CAPIS Morning Note – 11/01/23: Futures Lower As Refunding Announcement at 8:30 a.m. EDT, FOMC Announcement and 2:00 p.m. with Press Conference at 2:30 p.m. EDT.

Overnight Summary: The S&P 500 closed Tuesday higher by 0.65% at 4193.80 from Monday higher by 1.20% at 4166.82. The overnight high was hit at 4213 at 4:05 p.m. EDT while the low was hit at 4192.50 at 6:15 a.m. EDT. The range overnight was 21 points as of 7:30 a.m. EDT. The 10-day average of…

Overnight Summary: The S&P 500 closed Tuesday higher by 0.65% at 4193.80 from Monday higher by 1.20% at 4166.82. The overnight high was hit at 4213 at 4:05 p.m. EDT while the low was hit at 4192.50 at 6:15 a.m. EDT. The range overnight was 21 points as of 7:30 a.m. EDT. The 10-day average of the overnight range is at 30.80 from 31.20 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  -17.50 points which is  -0.42% at 7:30 a.m. EDT.

Earnings Out After The Close: 

  • Beats: AIZ +1.71, MTH +0.86, CHK +0.54, FSLR +0.45, KAI +0.42, LFUS +0.36, SON +0.23, PAYC +0.16, BLKB +0.15, AEIS +0.14, OI +0.10, MTG +0.08, PRO +0.06, CZR +0.05, MTCH +0.04, NE +0.03, FRSH +0.03, UNM +0.02, VOYA +0.02, ZWS +0.02, AMD +0.02, SKY +0.02, APAM +0.01, DEI +0.01, PECO +0.01 of note.
  • Flat: None of note.
  • Misses: MTZ (0.89), ESTE (0.23), EQH (0.17), TX (0.16), LUMN (0.13), OKE (0.08), YUMC (0.06), HUN (0.05), LTHM (0.04), SAFE (0.02), EQR (0.01), XHR (0.01) of note.

Capital Raises:

  • IPOs Priced or News:
    • Pineapple Financial Inc. (PAPL) Announces Pricing of Initial Public Offering.
  • New SPACs launched/News:
    • Forbion European Acquisition Corp. (FRBN) and enGene Holdings announce completion of business combination.
    • Industrial Tech Acquisitions II, Inc. (ITAQ) Announces Termination of Merger Agreement with NEXT Renewable Fuels, Inc. and its Intention to Liquidate.
    • SDCL EDGE Acquisition Corporation (SEDA) Announces Shareholder Approval of Extension of Deadline to Complete Business Combination.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • WDC: Announces Upsize And Pricing Of $1.4 Billion Convertible Notes Offering.
  • Common Stock filings/Notes:
    • HEPA: Filed Form S-1.. Up to 1,960,786 shares of Common Stock.
    • PRTG: Filed Form F-1.. 9,631,580 Ordinary Shares underlying Warrants.
    • SYTA: Announces Closing of $1.6 Million Public Offering of Common Shares and Pre-Funded Warrants.
    • XEL: Filed Form S-3ASR — Common Stock Offering.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • EHC: Filed Form S-3ASR — Mixed Shelf.
  • Debt/Credit Filing and 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: GTE +5%, CZR +5%, PRO +5%, GRBK +5%, FSLR +4%, CGAU +4% of note.
    • Trading Down: WE -35%, PAYC -29%, BGFV -14%, MTZ -12%, YUMC -9%, MTCH -6%, LTHM -6%, APAM -6%, OI -5%, PECO -5%, QUAD -5%, VOYA -4% of note.
  • News Items After the Close:
    • Stocks making the biggest moves after the bell: AMD, LTHM, MTCH, PAYC, MTZ, YUMC (CNBC)
    • AMD gives soft fourth-quarter guidance, but expects to sell $2 billion of AI chips next year. (CNBC)
    • Paycom’s (PAYC) stock plunges 30% as payroll company whiffs on earnings outlook. (MarketWatch)
    • WeWork (WE) Plans to File for Bankruptcy as Early as Next Week. (WSJ)
    • Yum China (YUMC) stock drops 9% after KFC operator sees ‘softening’ demand. (MarketWatch)
    • Big 5 Sporting Goods (BGFV) stock slides after forecast for a Q4 loss, same-store sales decline. (MarketWatch)
    • Alphabet (GOOGL), Match (MTCH) Settle Google Play Antitrust Fight Before Trial. (Bloomberg)
    • JPM desk “.. it appears that we are preparing for a bounce and have seen signals from both our Positioning Intelligence and Delta One team triggering a buy.” Our High Short Interest basket adds “almost 3% WTD .. much of this Equities action may be clients covering shorts ..” (CarlQ)
    • TSLA is aiming to make 200,000 units of its electric pickup truck, Cybertruck, per year, Chief Executive Officer Elon Musk.
    • Northrop Grumman (NOC) awarded $543 million U.S. Navy contract modification.
    • NOVONIX (NVX) Finalizes US$100 Million Grant Award from U.S. Department of Energy.
    • IperionX (IPX) awarded $12.7 million DOD contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Bristol-Myers (BMY) appoints Christopher Boerner, Ph.D., to Chair of the Board.
    • Canada Goose (GOOS) announces that Neil Bowden, current Deputy CFO, has been named Chief Financial Officer and current CFO, Jonathan Sinclair, has been named President, APAC.
    • Gran Tierra Energy (GTE) announces appointment of Sebastien Morin as COO. (see Buyback too)
    • Kraft Heinz (KHC) announces leadership and organizational changes.
    • Marchex (MCHX) Hires Holly Aglio as Chief Financial Officer.
    • Nephros (NEPH) Hires Judy Krandel as Chief Financial Officer.
    • Phillips Edison & Company (PECO) announces Devin Murphy to step down as President; Bob Myers promoted to President; Joe Schlosser promoted to COO.
    • Trimble (TRMB) announces David Barnes to retire; Phil Sawarynski named CFO.
    • United Natural Foods (UNFI) Appoints Andre Persaud as President and Chief Executive Officer of Retail.
  • Buyback Announcements or News: 
    • BlueLinx (BXC) Announces New $100 Million Share Repurchase Authorization.
    • Gran Tierra Energy Inc. (GTE) Announces Normal Course Issuer Bid and Automatic Share Purchase Plan.
    • Janus Henderson Group (JHG) approves new share repurchase authorization of up to $150 million of common shares.
    • Plus Therapeutics (PSTV) Announces Share Repurchase Program.
    • RBB Bancorp (RBB) Resumes Share Repurchases.
    • Unum Group (UNM) Board of Directors authorizes $500 million share repurchase program.
  • Stock Splits or News:
    • Motus GI (MOTS) Announces 1-for-15 Reverse Stock Split.
    • PRE 1-for-15 reverse split is expected to become effective on or around November 13.
  • Dividends Announcements or News:
    • CDW increases quarterly cash dividend to $0.62 per share from $0.59 per share.
    • Corebridge Financial (CRBG) Declares Special Dividend of $1.16 Per Share.
    • Noble Corporation (NE) approved an increase of the quarterly interim dividend to $0.40 per share in the fourth quarter of 2023.
  • Insider Sales Of Note: None of note.

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

S&P 500 -19, Dow Jones -131,  NASDAQ -70, and Russell 2000 -12.  (as of 7:58 a.m. EDT).  Asia is higher while Europe is higher this morning ex the FTSE. VIX Futures are at 18.23 from 19.25 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 4.901% from 4.812% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $34,388.23 from $34,420 yesterday, lower by -0.32%.

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

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

A busy day for corporate earnings reports ended with major stock indexes higher, though not enough to prevent them from a third-straight monthly decline. The S&P 500 climbed 0.6% on Tuesday, to end October 2.2% lower. Every industry segment in the benchmark index rose, with real-estate companies, banks and utilities leading the way. Arista Networks paced the index, gaining 14% after the networking equipment company beat quarterly sales and profit expectations. But the broader index was weighed down by earnings-related selloffs, including in heavy equipment manufacturer Caterpillar, down 6.7%, and contract drugmaker Catalent, which lost about 14%. Vans shoe owner VF Corp. also dropped 14% in its worst day since 1987’s Black Monday stock market crash. The tech-heavy Nasdaq Composite climbed 0.5% and the Dow Jones Industrial Average added 0.4%, or 124 points. For the month, they lost 2.8% and 1.4%, respectively. (WSJ – edited by QPI)

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

  • Wednesday After the Close:

  • Thursday Before the Open:

Earnings of Note This Morning:

  • Beats: SUN +1.72, MLM +0.89, TGTX +0.70, HUM +0.62, BLDR +0.36, W +0.35, EL +0.32, UTHR +0.28, ETR +0.25, EAT +0.23, YUM +0.17, IDXX +0.16, DIN +0.15, GRMN +0.13, TT +0.13, SPR +0.12, ESAB +0.12, CDW +0.12, TRI +0.11, SMG +0.11, JHG +0.10, PERI +0.10, MTRN +0.09, FYBR +0.09, LIVN +0.09, GNRC +0.09, TRMB +0.08, DD +0.08, CVS +0.08, NCLH +0.08, AXTA +0.07, DFIN +0.07, PSN +0.07, CMCO +0.06, KMT +0.06, KHC +0.06, IQV +0.05, VRSK +0.05, FWRG +0.05, AVA +0.05, DTM +0.04, NI +0.03, BLCO +0.03, DRH +0.03, EXTR +0.03, CERE +0.02, ALIT +0.02, DRVN +0.02, PUMP +0.02, TEL +0.02, AVNS +0.02, DNB +0.01, SHC +0.01 of note.
  • Flat: RDWR of note.
  • Misses: BALY (1.03), NMRA (0.79), ASTE (0.63), GSK (0.61), CLH (0.41), SITE (0.25), DTE (0.19), APLS (0.18), BRY (0.14), SPWR (0.11), SXC (0.10), FDP (0.07), TKR (0.04), CHEF (0.01), BIP (0.01) of note.
  • Still to Report: GOOS, CNDT, DBRG, FTDR, NMRK, NNN, TTMI, WING of note.

Company Earnings Guidance:

  • Positive Guidance: CVLT, ATEC, TNC, SON, AXTA, TT, ESAB, PSN, EAT, CHEF, GRMN, KHC, ALIT of note.
  • Negative Guidance: IPGP, PAYC, LTHM, ZWS, PRO, OI, MTH, AEIS, MTZ, MTCH, LFUS, TEL, DD, KMT, LIVN, IDXX, DTE, EL, TKR, IQV, SLAB, TRMB, EXTR, BLDR, NCLH of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CRSP +17%, NVX +15%, GRBK +6%, GTE +6%, PRO +6%, CZR +4%, AIZ +4%, CGAU +4%, XPEV +4% of note.
  • Gap Down: WE -37%, PAYC -37%, BGFV -15%, MTZ -12%, YUMC -12%, WTTR -8%, QUAD -8%, MTCH -7%, OI -7%, PECO -6%, APAM -6%, LTHM -6%, IPX -5%, VOYA -5%, SAFE -4%, HUN -4%, FDP -4% of note.

Insider Action: SFNC, TRU 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.

  • Five Things You Need To Know Before You Start Your Day. (Bloomberg)
  • 5 Things To Know Before The Stock Market Opens. (CNBC)
  • Bloomberg Lead Story: Biden’s balancing act gets harder as Gaza offensive grows. (Bloomberg)
  • Bloomberg Most Shared Story: Druckenmiller has a massive bet on the 2-year bond.  (Bloomberg)
  • All eyes on the Treasury Debt refunding announcement at 8:30 a.m. EDT. (CNBC)
  • US Futures slip before Fed’s likely “Hawkish Hold”: Market Wrap. (Bloomberg)
  • Bloomberg Opinion:  The U.N. fails to rise to occasion. Again. (Bloomberg)
  • Former Hedge Fund Manager Stanley Druckenmiller interviewed on CNBC, was highly critical of Washington D.C. and its spending habits. (CNBC)
  • Yum Brands (YUM) misses on revenues. (CNBC)
  • CVS beats on earnings and revenues as health services demand rises. (CNBC)
  • Adjustable rate mortgage demand jumps nearly 10% as buyers struggle to afford the housing market. (CNBC)
  • NPR Morning Report Marketplace:  You realized the AI you’re creating may be dangerous. Now what? (Podcast)
  • NY Times The Daily:  Lessons from an unending conflict. (Podcast)
  • BBC Global News: Israel confirms deadly strike in Gaza refugee camp. (Podcast) 
  • Bloomberg: The Big Take: One former president’s legal troubles.  (Podcast) 
  • Wealthion: The future of Wealthion. (Podcast)

Moving Average Update:

  • Score jumps 20 to 31%.  11 green (another shout out to Spinal Tap)

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EDT
    • The President departs the White House en route to Joint Base Andrews, arriving at 2:50 p.m. EDT in Northfield, Minnesota, 11:40 a.m. EDT
    • The President participates in a tour of a family farm in Northfield, Minnesota as part of his Administration’s Investing in Rural America Event Series, 3:50 p.m. EDT
    • The President delivers remarks highlighting how Bidenomics and his Investing in America agenda are ensuring rural Americans do not have to leave their hometowns to find opportunity, 4:15 p.m. EDT
    • The President departs Northfield, Minnesota en route Minneapolis, Minnesota arrriving at 5:30 p.m. EDT in Minneapolis, Minnesota, 5:15 p.m. EDT
    • The President participates in a campaign reception, 7:15 p.m. EDT
    • The President departs Minneapolis, Minnesota en route to Joint Base Andrews arriving at 11:05 p.m. EDT at the White House, 8:30 p.m. EDT

Economic:

  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications: Composite: -2.1%, Purchase: -1.4%, ReFi: -3.5%
    • U.S MBA 30-YEAR Mortgage Rate Actual: 7.86% VS 7.90% Previous
    • U.S MBA Mortgage Application (WOW) Actual: -2.1% VS -1.0% Previous
  • October ADP Employment Report is due out at 8:15 a.m. EDT and expected to come in at 100,000 from 89,000 last month.
  • Treasury Refunding 8:30 a.m. EDT
  • PMI Mfg Final 9:45 a.m. EDT
  • September Construction Spending is due out at 10:00 a.m. EDT and is expected to fall to 0.4% from 0.5%.
  • October ISM Manufacturing Index is also due out at 10:00 a.m. EDT and is expected to remain at 49%.
  • JOLTS 10:00 a.m. EDT
  • EIA Petroleum Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:  

  • The FOMC Announcement is due out at 2:00 p.m. EDT with a press conference at 2:30 p.m. EDT with Fed Chairman Powell.

M&A Activity and News:

  • Tyler Technologies (TYL) Acquires ResourceX.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Hovde Financial Services Conference
      • Previously posted and ongoing conferences:
        • Gabelli Funds’ Automotive Symposium
  • Top Shareholder Meetings: CONX, INTE, TRVG
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: BIVI, COST, CYBN, FDMT, LVO, RA
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • Emerging Growth Conference
    • mRNA Health Conference
    • TIDES Europe Annual Meeting
    • Vascular InterVentional Advances Annual Meeting

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: