Overnight Summary: The S&P 500 closed Wednesday at 4080.11 (higher by 3.09%) from Tuesday at 3957.63 (lower by -0.16%). The overnight high of 4096 was hit at 6:05 p.m. EST. The low was hit at 4072 at 4:40 p.m. EST, a range of ~24 points high to low. At 7:20 a.m. EST, the S&P 500 (mini) was down -1.25.
Earnings Out After The Close:
- Beats: SPLK +0.58, PVH +0.42, OKTA +0.24, LZB +0.20, CRM +0.18, NTNX +0.15, FIVE +0.14, ESTC +0.10, SNPS +0.07, PSTG +0.06, SNOW +0.06, VSCO +0.06, YEXT +0.03, SMTC +0.02, BOX +0.01, NCNO +0.01.
- Flat: None of note.
- Misses: GIII (0.49), CRDO (0.01).
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 (earnings/buyout/announcement), but once in awhile you can uncover stocks prior to a pop or drop.
- IPOs Priced or News:
- FLCT: sees IPO price $6.25 per unit. (Bloomberg)
- New SPACs launched/News:
- Advanced Merger Partners, Inc. (AMPI) Will Redeem Its Public Shares and Will Not Consummate an Initial Business Combination.
- Iris Acquisition Corp (IRAA): Liminatus Pharma LLC and Iris Acquisition Corp to combine; plan to operate under Liminatus Pharma.
- Secondaries Priced:
- AURA: Announces Pricing of Public Offering of Common Stock.
- CNSP: Pricing of $6.0 Million Public Offering At a Premium to the Market Closing Price.. Priced at$3.175.
- CTO: Announces Pricing of Upsized Public Offering of 3,000,000 shares of its common stock at a price to the public of $19.00 per share.
- ISEE: Prices $300 Million offering. 13.4 Million shares at $22.50 per share.
- NTLA: Pricing of Public Offering of Common Stock. 6,550,219 shares at$45.80.
- Notes Priced of note: None of note.
- Common Stock filings/Notes:
- AURA: Proposed Public Offering of Common Stock. (SVB, Cowen and Evercore bookmanagers)
- AZYO: Proposed Public Offering of Common Stock. (Cantor bookmanager)
- CTO: Public Offering of Common Stock.. 2,500,000 shares. (WFC Bookmanager)
- FREY: Public Offering of 13,500,000 Ordinary Shares. (CS, BAC and MS Bookmanager)
- ISEE: Proposed Offering of Common Stock.. $250 Million. (MS, BAC, Cowen and Stifel bookmanagers)
- MSPR: Filed Form S-1.. Up to 67,423,588 Shares of Class A Common Stock.
- NTLA: Proposed Public Offering of Common Stock.. $250 million of shares. (GS Underwriter)
- OABI: Filed Form S-1.. Up to 36,345,645 Shares of Common Stock Up to 11,345,489 Warrants Up to 19,012,156 Shares of Common Stock Issuable Upon Exercise of Warrants.
- SCLX: Filed Form S-1.. Up to 28,078,672 Shares of Common Stock.
- SHLS: Launch of Offering of 20,000,000 Shares of Class A Common Stock. (JPM, Guggenheim and MS Bookmanager)
- Direct Offering: None of note.
- Selling Shareholders of note:
- AEL: Files for 15,886,163 share common stock offering by selling shareholders.
- FANG: Filed Form S-3ASR.. Up to 5,920,818 Shares by selling shareholders.
- LMND: Filed Form S-3.. 7,846,646 Warrants to Purchase Shares of Common Stock Up to 412,969 Shares of Common Stock Issuable Upon Exercise of Warrants to be Sold by Selling Shareholders.
- Private Placement of Public Entity (PIPE):
- TCBP: Announces Closing of $7.35 Million Private Placement.
- Mixed Shelf Offerings:
- NJR: Filed Form S-3ASR — Mixed Shelf Offering.
- Debt Filing/Notes:
- DAC: Announces Senior Notes Repurchase..
- Tender Offer:
- GE: Announces Total Consideration and Amounts Accepted in its Debt Tender Offer: Expects to Repurchase Approximately $7.2 Billion in Principal Amount on December 2, 2022.
- 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: OKTA +13%, PVH +10%, FIVE +9%, SPLK +8%, OFIX +7%, SNPS +6%, RGR +5%.
- Trading Down: GIII -23%, ESTC -15%, SHLS -10%, FREY -10%, CRM -6%, SNOW -5%, CTO -5%. NTLA -5%, OGS -4%.
- News Since The Close:
- Stocks making the biggest moves after hours: CRM, SNOW, COST, FIVE, VSCO, SPLK, PVH, ESTC (CNBC)
- Salesforce (CRM) stock falls over 5% on earnings and sudden departure of co-CEO Bret Taylor. (CNBC)
- Snowflake (SNOW) stock drops after sales forecast that CFO admits is ‘conservative’ (MarketWatch)
- ELON MUSK TWEET: Regarding Apple (AAPL) – Good conversation. Among other things, we resolved the misunderstanding about Twitter potentially being removed from the App Store. Tim was clear that Apple never considered doing so.
- Sam Bankman-Fried Denies Knowing Scale of Bad Alameda Bets. (WSJ)
- Raytheon Technologies (RTX) awarded a $1.22 billion US Army contract for National Advanced Surface-to-Air Missile Systems.
- Aerojet Rocketdyne (AJRD) awarded a $240 million modification to a previously awarded Missile Defense Agency contract for Medium Range Ballistic Missiles.
- Boeing (BA) awarded Options 7, 8 and 9 to its US Air Force contract in an estimated amount of $235 million.
- Exchange/Listing/Company Reorg and Personnel News:
- Arcadia Biosciences (RKDA) Announces CFO Transition.
- Conformis, Inc. (CFMS) Regains Compliance with Nasdaq’s Minimum Bid Price Rule.
- Dimitrius Oliveira appointed as CEO of Atento (ATTO) and Anil Bhalla as Executive Chairman of the Board.
- Enochian BioSciences (ENOB) Announces Receipt of Notice from Nasdaq Regarding Delayed Filing of Form 10-Q for the Period Ended September 30, 2022.
- Johnson & Johnson (JNJ) Names CEO Joaquin Duato as Chairman of the Board.
- Royal Bank of Canada (RY) announced that Jacynthe Cote will be appointed as Chair of the Board.
- Shoals Technologies Group, Inc. (SHLS) announces that Jason Whitaker intends to step down from his role as CEO for health reasons.
- WW International Inc. (WW) CFO Amy O’Keefe to leave.
- Buyback Announcements or News: None of note.
- Stock Splits or News:
- Baudax Bio (BXRX) Announces 1-for-40 Reverse Stock Split.
- Dividends Announcements or News:
- BMO Financial Group (BMO) Increases Common Share Dividend by 4 cents from the prior quarter, up 8 per cent from the prior year.
- ChoiceOne Financial (COFS) Announces 4% increase in Cash Dividend.
- Essential Properties Realty Trust, Inc. (EPRT) Increases Quarterly Dividend to $0.275 per Share, a 1.9% Increase Over Prior Quarter.
- LZB Increases Dividend By 10%.
- Sturm, Ruger & Company, Inc. (RGR) Declares Special Dividend of $5.00 Per Share.
- Universal Health (UHT) increases quarterly dividend to $0.715 from $0.710.
What’s Happening This Morning: Futures value reflects the change with fair value.
S&P 500 +1, Dow Jones -4, NASDAQ +1, and Russell 2000 +7. (as of 8:01 a.m. EST). Asia higher. Europe is higher. VIX Futures are at 22.17 from 23.20. 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 3.59% from 3.725%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $17,129 from $16,872 higher by +0.41%.
Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):
- Daily Positive Sectors: Technology, Communication Services, Consumer Cyclical, Healthcare, Utilities, Basic Materials, Real Estate of note.
- Daily Negative Sectors: None 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.
Stocks rallied Wednesday after Federal Reserve Chair Jerome Powell signaled a potential slowdown in interest-rate increases, powering the Dow Jones Industrial Average more than 700 points higher and into a new bull market. The S&P 500 and Nasdaq Composite jumped 3.1% and 4.4%, respectively, and all three indexes ended November with a second consecutive month of gains. Still, the rally wasn’t enough to undo the damage inflicted earlier in the year as rapidly rising interest rates battered stocks. The S&P 500 is down 14% in 2022 and remains on track for its worst year since 2008. The tech-heavy Nasdaq Composite, whose members tend to be especially sensitive to changing rates, has slumped 27% . (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)
- Thursday After the Close: MRVL, VEEV, ULTA, ZS, SMAR, ASAN, MITK, ZUMZ of note.
- Friday Before the Open: CBRL, GCO of note.
Earnings of Note This Morning:
- Beats: TD +0.12, KR +0.06, PDCO +0.06, SCWX +0.05.
- Flat: None of note.
- Misses: CM (0.33), DG (0.22), BIG (0.05), DBI (0.05), BMO (0.03).
- Still to Report: None of note.
- Positive Guidance: ARE, OKTA, FIVE, SNPS, YEXT, NTNX of note.
- Negative Guidance: CRM, SMTC, NCNO, GIII, OGS, DBI, DG of note.
Erlanger Research Advance/Decline Chart:
Gap Ups & Down In Early Pre-Market:
- Gap Up: OKTA +14%, FIVE +8%, SPLK +8%, PVH +8%, RGR +7%, NTNX +5%, SNPS +5%, OFIX +5%, RLYB +5%, PSTG +4% of note.
- Gap Down: GIII -25%, ESTC -14%, BIG -14%, SHLS -10%, XPEV -8%, NTLA -8%, SSL -7%, CRM -6%, FREY -6%, SNOW -5%, LI -5%, CTO -4%, OGS -4%, of note.
Insider Action: UHAL, TDW 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: DBI, LE, CRM, DG, KR, SNOW, COST, SPLK, FIVE, NTNX, OKTA, PVH (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: FTX Missing Billions Remain Mystery After Bankman-Fried Grilling at Deal Book. (Bloomberg)
- Bloomberg Most Read Story: Musk’s Neuralink Hopes to Implant a Computer in Human Brain in Six Months. (Bloomberg)
- China signals slight Covid easing policy – but no major changes yet. (CNBC)
- Russian Oil Sanctions are about to kick in and what that means. (CNBC)
- Brazil’s economy grew less than expected in Q3 but still hits a record level. (Reuters)
- EU asks oil to be set at $60 a barrel when coming from Russia. (WSJ)
- Tesla (TSLA) to recall 435,000 cars in China over rear light issue. (CNBC)
- Senate Leadership vowed to moved forward on a bill to avert a rail strike but unclear how soon vote can happen. (NYT)
- Netflix (NFLX) to allow viewers to preview content. (WSJ)
- Kroger (KR) raises sales forecast on grocery demand. (Reuters)
- Dollar General (DG) cuts forecast on higher costs. (Reuters)
- BMO misses estimates on weakness to investment banking. (Bloomberg)
Moving Average Update:
- Score moonshots to 91% from 45%.
- President’s Public Schedule:
- The President receives the Presidential Daily Briefing, 8:00 a.m. EST
- The President and The First Lady will greet President Emmanuel Macron and Mrs. Brigitte Macron of France for the Official Arrival Ceremony; The Vice President and The Second Gentleman attend, 9:00 a.m. EST
- The President holds a bilateral meeting with President Emmanuel Macron of France, 10:00 a.m. EST
- The President hosts a joint press conference with President Emmanuel Macron of France, 11:45 a.m. EST
- The President and The First Lady greet President Emmanuel Macron and Mrs. Brigitte Macron of France on arrival for the State Dinner, 7:00 p.m. EST
- The President and The First Lady participate in a photo opportunity with President Emmanuel Macron and Mrs. Brigitte Macron of France at the Grand Staircase on the occasion of the State Dinner, 7:30 p.m. EST
- The President and The First Lady host President Emmanuel Macron and Mrs. Brigitte Macron of France for a State Dinner; The Vice President and The Second Gentleman attend, 8:50 p.m. EST
- Challenger JobCut 7:30 a.m. EST
- U.S. Nov. Challenger Job Cuts: 76.835K vs 33.843K prev U.S. Nov. Challenger Job Cuts: +76.8% y/y.
- October Personal Income is due out at 8:30 a.m. EST and expected to remain at 0.4%.
- October PCE Prices – Core is due out also at 8:30 a.m. EST and expected to fall to 0.2% from 0.5%.
- Jobless Claims 8:30 a.m. EST
- PMI Mfg Final 9:45 a.m. EST
- November ISM Manufacturing Indexis due out at 10:00 a.m. EST and expected to fall to 49.8% from 50.2%.
- October Construction Spending is also due out at 10:00 a.m. EST and expected to fall to -0.2% from 0.2%.
- EIA Natural Gas Report 10:30 a.m. EST
Federal Reserve / Treasury Speakers:
- Federal Reserve Bank of Dallas Lorie Logan 9:25 a.m. EST
- Federal Research Board of Governors Michelle Bowman 9:30 a.m. EST
- Federal Reserve Minneapolis President Neel Kashkari 11:00 a.m. EST
- Federal Reserve Vice Chair for Supervision Michael S. Barr 3:00 p.m. EST
- Arco (ARCE) Announces Receipt of Non-Binding Going Private Proposal at $11.00 per share, cash deal.
- Byline Bancorp (BY) and Inland Bankcorp enter into an agreement in which Inland Bancorp will combine with Byline in a cash and stock transaction valued at approximately $165 million.
- Diamondback Energy, Inc. (FANG) Announces Closing of FireBird Acquisition.
- Hewlett Packard Enterprise (HPE) Held Takeover Talks With Nutanix (NTNX). (Bloomberg)
Meeting & Conferences of Note:
- Sellside Conferences:
- Bank of America (BofA) Renewables Conference 2022 (12/01/22-12/02/22)
- BMO Insurance Conference 2022
- Benchmark 11th Annual Discovery One-on-One Investor Conference 2022
- Canaccord Genuity 3rd Annual AgriFood Tech Innovations Forum 2022 (12/01/22-12/02/22)
- Goldman Sachs Aircraft Leasing Conference 2022
- KBW Virtual Title Insurance Day 2022
- Previously posted and ongoing conferences:
- Alliance Global Partners Biotech Conference 2022 (11/30/22-12/01/22)
- Bank of America Global Research Materials & Infrastructure Conference 2022 (11/29/22-12/01/22)
- Barclays Global Automotive and Mobility Tech Conference 2022 (11/30/22-12/01/22)
- Credit Suisse 10th Annual Industrials Conference 2022 (11/30/22-12/02/22)
- Credit Suisse 26th Annual Technology TMT Conference 2022 (11/28/22-12/01/22)
- Evercore ISI HealthCONx Conference (11/29/22-12/01/22)
- Piper Sandler 34th Annual Healthcare Conference 2022 (11/29/22-12/01/22)
- RSB Annual Conference 2022 (11/28/22-12/01/22)
- 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)
- Company Meetings: ACII
- Fireside Chat:
- Investor/Analyst Day/Calls: AFG, CNTX, CVX, FTCH, GALT, HUM, LDOS, NTGR, OGS, SBET, SPGI
- Update: None of note.
- R&D Day: None of note.
- Company Event: None of note.
- Industry Meetings:
- None of note.
- 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: