CAPIS Morning Note – 10/12/22: Stocks Are Higher Overnight Into Morning Ahead Of PPI at 8:30 a.m. EDT. FOMC Minutes At 2:00 P.M. EDT.

Overnight Summary: The S&P 500 closed Tuesday at 3588.84 (lower by -0.65%) from Monday at 3612.39 (lower by -0.75%).  The overnight high of 3635.25 was hit at 2:50 a.m. EDT. The low was hit at 3596.25 at 8:15 p.m. EDT, a range of 39 points high to low which is below the recent range of…

Overnight Summary: The S&P 500 closed Tuesday at 3588.84 (lower by -0.65%) from Monday at 3612.39 (lower by -0.75%).  The overnight high of 3635.25 was hit at 2:50 a.m. EDT. The low was hit at 3596.25 at 8:15 p.m. EDT, a range of 39 points high to low which is below the recent range of 45.  At 7:15 a.m. EDT, the S&P 500 was up +22.75 points which is 0.63%.  

Earnings Out After The Close: 

  • Beats: None of note.
  • 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:
    • NOG: Prices Upsized $435 Million Convertible Senior Notes Offering.
  • Common Stock filings/Notes:
    • CCJ: US$650 million bought deal offering of common shares.
    • DICE: Proposed Public Offering of Common Stock. $250 Million. BAC, SVB, Evercore and Guggenheim bookmanagers.
    • NVIV: Closing of $9 Million Registered Direct and Private Placement Offerings, Priced At-the-Market Under Nasdaq Rules.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • RCUS: Filed Form S-3ASR.. 11,613,029 Shares Common Stock Offered by the Selling Stockholder.
  • Private Placement of Public Entity (PIPE):
    • ESTE: has purchased 3.0 million shares of common stock from certain affiliates of Warburg Pincus, LLC.
  • Mixed Shelf Offerings:
    • CTO: Filed Form S-3.. $500 Million Mixed Security Shelf.
    • EGRX: Filed Form S-3.. $200,000,000 Mixed Shelf.
    • NCMI: Filed Form S-3.. $100 Million Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • ABR: Closes Offering of $150 Million of 8.50% 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: LOCO +14%, AMRN +6%, UVE +5%, GATO +4%.
    • Trading Down: CCJ -11%.
  • News Since The Close:
    • Intel (INTC) reportedly plans to lay off thousands of workers, with details potentially emerging alongside quarterly earnings. (MarketWatch)
    • U.S. Treasury Secretary Yellen: I Think The United States Is Doing Very Well. (CNBC)
    • Elbit Systems of America (ESLT) Awarded $107 Million Order to Supply Night Vision Systems for the U.S. Army.
    • Granite Constr (GVA) awarded an approximately $11 million construction contract by the California Department of Transportation.
    • Monthly Assets Under Management Reports:
      • BEN $1.29 billion VS. $1.38 billion.
      • IVZ $1.32 billion – down 6.5% from August.
      • AB $613 billion – down 8% from August.
      • APAM $120.6 billion.
      • VRTS $145 billion.
  • Exchange/Listing/Company Reorg and Personnel News:
    • BigBear.ai (BBAI) Names Former IBM Executive Mandy Long as Chief Executive Officer.
    • Drive Shack Inc. (DS) Receives Continued Listing Standard Notice From NYSE.
    • LIZHI INC. (LIZI) Announces Receipt of Minimum Bid Price Notice from Nasdaq.
    • Ryman Hospitality Properties, Inc. (RHP) Announces Leadership Transition.
    • TopBuild (BLD) appointed Joseph Viselli to COO role.
    • Tripadvisor (TRIP) Announces Chief Financial Officer Succession.
    • Vaxcyte (PCVX) Expands Executive Leadership Team with Jakub Simon M.D., M.S. as Chief Medical Officer.
  • Buyback Announcements or News:
    • Earthstone (ESTE) Announces Share Repurchase.
    • El Pollo Loco (LOCO) Board Of Directors Approves 20 Million Share Repurchase Program. (see Dividends) (MarketWatch)
  • Stock Splits or News:
    • UXIN announces one-for-ten ADS ratio change.
  • Dividends Announcements or News: 
    • Cango Inc. (CANG) Declares Special Cash Dividend of $0.50 per ordinary share or $1 per ADS.
    • El Pollo Loco (LOCO) Board Of Directors Declares Special Dividend of $1.50 per share.
    • MSC Industrial (MSM) increases its quarterly dividend 5% to $0.79 per share.

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

S&P 500 +23, Dow Jones +138, NASDAQ +101, and Russell 2000 +10. (as of 8:06 a.m. EDT). Europe higher ex France and Asia lower ex Shanghai.  VIX Futures are at 31.57 from 31.90 yesterday morning and the VIX closed at 33.63 from 31.36 yesterday. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures higher with Natural Gas higher. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10-year Treasury sees yields at 3.96% from 3.933% yesterday. Bitcoin is at $19,165 from $19,109 yesterday morning and is higher by 0.86% this morning.

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

  • Daily Positive Sectors: Real Estate, Consumer Defensive, Healthcare of note.
  • Daily Negative Sectors: Technology, Communication Services, Financial, Consumer Cyclical of note.
  • One Month Winners:  Energy of note.
  • Three Month Winners:  Energy of note.
  • Six Month Winners: Energy of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Energy of note.

Bank of England is slapping our markets around silly.  We seemed to be recovering through the day until news came from the BofE that pensions funds had three days to rebalance which put some imbalance in the US market with fear.  NDX was down 1.24%.  The Dow Industrials did end green!

 

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)

  • Wednesday After the Close: DCT of note.
  • Thursday Before the Open:  TSM, BLK, PGR, WBA, FAST, DAL, DPZ, CMC, HTLD of note.

Earnings of Note This Morning:

  • Beats: PEP +0.12.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: PEP of note.
  • Negative Guidance: PHG, OMI of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CANG +18%, LOCO +14%, GATO +13%, ESTE +4%, AB +4%.
  • Gap Down: ADEA -10%, CCJ -10%, PHG -7%.

Insider Action: No stock sees Insider buying with dumb short selling.  RCKT 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: PEP INTC P  (CNBC)
  • Five Things To Know Before Market Opens. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story:  U.S. Core CPI Inflation to Hit 40 Year High When Reported on Thursday. (Bloomberg)
  • Bloomberg Most Read Story:  Intel (INTC) Job Cuts reviewed. (Bloomberg)
  • BOE Bailey pressed to extend the Gilt Purchases amid confusion on the deadline. (Bloomberg)
  • President Biden says there is a “slight chance of a recession” but does not think will happen. Also, notes the consequences for Saudi Arabia over OPEC+ decision. (CNN)
  • Pepsi (PEP) reports a strong quarter and raises forecast. (CNBC)
  • Intel (INTC) to separate chip design from chip production. (WSJ)
  • FTC looking into Uber (UBER) rewards program. (NY Post)
  • U.S. trying to prevent supply chain issues after Chinese export restrictions. (Reuters)
  • Vista Equity nears deal to buy KnowBe4 for $4.5 billion. (WSJ)
  • Mortgage Rates hit 6.81%. (Bloomberg)

Moving Average Update:

  • Day 2 score of zero.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 8:30 a.m. EDT
    • The President departs the White House en route Joint Base Andrews and Vail, Colorado, 9:15 a.m. EDT
    • The President delivers remarks on protecting and conserving America’s iconic outdoor spaces, 3:30 p.m. EDT
    • The President departs Vail, Colorado en route Los Angeles, California, 5:35 p.m. EDT
    • The President arrives in Santa Monica, California, 7:50 p.m. EDT

Economic: 

  • MBA Mortgage Applications 7:00 a.m. EDT

    • US MBA Market Index for Oct 7 Week -2% at 214.3; Prev Week 218.7, Composite: -2%, Purchase: -2.1%, ReFi: -1.8%.
  • September PPI is due out at 8:30 a.m. EDT and expected to come in at 0.2% from -0.1%.
  • Atl. Fed Business Inflation 10:00 a.m. EDT
  • WASDE Report 12:00 p.m. EDT
  • The latest FOMC Minutes are due out at 2:00 p.m. EDT.
  • Bank of Korea meets and is expected to raise rates.

Federal Reserve / Treasury Speakers:

  • Federal Reserve Vice Chair for Supervision Michael S. Barr 1:45 p.m. EDT
  • Federal Reserve Minneapolis President Neel Kashkari 5:30 p.m. EDT
  • Federal Research Board of Governors Michelle Bowman 6:30 p.m. EDT

M&A Activity:

  • Cameco (CCJ) and Brookfield Renewable Form Strategic Partnership to Acquire Westinghouse Electric Company. (WSJ)
  • GE Announces Filing of Form 10 Registration Statement for Planned Spin-Off of GE HealthCare. (MarketWatch)
  • RCM Tech (RCMT) announces acquisition of TalentHerder.
  • Stantec (STN) signs letter of intent to acquire Philadelphia-based L2P.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Dawson James 7th Small Cap Growth Stock Conference 2022
    • Houlihan Lokey Global Tech Conference 2022 (10/12/22-10/13/22)
    • MicroCap Rodeo Fall Harvest Best Ideas Conference 2022 (10/12/22-10/13/22)
    • Roth Booth Tour-Global Gaming Expo 
    • SVB Digital Health Innovators & Disrupters 
    • TD Securities Mining Virtual Conference – 2022
      • Previously posted and ongoing conferences:
        • JP Morgan & Robin Hood Investors Conference
        • BTG 13th Latin America CEO Conference 2022 (10/11/22-10/13/22)
        • John Tumazos Very Independent Research (10/11/22-10/12/22)
  • Company Meetings: SNES
  • Fireside Chat:
    • Riley Permian (REPX) Fireside Chat with Water Tower Research 2022.
  • Investor/Analyst Day/Calls: APPF, JEF, PL, RGLD, UBX
  • Update: None of note
  • R&D Day: None of note.
  • Company Event:
    • eGain Solve (EGAN) 2022 (10/11/22-10/12/22)
    • Deutsche Telekom AG ESG Day for Media and Investors 2022.
  • Industry Meetings:
    • Immuno-Oncology Summit (10/12/22-10/14/22)
      International Elastomers Conference
    • The Battery Safety Summit 2022 (10/12/22-10/14/22)
    • North American Spine Society (NASS) 2022 (10/12/22-10/15/22)
    • 51st Child Neurology Society (CNS) Annual Meeting (10/12/22-10/15/22)
    • Windy City Roundup 2022 (10/12/22-10/13/22)
        • Previously posted and ongoing conferences:
          • Alliance for Regenerative Medicine Cell and Gene Meeting on the Mesa 2022 (10/11/22-10/13/22)
          • World Vaccine Congress Europe 2022 (10/11/22-10/14/22)
          • Satellite Innovation 2022 Silicon Valley Space Week (10/11/22-10/12/22)

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: