CAPIS Morning Note – 12/22/22: Stocks Lower After Yesterday’s 1.49% Move in the S&P 500.

Please Note: Next Morning Note will be out Tuesday, December 27th. Events for Friday, December 23rd are listed in this note. Happy Holidays!! Overnight Summary: The S&P 500 closed Wednesday up 1.49% at 3878.44 from Tuesday up 0.10% at 3821.62.  The overnight high of 3919.75 was hit at 9:20 p.m. EST. The low was hit…

Please Note: Next Morning Note will be out Tuesday, December 27th. Events for Friday, December 23rd are listed in this note. Happy Holidays!!

Overnight Summary: The S&P 500 closed Wednesday up 1.49% at 3878.44 from Tuesday up 0.10% at 3821.62.  The overnight high of 3919.75 was hit at 9:20 p.m. EST. The low was hit at 3895 at 6:25 a.m. EST, a range of ~25 points high to low.  At 7:15 a.m. EST, the S&P 500 (mini) was -5.50.

Earnings Out After The Close: 

  • Beats: MLKN +0.04.
  • Flat: None of note.
  • Misses: MU (0.02).

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 a while, you can uncover stocks prior to a pop or drop.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:
  • Secondaries Priced:
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • MNPR: Filed Form S-3.. $100,000,000 Common Stock
    • SMMT: Filed Form S-3.. Subscription Rights to Purchase Up to 476,190,476 Shares of Common Stock at the Initial Price
  • Direct Offering:
    • COSM: Announces Successful Closing of $32.5 Million Registered Direct Offering and Concurrent Private Placement Priced At-The-Market.
  • Selling Shareholders of note:
    • OWL: Files Prospectus Related To Offer And Sale By Selling Stockholders Of Up To 52.1 Million Class A Shares.
    • See WEJO Mixed Shelf Offering
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • WEJO: Filed Form S-3.. $200Million Mixed Shelf – 30,733,869 Common Shares and 3,776,378 Warrants to Purchase Common Shares Offered by the Selling Shareholders.
  • Debt Filing/Notes:
    • PNBK: Announces Completion of $12 Million Senior Debt Offering.
  • 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: MLKN +5%, MRTX +4%.
    • Trading Down: BLI -11%, LXRX -8%.
  • News Since The Close:
    • Stocks making the biggest moves after hours: UA, MU, MLKN (CNBC)
    • META GOOG: Tech Giants Ditch Office Space In London And Europe. (FT)
    • Micron (MU):
      • Announces restructuring plan in response to challenging industry conditions; to reduce headcount by approximately 10% over CY23.
      • MU CEO: “In the last several months, we have seen a dramatic drop in demand…” CFO: “…It’s not a permanent condition. This is just a function of volumes that are unseen drops in volumes, and you see — and actually the steps that we’re actively taking to reduce supply”
    • General Dynamics (GD) Electric Boat Corp awarded $5.13 billion U.S. Navy contract modification.
    • Raytheon Technologies (RTX) awarded $413 million U.S. Air Force contract.
    • Dover (DOV) subsidiary Pole/Zero awarded $53.5 million contract by U.S. Department of Defense.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Akanda Corp.’s (AKAN) Chief Executive Officer On Paid Leave of Absence.
    • Angion (ANGN) Receives Nasdaq Notice Regarding Minimum Bid Price Requirements.
    • Ever-Glory (EVK) Announces Voluntary Delisting from the Nasdaq Global Market.
    • Fiserv (FISV) Chairman Frank Bisignano enters into a new employment agreement to serve as President and CEO through Dec 2027.
    • FUTU: Announces Proposed Dual Primary Listing on The Stock Exchange of Hong Kong Limited.
    • Kanzhun Ltd ADR (BZ) Successfully Listed on the Main Board of The Stock Exchange of Hong Kong.
    • MasTec (MTZ) CFO George L. Pita to retire.
    • Novo Integrated Sciences (NVOS) Announces Receipt of Notice from Nasdaq.
    • Otonomy (OTIC) Announces Change in Stock Exchange Listing.
    • Protalix BioTherapeutics (PLX) to Delist its Common Stock from the Tel Aviv Stock Exchange.
    • TechTarget (TTGT) announces that it has promoted Rebecca Kitchens from EVP & Publisher to President and Steve Niemiec from Chief Revenue Officer to COO & Chief Revenue Officer.
    • Under Armour (UAA/UA) Announce Stephanie Linnartz as President and CEO. (MarketWatch)
    • WNS announced that effective end of day December 31, 2022, Michael Menezes and Gareth Williams will retire from the Board of Directors.
  • Buyback Announcements or News:
    • AdaptHealth (AHCO) extends share repurchase plan.
    • Carmax (KMX) Pauses Share Buyback After Quarterly Profit Plunges 86%.
    • EnLink Midstream (ENLC) authorizes common unit repurchase program for the repurchase of up to $200 million during 2023.
    • LiveRamp (RAMP) increases share repurchase program by $100 million to $1.1 billion.
    • U.S. Global Investors (GROW) Continuation of Stock Repurchase Program and Monthly Dividend.
  • Stock Splits or News:
    • OP trading r/s price.
    • THMO trading r/s price.
    • Team, Inc. (TISI) Completes One-for-Ten Reverse Stock Split.
  • Dividends Announcements or News:
    • COP Goes ex div tomorrow for $0.70.
    • RENN trading premarket on Announced Special Cash Distribution of $31.5585 per ADS.

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

S&P 500 -9, Dow Jones -63,  NASDAQ -36,  and Russell 2000 -3. (as of 7:56 a.m. EST).  Asian markets are higher.  Europe markets are trading lower ex the FTSE. VIX Futures are at 22.80 from 23.55.  Gold, Silver and Copper lower.  WTI Crude Oil and Brent higher with Natural Gas higher as well. $ barely down. US 10-year Treasury sees yields at 3.651% from 3.67%. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $16,823 from $16,844 higher by 0.33%.

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

  • Daily Positive Sectors: Energy, Industrials, Technology, Financial Consumer Cyclical of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners:  Healthcare, Utilities, Consumer Defensive of note.
  • Three Month Winners: Basic Materials, Industrials, and Healthcare of note.
  • Six Month Winners: Industrials, Energy, Healthcare of note.
  • Twelve Month Winners: Energy,  of note.
  • Year to Date Winners: Energy of note.

Stocks rose, lifted by consumer-confidence data that jumped to its highest level since April. The 10-year Treasury yield inched higher, while the two-year yield fell.  Crypto miners’ shares struggled; Nike’s stock soared, while Rite Aid’s headed in the other direction.  All 11 of the S&P 500’s sectors ended higher, along with all three U.S. indexes—which are, as of Wednesday’s close, on pace for weekly gains. (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)

  • Thursday After the Close: AVO of note.
  • Friday Before the Open: None of note.
  • Friday After the Close: None of note.
  • Tuesday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: APOG +0.10.
  • Flat: None of note.
  • Misses: KMX (0.43).
  • Still to Report: PAYX.

Guidance:

  • Positive Guidance: CTAS, APOG of note.
  • Negative Guidance: TTC, MU of note.

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: ORIC +56%, ALVO +9%, MLKN +5%, MRTX +4% of note.
  • Gap Down: BLI -11%, LXRX -8% of note.

Insider Action: 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: KMX MU UAA TSN MLKN TSP GBTG MRTX (CNBC)
  • Five Things to Know This Morning: (CNBC)
  • Bloomberg Lead Story: Zelenskiy wins Applause and Aid in Trip to Washington D.C. (Bloomberg)
  • Bloomberg Most Read Story: Putin Pledges Unlimited Spending to Ensure Victory in Ukraine. (Bloomberg)
  • Turkey raises the minimum wage by 55% as inflation continues to rage. (CNBC)
  • Congress is at a standstill on the spending bill due to the immigration amendment. McConnell could extend into the new year. (Politico)
  • FTX’s Gary Wang and Alameda’s Caroline Ellison plead guilty to federal charges, and agree to cooperate with prosecutors. (CNBC)
  • CarMax (KMX) pauses share buyback as profits fall. (Reuters)
  • Tesla (TSLA) will offer $7,500 discounts on Model 3 and Y this month. (Reuters)

Moving Average Update:

  • Score jumps to 31% from 5%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 9:00 a.m. EST

Economic: 

  • Thursday, December 22nd
    • Q3 GDP (final estimate) is due out at 8:30 p.m. EST and is expected to remain at 2.9%.
    • Jobless Claims 8:30a p.m. EST
    • Chicago Fed Activity Index 8:30 p.m. EST
    • Corporate Profits 8:30 p.m. EST
    • Leading Indicators 10:00 p.m. EST
    • EIA Natural Gas Report 10:30 p.m. EST
    • KC Fed Mfg Index 11:00 p.m. EST
  • Friday, December 23rd
    • November Durable Orders are due out at 8:30 a.m. EST and are expected to drop to -1.0% from 1.0%.
    • November Personal Income is due out also at 8:30 a.m. EST and expected to rise by 0.3% from 0.7% in October.
    • November PCE Core is also due out at 8:30 a.m. EST and expected to rise by 0.3% from 0.2%.
    • November New Home Sales are due out at 10:00 a.m. EST and expected to rise by 600,000 from 623,000.
    • December University of Michigan Consumer Sentiment (final) is due out at 10:00 a.m. EST and is expected to remain at 59.1.

Federal Reserve / Treasury Speakers:

  • None of note.

M&A Activity:

  • Berkeley Lights (BLI) to acquire IsoPlexis (ISO) in an all-stock transaction valued at $57.8 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note.
      • Previously posted and ongoing conferences:
        • None of note.
  • Company Meetings: CRKN, PLTR, PSAC, RBCN.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: TMRC.
  • 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:
        • BIO Partnering Conference

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: