CAPIS Morning Note – 12/09/22: Futures Up To Close Out the Week

Overnight Summary: The S&P 500 closed Thursday at 3963.51 (up by +0.75%….yeah!) from Wednesday at 3933.92 (lower by -0.19%).  The overnight high of 3982.75 was hit at 2:34 a.m. EST. The low was hit at 3960.25 at 7:51 p.m. EST, a range of ~22 points high to low.  At 7:25 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Thursday at 3963.51 (up by +0.75%….yeah!) from Wednesday at 3933.92 (lower by -0.19%).  The overnight high of 3982.75 was hit at 2:34 a.m. EST. The low was hit at 3960.25 at 7:51 p.m. EST, a range of ~22 points high to low.  At 7:25 a.m. EST, the S&P 500 (mini) was up +15.

Earnings Out After The Close: 

  • Beats: RH +0.97, AVGO +0.16, DOCU +0.15, DOMO +0.13, PHR +0.11, CHWY +0.07, FIZZ +0.05, LULU +0.04.
  • Flat: None of note.
  • Misses: MANU (5.97), COO (0.36), MTN (0.11), COST (0.06), CURV (0.04).

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:
    • Figure Acquisition Corp. I (FACA) announces intention to combine business with large warehouse lender and bank holding company.
  • Secondaries Priced:
    • AUTL: Pricing of Public Offering 75,000,000 American Depositary Shares @$2. (Jefferies, Blair and WFC Bookmanagers)
    • ERAS: Announces Pricing of Underwritten Offering of Common Stock 15,384,616 shares at $6.50/share.
    • GROM: Prices $5.0 Million Public Offering.
    • GTLS: Priced previously announced concurrent offerings of 5.9 million shares of common stock at public offering price of $118.17 per share.
    • REPL: Pricing of Public Offering.. 5,374,486 shares @$23.50.
    • RXDX: Pricing of Public Upsized $500 Million Offering of Common Stock.. 4,545,455 shares @$110.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • AUTL: Proposed Public Offering in the United States. (Jefferies, Blair and WFC Bookmanagers)
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing/Notes:
    • BIMI: Announces Sale of $2 Million Promissory Note. (See Stock Splits)
    • BAC: Filed Form S-3.. Debt Shelf.
  • Tender Offer:
    • TNET: About 1.5 million shares tendered at or below $72 per share.
  • 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: DOCU +8%, CMTL +6%, BBWI +5%, .
    • Trading Down: AUTL -20%, COO -9%, LULU -6%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: LULU, COST, DOCU (CNBC)
    • Bath & Body Works (BBWI) stock gains after Third Point discloses 6% stake. (MarketWatch)
    • Lululemon (LULU) shares fall after company offers weak holiday quarter guidance. (CNBC)
    • Lockheed Martin (LMT) awarded $2.22 billion U.S. Navy contract modification.
    • ICF International (ICFI) selected by the U.S. Air Force for $25 million environmental services contract.
  • Exchange/Listing/Company Reorg and Personnel News:
    • CNO Financial (CNO) promotes Jean Linnenbringer to COO.
    • Krispy Kreme, Inc. (DNUT) announces appointment of Jeremiah Ashukian as Executive Vice President and Chief Financial Officer.
    • LI: President and Director Yanan Shen Tendered Resignation. Donghui Ma Named As President from Jan 1.
    • Veritiv (VRTV) announces that Eric Guerin will succeed Steve Smith as CEO.
  • Buyback Announcements or News: 
    • ATRenew (RERE) Announces Extension of its Existing Share Repurchase Program.
    • AXIS Capital (AXS) Announces New $100 Million Share Repurchase Authorization; Increases Quarterly Dividend By $0.01.
    • Arcosa, Inc. (ACA) Declares Quarterly Dividend and Renews $50 Million Share Repurchase Authorization.
    • Broadcom (AVGO) will resume authorized share repurchases for remaining $13 billion; increasing quarterly dividend 12% to $4.60 per share.
    • Braemar Hotels & Resorts (BHR) increases its quarterly dividend to $0.05 per share; authorizes stock repurchase program of up to $25 million.
    • Celestica (CLS) to repurchase up tp 8.77 million shares.
    • Douglas Emmett (DEI) Announces $300 Million Share Repurchase Authorization. (See Dividend cut below)
    • NuScale Power (SMR) Names Karin Feldman Interim Chief Operating Officer/Chief Nuclear Officer.
    • PENN Entertainment (PENN) authorizes new $750 million share repurchase program.
    • TotalEnergies SE (TTE) decides to withdraw its directors from Novatek and will no longer equity account for its stake in Novatek; will record a $3.7 bln impairment in Q4.
    • Trinity Industries (TRN) increases quarterly dividend 13% to $0.26 per share; announces new $250 million share repurchase authorization.
    • Triton International (TRTN) approves an increase in the size of its existing share repurchase authorization to $400 million.
    • Walgreens Boots Alliance (WBA) sells $1.0B in AmerisourceBergen (ABC) shares; $200M buyback from WBA.
    • WM: Announces Plan to Increase its Dividend Rate and a New Share Repurchase Authorization.
  • Stock Splits or News:
    • BIMI Announces 1-for -10 Reverse Stock Split.
    • Babylon (BBLN) Announces Additional Details on its Upcoming 1-for-25 Reverse Share Split.
    • GROM trading r/s price.
    • MYSZ trading r/s price.
    • NDRA trading r/s price.
  • Dividends Announcements or News:
    • See Buybacks above: AXS, ACA, AVGO, BHR, TRN, WM
    • BBY Goes ex div on Monday for $0.88.
    • Bristol Myers Squibb (BMY) Announces Dividend Increase of 5.6% to $0.57 per share.
    • Crescent Point Energy (CPG) acquires Kaybob Duvernay assets and increases base dividend by 25%.
    • Douglas Emmett (DEI) cuts dividend to $0.19 per share from $0.28 per share.
    • Ecolab (ECL) Increases Cash Dividend 4%.
    • Edison (EIX) increases quarterly dividend 5.4% to $0.7375 per share from $0.7 per share.
    • F&G Annuities & Life (FG) declares an inaugural quarterly dividend of $0.20 per share.
    • Independent Bank (INDB) increases quarterly dividend 8% to $0.55 per share.
    • Medtronic (MDT) increases quarterly dividend 8% to $0.68 per share.
    • TE Connectivity’s (TEL) board approves recommendation to raise annualized dividend to $2.36 per share.
    • Territorial Bancorp Inc. (TBNK) Declares Special Dividend.
    • Utz Brands (UTZ) Board of Directors Increases Quarterly Cash Dividend.
    • W.P. Carey (WPC) increases quarterly dividend to $1.065 per share from $1.061 per share.
    • Zoetis (ZTS) increases quarterly dividend 15% to $0.375 per share.

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

S&P 500 +23, Dow Jones +154,  NASDAQ +85,  and Russell 2000 +9. (as of 7:53 a.m. EST).  Asian markets were up to end a very positive week.  Hang Send was up 2.3% and up 6.6% for the week.  The Shanghai Composite end up 1.6% for the week.  Europe markets are trading slightly down. European markets were flat to mixed, but for the week they were all down over 1% with Italy down 2.2%.  VIX Futures are at 22.60 (up +1.39%). Gold and Silver up a touch.  WTI Crude Oil and Brent higher with Natural Gas higher as well. $ barely down. US 10-year Treasury sees yields at 3.469%. The U.S. Dollar is unchanged versus the Euro, a touch higher versus the Pound and down against the Yen. Bitcoin is at $17,260 from $16,826.

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

  • Daily Positive Sectors: Technology, Consumer Cyclical, Healthcare, Basic Materials of note.
  • Daily Negative Sectors: Energy, Communication Services 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. stocks rose, with the S&P 500 regaining some ground after five consecutive sessions of losses triggered by worries about how severe an economic downturn might be.  The S&P 500 advanced 29.59 points, or 0.8%, to 3963.51 on Thursday. The Dow Jones Industrial Average gained 183.56 points, or 0.5%, to 33781.48. The Nasdaq Composite added 123.45 points, or 1.1%, to 11082.00.  U.S. stocks have endured a stretch of losses recently. As of Wednesday, the benchmark S&P 500 had fallen eight of the past nine trading days. Worries that the Federal Reserve will hold interest rates higher for longer have been a key driver of those losses, as traders have considered the possibility that officials next year could raise their benchmark rate above the 5% currently expected by investors. (WSJ)

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

  • Friday After the Close: ORCL of note.
  • Monday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: LI (1.18).
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: CIEN, CHWY, AVGO, CMTL, RH of note.
  • Negative Guidance: METC, DOCU, COO, CURV of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: DOCU +12%, CMTL +7%, BHR +6%, PHR +5%, BBWI +4%, AVGO +4% of note.
  • Gap Down: AUTL -27%, LULU -7%, CURV -6%, ICPT -4%, ALNY -4%, LI -4% of note.

Insider Action: No stock 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: LULU, COST, AVGO, NFLX, DOCU, ABC, BBWI, RH  (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: Musk Twitter Leak Raises Concern About Outside Data Access. (Bloomberg)
  • Bloomberg Most Read Story: Tesla’s Troubles Are Piling Up While Elon Musk Is Distracted With Twitter. (Bloomberg)
  • U.S. to Levy Human-Rights Sanctions on Russia, China. (WSJ)
  • Sen. Kyrsten Sinema leaves Democratic party to become independent. (CNBC)
  • Goldman (GS) Moves More Bankers to Dubai in Middle East Money Push. (Bloomberg)
  • United Airlines (UAL), Boeing (BA) set to announce major 787 order -sources. (Reuters)
  • Tesla (TSLA) to suspend Model Y output in Shanghai in last week of Dec-memo. (Reuters)
  • Workers at GM-LG Battery Plant (GM) in Ohio Vote to Unionize. (WSJ)
  • Apple (AAPL) workers in Australia plan Christmas strike. (Reuters)
  • Former Apple (AAPL) Executive Says Company Blundered by Firing Him After TikTok Video. (WSJ)

Moving Average Update:

  • Score notches down to 20% from 25%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre, 1:00 p.m. EST

Economic: 

  • November PPI is due out at 8:30 a.m. EST and expected to come in at 0.2% from 0.2% last month.
  • December University of Michigan Consumer Sentiment is due out at 10:00 a.m. EST  and is expected to rise to 57% from 56.8%.
  • Wholesale Inventories 10:00 a.m. EST
  • Baker Hughes Rig Count 1:00 p.m. EST
  • The latest NYSE And NASDAQ Short Interest is due out after the close for the period ending November 30th. During the collection period, the S&P 500 fell -0.73%.

Federal Reserve / Treasury Speakers:

  • Blackout Period.

M&A Activity:

  • AMCON Distributing Company (DIT) Acquires Henry’s Foods, Inc.
  • RH acquires Dmitriy & Co and Jeup.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Capital Link Invest in Greece Forum
      • Previously posted and ongoing conferences:
        • Bank of America Virtual Lithium and Battery Storage Conference 2022 (12/08/22-12/09/22)
        • Goldman Sachs Autos Conference 2022 (12/08/22-12/09/22)
  • Company Meetings: PX
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: SNTI, SYRS (12/10/22)
  • Update:
  • R&D Day: None of note.
  • Company Event:
    • Affimed (AFMD) Investor Event on AFM13 Clinical Development at the ASH Annual Meeting. (12/10/22)
  • Industry Meetings:
    • Essity Consumer Goods Presentation
    • American Society of Hematology (ASH) Annual Meeting & Exposition 2022 (12/10/22-12/13/22)
      • Previously posted and ongoing conferences:
        • International Union of Nutritional Sciences International Congress of Nutrition (IUNS-ICN) 2022 (12/06/22-12/11/22)
        • San Antonio Breast Cancer Symposium (SABCS) 2022 (12/06/22-12/10/22)

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: