CAPIS Morning Note – 10/04/22: Stock Rally Continues as S&P 500 Clears 3700, Dollar At a Peak?

Overnight Summary: The S&P 500 closed Monday at 3678.43 (higher by 2.50%) from Friday at 3585.62 (lower by -1.51%). The overnight high of 3761.50 was hit at 6:35 a.m. EDT. The low was hit at 3686.25 at 6:35 p.m. EDT, a range of 75.25 points high to low which is above the recent range of…

Overnight Summary: The S&P 500 closed Monday at 3678.43 (higher by 2.50%) from Friday at 3585.62 (lower by -1.51%). The overnight high of 3761.50 was hit at 6:35 a.m. EDT. The low was hit at 3686.25 at 6:35 p.m. EDT, a range of 75.25 points high to low which is above the recent range of 45.  At 7:15 a.m. EDT, the S&P 500 was up +57 points up 1.54% at 3748.

Earnings Out After The Close:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

Chart Review: Is the U.S. Dollar Rolling Over? Below is a chart of the U.S. Dollar Bullish ETF (UUP). A break of $30 is needed and then $29 to see a trend change.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • RCKT: 6.8 million shares offering priced at $14.75 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ADC: Exercise of Underwriters’ Option and Closing of Forward Offering of Common Stock.
    • CLXT: Filed Form 424B5.. Up to 15,661,000 Shares of Common Stock.
    • RCKT: Announces Proposed Public Offering of Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • OPGN: Closing of $3.38 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • LILM: Files for 193,560,280 share common stock offering by selling shareholders; also files for 51,663,116 share common stock offering.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • SALM: Filed Form S-4.. $40,000,000 Mixed Shelf — 1 Million shares.
    • TYRA: Filed Form S-3.. $400,000,000 Mixed Shelf.
  • Debt Filing/Notes:
    • Matador Resources Company (MTDR) Announces Upgrades to Corporate Credit Rating and $105 Million in Additional Bond Repurchases.
  • Convertible Offering & Notes Filed:
    • IVC: Announces Additional Draw of Term Loans and Exchange of Existing Convertible Notes.

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: BLKB +6%, RIVN +6%, GSM +4%.
    • Trading Down: AXTI -7%, MRVI -7%, RCKT -5%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: RIVN, DT, KZR, RCKT (CNBC)
    • North Korea fired a ballistic missile over Japan yesterday. (CNBC)
    • Rivian (RIVN) says on pace to meet 2022 goals after production grew 67% in the third quarter. (CNBC)
    • Poshmark (POSH) to be bought by South Korean internet company Naver in $1.2 billion deal. (MarketWatch)
    • A second Twitter (TWTR) whistleblower could appear at Elon Musk trial. (NY POST)
    • Lockheed Martin (LMT) and others are awarded a ceiling of $5.1 bln modifications to a previously awarded US Navy contract.
    • General Dynamics (GD) awarded a $533 million US Navy modification to previously awarded contract for Virginia-class submarines.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Akanda Corp. (AKAN) Receives Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • CACI Intl (CACI) announces that Thomas Mutryn will retire as CFO.
    • Carriage Services (CSV) announces departure of CFO.
    • Cars.com (CARS) reappoints Sonia Jain as CFO.
    • Essex Property (ESS) announces planned retirement of its President and CEO.
    • Kura Sushi (KRUS) names Jeff Uttz as its new CFO.
    • Maravai Life Sciences (MRVI) appoints William “Trey” Martin as CEO.
    • RIOT: Effective as of September 26, 2022, Mr. Jeffrey G. McGonegal stepped down from his long-time position as the CFO.
    • Utz Brands (UTZ) Announces CEO Succession Plan.
  • Buyback Announcements or News:
    • Bogota Financial Corp. (BSBK) Adopts and Receives Regulatory Approval of Third Repurchase Program.
    • Centerra Gold (CGAU) intends to proceed with normal course issuer bid to purchase for cancellation up to 15,610,813 common shares, representing ~7.1% of issued/outstanding shares, or 10% of the public float.
    • First Financial Northwest (FFNW) authorizes the repurchase of up to 5% of its outstanding common shares.
    • Urstadt Biddle Prop (UBA) authorizes share repurchase program of up to 2.0 million shares of common stock.
  • Stock Splits or News:
    • Cocrystal Pharma (COCP) Announces a 1-for-12 Reverse Stock Split.
    • EJH trading r/s price.
    • Quanergy Systems Inc (QNGY) – Board of Directors has approved a reverse stock split of its outstanding shares of common stock at a ratio of 1-for-20.
  • Dividends Announcements or News: 
    • Bank OZK (OZK) increases quarterly dividend to $0.33 per share from $0.32.

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

S&P 500 +61, Dow Jones +409, NASDAQ +234,  and Russell 2000 +33. (as of 8:08 a.m. EDT). Europe higher and Asia lower ex Japan.  VIX Futures are at 28.25 from 31 yesterday morning and the VIX closed at 30.10 from 31.62 yesterday. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures higher with Natural Gas lower. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.595% from  3.736% Monday morning. Bitcoin is at $19,954 from $19,190 yesterday morning and is higher by 2.18% this morning.

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

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

BAM!  We got some live action today (shoutout Turtle Man!).  Indexes up across the board in a reflective bounce from all the negative daily prints.  Treasury yields dropped.  TLT was up 1.59% to close at 103.83….still holding that 100 mark.  SLV was up 9.14%.

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)

  • Tuesday After the Close: None of note.
  • Wednesday Before the Open: LW, RPM, XRAY, HELE of note.

Earnings of Note This Morning:

  • Beats: AYI +0.34.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: None of note.
  • Negative Guidance: AXTI of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: POSH +11%, RIVN +9%, GSM +6%, BLKB +6%, KZR +5%, WES +4%, AMRX +4%.
  • Gap Down: MRVI -7%, RCKT -4%.

Insider Action: No stock sees Insider buying with dumb short selling.  BCOV 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: RIVN POSH CS DPZ GILD RCKT TSLA (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Bulls Storm Into Stocks and Bonds Amid Peak Rate Bets. (Bloomberg)
  • Bloomberg Most Read Story: Elon Musk sets off uproar in Ukraine  over pro-Russian Tweets. (Bloomberg)
  • UK Chancellor Kwasi Kwarteng will release a plan to cut UK debt by end of October. (FT)
  • Germany may need to cut exports to France to keep power grid running. (FT)
  • Foxconn is”cautiously positive” on the fourth quarter. (CNBC)
  • Meta (META) to scale back NYC hiring and freeze overall hiring. (Bloomberg)
  • Boeing (BA) does not expect 737 Max approval until mid 2023. (Reuters)
  • Creditors of Bed Bath & Beyond (BBBY) are organizing for a potential bankruptcy. (WSJ)
  • Spotify (SPOT) to release a podcast by Kim Kardashian. (TechCrunch)

Moving Average Update:

  • Green shoots – Day 1.  Score jumps to 25%.

Geopolitical: 

  • President’s Public Schedule:
    • The President and The Vice President receive the President’s Daily Briefing, 10:15 a.m. EDT
    • The President has lunch with The Vice President, 12:00 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President and The Vice President attend the second meeting of the Task Force on Reproductive Healthcare Access and deliver remarks; The Secretary of Health and Human Services, the Secretary of Education, the Secretary of Veterans Affairs, the Director of the Office of Management and Budget, and the Director of the Office of Science and Technology Policy attend, 3:30 p.m. EDT

Economic: 

  • Redbook Sales 8:55 a.m. EDT
  • August Factory Orders are due out at 10:00 a.m. EDT and are expected to come in at 0.4% from -0.1%.
  • JOLTS 10:00 a.m. EDT
  • API  Crude Oil Data 4:30 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Bank of Dallas Lorie Logan 9:00 a.m. EDT
  • Federal Reserve New York President John Williams 9:00 a.m. EDT
  • Federal Reserve Cleveland President Loretta Mester 9:15 a.m. EDT
  • Federal Research Board of Governors Philip N. Jefferson 11:45 a.m. EDT
  • Federal Reserve San Francisco President Mary Daly 1:00 p.m. EDT

M&A Activity:

  • AeroClean Technologies (AERC) and Molekule (MUKL) to Combine in an All-Stock Merger Establishing an Industry-Leading Provider of Premium, FDA-Cleared Air Purification Products and Solutions.
  • Brink’s (BCO) Acquires NoteMachine for Approximately $179 Million to Accelerate ATM Managed Services Strategy.
  • Global Blue (GB) announces the acquisition of a majority stake in Shipup.
  • Naver to Acquire Poshmark (POSH). Poshmark stockholders to receive $17.90 per share in cash.
  • Velodyne Lidar (VLDR) Acquires AI Software Company Bluecity.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Alliance Global Partners Virtual Fall Consumer Cannabis Conference 2022
    • Mizuho Healthcare REIT Conference 2022
    • Morgan Stanley Telecoms CTO Symposium
    • Raymond James Sustainability Conference
      • Previously posted and ongoing conferences:
        • Credit Suisse Sustainability Week
        • Chardan Genetic Medicines Conference (10/03/22-10/04/22)
        • RBC Capital Markets CDMO Healthcare Conference (10/03/22-10/04/22) 
  • Company Meetings: MBTC
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AEP, BXC, CMBM, CNTB, EAR, HAS, INBX, SNPS, TTD
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Duke Energy (DUKE) Transition Update 2022.
    • OpenText (OTEX) World 2022 (10/04/22-10/06/22)
  • Industry Meetings:
    • MetaBeat 2022
      • Previously posted and ongoing conferences:
        • The Federal Reserve Banks of Atlanta, Dallas, and Richmond Technology-Enabled Disruption Conference.
        • International Symposium on Microelectronics IMAPS 2022. (10/03/22-10/06/22)
        • National Association of Convenience Stores Trade Show and Petroleum Equipment Institute Convention 2022 (10/01/22-10/04/22)

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: