CAPIS Morning Note – 10/19/23: Fedmageddon Today With Too Many Speakers Including Chair Powell, Stocks Flat

Overnight Summary: The S&P 500 closed Wednesday lower by -1.34% at 4314.60 from Tuesday lower by -0.01% at 4373.20. The overnight high was hit at 4350.50 at 4:25 p.m. EDT while the low was hit at 4320.75 at 3:55 a.m. EDT. The range overnight was 30 points as of 6:10 a.m. EDT. The 10-day average of…

Overnight Summary: The S&P 500 closed Wednesday lower by -1.34% at 4314.60 from Tuesday lower by -0.01% at 4373.20. The overnight high was hit at 4350.50 at 4:25 p.m. EDT while the low was hit at 4320.75 at 3:55 a.m. EDT. The range overnight was 30 points as of 6:10 a.m. EDT. The 10-day average of the overnight range is at 24.20 from 23.50 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 -0.50 points which is -0.01% at  7:15 a.m. EDT.

Table of the Week: How Strong is the Labor Market ? Is the data lying? From Carl Pellegrini (via Substack)

 

Earnings Out After The Close: 

  • Beats: LRCX +0.51, NFLX +0.24, PPG +0.13, SAP +0.11, LBRT +0.10, COLB +0.06, FNB +0.04, FR +0.01, SLG +0.01 of note.
  • Flat: CNS, LVS, REXR, SNV of note.
  • Misses: DFS (0.58), AA (0.08), TSLA (0.07), STLD (0.07), CCI (0.03), EFX (0.02), ZION (0.02), KMI (0.01), MRTN (0.01) of note.

Capital Raises:

  • IPOs Priced or News:
    • Northann Corp. (NCL) Announces Pricing of $6,000,000 Initial Public Offering.
    • Webuy Global Limited (WBUY) Announces Pricing of $15.2 Million Initial Public Offering.
  • New SPACs launched/News:
    • Atlantic Coastal Acquisition Corp. II (ACAB) Announces Extension of Business Combination Period and Additional Contribution to Trust Account.
    • TenX Keane Acquisition (TENK) Announces Extension of the Deadline for an Initial Business Combination.
  • Secondaries Priced:
    • RARE: Pricing of Public Offering of Common Stock and Pre-Funded Warrants. Priced @$30.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • FLGC: Filed Form S-1.. 1,423,760 Common Shares.
    • MCOM: Filed Form 424B2.. 24,500,000 Shares of Class A Common Stock.
  • Direct Offering:
    • PG: Filed Form S-3ASR.. 12,000,000 Shares of Common Stock (without par value) To Participants in The Procter & Gamble Company Direct Stock Purchase Plan.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • REBN: Filed Form S-3.. $20,000,000 Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • PG: Filed Form S-3ASR.. Debt Securities Shelf.
    • ENOV: Announces Proposed Private Offering of $400 Million of Convertible Senior Notes.
    • SMTC: Announces Proposed Private Placement of $250 Million of Convertible Senior Notes.
  • 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: NFLX +12%, LVS +5%, SAP +4% of note.
    • Trading Down: EFX -7%, LRCX -5%, ZION -4% of note.
  • News Items After the Close:
    • Tesla’s (TSLA) Earnings Fall as Price Cuts Weigh on Profit. (WSJ)
    • Tesla (TSLA) Tempers Expectations on Cybertruck’s Nov. 30 Debut. (Bloomberg)
    • TSLA In a nutshell we would characterize the conference call as a “mini disaster” as the Street wanted to get their arms around the falling margins/constant price cuts seen globally, but instead heard a much more cautious Musk. Thesis unchanged but challenges; PT to $310 (Dan Ives, Tech Analyst at Wedbush Securities)
    • Costco (COST) Says Craig Jelinek To Step Down As CEO effective January 2024 but will remain and advisor through April of 2024 as well as on the Board of Directors on an ongoing basis.
    • Netflix (NFLX) to Raise Prices as Password Crackdown Boosts Subscriber Growth. (WSJ)
    • OpenAI Is in Talks to Sell Shares at an $86 Billion Valuation. (Bloomberg)
    • Disney (DIS) Offers Peek at ESPN Profit and Sports TV’s Challenges. (Bloomberg)
    • Zions Bancorp (ZION) stock drops as net interest income falls short of expectations. (MarketWatch)
    • Pfizer (PFE) Prices Covid Drug Paxlovid at $1,400 for a Five-Day Course. (WSJ)
    • Devon Energy (DVN) Mulls M&A Options With Marathon (MRO), CrownRock. (Bloomberg)
    • Ford (F) To Lay Off Another 150 Workers In Michigan Due To Uaw Strike.
    • Nokia (NOK) to cut up to 14,000 jobs as US demand shrinks, growth uncertain. (MarketWatch)
    • Xcel Energy (XEL) receives a $100 million Department of Energy grant to boost wildfire mitigation and grid resiliency.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Crown Castle (CCI) CFO Daniel K. Schlanger to depart.
    • Envirotech Vehicles (EVTV) Announces It Has Regained Compliance with Nasdaq Listing Rule 5250(c)(1).
    • NYSE to Commence Delisting Proceedings with Respect to the Warrants of Local Bounti Corporation (LOCL WS)
    • Moxian (MOXC) Receives NASDAQ Notification Regarding Minimum Bid Price Requirements.
    • Tritium (DCFC) Receives Nasdaq Notice Regarding Minimum Bid Price Requirement.
    • Viavi (VIAV) appoints Ilan Daskal as CFO.
    • Visa (V) announces that Alfred Kelly will retire as Chairman on January 23.
    • Western Copper (WRN) announced the departure of Ken Engquist, Chief Operating Officer.
    • Y-mAbs Therapeutics (YMAB) appoints Michael Rossi as President and Chief Executive Officer and a member of the Board of Directors.
  • Buyback Announcements or News: 
    • Home Bancorp, Inc. (HBCP) Announces New Share Repurchase Plan. (see dividends)
    • Las Vegas Sands (LVS) Authorizes $2.0 billion Stock Repurchase. (MarketWatch)
    • Minerals Tech (MTX) initiates a one-year $75 mln share repurchase program. (see dividends)
    • William Penn Bancorporation (WMPN) Announces Seventh Stock Repurchase Program.
  • Stock Splits or News:
    • NEXI trading reverse split price.
  • Dividends Announcements or News: 
    • Ex Dividend today: PG CVS GEHC WSM CRH.
    • Armstrong World Industries (AWI) Announces Increase in Quarterly Dividend 10% to $0.28 per share.
    • Banner Corporation (BANR) Declares Quarterly Cash Dividend of $0.48 Per Share.
    • Brown & Brown, Inc. (BRO) announces 13% increase in quarterly cash dividend rate.
    • Costco Wholesale Corporation (COST) Quarterly Cash Dividend Declared.
    • Home Bancorp, Inc. (HBCP) Declares Quarterly Dividend.
    • Minerals Tech (MTX) increases quarterly dividend 100% to $0.10 per share from $0.05 per share
    • Pinnacle West (PNW) increases quarterly cash dividend 1.7% to $0.88 per share.
    • Prosperity Bancshares (PB) increases quarterly cash dividend 1.82% to $0.56 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 -7, Dow Jones -61,  NASDAQ +8, and Russell 2000 -5.  (as of 7:57 a.m. EDT).  Asia and Europe are lower this morning. VIX Futures are at 19.45 from 19.10 yesterday.  Gold and Silver are lower with Copper higher this morning. WTI Crude Oil  and Brent Crude Oil are lower with Natural Gas lower as well. US 10-year Treasury sees yields at 4.96% from 4.817% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $28,459 from $28,408 yesterday, higher by +0.60%.

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

  • Daily Positive Sectors: Energy of note.
  • Daily Negative Sectors: Industrials, Basic Materials, Real Estate, Consumer Cyclical, Financial, Communication Services, Technology, Healthcare, Utilities of note.
  • One Month Winners: None of note.
  • Three Month Winners: Energy and Communication Services 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.

Long-term bond yields hit a fresh 16-year high Wednesday, weighing on stocks already pressured by the conflict in Gaza and corporate earnings results.  The 10-year U.S. Treasury yield rose to 4.902%, the highest closing level since July 2007. The S&P 500 fell 1.3%. The Dow Jones Industrial Average shed 332.57 points, or 1%. The Nasdaq Composite lost 1.6%.  A swift climb in bond yields has dented enthusiasm for stocks in recent weeks. Investors are also monitoring the intensifying Israel-Hamas war that threatens to disrupt the global energy market. A mixed bag of corporate earnings results further complicates the outlook for stocks.  (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:

 

  • Friday Before the Open:

Earnings of Note This Morning:

  • Beats: LNN +0.63, MMC +0.18, TCBI +0.17, AAL +0.13, UNP +0.10, FITB +0.09, GPC +0.07, WSO +0.07, SNA +0.07, AUB +0.06, WNS +0.06, WBS +0.06, NOK +0.05, PM +0.05, T +0.02, KEY +0.02 of note.
  • Flat: POOL, EWBC of note.
  • Misses: MAN (0.75), BKU (0.08), BX (0.07), IRDM (0.05), ALK (0.04), TFC (0.01) of note.
  • Still to Report: BMI, FCX, HOMB of note.

Company Earnings Guidance:

  • Positive Guidance: PPG, TSM of note.
  • Negative Guidance: NFLX, EFX, CCI, SLG, WNS, ALK, MAN of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: NFLX +13%, LVS +5%, SAP +4%, COLB +4% of note.
  • Gap Down: EFX -6%, TSLA -5%, ZION -5%, WNS -4% of note.

Insider Action: CERE sees Insider buying with dumb short selling.  ATXS 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 To Know Before The Stock Market Opens Thursday. (CNBC)
  • Bloomberg Lead Story: Israel Latest: UK, Germany Visits Seek To Contain Deadly Conflict. (Bloomberg)
  • Bloomberg Second Most Shared Story: Trump is Winning Over Swing State Voters Wary of Biden Economic Plan. (Bloomberg)
  • 10-Year Yields are near 5%, Tesla Slides: Market Wrap. (Bloomberg)
  • Netanyahu warns of a long war. (CNBC)
  • Morgan Stanley Investment Mgmt says that the 10-Year Bond is a Buy Here. (Bloomberg)
  • Surging Bond yields are the markets biggest problem currently. (Yahoo Finance)
  • TSMC sees biggest profit drop in 5 years. (CNBC)
  • American Airlines (AAL) posts a Q3 loss and trims 2023 guidance.  (CNBC)
  • NPR Morning Report Marketplace: How water moves or stalls the economy. (Podcast)
  • NY Times The Daily: A Texas Town wanted tougher Border Security, now regrets move. (Podcast)
  • BBC Global News: Humanitarian aid to enter Gaza. (Podcast) 
  • Bloomberg: The Big Take: A Fertility Startup Is Having Some Growing Pains. (Bloomberg)
  • Wealthion: Bill Fleckenstein: A generation long bear market in bonds lies ahead. (Podcast)

Moving Average Update:

  • Score dives down to 25% from 71%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • The President addresses the nation to discuss our response to Hamas’ terrorist attacks against Israel and Russia’s ongoing brutal war against Ukraine, 8:00 p.m. EDT (Release)

Economic:

  • Initial Jobless Claims 8:30 a.m. EDT
  • October Philadelphia Fed Index is due out at 8:30 a.m. EDT and is estimated to come in at -6.5 after coming in last month at -13.50.
  • September Existing Home Sales are due out at 10:00 a.m. EDT and are estimated to come in at 3.90 million from 4.04 million.
  • September Leading Indicators are due out at 10:00 a.m. EDT as well and are estimated to remain at -0.4%.
  • EIA Natural Gas Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:  

  • Federal Reserve Board of Governors Philip N. Jefferson 9:00 a.m. EDT
  • Federal Reserve Chair Jerome Powell 12:00 p.m. EDT
  • Federal Reserve Chicago President Austan Goolsbee 1:20 p.m. EDT
  • Federal Reserve Vice Chair for Supervision Michael S. Barr 1:30 p.m. EDT
  • Federal Reserve Atlanta President Raphael Bostic   4:00 p.m. EDT
  • Federal Reserve Philadelphia President Patrick Harker  5:30 p.m. EDT
  • Federal Reserve Bank of Dallas Lorie Logan 6:40 p.m. EDT

M&A Activity and News: None of note.

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: