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06.24.2022 13 new Morning Note posts under Morning Note (9) and CAPIS Insights (4)

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Morning Note

"CAPIS Morning Note – 05/18/22: Stocks Lower As Target (TGT) Misses Its Bullseye"

posted by CAPIS on 05/18/2022 at 8:13 am

by CAPIS

05/18/2022 at 8:13 am

Overnight Summary: The S&P 500 closed Tuesday at 4088.85 (higher by 2.02%) from 4008.01 on Monday.  Futures have traded lower overnight. The overnight high of 4095 was hit at 6:20 p.m. EDT. The low was hit at 4052 at 7:28 a.m. EDT, a range of 43 points high to low which is around the typical range of late with 45 the average. At 7:55 a.m. EDT the current price is 4053.75 which is -0.76% and 31 points.

Earnings Out After The Close:

  • Beats: KEYS +0.15, AGYS +0.07, DOCS +0.06.
  • Flat: NXGN.
  • Misses: DLO (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News:  None of note.
  • Secondaries Priced:
    • Ares Commercial Real Estate (ACRE) prices offering of 7 million shares of common stock for gross proceeds of $104.7 million, MS, WFC, Citi and UBS Bookmanagers.
  • Notes Priced of note:
    • Pricing of CNH Industrial Capital LLC (CNHI) $500 million notes.
  • Common Stock filings/Notes:
    • ACER: Filed Form 424B2.. $6,400,000 Common Stock
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • Casa Systems (CASA) files for 9.323 million share common stock offering by selling shareholder.
    • European Wax Center (EWCZ) commences public offering of 4.5 million shares of Class A common stock by selling stockholders
    • LAB: Filed Form S-3.. 75,164,397 Shares of Common Stock Offered by the Selling Securityholders.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • EQR: Filed Form S-3ASR.. Mixed Shelf Offering.
    • RNR: Filed Form S-3ASR.. $1Billion Mixed Shelf Offering.
  • 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: NCMI +18%, DLO +17%, AGYS +14%, TCS +10%, SPNT +9%.
    • Trading Down: DOCS -16.7%, LAB -4.3%.
  • News Since The Close:
    • Stocks making the biggest moves after hours:  (CNBC)
    • Caterpillar (CAT) CEO Dismisses Recession Concerns, Citing Robust Demand – Sees Good Activity Across Mining, Construction Markets.
    • WMT biggest drop since 1987.
    • NASA picks Booz Allen (BAH) for $622.5 million cybersecurity and privacy enterprise contract. (FedScoop)
    • Lockheed Martin (LMT) awarded $630 million Navy contract.
    • Wynn Resorts (WYNN): Justice Department sues to compel Steve Wynn to register under the foreign agents registration act. (WSJ)
    • National Cinemedia (NCMI): AMC Entertainment (AMC) discloses 6.8% stake in NCMI.
    • Federal Reserve Chicago President Charles Evans: Favors front loading interest rate hikes.  Should raise rates to 2.25-2.5% neutral range expeditiously.  Inflation clearly much too high.  Economic momentum is strong, labor market is downright tight.
    • Russian/Ukraine News:
      • Finland, Sweden Apply for NATO Membership, Breaking Decades of Neutrality. (WSJ)
  • Exchange/Listing/Company Reorg and Personnel News:
    • Aquestive Therapeutics (AQST) Announces CEO Transition.
    • Diffusion Pharmaceuticals (DFFN) Announces Appointment of Raven Jaeger, M.S., as Chief Regulatory Officer.
    • Digital World Acquisition Corp (DWAC) to delay 10-Q filing.
    • DXC Technology (DXC) appoints CEO Mike Salvino to the additional position of board chairman.
    • FirstEnergy (FE) elects John W. Somerhalder as Board chair.
    • MEDNAX (MD) appoints James D. Swift, M.D. as Chief Operating Officer; Curtis B. Pickert, M.D. as Chief Physician Executive.
    • RPC (RES) CEO Richard A. Hubbell to transition to role of Executive Chairman.
    • SIRIUSPOINT (SPNT) announces Daniel S. Loeb joining the Board of Directors.
    • United Natural Foods (UNFI) announces retirement of COO from the company.
  • Buyback Announcements:
    • APLE: Filed Form 8K.. On May 13, 2022, the Board approved an extension until July 2023 of the Company’s existing share repurchase program.
    • Doximity (DOCS) authorized a new stock repurchase program to acquire up to $70 million of its Class A common stock.
    • Extreme Networks (EXTR) Announces New $200 million Share Repurchase Program.
    • Flushing Financial Corporation (FFIC) Announces 1 Million Increase in Share Repurchase Authorization.
    • Live Oak Bancshares (LOB) authorized the repurchase of up to $50,000,000 in shares of voting common stock.
    • LOW  Repurchased About 19 Million Shares For $4.1 billion.
    • SP Plus Corporation (SP) Announces New $60 Million Share Repurchase Authorization.
    • Interface (TILE) Announces $100 Million Share Repurchase Authorization.
  • Stock Splits:  
    • UTStarcom (UTSI) Announces Date for Extraordinary General Meeting to Approve Reverse Share Split.
  • Dividends Announcements: 
    • Flushing Financial Corporation (FFIC) Declares Quarterly Dividend of $0.22 per Share.
    • Havertys (HVT) increases quarterly dividend $0.03 to $0.28 per share.
    • Interface (TILE) Declares Regular Quarterly Dividend.
    • MAA Announces 15% Increase to Quarterly Common Dividend to $1.25 per share.
    • Northrop Grumman (NOC) raises quarterly dividend by 10% to $1.73 per share

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

S&P 500 -34, Dow Jones -202, NASDAQ -148, and Russell 2000  -15.  Europe lower and Asian higher ex Shanghai.  VIX Futures are at 27.90 from 27.27 yesterday morning and the VIX closed at 26.10 from 27.47  yesterday. Gold,  Silver  and Copper lower. WTI Crude Oil lower with 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 2.995% from 2.913% from yesterday. Bitcoin is at $29,801 from $30,359 yesterday morning and is lower by -1.09% this morning. As of 8:10 a.m. EDT.

Sector Action – 05/17/22 Close:  

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

Strong gains across the board with Technology stocks leading the way.  NASDAQ was up 2.76%.  Small Cap got in the mix with Russell 2000 up 3.19%.  TLT hit 114.46 for a loss of 1.21%  Updated 05/17/22 close.

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

  • Wednesday After the Close: CSCO, SNPS, CPRT, BEKE, TCOM, BBWI, GDS of note.
  • Thursday Before the Open: BABA, CAE, KSS, VIPS, EXP, LSPD, GOOS, MNRO, PLCE of note.

Earnings of Note This Morning:

  • Beats: LOW +0.29, ADI +0.29, , TJX +0.08, OYU +0.02, DT +0.02.
  • Flat: None of note.
  • Misses: TGT (0.87), TGI (0.03).
  • Still to Report: None of note.

Guidance:

  • Positive Guidance:  AGYS, KEYS, DT, ADI of note.
  • Negative Guidance: TGI, TJX of note.

Erlanger Research Advance/Decline Chart: Updated through 05/17/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: NCMI +23%, DLO +14%, AGYS +11%, SPNT +8%, XAIR +6%, TCS +5%, CWK +5%, NVST +4%.
  • Gap Down: DOCS -14%, NXGN -14%, EWCZ -8%, ACRE -6%, RES -6%, DOYU -4%.

Insider Action: YELL, NMFC, BRKR, FTCI sees Insider buying with dumb short sellingOPNT, RIG sees Insider buying with smart short sellers. 05/17/22 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:  TGT, WMT, CARR, SCVL, LOW, PENN   (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • U.S. Public schools have lost 1.2 million students since the pandemic began. (NYT)
  • Target (TGT) to have its worst day since Black Monday in 1987. (Market Watch)
  • Analog Devices (ADI) beat and has an upbeat outlook. (Market Watch)
  • Lowes (LOW) complains about cold weather as not as strong as Home Depot (HD). (Market Watch)
  • Microsoft (MSFT) willing to make changes to its cloud strategy after complaints from competitors. (Bloomberg)
  • Robinhood Snacks looks at the U.S. Dollar’s winning streak. Warren Buffet and Berkshire Hathaway’s (BRKB) and the recent buying spree.

Moving Average Update:

  • Hey….2 full rows green!  Price action above the 5 and 10 day moving averages across the board.  Score goes from 20% to 40%.  Updated 05/17/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 10:15 AM
    • Press Briefing by White House COVID-19 Response Team and public health officials, 10:45 AM
    • The President and The First Lady depart the White House en route Joint Base Andrews, 1:15 PM
    • The President arrives at Joint Base Andrews, 1:25 PM
    • The President receives a briefing from his senior leadership team on inter agency efforts to prepare for and respond to hurricanes this season, 1:45 PM
    • The President departs Joint Base Andrews en route the White House, 2:50 PM
    • The President arrives at the White House, 3:00 PM

Economic

  • MBA Mortgage Applications May 13: -11.0% (prev 2.0%) – US MBA 30 Year Mortgage Rate May 13: 5.49% (prev 5.53%)
  • EIA Petroleum Report 10:30 a.m. EDT
  • April Housing Starts is out at 2:00 p.m. EDT and is expected to fall to 1,775,000 from 1,793,000.

Federal Reserve Speakers:

  • Federal Reserve Philadelphia President Patrick Harker 4:00 p.m. EDT 

M&A Activity:

  • Envista (NVST) agrees to acquire Osteogenics Biomedical business.
  • MagnaChip Semi (MX) shares higher by 10% pre-market following report that private equity firms including Carlyle Group (CG) will bid for the company.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • BMO Global Farm to Market Conference (05/18/22-05/19/22)
    • Citigroup Regional Tech Conference (05/18/22-05/20/22)
    • Citi BioTECH Virtual Co-Panel Day 2022
    • Citi Mood Disorder: Mental Health Panel 2022
    • MoffettNathanson 9th Annual Media & Communications Summit 2022 (05/18/22-05/19/22)
    • Wells Fargo Financial Services Investor Conference (05/18/22-05/19/22)
      • Previously Announced  Conferences:
        • Bank of America Global Metals, Mining and Steel Conference 2022 (05/17/22-05/19/22)
        • Bank of America Securities Transportation Airlines & Industrials Conference 2022 (05/17/22-05/19/22)
        • Citigroup Frontier Markets Symposium
        • Goldman Sachs Global Consumer Conference 2022 (05/17/22-05/18/22)
        • HSBC 9th Annual China Conference 2022 (05/10/22-05/20/22)
        • JP Morgan European Technology, Media and Telecoms Conference 2022 (05/17/22-05/19/22)
        • JP Morgan Global Hydrogen Week
        • Microcap Rodeo Spring Into Action Best Ideas Conference 2022 (05/16/22-05/20/22)
        • 34th annual Morningstar Investment Conference 2022 (05/16/22-05/18/22)
        • Needham 17th Annual Technology & Media Conference 2022 (05/16/22-05/19/22)
        • Nomura KAKUSHIN Seminar
        • RBC Capital Markets Canadian Automotive, Industrials and Transportation Conference 2022 (05/17/22-05/19/22)
        • RBC Capital Markets Global Healthcare Conference 2022(05/17/22-05/18/22)
        • Rosenblatt Securities Annual FinTech Summit 2022 (05/17/22-05/18/22)
        • UBS Best of Europe One-on-One Conference 2022 (05/17/22-05/19/22)
  • Company Meetings: AMD, ANTM, CBRE, CMG, DGX, FL, H, HAL, HIG, HUM, HSIC, JWN, KBR, LUV, PPL, RHI, ROST, RS, STT, TAP, TMO, UHS, WEN, XEL.
  • Fireside Chat: EPM, PLUG.
  • Investor/Analyst Day/Calls: AKAM, CYXT, EPAM, EXTR, NEWR, PROC, RBA, RHHBY, SAXPY, SNY, SQ, TMO.
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event:
    • Wex (WEX) Spark 2022. (05/16/22-05/18/22)
    • Intel (INTC) Network Builders Summit.
  • Industry Meetings:
    • Society For Investigative Dermatology Annual Meeting (SID) 2022(05/1/22-05/21/22)
      • Previously Posted and Ongoing Conferences:
        • American Gas Association AGA Financial Forum 2022(05/17/22-05/19/22)
        • Wall Street Journal Future of Everything Festival 2022 (05/17/22-05/19/22)
        • American Society of Gene and Cell Therapy Meeting (05/16/22-05/18/22)
        • American Thoracic Society (ATS) International Conference 2022 (05/13/22-05/18/22)
        • ABGSC Life Science Summit (05/15/22-05/19/22)
        • Energy Infrastructure Council (EIC) Investor Conference 2022 (05/15/22-05/18/22)

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:

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