The Daily Briefing For July 5th: Stocks Lower After The Fireworks

Overnight Summary:  The S&P 500 closed Monday at 4455.59 up 0.12% from Friday at 4450.38 up 1.23%. Overnight ranges saw the high hit at 4492.75 at 9:40 p.m. EDT while the low was high at 4467.50 at 5:40 a.m. EDT. The range overnight was 25 points. The 10-day average of the overnight range is at 19.10 from 18.50.  The average for May/June average was 19.94 from 21.63 in May. Currently, the S&P 500 is lower by -20 points and is lower by -0.45% at 7:10 a.m. EDT.

Startling Fact: July 3rd was the hottest day on the planet ever recorded. (Reuters)

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 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: None of note.
• New SPACs launched/News:
  • Arrival (ARVL) and Kensington Capital Acquisition Corp. V Agreed to Terminate Business Combination Agreement.
• Secondaries Priced:
  • EFSH: Announces Pricing of $1.869 Million Public Offering.
• Notes Priced of note: None of note.
• Common Stock filings/Notes:
  • ACON: Form S-1.. 1,571,156,shares of our common stock.
  • GNLN: Announces Closing of $4.3 Million Public Offering.
  • IGMS: Announces Closing of Upsized Public Offering and Concurrent Private Placement and Full Exercise of the 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:
  • JBL: Form S-3ASR – Mixed Shelf Offering.
  • SURG: Form S-3.. $100 Million Mixed Shelf Offering.
  • USEA: Form F-3 Filed $300,000,000 Mixed Shelf.
• Debt/Credit Filing and Notes:
  • CAR: Announces Intention to Offer €400 Million of Senior Notes.
  • CPE: Closes Delaware Basin deal, cuts outstanding debt by $300M.
  • PLAY: Announces Amendment to Credit Agreement, Reduces Spread 1.25% and Further Enhances Liquidity Position with Upsize of Term Loan B to $900 Million on Strong Demand.
  • REI: Announces $25 Million Debt Reduction in Q2 2023 and Sale of Non-Core Delaware Basin Assets.
• 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:

• News Items After the Close:
  • META Set To Release Twitter Competitor Soon, Sources Say. (WSJ)
  • Soros Foundation to Cut Staff by 40%. (WSJ)
• News Items Over the Holiday:
  • The Biden Administration is preparing to restrict Chinese companies’ access to US cloud-computing services. (WSJ)
  • Microsoft (MSFT) likely to face antitrust investigation from EU over Teams practices.
  • META faces setback in EU court over German antitrust agency’s decision on Facebook.

• Exchange/Listing/Company Reorg and Personnel News:
  • ATI Physical Therapy (ATIP) Receives NYSE Non-Compliance Letter Regarding Market Capitalization Requirements.
  • Ault Alliance, Inc. (AULT) Regains Compliance with NYSE American Continued Listing Standards.
  • FSD Pharma (HUGE) Appoints Zeeshan Saeed as Chief Executive Officer, Anthony Durkacz to Serve as Executive Co-Chairman of the Board of Directors.
  • KB Financial (KB) disclosed that the board of Kookmin Bank, a subsidiary of KB Financial Group, passed a resolution to split-off Kookmin Bank’s fund service business to form a new entity.
  • Light & Wonder (LNW) Announces CFO Transition.
  • MIMEDX (MDXG) Appoints Doug Rice as Chief Financial Officer.
  • Natural Gas Services (NGS) Stephen Taylor to serve as interim CEO.
  • Osisko (OR) Announces Appointment of Paul Martin as Interim CEO.
  • PHINIA (PHIN) completes separation from BorgWarner (BWA), starts trading on New York Stock Exchange.
  • Siyata Mobile (SYTA) plans to appeal Nasdaq delisting notice.
  • SQZ: NYSE to Commence Delisting Proceedings Against SQZ.
  • Uranium Royalty (UROY) receives approval from TSX for listing of common shares.
  • Vertical Aerospace Group (EVTL) appointed Stuart Simpson as Chief Financial Officer.
• Buyback Announcements or News:
  • DHT Holdings, Inc. (DHT) announces share buyback.
• Stock Splits or News:
  • BDRX, BFRI, AGFY, XXII, WKEY Trading r/s price this morning.
• Dividends Announcements or News:
  • Bank OZK (OZK) Announces Increase to Quarterly Common Stock Dividend and Announces Preferred Stock Dividend.
  • Extra Space Storage (EXR) announces dividend of $1.01 per share.
  • Life Storage (LSI) announces dividend of $0.90 per share.
  • SYLA (SYT) Announces Plan to Double Dividend Per Share.
• Insider Sales Of Note: SNOW Director 500,000.

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

S&P 500 -22, Dow Jones -173,  NASDAQ -86, and Russell 2000 -16. (as of 7:54 a.m. EDT).  Asia and Europe are lower this morning. VIX Futures are at 15.20 from 14.90 Friday.  Gold higher with Silver and Copper lower this morning. WTI Crude Oil higher and Brent Crude Oil lower with Natural Gas higher. US 10-year Treasury sees yields at 3.862% from 3.855% yesterday. The U.S. Dollar is lower versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $30,478 from $30,665 Monday, lower by -0.80%.

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

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

U.S. stocks edged higher in a shortened trading session Monday, as investors geared up for the second half of 2023 following a market rally to start the year.  The S&P 500 added 0.1%. The Dow Jones Industrial Average gained roughly 10 points, or less than 0.1%. The Nasdaq Composite rose 0.2%.  The stock market is coming off an expectation-defying first-half performance, with all three major U.S. indexes logging gains despite concerns about the economy. The Nasdaq recorded its best start to the year since the 1980s, as an artificial-intelligence craze swept through markets and boosted megacap tech shares. The S&P 500 finished the first half up 16%.  (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: None of note.
• Thursday Before the Open: None of note.

Earnings of Note This Morning:

• Beats: None of note.
• Flat: None of note.
• Misses: None 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: AXTI +10%, DWAC +6% of note.
• Gap Down: None of note.

Insider Action: BDTX sees Insider buying with dumb short selling.  No stock 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 On Wednesday. (CNBC)
• Five Things You Need to Know to Start Your Day. (Bloomberg)
• Stocks Making The Biggest Pre-Market Moves: RIVN UPS COIN AZN RIG HTZ (CNBC)
• Bloomberg Lead Story: The U.S. Middle Class’s Economic Anxiety Will Decide The 2024 Election. (Bloomberg)
• Bloomberg  Second Most Shared Story: Earth Keeps Breaking Temperature Records Due To Global Warming. (Bloomberg)
• Stocks decline as China Data saps Risk Sentiment: Market Wrap. (Bloomberg)
• Eurozone Business Output contracts. (CNBC)
• Russian Oil and Gas revenue fell 25% in June. (Bloomberg)
• Treasury Secretary Yellen’s Visit seeks to usher in more talks. (Bloomberg)
• Fed Minutes out later today offer clues on why the awkward “pause and hike” message. (Bloomberg)
• UPS denies walking away from Teamsters Union as strike looms. UPS did sweeten its offer last Friday but it did not go far enough after review. (Reuters)

Moving Average Update:

• Score remains at 100%.

Geopolitical: 

• President’s Public Schedule:
  • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
  • The President holds a bilateral meeting with Prime Minister Ulf Kristersson of Sweden, 2:00 p.m. EDT
  • Press Briefing by Press Secretary Karine Jean-Pierre, 2:15 p.m. EDT

Economic:

• MBA Mortgage Applications 7:00 a.m. EDT
• Redbook Sales 8:55 a.m. EDT
• The June ADP Payroll Index is due out at 8:15 a.m. EDT and is expected to fall to 245,000 from 278,000.
• May Factory Orders are due out at 10:00 a.m. EDT and are expected to climb to 0.6% from 0.4%.
• The Federal Reserve Open Market Committee (FOMC) is out with its latest minutes at 2:00 p.m. EDT.
• API Crude Oil Data 4:30 p.m. EDT

Federal Reserve / Treasury Speakers:

• Federal Reserve New York President John Williams 4:00 p.m. EDT

M&A Activity:

• ATS Acquires AI Process Optimizer Yazzoom.
• Brookfield Reinsurance (BNRE) to Acquire AEL in $4.3 Billion Transaction.

Meeting & Conferences of Note:

• Sellside Conferences: None of note.
  • Previously posted and ongoing conferences: None of note.
• Top Shareholder Meetings: BACK, BUR
• Fireside Chat: None of note.
• Investor/Analyst Day/Calls: BOSSY, DAL
• Update: None of note.
• R&D Day: None of note.
• Company Event: None of note.
• Industry Meetings:
  • Association of Physicians of Pakistani Descent of North America (APPNA) 46th Annual Summer Convention 2023 (07/04/23-07/09/23)
    • Previously posted and ongoing conferences: None of note.
      • World Congress of Dermatology (07/03/23-07/08/23)

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 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: