CAPIS Morning Note – 12/06/21: Who Wins – Omicron Spreading Virus or Santa Spreading Holiday Cheer? Stocks Mixed.

Overnight Summary: Futures start the week split with the Dow Jones Industrials up 232 and technology stocks lower by -66 for the Nasdaq with the S&P 500 up 13. Note that the S&P lost all gains from 4:00 a.m. EST to 6:00 a.m. EST before rallying back up to our reporting time at 7:25 a.m. EST …

Overnight Summary: Futures start the week split with the Dow Jones Industrials up 232 and technology stocks lower by -66 for the Nasdaq with the S&P 500 up 13. Note that the S&P lost all gains from 4:00 a.m. EST to 6:00 a.m. EST before rallying back up to our reporting time at 7:25 a.m. EST  There have been more confirmed cases of Omicron in the United States concerning public health officials especially about the virulence and ease of transmission.  Both Asian markets and European indexes were down slightly. China cuts is reserve ratio and issues related to Evercore payment/nonpayment on upcoming debt are a clear and present danger to Asian and global markets as we enter the week.

Earnings Out After The Close:

  • Beats: None
  • Flat: None
  • Misses: None

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched: None of note.
  • Secondaries Priced: None of note
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • GRIL: Filed Form S-3.. 22,093,822 Shares of Common Stock
  • Pricing of Over-Allotment: None of note.
  • Direct Offering: None of note. 
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • HOMB: Filed Form S-3ASR.. Mixed Shelf Offering
    • SMG: Filed Form S-3ASR.. Mixed Shelf
    • TRT: Filed Form S-3.. $10 Million Mixed Shelf
    • YMTX: Filed Form S-3.. $200 Million Mixed Shelf
  • Convertible Offering & Notes Filed: 
    • RILY: Closes $300 Million Offering of Senior Notes Due 2026
    • RPAY: Filed Form S-3.. $77,880,000 of Convertible Senior Notes due 2026 and Up to 18,333,304 Shares of Class A Common Stock
  • Note Offerings 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:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: IMGN 38%, GCP 20%, BAK 19%, MRVL 16%, CHGG 14%, RVNC 14%, SSL 13%, VET 13%, AMBA 12%, EVTC 12%, FGEN 11%, SABR 11%, FICO 10%, PAM 10%, HMY 9%, SIMO 9%, HPQ 9%, UMC 9%, PETQ 7%, SQQQ 6%
    • Trading Down: DOCU -46%, TGTX -35%, DOMO -34%, ESPR -33%, UXIN -29%, ESTC -27%, DDS -26%, NVAX -26%, DQ -26%, ARRY -26%
  • News Items Over the Weekend:
    • Stocks That Defined the Week: MRNA, TWTR, MSFT, XOM, T, CRM, KR (Wall Street Journal)
    • Italy reports 17,030 new coronavirus cases, the biggest one-day increase since April
    • Goldman Cuts U.S. GDP Forecast, Saying Omicron Is Drag on Growth (Bloomberg)
    • Fauci: US ‘hopefully’ will lift African countries travel ban in ‘reasonable period of time’: UAL, AAL, DAL, JBLU, SAVE, HA, LUV (The Hill)
    • Biden Administration expected to announce diplomatic boycott of Beijing Olympics this week (CNN)
    •  High-Flying Tech Stocks Are Bordering on Correction Territory (Bloomberg)
    • ‘A perfect storm’ as bitcoin stages weekend crash that puts it on verge of ‘breakdown.’ Here’s what crypto bulls are saying. (MarketWatch)
    • Trump Media & Technology Group Corp. and Digital World Acquisition Corp. (DWAC) Announce $1 Billion “PIPE” Investment in Committed Capital to Fund Business
    • Barron’s:
      • Positive View: DHI, LEN, PHM, TOL, CCS, MTH, UMH, BA, MTTR, NVDA, QCOM, U, DE, BMY, TWTR
      • Negative View: None of note.
      • Mixed View: None of note.
  • Exchange/Listing/Company Reorg and Personnel News: 
    • S&P Changes effective prior to the open on December 20th
      • Signature Bank (SBNY), Solarredge (SEDG), and Factset (FD) set to join S&P 500 (Large Cap) from the S&P 400 (Mid-Cap) and swapping with Leggett & Platt (LEG), Hanesbrands (HBI), and Western Union (WU) 
      • From the S&P 600 (Small Cap), Macy’s (M), Vicor (VICR), and Power Integrations (POWI) will move to the S&P 400 (Mid-Cap), swapping with Tootsie Roll Industries, Inc. (TR), Nektar Therapeutics (NKTR) and  Telephone & Data Systems Inc. (TDS).
    • Alibaba Group (BABA) announces CFO Succession effective April 1, 2022
    • Foresight Acquisition Corp. (FORE) closes business combination with P3 Health Partners.  It will trade under symbol “PIII” starting December 6
    • Cboe Global Markets (CBOE) reported November stats and contracts traded totaled 285,663,721 up 32% from a year ago.
    • Imperial Petroleum Inc. (IMPP) Announces commencement of trading on the Nasdaq Capital Market
    • Lucid Group (LCID) – On Dec 3, received subpoena from The U.S. Securities and Exchange Commission (SEC) requesting production of certain documents related to an investigation by the SEC
    • Sunrun (RUN) discloses planned departure of COO Christopher Dawson, effective December 31
    • Thimble Point Acquisition Corp. closes with Pear Therapeutics and will trade under symbol “PEAR” on December 6
    • CNN fires Anchor Chris Cuomo for helping his brother the former Governor of New York and a potential allegation from 16 years ago while at ABC News.
  • Buyback Announcements:
    • ACI Worldwide (ACIW) announces $250 million share repurchase authorization
    • BrightView (BV) $250 million share repurchase program.
    • ReneSola Power (SOL) authorizes $50 million share repurchase
    • Sunlands Technology Group ADR (STG) announces $15 million share repurchase program
  • Stock Splits: None of note.
  • Dividends Announcements: 
    • AES stock dividend of $0.1580/share.  An increase from $0.1505/share.
    • Amgen (AMGN) Announces 10.2% Increase In 2022 First Quarter Dividend to $1.94/share from $1.76/share.
    • The Buckle, Inc. (BKE) Announces a $5.65 Per Share Special Cash Dividend and a 6.1 Percent Increase in Its Quarterly Dividend
    • Essential Properties Realty Trus (EPRT) increase of $0.26/share for quarterly dividend.
    • Laureate Education (LAUR) special cash distribution of $0.58/share
    • Morningstar (MORN) increases dividend 14% to $0.36/share
    • PotlatchDeltic (PCH) Board Declares $4 Special Dividend and Increases Regular Distribution 7.3% to $0.44/share from $0.41/share

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

S&P 500 +13 Dow Jones Industrial Average +214 NASDAQ -61 Russell 2000 +13.29. Asia lower and Europe higher. VIX is at 27.97 from 26 in futures on Friday. Gold and Silver lower with Copper higher. WTI Crude Oil and Brent Oil Futures higher. Natural Gas is lower. $ is higher vs Euro, higher vs Pound and higher vs Yen. US 10 year Treasury price is at $130.84 from $130.47  with yields at 1.39% from 1.432% on Friday morning. Bitcoin at $48,639 from $56,915 on Friday morning and this morning down -0.56%. As of 8:15 a.m. EST.

Friday’s Action – 12/03 Close:  

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

Indexes ended Friday down after a very volatile week. Russell 2000 was down -2.13%.  TLT gained 1.19% to finish the week at 154.35.  Updated 12/03 close.

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

  • Monday After the Close: MDB, COUP, HQY, SUMO, CMTL of note.
  • Tuesday Before the Open: AZO, DBI, CONN of note.

Earnings of Note This Morning:

  • Beats: SAIC +0.39
  • Flat: none
  • Misses: none
  • Still to Report: none

Erlanger Research Advance/Decline Chart: Updated through 12/03 close.

Gap Ups & Down In Early Pre-Market:

    • Gap Up: ACET +43%, FULC +16%, GCP +14%BLCM +9%, DWAC +9%, GLSI +8%, GRTS +6%, MESO +5%, SOL +5%
    • Gap Down: AGLE -30%, LCID -14%,

Insider Action: CLR, MGPI, CDLX sees Insider buying with dumb short selling and no stock has smart short sellers with insider buys. 11/29 close

Rags & Mags: Highlighted Stories may be clicked through to the original story.  Repeated stories from prior days never listed, i.e. “rehashed news”.

  • Five Things To Know To Start Your Day. (Bloomberg)
  • Stocks Making The Biggest Moves: KSS, FDS, BABA, LCID, MSTR, GCP  (CNBC)
  • U.S. looks to a potential diplomatic boycott of the Winter Olympics for 2022 to be held in China. (CNN)
  • Concerns over Russian invasion of Ukraine continue to rise as 175,000 troops on the Ukraine border. (CNN)
  • Covid-19 cases come in at 149,222 from 113,816 a week ago. (CDC)
  • NIH Director Dr. Anthony Fauci notes that Omicron variant does not carry a “great degree of severity” but has a “transmission advantage.” (CNN)
  • Omicron variant is like a common cold in transmission and severity. (The Washington Post)
  • Congress to focus on The National Defense Authorization Act. Dems want to attach the Debt Ceiling to this piece of legislation ahead of 12/15 deadline. (WSJ)
  • China denies potential ban on one way to bring Chinese companies public in overseas markets. (Bloomberg)
  • Chinese company Evergrande shares plunge on upcoming debt payment due on Monday night. (CNBC)
  • Didi (DIDI) Sends Warning to China Investors Who Thought Worst Was Over. (Bloomberg)
  • Central banks tighten to counter inflation hitting Cryptocurrencies. (Bloomberg)
  • Noodles (NDLS) looks to a potential price increase. (WSJ)
  • Engine Capital wants Kohl’s (KSS) to consider a sale of the company. (WSJ)
  • Amazon (AMZN) begins to charter private cargo ships to bring merchandise to U.S. (CNBC)
  • Goldman Sachs Cuts U.S. GDP Growth Forecast For 2022 Over Omicron Fears – (Reuters)
  • Johnson & Johnson (JNJ) COVID-19 Booster when given six months after two-dose regimen of BNT162b2, shows substantial rise in antibodies. 

Moving Average Update:

  • The score lowers to 26% from 30%. Updated 12/03 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President and The Vice President receive the President’s Daily Brief, 10:00 a.m. EST
    • Press Briefing by Press Secretary Jen Psaki, 1:00 p.m. EST
    • The President delivers remarks on how his Build Back Better Act will lower the costs of prescription drugs for millions of Americans 2:00 p.m. EST

Economic: 

  • Investor Movement Index 12:30 p.m. EST
  • The Reserve Bank of Australia (RBA) will be out with its latest interest rate decision on Monday night.

Federal Reserve Speakers:

  • None of note.

M&A Activity: 

  • GCP Applied Tech (GCP) $2.3 billion acquisition by Saint-Gobain (CODYY).
  • Jack in the Box (JACK) to buy Del Taco (TACO) for $12.51 in cash and it closed at $7.53 on Friday.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bank of America Home Care Conference (12/06-12/07)
    • Bank of America Water Conference
    • Capital One 16th Annual Energy Conference (12/06-12/08)
    • Credit Suisse Climate Symposium (12/06-12/07)
    • H.C. Wainwright Psychedelics Conference
    • HSBC Real Estate Conference (12/06-12/10)
    • Jefferies Consumer Finance Summit
    • JMP Hematology and Oncology Summit (12/06-12/07)
    • KBW Innovation in Finance Conference (12/06-12/07)
    • Raymond James Technology Conference (12/06-12/08)
    • UBS Global Telecoms, Media, Technology Virtual Conference (12/06-12/08)

Previously Posted and Ongoing Conferences:

      • None
  • Company Meetings: LEJU
    • Fireside Chat:
  • Investor/Analyst Day: ACET, ARCE, FSTX, NKTR, SCYX, SLG, TNDM, UNP 
  • Update: None of note.
  • R&D Day: None of note.
  • Conference Call: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • Annual Meeting of the American College of Neuropsychopharmacology 2021 (12/05-12/08)

Previously Posted and Ongoing Conferences:

      • American Epilepsy Society AES Annual Meeting 2021 (12/03-12/07)

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:

Friday’s Upgrades and Downgrades: