CAPIS Morning Note – 12/14/21: Stocks Struggling Out Of The Gate

Overnight Summary:  The bid has yet to come back to stocks this morning. The S&P 500 is lower by -7.25 at 7:20 a.m. this morning. Stocks rallied until 4:00 a.m. EST and then pulled back hitting a low at 4640 before rallying to 4651. Asia was lower as China’s Zhejiang province shutting down business operations…

Overnight Summary:  The bid has yet to come back to stocks this morning. The S&P 500 is lower by -7.25 at 7:20 a.m. this morning. Stocks rallied until 4:00 a.m. EST and then pulled back hitting a low at 4640 before rallying to 4651. Asia was lower as China’s Zhejiang province shutting down business operations due to rising Covid-19 cases. Europe actually started out stronger before moving back to neutral with only the FTSE seeing strength on a falling jobless rate.

Earnings Out After The Close:

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

Capital Raises:

  • IPOs Priced or News:
    • Fresh Vine Wine (VINE) prices 2.2 million share IPO at $10.
    • Sidus Space, Inc. (SIDU) initial public offering of 3,000,000 shares of its Class A common stock at a price of $5.00 per share.
  • New SPACs launched:
    • Jackson Acquisition Company (RJAC ) announces closing of $200 million initial public offering.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BLU: Launch of a Public Offering of Common Shares in Canada and the United States.. US$175 million.. Jeffeires, Evercore and RBC Bookmanagers.
    • CCB: Public Offering of Common Stock.. $30.0 million of its common stock.. Keefe bookmanager.
    • ICCM: Closes $17 Million Underwritten Public Offering and Partial Exercise of Over-Allotment Option.
    • PERI: Closing of $180.0 Million Follow-on Offering of Ordinary Shares.
    • VRE: At-The-Market Share Offering Program.. $200 million shares
  • Pricing of Over-Allotment: None of note.
  • Direct Offering: 
    • ERPY: $7.85 Million Registered Direct Offering.
  • Selling Shareholders of note:
    • FE: Filed Form S-3ASR..25,588,535 Shares of Common Stock by selling shareholders
    • SEEL: Filed Form S-3.. 3,212,832 Shares of Common Stock.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • BMY: Filed Form S-3ASR.. Mixed Shelf Offering.
    • CAT: Filed Form S-3ASR.. Mixed Shelf Offering.
    • PNC: Filed Form S-3ASR.. Mixed Shelf Offering.
  • Convertible Offering & Notes Filed: 
    • Babcock & Wilcox Enterprises (BW) Announces Closing of $140 Million Offering of Senior Notes Due 2026.
    • Iron Mountain (IRM) Incorporated Upsizes and Prices Debt Offering.
    • IRM: Upsizes and Prices Debt Offering.
    • POST: Pricing of Senior Notes Offering.
    • PTON: Second amendment Revolving credit agreement.
    • Essent Group Ltd. (ESNT) Announces Amended and Extended $825 Million Credit Facility.
  • 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:

  • After Hours: 
    • Trading Up: GAMB +7%, SNSE +5%, AA +5%, ELY +3%
    • Trading Down: PL -12%, PRPL +8%, APTO -8%,
  • News Items After The Close:
    • California To Re-Institute Statewide Mask Mandate As Omicron-Fuelled Covid Rates Rise. (Reuters)
    • Lithium Prices Soar, Turbocharged By Electric-Vehicle Demand and Scant Supply. (WSJ)
    • Morgan Stanley (MS) CEO says he was wrong on return-to-office push: ‘Everybody’s still finding their way’. (CNBC)
    • The CDC now lists 84 destinations at “Level 4: Very High” classification, including nearly all of Europe. (Reuters)
    • United Airlines (UAL) and Virgin Australia Group Announce New Partnership.
    • U.S. Air Force awards Leidos (LDOS) contract worth an estimated $82 million.
    • FDA places a clinical holds on INDs for oral and implant formulations of islatravir impacting Merck (MRK) and Gilead (GILD).
    • Moderna (MRNA) and Australia Announce Collaboration to Bring mRNA Manufacturing to Australia.
    • Toyota (TM), in Reversal, Says It Will Shift More Rapidly to EVs. (Wall Street Journal)
    • Boy Scouts of America reaches settlement agreement-in-principle with Chubb (CB).
    • Assets Under Management for November: AssetMark (AMK) .
  • Exchange/Listing/Company Reorg and Personnel News: 
    • KemPharm (KMPH), Centessa Pharmaceuticals (CNTA), Sensei Biotherapeutics (SNSE) will be added to the NASDAQ Biotechnology Index on December 20, 2021.
    • Alcoa (AA) joins S&P MidCap 400, replacing Hill-Rom (HRC) on December 20 .
    • CooTek (CTK) Announces Receipt of NYSE Non-compliance Letter Regarding ADS Trading Price.
    • Fortinet (FTNT) Named to Nasdaq-100 Index on December 20, 2021.
    • Bellicum (BLCM) regains compliance with Nasdaq continued listing requirements.
    • Camden National Corp. (CAC) assigns Michael Archer as CFO starting Jan. 3, 2022.
    • CFO Richard Hanks enters separation agreement with Clarivate (CLVT).
    • Northern Oil & Gas (NOG) assigns COO Adam Dirlam to President, effective immediately.
    • Purple Innovation (PRPL) Joseph Megibow is stepping down as CEO, to be replaced by Robert DeMartini.
    • TPI Composites (TPIC) CFO Bryan Schumaker will resign and names Adan Gossar as interim CFO.
    • Williams Cos (WMB) announces John Porter as CFO.
  • Buyback Announcements:
    • BrightView (BV) Announces Repurchase of Shares from MSD Partners.
    • Callaway Golf Company (ELY) announces new $50 million stock repurchase program.
    • EQT (EQT) announces $1 Billion share repurchase program.
    • Luminar (LAZR), CEO, Board Members, and Management Announce Plan to Purchase a Total of $250 Million of LAZR Stock.
    • OneMain Holdings (OMF) Announces Increase in Share Repurchase Authorization to $300 million from $200 million.
    • Viomi Technology Co., Ltd (VIOT) Announces Update of Share Repurchase Program.
    • Laboratory Corp (LH) enters into a $1 billion accelerated share reppurchase agreement.
  • Stock Splits: None of note.
  • Dividends Announcements: 
    • EQT (EQT) announces reinstatement of regular dividend.
    • Special cash dividend declared by American Financial (AFG) of $2.00 per share.

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

S&P 500 -8 Dow Jones Industrial Average +8 NASDAQ -71 Russell 2000 +4. Asia lower and Europe mixed. VIX is at 20.90 from 19.71 yesterday. Gold and Silver lower with Copper higher. WTI Crude Oil and Brent Oil Futures lower. Natural Gas is lower. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10 year Treasury price is at $130.73 from $130.48 with yields at 1.438% from 1.467% yesterday morning. Bitcoin at $47,586 from $48,520 yesterday morning and this morning 2.11%. As of 8:20 a.m. EST.

Monday’s Action – 12/13 Close:  

  • Daily Positive Sectors: Utilities, Healthcare, Consumer Defensive of note.
  • Daily Negative Sectors: Energy, Consumer Cyclical, Technology, Financial, Communication Services, Industrials, Basic Materials of note.
  • One Month Winners: Utilities, Consumer Defensive, Real Estate of note.
  • Three Month Winners: Energy, Technology, Real Estate of note.
  • Six Month Winners: Technology, Real Estate, Utilities of note.
  • Twelve Month Winners: Energy, Real Estate, and Technology of note.
  • Year to Date Winners: Energy, Technology, and Real Estate  of note.

Indexes started the week on a negative note. Small Cap and Tech lead the indexes down, especially at the closing bell.  TLT traded up +1.48% closing at 151.31.  Oil and Natural Gas traded down 1.13% and -1.26% respectively. Updated 12/13 close.

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

  • Tuesday After the Close: none of note.
  • Wednesday Before the Open: none of note.

Earnings of Note This Morning:

  • Beats: None.
  • Flat: None.
  • Misses: None.
  • Still to Report: None.

Erlanger Research Advance/Decline Chart: Updated through 12/13 close.

Gap Ups & Down In Early Pre-Market:

    • Gap Up: GAMB +8%, MOLN +8%, ATRA +7%, SNSE +7%, AA +4%, FATE +3%, AFG +3%
    • Gap Down: APTO -16%, PL -11%, PRPL -8%, MESO -8%, TSVT -6%, BLU -3%

Insider Action: LOV, THO sees Insider buying with dumb short selling and no stock has smart short sellers with insider buys. 12/10 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: GME, AMC, BYND, PFE, TSLA  (CNBC)
  • South African Study on Omicron finds causes less severe disease, 29% reduction in risk of hospitalization, two doses of Pfizer (PFE) provides 33% protection from infection, 7-% against hospitalization with no data on two shots and a booster. (The Washington Post)
  • China fines Weibo (WB) for social media violations. Crack down on big tech continues in China.
  • Senate Majority Leader Schumer (D – NY) wants the Build Back Better Act passed by Christmas but Senator Joe Manchin (D-WV) still on the fence. (Politico)
  • Senate will vote to raise the debt ceiling to get past Mid Term Elections. (Bloomberg)
  • Omicron variant is surging in Washington State. (NY Times)
  • American Society of Hematology (ASH) continues to see many abstracts, trial data and announcements being made.
  • Pfizer (PFE) Announces Additional Phase II and III Study Results confirming robust efficacy of novel COVID-19 Oral Antiviral Treatment Candidate in reducing risk of hospitalization or death.
  • Neogen (NEOG) shares soar 14% premarket after it confirms deal to combine with 3M’s (MMM) food-safety business. (Market Watch)
  • Terminix (TMX) shares jump 23% after agreeing to Rentokil (RTO) buyout. (Market Watch)
  • Walt Disney (DIS) believes it will renew distribution deal with YouTube ahead of deadline.
  • Kroger (KR) to End Some Covid-19 Benefits for Unvaccinated Workers.  Company Memo *Kroger to Cut Paid Covid-19 Leave for Unvaccinated Employees — Kroger to Add $50 Monthly Surcharge to Health Plan for Unvaccinated Nonunion Employees.
  • Robinhood looks at Tesla (TSLA) CEO Elon Musk naming as Time’s “Person of the Year”.  Harley Davidson (HOG) to take LiveWire division public will own 75% of new entity.

Moving Average Update:

  • Score dive bombs to 53% from 76%. Updated 12/13 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President and The Vice President receive the President’s Daily Brief, 10:05 a.m. EST
    • Press Briefing by Press Secretary Jen Psaki, 1:00 p.m. EST
    • The President, The First Lady, The Vice President, and The Second Gentleman attend a holiday celebration for the Democratic National Committee; The President and The Vice President deliver remarks, 6:15 p.m. EST

Economic: 

  • November NFIB Small Business Optimism Index is due out at 6:00 a.m. EST and last month came in at 98.20.
  • November PPI is due out at 8:30 a.m. EST and is expected to fall to 0.5% from 0.6%.
  • Redbook Sales 8:55 a.m. EST
  • API Crude Oil Data 4:30 p.m. EST 

Federal Reserve Speakers:

  • None of note as we head into the first day of the FOMC meeting.

M&A Activity: 

  • OrthogenRx acquired for $160 million by Avanos Medical (AVNS).
  • Brown & Brown (BRO) obtains assets of Dealer Admin. Services.
  • Gambling.com Group (GAMB) agrees to acquire RotoWire to accelerate U.S. expansion.
  • NIKE, Inc. (NKE) acquires RTFKT.
  • New Gold (NGD) to sell Blackwater Gold Stream for $300 million.
  • Reliance Steel & Aluminum Co. (RS) Acquires Admiral Metals Servicecenter Company, Inc.
  • Rocket Lab (RKLB) to acquire SolAero Holdings, Inc., a global leader in space solar power products.
  • Vaccitech (VACC) acquires Avidea Technologies to expand product pipeline and strengthen scientific leadership in immunotherapies and vaccines.
  • VICI Properties Inc. (VICI) Enters Into Agreements Relating to the Mirage Hotel & Casino in Las Vegas with MGM for $1.075 billion.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Imperial Capital Security Investors Conference 2021 (12/14-12/15)
    • Oppenheimer 5G Summit: Wireless and Cloud Convergence Begins 2021
    • The Seaport Global Energy & Industrials: Transformation & Sustainability Conference 2021
    • Oppenheimer Midwest Industrial (Virtual) Summit 2021
    • Pickering Energy Partners TE&MFest 2021
    • Truist Texas Bank Summit 2021
    • UBS Specialty Insurance Conference 2021
    • Wolfe Global Consumer Growth Conference 2021 (12/14-12/15) 
      • Previously Posted and Ongoing Conferences:
        • Lytham Partners Winter 2021 Investor Conference (12/13-12/16)
        • Stifel Medtech Madness Annual West Coast Bus Tour 2021 (12/13-12/15)
  • Company Meetings: ATXS, WEI, WGP
    • Fireside Chat: UBER, OGEN, VFF
  • Investor/Analyst Day/Calls: AFG, AJG, AVYA, B, BLKB, CPB, FATE, FLGC, FSTR, OCX, OSG, RCKT, RGLD, RICK, SAGE, WEJO, QTWO
  • Update: IMAB, COMM, FFIV, JACK
  • R&D Day: GMAB, SAGE
  • Company Event: None of note.
  • Industry Meetings: None of note.
    • Cell Therapy Analytical Development Summit 2021
      • Previously Posted and Ongoing Conferences:
        • American Society of Hematology Annual Meeting (12/11-12/14)

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:

Monday’s Upgrades and Downgrades: