Overnight Summary: The S&P 500 closed Friday lower by -0.27% at 4288.05 from Thursday higher by 0.59% at 4299.70. The overnight high was hit at 4355.50 at 3:30 a.m. EDT while the low was hit at 4323.75 at 6:50 a.m. EDT. The range overnight was 32 points. The 10-day average of the overnight range is at 26.80 from 24.50 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 +0.50 points which is +0.01% at  7:10 a.m. EDT.

Earnings Out After The Close: 

• IPOs Priced or News:
  • Birkenstock Sees IPO Priced At $44.00 And $49.00 Per Ordinary Share. (SEC Filing)
  • Lexeo Therapeutics files for IPO. (MarketWatch)
• New SPACs launched/News:
  • Digital World Acquisition Corp. (DWAC) and Trump Media & Technology Group Corp. Reaffirm Commitment to Merger.
  • Vision Sensing Acquisition Corp. (VSAC) Announces Intention to Extend Period to Consummate Initial Business Combination to November 3, 2023.
• Secondaries Priced:
  • VTGN: $100 million offering prices at $5.38 per share with multiple sets of warrants.
• Notes Priced of note: None of note.
• Common Stock filings/Notes:
  • CZOO: Filed Form F-1.. Warrants and Stocks.
  • IGC: Filed Form S-3.. 10,000,000 Shares of Common Stock.
  • MYNA: Filed Form F-3.. 20,000,000 American Depositary Shares Representing 5,000,000 Ordinary Shares Rights to Subscribe for 20,000,000 American Depositary Shares.
  • ROIV: Filed Form S-3.. Up to $1,500,000,000.
  • TCBP: Filed Form F-3.. UP TO 12,942,813 American Depositary Shares Representing 12,942,813 Ordinary Shares.
  • TRDA: Filed Form 8-K.. entered into a sales agreement up to $150.0 million.
  • VLCN: Filed Form S-1.. Share offering.
• Direct Offering: None of note.
• Selling Shareholders of note:
  • CCG: Filed Form F-1.. Up To 13,663,325 Class A Ordinary Shares Issuable Upon The Exercise Of Warrants Up To 59,328,073 Class A Ordinary Shares And 2,860,561 Warrants To Purchase Class A Ordinary Shares Offered By Selling Securityholders.
  • NYAX: Filed Form F-3.. $70,000,000 of Ordinary Shares, Warrants, Rights, Debt Securities and/or Units Offered by the Company and Up to 1,294,219 Ordinary Shares Offered by Selling Shareholders.
  • RIG: Filed Form S-3ASR.. 9,891,980 share common stock offering by selling shareholder.
  • WULF: Files for 44,688,114 share common stock offering by selling shareholders.
• Private Placement of Public Entity (PIPE): None of note.
• Mixed Shelf Offerings: None of note.
• Debt/Credit Filing and Notes:
  • BXP: Exercises $315.0 Million Accordion Feature Increasing Its Revolving Credit Facility Capacity to More Than $1.8 Billion.
  • MFIN: Announces Completion of Private Placement of $39.0 Million of Senior Notes.
  • VLRS: Successfully completes Ps. $1.5 billion Asset-Backed Trust Notes Offering.
• Tender Offer:
  • D: Recommends Shareholders Reject ‘Mini-Tender’ Offer By TRC Capital Investment Corporation.
• Convertible Offering & Notes Filed:
  • FSR: Announces Successful Closing of $170 Million Additional Convertible Notes Offering; Now Able to Offer Up to $623.3 Million Additional 0% Convertible Notes For Up to $550 Million in Gross Proceeds As a Result of Purchase Agreement Amendment.
  • HLX: Announces Its 6.75% Convertible Senior Notes Due 2026 Will Become Convertible.
  • TRIN: Announces Adjustment to Conversion Rate of its 6.00% Convertible Notes due 2025.

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: ICPT 77.1%, CHS 69.6%, BHVN 52.5%, GRTS 37.6%, GRPN 32.2%, RYAM 27.5%, TAL 25.4%, CDXS 19.2%, JBL 18.1%, KPTI 17.0%, UPLD 15.7%, FTCH 15.7%, GTHX 15.5%, GH 14.7%, KOS 14.7%, MTRX 14.6%, AAOI 14.4%.
  • Trading Down: NEP -39.6%, UNFI -25.3%, GUT -18.7%, ATRA -17.9%, EBIX -16.9%, CHRS -15.9%, NEE -15.5%, BEP -14.9%, TPIC -14.4%, AQN -14.3%, ALLO -14.0%, CORT -13.7%, APLS -13.1%, LPSN -12.6%, RVNC -12.4%, HMY -12.2%.

• News Items After the Close:
  • JetBlue (JBLU) raises flight attendant pay, union agrees to support merger with Spirit. (CNBC)
  • Rivian Automotive (RIVN) discloses it has agreed to build an EV manufacturing plant in Georgia.
  • Robinhood Markets (HOOD) expects to accrue $100 mln expense related to these previously disclosed legal and regulatory matters.
  • Biogen (BIIB) gets FDA approval for biotech treatment similar to Roche’s Actemra. (MarketWatch)
  • BAE Systems (BAESY): GBP 3.95 billlion awarded for next phase of AUKUS submarine program.
  • Lockheed Martin’s (LMT) (MarketWatch)
    • Awarded a $1.2 billion modification to previously awarded US Navy contract for Trident II missile production.
    • Awarded a $746 million US Navy contract relating to Switzerland’s F-35 Joint Strike Fighter program.
    • Sikorsky Aircraft unit awarded a $650 million US Air Force contract for the HH-60W Combat Rescue Helicopter.
  • Northrop Grumman (NOC) awarded a $150 million modification to US Navy contract.
• News Items Over the Weekend:
  • The Score – Stocks That Defined the Week: F, AMZN, TGT, PTON, GME  (WSJ)
  • America’s Debt Problem Is Too Big for the Bond Vigilantes. (WSJ)
  • U.S. stock-market seasonality suggests a potential rally in the fourth quarter. Why this time might be different. (MarketWatch)
  • The Senate has passed a short-term bill to keep the government funded into November.
  • The fact that the US avoided a shutdown “makes it more likely that Fed officials proceed with a 25bp hike at the Nov 1st meeting, which remains our base case. We had been of the view that the consensus was overstating the likelihood of a prolonged shutdown:” (Citi’s Hollenhorst)
  • JPM Desk “.. Tactically, we resume our bullish stance on Equities given (i) limited upsides for oil to sustain above $100; (ii) sharp move higher in yields could be overdone by technical factors; (iii) an improvement in economic data and earnings may provide support for stocks; and (v) positive shift in HF flow and persistent shorts addition may suggest the risk of a reversal.” (Carl Q)
  • The week starts with the three price moves that neither the US economy (particularly, growth and financial stability) nor the markets enjoy: Higher yields; Higher oil prices; and a Stronger dollar. (EL-ERIAN)
  • Barron’s:
    • Positive View: OXY, MYRG, FLR, MTZ, ACM, META of note.
    • Cautious View: F, GM, TSLA of note.
    • Mixed View: None of note.
• Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week: None of note.

• Exchange/Listing/Company Reorg and Personnel News:
  • Cano Health (CANO) Announces Change in Chief Financial Officer Role.
  • Guess? (GES) co-founder Maurice Marciano is retiring from Board of Directors effective immediately.
  • Origin Materials (ORGN) appoints Matt Plavan as CFO.
  • Smile Direct Club (SDC) has filed for bankruptcy. (MarketWatch)
  • Urban One, Inc. (UONE) Receives NASDAQ Staff Determination of Non-Compliance with Listing Rule 5250(c)(1).
  • V2X (VVX) announced Shawn Mural has been appointed as its Senior Vice President and Chief Financial Officer.
  • ZoomInfo (ZI) COO will transition into the role of EVP, International Expansion.
• Buyback Announcements or News:
  • Banco Bilbao Vizcaya Argentaria (BBVA) announces EUR 1.0 billion share buyback.
• Stock Splits or News:
  • Trading Reverse Split: NCTY, EBET
  • a.k.a. Brands Holding Corp. (AKA) Announces Effectiveness of Previously Announced Reverse Stock Split.
  • ARMOUR Residential REIT, Inc. (ARR) Announces Effectiveness of One-For-Five Reverse Stock Split.
  • Borqs Technologies (BRQS) Announces Reverse Stock Split.
  • Skillsoft (SKIL) Completes Reverse Stock Split.
• Dividends Announcements or News:
  • Global Net Lease (GNL) declares dividend of $0.354 per share.
• Insider Sales Of Note: None of note.

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

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

• Daily Positive Sectors: Consumer Cyclical, Technology of note.
• Daily Negative Sectors: Energy, Financial, Industrials, Communication Services, Healthcare of note.
• One Month Winners: Energy Financial of note.
• Three Month Winners: Energy, Communication Services, Financial of note.
• Six Month Winners: Communication Services, Energy, and Technology 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.

Stocks closed mostly lower on Friday, with the S&P 500 cementing its biggest drop in a month since December, as a surge in bond yields knocked the wind out of this year’s rally in equities. The Dow Jones Industrial Average fell about 157 points, or 0.5%, ending near 33,508. The S&P 500 index shed 0.3% and the Nasdaq Composite index gained 0.1%. September was the worst month for the Dow since February, with its -3.5% loss, while the S&P 500 shed -4.9% and the Nasdaq lost -5.8%, marking their worst months since December 2022. Yearly core inflation edged higher in August, according to Friday’s release of the latest PCE price index. (WSJ – edited by QPI)

 

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

• Gap Up: GNL +4% of note.
• Gap Down: None of note.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

• 5 Things You Need to Know to Start Your Day. (Bloomberg) 
• 5 Things to Know Before the Stock Market Opens. (CNBC)
• Bloomberg Lead Story:  Why A U.S. Recession is Still Likely and Coming Soon. (Bloomberg)
• Bloomberg Second Most Shared Story: Severe Crash is Coming For US Office Properties, Investors Say. (Bloomberg)
• Chinese demand for oil and copper is booming says Goldman Sachs. (CNBC)
• Birkenstock attracts Norwegian Wealth Fund to $1.6 billion IPO. (Bloomberg)
• Bond yields rise as traders look ahead to Powell: Market Wrap. (Bloomberg)
• McCarthy shutdown turnabout came with phone flurry, blame game. (Bloomberg)
• Rep Matt Gaetz (R-FL) says he will seek to unseat House Speaker McCarthy this week. (CNN)
• California Governor Newsom names Laphonza Butler to fill Senator Dianne Feinstein (D-CA) even though she lives in Maryland. (CNBC)
• NPR Morning Report Marketplace: Plunging U.S. crop exports explained.  (Podcast)
• NY Times The Daily: Amazon’s most beloved feature may turn out to be illegal. (Podcast)
• BBC Global News: US Republicans face a mutiny in Congress. (Podcast) 
• Bloomberg:  Seema Shah warns a US recession is still coming. (Podcast)
• Wealthion:  A market bounce then look out below? (Podcast)

Moving Average Update:

• Score remains at 22%.

Geopolitical: 

M&A Activity and News: 

• COHU acquires Equiptest Engineering for $20 million.

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: