CAPIS Morning Note – 11/29/22: Stocks Rebound From Monday Selling

Overnight Summary: The S&P 500 closed Monday at 3963.94 (lower by -1.54%) from Friday at 4026.12(lower by -0.03%).  The overnight high of 3990 was hit at 3:55 a.m. EST. The low was hit at 3968.25 at 4:05 p.m. EST, a range of ~22 points high to low.  At 7:10 a.m. EST, the S&P 500 (mini)…

Overnight Summary: The S&P 500 closed Monday at 3963.94 (lower by -1.54%) from Friday at 4026.12(lower by -0.03%).  The overnight high of 3990 was hit at 3:55 a.m. EST. The low was hit at 3968.25 at 4:05 p.m. EST, a range of ~22 points high to low.  At 7:10 a.m. EST, the S&P 500 (mini) was up +11.50.

Earnings Out After The Close: 

  • Beats: None of note.
  • Flat: None of note.
  • Misses: ARWR (1.55), AZEK (0.02).

Unusual Options Activity:

Daily Screen in Erlanger Chartroom that highlights unusual Call and Put Options activity.  It looks for volume outliers relative to the Open interest in Calls or puts.  Usually, the stock price activity reflects the outlier situation, but once in awhile you can uncover stocks prior to a pop or drop.

 

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • AL: Announces Pricing of Public Offering of $700.0 Million of Senior Unsecured Medium-Term Notes.
  • Common Stock filings/Notes:
    • MEDS: Filed Form S-1.. 2,663,045 Shares of Common Stock.
    • TCRT: Proposed Public Offering of Common Stock. (Cantor bookmanager)
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • KALA: Up to $31 Million Private Placement Financing.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes:
    • DBD: Announces the Commencement of an Exchange Offer and Consent Solicitation with respect to its Outstanding 8.50% Senior Notes due 2024.
  • 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: NUS +5%, NXST +5%, BIGC +4%.
    • Trading Down: AZEK -7%.
  • News Since The Close:
    • Federal Reserve St. Louis President James Bullard: FOMC Needs To Get To Bottom End Of 5%-7% Rate Range – Fed Will Have To Pursue Rate Hikes Into 2023
    • Federal Reserve Richmond President Thomas Barkin: I’m focused on bringing down inflation.  In data so far have seen labor market that’s still quite tight.  Expect to see continuation of solid job growth.  You’ve got to get inflation under control, and make sure of it before you do any talk of loosening.
    • Federal Reserve Cleveland President Loretta Mester: Do not think the Fed is near a pause in tightening – costs of stopping tightening too early are high.
    • UnitedHealth (UNH) announces mixed guidance for this year, 2023. (MarketWatch)
    • Shanghai Disneyland (DIS) To Be Temporarily Closed From Tuesday.
    • Raytheon Technologies (RTX) awarded $398 million contract modification from the U.S. Navy.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Index Changes:
      • Nexstar Media Group (NXST) and PBF Energy (PBF) set to join S&P MidCap 400; Sabre (SABR) and Nu Skin Enterprises (NUS) to join S&P SmallCap 600
    • Canadian Nat’l Rail (CNI) names Edmond Harris as COO.
    • Dutch Bros Inc. (BROS) Names Christine Barone As President.
    • Enfusion (ENFN) Announces Resignation of Chief Financial Officer.
    • ICHOR Corporation (ICHR) appoints Bruce Ragsdale as its new COO.
    • Integral Ad Science (IAS) announced the appointment of Khurrum Malik as Chief Marketing Officer.
    • Vail Resorts (MTN) appoints Angela Korch as CFO. (MarketWatch)
    • Versus Systems (VS) Regains Compliance with Nasdaq Minimum Bid Price Requirement.
    • Vivos Therapeutics (VVOS) Announces Receipt of Notice from Nasdaq Regarding Late Filing of Third Quarter 2022 Quarterly Report on Form 10-Q.
  • Buyback Announcements or News:
    • ATSG Directors Approve New $150 Million Share Repurchase Authorization.
    • Builders FirstSource (BLDR) Increases Stock Repurchase Plan by $1 Billion.
  • Stock Splits or News: 
    • CNS Pharmaceuticals (CNSP) Announces Reverse Stock Split (- for 30).
    • DRRX 1-for-10 reverse split.
  • Dividends Announcements or News:
    • iStar (STAR) Announces Details for Its Special Dividend.

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

S&P 500 +10, Dow Jones +30,  NASDAQ +56,  and Russell 2000 +7. (as of 7:56 a.m. EST).  Asia higher ex Japan.  Europe is higher as well.  VIX Futures are at 23.12 from 22.57. Gold, Silver and Copper higher. WTI Crude Oil and Brent higher with Natural Gas higher as well. $ is flat. US 10-year Treasury sees yields at 3.659% from 3.672%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $16,479 from $16,213 higher by +1.52%.

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

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

All three benchmark indexes lost around 1.5%. Treasurys posted slight gains, although the 10-year note was flat. Oil, meanwhile, finished up after being down for much of the day. Read Monday’s full markets round-up here.  Investors are evaluating mounting protests in China against the government’s zero-tolerance approach to Covid-19, as well as a surge in new infections in the country. Stocks have come under pressure in mainland China and Hong Kong, though some investors were buying today. (WSJ)

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)

  • Tuesday After the Close: INTU, WDAY, CRWD, HPE, NTAP, CMP of note.
  • Wednesday Before the Open: RY, HRL, BEKE, DCI, FRO, LESL, SFL, TITN of note.

Earnings of Note This Morning:

  • Beats: BILI +0.20, BNS +0.09.
  • Flat: None of note.
  • Misses: HIBB (0.57), BZUN (0.33).
  • Still to Report: CRNC, SJR.

Guidance:

  • Positive Guidance: PGNY, UNH of note.
  • Negative Guidance: AZEK, BILI of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: BILI +8%, NXST +6%, BIDU +5%, BZUN +5%, BIGC +4%, SABR +4%.
  • Gap Down: AZEK -8% of note.

Insider Action: TDW, SMBK 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 premarket: HIBB  SI CC GNRC UPS AAPL BILI ROKU (CNBC)
  • 5 things to know before the stock market opens. (CNBC)
  • Five Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story: Stocks Climb, Dollar Fades As China Turmoil Eases. (Bloomberg)
  • Bloomberg Most Read Story: Apple (AAPL) to lose 6 million iPhone production from Foxconn plant. (Bloomberg)
  • China sees Covid cases drop for the first time in a week. (CNBC)
  • China touts vaccination progress, especially seniors getting booster. (CNBC)
  • Wall Street Rips Up Dollar Playbook as 2022 Top Bet Crumbles. (Bloomberg)
  • U.S. Flu Hospitalizations up 30% in the last week. (CNBC)
  • Micron (MU) to increase 1-Beta DRAM Shipments. (Digitimes)
  • Apple (AAPL) has yet to response to Musk’s claims that Apple threatened to pull Twitter from the App Store. (CNN)
  • Strategists see stocks rallying 6% next year after choppy start. (Reuters)

Moving Average Update:

  • Score crashed down to 45% from 88%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EST
    • The President departs the White House en route Joint Base Andrews, 11:55 a.m. EST
    • The President departs Joint Base Andrews en route Freeland, Michigan, 12:25 p.m. EST
    • The President arrives in Freeland, Michigan, 2:05 p.m. EST
    • The President tours the SK SiltronCSS facility, 2:35 p.m. EST
    • The President discusses how his economic plan is leading to a manufacturing boom, growing the economy, and creating good-paying jobs in Michigan and across the country, 3:30 p.m. EST
    • The President departs Freeland, Michigan en route Joint Base Andrews, 5:35 p.m. EST
    • The President arrives at Joint Base Andrews, 7:05 p.m. EST
    • The President arrives at the White House, 7:35 p.m. EST

Economic: 

  • September S&P Case Schiller Home Price Index is due out at 9:00 a.m. EST and expected to come in at 10.7% from 13.1%.
  • FHFA House Price Index 9:00 a.m. EST
  • November Consumer Confidence is due out at 10:00 a.m. EST and expected to fall to 100 from 102.5.
  • API Crude Oil Data 4:30 p.m. EST

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Apollo Endosurgery (APEN) to be Acquired by Boston Scientific (BSX).
  • Bionano Genomics (BNGO) to Acquire Purigen Biosystems to Enable Further Simplified and Accelerated DNA Isolation for Optical Genome Mapping (OGM) and Address Difficult Sample Types in New Applications with Isotachopho.
  • Leonardo DRS Announces Closing of Merger With RADA.
  • Royal Bank of Canada (RY) to strengthen premium Canadian business with agreement to acquire HSBC Canada (HSBC).
  • USNA Acquires Two Companies—Rise Bar & Oola.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bank of America Global Research Materials & Infrastructure Conference 2022 (11/29/22-12/01/22)
    • Barclays Eat, Sleep, Play Conference 2022 (11/29/22-11/30/22)
    • Berenberg Discover AI Seminar
    • BTIG Ophthalmology Day
    • Evercore ISI HealthCONx Conference (11/29/22-12/01/22)
    • Goldman Sachs Carbonomics CEO Day 2022
    • Piper Sandler 34th Annual Healthcare Conference 2022 (11/29/22-12/01/22)
    • Redburn CEO Conference (11/29/22-11/30/22)
    • Scotiabank Mining Conference (11/29/22-11/30/22)
    • UBS Global Real Estate CEO/CFO Conference 2022 (11/29/22-12/01/22)
    • Wells Fargo 6th Annual TMT Summit 2022 (11/29/22-12/01/22)
      • Previously posted and ongoing conferences:
        • Bank of America Securities Leveraged Finance Conference 2022 (11/28/22-11/30/22)
        • Berenberg 1-1 Symposium at the German Equity Forum 2022 (11/28/22-11/30/22)
        • Citi Chemicals for the Non-Chemist Conference 2022
        • Credit Suisse 26th Annual Technology TMT Conference 2022 (11/28/22-12/01/22)
        • RSB Annual Conference 2022 (11/28/22-12/01/22)
        • UBS Global Emerging Markets (GEMS) One-on-One Conference 2022 (11/28/22-11/30/22)
  • Company Meetings: NDRA, PBLA, SBII
  • Fireside Chat:
  • Investor/Analyst Day/Calls: BNGO, CRNC, ED, EMR, KN, NSRGY, QURE, MAC, RCAT, SU, TRP, UNH.
  • Update: None of note.
  • R&D Day:
  • Company Event: None of note.
  • Industry Meetings:
    • Clinical Trials on Alzheimer’s Disease (CTAD) Conference 2022 (11/28/22-12/02/22)
      • Previously posted and ongoing conferences:

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: