CAPIS Morning Note – 10/13/23: S&P 500 Up 0.95% For The Week, Looks To Lock In Second Up Week In A Row After Four Down Weeks

Overnight Summary: The S&P 500 closed Thursday lower by -0.62% at 4349.61 from Wednesday higher by 0.43% at 4376.95. The overnight high was hit at 4391.75 at 4:10 a.m. EDT while the low was hit at 4365.25. at 6:40 a.m. EDT. The range overnight was 26 points as of 7:20 a.m. EDT. The 10-day average of…

Overnight Summary: The S&P 500 closed Thursday lower by -0.62% at 4349.61 from Wednesday higher by 0.43% at 4376.95. The overnight high was hit at 4391.75 at 4:10 a.m. EDT while the low was hit at 4365.25. at 6:40 a.m. EDT. The range overnight was 26 points as of 7:20 a.m. EDT. The 10-day average of the overnight range is at 25.30 from 26.10 down from a peak of 31.50 on 8/15.  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 lower by -4.25 points which is -0.10% at  7:35 a.m. EDT.

Earnings Out After The Close: 

  • Beats: None of note.
  • Flat: None of note.
  • Misses: SGH (0.11) of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • Portage Fintech Acquisition Corporation (PFTA) Announces Name Change to Perception Capital Corp. III.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • VNOM: Prices $400 Million Offering of 7.375% Senior Notes.
  • Common Stock filings/Notes:
    • AGNC: Implemented a new “at the market” common stock issuance program.
    • ATCO: Announces Full Redemption of Its Series I Preferred Shares Full Redemption Of Its Fixed-To-Floating Rate Cumulative Redeemable Perpetual Preferred Shares – Series I.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • SINT: Filed Form S-3.. $75,000,000 Mixed Shelf.
  • 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 :

  • After Hours: 
    • Trading Up: CMTL +16%, RLAY +13%, DG +8%, LC +6%, AVNT +4% of note.
    • Trading Down: SAVA -41%, OM -33%, SGH -24%, BDC -16%, VIGL -8%, IDT -5% of note.
  • News Items After the Close:
    • Boston Federal Reserve President Susan Collins (non FOMC voter) believes we may be at, or very near, the peak for this cycle, but not taking further tightening off the table yet.
    • Rep Steve Scalise (R-LA) Is Withdrawing From Speaker Race. (WSJ)
    • Bank earnings kick off with JPMorgan (JPM), Wells Fargo (WFC) amid concerns about rising rates, bad loans. (CNBC)

    • Discover Financial Services (DFS): credit card delinquency rate for September was 1.63%, up from 1.51% in August and 1.12% in the year-ago period.
    • Co-developer of Cassava’s (SAVA) potential Alzheimer’s drug cited for ‘egregious misconduct’ (Science.org)
    • Lending Club (LC) announces 14% workforce reduction. (MarketWatch)
    • Qualcomm (QCOM) to lay off 1,258 employees in two of its California offices. (MarketWatch)
    • California Preparing Suit To Block Albertsons (ACI)-Kroger (KR) Deal. (BloombergLaw)
    • Lockheed Martin (LMT) awarded $380 million U.S. Navy order against a previously issued basic ordering agreement.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Dollar General Corporation (DG) Board of Directors Appoints Todd Vasos as Chief Executive Officer.
    • Mitek Systems (MITK) disclosed Nasaq Panel granted the Company’s requested extension, providing the Company until November 3, 2023 to file the Q3 Form 10-Q.
    • Mistras Group (MG) announces grant of stock options following appointment of new interim President and CEO.
    • OPAL Fuels (OPAL) Appoints Scott Contino Interim Chief Financial Officer.
    • Reynolds Consumer Products (REYN) announces appointment of Scott Huckins as its Chief Financial Officer.
    • SOLO: Stephen Johnston Succeeds Mark Orsmond as ElectraMeccanica’s Chief Financial Officer
  • Buyback Announcements or News:
    • CNH Industrial (CNHI) confirms its intention to complete the sixth tranche of its $300 million buyback program with additional purchases equal to ~$21.8 million
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • Agree Realty (ADC) increases monthly dividend to $0.247 per share from $2.43 per share.
    • Avient (AVNT) increases quarterly cash dividend to $0.25/share from $0.2475/share
    • EBET Common Stock to Begin Trading on the OTC Pink Sheets on October 13.
    • EQT Corp. (EQT) increases quarterly cash dividend 5% to $0.1575 per share.
    • Northwest Natural (NWN) increases in quarterly dividend by 0.5% to $0.4875 per share.
    • Riley Exploration Permian (REPX) increases quarterly cash dividend to $0.36 per share from $0.34 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 -2, Dow Jones +39,  NASDAQ -37, and Russell 2000 +0.45.  (as of 7:56 a.m. EDT).  Asia is lower as is Europe this morning. VIX Futures are at 17.85 from 17.11 yesterday.  Gold and Silver are higher with Copper lower this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas lower. US 10-year Treasury sees yields at 4.623% from 4.55% yesterday. The U.S. Dollar is higher versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $25.835 from $26,739 yesterday, higher by 0.52%.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Basic Materials, Utilities, Real Estate, Consumer Defensive, Consumer Cyclical, Industrials, Communication Services, Healthcare 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.

Major stock indexes fell Thursday, snapping a four-day winning streak, after fresh data showed inflation remains a concern.  Treasury yields rose after the consumer-price-index report and climbed further after a bond auction revealed weak demand.  The S&P 500 declined 0.6%, trimming the benchmark index’s gain in 2023 to 13%. The Dow Jones Industrial Average dropped 0.5%, or about 174 points, while the tech-heavy Nasdaq Composite retreated 0.6%.  The losses were broad-based, with nine of the 11 sectors of the S&P 500 ending the day lower. The utilities and materials segments were the worst performers, dropping 1.5% each. The energy (see below for short interest) and technology groups ticked up 0.1% each.  (WSJ – edited by QPI)

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

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

 

Earnings of Note This Morning:

  • Beats: BLK +2.57, PNC +0.50, JPM +0.35, UNH +0.23, WFC +0.15 of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: C of note.

Company Earnings Guidance:

  • Positive Guidance: UNH of note.
  • Negative Guidance: INMD, SGH, OM, DG, BDC, STKL of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CMTL +17%, DG +7%, AVNT +4% of note.
  • Gap Down: OM -39%, SAVA -29%, SGH -26%, BDC -14%, VIGL -5% of note.

Insider Action: No stock 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.

  • 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: Army Orders Evacuation of 1.1 Million People From Gaza.  (Bloomberg)
  • Bloomberg Second Most Shared Story: Dreams of Big Bond Gains Backfire With $10 Billion ETF Loss. (Bloomberg)
  • Poland’s elections could mark a crossroads for EU solidarity and Ukraine support. (CNBC)
  • Treasuries and Oil Jump on Israel-Hamas Conflict: Market Wrap. (Bloomberg)
  • Oil prices rise 4% after U.S. tightens sanctions on Russian crude sales. (CNBC)
  • JP Morgan (JPM) tops profit estimates as bank benefits from higher rates, benign credit. (CNBC)
  • Wells Fargo (WFC) tops estimates and the share price rises. (CNBC)
  • NPR Morning Report Marketplace:  The race of China’s EV market. (Podcast)
  • NY Times The Daily:  Golan’s story on Hamas attack. (Podcast)
  • BBC Global News:   UN says the situation in Gaza is dire. (Podcast) 
  • Bloomberg: Can Bob Iger save Disney (DIS) again? (Podcast)
  • Wealthion:  Hard-won investing lessons from Long Term Capital. (Podcast)

 

Moving Average Update:

  • Score declines to 51% from 71%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:30 a.m. EDT
    • The President departs the White House en route to Joint Base Andrews, 12:40 p.m. EDT
    • The President arrives in Philadelphia, Pennsylvania, 1:45 p.m. EDT
    • The President participates in a tour of Tioga Marine Terminal, 2:20 p.m. EDT
    • The President discusses how his Bidenomics agenda is creating good-paying union jobs, investing in America, and building the clean energy future, 3:15 p.m. EDT
    • The President departs Philadelphia, Pennsylvania en route to New Castle, Delaware, 4:30 p.m. EDT
    • The President arrives in New Castle, Delaware, 4:55 p.m. EDT
    • The President departs New Castle, Delaware en route to the White House, 7:55 p.m. EDT
    • The President arrives at the White House, 8:50 p.m. EDT

Economic:

  • Import and Export Prices 8:30 a.m. EDT
  • Consumer Sentiment 10:00 a.m. EDT
  • October University of Michigan Consumer Sentiment (Prelim) is due out at 10:00 a.m. EDT and is expected to fall to 67.5 from 68.10.
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:  

  • Federal Reserve Philadelphia President Patrick Harker 9:00 a.m. EDT
  • Federal Reserve Chair Jerome Powell To Speak Oct 19 Before Economic Club Of New York.

M&A Activity and News: 

  • Bowman Consulting Group (BWMN) announces the acquisition of Dennis Corporation.
  • Comtech Telecom (CMTL): Stellant Systems to acquire power systems technology product line from Comtech for a total cash purchase of $40 million.
  • Sharecare (SHCR) confirms receipt of unsolicited proposal from Claritas Capital.
  • Block (SQ) acquires Hifi. (LinkedIn)

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: