CAPIS Morning Note – 10/24/23: Stocks Higher As Yields On 10-Year Remain Below 4.90%

Overnight Summary: The S&P 500 closed Monday lower by -0.17% at 4217.04 from  Friday lower by -1.26% at 4224.16. The overnight high was hit at 4262.50 at 5:50 a.m. EDT while the low was hit at 4242.25 at 9:40 p.m. EDT. The range overnight was 20 points as of 7:25 a.m. EDT. The 10-day average of…

Overnight Summary: The S&P 500 closed Monday lower by -0.17% at 4217.04 from  Friday lower by -1.26% at 4224.16. The overnight high was hit at 4262.50 at 5:50 a.m. EDT while the low was hit at 4242.25 at 9:40 p.m. EDT. The range overnight was 20 points as of 7:25 a.m. EDT. The 10-day average of the overnight range is at 24.20 from 23.70 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 higher by  points which is  % at 7:25 a.m. EDT.

Earnings Out After The Close: 

  • Beats: RLI +0.53, NUE +0.28, SSD +0.25, WSFS +0.19, MEDP +0.17, WRB +0.17, CR +0.16, PKG +0.12, CLF +0.11, CALX +0.09, BRO +0.09, IBTX +0.06, CDNS +0.06, AGYS +0.06, HSTM +0.04, CATY +0.04, ARE +0.02 of note.
  • Flat: CCK of note.
  • Misses: TFII (0.16), HRI (0.15), TBI (0.07), AAN (0.06), HXL (0.05) of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • Healthwell Acquisition Corp. I (HWEL) Announces Postponement of the Special Meeting of Stockholders to Approve the Proposed Business Combination with Starton Therapeutics, Inc. and Related Transactions.
    • TenX Keane Acquisition (TENK) and Citius Pharmaceuticals (CTXR) announce merger agreement.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BAER: Terminates Proposed Public Offering of its Common Stock.
    • NXU: Announces Closing of $3.0 Million Public Offering of Common Stock.
    • RARE: Announces Closing of Public Offering of Common Stock and Pre-Funded Warrants and Full Exercise of Underwriters’ Option to Purchase Additional Shares.
    • SDA: Files for 3,000,000 shares of common stock; relates to warrants.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • REXR: Filed Form S-3ASR Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • OSG: Reduces Outstanding Debt.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • OCTO: Achieves Prepayment and Redemption Agreement with respect to Certain Outstanding Senior Secured Convertible Notes and Warrants.

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: ASTI +36%,  RDFN +14%, AGYS +10%, ASPN +9%, AMRX +7%, CR +5%, MATX +5%, HRI +5%, MEDP +5%, IPAR +4% of note.
    • Trading Down: BI -12%, HXL -7%, AGNC -7%, AAN -7% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after the bell: RDFN, TBI, HXL, KREF, AGYS, CDNS (CNBC)
    • Cadence Design Systems’ (CDNS) stock dips on disappointing guidance. (MarketWatch)
    • Crane’s (CR) stock rallies more than 5% after Q3 beat, deal to buy piping company (MarketWatch)
    • Agilysys’ (AGYS) stock jumps on revenue, earnings beat (MarketWatch)
    • Redfin’s (RDFN) stock rallies more than 12% after Apollo throws real-estate brokerage a lifeline (MarketWatch)
    • BWXT: Announces $300 Million Contract for Naval Nuclear Reactor Fuel.
  • Exchange/Listing/Company Reorg and Personnel News:
    • DOW Names Jeffrey Tate as CFO.
    • Fitell Corporation (FTEL) Announces New CEO to Drive Expansion in Australia and Asia.
    • GE Announces Planned Spin-Off Timing Beginning of Second Quarter of 2024; Selects Listing Exchanges and Ticker Symbols for Future Independent GE Vernova and GE Aerospace.
    • Hertz Global (HTZ) announces that Justin Keppy will join the company as Executive Vice President and Chief Operating Officer.
    • IonQ (IONQ) co-founder and Chief Science Officer Dr. Chris Monroe to step down.
    • Johnson & Johnson (JNJ) Worldwide Chairman of MedTech stepping down.
    • Onconova (ONTX) Expands Leadership Team with Two Key Appointments.
    • SEE Announces Leadership Transition.
  • Buyback Announcements or News: 
    • RTX: Approves $10 billion Accelerated Share Buyback Program.
    • TFI International (TFII) approves up to 10% of its stock for repurchases.
    • Travelzoo (TZOO) Announces Share Repurchase Program.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.
  • Insider Sales Of Note: None of note.

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

S&P 500 +24, Dow Jones +158,  NASDAQ +104, and Russell 2000 +15.  (as of 7:55 a.m. EDT).  Asia is higher while Europe is higher ex the FTSE this morning. VIX Futures are at 19.45 from 21.47 yesterday.  Gold and Silver lower with Copper higher this morning. WTI Crude Oil  and Brent Crude Oil are higher with Natural Gas lower. US 10-year Treasury sees yields at 4.85% from 4.989% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $34,300 from $30,652 yesterday, higher by +9.64%.

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

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

Investors have been waiting for the right moment to jump back into the frigid bond market. On Monday, some of them took the plunge.   A months-long bond selloff helped push the 10-year U.S. Treasury yield above 5% on Monday morning for the first time since 2007. Some investors saw the milestone as a buying opportunity, quickly pushing yields back to 4.836%. The stock market’s response to Monday’s reversal was mixed. The Dow Jones Industrial Average fell 0.6%, or 191 points. The S&P 500 ticked down 0.2%, while the tech-heavy Nasdaq Composite rose 0.3%.  (WSJ – edited by QPI)

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

  • Tuesday After the Close:

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: NUE +1.35, SPOT +0.55, CNC +0.45, SHW +0.42, GM +0.41, AWI +0.29, MMM +0.26, GE +0.26, CBU +0.22, DHR +0.22, MLI +0.15, KMB +0.14, XRX +0.11, ADM +0.10, NVS +0.07, PNR +0.07, NEP +0.07, PHM +0.07, SASR +0.06, NEE +0.06, KO +0.05, SYF +0.05, VZ +0.04, DOW +0.04, DGX +0.03, RTX +0.03, FI +0.03, HAL +0.02, DOV +0.02, BANC +0.01, SMPL +0.01, ARCC +0.01 of note.
  • Flat: IVZ +0.00, PII +0.00 of note.
  • Misses: PACW (0.35), ABG (0.28), TECK (0.26), PPBI (0.07), HRI (0.04), TRU (0.04), GLW (0.01) of note.
  • Still to Report: BCS, FELE, GATX, ITW, ONB, PCAR, SFNC of note.

Company Earnings Guidance:

  • Positive Guidance: AGYS, ARE, MEDP, IPAR, MATX, AMRX, ASPN, CNC, AWI, GE, PKG, MMM, DGX, KO, KMB, SHW, FI of note.
  • Negative Guidance: UCTT, CDNS, TBI, CCK, AAN, PII, DOV, TRU, SMPL, PNR, GLW of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ASTI +94%, AGYS +12%, LOGI +11%, RDFN +8%, MEDP +8%, AMRX +7%, ASPN +7%, GE +6%, HRI +5%, CR +4%, PKX +4% of note.
  • Gap Down: TBI -19%, IONQ -15%, AGNC -9%, PII -6%, HXL -6%, AAN -5%, BCS -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 To Know Before The Stock Market Opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Macron Calls For a Coalition To Fight Against Hamas. (Bloomberg)
  • Bloomberg Second Most Shared Story: Money Managers with $100 Trillion Confront End of Bull Market.   (Bloomberg)
  • Bloomberg Opinion: What the Federal Funds Rate is not telling you. Former Federal Reserve NY President William Dudley. (Bloomberg)
  • Bonds rebound as stock traders await tech earnings: Market Wrap. (Bloomberg)
  • Chinese President Xi visited the People’s Bank of China (PBOC) in a effort to shore up the Chinese economy. (Bloomberg)
  • Wall Street hikes anti-obesity drug sales to $100 billion and beyond. (CNBC)
  • Coca Cola (KO) beats and raises as volume rises as well. (Bloomberg)
  • Spotify (SPOT) turns a profits and user growth upticks. (Yahoo Finance)
  • Barclay’s (BCS) warns and stock drops 6.5%. (CNBC)
  • NPR Morning Report Marketplace:  Some NYC Airbnb (ABNB) hosts go underground following crackdown. (Podcast)
  • NY Times The Daily: The Lawyers now turning on Trump.  (Podcast)
  • BBC Global News: Two more hostages released from Gaza.  (Podcast) 
  • Bloomberg: Israel debates when and how to invade Gaza.  (Bloomberg)
  • Wealthion: While a brief bounce is likely, markets likely to face decades long headwinds. (Podcast)

Moving Average Update:

  • Score remains at 8%.

Geopolitical: 

  • President’s Public Schedule:
    • The President awards the National Medal of Science and the National Medal of Technology and Innovation, 11:30 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EDT
    • The President and The First Lady welcome Prime Minister Anthony Albanese and Ms. Jodie Haydon of Australia to the White House, 6:00 p.m. EDT

Economic:

  • Redbook Sales 8:55 a.m. EDT
  • PMI Composite Flash 9:45 a.m. EDT
  • Richmond Fed Mfg Index 10:00 a.m. EDT
  • The 2-Year Treasury Auction is held at 1:00 p.m. EDT.
  • API Crude Oil Data 4:30 p.m. EDT

Federal Reserve / Treasury Speakers:  

  • Fed Blackout period until FOMC Announcement on November 1st 2023.

M&A Activity and News:

  • Cadence Bank (CADE): Arthur J. Gallagher (AJG) to acquire CADE for $904 million in cash.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • JPM/Robin Hood Investors Conference
    • H.C. Wainwright NASH Conference
      • Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings: ELBM, STAF, VHC
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AMGN, ASLN, AUTL, PDFS, PSNL, XPEV
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Cisco’s (CSCO) WebexOne Event
    • Itron (ITRI) Inspire 2023 (10/22/23-10/27/23)
  • 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 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: