THe Daily Briefing For March 2nd:10 Year U.S. Bond Yield Over 4.00% and 2 Year Approaches 5.00%, Stocks Down But Off Overnight Lows

Overnight Summary: The S&P 500 closed Wednesday lower by -0.47% at 3951.39 from Tuesday lower by -0.30% at 3970.15.  The overnight high of 3965.50 was hit at 7:20 p.m. EST. The low was hit at 3925 at 3:10 a.m. EST, a range of ~40 points high to low.  At 7:20 a.m. EST, the S&P 500 (mini) was lower by -10.50 points which is -0.27%.

Earnings Out After The Close: 

• Beats: SPLK +0.89, CDLX +0.50, CRM +0.32, FTDR +0.24, AXNX +0.23, OKTA +0.21, PSTG +0.14, VEEV +0.12, SNOW +0.09, AVID +0.09, AAN +0.08, DSGX +0.05, DM +0.05, VRRM +0.04, CERT +0.03, BOX +0.03, XENE +0.02, STKL +0.02, ZUO +0.02, RPAY +0.01, CRDO +0.01 of note.
• Flat: RSI of note.
• Misses: ZIMV (1.37), JAZZ (1.19), PLUG (1.00), CODI (0.79), CYTK (0.27), CELH (0.26), FNKO (0.24), GEF (0.15), LNW (0.10), CCCS (0.07), SRI (0.07), DV (0.05), INO (0.04), VUZI (0.03), AIMC (0.01) 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:
  • JATT Acquisition Corp’s (JATT) Proposed Business Combination With Zura Bio Limited Declared Effective by US SEC.
• Secondaries Priced:
  • ALIT: Prices secondary offering 46.0 mln shares of common stock at $9.00 per share.
• Notes Priced of note:
  • AYX: Announces Upsizing and Pricing of $450 Million of Senior Unsecured Notes Due 2028.
  • FYBR: Prices $750 Million of First Lien Secured Notes.
  • TEVA: Successful Upsize and Pricing of $2,490,000,000 (equivalent) Sustainability-Linked Senior Notes and the Increase of the Maximum Tender Amount of its Debt Tender Offer.
• Common Stock filings/Notes:
  • ALIT: Commencement of Secondary Offering 40 Million shares by selling shareholder. (JPM and BAC Bookmanagers)
  • CYTK: Form 424B5 .. $300,000,000 Common Stock.
  • DRMA: Filed Form S-1 — Sell common stock.
  • RVMD: Public Offering of Common Stock $300 Million worth of shares. (JPM, Cowen, SVB and Guggenheim bookmanagers)
  • WULF: Closing of $28 Million Underwritten Equity Offering and Over-Allotment Option.
• Direct Offering:
  • DUO: Announces US$620,800 Registered Direct Offering of American Depositary Shares.
• Selling Shareholders of note:
  • HAYW: Secondary Offering of 16,000,000 Shares of Common Stock by Selling Stockholders.
  • OPCH: Secondary Offering of 13,000,000 Shares of Common Stock by selling shareholders (WAB) AND Common Stock Repurchase.
• Private Placement of Public Entity (PIPE):
  • AMBO: Completes US$2.0 Million Private Placement with Strategic Investor.
• Mixed Shelf Offerings:
  • CDLX: Filed Form POS AM $100 Million Mixed Shelf.
  • NOMD: Filed Form F-3ASR — Mixed Shelf.
  • OESX: Filed Form S-3.. $100 Million Mixed Shelf.
  • VTNR: Filed Form POSASR – $500,000,000 Mixed Shelf.
  • WLKP: Filed Form S-3.. $500Million Mixed Shelf.
• Debt Filing/Notes:
  • SPG: Sells $1.3 Billion of Senior Notes.
• Tender Offer: None of note.
• Convertible Offering & Notes Filed:
  • TGL: Closing Of Convertible Debt Facility For Up To $5.5 Million.
  • VIAV: Announces Private Convertible Exchange and Subscription Transactions of $250 Million Principal Amount of 1.625% Senior Convertible Notes Due 2026
  • WYNN: Files a proposed private offering of convertible bonds.

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: CRM +15%, OKTA +13%, DM +11%, AEO +7%, AGL +6%, RADI +5%, VEEV +4%, JAZZ +4% of note.
  • Trading Down: SI -32%, FNKO -27%, CANO -19.4%, ZIMV -16%, AVID -16%, BOX -9%, AAN -8%, PSTG -8%, SNOW -7%, RVMD -7%, CYTK -5%, CDLX -5%, CELH -4% of note.
• News After The Close:   
  • Stocks making the biggest moves after hours: SI, CRM, SNOW, OKTA, PLUG, CELH, SPLK, BOX, AEO  (CNBC)
  • US Two-Year Treasury Yields Rise To 4.9080%, A Fresh High Since mid 2006. (CNBC)
  • Tesla (TSLA) shares fall 5% as Elon Musk’s ‘Master Plan 3’ is short on details about both cars and finances. (MarketWatch)
  • Salesforce (CRM) Stock Surges as Software Maker Sees Its Profitability Rising. (WSJ)
  • Silvergate (SI) shares tumble 30% after crypto-friendly lender delays filing its Annual Report. (MarketWatch)
  • Senate overturns federal rule on ESG investments, President Biden vows to veto. (CNBC)
  • Starbucks (SBUX) Illegally Fired 6 New York Union Activists, Judge Rules. (Bloomberg)

• Exchange/Listing/Company Reorg and Personnel News:
  • Files to Delay 10-K: FLS, DNA, RKLB, ARGO, SI
  • Delisting of Securities from The Nasdaq Stock Market: EQONEX LIMITED; Scopus BioPharma Inc.; Peak Bio, Inc.; Statera Biopharma, Inc.; Tricida, Inc.; Arbor Rapha Capital Bioholdings Corp. I; Calithera Biosciences, Inc.; Waitr Holdings Inc.; Allied Healthcare Products, Inc.; and Metacrine, Inc.
  • Angel Oak Mortgage (AOMR) announces plans to change its name to Angel Oak Mortgage REIT.
  • Certara (CERT) announces that John Gallagher will succeed Andrew Schemick as CFO.
  • Funko (FNKO) appoints Steve Nave as CFO and COO.
  • InnovAge (INNV) names Christine Bent as COO.
  • Invitation Homes (INVH) announces the promotion of Charles Young to President and COO.
  • Latch (LTCH) announces receipt of extended Nasdaq stay.
  • Moog (MOG.A) elects Mark Trabert as COO, replacing Pat Roche who became the CEO.
  • Old Dominion (ODFL) elects Gregory Plemmons to succeed Kevin Freeman as COO.
  • RBB Bancorp (RBB) announces the appointment of Alex Ko as EVP and CFO
  • SelectQuote, Inc. (SLQT) Cures Stock Price Deficiency; Regains Compliance with NYSE Continued Listing Standards. (see stock splits)
  • Summit Materials (SUM) announces the appointment of Scott Anderson as its new EVP and CFO.
• Buyback Announcements or News:
  • AerCap (AER) Board of Directors approved a new share repurchase program authorizing total repurchases of up to $500 million.
  • Hess (HES) announces $1 billion buyback authorization. (see dividend)
  • OPCH (see Capital Raises – Selling Shareholder)
  • PSTG: announces $250 million buyback.
  • Salesforce (CRM) Announces Share Buyback Program Increased To $20 billion.
  • SNOW: Authorized a $2.0 billion stock repurchase program.
• Stock Splits or News:
  • SLQT regains compliance with NYSE, to seek approval for reverse split.
• Dividends Announcements or News:
  • Aaron’s (AAN) Directors Raise Cash Dividend Over 11%.
  • AEO reinstates dividend.
  • Best Buy (BBY) increases quarterly dividend by 5% to $0.92/sh, new yield is 4.5%.
  • Canadian Natrl Res (CNQ) raises quarterly dividend by 6% to CAD0.90 per share.
  • Choice Hotels (CHH) increases quarterly cash dividend 21% to $0.2875 per share.
  • Crescent Point Energy (CPG) announces CAD$0.032 special dividend in addition to unchanged CAD$0.10 quarterly dividend.
  • Hess (HES) increases quarterly dividend 17% to $0.4375 per share.
  • WhiteHorse Finance, Inc. (WHF) Declares Quarterly Distribution of $0.355 Per Share and Special Distribution of $0.07 Per Share.

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

S&P 500 -16, Dow Jones +66,  NASDAQ -78, and Russell 2000 -10. (as of 7:59 a.m. EST).  Asia higher ex Japan lower by -0.06% and Europe lower ex CAC which is up +0.06%. VIX Futures are at 21.40 from 20.65  yesterday.  Gold, Silver and Copper lower. WTI Crude Oil and Brent higher with Natural Gas lower. US 10-year Treasury sees yields at 4.03% from 3.94% since yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $23,346 from $23,744 yesterday, lower by  -0.24%.

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

• Daily Positive Sectors: Basic Materials, Energy of note.
• Daily Negative Sectors: Utilities, Real Estate of note.
• One Month Winners:  Technology,  Industrials of note.
• Three Month Winners: Consumer Cyclical, Technology, Financial of note.
• Six Month Winners: Basic Materials, Financial, Industrial of note.
• Twelve Month Winners: Energy, Industrial, Utilities of note.
• Year to Date Winners: Technology, Consumer Cyclical, Communication Services of note.

Stronger-than-expected manufacturing data Wednesday pushed the market lower and lifted the 10-year Treasury yield to a level rarely seen in recent years, as investors weigh signs of persistent inflation.  The S&P 500 fell 18.76 points, or 0.5%, to 3951.39. The technology-focused Nasdaq Composite dropped 76.06 points, or 0.7%, to 11379.48.  The Dow Jones Industrial Average spent most of the day in the red, then eked out a tiny gain of 5.14 points, or 0.02%, to 32661.84. The three U.S. indexes had closed February with monthly losses. (WSJ – edited by QPI)

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: AER +0.70, BIG +0.49, BBY +0.47, M +0.29, BURL +0.23, BILI +0.16, DFH +0.08, SSYS +0.04, UTZ +0.03, TD +0.03, AMRX +0.02, STVN +0.02, PDCO +0.01, BUD +0.01 of note.
• Flat: None of note.
• Misses: CNQ (0.30), EXK (0.16), STER (0.05), HRL (0.05), ICPT (0.04), SIX (0.01), GMS (0.01) of note.
• Still to Report: KR, PTLO, SFM of note.

Guidance:

• Positive Guidance: FSS, OKTA, CRM, PLUG, CCCS, VRRM, STVN of note.
• Negative Guidance: VEEV, ZIMV, SPLK, BOX, JAZZ, CDLX, FNKO, RPAY, AVID, AAN, BILI, AMRX, HRL, M, BBY of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

• Gap Up: OKTA +15%, CRM +15%, AMRX +13%, DM +11%, FTDR +9%, DV +7%, AGL +7%, AEO +6%, VEEV +5%, RADI +5%, JAZZ +4%, DSGX +4% of note.
• Gap Down: SI -30%, FNKO -26%, ZIMV -16%, CANO -16%, PSTG -12%, BOX -10%, CYTK -9%, AVID -8%, HAYW -7%, SNOW -6%, GEF -6%, CELH -6%, BILI -6%, TSLA -6%, AAN -5%, CDLX -5%, CNQ -5%, RVMD -5%, HLN -4%, VUZI -4%, PLUG -4% of note.

Insider Action: LAZY 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.

• Stocks Making the Biggest Pre-Market Moves: CRM, BBY, M, TSLA, ON, COIN, MKTX, OKTA, DLTR, SNOW, NIO, BUD, GETR (CNBC)
• 5 Things To Know Before The Stock Market Opens Thursday. (Bloomberg)
• 5 Things You Need to Know to Start Your Day. (Bloomberg)
• Bloomberg Lead Story: Tesla Shares Drop After Investor Day Disappoints. (Bloomberg)
• Bloomberg Most Read Story: Car Debt Piles Up As Owners Owe More Than Vehicle Value. (Bloomberg)
• U.S. Secretary of State Antony Blinken meets with Russian Foreign Minister Sergei Lavrov at G20. (CNN)
• Eurozone inflation softens to 8.5% but still more work to do on the inflation front. (CNBC)
• White House aims to shift the cybersecurity burden, shifting to software companies that fail to protect customers. (CNBC)
• Silvergate (SI) big crypto losses feed watchdogs’ worst fears. (Bloomberg)
• Futures fall on higher rates. (Bloomberg)
• The Ray Dalio Era ends at Bridgewater. What to expect next. (Bloomberg)
• Macy’s (M) shares higher after beats holiday expectations. (CNBC)
• Best Buy (BBY) misses estimates and stock lower. (CNBC)

Moving Average Update:

• Score remains at 31%.

Geopolitical: 

• President’s Public Schedule:
  • The President receives the Presidential Daily Briefing, 9:30 a.m. EST
  • The President departs the White House en route the Senate Democratic Caucus Lunch, 12:40 p.m. EST
  • The President attends the Senate Democratic Caucus Lunch, 1:00 p.m. EST
  • The President arrives at the White House, 2:10 p.m. EST
  • Press Briefing by Press Secretary Karine Jean-Pierre, 2:30 p.m. EST

Economic:

• Initial Jobless Claims 8:30 a.m. EST
• Productivity and Costs 8:30 a.m. EST
• EIA natural Gas Report 10:30 a.m. EST

Federal Reserve / Treasury Speakers:

• Federal Reserve Board of Governors Christopher Waller 4:00 p.m. EST
• Federal Reserve Minneapolis President Neel Kashkari 6:00 p.m. EST
• Fed Chair Powell To Give Semi-annual Monetary Policy Report To House Financial Services Committee On March 8, 10 a.m. EST

M&A Activity:

• Agilon Health (AGL) Announces Acquisition of mphrX, a Leading Healthcare Technology Company.
• Radius Global Infrastructure (RADI) to be Acquired by EQT Active Core Infrastructure and PSP Investments for $15.00 per Share in Cash.

Meeting & Conferences of Note:

• Sellside Conferences:
  • Bank of America Securities Refining Conference 2023
  • Bank of America Animal Health Summit 2023
  • Baird Silicon Slopes Event 2023
  • Evercore ISI 7th Annual Payments and FinTech Innovators Forum 2023 (03/02/23-03/03/23)
  • Susquehanna 12th Annual Technology Conference 2023 (03/02/23-03/03/23)
    • Previously posted and ongoing conferences:
      • • Bank of America Global Agriculture and Materials Conference 2023 (03/01/23-03/02/23)
        • Bank of America Securities Power, Utilities and Clean Energy Conference (02/28/23-03/02/23)
        • Barclays Investment Grade Energy and Pipelines Corporate Days (02/28/23-03/04/23)
        • Bernstein TMT & Consumer 1:1 Forum
        • Citi Healthcare Services, Medtech, Tools & HCIT Conference 2023 (03/01/23-03/02/23)
        • KBW Fintech Payments Conference (02/28/23-03/02/23)
        • Piper Sandler Western Financial Services Conference 2023 (03/01/23-03/03/23)
        • Wells Fargo West Coast Biotech Tour
        • Wolfe Research Real Estate Conference

• Company Meetings: DTOC, SLQT
• Fireside Chat: None of note.
• Investor/Analyst Day/Calls: BRFH, FLO, FTDR, HUM, NABL,  PFG, SLNA, WBS
• Update: None of note.
• R&D Day: None of note.
• Company Event: None of note.
• Industry Meetings:
  • Global NASH Congress 2023 (03/02/23-03/03/23)
    • Previously posted and ongoing conferences:
      • Natural Disaster Expo Miami 2023 (03/01/23-03/02/23)
      • 18th Congress of European Crohn’s and Colitis Organisation (ECCO) 2023 (03/01/23-03/04/23)
      • European Congress of Radiology (ECR) 2023 (03/01/23-03/05/23)
      • Mobile World Congress MWC 2023 (02/27/23-03/02/23)
      • BioProcess International US West 2023 (02/27/23-03/02/23)
      • Americas Transform Partner Summit 2023 (02/27/23-03/03/23)
      • Biocom California’s 13th Annual Global Life Science Partnering & Investor Conference 2023 (02/28/23-03/02/23)

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: