CAPIS Morning Note – 10/21/22: Stocks Lower at 10 Year Yield Climbs to 4.23%.

Overnight Summary: The S&P 500 closed Thursday at 3665.78 (lower by -0.80%) from Wednesday at 3695.16 (lower by 0.67%).  The overnight high of 3679.75 was hit at 3:25 a.m. EDT. The low was hit at 3647 at 5:25 a.m. EDT, a range of 32.75 points high to low which is below the recent range of…

Overnight Summary: The S&P 500 closed Thursday at 3665.78 (lower by -0.80%) from Wednesday at 3695.16 (lower by 0.67%).  The overnight high of 3679.75 was hit at 3:25 a.m. EDT. The low was hit at 3647 at 5:25 a.m. EDT, a range of 32.75 points high to low which is below the recent range of 45.  At 7:15 a.m. EDT, the S&P 500 was down -19 points which is -0.52%.  

Earnings Out After The Close: 

  • Beats: HTH +0.29 , UFPI +0.24 , THC +0.22 , EEFT +0.20 , SIVB +0.20 , SNAP +0.09 , ASB +0.03 , BJRI +0.03 , CSX +0.03 , BDN +0.02.
  • Flat: None of note.
  • Misses: SAM (0.96), WHR (0.86), WAL (0.19), RHI (0.12), OZK (0.09), FFBC (0.01), GBCI (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • BHVN Prices offering of 25 million shares of common stock at $10.50 per share.
    • SIEN: Announces Pricing of $13.2 Million Public Offering.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AMPS: Announces the Results of the Completed Redemption of all Outstanding Public and Private Warrants.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • MBOT: Announces $5 Million Registered Direct Offering Priced At-The-Market under Nasdaq Rules
    • RIBT Closing of $1.5 Million Registered Direct Offering.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes:
    • AMC: AMC’s Subsidiary Odeon Finco PLC Announces Closing of Senior Secured Notes Offering.
  • 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: PCT +8.3%, BJRI +5%, ASB +4%, SAM +4%.
    • Trading Down: IMUX -76%, SNAP -25%, THC -14%, SIVB -13%, SMMT -9%, RHI -7%, PINS -7%TTD -5%, WHR -4%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: SNAP, CSX, WHP, GOOGL, META, THC, SIVB, RHI (CNBC)
    • Snap Crackled, Now It Stopped: Amid a challenging macroeconomic backdrop, Snap (SNAP) is cheap but clearly not cheap enough. (WSJ)
    • Whirlpool (WHR) CEO Says Consumer Demand Down ‘massively’ in June, July.
    • NYSE Announces Decision to Suspend and Remove Revlon, Inc. (REV) From the List. (MarketWatch)
    • Tenet Healthcare (THC) stock drops more than 20% on poor outlook. (MarketWatch)
    • Toyota Motor (TM) expects to miss its annual production target of 9.7 Million due to chip shortage.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Aurinia Pharma (AUPH) discloses departure of Executive Vice President-Research and Chief Medical Officer.
    • Central Pacific Financial (CPF) appoints Arnold Martines as CEO.
    • China Green Agriculture, Inc. (CGA) Receives NYSE Notice Regarding Late Form 10-K Filing.
    • Intercontinental Hotels Group (IHG) announces that Paul Edgecliffe-Johnson will step down from the Board and his role as Chief Financial Officer and Group Head of Strategy to take up a new position outside of IHG.
    • Mullen Automotive (MULN) Taps Former GM Executive John Schwegman as Chief Commercial Officer for Next Phase of EV Growth.
    • P3 Health Partners (PIII) Announces Chief Financial Officer Transition Appoints Erin Darakjian as Interim CFO.
    • SRAX Announces Receipt of Nasdaq Listing Determination; Company to Request Hearing and Further Stay.
    • Vicarious Surgical (RBOT) Announces Changes to Board of Directors.
    • VAALCO Energy, Inc. (EGY) Announces Addition to Senior Leadership.
  • Buyback Announcements or News:
    • Snap (SNAP) announces $500 million stock buyback authorization.
    • Tenet (THC) Announces $1 Billion Share Repurchase Program.
  • Stock Splits or News:
    • KALA trading reverse split price.
  • Dividends Announcements or News: 
    • Hilltop (HTH) declared a quarterly cash dividend of $0.15 per share.
    • Murphy USA Inc. (MUSA) Announces Dividend Increase.
    • Pinnacle West (PNW) raises annual dividend to $0.06 per share, a 1.8% bump.
    • SLB: Board Approved Quarterly Cash Div Of $0.175 per share.

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

S&P 500 -20, Dow Jones -157, NASDAQ -102, and Russell 2000 -6. (as of 8:03 a.m. EDT). Europe lower and Asia lower ex Shanghai.  VIX Futures are at 30 from 30.27 yesterday morning and the VIX closed at 29.98 from 31.37 yesterday. Gold, Silver and Copper lower. WTI Crude Oil and Brent Oil Futures higher with Natural Gas lower. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10-year Treasury sees yields at 4.263% from 4.125% yesterday. Bitcoin is at $18,995 from $19,213.90 yesterday morning and is lower by -0.33% this morning.

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

  • Daily Positive Sectors: Energy of note.
  • Daily Negative Sectors: Utilities, Industrials, Consumer Cyclical, Financial, Consumer Defensive of note.
  • One Month Winners:  None of note.
  • Three Month Winners:  Energy of note.
  • Six Month Winners: None of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Energy of note.

Markets tested resistance and support Erlanger Value Lines (chart below and description on how to use values lines CLICK HERE).  Yields, particularly short term, drove the markets lower as Philadelphia Fed President Harker commented about expectations of higher rates by year end.  TLT dropped down 1.65% to close at 94.88…..(did you not listen to Fred Meissner?!?!?!)

  

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)

  • Friday After the Close: None of note.
  • Monday Before the Open: PHG, KEX, CBU, BOH, DORM, HNI, SCHN of note.

Earnings of Note This Morning:

  • Beats: SLB +0.08, HCA +0.07, SMPL +0.07, AXP +0.05, IPG +0.05, SXT +0.03, VZ +0.03, HBAN +0.01.
  • Flat: None of note.
  • Misses: RF (0.16), ALV (0.02).
  • Still to Report: None

Guidance:

  • Positive Guidance: EEFT of note.
  • Negative Guidance: THC, WHR of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: VRE +18%, BJRI +5.1%, ASB +4.5%, UFPI +4.1%.
  • Gap Down: IMUX -68%, SNAP -27%, SIVB -16%, THC -14%, SMMT -11%, RHI -10%, TWTR -8%, PINS -7%, TTD -6%, BHVN -5%, FFBC -4%, IHG -4%, WHR -4%, META -4%.

Insider Action: No stock sees Insider buying with dumb short selling.  TCDA, ETNB 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:  AXP VZ SNAP CSX THC VRE IHG WHR  UAA. (CNBC)
  • Five Things to Know This Morning. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story:  Twitter tumbles as U.S. weighs Security Review for Musk deal. (Bloomberg)
  • Bloomberg Most Read Story: Trump deposed by investors in Apprentice videophone pitches. (Bloomberg)
  • Germany removes opposition to EU gas price cap. (FT)
  • Ukraine President warns Russia may attack a hydroelectric plant. (CNBC)
  • 10-year yield climbs to a 14 year high. (CNBC)
  • St. Louis Federal Reserve President James Bullard spoke “off record” at invite only bank client event at Citigroup alongside the IMF and World Bank meeting. (NYT)
  • Snap (SNAP) falls 25% on Q3 miss. (CNBC)
  • Verizon (VZ) sees profits drop 23%. (Reuters)
  • HCA Healthcare (HCA) misses as Covid admissions fall. (Reuters)
  • Schlumberger (SLB) sees profits jump 65%. (Reuters)
  • Twitter (TWTR) could see jobs cuts of up to 75% of the workforce. (The Washington Post)
  • Pfizer (PFE) to charge $110 a dose for latest vaccine booster. (WSJ)
  • Antitrust review of Kroger (KR) and Albertsons (ACI) merger to look at store overlap. (WSJ)

Moving Average Update:

  • Score slips back to 31% as market takes a breather.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:30 a.m. EDT
    • The President delivers brief remarks on the historic deficit reduction his economic plan is achieving, 11:00 AM
    • The President departs the White House en route Joint Base Andrews, 1:10 p.m. EDT
    • The President departs Joint Base Andrews en route Dover, Delaware, 1:30 p.m. EDT
    • The President arrives in Dover, Delaware, 2:10 p.m. EDT
    • The President delivers remarks on student debt relief, 3:15 p.m. EDT
    • The President departs Dover, Delaware en route Rehoboth, Delaware, 5:25 p.m. EDT
    • The President arrives in Rehoboth Beach, Delaware, 5:45 p.m. EDT

Economic: 

  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve New York President John Williams 9:10 a.m. EDT
  • Keep in mind members we do enter a blackout period tomorrow for the Fed – No speakers till Announcement.

M&A Activity:

  • FleetCor (FLT) signs definitive agreement to acquire European workforce lodging provider Roomex.
  • Veris Residential (VRE) confirmed receipt of unsolicited proposals from Kushner Companies to externally manage the Company or to acquire the Company for $16.00 per share.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note.
      • Previously posted and ongoing conferences:
        • Credit Suisse Real Estate Conference
        • Societe Generale Pan-European Real Estate Conference 2022 (10/20/22-10/22/22)
  • Company Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: BAYRY
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • Industry Meetings:

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: