The Daily Briefing For August 16th: Can Stocks Rebound From Yesterday's Selling? So Far Stocks Flat.

Overnight Summary: The S&P 500 closed Tuesday lower by -1.16% at 4437.86 from Monday higher by 0.58% at 4489.72. Overnight ranges saw the high hit at 4467.25 at 4:35 a.m. EDT while the low was hit at 4447 at 8:45 p.m. EDT. The range overnight was 20 points. The 10-day average of the overnight range is at 29.40 from 31.50 yesterday.  The average for May/June/July average was 18.81 from 19.94 in May/June. Currently, the S&P 500 is lower by -3.50 points and by -0.08% at 7:25 a.m. EDT.

Earnings Out After The Close: 

• Beats: CAVA +0.23, HRB +0.17, JKHY +0.17, LRN +0.14, A +0.07, ALC +0.05, COHR +0.03, DLO +0.02 of note.
• Flat: None of note.
• Misses: MRCY (0.41) of note.

Unusual Options Activity:

Daily Screen in Erlanger Chartroom that highlights unusual Call and Put Options activity in the S&P 500.  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:
  • SGMT: Closing of Underwriters’ Option to Purchase Additional Shares of Series A Common Stock in Connection with its Upsized Initial Public Offering.
• New SPACs launched/News: None of note.
• Secondaries Priced:
  • ANTX: Pricing of $70.0 Million Underwritten Offering of Common Stock.. Priced @$9.
  • HESM: Prices $288 million secondary stock offering at $28.80 per Class A shares.
  • NRG: Announces Pricing of $500.0 Million of Pre-Capitalized Trust Securities to Replace Maturing Pre-Capitalized Trust Securities.
• Notes Priced of note:
  • AKAM: Announces Pricing of Upsized Offering of Convertible Senior Notes.
• Common Stock filings/Notes:
  • AUMN: Form S-1 Filed.. Up to 1,427,587 Shares of common stock
  • HLLY: Holley Inc. holder Holley Parent Holdings, LLC files Form 144 with the SEC noticing the proposal to sell 5.5 mln shares of common stock
  • JMIA: Filed Form F-3.. 20,227,736 American Depositary Shares.
• Direct Offering: None of note.
• Selling Shareholders of note:
  • ACHR: Filed Form S-3.. 94,671,586 shares of Class A Common Stock Offered by the Selling Stockholders.
  • ARHS: Secondary Offering of Class A Common Stock by Selling Stockholders. 12 million shares. (BAC and Jefferies Bookmanager)
  • CRGE – S-3 45,856,593 Common Shares Offered by the Selling Stockholders.
  • CTMX: Filed Form S-3.. 25,961,539 Shares Common Stock Offered by the Selling Securityholders
  • HESM: Secondary Public Offering of 10 Million Class A Shares by selling shareholder. (GS Bookmanager)
  • NEXT: Filed Form S-3.. 24,163,042 shares of Common Stock for Sale by the Selling Stockholders.
  • SBIG: Filed Form S-3.. $25,000,000 Common Stock – Up to 3,204,806 Shares of Common Stock Offered by L1 Capital – 12,800,418 Shares of Common Stock 6,000,000 Private Warrants Offered by Selling Securityholders.
• Private Placement of Public Entity (PIPE): None of note.
• Mixed Shelf Offerings: None of note.
• Debt/Credit Filing and Notes:
  • SSR Mining (SSRM) increases revolving credit facility to $400 million.
• 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 and Over the Holiday:

• After Hours: 
  • Trading Up: DLO +33%, CAVA +8%, LRN +7%, HRB +6%, ANGO +5% of note.
  • Trading Down: MRCY -10%, ARHS -7%, JKHY -6%, HLLY -6%, HESM -4% of note.
• News Items After the Close:
  • Stocks making the biggest moves after hours: HRB, CAVA, LRN, UAVS, MRCY  (CNBC)
  • SPX closed below the 50d sma first time since March 28. (MarketWatch)

• • Sanofi (SNY) Was Mystery Bidder That Lost Reata to Biogen (BIIB). (Bloomberg)
  • Cava’s (CAVA) stock rallies after results beat expectations. (MarketWatch)
  • Stride’s (LRN) stock jumps 9% on enrollment growth. (MarketWatch)
  • H&R Block’s (HRB) stock pops as earnings, forecast beat Street (MarketWatch)
  • RTX awarded $322 million U.S. Army contract.
  • American States Water (AWR) awarded $349 million U.S. Defense Logistics Agency contract.
  • Granite Constr (GVA) awarded approximately $215 mln contract by Akron, OH to construct the Northside Interceptor Tunnel Project.

• Exchange/Listing/Company Reorg and Personnel News:
  • Alignment Healthcare (ALHC) CMO and COO Dr. Dinesh Kumar to depart.
  • Digital World Acquisition (DWAC) Files To Delay 10-Q.
  • Dlocal (DLO) Names Former Mercadolibre CFO Pedro Arnt As Co-CEO.
  • The LGL Group (LGL) Chairman Marc Gabelli Announces the Election of Two Independent Board Members and the Appointment of Co-CEO Timothy Foufas to Help Build Value Across Multiple Industries.
  • Marten Transport (MRTN) Appoints Randall Baier As Executive Vice President And Chief Technology Officer.
  • Mercury (MRCY) misses by $0.41, misses on revs; guides FY23 EPS in-line, revs in-line; appoints new CEO.
  • Premier (PINC) Chair of the Board of Directors Terry D. Shaw to resign from the Board,
  • Silvergate Capital (SICP) announces departures of CEO, CFO, legal chief. (MarketWatch)
  • TIPT: Appoints Edward Peña as CFO, effective August 28, 2023; succeeds Mike Grasher, who will transition to executive VP, international business development.
• Buyback Announcements or News:
  • HF Sinclair (DINO) Board of Directors Authorizes $1 Billion Share Repurchase Program.
  • Integra (IART) entered into an accelerated share repurchase agreement with Wells Fargo Bank, N.A. to repurchase $125 million in the aggregate of the Company’s outstanding shares of common stock.
  • OVBC announces extension of Stock Buyback Program.
  • Scorpio Tankers Inc. (STNG) Announces Repurchases of its Common Shares.
• Stock Splits or News:
  • Distribution Solutions Group (DSGR) declares two-for-one stock split.
  • WATT trading r/s price.
• Dividends Announcements or News: 
  • HRB: Announces a 10% Dividend Increase.
  • Stock Yards Bancorp (SYBT) increases quarterly cash dividend $0.01 to $0.30 per share.
• Insider Sales Of Note: None of note.

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

S&P 500 -1, Dow Jones +1,  NASDAQ +1, and Russell 2000 +2.  (as of 7:55 a.m. EDT).  Asia is lower and Europe is lower this morning ex Germany. VIX Futures are at 17.85 from 17.18 yesterday.  Gold and Silver higher with Copper lower this morning. WTI Crude Oil and Brent Crude Oil lower with Natural Gas lower as well. US 10-year Treasury sees yields at 4.19% from 4.235% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $29,144 from $29,354 yesterday, lower by -0.03%.

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

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

U.S. stocks and government bonds fell Tuesday, sending benchmark Treasury yields near their highest levels since 2008 and the Dow Industrials down some 360 points.  Rising Treasury yields have muddied the outlook for equity investors. Concerns about China’s faltering economy, meanwhile, continued to weigh on investor sentiment, as market participants digested a fresh batch of weak Chinese economic data and a series of surprise rate cuts.  The Dow, S&P 500 and Nasdaq all dropped more than 1% for the first time since May, after a Nasdaq-led rally Monday. The Dow broke a three-day winning streak.  All of the S&P 500’s 11 sectors were in the red. Energy led them downward, falling more than 2%. Among the few advancers: some homebuilding stocks purchased in the second quarter by Warren Buffett’s Berkshire Hathaway. (WSJ – edited by QPI)

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

• Wednesday After the Close: 

• Thursday Before the Open:

Earnings of Note This Morning:

• Beats: JD +0.44, TGT +0.37, EAT +0.08, TJX +0.08  of note.
• Flat: PFGC of note.
• Misses: None of note.
• Still to Report: None of note.

Guidance:

• Positive Guidance: HRB, ALC, JKHY of note.
• Negative Guidance: A, TGT, PFGC of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

• Gap Up: DLO +27%, ANGO +13%, CAVA +11%, AVAL +8%, LRN +7%, HHRS +7%, HRB +7%, COIN +6% of note.
• Gap Down: COHR -22%, TSEM -12%, MRCY -11%, ARHS -8%, HLLY -6%, HESM -5% of note.

Insider Action: EOLS, MKTX, NEE sees Insider buying with dumb short selling.  ASYS 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.

• 5 Things to Know Before the Stock Market Opens Wednesday. (CNBC)
• Five Things You Need to Know to Start Your Day. (Bloomberg)
• Bloomberg Lead Story: Goldman CEO’s Most Loyal Deputy Is Tested by Mutinous Partners. (Bloomberg)
• Bloomberg Most Shared Story: One Nassau County has a housing crisis, the other Nassau County has a solution. (Bloomberg) 
• China Shadow Bank Crisis spark protest by angry investors. (Bloomberg)
• US Stocks waver before Fed minutes, Pound Climbs:Market Wrap. (Bloomberg)
• Target (TGT) jumps on big profit gain but the forecast is cut. Stock is up 7.66%. (Bloomberg)
• NPR Marketplace: When will the Federal Reserve start cutting interest rates? (Podcast)
• BBC Global News:  Two years after the Taliban takeover in Afghanistan. (Podcast) 
• NY Times The Daily:  Coup in Niger has the world’s attention. (Podcast)
• Bloomberg: How economic complexity explains which countries become rich. (Podcast)
• Wealthion: Higher interest rates to cause “more pain” for stocks and bonds. (Podcast)

Moving Average Update:

• Score dive bombs to 22% from 60%.

Geopolitical: 

• President’s Public Schedule:
  • The President receives the Presidential Daily Briefing, 11:00 a.m. EDT
  • Press Briefing by Press Secretary Karine Jean-Pierre, Domestic Policy Advisor Neera Tanden, Senior Advisor to the President for Clean Energy Innovation John Podesta, and FEMA Administrator Deanne Criswell, 12:15 p.m. EDT
  • The President delivers remarks on the anniversary of the Inflation Reduction Act—a key part of Bidenomics that is Investing in America, reducing costs for hardworking families, making the tax code fairer, and the biggest investment in climate action in history, 2:30 p.m. EDT

Economic:

• MBA Mortgage Applications was out at 7:00 a.m. EDT and fell -0.8% from -3.1% last week.
• August Housing Starts are due out at 8:30 a.m. EDT and are expected to rise to 1,446,000 from 1,443,000.
• July Industrial Production is due out at 9:15 a.m. EDT and is expected to rise to 0.3% from -1.5%.
• Atl. Business Inflation Exp. 10:00 a.m. EDT
• EIA Petroleum Report 10:30 a.m. EDT
• FOMC Minutes 2:00 p.m. EDT

Federal Reserve / Treasury Speakers: None of note.

M&A Activity and News:

• Intel (INTC) Announces Termination of Tower Semiconductor (TSEM) Acquisition

Meeting & Conferences of Note:

• Sellside Conferences:
  • BTIG Consumer Technology Conference
  • JP Morgan Hardware & Semis Management
  • Needham FinTech & Digital Transformation Conference (08/16/23-08/17/23)
  • RBC Nashville Healthcare Bus Tour
  • Sidoti Micro Cap Virtual Conference (08/16/23-08/17/23)
  • H.C. Wainwright 3rd Annual Ophthalmology Conference 2023
    • Previously posted and ongoing conferences:
      • Stifel Biotech Executive Summit 2023 (08/14/23-08/16/23)
      • Deutsche Bank Transportation Conference (08/15/23-08/16/23)
      • UBS MedTech Tools and Genomics Summit (08/15/23-08/17/23)
      • Credit Suisse Brazil Financials Conference
• Top Shareholder Meetings: FFIE, SJM
• Fireside Chat: ADBE, MCO
• Investor/Analyst Day/Calls: ATH, AYRO, CDXC, GDDY, JEWL, LGVN, PAVM
• Update: None of note.
• R&D Day: None of note.
• Company Event:
  • Longeveron Inc. (LGVN) Virtual KOL Event: Medicinal Signaling Cells (MSCs) for Hypoplastic Left Heart Syndrome (HLHS) with Lomecel-B.
• Industry Meetings:
  • ESS+ International Security Fair (08/16/23-08/18/23)
    • Previously posted and ongoing conferences:
      • Australasian Gaming Expo (08/15/23-08/17/23)
      • 15th Annual Bioprocessing Summit 2023 (08/14/23-08/17/23)
      • DoD Corrosion Prevention Technology Symposium 2023 (08/14/23-08/17/23)
      • EnerCom 28th Annual Energy Investment Conference 2023 (08/14/23-08/16/23)
      • SHARE Series 2023 (08/13/23-08/18/23)
      • Cancer Genomics Consortium (CGC) Annual Meeting 2023 (08/13/23-08/16/23)

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 is 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: