The Daily Briefing For January 19th: Stocks Continue To Sell Off
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The Daily Briefing For January 19th: Stocks Continue To Sell Off
Overnight Summary: The S&P 500 closed Wednesday lower by -1.58% at 3928.86 from Tuesday lower by -0.20% at 3990.97. The overnight high of 3948.75 was hit at 6:50 p.m. EST. The low was hit at 3913.75 at 7:05 a.m. EST, a range of ~35 points high to low. At 7:10 a.m. EST, the S&P 500 (mini) was lower by -28.75.
Lead Story: U.S. Debt limit to hit its limit at $31.4 trillion today. (NYT)
Earnings Out After The Close:
- Beats: TCBI +3.24, DFS +0.06, FHN +0.02.
- Flat: AA, KMI.
- Misses: WTFC (0.25), FUL (0.20).
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.
- IPOs Priced or News: None of note.
- New SPACs launched/News:
- SDCL EDGE Acquisition Corporation (SEDA) Receives Notification from the NYSE of Non Compliance with the Listing Rule to Maintain a Minimum of 300 Public Stockholders on a Continuous Basis.
- Secondaries Priced:
- BLUE: Prices offering of 20 million shares of common stock at $6.00 per share.
- OLK 5.83 Million share Secondary priced at $20.00.
- Notes Priced of note: None of note.
- Common Stock filings/Notes:
- AKTS: Announces proposed public offering of common stock.
- BLUE: Announces Pricing of $120 Million Public Offering of Common Stock.
- DCPH: Announces $125M common stock offering.
- MARK: Filed Form S-1.. 5,000,000 Shares of Common Stock.
- VICI: Closing of Upsized Public Offering of Common Stock and Full Exercise of Underwriters’ Option to Purchase Additional Shares.
- Direct Offering: None of note.
- Selling Shareholders of note: None of note.
- Private Placement of Public Entity (PIPE): None of note.
- Mixed Shelf Offerings:
- ARDX files $250M mixed securities shelf.
- OLK: Files mixed securities shelf offering.
- TCMD: Filed Form S-3.. $150 Million Mixed Shelf.
- Debt Filing/Notes:
- NCLH: Announces Proposed Offerings of Senior Secured Notes..
- Tender Offer: None of note.
- Convertible Offering & Notes Filed:
- SGH: Announces exchange of $150.0 million of its existing 2.25% Convertible Senior Notes due 2026 for 2.000% Convertible Senior Notes due 2029; also says repurchased 325K shares.
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: None of note.
- Trading Down: AKTS -17%, OLK -12%, VRE -9%, DCPH -9%, DFS -6% of note.
- News After The Close:
- Stocks making the biggest moves after hours: DFS, AA, FUL (CNBC)
- Alcoa (AA) notches second straight quarterly loss after ‘challenging market conditions’. (MarketWatch)
- LAZ, COIN: Crypto Media Outlet CoinDesk Taps Bankers for Potential Sale. (WSJ)
- Discover (DFS) results beat, but signs grow that customers are falling behind; company declares dividends. (MarketWatch)
- Apple (AAPL) to Expand Smart-Home Lineup, Taking On Amazon (AMZN) and Google (GOOGL). (Bloomberg)
- Weaker shipping demand hits ocean-freight shipper Matson’s (MATX) fourth-quarter profit expectations. (MarketWatch)
- Federal Reserve Bank of Dallas Lorie Logan:
- The FOMC Is Committed To Achieving Price Stability, But Inflation Is Too High.
- The Tight Labour Market Must Be Better Balanced.
- Slowing Rate Hikes Ensures Even Better Decisions.
- Indicates Support For Slower Us Rate-hike Pace -need To See More Data Showing Labour Market Not Overheated -officials Shouldn’t Lock In Peak Rate, Must Assess Data.
- Once Stop Raising Rates, Risks Will Still Be Two-sided -may Need To Raise Rates Again Depending On Data.
- Federal Reserve Philadelphia President Patrick Harker:
- Inflation Still Has Upside Risks
- It’s Going To Be A While Before The Fed Eases Rates, Data Will Determine Path
- Federal Policy Does Not Have To Be Set At Very Restrictive.
- Seeing Mounting Evidence Of A Slowing Economy -fed Policy Need Not Be Set At Very Restrictive Levels
- The Fed Needs To Get The Funds Rate North Of 5%.
- Exchange/Listing/Company Reorg and Personnel News:
- Advantage Solutions (ADV) Names Dave Peacock, CEO and New Board Member.
- Black Stone Minerals (BSM) CFO Jeff Wood to leave company. VP Evan Kiefer to assume role of Interim CFO.
- Kinder Morgan (KMI) announces new CEO. (see Buyback and Dividends)
- nCino (NCNO) Announces Chief Financial Officer Transition.
- Prenetics (PRE) Announces Dr. Bayju Thakar as Chief Executive Officer of Prenetics EMEA.
- PRTY NYSE to Suspend Trading Immediately. PRTY is now PRTYQ on the OTCM. It will begin trading as a pink sheet OTC this morning.
- SQZ Biotechnologies (SQZ) gets non-compliance notice from NYSE.
- Buyback Announcements or News:
- Fastenal Company (FAST) Announces Cash Dividend and Share Repurchase Activity.
- Kinder Morgan (KMI) authorizes $1.0 billion increase in share repurchase program.
- SBFM $2 million stock repurchase program.
- Stock Splits or News: None of note.
- Dividends Announcements or News:
- Ault Alliance (AULT) Declares Monthly Cash Dividend of $0.2708333 Per Share of 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock.
- APA Goes ex div tomorrow for $0.25.
- CL Goes ex div tomorrow for $0.47.
- Discover (DFS) declared semi-annual cash dividends, as well as a quarterly cash dividend of 60 cents a share.
- EnLink Midstream (ENLC) raises its quarterly distribution to $0.125 per unit, an 11% bump.
- Fastenal Company (FAST) raises quarterly dividend to $0.35 per share, up $0.04. (see above in Buyback Announcements)
- Kinder Morgan (KMI) expects a 2% increase in dividends in FY23 to $1.13 per share.
- ONEOK (OKE) increases quarterly dividend $0.020 to $0.955 per share.
- Vornado (VNO) Declares Quarterly Common Dividend of $.375 Per Share, a 29% drop. Trades down after hours after cutting dividend. (MarketWatch)
What’s Happening This Morning: Futures value reflects the change with fair value.
S&P 500 -35, Dow Jones -288, NASDAQ -114, and Russell 2000 -20. (as of 7:58 a.m. EST). Asian markets are higher ex the Nikkei. Europe markets are trading lower. VIX Futures are at 20.70 from 21.06 yesterday. Gold higher with Silver and Copper lower. WTI Crude Oil and Brent are lower with Natural Gas higher. US 10-year Treasury sees yields at 3.38% from 3.474% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $20,756 from $21,231 yesterday, lower by -0.07%.
Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):
- Daily Positive Sectors: None of note.
- Daily Negative Sectors: Consumer Defensive, Utilities, Energy, Industrials, Financial of note.
- One Month Winners: Financial, Basic Materials, Energy of note.
- Three Month Winners: Basic Materials, Industrials, 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 fell Wednesday after a fresh batch of economic data offered worrying signs of how the economy is weathering the Federal Reserve’s tightening campaign. The S&P 500 lost 62.11 points, or 1.6%, to 3928.86 with each of its 11 sectors in the red. The Dow Jones Industrial Average dropped 613.89 points, or 1.8%, to 33296.96. The Nasdaq Composite Index shed 138.10 points, or 1.2%, to 10957.01. All three major indexes gave up gains made in early trading. Wednesday morning data showed retail sales fell 1.1% in December, with higher interest rates and inflation hurting spending on vehicles, gasoline and furniture. Wholesale price inflation fell to its slowest pace since March 2021, brightening the price outlook for consumers and policy makers but casting a cloud over hopes for a “soft landing.” (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)
- Thursday After the Close:
- Friday Before the Open:
Earnings of Note This Morning:
- Beats: WNS +0.03, BANC +0.02, CBSH +0.02, TFC +0.02, CMA +0.02, FAST +0.01, FITB +0.01.
- Flat: PG of note.
- Misses: NTRS (1.10), BKU (0.28), KEY (0.17), MTB (0.15), SNV (0.01).
- Still to Report: HOMB.
- Positive Guidance: IRMD, SMCI, WNS of note.
- Negative Guidance: FUL of note.
Erlanger Research Advance/Decline Chart:
Gap Ups & Down In Early Pre-Market:
- Gap Up: TCBI +5%, VMEO +4% of note.
- Gap Down: OLK -12%, AKTS -10%, WTFC -8%, VRE -8%, IIPR -7%, DCPH -7%, DFS -6%, AA -6% of note.
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: RBLX, DFS, CHGG, SCHW, AAPL, F, AA (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: J.P. Morgan’s Dimon Says U.S. Shouldn’t “Play Games” on Debt Ceiling . (Bloomberg)
- Bloomberg Most Read Story: New Zealand Prime Minister Ardern announces shock resignation. (Bloomberg)
- BOE Governor corner has turned on inflation in the U.K. (Bloomberg)
- Equity Rally fizzles amid worries over recession fears. (Bloomberg)
- Proctor & Gamble (PG) revenue and profit fall from a year ago. (CNBC)
- Hertz (HTZ) is partnering with the city of Denver to bring 5,000 EVs and lots of charging stations. (CNBC)
- NASA and Boeing (BA) create a new plane design. (CNN)
Moving Average Update:
- Score pulls back to 57% from 88%.
- President’s Public Schedule:
- The President receives the Presidential Daily Briefing, 7:30 AM
- The President departs the White House en route Joint Base Andrews and then Santa Clara County, California, 9:25 AM
- Principal Deputy Press Secretary Olivia Dalton and FEMA Administrator Deanne Criswell will speak aboard Air Force One en route Santa Clara County, California, 11:30 AM
- The President arrives in Santa Clara County, California, 3:10 p.m. EST
- The President surveys storm-ravaged areas via helicopter en route Santa Cruz County, California, 3:25 p.m. EST
- The President arrives in Santa Cruz County, California, 3:50 p.m. EST
- The President meets with business owners and local residents impacted by the devastation from recent storms, 4:50 p.m. EST
- The President visits with first responders, state and local officials to survey recovery efforts and assess what additional Federal support is needed, 5:35 p.m. EST
- The President delivers remarks to reaffirm his commitment to supporting the people of California as they recover and rebuild from the impact of recent extreme weather across the state, 6:00 p.m. EST
- The President departs Santa Cruz County, California en route Santa Clara County, California, 7:00 p.m. EST
- The President departs Santa Clara County, California en route Joint Base Andrews, 7:35 p.m. EST
- The European Central Bank (ECB) minutes from December are due out before the open in the U.S.
- December Housing Starts are due out at 8:30 a.m. EST and is expected to come in at 1,355,000 from 1,427,000 in November.
- January Philadelphia Fed Index is also out at 8:30 a.m. EST and is expected to come in at -11 from -13.80.
- Initial Jobless Claims 8:30 a.m. EST
- EIA Natural Gas Report 10:30 a.m. EST
- EIA Petroleum Report 11:00 a.m. EST
Federal Reserve / Treasury Speakers:
- Federal Reserve Boston President Susan M. Collins 9:00 a.m. EST
- Federal Research Board of Governors Lael Brainard 1:15 p.m. EST
- Federal Reserve New York President John Williams 6:35 p.m. EST
M&A Activity: None of note.
Meeting & Conferences of Note:
- Sellside Conferences:
- Stifel Seniors Housing and Healthcare Real Estate Conf
- UBS Global Energy Transition Call Series: Energy Storage Solutions with Amprius
- Previously posted and ongoing conferences:
- Company Meetings: COST, INTU, POL
- Fireside Chat:
- Investor/Analyst Day/Calls: CODI, GROY, PETS, SURG.
- 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: