CAPIS Morning Note – 12/18/23: Merger Monday As PGTI and X are Bought Over The Weekend.

Overnight Summary: The S&P 500 closed Friday lower by -0.01% at 4719.19 from Thursday higher by 0.26% at 4719.55. The overnight high was hit at 4782.75 at 1:20 a.m. EST while the low was hit at 4769.50 at 6:30 p.m. EST. The range overnight was 13 points as of 7:05 a.m. EST. The 10-day average…

Overnight Summary: The S&P 500 closed Friday lower by -0.01% at 4719.19 from Thursday higher by 0.26% at 4719.55. The overnight high was hit at 4782.75 at 1:20 a.m. EST while the low was hit at 4769.50 at 6:30 p.m. EST. The range overnight was 13 points as of 7:05 a.m. EST. The 10-day average of the overnight range is at 15.40 from 16.30.  The average for May-November average was 21.43 from 22.06. Currently, the S&P 500 is higher by +6.25 at 7:05 a.m. EST.  

Executive Summary: Despite stock indexes at new highs, there are still deals to be done. This is a positive for stocks. We should move into slower trading as the holidays are here with 9 trading days left in the year.

  • December NAHB Housing Index is due out at 10:30 a.m. EST.

Earnings Out After The Close: 

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
    • IX Acquisition Corp. (IXAQ) Announces Shareholder Meeting Results and New Monthly Contribution to be Deposited into Trust Account.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • SMFL: Filed Form S-1.. 1,819,777 Shares Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
    • ORIC: Files for 12,142,852 shares of common stock by selling shareholders.
    • TLSI: Files for 5,859,375 shares of common stock by selling shareholder.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ACA: Files mixed shelf securities offering.
    • CBT: Files mixed securities shelf offering.
    • OTEX: Files mixed shelf securities offering.
    • RPID: Filed Form S-3.. $200,000,000 mixed shelf offering.
    • SHEL: Files mixed shelf securities offering.
  • Debt/Credit Filing and Notes: None of note.
  • Tender Offer: None of note. 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 and Over the Weekend:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: TPIC 55.1%, RUN 44.5%, PLAB 41.1%, COMM 38.6%, MOR 38.4%, FATE 37.5%, ACAD 35.8%, BVN 32.9%, SPWR 29.3%, HMST 28.9%, RYTM 28.3%, GKOS 28.0%, CVNA 27.7%, CDXS 27.2%, RH 27.1%, DOCU 27.0%, DNLI 25.9%, CERS 25.7%.
    • Trading Down: RILY -19.6%, EGRX -19.0%, APLS -16.4%, NG -13.3%, CQP -12.2%, SIGA -10.5%, EDU -10.5%, CMTL -10.1%, FCN -10.1%.
  • News Items After the Close:
    • Nasdaq 100 Closes At Record For First Time Since November 2021.
    • Exclusive: US FDA finds control lapses at Moderna (MRNA) manufacturing plant. (Reuters)
    • Beware the Most Crowded Trade on Wall Street: Next Year’s Soft Landing. (WSJ)
    • Federal Reserve Atlanta President Raphael Bostic Agrees With NY Fed President Williams: Comfortable Keeping Rates Higher For Longer.
    • Lockheed Martin (LMT) awarded a $663 million modification to a previously awarded US Navy contract.
  • News Items Over the Weekend:
    • The Score: Stocks That Defined the Week: M, HAS, PFE, CI, HUM, ORCL (WSJ)
    • It’s the Magnificent Seven’s Market. The Other Stocks Are Just Living in It. (AAPL, MSFT. GOOG, AMZN, NVDA, TSLA, META) (WSJ)
    • Illumina (ILMN) $7.1 billion deal for Grail sent back to FTC by appeals court.
    • Teamsters authorize strike at Anheuser-Busch’s (BUD) US breweries.
    •  Barron’s:
      • Positive View:  GM ORCL ADBE IBM ANET SNOW DELL HPQ HPE DVN FANG MRO PR SWN CIVI of note.
      • Cautious View:  Negative equity on auto loans is at its highest level in more than three years.
      • Mixed View:  of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

     

  • Exchange/Listing/Company Reorg and Personnel News:
    • Amneal (AMRX) Announces Move to Nasdaq.
    • e.GO (EGOX) Receives Nasdaq Notice Regarding Minimum Bid Price Requirement.
    • EMCOR Group (EME) CFO Mark Pompa to step down, effective April 1, 2024; Jason Nalbandian to become new CFO.
    • Federated Hermes (FHI) Vice Chairman Gordon Ceresino to retire.
    • Finance of America (FOA) Receives Continued Listing Standard Notice from the NYSE.
    • Gildan Activewear (GIL): Pzena Investment Management calls on the Board to re-appoint former CEO Glenn Chamandy.
    • Gyre Therapeutics (GYRE) appoints Nassim Usman as CEO earlier in today’s session.
    • Intermex (IMXI) Appoints New Independent Director.
    • Mitek Systems (MITK) to delay 10-K filing.
    • Navient (NAVI): Edward Bramson named Vice Chairman.
    • Viatris (VTRS) names Theodora Mistras as CFO; current CFO Sanjeev Narula to step down.
  • Buyback Announcements or News:
    • Seacoast Banking Corporation (SBCF) of Florida Announces Renewal of Share Repurchase Program.
    • SEI Investments (SEIC) increases share repurchase program by $250 mln increasing the available authorization under the program to ~$289 million.
  • Stock Splits or News: None of note.
  • Dividends Announcements or News: None of note.
  • Insider Sales Of Note: None of note.

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

S&P 500 +6, Dow Jones +52,  NASDAQ +1, and Russell 2000 +5.  (as of 7:56 a.m. EST).  Asia is lower ex the Kospi while Europe is lower ex the FTSE this morning. VIX Futures are at 14.60 from 14.07 this morning.  Gold and Silver are higher with Copper lower this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas higher as well. US 10-year Treasury sees yields at 3.90% unchanged from Friday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $40,938 from $42,701 lower by -0.45% this morning.

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

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

The Dow Jones Industrial Average set a record for a third straight day Friday to cap a strong week for stocks.  The S&P 500 advanced for a seventh consecutive week, its longest winning streak in six years.  The broad-market benchmark stalled Friday, slipping 0.01%, but closed up big for the week after the Federal Reserve hinted Wednesday it could slash interest rates next year. Rate cuts would mark a major turning point in the Fed’s roughly two-year campaign to control inflation.  The Dow rose 0.2% to a record 37305.16 points, while the Nasdaq Composite was 0.4% higher.  All were up more than 2% for the week. For the S&P 500, that marked the longest winning streak since November 2017.  Bond yields were little changed Friday, with the benchmark 10-year Treasury yield closing just under 4% for a second straight day.   (WSJ – edited by QPI)

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

  • Monday After the Close:

  • Tuesday Before the Open:

Earnings of Note This Morning:

  • Beats: None of note.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: HEI of note.

Company Earnings Guidance:

  • Positive Guidance: STLD of note.
  • Negative Guidance: NX of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SMFL +47%, X +28%, ARQT +23%, NIO +12% of note.
  • Gap Down:  EBIX -53% of note.

Insider Action: Several stocks sees Insider buying with dumb short selling.  OSG 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 before the bell: X AFRM ILMN ADBE UBER  (CNBC)
  • What You Need To Know To Start Your Day. (Bloomberg)
  • 5 Things To Know Before the Stock Market Opens on Monday. (CNBC)
  • Bloomberg Lead Story: BP To Pause All Tanker Transits Through The Red Sea. (Bloomberg)
  • Bloomberg Most Shared Story: U.S. Frackers return to haunt OPEC’s pricing strategy. (Bloomberg)
  • U.S. Stocks waver amid rates pushback: Market Wrap. (Bloomberg)
  • Goldman Sachs strategists lift forecast a month after setting it. (Bloomberg)
  • Southwest Airlines (LUV) reachs $140 million settlement for last December’s flight canceling meltdown. (CNBC)
  • Bloomberg The Big Take:  The big equality stories of 2023. (Podcast)
  • NPR Marketplace:  How AI could help families get paid leave benefits. (Podcast)
  • NY Times Daily:  The man who counts every shooting in America. (Podcast)
  • Wealthion:  Fed’s 2024 Agenda. (Podcast)

Moving Average Update:

  • 100%.  Day 6.  Drum beats on and on.

Geopolitical: 

  • President’s Public Schedule:
    • President receives the Daily Briefing at 11:00 a.m. EST.

Economic:

  • December NAHB Housing Index  is due out at 10:30 a.m. EST and is expected rise to 38 from 34.

Federal Reserve / Treasury Speakers:  Federal Reserve Chicago President Austan Goolsbee to speak at 8:30 a.m. EST on CNBC.

M&A Activity and News: 

  • KKR acquires $7.2 Billion Portfolio of Prime Recreational Vehicle Loans.
  • PC-TEL (PCTI) announces it has been acquired by Amphenol (APH) and no longer trades publicly.
  • Nippon Steel to buy U.S. Steel (X) for $14.9 billion. (CNBC)
  • Masonite (DOOR) to buy PGT Innovations (PGTI) for $41 a share, $33.50 in cash, and $7.50 in shares on Masonite. (

Meeting & Conferences of Note:

  • Sellside Conferences: None of note.
      • Previously posted and ongoing conferences: None of note.
  • Top Shareholder Meetings: None of note.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ENS holds a business update call.
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings: None of note.
    • Previously posted and ongoing conferences: None of note.

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 is 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: