CAPIS Morning Note – 10/13/22: Stocks Improve U.K. Mini Plan, Pound Rises and CPI Due At 8:30 P.M. EDT

Overnight Summary: The S&P 500 closed Wednesday at 3577.03 (lower by -0.33%) from Tuesday at 3588.84 (lower by -0.65%).  The overnight high of 3611.25 was hit at 5:25 a.m. EDT. The low was hit at 3581.75 at 3:10 p.m. EDT, a range of 30 points high to low which is below the recent range of…

Overnight Summary: The S&P 500 closed Wednesday at 3577.03 (lower by -0.33%) from Tuesday at 3588.84 (lower by -0.65%).  The overnight high of 3611.25 was hit at 5:25 a.m. EDT. The low was hit at 3581.75 at 3:10 p.m. EDT, a range of 30 points high to low which is below the recent range of 45.  At 7:15 a.m. EDT, the S&P 500 was up +19 points which is 0.53%.  

Earnings Out After The Close: 

  • Beats: DCT +0.01.
  • 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:
    • BFST: Underwritten Public Offering of Common Stock.. 2,500,000 shares @$20.
    • CTM: Announces Pricing of $3,000,000 Public Offering and NYSE Listing.
    • DICE: 8.22 million share Secondary priced at $36.50.
    • VECT: Announces pricing of $125m underwritten offering, about $7.5 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AKTX: Filed Form F-1.. 2,784,705,800 Ordinary Shares American Depositary Shares representing Ordinary Shares.
  • 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:
    • FFWM: Filed Form S-3ASR Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • Tender Offer:
    • NM: Extends $20 Million Tender Offer for Its Series G and Series H American Depositary Shares Until Midnight on October 21, 2022.
  • 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: QDEL +7%, DCT +7%, DWAC +6%.
    • Trading Down: TTCF -6%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: DWAC, DCT, VSCO, AMAT (CNBC)
    • Bank of America’s (BAC) CEO Moynihan: markets can survive, there is enough capital in the system.
    • Applied (AMAT) is revising its fourth-quarter business outlook for net sales to approximately $6.4 billion, plus or minus $250 million, which compares to the prior outlook of $6.65 billion, plus or minus $400 million. The revised net sales outlook reflects the impact of the new export regulations partially offset by supply chain performance improvements.
    • Google (GOOG) approves Trump’s Truth Social (DWAC) for Play Store – (Axios)
    • Monthly Assets Under Management Reports:
      • MN $17.4 billion
  • Exchange/Listing/Company Reorg and Personnel News:
    • COMSovereign (COMS) Announces Receipt of Nasdaq Listing Determination; Company to Request Hearing and Further Stay.
    • Generac (GNRC) COO Thomas F. Pettit to resign to pursue another opportunity.
    • SiriusPoint (SPNT) Announces Steve Yendall as Chief Financial Officer.
    • Squarespace (SQSP) announces the appointment of Nathan Gooden as CFO and Treasurer.
    • Tattooed Chef (TTCF) will restate its 2Q22, 1Q22, and quarterly and annual financial statements for 2021 to address accounting issues.
  • Buyback Announcements or News:
    • Fastenal Company (FAST) Announces Share Repurchase Activity. (see Dividends)
    • Orchid Island Capital (ORC) increases its stock repurchase authorization by 4.3 million shares.
  • Stock Splits or News:
    • TTOO trading r/s price.
  • Dividends Announcements or News: 
    • Fastenal Company (FAST) Announces Cash Dividend.

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

S&P 500 +37, Dow Jones +303, NASDAQ +83, and Russell 2000 +21. (as of 8:12 a.m. EDT). Europe higher ex France and Asia lower.  VIX Futures are at 31.59 from 31.57 yesterday morning and the VIX closed at 33.54 from 33.63 yesterday. Gold, Silver and Copper higher. WTI Crude Oil and Brent Oil Futures higher with Natural Gas higher. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10-year Treasury sees yields at 3.89% from 3.96%  yesterday. Bitcoin is at $18179.50 from $19,165 yesterday morning and is higher by -2.27% this morning.

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

  • Daily Positive Sectors: Consumer Defensive, Consumer Cyclical of note.
  • Daily Negative Sectors: Utilities, Real Estate, Industrials, Basic Materials 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.

Stocks ended marginally lower for the day.  Bank of England was buying heavily keeping yields in check overseas.  Feds continued concern over inflation via the latest minutes from the September meeting was not enough to scare the markets.  SPX ended down 33 bps at 3577.03.  TLT attempts to make 100 level support closing at 100.35 recovering from previous pullbacks.

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: WAFD of note.
  • Friday Before the Open: UNH, JPM, WFC, MS, C, PNC, USB, FRC of note.

Earnings of Note This Morning:

  • Beats: BLK +2.28, TSM +0.44, CMC +0.17, WBA +0.03, FAST +0.02.
  • Flat: None of note.
  • Misses: DPZ (0.19), DAL (0.02).
  • Still to Report: PGR.

Guidance:

  • Positive Guidance: QDEL, VSCO, TSM, DAL of note.
  • Negative Guidance: AMAT, ACCO, CRS, PCRX of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: DWAC +13%, DCT +9%, QDEL +5%, NVRO +5%, AIV +5%, GOL +4%, AZEK +4%.
  • Gap Down: TMST -4%.

Insider Action: EVA sees Insider buying with dumb short selling.  BCOV, BRT 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: DAL WBA AMAT (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story:  Only Certainty With Inflation Data is Volatility. (Bloomberg)
  • Bloomberg Most Read Story:  Intel (INTC) Planning Thousands. (Bloomberg)
  • Treasury Secretary Janet Yellen says she is worried about “a loss of liquidity” in the U.S. Treasury market. (Bloomberg)
  • U.K. Prime Minister Liz Truss under pressure to rewrite a mini budget. (FT)
  • Delta (DAL) put up some strong numbers and forecasts positive growth. Planes are full. (CNBC)
  • Chevron (CVX) CEO Mike Wirth notes that climate change policies have worsened energy shortages. (FT)
  • Initial sales of Apple (AAPL) iPhone 14 and 14 Plus are below expectations. (Digitimes)

Moving Average Update:

  • Day 3 score of zero.

Geopolitical: 

  • President’s Public Schedule:
    • The President delivers remarks on how Bipartisan Infrastructure Law investments are helping to improve public transit, create jobs and opportunity, and reduce pollution and traffic in Los Angeles and across the country, 2:15 p.m. EDT
    • The President participates in a reception for the Democratic Congressional Campaign Committee, 10:45 p.m. EDT

Economic: 

  • September CPI is due out at 8:30 a.m. EDT and is expected to rise by 0.4% from last month’s 0.6%. 
  • Jobless Claims 8:30 a.m. EDT
  • EIA Natural Gas Report 10:30 a.m. EDT
  • EIA Petroleum Report 11:00 a.m. EDT
  • The September Treasury Budget is due out at 2:00 p.m. EDT and came in last month at $-219.6 Billion

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • None of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse CEO Brazil Education Conference 2022
    • Capital Link’s Closed-End Funds & Global ETFs Forum
    • Nantucket Conference
    • Needham & Company Conference
    • Sachs Biopole Investment Seminar
    • Solebury Trout Fall Private Company Showcase
      • Previously posted and ongoing conferences:
        • Roth Booth Tour-Global Gaming Expo 
        • SVB Digital Health Innovators & Disrupters 
        • 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)
        • BTG 13th Latin America CEO Conference 2022 (10/11/22-10/13/22)
  • Company Meetings: AMPE, LUXA, PAYX
  • Fireside Chat:
    • Numinus Wellness Inc. (NUMI) Water Tower Research Fireside Chat
  • Investor/Analyst Day/Calls: ACHL, BRZE, RNA, VSCO, VRNT
  • Update: None of note
  • R&D Day: None of note.
  • Company Event:
    • Engage (EGAN) Customer Knowledge Management (KM) Conference.
  • Industry Meetings:
    • Joint School of Nanoscience and Nanoengineering (JSNN) NanoImpacts 2022: Semiconductor Synthetic Biology and Beyond (10/13/22-10/15/22)
    • National Academy of Sports Medicine (NASM) Optima Conference 2022 (10/13/22-10/15/22)
    • CES Unveiled Amsterdam 2022
        • Previously posted and ongoing conferences:
          • 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)
          • Immuno-Oncology Summit (10/12/22-10/14/22)
          • 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)

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: