CAPIS Morning Note – 12/15/22: BOE and Swiss National Bank Raise Rates As Well. Stocks Rally Ends.

Overnight Summary: The S&P 500 closed Wednesday at 3995.32 (lower by -0.61%) from Tuesday at 4019.65 (higher by 0.73%).  The overnight high of 4042.75 was hit at 6:40 a.m. EST. The low was hit at 3987 at 4:45 a.m. EST, a range of ~55 points high to low.  At 7:10 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Wednesday at 3995.32 (lower by -0.61%) from Tuesday at 4019.65 (higher by 0.73%).  The overnight high of 4042.75 was hit at 6:40 a.m. EST. The low was hit at 3987 at 4:45 a.m. EST, a range of ~55 points high to low.  At 7:10 a.m. EST, the S&P 500 (mini) was -36.

Earnings Out After The Close: 

  • Beats: TCOM +0.29, LEN +0.12, NDSN +0.11.
  • 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: None of note.
  • Secondaries Priced:
    • ATXS: Pricing of $100 Million Underwritten Offering of Common Stock.. Priced @$11.01.
    • NFE: Prices secondary offering of 6.9 million shares of common stock at $46.00 per share.
    • PRTA prices offering. 3.25 Million shares at $56.50 per share.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • LNT: Entered into a distribution agreement for sale of common stock with offering price of up to $225,000,000.
    • NFE: Commences public offering of 6.90 mln shares of common stock by Energy Transition Holdings.
    • NVAX: Proposed $125 Million Public Offering of Common Stock. (JPM, Jefferies and Cowen bookmanager) – (See Convertible Offering below)
    • RNA: Announces Proposed Public Offering of Common Stock.
    • SCTL: Announces Closing of $35.6 Million Concurrent Public Offerings.
      SNDX: Closing of Public Offering of Common Stock and Full Exercise of Underwriters’ Option to Purchase Additional Shares.
  • Direct Offering:
    • CKPT: Announces $7.5 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules.
  • Selling Shareholders of note:
    • RBT: Filed Form S-1.. Up to 24,616,551 Shares of Class A Common Stock by selling shareholders.
    • WBX: Files for 8,176,694 Class A share offering by selling shareholders.
    • VOR: Filed Form S-3.. 11,627,907 Shares common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE):
    • BCDA: Announces $3.6 Million Private Placement of Common Stock.
  • Mixed Shelf Offerings:
    • BY: Files for $200 million mixed securities shelf offering.
    • CENT: Filed Form S-3ASR.. Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • NVAX: Announces $125 million convertible notes offering.

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: RICK +5%, BMEA +4%, PL +4%.
    • Trading Down: NVAX -10%, PSNL -7%, NFE -4%.
  • News Since The Close:
    • Novavax (NVAX) stock sinks after proposed $125 million share sale, convertible debt offering. (MarketWatch)
    • DoubleLine’s Gundlach on CNBC:
      • Thinks Inflation Rate Is Going To Fall Faster Than Most Economists Do.
      • Says housing market is ‘obviously’ in a recession.
    • The US Senate voted to ban the hugely popular TikTok video-sharing app from all government-issued phones as the Biden administration considers restrictions on the Chinese-owned platform.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Centene (CNC) announces leadership changes; names Ken Fasola President; appoints Jim Murray COO.
    • Empire State Realty Trust (ESRT) CFO Christina Chiu has also been named the company’s COO.
    • First Hawaiian (FHB) names James Moses as CFO.
    • Goodyear Tire (GT) names Christina Zamarro CFO. (MarketWatch)
    • JELD-WEN (JELD) names William J. Christensen CEO.
    • Lyell Immunopharma (LYEL) names Lynn Seely, MD as President and CEO.
    • M&T Bank (MTB) names Daryl Bible CFO.
    • Norwegian Cruise Line Holdings (NCLH) Announces Senior Executive Leadership Transitions at Regent Seven Seas Cruises and Oceania Cruises.
    • Personalis (PSNL) Announces CEO Retirement and Transition.
    • Insulet (PODD) COO Charles Alpuche to retire.
    • Radian Group (RDN) discloses CFO departure.
    • Ra Medical Systems (RMED) Regains Compliance with NYSE American Continued Listing Standards.
    • Nyse To Suspend Trading Immediately In Starry Group Holdings, Inc. (STRY) And Commence Delisting Proceedings.
    • Sysco (SYY) announces that Aaron Alt will step down as Executive Vice President and Chief Financial Officer.
    • Tronox (TROX) Announces Chief Financial Officer Retirement and Succession Plan.
  • Buyback Announcements or News:
    • Argan, Inc. (AGX) Increases Share Repurchase Program to $125 Million. (See Dividends)
    • Cadence Bank (CADE) announces 10 mln shares repurchase program for 2023.
    • HF Sinclair (DINO) agreed to repurchase an aggregate of 1 mln shares of the outstanding common stock from a registered broker for an aggregate purchase price of $48,600,000.
    • Eagle Bancorp (EGBN) authorizes new share repurchase program for up to 1.6 million shares.
  • Stock Splits or News:
    • BTB trading r/s price .
  • Dividends Announcements or News:
    • Argan, Inc. (AGX) Declares Regularly Quarterly Cash Dividend of $0.25 Per Common Share.
    • Lamb Weston (LW) raises quarterly dividend by 14% to $0.28 per share.
    • Toll Brothers (TOL) Announces Cash Dividend.

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

S&P 500 -40, Dow Jones -267,  NASDAQ -145,  and Russell 2000 -19. (as of 8:08 a.m. EST).  Asian markets are lower.  Europe markets are trading lower. VIX Futures are at 23.25 from 24.01 . Gold, Silver andCopper lower.  WTI Crude Oil and Brent higher with Natural Gas lower. $ barely down. US 10-year Treasury sees yields at 3.48% from 3.50%. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $17,655 from $17,857 lower by -0.69%.

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

  • Daily Positive Sectors: Healthcare of note.
  • Daily Negative Sectors: Energy, Financial, Basic Materials, Technology, Communication Services 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. stocks ended lower in choppy trade after the Federal Reserve raised rates another 50 basis points at its final rate-setting meeting of 2022, a year in which the central bank has quickly jacked up its policy rate to its highest level in 15 years. The Dow Jones Industrial Average DJIA, -0.42% ended down about 142 points, or 0.4%, near 33,966, but was well off the session’s low of 33,704.17. The S&P 500 index SPX, -0.61% fell 0.6%, while the Nasdaq Composite Index COMP, -0.76% shed 0.8%. Fed Chair Powell, in an afternoon news briefing, said more work still needs to be done to ensure that inflation follows a concrete path lower to its 2% annual target, even though November’s consumer-price index this week showed a slowing to a 7.1% annual rate from a peak level above 9% this summer.  (MarketWatch)

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)

  • Thursday After the Close: None of note.
  • Friday Before the Open: ACN, DRI, WGO of note.

Earnings of Note This Morning:

  • Beats: JBL +0.07.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

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

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: BMEA +5%, VOR +5%, RICK +5% of note.
  • Gap Down: NVAX -10%, PSNL -8%, NFE -6%, FSM -4%, LEN -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: TSLA WBD LEN NVAX WDC T TTD SNAP. (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: Equities Decline as Hawkish Fed Halts Global Rally. (Bloomberg)
  • Chinese to offer more stimulus as Covid spikes. (Bloomberg)
  • Bloomberg Most Read Story: FTX Executive Ryan Salame Tipped Off Bahamian Regulators To Possible Fraud. (Bloomberg)
  • Bank of England hikes by 50 basis points. (CNBC)
  • Swiss National Bank raises rates as well. (CNBC)
  • Biden Administration makes Covid tests free again this winter. (CNBC)
  • 10 Year dips under 3.50%. (CNBC)

Moving Average Update:

  • Score goes to 68% from 74%.

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 Summit Leaders Session, 11:05 a.m. EST
    • The President participates in the U.S.-Africa Summit Leaders Session on partnering on the African Union’s Agenda, 11:15 a.m. EST
    • The President arrives at the White House, 1:05 p.m. EST
    • The President departs the White House en route the U.S.-Africa Leaders Summit Closing Session on Promoting Food Security and Food Systems Resilience, 3:35 p.m. EST
    • The President participates in a Family Photo with U.S.-Africa Summit Leaders, 3:40 p.m. EST
    • The President participates in the U.S.-Africa Leaders Summit Closing Session on Promoting Food Security and Food Systems Resilience, 4:00 p.m. EST
    • The President departs the U.S.-Africa Leaders Summit Closing Session on Promoting Food Security and Food Systems Resilience en route the White House, 5:45 p.m. EST
    • The President arrives at the White House, 5:50 p.m. EST
    • The President departs the White House en route Joint Base Andrews, 8:00 p.m. EST
    • The President departs Joint Base Andrews en route New Castle, Delaware, 8:30 p.m. EST
    • The President arrives in New Castle, Delaware, 9:05 p.m. EST

Economic: 

  • November Retail Sales are due at 8:30 a.m. EST and expected to come in at -0.3% from 1.3%.
  • December Philadelphia Fed Index is due out at 8:30 a.m. EST and expected to drop to -10 from -19.40.00
  • December Empire State Manufacturing is due out at 8:30 a.m. EST and expected to fall to -1.0 from 4.5.
  • Initial Jobless Claims 8:30 a.m. EST
  • November Industrial Production is due out at 9:15 a.m. EST and is expected to improve to 0.1% from -0.1%.
  • Business Inventories 10:00 a.m. EST
  • EIA natural Gas Report 10:30 a.m. EST

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Shore Bancshares (SHBI) to merge with Community Financial (TCFC).

Meeting & Conferences of Note:

  • Sellside Conferences:
    • DNB Nordic Healthcare Conference
    • Imperial Capital Security Investor Conference
    • Oppenheimer Midwest Industrial Virtual Summit
    • UBS Virtual Electric Grid Summit 2022
      • Previously posted and ongoing conferences:
        • Deutsche Bank db access AutoTech Conference 2022 (12/13/22-12/15/22)
        • 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

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: