CAPIS Morning Note – 10/26/22: Microsoft and Google Lower Post Earnings, Stocks Modestly Lower.

Overnight Summary: The S&P 500 closed Tuesday at 3859.11 (higher by 1.63%) from Monday at 3794.34 (higher by 1.19%).  The overnight high of 3853.50 was hit at 4:40 a.m. EDT. The low was hit at 3825.50 at 9:10 a.m. EDT, a range of 28 points high to low which is below the recent range of…

Overnight Summary: The S&P 500 closed Tuesday at 3859.11 (higher by 1.63%) from Monday at 3794.34 (higher by 1.19%).  The overnight high of 3853.50 was hit at 4:40 a.m. EDT. The low was hit at 3825.50 at 9:10 a.m. EDT, a range of 28 points high to low which is below the recent range of 45.  At 7:05 a.m. EDT, the S&P 500 was down -23.50 points which is -0.61%.  

Earnings Out After The Close: 

  • Beats: WIRE +3.15, TNET +0.62, AMP +0.58, CB +0.56, CMG +0.32, CC +0.17, WH +0.17, ENPH +0.16, MTDR +0.15, BYD +0.15, IEX +0.14, CNI +0.12, UHS +0.12, TENB +0.12, WSBC +0.11, TER +0.11, FFIV +0.10, MANH +0.09, EQC +0.09, HIW +0.08, JNPR +0.08, MAT +0.08, V +0.07, NEX +0.06, TXN +0.06, AGYS +0.06, CSGP +0.06, TRMK +0.06, RNST +0.05, KRC +0.04, MSFT +0.04, BXP +0.04, VBTX +0.03, HA +0.03, EGP +0.02, NCR +0.02, ZWS +0.02, NXGN +0.02, LXFR +0.02, CHX +0.01, MXL +0.01.
  • Flat: AXTA +0.00, EQR +0.00, FE +0.00.
  • Misses: LRN (0.40), UMBF (0.33), GOOG (0.19), SKX (0.17), SPOT (0.15), FIBK (0.14), VICR (0.08), NAVI (0.04), AGR (0.04), FCF (0.02), ROIC (0.01).

Capital Raises:

  • IPOs Priced or News:
    • INTC to list its self-driving technology unit Mobileye at $21 per share, above its previously estimated $18-$20 per share range. MBLY valuation: $16.7B.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • PCVX: Announces Pricing of $600 Million Public Offering.
    • THMO: PRICES $2.05 MILLION PUBLIC OFFERING – 11,783,572 shares @$0.14.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BHVN: Announces Closing of Public Offering and Full Exercise of the Underwriters’ Option to Purchase Additional Shares.
    • NBY: Filed Form S-1.. 35,510,720 Shares of Common Stock.
    • POR: commences $375 million common stock offering.
    • TSHA: Proposed Public Offering of Common Stock.. $30 Million. GS Bookmanager
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering:
    • CLRB: Closing of Concurrent Registered Direct and Private Placement Offerings of Approximately $10.7 Million Priced At-The-Market Under Nasdaq Rules.
    • MBOT: Closing of $5 Million Registered Direct Offering Priced At-The-Market under Nasdaq Rules.
  • 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: 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: WFRD +8%, UHS +8%, MXL +6%, CHX +5%, ENPH +5%, WIRE +4%, TENB +4%, EQC +4%, JNPR +4%.
    • Trading Down: LRN -17%, AMP -13%, TSHA -13%, SKX -11%, NEX -10%, VICR -7%, GOOG -6%, TXN -5%, AIZ -5%, SPOT -5%, MAT -4%, CB -4%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: GOOGL, MSFT, TXN, CMG, SPOT, ENPH (CNBC)
    • Intel (INTC) Prices Widely Anticipated IPO for Self-Driving Car Unit Mobileye. (WSJ)
    • Alphabet (GOOGL) misses on earnings as YouTube shrinks; company will cut headcount growth by half in Q4. (CNBC)
    • Microsoft (MSFT) Earnings Fall, Stock Slides as PC Demand and Strong Dollar Hurt Sales. (WSJ)
    • Texas Instruments (TXN) focuses on long-term chip capacity buildout, while weak short-term outlook weighs on stock. (MarketWatch)
    • Chipotle (CMG) says price hikes lift revenue as customer visits slip. (CNBC)
    • Visa (V) beats on earnings and boosts dividend by 20%. (MarketWatch)
    • VZ Chief Creative Officer McKechnie Is Leaving. (Adweek)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Automatic Data (ADP) appointed Maria Black to succeed Carlos Rodriguez as CEO.
    • Bed Bath & Beyond (BBBY) names Sue Gove as president and CEO.
    • Biophytis (BPTS) Announces Receipt of Nasdaq Notice.
    • Evercore (EVR) announces that Evercore Chief Financial Officer Celeste Mellet will depart for a new position.
    • HCA promotes Jon Foster to COO.
    • Life Storage (LSI) CFO Andrew Gregoire to retire.
    • SMTS: Announces Voluntary Delisting From NYSE American and BVL Exchanges
  • Buyback Announcements or News:
    • ChampionX (CHX) is authorized to repurchase up to $750 million of its outstanding common stock, which is an increase of $500 million to the original amount of the Share Repurchase Program.
    • NexTier Oilfield (NEX) authorizes up to $250 million for share repurchases.
    • United (USEA) Completes Second Stock Buyback of $3 million and Initiates Additional $3 million Stock Buyback Plan.
    • Visa (V) Authorized a New $12.0 billion Share Buyback Program.
    • Wyndham Hotels & Resorts (WH) increases share repurchase authorization by $400 million.
  • Stock Splits or News:
    • HOTH trading r/s price.
  • Dividends Announcements or News: 
    • Assoc Banc-Corp (ASB) increases quarterly dividend to $0.21 per share, a $0.01 bump.
    • Black Hills Corp (BKH) increases quarterly dividend to $0.625 per share.
    • Crescent Point Energy (CPG) declares CDN$0.35 per share special dividend and leaves quarterly dividend unchanged at CDN$0.08 per share.
    • Delek Logistics Partners (DKL) increases quarterly cash distribution to $0.99 per share, a $0.005 increase.  Nice job.
    • Energy Transfer (ET) increases quarterly cash distribution to $0.265 per share.
    • First Commonwealth (FCF) increases quarterly dividend by 4.3%.
    • First Interstate BancSystem, Inc. (FIBK) Increases Quarterly Cash Dividend to $0.47 per share.
    • Getty Realty Corp. (GTY) increases quarterly dividend to $0.43 per share.
    • Marine Products (MPX) increases quarterly dividend to $0.14, up $0.02.
    • Navios Maritime Partners L.P. (NMM) Announces Cash Distribution of $0.05 per Unit.
    • NBT Bancorp Inc. (NBTB) Approves Dividend.
    • Prosperity Bancshares (PB) declared a fourth quarter cash dividend of $0.55 per share, an increase of 5.8%, from the prior quarter.
    • Rollins (ROL) raises quarterly dividend by 30% to $0.13 per share.
    • Shenandoah Telecom (SHEN) increases annual cash dividend $0.01 to $0.08 per share.
    • UMB Financial Corporation (UMBF) Announces 2.7% Cash Dividend Increase.
    • Veritex’s (VBTX) Board of Directors declared a quarterly cash dividend of $0.20 per share on its outstanding shares of common stock.

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

S&P 500 -28, Dow Jones -40,  NASDAQ -200, and Russell 2000 +9. (as of 8:10 a.m. EDT). Europe lower ex Germany and Asia higher.  VIX Futures are at 28.53 from 29.81 yesterday morning and the VIX closed at 28.44 from 29.69 yesterday. Gold, Silver and Copper higher. WTI Crude Oil and Brent Oil Futures higher with Natural Gas lower as well. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10-year Treasury sees yields at 4.061% from 4.175% yesterday. Bitcoin is at $20.672 from $19,286 yesterday morning and is higher by 1.89% this morning.

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

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

Home prices declined along with bond yields which boosted the index returns.  Russell 2000 was up 2.73% to lead.  UNG was up 7.64%!

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)

  • Wednesday After the Close: CP, NOW, F, ORLY, KLAC, DLR, RJF, MOH, URI, INVH, AEM, ACGL, MAA, ALGN, BMRN, EQT, AZPN, ESS, TYL, WOLF, UDR, VFC, AR, RE, GGG, WFG, FLEX, NLY, CHDN, FBHS, OLN, SEIC, VMI, CACI, EHC, ASGN, ENSG, MSA, FTI of note.
  • Tuesday Before the Open: MA, MRK, MCD, CMCSA, HON, SPGI, CAT, AMT, MO, BUD, NOC, SO, FISV, KDP, AEP, SHOP, XEL, CARR, STM, BAX, ALNY, TROW, CBRE, DTE, LUV, LH, WST, ARES, CMS, CHKP, LKQ, TXT, KIM, IP, RCL, SWK of note.

Earnings of Note This Morning:

  • Beats: COOP +1.54, GPI +1.37, BG +0.90, EVR +0.83, CSTM +0.46, HOG +0.38, OC +0.38, ODFL +0.28, PAG +0.26, TMO +0.26, TDY +0.24, UMC +0.23, ROP +0.22, TMHC +0.21, TKR +0.18, FBC +0.17, WNC +0.16, BMY +0.16, EDU +0.15, EXP +0.14, IART +0.14, CHEF +0.13, SLAB +0.12, GRMN +0.12, IQV +0.10, GD +0.10, RES +0.09, HLT +0.07, ADP +0.07, KHC +0.07, SLGN +0.05, DRVN +0.05, PRG +0.04, WM +0.04, CME +0.04, BXMT +0.04, FTV +0.03, BCO +0.03, VRT +0.02, KBR +0.02, OTIS +0.02.
  • Flat: PB +0.00, HES +0.00.
  • Misses: BA (6.25), SF (0.16), MAS (0.08), MNRO (0.02), AVY (0.01), NYCB (0.01), BSX (0.01), TPB (0.01).
  • Still to Report: APH , BOKF , CTS , NSC , BPOP , ROL , R , STX , WING.

Guidance:

  • Positive Guidance: ITW, CSGP, ENPH, MANH, NXGN, HIW, WH, LRN, KRC, BG, EDU, TKR, WNC, ROP, CHEF, ADP, DRVN, WPP of note.
  • Negative Guidance: TXN, MAT, FFIV, SKX, NEX, TNET, AIZ, AXTA, ZWS, BXP, OTIS, BSX, AVY, SLGN, PRG, MAS, SLAB, GRMN, IQV, FTV, BCO of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: AGYS +7%, CHX +7%, UHS +6%, FCF +6%, ENPH +6%, WIRE +5%, WFRD +5%, JNPR +5%, OLMA +4%, EQC +4%, ATRA +4%.
  • Gap Down: TSHA -15%, SKX -13%, NEX -10%, LRN -8%, GOOG -6%, MSFT -6%, MAT -6%, AIZ -5%, SPOT -5%, TXN -5%, NAVI -4%, VICR -4%.

Insider Action: TCBI, CCI 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.

  • Stocks Making The Biggest Moves: BA, HLT, WM, GOOGL, HOG, KHC, MSFT, V, SPOT, MBLY, MAT  (CNBC)
  • Five Things to Know This Morning. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Tech Giants Weigh On Futures. Dollar Retreats as well. (Bloomberg)
  • Bloomberg Most Read Story: New Covid Boosters are not better than Old Ones. (Bloomberg)
  • China sees new Covid-19 cases in Macau potentially impact casinos. (Bloomberg)
  • Fixed Rate 30 Year Mortgage hits 7% the highest since 2001. (Bloomberg)
  • Mortgage Demand is half of what it was a year ago. (CNBC)
  • Goldman Sachs does not believe conditions exist for a bottom in equities. (Bloomberg)
  • Democrat John Fetterman’s uneven debate performance in Pennsylvania debate could give the edge to Republican Mehmet Oz which could decide the control of the Senate. (Bloomberg)
  • Automakers to double spending on EV and battery development by 2030. (Reuters)
  • Boeing (BA) reports quarterly loss on Air Force One and Tanker programs. (CNBC)

Moving Average Update:

  • Score improves to 65% from 62%. Let the good times roll. (

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EDT
    • The President delivers remarks on new actions to provide families with more breathing room, 10:30 a.m. EDT
    • The President hosts a bilateral meeting with President Isaac Herzog of Israel, 12:45 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:00 p.m. EDT
    • The President meets with Department of Defense leaders, 3:00 p.m. EDT
    • The President participates in a virtual political reception for Representative Matt Cartwright, 7:30 p.m. EDT
    • The President participates in a virtual political reception for Representative Cynthia Axne, 8:00 p.m. EDT
    • The President participates in a virtual political reception for Members of Congress in Nevada, 8:30 p.m. EDT

Economic: 

  • MBA Mortgage Applications 7:00 a.m. EDT

    • U.S MBA 30-YEAR MORTGAGE RATE ACTUAL: 7% VS 6.94% PREVIOUS
    • U.S MBA MORTGAGE APPLICATIONS (WOW) ACTUAL: -1.7% VS -4.5% PREVIOUS
    • US MBA Mortgage Applications Oct 21: 1.7% (prev -4.5%) – US MBA 30-Yr Mortgage Rate Oct 21: 7.16% (prev 6.94%)
  • International Trade in Goods 8:30 a.m. EDT
  • Wholesale Inventories 8:30 a.m. EDT
  • September New Home Sales are due out at 10:00 a.m. EDT and expected to come in at 575,000 from 685,000.
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • We enter a blackout period for the Fed – No speakers until  Fed Announcement on November 2nd.

M&A Activity:

  • Teledyne (TDY) to Acquire ETM-Electromatic.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Credit Suisse Global Trading Forum
      SVB Securities Biopharma Private Company Connect
    • ThinkEquity Conference
      • Previously posted and ongoing conferences:
        • None of note.
  • Company Meetings: CFMS, PH.
  • Fireside Chat:
  • Investor/Analyst Day/Calls: ADP, OLMA
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • Industry Meetings:
    • 38th Congress of European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) (10/26/22-10/28/22)
    • 14th World Stroke Congress 2022 (10/26/22-10/29/22)
    • OLEDs World Summit 2022 (10/26/22-10/27/22)
    • American Academy of Optometry 2022 Annual Meeting (10/26/22-10/28/22)
    • Advanced Bioeconomy Leadership Conference (ABLC NEXT 2022) 2022 (10/26/22-10/28/22)
    • American Academy of Ophthalmology AAO Annual Meeting 2022 (10/26/22-10/29/22)
    • Atomic Energy Agency (IAEA) International Ministerial Conference on Nuclear Power in the 21st Century 2022 (10/26/22-10/28/22)
    • Auto Finance Summit 2022 (10/26/22-10/28/22)
    • EORTC-NCI-AACR (ENA) Symposium 2022 (10/26/22-10/28/22)
        • Previously posted and ongoing conferences:
          • American Society for Radiation Oncology Conference
          • American Society of Human Genetics (ASHG) 2022 (10/25/22-10/29/22)
          • 5th Annual Targeted Protein Degradation (TPD) Summit 2022 (10/25/22-10/28/22)
          • LD Micro 15th Annual Main Event Conference 2022 (10/25/22-10/27/22)
          • International Neurology & Brain Disorders Conference 2022 (10/24/22-10/26/22)
          • BIO-Europe (10/24/22-10/26/22)
          • Gartner ReimagineHR Conference USA 2022 (10/24/22-10/26/22)
          • American College of Gastroenterology (ACG) Annual Scientific Meeting 2022 (10/21/22-10/26/22)
          • ASRM Scientific Congress & Expo 2022 (10/22/22-10/26/22)
          • American Society of Radiation Oncology (ASTRO) 64th Annual Meeting 2022 (10/23/22-10/26/22)

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: