CAPIS Morning Note – 10/07/22: Jobs Friday Data Due out At 8:30 a.m. EDT. Stocks Flat Into Data.

Overnight Summary: The S&P 500 closed Thursday at 3744.52 (lower by -1.02%) from Wednesday at 3783.28 (lower by -0.20%). The overnight high of 3762 was hit at 10:50 p.m. EDT. The low was hit at 3732 at 2:30 a.m. EDT, a range of 30 points high to low which is below the recent range of…

Overnight Summary: The S&P 500 closed Thursday at 3744.52 (lower by -1.02%) from Wednesday at 3783.28 (lower by -0.20%). The overnight high of 3762 was hit at 10:50 p.m. EDT. The low was hit at 3732 at 2:30 a.m. EDT, a range of 30 points high to low which is below the recent range of 45.  At 7:45 a.m. EDT, the S&P 500 was down -1 point effectively flat.

Earnings Out After The Close: FactSet cut earnings estimate growth rate for Q3 from 9.8% on June 30 to 2.3%. Did analysts make it easy to beat estimates? Soon we will know.

  • Beats: AEHR +.04 LEVI +0.03.
  • Flat: None of note.
  • Misses: ACCD -0.16.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • AMLX prices 6.6 million shares of common stock at $32
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • None of note.
  • 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):
    • None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes: None of note.
  • Tender Offer: CS for a variety of debt offerings.
  • 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:

  • After Hours: 
    • Trading Up: AEHR +12%, DKNG +9%, ATCO +7%, PAYO +7%, MSGS +7% of note.
    • Trading Down: LEVI -6%, LNTH -6%,  AMD -4%,  of note. Most tech stocks are trading off -1% to -3%.
  • News Since The Close:
    • Advanced Micro Devices (AMD) warns Q3 revenues and gross margin guidance due to lower PC demand and inventory correction in PC supply chain.
    • Levi Strauss (LEVI) lowers FY 22 EPS and revenue guidance.
    • Senator Ben Sasse (R – NE) to resign before year-end. (NBC News)
    • Peloton (PTON) CEO Barry McCarthy clarifies earlier statement, “I joined Peloton for the comeback, not to sell the business.”
    • CVS Health (CVS) sees a drop in Star Ratings for 2023 that will impact 2024 revenues. No impact on 2023. Stock down -4%.
    • Draft Kings (DKNG) trades up on report the company is close to signing a deal with Walt Disney (DIS) for exclusive partnership with ESPN.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Open Lending (LPRO) CEO John Flynn to retire but continue as Chairman. Keith Jezek named as CEO.
    • Healthpeak (PEAK) CEO Tom Herzog to step down as CEO. Board named Scott Brinker as the next CEO, was President and CIO.
    • PAYO to join S&P 600, LNTH moves to S&P 400 from S&P 600.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: 
    • MSGS declares a $7 special dividend.

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

S&P 500 -1, Dow Jones +50, NASDAQ -40 and Russell 2000 +2.09. (as of 8:00 a.m. EDT). Europe higher ex Germany and Asia lower.  VIX Futures are at 29.77 from 28.90 yesterday morning and the VIX closed at 30.42 from 29.07 yesterday. Gold lower, Silver higher and Copper lower. WTI Crude Oil and Brent Oil Futures higher with Natural Gas lower. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10-year Treasury sees yields at 3.845% from 3.78% yesterday morning. Bitcoin is at $19,999 from $21,138 yesterday morning and is lower by -0.26% this morning.

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

  • Daily Positive Sectors: Energy of note.
  • Daily Negative Sectors: Real Estate, Utilities, Financials and Consumer Defensive of note.
  • One Month Winners:  Energy of note.
  • Three Month Winners:  Energy and Industrials of note.
  • Six Month Winners: Energy of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Energy of note.

Stocks struggled yesterday. The S&P 500 dropped more than -1% yesterday as did the Dow.

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: TLRY -0.06
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: STZ of note.
  • Negative Guidance: LEVI of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: AEHR +14%, DKNG +8%, ATCO +7%, ALLO +7%, CS +7%, PAYO +7%, LAND +5%, EXTN +5%, TECK +4%, MSGS +4% .
  • Gap Down: AMD -6%, LNTH -5%, CVS -5%, LEVI -5%, KTB -4%, LOGI -4%, NVDA -4%, TSM -3%, INTC -3%.

Insider Action:  sees Insider buying with dumb short selling.  No stock sees Insider buying with smart short sellers.  No new names today this is yesterday’s names.

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: AMD LEVI DKNG  (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story:  President Biden says nuclear threat is real. (Bloomberg)
  • Bloomberg Most Read Story:  President Biden says nuclear threat is real. (Bloomberg)
  • Friday’s Jobs preview. (CNBC)
  • President Biden said at a fundraising event that the risk of nuclear “armageddon” is at the highest level since the Cuban Missile Crisis. (PBS)
  • $570 million stolen in Crypto attack from Binance BNB token. (CNBC)
  • Walmart (WMT) to eliminate 1500 jobs in Atlanta. (Reuters)
  • Merck (MRK) Covid-19 pill did not lower hospitalization rates. (FT)

Moving Average Update:

  • Score slips a notch from 42% to 40% as the Mid Cap Index fell below its 20 day moving average.

Geopolitical: 

  • President’s Public Schedule:
    • The President will visit Hagerstown, Maryland, and arrives at 12:05 p.m. Will visit a Volvo Group Powertrain Plant.
    • Then heads to Wilmington, DE for the weekend.

Economic: 

  • September Nonfarm Payrolls is due out at 8:30 a.m. EDT and expected to come in at 250,000 from 315,000. The Unemployment Rate is expected to stay at 3.7%.
  • August Consumer Credit is due out at 3:00 p.m. EDT and came in July at $23.3 billion.

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • None of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Cantor Fitzgerald Neurology & Psychiatry Conference (10/06/22-10/07/22)
      • Previously posted and ongoing conferences:
        • Credit Suisse Sustainability Week
  • Company Meetings: ED, RPM and XMTR
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: RPM
  • Update: None of note
  • R&D Day:
    • None of note.
  • Company Event:
    • None of note
  • 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:
        • None 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 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: