CAPIS Morning Note – 7/26/22: Walmart Warning Hits Market As Stocks Lower This Morning

Overnight Summary: The S&P 500 closed Monday at 3966.84 (higher by 0.13%) from 3961.63 (lower by -0.93%) on Friday.  Futures are trading lower in the premarket session. The overnight high of 3964.50 was hit at 5:10 a.m. EDT. The low was hit at 3950 at 6:40 a.m. EDT, a range of 14 points high to low…

Overnight Summary: The S&P 500 closed Monday at 3966.84 (higher by 0.13%) from 3961.63 (lower by -0.93%) on Friday.  Futures are trading lower in the premarket session. The overnight high of 3964.50 was hit at 5:10 a.m. EDT. The low was hit at 3950 at 6:40 a.m. EDT, a range of 14 points high to low which is below the range of late with 45 the average range. At 7:05 a.m. EDT the current price is 3956.25 which is -0.35% and -13.75 points. 

Breaking News: 

Earnings Out After The Close:

  • Beats: WIRE +5.57 WHR +0.65 RNR 0.41 LBRT 0.38 PKG +0.38 FFIV +0.34 +AAN +0.17 SSD +0.15 CDNS +0.11. UHS +0.11 NXPI +0.10 CR +0.08 MEDP +0.07 RRC +0.06
  • Flat: None of note.
  • Misses: KALU -0.81.

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:
    • CCL: Closing of $1 Billion Offering of Common Stock.
    • INRX: Withdraws offering.
    • LEGN: Proposed Public Offering $250 million of American Depositary Shares.. MS, JPM, Jefferies and Eevercore bookmanager
    • VERV: Closing of Upsized Public Offering of Common Stock and Full Exercise by Underwriters of Option to Purchase Additional Shares.
  • Pricing of Over-Allotment/Notes:
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings: None of note.
  • Debt Filing: Quest Diagnositics (DGX) files debt offering.
  • Convertible Offering & Notes Filed:

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: SHLX +10%, LBRT +9%, FFIV +5%, WIRE +5%, AIN +5%, TBI +5%, CALX +4%.
    • Trading Down: AAN -22%, ALGT -18%, WMT -10%, PETS -8%, LEGN -7%, HXL -6%, WAB -5%, TGT -5%, CONN -5%, UHS -4%, DLTR -4%, M -4%.
  • News Since The Close:
    • Walmart (WMT) reports updated guidance as lowers estimates for Q2 and FY 23. (MarketWatch)
    • Other retailers fall in sympathy. Amazon down.
    • Alibaba (BABA) to pursue primary listing on Hong Kong Stock Exchange.
    • El Erian on CNBC notes inflation is impacting revenue side with demand destruction. (CNBC)
    • Angion (ANGN) to explore strategic alternatives for enhancing and preserving shareholder value.
    • Canadian Real Estate market could see a 42%. (Toronto Star)
    • Moody’s lowers European Growth forecasted.
    • Exchange/Listing/Company Reorg and Personnel News:
      • Apogee Enterprises (APOG) announces CFO transition.
  • Buyback Announcements or News:
    • UPS raises to $3 billion stock repurchase authorization.
  • Stock Splits or News:
    • Exela Technologies (XELA) reverse split 1-20.
  • Dividends Announcements or News: 
    • Hess Midstream (HESM) raises dividend to $0.5559 from $0.5492 a share.
    • Delek Logistics (DKL) raises dividend to $0.985 from $0.98 a share.

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

S&P 500 -, Dow Jones -, NASDAQ -, and Russell 2000 -. Europe lower ex FTSE and Asia higher ex Japan.  VIX Futures are at 25.40 from 26.30 yesterday morning and the VIX closed at 23.36 from 23.88  yesterday. Gold lower with Silver and Copper higher. WTI Crude Oil  and Brent Oil Futures higher and Natural Gas higher. $ is higher vs Euro, higher vs Pound and lower vs Yen. US 10 year Treasury sees yields at 2.759% from 3.045%  yesterday morning. Bitcoin is at $21,087 from $22,903 yesterday morning and is lower by -2.94% this morning. As of 8:08 a.m. EDT.

Sector Action – 07/25/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):  

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

Investors are waiting out until the Fed decision.  Stocks ended mixed with the DOW up and the NASDAQ down 0.43%  Updated 07/25/22 close.

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

  • Tuesday After the Close: MSFT, GOOG, V, TXN, MDLZ, CNI, CB, SYK, CMG, ENPH, EQR, AMP, CSGP, UDR, FE, ESS, TER, IEX, BXP, JNPR, ZION, MASI, MANH, EGP, SKX, BYD, AXTA, ASH, MTDR, TENB, AXS, FIBK, UMBF, ZWS, CHX, HIW, ABCB, PEB, FCPT, HPP, NEX, ROIC, WSBC, TRMK, RNST, PGRE, SILK, FCF, AGYS, NXGN, HA, AAN, LXFR of note.
  • Wednesday Before the Open: TMUS, BMY, BA, ADP, CME, SHW, HUM, GD, NSC, BSX, AEP, KHC, SHOP, APH, TEL, HES, ODFL, OTIS, ROK, SPOT, GPC, GRMN, TDY, GIB, ROL, UMC, AVY, BG, LW, CCJ, PAG, OC, TEVA, SF, OSK, SAIA, OPCH, BOKF, DRVN, SLAB, BXMT, ALKS, SLGN, AMG, IART, TPX, NYCB, EVR, R, TMHC, GPI, SHOO, FSS, CSTM, TRN, FBC, STRA, VBTX, MNRO, EXTR, CHEF, RES, CAMT, PRG, WNC, PDS, TPB of note.

Earnings of Note This Morning:

  • Beats: ADM +0.43 GE +0.36 PII +0.30 CNC +0.18 UPS +0.13 MSCI +0.11 PHM +0.10 GPK +0.09 MCD +0.08 AVNT +0.06 RTX +0.05 MMM +0.04 IRDM +0.04.
  • Misses: ARCC -0.22 GM -0.18 SSTK -0.12 XRX -0.11 AWI -0.07.
  • Still to Report: ACI CVLT KMB KO MCO NVR PCAR UBS WSO.

Guidance:

  • Positive Guidance: WWE, NXPI, FFIV, CDNS, CALX, MEDP, AIN, LBRT, CLS of note.
  • Negative Guidance: WHR, AAN, ALGT, LOGI, UPS, ST of note.

Erlanger Research Advance/Decline Chart: Updated through 07/25/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: LBRT +11%, SHLX +9%, FFIV +7%, WIRE +6%, NTB +5%, AIN +5%, BDN +5%, BABA +4%, RRC +4%, CLS +4%.
  • Gap Down: AAN -26%, ALGT -18%, BBIG -13%, PETS -10%, WMT -9%, UBS -7%, HXL -6%, WAB -5%, TGT -5%, LEGN -5%, KSS -4%, DLTR -4%, TJX -4%, ROST 4%.

Insider Action: CCI sees Insider buying with dumb short selling.  MICS, RVMD, TCDA sees Insider buying with smart short sellers. 07/25/22 close.

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: WMT GM PII. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Powell’s Bond Market Recession Indicator is Sending a Warning . (Bloomberg)
  • Bloomberg Most Read Story: Roubini warns on shallow recession calls, delusional. (Bloomberg)
  • EU to weaken plan on natural gas use in the winter. (Reuters)
  • Senate delays Semiconductor Bill vote to tomorrow due to weather. (The Hill)
  • Amazon (AMZN) to increase Prime cost in Europe by up to 43%. (Reuters)
  • Coca Cola (KO) guides higher and notes consumers willing to pay more. (Bloomberg)
  • Meta (META) employees concerned about job losses. (Business Insider)
  • 3M (MMM) to initiate Chapter 11 for Aearo Technologies, earplug division. Spinoff Health Care division. (MarketWatch)
  • Robinhood Snacks looks at how NFL moves to streaming. Rise of U.S. Dollar hurts Big Tech.

Moving Average Update:

  • Score retreats to at 71%.  Updated 07/25/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 9:30 a.m. EDT
    • White House to hold a Covid-19 Vaccine meeting with health care officials, no set time yet.
    • The President meets virtually with the Chairman and Principal Owner of the Republic of Korea conglomerate SK Group to discuss the company’s robust investments in American manufacturing and jobs; The Secretary of Commerce attends, 2:00 p.m. EDT

Economic: 

  • May Case-Shiller Home Price Index is due out at 9:00 a.m. EDT and expected to come in at 20.8% from last month  at  21.20%.
  • July Consumer Confidence is due out at 10:00 a.m. EDT and is expected to fall to 96.4 from 98.70.
  • June New Home Sales is due out at 10:00 a.m. EDT and is expected to fall to 670,000 from 696,000.
  • The latest NYSE and NASDAQ Short Interest through the 13th of July from the 28th of June is due out after the close. During that period, the S&P 500 fell -0.52%.

Federal Reserve / Treasury Speakers:

  • Fed Speakers are on a Blackout Period into the FOMC Meeting. Blackout Period from July 16-July 28.

M&A Activity:

  • Abri SPAC I (ASPI) cancels merger with Apifny Group. Will seek a different business combination.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • JP Morgan Latam & Ceemea Smid Cap Opportunities Conference
      • Previously posted and ongoing conferences:
        • SVB Securities Big Data, A.I. & Machine Learning in Healthcare. (07/25/22-07/30/22)
  • Company Meetings: IMAQ, RDUS, VFC, VOD.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ASMB, SNPX, ZENV
  • Update:
    • Tremor International (TRMR) Conference Call on the Acquisition of Amobee.
  • R&D Day: RXDX.
  • Company Event:
    • Tuesday all day AMZN will hold its annual AWS re:Inforce learning conference focused on security, compliance, identity, and privacy issues. The event features access to hundreds of technical and business sessions..
  • Industry Meetings:
    • B & T Cell-Mediated Autoimmune Disease Drug Development Summit (07/26/22-07/28/22)
    • AACC Annual Scientific Meeting & Clinical Lab Expo
    • NIIMBL 2022 National Meeting (07/26/22-07/28/22)
    • Mining Disrupt Conference 2022 (07/26/22-07/28/22)
      • Previously posted and ongoing conferences:
        • Basic Cardiovascular Sciences (BCVS) Scientific Sessions 2022 (07/25/22-07/28/22)
        • Federation of Defense & Corporate Counsel (FDCC) Annual Meeting 2022 (07/23/22-07/30/22)
        • American Association for Clinical Chemistry (AACC) Annual Scientific Meeting and Clinical Lab Exposition 2022 (07/24/22-07/28/22)
        • The 24th International Symposium on the Photochemistry and Photophysics of Coordination Compounds 2022 (07/24/22-07/29/22)

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: