CAPIS Morning Note – 12/06/22: Stocks Up Modestly, Fate of Senate To Be Decided In Georgia Runoff

Overnight Summary: The S&P 500 closed Monday at 3998.84 (lower by -1.79%) from  Friday at 4071.70 (lower by -0.12%).  The overnight high of 4014 was hit at 4:00 a.m. EST. The low was hit at 3996 at 5:35 a.m. EST, a range of ~20 points high to low.  At 7:20 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Monday at 3998.84 (lower by -1.79%) from  Friday at 4071.70 (lower by -0.12%).  The overnight high of 4014 was hit at 4:00 a.m. EST. The low was hit at 3996 at 5:35 a.m. EST, a range of ~20 points high to low.  At 7:20 a.m. EST, the S&P 500 (mini) was up 5.50.

Earnings Out After The Close: 

  • Beats: SUMO +0.11, GTLB +0.05.
  • Flat: None of note.
  • Misses: None of note.

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.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • X-Energy to go public via business combination with Ares Acquisition Corp. (AAC).
    • Blue Safari Group Acquisition Corp. (BSGA) Announces Extension of Combination Period and Second Amendment to the Merger Agreement.
    • Infrared Cameras Holdings, Inc., a Leading Provider of Thermal Cameras and Infrared Systems, to List on NASDAQ Through Business Combination with SportsMap Tech Acquisition Corp. (SMAP).
  • Secondaries Priced: None of note.
  • Notes Priced of note:
    • ET: Announces Pricing of $2.5 Billion of Senior Notes.
    • LNTH: Announces Pricing of Offering of $500 Million Convertible Senior Notes due 2027.
    • SAR: Prices Public Offering of $52.5 Million 8.125% Notes Due 2027.
    • VAC: Prices offering of $500 million of 3.25% convertible senior notes due 2027.
  • Common Stock filings/Notes:
    • BIVI: Filed prospectus supplement to increase shares of Class A common stock to $17.5 million from $8.1 million that may be sold pursuant to the previously disclosed Controlled Equity Offering Sales Agreement, dated August 31, 2022.
    • CTO: Announces Closing of Public Offering of Common Stock and Full Exercise of Underwriters’ Option to Purchase Additional Shares.
    • ISUN: Filed Form S-3.. up to 5,286,654 shares.
    • OKYO: Filed Form F-3.. 4,484,305 American Depositary Shares Representing 291,479,825 Ordinary Shares.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • HTGM: Filed Form S-1.. Mixed Shelf.
  • Debt Filing/Notes:
    • BBBY: Announces Extension of Exchange Offers and Consent Solicitations for Certain of its Outstanding Debt Securities.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • AXON: Announces Proposed Convertible Senior Notes Offering.
    • HLF: Proposed Offering of $250 Million Aggregate Principal Amount of Convertible Senior Notes.
    • STNG: Announces Conversion of the Convertible Bond due 2025.

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: GTLB +21%, OFIX +12%, SUMO +12%, BIVI +11%.
    • Trading Down: HLF -11%, AXON -4%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: GTLB, HLF, SUMO  (CNBC)
    • PepsiCo (PEP) to Lay Off Hundreds of Workers in Headquarters Roles. (WSJ)
    • Sumo Logic (SUMO) stock jumps more than 10% after third-quarter beat, raised outlook. (MarketWatch)
    • US, EU Weigh Climate-Based Tariffs on Chinese Steel and Aluminum. AA, MT, NUE, STLD, X, TMST, CLF (Bloomberg)
    • Facebook owner Meta (FB) may remove news from platform if U.S. Congress passes media bill. (Reuters)
    • Crypto Pressure Ratchets Up as FTC Probes Several Firms Over Ads. (Bloomberg)
    • GME has started a new round of layoffs. (Axios)
    • Northrop Grumman (NOC) awarded a $406 million US Air Force task order for engineering services.
    • Leonardo DRS (DRS) receives contract from U.S. Army worth $39.5 million.
  • Exchange/Listing/Company Reorg and Personnel News:
    • AMC Networks (AMCX) appoints current Chairman James L. Dolan as Interim Executive Chairman. (MarketWatch)
    • AppTech Payments Corp. (APCX) Expands Leadership Team with Key New Hires.
    • The Buckle, Inc. (BKE) Announces the Election of Shruti S. Joshi to the Company’s Board of Directors.
    • Blink Charging (BLNK) appoints Mark Pastrone, current COO of subsidiary SemaConnect, to COO of the company.
    • CURO Names Ismail Dawood Chief Financial Officer.
    • Nasdaq grants Esports Entertainment’s (GMBL) request for continued listing.
    • Gibraltar Industries (ROCK) says COO Burns to depart from position.
    • Hepion Pharmaceuticals, Inc. (HEPA) Granted 180-day Extension by Nasdaq to Meet the Minimum Bid Price Requirements.
    • Karuna Therapeutics (KRTX) appoints Bill Meury as President and CEO.
    • NeoGenomics (NEO) Announces Chief Financial Officer Transition.
    • Owlet (OWLT) Receives Notice Regarding NYSE Continued Listing Standards.
    • NYSE American to Commence Delisting Proceedings against Winc, Inc. (WBEV)
  • Buyback Announcements or News: 
    • BellRing Brands (BRBR) Announces New Share Repurchase Authorization of $50 Million.
    • Natural Alternatives International, Inc. (NAII) Announces a $1 Million Increase in its Stock Repurchase Plan.
  • Stock Splits or News:
    • MediWound (MDWD) announces 1-for-7 reverse share split.
    • UpHealth (UPH) to Effect 10:1 Reverse Stock Split.
  • Dividends Announcements or News:
    • The Buckle, Inc. (BKE) Announces a $2.65 Per Share Special Cash Dividend, a $0.35 Per Share Quarterly Dividend.
    • Hanover Insurance (THG) increases quarterly dividend to $0.81 per share, A $0.06 bump.
    • Matador Resources Company (MTDR) Amends Its Quarterly Cash Dividend Policy to $0.15 Per Share.
    • NEM Goes ex div tomorrow for $0.55.
    • Renren (RENN) Provides Update on Special Cash Distribution For Settlement Regarding Shareholder Derivative Litigation.
    • SEI Investments (SEIC) increases its semi-annual dividend to $0.43 per share, a 7.5% increase.
    • Summit Materials (SUM) declares special stock dividend of 0.017 shares of company’s Class A common stock for each outstanding share of common stock.

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

S&P 500 +3, Dow Jones +30,  NASDAQ +27,  and Russell 2000 +1. (as of 7:53 a.m. EST).  Asia higher ex Hong Kong.  Europe is lower.  VIX Futures are at 21.55 from 21.45. Gold, Silver and Copper higher. WTI Crude Oil and Brent lower with Natural Gas lower. $ is flat. US 10-year Treasury sees yields at 3.551% from 3.51%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $16,994 from $17,260 higher by +0378%.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Energy, Consumer Cyclical, Financial, Basic Materials of note.
  • One Month Winners:  Basic Materials,Communication Services, Technology of note.
  • Three Month Winners: Basic Materials, Industrials, 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.

U.S. stock indexes posted their worst day in nearly a month on Monday as hotter-than-expected reading on the U.S. services sector fueled speculation that the Federal Reserve will hike interest rates more aggressively to subdue inflation. The Dow Jones Industrial Average DJIA, -1.40% finished 482 points lower, or 1.4%, to 33,947. The S&P 500 SPX, -1.79% dropped 1.8% to close below 4,000-level for the first time in nearly a week, while the Nasdaq Composite COMP, -1.93% slumped 1.9%.  (MarketWatch)

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

  • Tuesday After the Close: MDB, CASY, TOL, GWRE, AVAV, ZUO, SWBI, MITK, SFIX of note.
  • Wednesday Before the Open: CPB, THO, OLLI, UNFI, LOVE, WEBR of note.

Earnings of Note This Morning:

  • Beats: AZO +2.17, SIG +0.42, BASE +0.11, CONN +0.05.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: SUMO, GTLB of note.
  • Negative Guidance: VFC, BASE of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: VVNT +31%, GTLB +18%, BIVI +14%, EBS +9%, SUMO +8% of note.
  • Gap Down: MRTX -10%, HLF -10%, PSTX -4%, LSCC -4% of note.

Insider Action: BX, COFS sees Insider buying with dumb short selling.  AZYO, GOCO 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: HLF GTLB TXT AZO SIG JPM RCL AXON GE.(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:  US Futures Waiver as Rate Bets Thrown Into Doubt. (Bloomberg)
  • Bloomberg Most Read Story: $65 Trillion in Dollar Debt. (Bloomberg)
  • Georgia Runoff for Senate seat front and center today. (Bloomberg)
  • A traffic jam of oil tankers has happened near Turkey after Russian oil price cap went into effect. (FT)
  • TSMC (TSM) to invest $40 billion into a chip plant in Arizona. (WSJ)
  • CEOs are not as optimistic for 2023 after 2022. (Yahoo)

Moving Average Update:

  • Score retreat and score pulls back to 45% from 91%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 8:45 a.m. EST
    • The President departs the White House en route Joint Base Andrews, 9:25 a.m. EST
    • The President departs Joint Base Andrews en route Phoenix, Arizona, 9:45 a.m. EST
    • The President arrives in Maricopa County, Arizona (12:40 PM Local), 2:40 p.m. EST
    • The President tours TSMC (1:30 PM Local), 3:30 p.m. EST
    • The President discusses how his economic plan is leading to a manufacturing boom, rebuilding supply chains, and creating good-paying jobs in Arizona and across the country (2:00 PM Local), 4:00 p.m. EST
    • The President departs en route Luke Air Force Base, Maricopa County, Arizona (4:05 PM Local), 6:05 p.m. EST
    • The President departs Luke Air Force Base, Maricopa County, Arizona en route Joint Base Andrews (4:45 PM Local), 6:45 p.m. EST
    • The President arrives at Joint Base Andrews, 10:20 p.m. EST
    • The President departs Joint Base Andrews en route the White House, 10:30 p.m. EST
    • The President arrives at the White House, 10:40 p.m. EST

Economic: 

  • Int. Trade in Goods 8:30 a.m. EST
  • Redbook Sales 8:55 a.m. EST
  • API Crude Oil Data 4:30 p.m. EST

Federal Reserve / Treasury Speakers:

  • Blackout Period.

M&A Activity:

  • Mill City Ventures III, Ltd. (MCVT) Enters into Letter of Intent to Acquire Mustang Funding, LLC.
  • NRG Energy, Inc. (NRG) to Acquire Vivint Smart Home, Inc. for $12 per share ($2.8 billion all cash deal)
  • Orthofix (OFIX): Indication of Interest for Buyout at $24.00 per share.
  • SS&C Techs (SSNC) acquires Complete Financial Ops.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bank of America Water Conference
    • Citigroup Global Consumer Conference (12/06/22-12/08/22)
    • Cowen 5th Annual Cannabis Conference 2022 (12/06/22-12/08/22)
    • Credit Suisse 12th European Business Services Conference 2022 (12/06/22-12/07/22)
    • Credit Suisse Climate Tech Conference 2022 (12/06/22-12/07/22)
    • Credit Suisse 2022 Chicago Chemical Conference
    • CS Mexico Infrastructure Conference
    • Goldman Sachs U.S. Financial Services Conference 2022 (12/06/22-12/07/22)
    • Jefferies Private Medtech Summit
    • JMP Securities Hematology and Oncology Summit 2022 (12/06/22-12/07/22)
    • KBW Keefe, Bruyette & Woods UK Growth Financials Experience Conference 2022
    • Morgan Stanley Global Consumer and Retail Conference 2022 (12/06/22-12/07/22)
    • Morgan Stanley 5th Annual Space Summit 2022
    • Nasdaq 47th Investor Conference 2022 (12/06/22-12/07/22)
    • Susquehanna Virtual Freight Forum 2022
    • Truist Securities 4th Annual Industrials & Services Summit 2022 (12/06/22-12/07/22)
      • Previously posted and ongoing conferences:
        • Arete Tech Conference (12/05/22-12/06/22)
        • Bank of America Securities Home Care Conference(12/05/22-12/06/22)
        • BMO Capital Markets Growth & ESG Conference 2022 (12/05/22-12/07/22)
        • Capital One Securities 17th Annual Energy Conference 2022 (12/05/22-12/07/22)
        • JPMCrypto Economy Forum
        • Raymond James Technology Investors Conference (12/05/22-12/07/22)
        • The RHK Capital Disruptive Growth Conference hosted at ReedSmith 2022 (12/05/22-12/06/22)
        • UBS Global Media, Telecoms Communications, Technology (TMT) Conference 2022 (12/05/22-12/07/22)
        • Wolfe Research Virtual Consumer Growth Conference 2022 (12/05/22-12/06/22)

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: