CAPIS Morning Note – 10/27/23: Stocks Higher, Gains Fade And Dow Turns Down.

Overnight Summary: The S&P 500 closed Thursday lower by -1.18% at 4137.23 from Wednesday lower by  -1.43% at 4186.77. The overnight high was hit at 4185 at 5:05 a.m. EDT while the low was hit at 4165.50 at 7:20 a.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 Thursday lower by -1.18% at 4137.23 from Wednesday lower by  -1.43% at 4186.77. The overnight high was hit at 4185 at 5:05 a.m. EDT while the low was hit at 4165.50 at 7:20 a.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 29.40 from 30 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  +10 points which is  0.24% at 7:25 a.m. EDT.

Earnings Out After The Close: 

  • Beats: DECK +2.39, COF +1.21, CUBI +0.99, CMG +0.81, FIX +0.61, CINF +0.51, KNSL +0.47, APPF +0.44, MGRC +0.40, AMZN +0.35, CDP +0.33, HIG +0.32, X +0.28, INTC +0.19, MTX +0.18, LHX +0.16, LPLA +0.16, DXCM +0.16, EVTC +0.15, SKYW +0.15, SKX +0.14, ATGE +0.13, RSG +0.11, MMSI +0.10, PFG +0.10, CSL +0.10, EHC +0.09, PFSI +0.08, SPSC +0.08, MHK +0.07, NRDS +0.07, OLN +0.07, AJG +0.05, COLM +0.05, JNPR +0.05, AB +0.03, ABCB +0.03, EMN +0.03, FHI +0.03, FE +0.03, PEB +0.03, TEX +0.03, AX +0.03, RMD +0.03, ESS +0.02, STAG +0.02, VRSN +0.02, DLR +0.01, ENPH +0.01, LTC +0.01 of note.
  • Flat: CPT +0.00, CUZ +0.00, ELME +0.00, GLPI +0.00, PFS +0.00, UDR +0.00 of note.
  • Misses: PTCT (0.70), BIO (0.45), SAM (0.38), DRQ (0.28), HUBG (0.20), BJRI (0.15), COUR (0.14), TXRH (0.11), F (0.07), NOV (0.06), CC (0.06), WY (0.02), EXPO (0.01), SSNC (0.01), SSB (0.01) of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • FC Barcelona and Mountain & Co. I Acquisition Corp. (MCAA) amend and restate Business Combination Agreement with regards to Barça Media.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ICU: Filed Form RW.
    • NVNO: Filed Form S-3.. 14,708,942 Shares of Common Stock.
    • RNAZ: Announces Public Offering of Common Stock. (ThinkEquity Bookmanager)
  • Direct Offering:
    • GLUE: $25 Million Registered Direct Offering, Priced At- the-Market Under Nasdaq Rules.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • ASPI: Announces Closing of $9.1 Million Private Placement of Common Stock.
  • Mixed Shelf Offerings:
    • AYI: Filed Form S-3ASR — Mixed Shelf.
    • BRFH: Filed Form S-3.. Mixed Shelf.
    • COHN: 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:
    • BNGO: Filed Form S-3.. Up to $35,000,000 of Senior Secured Convertible Notes due 2025 — Up to 12,221,738 Shares of Common Stock.

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: COUR +17%, DXCM +14%, SWI +11%, DECK +10%, MMSI +10%, INTC +9%, FIX +8%, APPF +7%, CUBI +7%, NRDS +7%, EVTC +6%, TBBK +6%, GRPN +6%, JNPR +5%, MTX +5%, COF +5%, BFST +5%, CPT +4%, CINF +4%, NOV +4% of note.
    • Trading Down: ENPH -17%, PTCT -12%, SBCF -7%, BIO -7%, RMD -7%, OLN -5%, SAM -5%, ELME -4%, EXPO -4%, F -4%, HUBG -4%, CC -4%, CSTR -4% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after the bell: INTC, AMZN, CMG, ENPH, DECK, DXCM, COF, F (CNBC)
    • Amazon’s (AMZN) Profit Triples as Sales Show Resilience. (WSJ)
    • Ford (F) Misses on Profit, Pulls 2023 Outlook After Strike Deal. (Bloomberg)
    • Intel (INTC) stock rises on earnings beat and strong revenue guidance. (CNBC)
    • Chipotle Mexican Grill (CMG) easily tops earnings estimates, as higher prices help offset food inflation. (CNBC)
    • Apple (AAPL) Faces Potential Watch Import Ban After Federal Trade Ruling. (WSJ)
    • Silver Lake, Thoma Bravo-Backed SolarWinds (SWI) Is Weighing Potential Sale. (Bloomberg)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Alliant Energy (LNT) CEO John Larsen to Become Executive Chairman, Lisa Barton Named CEO.
    • Arthur J. Gallagher & Co. (AJG) Announces Senior Leadership Appointments for Continued Expansion.
    • BuzzFeed, Inc. (BZFD) Announces Chief Financial Officer Succession Plan.
    • China SXT Pharmaceuticals, Inc. (SXTC) Regained Compliance with Nasdaq’s Minimum Bid Price Rule.
    • DSS Inc. (DSS) Receives Notice of Non-Compliance with NYSE American Trading Share Price Listing RuleCompany intends to cure the deficiency and return to compliance with NYSE American standard.
    • Kennametal (KMT) names William Lambert as Chairman of the Board.
    • Verastem (VSTM) promotes Vice President of finance Dan Calkins to CFO.
  • Buyback Announcements or News: 
    • The Bancorp (TBBK) increasing planned buyback in 2024.
    • Cboe Global Markets (CBOE) Announces Increase in Share Repurchase Authorization.  (see dividend)
    • DXCM: Announces $500 Million Share Repurchase Program.
    • Elme Communities (ELME) authorizes up to $50 million for repurchases.
    • Federated Hermes (FHI) authorizes new share repurchase program.
    • Hub Group (HUBG) New $250 million share repurchase plan, replacing the remaining availability under the current authorization. (see dividend)
    • loanDepot (LDI) amended and restated master repurchase agreement with Bank of America.
    • NerdWallet (NRDS) approves $30 million for repurchases.
    • Polaris (PII) Announces $1 Billion Share Repurchase Authorization. (see dividend)
    • Republic Services (RSG) authorized $3 billion buyback starting in January.
    • Stealthgas (GASS) announces $10 million increase in share repurchase program to $25 million.
  • Stock Splits or News:
    • GSE Solutions (GVP) Announces Reverse Stock Split.
    • JWEL, VVOS, CPOP, SMFL trading severse split price.
  • Dividends Announcements or News:
    • ABBV hikes the dividend by 4.7% to $1.55 quarterly.
    • Atlantic Union Bankshares (AUB) increases quarterly dividend to $0.32 per share.
    • Boise Cascade (BCC) declares a special dividend of $5.00 per share.
    • Cboe Global Markets (CBOE) Declares Fourth-Quarter 2023 Dividend.
    • Comfort Systems (FIX) increases quarterly dividend to $0.25 per share.
    • Gorman-Rupp (GRC) increases quarterly cash dividend to $0.18 per share.
    • Hub Group (HUBG) Initiation of a quarterly cash dividend program, initially set at $0.50 per share per year,
    • Macatawa Bank Corporation (MCBC) increases quarterly cash dividend 12% to $0.09 per share.
    • Kontoor Brands (KTB) increases quarterly cash dividend to $0.50 per share from $0.48 per share.
    • Murphy USA (MUSA) increases quarterly cash dividend to $0.41 per share from $0.39 per share.
    • Polaris (PII) Declares Regular Cash Dividend.
    • Principal Fincl (PFG) raises dividend $0.02 to $0.67 per share.
    • Rockwell Automation (ROK) increases quarterly dividend to $1.25 per share.
    • Select Energy Services (WTTR) increases quarterly cash dividend 20% to $0.06 per share.
    • WMC — Cutting dividend.
    • Exxon Mobil (XOM) Raises quarterly dividend to $0.95 per share from $0.91 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 +5, Dow Jones -87,  NASDAQ +84, and Russell 2000 -1.  (as of 8:00 a.m. EDT).  Asia is higher while Europe is lower ex the DAX this morning. VIX Futures are at 20.60 from 19.15 yesterday.  Gold and Silver are lower with Copper higher this morning. WTI Crude Oil  and Brent Crude Oil are higher with Natural Gas higher as well. US 10-year Treasury sees yields at 4.873% from 4.95% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $34,013 from $34,435 yesterday, lower by -0.73%.

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

  • Daily Positive Sectors: Real Estate, Utilities of note.
  • Daily Negative Sectors: Communication Services, Technology, Consumer Cyclical, 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.

A pullback in megacap technology stocks deepened Thursday, dragging the Nasdaq Composite into its worst two-day decline of the year. The tech-heavy index dropped 1.8%, while the S&P 500 shed 1.2%. The Dow Jones Industrial Average declined around 250 points, or 0.8%. A recent round of quarterly earnings reports has tamped down this year’s rally in big-tech shares. Third-quarter results from tech giants this week have mostly failed to impress investors, injecting volatility into the stock market. The S&P 500’s year-to-date gains have shrunk to 7.8%. (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: IMO +0.89, DAN +0.17, PIPR +0.17, PNM +0.16, NWL +0.16, LECO +0.15, NEWR +0.12, NVT +0.11, AON +0.11, ABBV +0.08, BCPC +0.07, CL +0.06, CBRE +0.05, SAIA +0.05, AN +0.05, OIS +0.03, B +0.01, STEL +0.01, GNTX +0.01 of note.
  • Flat: WT +0.00, AVTR +0.00 of note.
  • Misses: CVX (0.65), XOM (0.43), GTLS (0.20), PSX (0.19), POR (0.08), BAH (0.04), XEL (0.03) of note.
  • Still to Report: ABR, FHB, NWE, SMP of note.

Company Earnings Guidance:

  • Positive Guidance: ITGR, MGRC, DXCM, EVTC, DECK, SPSC, APPF, INTC, RSG, MMSI, COUR, SWK, PNM, CL  of note.
  • Negative Guidance: CTS, LHX, SKX, ENPH, AMZN, SSNC, HUBG, MHK, PEB, EMN, CPTT, EHC, UDR, DRQ, POR, GTLS, B, NWL, AER, ACMR, DAN, ABBV of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: DXCM 17%, COUR 16%, SWI 12%, CUBI 10%, EVTC 10%, MASI 10%, DECK 9%, MGRC 9%, FIX 8%, APPF 8%, NRDS 7%, INTC 7%, JNPR 7%, TBBK 6%, AMZN 6%, MMSI 6%, COF 5%, MTX 5%, BFST 5%, AVTR 5%, GRPN 5%, CPT 5%, CMG 4%, SKX 4% of note.
  • Gap Down: PTCT -22%, ENPH -21%, SNY -17%, NWG -11%, BIO -9%, SBCF -6%, OLN -6%, ELME -5%, EXPO -5%, HUBG -4%, CC -4%, BJRI -4% 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:  US Military attacks two Syrian facilities it says are linked to Iran. (Bloomberg)
  • Bloomberg Most Shared Story: Chinese Ex Premier Li Keqiang dies of heart attack. (Bloomberg)
  • Bloomberg Opinion:  Why no recession yet? Thank the US consumer. (Bloomberg)
  • Elon Musk CEO of X formerly Twittter wants to create competitive products to YouTube and LinkedIn. (Bloomberg)
  • Apple (AAPL) faces a potential import ban on watch. (WSJ)
  • Exxon (XOM) reports earnings up 15% from Q2 but down 15% from a year ago. (CNBC)
  • Chevron (CVX) profits fall short of expectations. (Bloomberg)
  • JP Morgan (JPM) CEO Dimon to sell $141 million of shares. First sale since became CEO. (Bloomberg)
  • NPR Morning Report Marketplace:  Policy makers take on AI, Meta’s impact on kids. (Podcast)
  • NY Times The Daily: A new threat: Surprise Hurricanes. (Podcast)
  • BBC Global News:  Israel rejects calls for Gaza ceasefire at UN. (Podcast) 
  • Bloomberg: The Big Take: Taylor Swift is a pop icon and a billionaire. (Podcast) 

Moving Average Update:

  • Score down to 2% from 8%.  Not good.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • The President departs the White House en route to a campaign reception in Washington, DC, 4:50 p.m. EDT
    • The President participates in a campaign reception, 6:00 p.m. EDT
    • The President departs Fort Lesley J. McNair en route to New Castle, Delaware, 7:15 p.m. EDT
    • The President arrives in New Castle, Delaware, 8:10 p.m. EDT

Economic:

  • September Personal Income is due out at 8:30 p.m. EDT and is expected to stay at 0.4%.
  • September PCE Core is expected to come in at 0.3% from 0.1% when released at 8:30 a.m. EDT.
  • October University of Michigan Consumer Sentiment is due out at 10:00 a.m. EDT and is expected to rise to 63.10 from 63.
  • Inflation Expectations 1 and 5 yr 10:00 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:  

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

M&A Activity and News:

  • Old National Bancorp (ONB) and CapStar Financial Holdings (CSTR) have entered into a definitive merger agreement for Old National to acquire CapStar in an all-stock transaction.

Meeting & Conferences of Note:

  • Sellside Conferences:
      • Previously posted and ongoing conferences:
        • Fall Foliage MicroCap Rodeo Conference
  • Top Shareholder Meetings: IOAC
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: GNPX 
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
  • Industry Meetings:
    • European Society of Gene & Cell Therapy
        • Previously posted and ongoing conferences:
          • Women in Bio Conference
          • CTAD Conference
          • ICS Cybersecurity Conference
          • Lightspeed Oxygen Summit

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: