CAPIS Morning Note – 10/12/23: Stocks Continue To Remain Strong Into Week’s End

Overnight Summary: The S&P 500 closed Wednesday higher by 0.43% at 4376.95 from Tuesday higher by 0.52% at 4358.24. The overnight high was hit at 4427.50 at 3:00 a.m. EDT while the low was hit at 4416.25. at 6:25 a.m. EDT. The range overnight was 11 points as of 7:20 a.m. EDT. The 10-day average of…

Overnight Summary: The S&P 500 closed Wednesday higher by 0.43% at 4376.95 from Tuesday higher by 0.52% at 4358.24. The overnight high was hit at 4427.50 at 3:00 a.m. EDT while the low was hit at 4416.25. at 6:25 a.m. EDT. The range overnight was 11 points as of 7:20 a.m. EDT. The 10-day average of the overnight range is at 26.10 from 27.40 down from a peak of 31.50 on 8/15 but getting close to retaking that high.  The average for May-September average was 20.96 from 21.10 in May through August and the September average was 19.87. Currently, the S&P 500 is higher by +16.25 points which is +0.37% at  6:15 a.m. EDT.

Earnings Out After The Close: 

  • Beats: RELL +0.06 of note.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News:
    • Gamer Pakistan (GPAK) Announces Closing of Initial Public Offering.
  • New SPACs launched/News:
    • AltC Acquisition Corp. (ALCC) discloses redemptions after the co extended the date to consummate an initial business combination to July 12, 2024.
    • Learn CW Investment Corporation (LCW) Announces Shareholder Approval of Extension of Deadline to Complete Business Combination to October 13, 2024.
    • Quetta Acquisition Corporation (QETA) Announces Closing of $69 Million Initial Public Offering.
  • Secondaries Priced:
    • ATXS: Pricing of $64 Million Underwritten Offering.. combined public offering price of $6.514.
    • CERE: Pricing of $450 Million Public Offering of Common Stock.. Priced @$22.81.
    • RGF: Pricing of Public Offering of its Class A Common Stock. 6,785,715 shares @$2.10.
    • SRRK: Pricing of Upsized Public Offering of Common Stock. 12,408,760 shares @$6.85. (JPM and Piper bookmanager)
  • Notes Priced of note:
    • NCLH: Pricing of $790,000,000 of Senior Secured Notes.
  • Common Stock filings/Notes:
    • CERE: Proposed Public Offering of Common Stock $400.0 million of shares of its common stock. (GS bookmanager)
    • OGI: Files final base shelf prospectus of up to CAD500 mln of of common shares, debt securities, subscription receipts, warrants, and units.
    • SRRK: Proposed Public Offering of Common Stock. $75Million shares. (JPM and Piper bookmanager)
  • Direct Offering:
    • LGVN: Announces $4 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules.
    • SIDU: Announces $2.0 Million Registered Direct Offering and Concurrent Private Placement.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt/Credit Filing and Notes: None of note.
  • Tender Offer: None of note.
  • 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 and Over the Holiday:

  • After Hours: 
    • Trading Up: ATXS +15% of note.
    • Trading Down: NGM -6%, ITOS -5% of note.
  • News Items After the Close:
    • IRS notifies Microsoft (MSFT) it owes an additional $29 billion in back taxes. (MarketWatch)
      • BofA: The $28.9 billion represents 111% of Microsoft’s deferred income tax liabilities and 45% of the company’s net cash balance. Again, Microsoft is planning to appeal, and is not anticipating an increase or decrease in tax liabilities and has commented that the case is unlikely to be resolved in the next 12 months. As such, we do not expect a material impact to near FY24 or FY25 GAAP EPS or FCF. More clarity is likely to be provided on the upcoming earnings call, scheduled for Tuesday, October 24.
    • Federal Reserve Boston President Susan M. Collins – Reflections on Phasing Policy Amidst (Pandemic) Uncertainty – (Link)
    • OpenAI plans major updates to lure developers with lower costs, sources say. (Reuters)
    • GOOGL: Teamsters, Community Groups Unite To Protest At Waymo L.a. County Launch (PRNewsWire)
    • The 8,700 UAW members at Ford’s (F) iconic and extremely profitable Kentucky Truck Plant have joined the Stand Up Strike after Ford refuses to make further movement in bargaining. (UAW) (MarketWatch)
      • Ford Motor: “Decision By The UAW To Call A Strike At Ford’s Kentucky Truck Plant Is Grossly Irresponsible “
    • Caroline Ellison Tells Jury She Dreaded Inevitable Collapse of FTX (WSJ)
    • Primoris Services (PRIM) received solar project awards with combined value of approximately $230 million.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Delisting of Securities from NASDAQ: of Humanigen, Inc.; Vinco Ventures, Inc.; Liquid Media Group Ltd.; Republic First Bancorp, Inc.; G Medical Innovations Holdings Ltd.; Orbital Infrastructure Group, Inc.; Spark Networks SE; DIRTT Environmental Solutions Ltd.; Chenghe Acquisition Co.; mCloud Technologies Corp.; VIQ Solutions Inc.; Capstone Green Energy Corporation; and Histogen Inc.
    • American Intl (AIG) appoints updated leadership positions across its General, North America, and International Insurance divisions.
    • Illumina (ILMN): EU Commission orders Illumina to unwind its completed acquisition of GRAIL.
    • Mobilicom Ltd. (MOB) provides delisting conversion process update.
    • NCR Atleos (NATL) to join S&P SmallCap 600
    • Ross Stores (ROST) appoints Stephen Brinkley as President.
    • So-Young (SY) Announces Board Change.
    • The Oncology Institute (TOI) appointed Jeremy Castle as COO.
  • Buyback Announcements or News: None of note.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • MSC Industrial (MSM) increases quarterly cash dividend 5% to $0.83 per share.
  • Insider Sales Of Note: None of note.

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

S&P 500 +16, Dow Jones +120,  NASDAQ +60, and Russell 2000 +11.  (as of 7:57 a.m. EDT).  Asia is higher and Europe is higher as well this morning. VIX Futures are at 17.11 from 17.45 yesterday.  Gold, Silver and Copper higher this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas lower. US 10-year Treasury sees yields at 4.55% from 4.558% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $26,739 from $27,225  yesterday, higher by 0.03%.

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

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

U.S. stocks edged higher Wednesday, extending their winning streak to four consecutive trading sessions.  The S&P 500 gained 0.4%. The tech-heavy Nasdaq Composite rose 0.7%, and the Dow Jones Industrial Average added 0.2%.  Stocks have rebounded in recent sessions as bond yields pulled back, reversing a swift run-up in yields that had weighed on equities. Top Federal Reserve officials have signaled recently that the central bank could be done raising interest rates if long-term yields remain near highs and inflation continues to cool.  (WSJ – edited by QPI)

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

  • Thursday After the Close: None of note.
  • Friday Before the Open:

Earnings of Note This Morning:

  • Beats: DPZ +0.87, DAL +0.08, FAST +0.02 of note.
  • Flat: None of note.
  • Misses: CMC (0.08), WBA (0.02) of note.
  • Still to Report: None of note.

Company Earnings Guidance:

  • Positive Guidance: EVLV, QDEL of note.
  • Negative Guidance: PLUG, DAL, WBA of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: OMGA +13%, ATXS +9% of note.
  • Gap Down: NGM -8%, ITOS -5% of note.

Insider Action: No stock sees Insider buying with dumb short selling.  HHH 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 premarket: F, TGT, WBA, DPZ, FSLR (CNBC)
  • 5 Things Need To Know to Start Your Day. (Bloomberg)
  • 5 Things to Know Before the Stock Market Opens. (CNBC)
  • Bloomberg Lead Story: Israel Latest: IDF Jets are Targeting Hamas Leaders in Gaza. (Bloomberg)
  • Bloomberg Second Most Shared Story: President Biden weighs freezing $6 billion for Iran after Hamas Attack on Israel. (Bloomberg)
  • Stocks rise as traders look to US CPI Data: Market Wrap. (Bloomberg)
  • Nouriel Roubini says markets are discounting risk of major Middle East conflict. (Bloomberg)
  • UK Economy grew 0.2% in August, propped by services sectors. (CNBC)
  • Walgreens (WAG) profit outlook declines as demand declines for Covid tests and vaccines. (CNBC)
  • Delta (DAL) trims profit outlook for 2023 on fuel, maintenance costs. (Bloomberg)
  • Dominos (DPZ) misses on revenues. (MarketWatch)
  • NPR Morning Report Marketplace:  EV subsidies are about to get more simple. (Podcast)
  • NY Times The Daily: The spoiler threat of RFK Jr. (Podcast)
  • BBC Global News: International calls for a humanitarian corridor for Palestinians.  (Podcast) 
  • Bloomberg: U.S. Government vs Google and Amazon. (Podcast)
  • Wealthion: Stocks & Everyday Americans to suffer when “lag effect” forces a correction. (Podcast)

 

Moving Average Update:

  • Score improves to 71% from 65%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President meets with CEOs to hear their perspectives on the economy, discuss his Administration’s progress implementing his historic agenda, and highlight how Bidenomics is growing the economy from the middle out and bottom up, 4:30 p.m. EDT

Economic:

  • September CPI is due out at 8:30 a.m. EDT and is estimated to come in at 0.3% after popping 0.6% last month.
  • Jobless Claims 8:30 a.m. EDT
  • EIA Natural Gas Report 10:30 a.m. EDT
  • EIA Petroleum Report 11:00 a.m. EDT
  • Treasury Statement 2:00 p.m. EDT

Federal Reserve / Treasury Speakers:  

  • Federal Reserve Atlanta President Raphael Bostic 1:00 p.m. EDT
  • Federal Reserve Boston President Susan M. Collins 4:00 p.m. EDT

M&A Activity and News: 

  • Kontron To Acquire Bsquare (BSQR) For $1.90 Per Share.

Meeting & Conferences 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 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: