CAPIS Morning Note – 12/19/22: Will Santa Claus Come To Wall Street The Last Two Weeks Of The Year?

Overnight Summary: The S&P 500 closed Friday at 3852.36 (lower by -1.11%) from Thursday at 3895.75 (lower by -2.49%).  The overnight high of 3899 was hit at 5:25 a.m. EST. The low was hit at 3876 at 12:40 a.m. EST, a range of ~23 points high to low.  At 7:25 a.m. EST, the S&P 500…

Overnight Summary: The S&P 500 closed Friday at 3852.36 (lower by -1.11%) from Thursday at 3895.75 (lower by -2.49%).  The overnight high of 3899 was hit at 5:25 a.m. EST. The low was hit at 3876 at 12:40 a.m. EST, a range of ~23 points high to low.  At 7:25 a.m. EST, the S&P 500 (mini) was +8.25.

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: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • BZ: Files for Class A ordinary share offering.
    • CYTO: Filed Form F-1.. 400,000 Common Shares.
    • EDSA: Filed Form S-3.. 5,382,667 Common Shares.
    • EYEN: Filed Form S-3.. 2,875,554 Shares of Common Stock.
    • PAGP: Filed Form S-3.. Class A Shares Representing Limited Partner Interests.
    • PTCT: Filed Form S-3ASR.. 1,095,290 Shares.
    • RANI: Filed Form S-3.. 6,009,542 Shares of Class A Common Stock.
    • SNPX: Filed Form S-3.. 26,125,280 Shares of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • ONON: Filed Form F-3ASR — Mixed Shelf.
  • Debt Filing/Notes: None of note.
  • 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 and Over the Week:

  • Weekly Wrap Up: Best and Worst performing large cap stocks:
    • Trading Up: MAXR 115.6%, RIGL 73.0%, GRTS 32.2%, DAKT 29.3%, COUP 26.7%, TUSK 25.9%, EHTH 21.8%, CYTK 21.7%, ESPR 20.6%, RCKT 18.4%, MTRX 17.9%, EXAS 16.4%, CBAY 16.3%, HZNP 16.3%, RIG 15.2%, DOCU 14.9%, SBH 14.7%, PBF 13.2%, OIS 12.9%.
    • Trading Down: GH -35.5%, NVAX -33.4%, KPTI -32.7%, FATE -30.7%, ALLO -22.5%, ADAP -22.4%, COMT -22.3%, ATRA -19.4%.
  • News Items After the Close:
    • Tesla (TSLA) stock suffers worst week since 2020 as Elon Musk sells, large shareholder asks for new CEO. (MarketWatch)
    • TSLA: Elon Musk’s Team Is Seeking New Investors For Twitter. (Semafor)
    • BAE Systems (BAESY), L3Harris, Leidos (LDOS) awarded a $4.1 billion US Navy contract for CANES production units, software.
    • Lockheed Martin (LMT) awarded a $302 million US Navy contract related to the MK 48 heavyweight torpedo; also awarded a $246 mln US Navy order.
    • Leidos (LDOS) awarded a $334 million US Air Force contract relating to Mayhem program.
    • Raytheon Technologies (RTX) awarded a $171 million US Navy modification to a previously awarded contract.
  • News Items Over the Weekend:
    • Stocks that Defined the Week: COIN, MRNA, DAL, VZ, TSLA, WBD, DRI  (WSJ)
    • The Week in Business: The FTX Founder’s Rapid Fall (NYT)
    • North Korea fires two ballistic missiles, escalating tensions, says South Korea.  (Reuters)
    • In the last housing crisis, “11 million homes fell below their mortgage balance .. Home prices would have to fall between 40% and 45% from their peak to put the same proportion of mortgaged homes underwater today ..” (CARL Q CNBC mentions WSJ)
    • China’s Zhejiang Province expects first wave of epidemic to peak around mid-Jan or earlier, which coincides with Lunar New Year, most celebrated holiday in Chinese culture, and warns of risk of epidemic spreading rapidly along with population movement.
    • Goldman Says China Covid Reopening Could Be ‘disorderly’.
    •  Barron’s:
      • Positive View: AMZN, T, BRK.A, GM, IBM, HTZ, JNJ, JWN, SHEL, V, YUM, HTHT of note.
      • Cautious View: RBLX, AAPL, META of note.
      • Mixed View: None of note.
  • Erlanger Type 1 Short Squeezes and Type 4 Long Squeezes reporting earnings this week:

  • Exchange/Listing/Company Reorg and Personnel News:
    • Activision (ATVI): COO Alegre to leave when contact expires March 31.
    • Ambrx Biopharma Inc. (AMAM) Announces Receipt of NYSE Non-Compliance Letter Regarding ADS Trading Price.
    • ADC Therapeutics (ADCT) Appoints Jose Carmona as Chief Financial Officer.
    • Cardinal Health (CAH) Names Aaron Alt Chief Financial Officer.
    • Lightning eMotors (ZEV) Receives Continued Listing Standards Notice from the NYSE.
    • MariaDB (MRDB) Completes Merger and Lands on NYSE as “MRDB”.
    • Microchip Technology (MCHP) Announces Addition to Its Board of Directors.
    • Party City (PRTY) Receives Continued Listing Standard Notice from the NYSE.
    • Red Robin Gourmet (RRGB) announces departure of COO and Senior Vice President Michael Buchmeier.
    • Taysha Gene Therapies (TSHA) announces executive leadership changes; Chair of the Board of Directors, Sean Nolan, appointed CEO.
    • Ulta Beauty (ULTA) Announces Addition to Board of Directors.
    • Weber (WEBR) names Alan Matula as CEO, effective immediately; he had been interim CEO; CFO William Horton to resign.
  • Buyback Announcements or News:
    • CRH Continues Share Buyback Program.
    • Ferguson PLC (FERG) Announces Share Repurchase Program.
    • Fanhua (FANH) Announces US$20 Million Share Buyback Program.
    • ZipRecruiter (ZIP) enters into accelerated share repurchase agreement to repurchase $50 mln of its common stock.
  • Stock Splits or News:
    • ATNF trading r/s price.
    • HEXO trading r/s price.
  • Dividends Announcements or News:
    • Albertsons (ACI) issues statement regarding Washington Supreme Court’s decision to extend the temporary restraining order against its previously announced special dividend payment.
    • ArrowMark Financial (BANX) announces special distribution of $0.10 and regular cash distribution of $0.39 per share for Fourth Quarter 2022.
    • Jefferies (JEF) Board of Directors Declares Spin-Off Dividend of Vitesse Energy Common Stock.
    • MDT Goes ex div tomorrow for $0.68.
    • STX Goes ex div tomorrow for $0.70.

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

S&P 500 +10, Dow Jones +66,  NASDAQ +44,  and Russell 2000 +4. (as of 7:51 a.m. EST).  Asian markets are lower.  Europe markets are trading higher. VIX Futures are at 24.40 from 25.10.  Gold, Silver and Copper lower.  WTI Crude Oil and Brent higher with Natural Gas lower. $ barely down. US 10-year Treasury sees yields at 3.541% from 3.495%. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $16,727 from $17,000 lower by -0.21%.

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

  • Daily Positive Sectors: None of note.
  • Daily Negative Sectors: Real Estate, Utilities, Consumer Cyclical, Energy, Technology, Healthcare of note.
  • One Month Winners:  Healthcare, Utilities, Consumer Defensive Basic Materials, Consumer Cyclical, Technology of note.
  • Three Month Winners: Basic Materials, Industrials, Consumer Defensive,and Healthcare of note.
  • Six Month Winners: Industrials, Energy, 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 closed lower for a third session in a row Friday, but avoided the session’s lows, as investors feared higher Federal Reserve rates could tip the economy into a recession. The Dow Jones Industrial Average DJIA, -0.85% shed about 282 points, or 0.9%, ending near 32,920, but well above the session’s low of 32,654.59, according to FactSet. The S&P 500 index SPX, -1.11% shed 1.1%, while the Nasdaq Composite Index COMP, -0.97% fell 1%. For the week, the Dow ended down 1.7%, the S&P 500 shed 2.1% and the Nasdaq fell 2.7%, with all three booking back-to-back weekly losses for the first time in about three months, according to Dow Jones Market Data.  (MarketWatch)

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

  • Monday After the Close: HEI, SCS of note.
  • Tuesday Before the Open: GIS, FDS, NEOG, FCEL of note.

Earnings of Note This Morning:

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

Guidance:

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

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: MDGL +151%, TSHA +17%, ZIP +5% of note.
  • Gap Down: ARDX -5%, YMAB -5% of note.

Insider Action: RWAY, ALIT, FULC 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: AJRD TSLA MESA SBGI META TSP WMG MRNA (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: Twitter users vote for Musk to step down as CEO. (Bloomberg)
  • Bloomberg Most Read Story: Musk Polls Twitter On Whether to Stay as CEO. (Bloomberg)
  • Putin visits Belarus so worries rise they may join the war. (WSJ)
  • Morgan Stanley forecasts that 2008 profit drop could equal 2008 era. (Bloomberg)
  • Winter storm to impact travel this week. (Weather)
  • “Avatar: The Way of Water” opens to $134 million in U.S., just missing estimates. Internationally, brought in another $300.5 million slightly below Disney (DIS) estimates. (CNBC)

Moving Average Update:

  • Score creeps down to 5% – ugh.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 8:00 a.m. EST
    • The President departs New Castle, Delaware en route the White House, 9:25 a.m. EST
    • The President arrives at the White House, 10:20 a.m. EST
    • The President hosts a bilateral meeting with President Guillermo Lasso of Ecuador, 1:30 p.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:30 p.m. EST
    • The President and The First Lady host a Hanukkah Holiday Reception, 7:00 p.m. EST

Economic: 

  • Housing Market Index 11:30 a.m. EST

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • John B. Sanfilippo & Son, Inc. (JBSS) Announces Acquisition of Just the Cheese Brand.
  • L3Harris (LHX) to Acquire Aerojet Rocketdyne (AJRD) for $58 per share.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note.
      • Previously posted and ongoing conferences:
        • None of note.
  • Company Meetings: ICLK, MBAC, NCTY, SIEN
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: BFRI
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • BIO Partnering Conference
      • 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 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: