Can Friday's Rally Continue And Carry The S&P 500 Back Above 4000?

by Geoff Garbacz | 01/23/2023 9:35 AM

Rebel Yell Morning Market Report

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Can Friday's Rally Continue And Carry The S&P 500 Back Above 4000?

Overnight SummaryThe S&P 500 closed Friday higher by 1.89% at 3972.61 from Thursday lower by -0.76% at 3898.65.  The overnight high of 3995 was hit at 3:10 a.m. EST. The low was hit at 3980.25 at 7:00 a.m. EST, a range of ~15 points high to low.  At 7:20 a.m. EST, the S&P 500 (mini) was lower by -3.25.

Lead Story:  A busy earnings week and concern over next week’s Fed meeting will drive markets this week. (CNBC)

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 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: None of note.
    • TradeUP Acquisition Corp. (UPTD) Announces Extension of the Deadline for an Initial Business Combination.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ICU: Filed Form S-1.. 6,718,842 Shares of Common Stock.
    • VMAR: To raise approximately $7.3 million.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • LIFW: Files for up tp 325,000,000 share common stock offering by selling shareholder.
    • XPOF: Files for 20,065,479 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE):
    • ALVO: Completes $137 Million Private Share Placement at $11.57 per share.
    • MTMT: Announces Initial Closing of Its Private Placement and Raises $ 10 Million to Launch New Platform “MarsProtocol” to Develop New Business in Digital Assets Staking.
  • Mixed Shelf Offerings:
    • AMPS: $600 million mixed securities shelf.
    • KA: $200 million mixed securities shelf.
    • LGHL $200 million mixed securities shelf.
    • MRAI: Filed Form S-3.. $100,000,000 Mixed Shelf.
    • ORC: Files for $1.0 billion mixed securities shelf offering.
  • Debt Filing/Notes: None of note.
  • Tender Offer:
    • IDCC: Commences a Modified “Dutch Auction” Tender Offer to Repurchase up to $200 Million of its Common Stock.
    • AstraZeneca (AZN) begins tender offer to acquire CinCor Pharma (CINC).
  • Convertible Offering & Notes Filed:
    • CLLS:  Amends $20 million convertible note under collaboration agreement with its partner Cytovia Therapeutics.

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: ATRO 33.4%, EOLS 27.8%, TRHC 21.6%, SDRL 16.8%, ALLY 16.2%, ACOR 16.0%, NATI 15.5%, SIVB 15.3%, RVNC 13.5%, RIGL 13.0%, PARR 12.9%, AMED 12.5%, DESP 12.4%, HCC 11.3%, MMYT 11.0%, TOUR 10.9%, BMA 10.3%, TUR 10.1%.
    • Trading Down: RUBY -23.1%, BLUE -21.4%, AVYA -20.9%, TCDA -19.2%, PRQR -18.1%, EHTH -17.2%, CHGG -16.5%, RYAM -15.4%, GLYC -15.2%, UXIN -15.1%, PUMP -14.7%, INSG -14.6%, DCPH -14.4%, KNOP -14.4%, SIEN -13.7%, CHRS -13.7%, DOMO -13.2%.
  • News Items After the Close:
    • Abbott (ABT) Under Federal Criminal Investigation Over Baby Formula. (WSJ)
    • Federal Reserve Probes Goldman’s (GS) Consumer Business. (WSJ)
    • Silvergate Capital (SI) exposure to Genesis was a $2.5 million deposit. (Business Wire)
  • News Items Over the Weekend:
    • Stocks that Defined the Week: MSFT, GS, NFLX, UAL, TSLA, PG, JWN  (WSJ)
    • The Week in Business: The Debt Limit and Politics (NYT)
    • BTC Bitcoin > $23,000, the highest since August 19.
    • Ron Klain Expected To Step Down As Biden’s White House Chief Of Staff. (NYT)
    • Fed officials are preparing to slow interest-rate increases for the second straight meeting. They could begin deliberating how much more softening in labor demand, spending and inflation they would need to see before pausing rate rises this spring.  (WSJ)
    • Crypto Banks Borrow Billions From Home-Loan Banks to Plug Shortfalls. (WSJ)
    •  Barron’s:
      • Positive View: JBL, COKE, STRL, CB, TROW, MSGS, WYNN, CZR, CR, TXT, WBD, PARA, TV, DRQ, HAL, RTX, ASML, CCEP, CNC, CCJ, LEU, SMR, BHP, WFC, DIS, CLMT, PM, MO, COP, HAL, CVI, DNOW, NEX of note.
      • Cautious View: None 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:
    • AnPac Bio-Medical Sciences (ANPC) Announces Receipt of Staff Delisting Determination from Nasdaq; Intends to Request A Hearing.
    • Argo Blockchain PLC (ARBK) Announces Regained Compliance with Nasdaq.
    • Battalion (BATL) Announces Appointment of New Chief Financial Officer and Appointment of General Counsel.
    • CONSOL Energy (CEIX) appoints Mitesh Thakkar as President and CFO.
    • Maris-Tech (MTEK) Announces Receipt of Nasdaq Minimum Bid Price Notification.
    • U.S. Silica (SLCA) COO Michael Winkler to retire.
    • Tata Motors (TTM) confirms its delisting from the NYSE and termination of its ADS program will become effective close of trading on the NYSE.
    • The Very Good Food Company (VGFC) is being delisted from Nasdaq.
  • Buyback Announcements or News: 
    • Fifth Third (FITB) entered into a new ~$200 million share repurchase agreement.
  • Stock Splits or News:
    • JAGX trading r/s price.
    • Oaktree Specialty Lending Corporation and Oaktree Strategic Income II, Inc. (OCSL) Announce Stockholder Approvals of Merger, implement a 1-for-3 reverse stock split.
  • Dividends Announcements or News: None of note.

What’s Happening This MorningFutures value reflects the change with fair value.

S&P 500 -1, Dow Jones +11,  NASDAQ +5,  and Russell 2000 -2. (as of 7:59 a.m. EST).  Asian markets are higher.  Europe markets are trading higher. VIX Futures are at 21.04 from 21.77  yesterday.  Gold and Silver lower with Copper higher.  WTI Crude Oil and Brent are higher with Natural Gas higher as well. US 10-year Treasury sees yields at 3.50% from 3.437%  yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $22,905 from $20,973 yesterday, higher by 1.72%.

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

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

Stocks rose Friday, boosted by some solid corporate earnings, though two major indexes finished the week with losses after being weighed down by concerns about a slowing economy.  The S&P 500 index rose 73.76 points, or 1.9%, to 3972.61, its first up day after three days of declines. The Nasdaq Composite gained 288.17 points, or 2.7%, to 11140.43, led higher by shares of Netflix and Alphabet. The Dow Jones Industrial Average was up 330.93 points, or 1%, to 33375.49.   The Dow and S&P still suffered their first weekly declines of the new year, falling 2.7% and 0.7% respectively. The Nasdaq’s rise on Friday gave the index a third consecutive week of gains. (WSJ)

Click here for a video explanation of Erlanger Value Lines.

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

  • Monday After the Close: 

  • Tuesday Before the Open:

Earnings of Note This Morning:

  • Beats: SYF +0.13, BOH +0.08.
  • Flat: None of note.
  • Misses: BKR (0.02) of note.
  • Still to Report: None of note.

Guidance:

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

Erlanger Research Advance/Decline Chart: 

Gap Ups & Down In Early Pre-Market:

  • Gap Up: PLRX +80%, HCM +10%, CLLS +9%, TV +4% of note.
  • Gap Down: None of note.

Insider Action: No stock sees Insider buying with dumb short selling.  COIN, DAL, LOVE 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: AMD W CRM SHOP ABT CRWD PYPL WDC WMG  SKX  ZM (CNBC)
  • 5 things to know before the stock market opens. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg)
  • Bloomberg Lead Story Citadel Makes $16 Billion To Top Paulsen’s Greatest Trade Ever. (Bloomberg)
  • Bloomberg Most Read Story:  The above Citadel Story. (Bloomberg)
  • Poland is ready to send tanks to Ukraine without Germany’s permission. (The Guardian)
  • FBI found more documents at Biden’s Delaware house over the weekend. (CNN)
  • Elliott Associates takes a MultiBillion Dollar stake in Salesforce (CRM)(Bloomberg)
  • Morgan Stanley says US Stocks are not pricing weak data. (Bloomberg)
  • Apple (AAPL) targeting 25% of its iPhone production to be done from India. (CNBC)
  • Spotify (SPOT) to cut 6% of workforce, with content head to be among those. (CNBC)
  • Banks are preparing for large layoffs. (FT)

Moving Average Update:

  • Score bounces big time to 80% from 40%.  Industrials ($INDU) sits just below 5 through 50 day MAs.

Geopolitical: 

  • President’s Public Schedule:
    • The President departs Rehoboth Beach, Delaware en route the White House, 9:45 a.m. EST
    • The President arrives at the White House, 10:40 a.m. EST
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:00 p.m. EST

Economic: 

  • Leading Indicators 8:30 a.m. EST

Federal Reserve / Treasury Speakers: With the FOMC announcement coming we do have a Fed blackout period set for January 21 until Feb 2.

M&A Activity:

  • AQUA To be acquired by Xylem (XYL) for ~$52.89 per share.
  • Benefitfocus (BNFT) Shareholders Approve Merger with Voya Financial (VOYA).
  • MTP not proceed with Bioasis acquisition, name change.
  • Southern Missouri Bancorp, Inc. (SMBC) Announces Completion of Merger With Citizens Bancshares Co.
  • WDC Western Digital merger discussions with Kioxia Holdings are progressing (Bloomberg)

Meeting & Conferences of Note:

  • Company Meetings: DCRD, ISSC, MTP, SMG
  • Fireside Chat:
    • ADBE: Bernstein Fireside Chat with Scott Belsky, Chief Product Officer and EVP, Creative Cloud.
  • Investor/Analyst Day/Calls: BNGO, CLNN, PLRX
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:

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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