CAPIS Morning Note – 12/14/22: Fed Out At 2:00 With Latest Announcement. Presser At 2:30. Was CPI Leaked Tuesday 60 Seconds Early?

Overnight Summary: The S&P 500 closed Tuesday at 4019.65 (higher by 0.73%) from Monday at 3990.56 (higher 1.43%).  The overnight high of 4072.50 was hit at 10:45 p.m. EST. The low was hit at 4046 at 6:40 p.m. EST, a range of ~26 points high to low.  At 7:10 a.m. EST, the S&P 500 (mini)…

Overnight Summary: The S&P 500 closed Tuesday at 4019.65 (higher by 0.73%) from Monday at 3990.56 (higher 1.43%).  The overnight high of 4072.50 was hit at 10:45 p.m. EST. The low was hit at 4046 at 6:40 p.m. EST, a range of ~26 points high to low.  At 7:10 a.m. EST, the S&P 500 (mini) was up +0.50.

Earnings Out After The Close: 

  • Beats: BRZE +0.07, ABM +0.01.
  • 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:
    • Financial Strategies Acquisition Corp. (FXCO) Announces Extension of Termination Date and Additional Contribution to Trust Account to Extend Termination Date.
    • Fifth Wall Acquisition Corp. III (FWAC): Mobile Infrastructure Corp. enters business combination with FWAC; expects to trade on NYSE under ticker “BEEP”.
    • Rice Acquisition Corp. II (RONI) said Wednesday it will combine with NET Power LLC in a deal valued at about $1.46 billion.
    • Social Leverage Acquisition Corp I (SLAC) Transfers Listing to the Nasdaq Stock Market LLC.
  • Secondaries Priced:
    • HROW: Priced an underwritten registered offering of 2,376,426 shares of its common stock at a price of $10.52 per share for aggregate gross proceeds of $25 million. (See Debt Filing below)
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • GRND: Filed Form S-1.. Up to 37,360,000 Shares of Common Stock Issuable Upon Exercise of Warrants Up to 174,514,804 Shares of Common Stock and Up to 23,560,000 Warrants to Purchase Common Stock.
    • NCPL: Proposed Public Offering of Common Stock. (ThinkEquity bookmanager)
      PRTA: Proposed Public Offering of Ordinary Shares.. 3Million ordinary Shares. (Jefferies, Evercore and Cantor bookmanager)
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ACNT: Filed Form S-3 $100 Million Mixed Shelf.
    • ARQQ: Files $100M mixed securities shelf.
  • Debt Filing/Notes:
    • BDN: Announces Closing of $350 Million Offering of 7.550% Guaranteed Notes Due 2028 and Completion of Sales of Properties Totaling $113.6 Million.
    • HROW: Announces Proposed Offering of $100 Million of Senior Notes Due 2027 and “BB” Rating from Egan-Jones.
  • Tender Offer: None of note.
  • 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: ICVX +7%.
    • Trading Down: GRND -8%, PRTA -6%BRZE -5%, ABM -4%.
  • News Since The Close:
    • Gilimex sues Amazon (AMZN) for $280 million in breach of contract on robotics. Interesting read. (NY Post)
    • Charter (CHTR) stock falls after 2023 capex forecast comes in above Wall Street expectations. (MarketWatch)
    • ABM Industries (ABM) stock falls after disappointing forecast. (MarketWatch)
    • Pfizer (PFE) gets $1.96 Billion US Army contract for Paxlovid.
    • Assets Under Management: AMK $87.1 billion.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Aveanna Healthcare Holdings (AVAH) Announces CEO Transition.
    • Bitfarms (BITF) Receives NASDAQ Notification Regarding Minimum Bid Price Deficiency.
    • CPI Card Group (PMTS) Announces Organizational Changes.
    • Digital Realty (DLR) Announces Appointment of Andy Power as Chief Executive Officer.
    • DS voluntary Delist.
    • Eagle Bulk Shipping (EGLE) CFO Frank De Costanzo to step down.
    • Matterport (MTTR) Announces Executive Leadership Team Hires.
    • Methanex (MEOH) Announces Changes to Executive Leadership Team.
    • ObsEva (OBSV) Evidences Compliance with Nasdaq’s Stockholder’s Equity Rule and Announces Moratorium Dismissal Request Filing.
    • Sleep Number (SNBR): Serta Simmons preparing to file for bankruptcy.
    • Tiziana Life Sciences Ltd. (TLSA) Granted 180-day Extension by Nasdaq to Meet Minimum Bid Price Requirements.
    • WD-40 Company (WDFC) Announces Board Changes. (see Dividends also)
  • Buyback Announcements or News:
    • ABM Industries (ABM) approves additional $150 million for share repurchases.
    • Newtek (NEWT) extended Stock Purchase Agreement with the National Bank of New York City and certain NBNYC shareholders to January 23, 2023 from Jan 3, 2023.
    • Pennant Group (PNTG) announces share repurchase program.
    • Southside Bancshares, Inc. (SBSI) Increases Stock Repurchase Plan Authorization.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News:
    • APA Corporation (APA) Declares Cash Dividend on Common Shares.
    • Franklin Resources (BEN) increases its quarterly dividend 3.4% to $0.30 per share.
    • MAA Announces 12% Increase to Quarterly Common Dividend.
    • Quanta Services (PWR) increases quarterly dividend 14% to $0.08 per share.
    • Realty Income (O) increases its monthly dividend to $0.2485 per share.
    • Toro (TTC) increases quarterly dividend by 13% to $0.34 per share.
    • WD-40 (WDFC) announces 6% increase in quarterly dividend to $0.83 per share. (MarketWatch)

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

S&P 500 -3, Dow Jones -2,  NASDAQ -10,  and Russell 2000 -3. (as of 7:59 a.m. EST).  Asian markets are higher.  Europe markets are trading lower. VIX Futures are at 24.01 from 24.81 . Gold and Silver lower with Copper higher.  WTI Crude Oil and Brent higher with Natural Gas lower. $ barely down. US 10-year Treasury sees yields at 3.50% from 3.584%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $17,857 from $17,440.

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

  • Daily Positive Sectors: Energy, Communication Services, Real Estate, Technology, Basic Materials of note.
  • Daily Negative Sectors: Consumer Defensive of note.
  • One Month Winners:  Basic Materials, Consumer Cyclical, Technology of note.
  • Three Month Winners: Basic Materials, Consumer Defensive,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 climbed and bond yields fell Tuesday after fresh data showed inflation eased last month, a welcome development for investors who have been anxious about rising prices for much of the year.  The S&P 500 added 29.09 points, or 0.7%, to 4019.65, paring some of its stronger gains from earlier in the session. The Nasdaq Composite rose 113.08 points, or 1%, to 11256.81. The Dow Jones Industrial Average added 103.60 points, or 0.3%, to 34108.64.  The latest data on the consumer-price index showed that inflation rose 7.1% in November from a year ago, compared with 7.7% in October—and cooler than economists surveyed by The Wall Street Journal had expected. Core inflation, which excludes food and energy, increased by 6%, softening from 6.3%. (WSJ)

Click here for a video explanation of Erlanger Value Lines.

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

  • Wednesday After the Close: LEN, TCOM, NDSN, MITK of note.
  • Thursday Before the Open: JBL of note.

Earnings of Note This Morning:

  • Beats: REVG +0.02.
  • Flat: None of note.
  • Misses: WEBR (0.18)
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: BRZE of note.
  • Negative Guidance: ABM of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: None of note.
  • Gap Down: GRND -6%, PRTA -6%, CYTK -5%, BRZE -5% of note.

Insider Action: PSA 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: DAL TSLA MRNA BBY ASPU ABM DRI PCAR. (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: 60 Seconds Before CPI Hit, Heavy Trading Drove Mystery Rally. (Bloomberg)
  • Bloomberg Most Read Story: Apple to allow outside App Stores in Overhaul Spurred by EU Laws. (Bloomberg)
  • China will stop counting Covid cases with no symptoms and accelerate vaccinations. (FT)
  • Congress working on a spending bill to extend a week and then out to next September. (WSJ)
  • U.S. to add 30 more companies to the Chinese Blacklist. (Bloomberg)
  • Federal Reserve Preview. (CNBC)
  • Mortgage demand rises as interest rates drop lower. (CNBC)
  • Delta (DAL) sees robust in 2023 as earnings to double. (CNBC)
  • Binance sees bumpy road to grow but they are growing. (CNBC)
  • UK Inflation is off its 41 year high as gas prices drop. (CNBC)
  • Morgan Stanley upgraded growth outlook for China. (CNBC)

Moving Average Update:

  • Score jumps to 74% from 54% yesterday and  22% Friday.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EST
    • The President departs the White House en route the U.S.-Africa Business Forum, 1:20 p.m. EST
    • The President delivers remarks at the U.S.-Africa Business Forum, 1:30 p.m. EST
    • The President arrives at the White House, 2:55 p.m. EST
    • The President hosts a small group multilateral meeting with leaders, 3:40 p.m. EST
    • The President and The First Lady host the U.S.-Africa Leaders’ Summit dinner; The Vice President and The Second Gentleman attend, 7:00 p.m. EST

Economic: 

  • MBA Mortgage Applications 7:00 a.m. EST
    • 30-Yr Mortgage Rate Actual: 6.42% VS 6.41% previous
    • Mortgage Applications (WOW) ACTUAL: 3.2% VS -1.9% previous
    • Composite: +3.2%, Purchase: +4%, ReFi: +2.8%
  • Import and Export Prices 8:30 a.m. EST
  • Atl. Fed Business Inflation 10:00 a.m. EST
  • EIA Petroleum Report 10:30 a.m. EST

Federal Reserve / Treasury Speakers:

  • The Federal Reserve Open Market Committee (FOMC) concludes a two day meeting with an announcement at 2:00 p.m. EST and a presser at 2:30 p.m. EST.

M&A Activity:

  • First Bank (FRBA) and Malvern Bancorp (MLVF) reach agreement on strategic combination in a transaction valued at approximately $149.5 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Bank of America Hydrogen Conference
    • Cowen Networking Summit
    • DA Davidson Holiday Beauty & Wellness Bus Tour
    • Evercore Virtual IR Summit
    • Jefferies Denver Healthcare Summit (12/14/22-12/16/22)
    • Jefferies Real Estate Conference (12/14/22-12/15/22)
    • RBC Capital Markets Healthcare Private Company Conference
    • ROTH Capital 11th Annual Deer Valley Consumer Conference 2022 (12/14/22-12/18/22)
    • Seaport Research Annual Corporate Access Dealer Days
    • UBS Power Infrastructure Conference
    • UBS Specialty Insurance/Reinsurance Virtual Conference 2022
      • Previously posted and ongoing conferences:
        • Deutsche Bank db access AutoTech Conference 2022 (12/13/22-12/15/22)
        • Janney Energy Transition Forum (12/13/22-12/14/22)
        • Stifel Medtech Madness Annual West Coast Bus Tour (12/12/22-12/14/22)
        • Susquehanna Semiconductor Showcase Virtual Event 2022 (12/13/22-12/14/22)
  • Company Meetings: ADEX, AZO, MON, OSI
  • Fireside Chat: NXGL .
  • Investor/Analyst Day/Calls: ACM, ALVR, AMAT, ATGE, CALT, CRTG, FBHS, LII, MKSI, NEWT, RICK,  RGLD, SJM
  • Update: STNG , SLRX , RIOT 
  • R&D Day: KYMR, REGN , YMAB,
  • Company Event: LSCC , DAL .
  • Industry Meetings:
    • MedInvest Oncology Investor Conference 2022. (12/14/22-12/15/22)
      • Previously posted and ongoing conferences:
        • 76th Annual Scientific Meeting and Showcase of the Society of Cosmetic Chemists (SCC) 2022 (12/12/22-12/14/22)

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: