CAPIS Morning Note – 7/27/22: Stocks Bounce Back After Tuesday Selling, FOMC to Come Down From Mt. Olympus at 2:00 P.M. EDT

Overnight Summary: The S&P 500 closed Tuesday at 3921.05 (lower by -1.15%) from  3966.84 (higher by 0.13%) on Monday.  Futures are trading lower in the premarket session. The overnight high of 3968.50 was hit at 4:10 a.m. EDT. The low was hit at 3915 at 4:05 p.m. EDT, a range of 53 points high to low…

Overnight Summary: The S&P 500 closed Tuesday at 3921.05 (lower by -1.15%) from  3966.84 (higher by 0.13%) on Monday.  Futures are trading lower in the premarket session. The overnight high of 3968.50 was hit at 4:10 a.m. EDT. The low was hit at 3915 at 4:05 p.m. EDT, a range of 53 points high to low which is above the range of late with 45 the average range. At 7:15 a.m. EDT the current price is 3956 which is 0.83% and 32.75 points. 

Breaking News: Stocks are awaiting the latest Federal Reserve Open Market Committee (FOMC) announcement and presser at 2:00 p.m. EDT and 2:30 p.m. EDT.

Earnings Out After The Close:

  • Beats: UMBF +0.93 CB +0.57 MTDR +0.34 TXN +0.34 CMG +0.26 AMP +0.25 V +0.23 ASH +0.22 ENPH +0.22 MANH +0.15 SKX +0.15  WH +0.13 BXP +0.09 TER +0.07.
  • Flat: None of note.
  • Misses: FIBK -0.16 AGYS -0.08 ZION -0.07 MSFT -0.06 GOOGL -0.06 SYK -0.03 HA -0.03 JNPR -0.02.

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • Legend Biotech (LEGN) prices offering of 8.14 ADSs for $43.00 per ADS.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ADXN: Completes $4.2 Million Equity Financing
    • ENSC: Filed Form S-3.. Up to 29,962,667 Shares of Common Stock Underlying Notes
    • PPG: Filed Form RW– Re: PPG Industries, Inc. – Application for Withdrawal of Registration Statement on Form S-3ASR
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • DNAY: Filed Form S-3.. $100,000,000 Mixed Shelf.
    • PEP: Filed Form S-3ASR — Mixed Shelf Offering .
  • Debt Filing:
    • PSA: Announces Redemption of 2.370% Senior Notes due 2022.
  • 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: TEVA +18.8% CMG +8.6% ENPH +8.3% MANH +7.2% TNET +6.9% NAVI +6.8% MSFT +5.4% GOOGL 5.1%.
    • Trading Down: FXLV -50.9% TENB -9.4% AXTA -6.6% NXGN -4.7% JNPR -4.6% TER -4.2% V -1%.
  • News Since The Close:
    • Treasury Secretary Janet Yellen will host a press conference on Thursday after GDP report with time to be determined.
    • Exxon Mobil (XOM) has two new discoveries  offshore Guyana.
    • Italy revised to Stable from Positive by Credit Agency.
    • President Biden considers $10,000 of student debt relief. (Bloomberg)
    • Cannell Capital confirms 10.7% stake in Build A Bear (BBW).
    • White House requests $7 billion to treat Monkeypox. (The Washington Post)
    • Teva (TEVA) to pay $4.25 billion for its role in the opioid crisis. (NYT)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Axalta Coating System (AXTA) CEO Robert Bryant stepping down August 31st.
    • NeoGenomics (NEO) names Chris Smith as CEO on 8/15.
    • Credit Suisse (CS) to name Ulrich Korner to be named CEO replacing Thomas Gottstein.
  • Buyback Announcements or News:
    • Cintas (CTAS) announces new buyback of $1 billion.
    • New Oriental (EDU) Announces Adoption of up to US$400 Million Share Repurchase Program.
    • Teck Resources (TECK) adds $500 million to its share repurchase program.
    • TopBuild (BLD) authorizes up to $200 repurchase of common stock.
  • Stock Splits or News:  
    • Nutriband Inc. (NTRB) Announces Seven-for-Six Forward Stock Split.
  • Dividends Announcements or News: 
    • Alexander & Baldwin (ALEX) raises quarterly dividend by 10% to $0.22 per share.
    • Cintas (CTAS) dividend increases to $1.15 from $0.95.
    • Prosperity Bancshares (PB) declares dividend.
    •  Teck Resources (TECK) dividend of $0.125 per share.
    • Wells Fargo (WFC) dividend to $0.30 from from $0.25 each quarter.

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

S&P 500 +31, Dow Jones +131, NASDAQ +165, and Russell 2000 +9.35. Europe higher and Asia lower ex Japan.  VIX Futures are at 25.35 from 25.40 yesterday morning and the VIX closed at 24.69 from 23.36 yesterday. Gold,  Silver and Copper higher. WTI Crude Oil  and Brent Oil Futures higher and Natural Gas higher. $ is lower vs Euro, lower vs Pound and lower vs Yen. US 10 year Treasury sees yields at 2.798% from 2.759% yesterday morning. Bitcoin is at $21,289 from $21,087 yesterday morning and is higher by 1.85% this morning. As of 8:10 a.m. EDT.

Sector Action – 07/26/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):  

  • Daily Positive Sectors: Utilities and Healthcare of note.
  • Daily Negative Sectors: Consumer Cyclical, Communication Services and Technology of note.
  • One Month Winners:  Energy, Utilities and 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.

Walmart (WMT) hurt by food inflation impacting customer spending away from clothing and non food goods caused a negative tone in the markets for Tuesday.  SPX pulled back -1.15% and the NASDAQ was down -1.87%.  Updated 07/26/22 close.

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

  • Wednesday After the Close: META, QCOM, NOW, LRCX, EQIX, F, ORLY, CTSH, VICI, AVB, AWK, DRE, INVH, ALGN, RJF, MAA, URI, AEM, CINF, ICLR, HOLX, MOH, ACGL, SSNC, EQT, TYL, CSL, PTC, CHRW, CG, ETSY, FICO, GFL, AR, QGEN, RE, GGG, NLY, FBHS, CHDN, CHE, FLEX, TDOC, KRC, MKSI, NOV, STAG of note.
  • Thursday Before the Open: MA, PFE, MRK, TMO, CMCSA, SNY, HON, AMT, BUD, CP, MO, SO, NOC, TRP, KDP, HSY, VLO, STLA, XEL, CVE, BAX, CARR, STM, FTS, TROW, PCG, SIRI, DTE, LUV, WST, LH, FTV, MLM, MT, CMS, ARES, SWK, ALNY, IP, LKQ, TXT, MAS, KIM, BEN, TFX, RS, MMP, MPW, ALLE, AOS, RCL, NLSN of note.

Earnings of Note This Morning:

  • Beats: COOP 8.56 GPI 1.34 EVR 1.07 HUM 0.99 PDS 0.55 SAIA 0.42 OC 0.50 PAG 0.45 TMHC 0.42 SCL 0,40 ROK 0.32 SLAB 0.29 AVY 0.27 HLT 0.24 CCJ 0.17 CHEF 0.17 GPC 0.17 ODFL 0.14 BMY 0.12 SLGN 0.12 OTIS 0.07 MNRO 0.06.
  • Flat: None of note.
  • Misses: EDU -0.97 CSTM -0.67 TMUS -0.46 SHW -0.33 BA -0.27 SF -0.23 BG -0.23 SPOT -0.21 IVZ -0.11 UMC -0.08 SHOP -0.06 TECK -0.05  .
  • Still to Report: APH EXTR NSC R TPX.

Guidance:

  • Positive Guidance: PII, AWI, FISV, HUBB, PGTI, FELE, QGEN, EGP, ENPH, NEX, MANH, CSGP, JNPR, TNET, IEX, GSK, HLT, TEL, SPOT of note.
  • Negative Guidance: AVNT, TRU, MMM, PNR, MCO, GLW, CVLT, FXLV, SKX, SYK, UDR, TENB, TER, BXP, MSFT, BG, OTIS of note.

Erlanger Research Advance/Decline Chart: Updated through 07/26/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: TEVA +19%, AMSC +15%, ENPH +10%, CMG +8%, MANH +8%, UMC +7%, SIGA +6%, CHX +6%, BXP +5%, HLT +5%, NAVI +4%, SILK +4%, TECK +4%, STRO +4%, TNET +4%, EQR +4%, SKX +4%, MSFT +4%, LYG +4%.
  • Gap Down: FXLV -56%, AXTA -7%, JNPR -5%, TER -5%, USNA -5%, NXGN -5%, RIO -4%.

Insider Action: KDP, JEF sees Insider buying with dumb short selling.  MICS, RVMD sees Insider buying with smart short sellers. 07/26/22 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: BA HLT SPOT GRMN. (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • 5 things to know before the stock market opens on Wednesday. (CNBC)
  • Bloomberg Lead Story:  A $9.4 Trillion Day of Reporting Looms for Thursday. (Bloomberg)
  • Bloomberg Most Read Story: President Biden considers a pause on student loan debt relief. (Bloomberg)
  • China orders lock down in Wuhan for 1 million people after some cases arose. (Bloomberg)
  • President Biden and Chinese President Xi to speak on Thursday. (Bloomberg)
  • Justice Department investigating President Trump’s efforts to overturn the 2020 election. (The Washington Post)
  • Technology Antitrust Bill is dead on arrival says Senate Majority Leader Schumer. (Bloomberg)
  • Mortgage demand drops further this morning. (CNBC)
  • Elliott Management takes a stake in Paypal (PYPL). (WSJ)
  • Cassava Sciences (SAVA) will face criminal investigation over Alzheimer’s drug. (Reuters)
  • Robinhood Snacks looks at Walmart’s guide lower and price cuts. Glossier moves into Sephora.

Moving Average Update:

  • Score notches down again to 51% from 71%.  Updated 07/26/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 9:30 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 3:00 p.m. EDT

Economic: 

  • June Durable Orders are due out at 8:30 a.m. EDT and expected to come in at -0.50% from 0.70%.
  • June Pending Home Sales are due out at 10:00 a.m. EDT and are expected to come in at -1.5% from 0.7%.
  • The latest Federal Reserve Open Market Committee (FOMC) interest rate announcement is due out at 2:00 p.m. EDT and then press conference at 2:30 p.m. EDT.

Federal Reserve / Treasury Speakers:

  • The latest Federal Reserve Open Market Committee (FOMC) interest rate announcement is due out at 2:00 p.m. EDT and then press conference at 2:30 p.m. EDT.

M&A Activity: None of note.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note. 
      • Previously posted and ongoing conferences:
        • JP Morgan Latam & Ceemea Smid Cap Opportunities Conference.
        • SVB Securities Big Data, A.I. & Machine Learning in Healthcare. (07/25/22-07/30/22)
  • Company Meetings: BAH, RIOT, RWLK, SAVE.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: CAG, HTGM, TRX
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Flowserve (FLS) Second Annual Destination Innovation Virtual Event.
  • Industry Meetings:
    • Suppliers Partnership for the Environment (SP) Innovation Summit 2022 (07/27/22-07/28/22)
    • OTC Metals and Mining Virtual Conference 2022 (07/27/22-07/28/22)
    • Florida International Medical Expo (FIME) 2022 (07/27/22-07/29/22)
      • Previously posted and ongoing conferences:
        • B & T Cell-Mediated Autoimmune Disease Drug Development Summit (07/26/22-07/28/22)
        • NIIMBL 2022 National Meeting (07/26/22-07/28/22)
        • Mining Disrupt Conference 2022 (07/26/22-07/28/22)
        • 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: