CAPIS Morning Note – 10/06/22: Stocks Lower For Second Morning In A Row, Another Recovery ahead?

Overnight Summary: The S&P 500 closed Wednesday at 3783.28 (lower by -0.20%) from Tuesday at 3790.93 (higher by 3.06%). The overnight high of 3819.50 was hit at 8:25 p.m. EDT. The low was hit at 3763.75 at 6:10 a.m. EDT, a range of 55 points high to low which is above the recent range of…

Overnight Summary: The S&P 500 closed Wednesday at 3783.28 (lower by -0.20%) from Tuesday at 3790.93 (higher by 3.06%). The overnight high of 3819.50 was hit at 8:25 p.m. EDT. The low was hit at 3763.75 at 6:10 a.m. EDT, a range of 55 points high to low which is above the recent range of 45.  At 7:15 a.m. EDT, the S&P 500 was down -21 points down -0.55% at 3773.

Earnings Out After The Close:

  • Beats: RGP +0.11.
  • 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: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • IMTE: Filed Form RW — Request for Withdrawal of Registration Statement on Form F-1.
    • PIXY: Filed Form S-3..1,270,834 Shares of Common Stock.
  • 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):
    • BGRY: Enters into Equity Purchase Agreement for up to $75 Million with Lincoln Park Capital.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes: None of note.
  • Convertible Offering & Notes Filed:
    • SMTC: proposes private offering of $250 million of convertible senior notes due 2027..

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: RELL +7% of note.
    • Trading Down: IGT -4% of note.
  • News Since The Close:
    • Federal Research Atlanta President Raphael Bostic Favors Raising Rates as High as 4.5% by Year-End. (Bloomberg)
    • TWTR Apollo, Sixth Street No Longer In Talks To Finance Twitter Deal, Sources Say. (Reuters)
    • Ford (F) raises price of F-150 electric truck as inflation bites. (Reuters)
    • UBER: Former Security Chief Is Convicted of Data Hack Coverup.
    • GE lays off 20% of its u.S. Onshore wind workforce.
  • Exchange/Listing/Company Reorg and Personnel News:
    • CVCY Names Interim Chief Financial Officer; Outgoing 32-Year CFO Remains With Company as Strategic Growth Advisor.
    • Nordstrom (JWN) CTO/CIO Edmond Mesrobian plans to step down.
    • Under Armour (UA) announces changes to executive leadership team.  President of the Americas Stephanie Pugliese to step down.
    • United Sec Bancshares (UBFO) appoints interim CFO.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: 
    • Northern Oil & Gas (NOG) intends to submit a request to the Board for a 20% increase to NOG’s quarterly dividend to $0.30 per share.
    • Richardson Electronics (RELL) Declares Quarterly Cash Dividend.

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

S&P 500 -21, Dow Jones -165, NASDAQ -54,  and Russell 2000 -11. (as of 8:05 a.m. EDT). Europe lower and Asia lower ex Japan.  VIX Futures are at 28.90 from 29.35 yesterday morning and the VIX closed at 29.07 from 30.10 yesterday. Gold, Silver and Copper higher. WTI Crude Oil and Brent Oil Futures lower with Natural Gas higher. $ is higher vs Euro, higher vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.78% from 3.681% yesterday morning. Bitcoin is at $21,138 from $20,094 yesterday morning and is lower by -0.24% this morning.

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

  • Daily Positive Sectors: Energy, Technology of note.
  • Daily Negative Sectors: Real Estate, Utilities, Basic Materials, Financials, Consumer Defensive 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.

Got to admit, it did not feel too bad today and certainly could have been worse.  I will take a 20bp slide in the SPX after the robust two day move.  USO up 2.36%.  TLT down $1 to $102.55.

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)

  • Thursday After the Close: LEVI, ACCD of note.
  • Friday Before the Open: TLRY of note.

Earnings of Note This Morning:

  • Beats: STZ +0.36, CAG +0.05.
  • Flat: None of note.
  • Misses: ANGO (0.04), MCK (0.04)
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: PERI of note.
  • Negative Guidance: ITGR, RGP of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: RELL +8%, HROW +5%.
  • Gap Down: SHEL -5%, SPLK -4%.

Insider Action:  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: PTON CAG MKC COMP SHEL PINS (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story:  Oil prices stoke inflation fears. (Bloomberg)
  • Bloomberg Most Read Story: Former President Trump notes U.S. Agency packed top secret documents, evidence says wrong. (Bloomberg)
  • British Trains to strike on Saturday. (BBC)
  • Sweden claims that “gross sabotage” was used on Nord Stream pipelines. (CNBC)
  • Credit Suisse (CS) looking for outside investor into its advisory and investment banking unit. (Bloomberg)
  • The U.S. may ease sanctions on Venezuela to let Chevron produce more oil. (WSJ)
  • Treasury Secretary Yellen calls for an overhaul of The World Bank. (Bloomberg)
  • The state of Louisiana will take back $794 million from Blackrock (BLK) over their ESG stance. (Reuters)
  • Twitter (TWTR) and Elon Musk are still negotiating terms over Twitter lawsuit on Musk. (WSJ)
  • General Electric (GE) to eliminate hundreds of jobs in wind unit. (Bloomberg)
  • Peleton (PTON) to layoff 12% of workforce or 500 workers. (Bloomberg)
  • Toyota (TM) aims to restart production on its first EV. (Reuters)
  • Microsoft (MSFT) may invest in Zupee. (Tech Crunch)

Moving Average Update:

  • Score slips a notch from 45% to 42%…..digesting.

Geopolitical: 

  • President’s Public Schedule:
    • The President departs the White House en route Joint Base Andrews, 10:00 a.m. EDT
    • The President departs Joint Base Andrews en route Poughkeepsie, New York, 10:20 a.m. EDT
    • The President arrives in Poughkeepsie, New York, 11:40 AM
    • The President tours IBM, 1:20 p.m. EDT
    • The President delivers remarks on creating jobs in the Hudson Valley, lowering costs, and ensuring the future is made in America, 2:00 p.m. EDT
    • The President departs Poughkeepsie, New York en route Red Bank, New Jersey, 3:05 p.m. EDT
    • The President arrives in Red Bank, New Jersey, 3:55 p.m. EDT
    • The President participates in a reception for the Democratic National Committee, 5:00 p.m. EDT
    • The President departs Red Bank, New Jersey en route New York, New York, 6:15 p.m. EDT
    • The President arrives in New York, New York, 6:40 p.m. EDT
    • The President participates in in a reception for the Democratic Senatorial Campaign Committee, 8:00 p.m. EDT
    • The President departs the Wall Street Landing Zone, 9:10 p.m. EDT
    • The President departs New York, New York en route Joint Base Andrews, 9:30 p.m. EDT
    • The President departs Joint Base Andrews en route the White House, 10:40 p.m. EDT
    • The President arrives at the White House, 10:50 p.m. EDT

Economic: 

  • Challenger Job Cuts 7:30 a.m. EDT
    • US Challenger Job Cuts (Y/Y) Sep: 67.6% (prev 30.3%)
    • September Job Cuts Announced by U.S. Employers 29,989, Up 68% Vs Year-Ago September Job Cuts Announced by U.S. Employers Up 46% Vs August Challenger Gray: Some Cracks Beginning to Appear in U.S. Labor Market U.S. Hiring Slowing, Downsizing Events Beginning to Occur.
  • The European Central Bank is out with its latest announcement at 7:45 a.m. EDT. 
  • Initial Jobless Claims 8:30 a.m. EDT
  • EIA Natural Gas Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Chicago President Charles Evans 1:00 p.m. EDT
  • Federal Research Board of Governors Christopher Waller 5:00 p.m. EDT
  • Federal Reserve Cleveland President Loretta Mester 6:30 p.m. EDT

M&A Activity:

  • None of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • BMO Capital Markets BioPharma Spotlight Series: Gene Editing & Therapy 2022
    • Cantor Fitzgerald Neurology & Psychiatry Conference (10/06/22-10/07/22)
    • Credit Suisse Brazil Utilities Conference
    • Goldman Sachs Private Real Estate Conference
    • JMP Securities Internet Forum
    • Roth Inaugural Healthcare Opportunities Conference
      • Previously posted and ongoing conferences:
        • BMO Capital Markets Canadian High Yield Conference (10/05/22-10/06/22)
        • Credit Suisse Sustainability Week
  • Company Meetings: ALTU, DEO, POET.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: GOOGL, GWRE, NCLH, NUVA, SDGR, SPRO
  • Update: SHEL.
  • R&D Day:
    • Aldeyra Therapeutics (ALDX) Conference Call on Top-Line Results from Part 1 of the Phase 3 GUARD Trial of ADX-2191.
  • Company Event:
    • Ayala Pharmaceuticals (AYLA) to Host Key Opinion Leader Webinar on Desmoid Tumors 2022.
    • Box (BOX) Virtual Investor Product Briefing 2022
    • OpenText (OTEX) World 2022 (10/04/22-10/06/22)
  • Industry Meetings:
    • ALS One 5th Annual ALS Research Symposium 2022 (10/06/22-10/07/22)
    • Aviation week network’s Aerospace IT 2022 (10/06/22-10/07/22)
      • Previously posted and ongoing conferences:
        • Edge Computing Expo North America 2022 (10/05/22-10/06/22)
        • International Symposium on Microelectronics IMAPS 2022. (10/03/22-10/06/22)

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: