CAPIS Morning Note – 12/12/22: Stocks Up, Federal Reserve To Meet Tuesday and Wednesday

Overnight Summary: The S&P 500 closed Friday at 3934.36 (lower by -0.73%) from Thursday at 3963.51 (up by +0.75%).  The overnight high of 3981.25 was hit at 6:20 a.m. EST. The low was hit at 3956 at 8:15 p.m. EST, a range of ~25 points high to low.  At 7:30 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Friday at 3934.36 (lower by -0.73%) from Thursday at 3963.51 (up by +0.75%).  The overnight high of 3981.25 was hit at 6:20 a.m. EST. The low was hit at 3956 at 8:15 p.m. EST, a range of ~25 points high to low.  At 7:30 a.m. EST, the S&P 500 (mini) was up +41.5.

Earnings Out After The Close: 

  • Beats: None of note.
  • 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:
    • Americas Technology Acquisition Corp. (ATA) Announces Termination of Business Combination Agreement with Rally Communitas Corp. by Mutual Agreement.
    • QT Imaging to list publicly via SPAC deal with GigCapital5 (GIA); expects to trade under ticker “QTI”.
    • SCP & CO Healthcare Acquisition Company (SHAC) Amends Charter to Unwind Before Year-End and Announces December 9, 2022 as Amended Termination Date and Announces Key Dates in Connection with the Liquidation.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ADMA: Closing of $69 Million Public Offering Including Full Exercise of Underwriters’ Option to Purchase Additional Shares.
    • AFIB: Filed Form S-3 .. $15,000,000 common stock.
    • APTO: Establishes New At-The-Market Facility.
    • IBIO: Closing of $3.5 Million Underwritten Public Offering.
    • IMUX: Filed Form S-3.. 8,696,552 shares of our common stock.
    • NBY: Filed Form S-1.. 1,548,502 Shares of Common Stock.
    • Societal CDMO (SCTL) Announces Proposed Concurrent Public Offerings of Common Stock and Preferred Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE):
    • CELC: Closes $100 Million Private Placement.
  • Mixed Shelf Offerings:
    • MUSA: Filed Form S-3ASR.. Mixed Shelf.
    • OOMA: Filed Form S-3.. $100,000,000 Mixed Shelf.
    • SRZN: Filed Form S-3.. $200 Million Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • Tender Offer:
    • BVH: Announces Amendment of Tender Offer to Increase Offer Price to $25.00 per Share and Extend Tender Offer Until December 23, 2022.
    • Merck (MRK) begins tender offer to acquire Imago BioSciences (IMGO).
  • Convertible Offering & Notes Filed:
    • AXON: Discloses it issued and sold $690 million aggregate principal amount of its 0.50% Convertible Senior Notes due 2027.

Capital Raise Summary From The TradeXchange, bringing traders and investors real time news and Squawk Box, and other sources.

News After The Close and Over the Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: MLCO 55%, BEAT 55%, GDS 54%, BZUN 51%, POL 43%, TAL 42%, STIM 38%, PDD 38%, PBYI 38%.
    • Trading Down: TECH -77%, CVNA -58%, QTNT -57%, FTCH -56%, PRTY -49%, AXDX -48%, MRTX -43%, BKD -41%, RUBY -36%, GIII -35%, PAGS -34%, NKTR -34%, ADAP -34%, ESPR -34%, NVTA -34%, NVAX -33%, KNOP -33%, CGC -31%.
  • News Items After the Close:
    • S&P 500 posts worst weekly showing since late Sept. ahead of final Fed meet of the year.
    • Science Applications (SAIC) awarded $350 million U.S. Navy contract.
  • News Items Over the Weekend:
    • Stocks that Defined the Week: LUV, PEP, CVNA, AAPL, CPB, AMZN, MSFT, ATVI (WSJ)
    • The Week in Business: Labor Actions Sweep Britain (NYT)
    • Fed Rate Increases Are Squeezing Consumer-Finance Companies. (WSJ)
    • US Probes FTX Founder For Fraud, Examines Cash Flows To Bahamas; Scope Of Inquiry Includes Tranfers Around Time Of Bankruptcy: (Bloomberg)
    • If the Fed raises rates again next week, the recession will be greatly amplified. (Elon Musk Tweet).
    • Assets Under Management: LAZ $221 Billion, VRTS $157.2 billion, WT $80 billion.
    •  Barron’s:
      • Positive View: + on RRX, CVS, IAC, KMX, AN, SAH, LAD, GPI, PAG, MCD, PM, ZTS, MA, BLK, LRCX, V, TXN, ODFL, PAYX, MSFT, MKTX, CRPT, MPWR, ANET, SCHW of note.
      • Cautious View: bx of note.
      • Mixed View: None of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

None of note.

  • Exchange/Listing/Company Reorg and Personnel News:
    • Blue Hat (BHAT) Announces Receipt of Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • Baker Hughes (BKR) Added to the Nasdaq-100 Index.
    • BiondVax (BVXV) Regains Nasdaq Compliance.
    • CLVS: Down Premarket After Co Files For Bankruptcy Protection.
    • Evolve Transition Infrastructure (SNMP) Receives Notice from NYSE American Regarding Continued Listing Standard.
    • FedNat Holding Company (FNHC) Voluntarily Files for Chapter 11 Bankruptcy Protection.
    • JetBlue Airways (JBLU) discloses ​that it extended the Company’s Chief Executive Officer contract.
    • Kaleyra (KLR) Announces CEO Transition Plan and Significant Board Enhancements.
    • Kazia (KZIA) Announces Receipt Of Nasdaq Minimum Bid Notification.
    • Ontrak (OTRK) Announces Receipt of Notice from Nasdaq Regarding Non-Compliance of its 9.50% Series A Cumulative Perpetual Preferred Stock with Minimum Bid Price Requirement.
    • PolyPid (PYPD) Announces Receipt of Nasdaq Minimum Bid Price Notification.
    • PriceSmart (PSMT) appoints Robert Price as interim CEO.
    • PBI: Hestia Capital Partners wants control of Pitney Bowes (PBI) Board and wants CEO replaced.
    • RYVYL (RVYL) Receives NASDAQ Notification Letter Regarding Minimum Bid Price Deficiency.
    • Smart for Life (SMFL) Announces Capital Restructuring Designed to Address Nasdaq Listing Requirements and Unlock Shareholder Value.
    • Timber Pharmaceuticals (TMBR) Regains Compliance with NYSE American Continued Listing Standards.
    • Twilio (TWLO) Announces Voluntary Delisting From Long-Term Stock Exchange.
    • Whole Earth Brands, Inc. (FREE) Announces CEO Transition.
  • Buyback Announcements or News:
    • Helmerich & Payne (HP) increased the maximum number of shares authorized to be repurchased in calendar year 2023 to five million common shares.
  • Stock Splits or News:
    • BIMI trading r/s price.
    • NUWE trading r/s price.
    • Team, Inc. (TISI) Announces One-for-Ten Reverse Stock Split.
  • Dividends Announcements or News:
    • Albany International (AIN) Increases Dividend.

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

S&P 500 +13, Dow Jones +86,  NASDAQ +31,  and Russell 2000 +3. (as of 8:01 a.m. EST).  Asian markets are lower today.  Europe markets are trading lower. VIX Futures are at 25.02 from 22.60. Gold, Silver and Copper lower.  WTI Crude Oil and Brent lower with Natural Gas higher. $ barely down. US 10-year Treasury sees yields at 3.534% from 3.469%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and up against the Yen. Bitcoin is at $16,943 from $17,260.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Energy, Healthcare, Consumer Cyclical, Consumer Defensive, Industrials of note.
  • One Month Winners:  Basic Materials, Consumer Cyclical, Communication Services, Technology of note.
  • Three Month Winners: Basic Materials, Consumer Defensive, 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 were trading down heading toward the closing bell Friday, with all three major benchmarks on track for weekly losses, as investors considered the latest wholesale inflation data ahead of the Federal Reserve’s policy meeting next week. The Dow Jones Industrial Average DJIA, -0.90% was down 0.4%, while the S&P 500 SPX, -0.73% slipped 0.2% and the technology-heavy Nasdaq Composite COMP, -0.70% dipped 0.1%.  (MarketWatch)

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

  • Monday After the Close: ORCL, COUP, FLNC of note.
  • Tuesday Before the Open: PLAB of note.

Earnings of Note This Morning:

  • Beats: COUP +0.05.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: None of note.
  • Negative Guidance: NOTV of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: GRCL +18%, HZNP +13%, BVH +7%, ALVR +5%, ARGX +5% of note.
  • Gap Down: ONCT -14%, ACET -13%, LVTX -9%, ABCM -6%, RIVN -5%, IDYA -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: COUP HZPN RIVN WEBR ACN UAA BBY GPS TPR LEVI EAT. (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: China’s Rapid Covid Reversal Sparks Whiplash As Cases Surge. (Bloomberg)
  • Bloomberg Most Read Story: U.S. Futures Rise With Central Bank Moves in Focus. (Bloomberg)
  • Heavy losses among Russian mercenaries in Luhansk, global leaders to discuss more sanctions. (CNBC)
  • U.S. Scientists make a breakthrough on nuclear fusion where they produced more energy than consumed. (Bloomberg)
  • Microsoft (MSFT) buys a 4% stake in the London Stock Exchange. (CNBC)
  • Social Security Cost of Living Increase 8.7%. (CNBC)
  • Spirit Airlines (SAVE) offers a 43% raise to pilots over two years. (Reuters)

Moving Average Update:

  • Score goes to 22% from 20%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 8:45 a.m. EST
    • The President and The First Lady depart the White House en route Arlington, VA, 12:10 p.m. EST
    • The President and The First Lady arrive in Arlington, VA, 12:20 p.m. EST
    • The President and The First Lady participate in a United States Marine Corps Reserve Toys for Tots event, 12:40 p.m. EST
    • The President and The First Lady depart Arlington, VA en route the White House, 1:30 p.m. EST
    • The President and The First Lady arrive at the White House, 1:40 p.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre and National Security Advisor Jake Sullivan, 3:00 p.m. EST

Economic: 

  • Treasury Statement 2:00 p.m. EST

Federal Reserve / Treasury Speakers:

  • Blackout Period.

M&A Activity:

  • Amgen (AMGN) To Buy Horizon Therapeutics ( HZNP) For $116.50 per Share Cash -Proposed Deal Implies An Enterprise Value Of Approximately $28.3 billion.
  • Boston Scientific (BSX) Announces Strategic Investment to Acquire Majority Stake of Acotec Scientific Holdings Limited.
  • Coupa Software Inc’s (COUP) Enters into Definitive Agreement to Be Acquired by Thoma Bravo for $8 Billion..
  • Ryan Specialty Group (RYAN) acquires Griffin Underwriting Services.
  • Weber Inc. (WEBR) to Be Taken Private by BDT Capital Partners for $8.05 Per Share.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Cowen Digital Engineering Services Summit (12/12/22-12/13/22)
    • Stifel Medtech Madness Annual West Coast Bus Tour (12/12/22-12/14/22)
      • Previously posted and ongoing conferences:
        • None of note.
  • Company Meetings: BGXX, HOTH, TMKR
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: AGIO, CIG, CRIS, CRVS, CTLP, GROW, , INAM, KPTI, MTBC, NKTR, ORTX
  • Update: None of note.
  • R&D Day:
  • Company Event: None of note.
  • Industry Meetings:
    • 76th Annual Scientific Meeting and Showcase of the Society of Cosmetic Chemists (SCC) 2022 (12/12/22-12/14/22)
      • Previously posted and ongoing conferences:
        • American Society of Hematology (ASH) Annual Meeting & Exposition 2022 (12/10/22-12/13/22)

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: