. Futures Higher.

Overnight Summary: The S&P 500 closed Tuesday lower by -1.47% at 4273.53 from Monday higher by 0.40% at 4337.44. The overnight high was hit at 4336.50 at 4:10 a.m. EDT while the low was hit at 4313.50 at 4:05 p.m. EDT. The range overnight was 23 points. The 10-day average of the overnight range is at…

Overnight Summary: The S&P 500 closed Tuesday lower by -1.47% at 4273.53 from Monday higher by 0.40% at 4337.44. The overnight high was hit at 4336.50 at 4:10 a.m. EDT while the low was hit at 4313.50 at 4:05 p.m. EDT. The range overnight was 23 points. The 10-day average of the overnight range is at 21.60 from 20.50 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 +16.50 points which is +0.38% at  7:20 a.m. EDT.

Short Interest Release (www.goodmorningwallst.com): Bi-Weekly release as of 09/26/23 close.

 

Earnings Out After The Close: 

  • Beats: MLKN +0.16, PRGS +0.08, AIR +0.08, COST +0.07 of note.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News:
    • Lead Real Estate Co., Ltd (LRE) Announces Pricing of Initial Public Offering.
  • New SPACs launched/News:
    • Athena Consumer Acquisition Corp. (ACAQ) Announces  Intention to Voluntarily Delist from NYSE American LLC and Planned Listing by Post-Combination Company on Nasdaq Upon Consummation of its Pending Business Combination with Next.e.GO Mobile SE.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • STR: Prices Upsized $600 Million Offering of Senior Notes.
  • Common Stock filings/Notes:
    • CRKN: Filed Form 424B5.. Up to $9,795,000 common stock.
    • ESLT: Files a Shelf Prospectus in Israel.
      FFIE: Announces “At-the-Market” Equity Offering Program.
    • IMVT: Announces Proposed Offering of $300 Million of Common Stock.
    • LI: Announces termination of at-the-market offering of American Depositary Shares.
    • NEPT: Closes US$4.5 Million Public Offering.
    • SCLX: Files to withdraw Registration Statement on Form S-1.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • CEI: Filed Form S-3.. Mixed Security Shelf.
  • Debt/Credit Filing and Notes:
    • BGS: Closes $550.0 Million Private Offering of Senior Secured Notes.
    • SWKH: Announces Public Offering of Senior Unsecured Notes Due 2028.
    • RIG: Announces Pricing of $325 Million of Secured Notes Due 2028.
  • 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: MLKN +17%, HAYW +8% of note.
    • Trading Down: MORF -6% of note.
  • News Items After the Close:
    • US Judge overturns Eli Lilly’s (LLY) $176.5 million loss in Teva (TEVA) patent case. (Reuters)
    • Costco (COST) tops quarterly earnings expectations, even as sales remain soft. (CNBC)
    • Rocket Lab (RKLB) lowers guidance after launch fail. (MarketWatch)
    • Senate reaches agreement on stopgap spending plan avoiding government shutdown. House still needs to play ball. (NYTimes)
    • EU probe into Adobe (ADBE), Figma deal paused, regulators await data. (Reuters)
    • AssetMark (AMK) charged by SEC for failing to disclose financial conflicts; to pay over $18 million. (SECFiling)
    • Palantir Technologies (PLTR) awarded $250 million U.S. Army contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Index Changes:
      • Civitas Resources (CIVI) to join S&P MidCap 400.
      • Hayward Holdings (HAYW) to join S&P SmallCap 600.
    • Glatfelter (GLT) Announces Resignation of Director Lee C. Stewart.
    • Golden Sun Education Group Limited (GSUN) Receives Nasdaq Notification Letter Regarding Minimum Bid Price Deficiency.
    • Industrial Logistics Properties Trust (ILPT) appoints Tiffany Sy as CFO.
    • mCloud (MCLD) to Delist from Nasdaq.
    • Morphic Holdings (MORF) Announces CEO Dr. Praveen Tipirneni to Take Temporary Medical Leave of Absence.
    • Pacira BioSciences (PCRX) Chairman and CEO David Stack to retire.
    • Peloton (PTON) appoints Nick Caldwell as Chief Product Officer. (MarketWatch)
    • PPG Industries (PPG) elects CEO Tim Knavish as chair of the board and CEO.
    • SeaChange (SEAC) Appoints Chris Klimmer CEO.
    • Seven Hills Realty Trust (SEVN) appoints Fernando Diaz as CFO.
    • TrueCar (TRUE) appoints Oliver Foley as CFO. (MarketWatch)
    • Velo3D (VLD) announces that CFO William McCombe has resigned.
  • Buyback Announcements or News:
    • Ovintiv (OVV) approved to renew share repurchase plan; to buy back up to 10% of its public float during the 12-month period starting October 3.
    • Phoenix New Media (FENG) Announces up to US$2 Million Share Repurchase Program.
    • Banco Santander (SAN) announces buyback program implementation for an amount equivalent to c. 25% of the Group’s underlying profit in the first half of 2023. (see Dividends also)
  • Stock Splits or News:
    • Mueller Industries, Inc. (MLI) Announces Two-for-One Stock Split.
    • RBT trading reverse split price.
    • ShiftPixy, Inc. (PIXY) one-for-twenty-four (1:24) reverse split effective 10/02.
    • SciSparc (SPRC) Announces Expected Implementation of 1-for-26 Reverse Share Split.
    • XWELL, Inc. (XWEL) Announces 1-for-20 Reverse Stock Split.
  • Dividends Announcements or News:
    • Banco Santander (SAN) announces dividend approval.
    • Waterstone Financial (WSBF) decreases quarterly cash dividend to $0.15 per share from $0.20 per share.
  • Insider Sales Of Note: None of note.

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

S&P 500 +17, Dow Jones +109,  NASDAQ +62, and Russell 2000 +9.  (as of 7:58 a.m. EDT).  Asia is higher ex Australia while Europe is lower this morning ex France. VIX Futures are at 18.45 from 17.85 yesterday.  Gold, Silver and Copper are lower this morning for a third day in a row. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas higher as well. US 10-year Treasury sees yields at 4.503% from 4.507%  yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $26,555 from $26,190 yesterday, lower by -0.42%.

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

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

U.S. stocks fell sharply Tuesday, dragged down once again by investor concerns about rising bond yields and a strengthening U.S. dollar.  The S&P 500 dropped 1.5%, extending its poor run since last week’s Federal Reserve meeting, when officials raised their interest-rate forecasts for 2024. The tech-heavy Nasdaq Composite shed 1.6%, while the Dow Jones Industrial Average slid 388 points, or 1.1%.  Online retail giant Amazon (AMZN) counted among the worst performers, falling 4%, after the Federal Trade Commission filed a lawsuit alleging that the company wields illegal monopoly power. (WSJ – edited by QPI)

 

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

  • Wednesday After the Close: CNXC, FUL, JEF, MU, WOR
  • Thursday Before the Open: ACN, KMX, JBL

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: PAYX of note.

Guidance:

  • Positive Guidance: MLKN of note.
  • Negative Guidance: SNX, PRGS, RKLB of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ABAT +18%, MLKN +18%, HAYW +8% of note.
  • Gap Down: MORF -5%, PRGS -4% of note.

Insider Action: No stock sees Insider buying with dumb short selling.  No stock sees Insider buying with smart short sellers.

  • DYNR, SNV, TLYS

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) 
  • Stocks Making The Biggest Moves: SIRI LEVI COST LCID RIVN CHPT. (CNBC)
  • Bloomberg Lead Story: China Puts Evergrande’s Billionaire Founder Under Police Control. (Bloomberg)
  • Bloomberg Second Most Shared Story: CIA Builds Its Own AI Tool in Rivalry with China. (Bloomberg)
  • Spain’s Right Wing Leader fails to win Prime Minister position in first attempt. (CNBC)
  • UBS and Credit Suisse face growing probe over alleged Russian sanctions evasion. (Bloomberg)
  • Landmark financing bill for marijuana financing advances in Senate. (CNBC)
  • Mortgage demand shrinks as interest rate hits 23 year high. (CNBC)
  • NPR Morning Report Marketplace:  Housing market role play. (Podcast)
  • NY Times The Daily: Did Hollywood writers get their happy ending? (Podcast)
  • BBC Global News:  US Judge says Trump inflated property values repeatedly. (Podcast) 
  • Bloomberg:  Why insurers are pulling out of high risk areas. (Podcast)
  • Wealthion: Markets about to “go wild”. (Podcast)

Moving Average Update:

  • Score goes to 11% from 14%.  200 dma still in sight for SPX and Nasdaq, but only ~2% away to the downside.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 12:00 p.m. EDT
    • The President holds a meeting with the President’s Council of Advisors on Science and Technology , which develops recommendations on science, technology, and innovation policy, 2:30 p.m. EDT
    • The President participates in a campaign reception, 5:45 p.m. EDT
    • The President participates in a campaign reception, 8:15 p.m. EDT
    • The President departs San Francisco, California en route to Phoenix, Arizona, 9:35 p.m. EDT
    • The President arrives in Phoenix, Arizona, 10:20 p.m. EDT

Economic:

  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications: Composite: -1.3%, Purchase: -1.5%, ReFi: -0.9%
    • U.S MBA Mortgage Applications (WOW) Actual: -1.3% VS 5.4% Previous
  • August Durables Orders are due out at 8:30 a.m. EDT and are expected to improve to -0/2% from -5.2%.
  • EIA Petroleum Report 10:30 a.m. EDT
  • The Republicans hold their Second Presidential Debate on Wednesday night.

Federal Reserve / Treasury Speakers:  None of note.

M&A Activity and News: 

  • Jabil (JBL) Announces Definitive Agreement to Divest Mobility Business for $2.2 Billion.

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: