The Daily Briefing For March 30th: Stocks Continue To Advance Heading Into Quarter End

by Geoff Garbacz | 03/30/2023 8:39 AM

Rebel Yell Morning Market Report

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The Daily Briefing For March 30th: Stocks Continue To Advance Heading Into Quarter End

Overnight SummaryThe S&P 500 closed Wednesday higher by 1.42% at 4027.81 while Tuesday was lower by -0.16% at 3971.27. The overnight high of 4083.50 was hit at 7:05 a.m. EDT. The low was hit at 4052.50 at 8:05 p.m. EDT, a range of ~43 points high to low.  At 7:20 a.m. EDT, the S&P 500 (mini) was higher by 24 points which is 0.59%.

Fun Fact: Major League Baseball begins play today and all 30 teams are playing today for the first time since 1968. As John Fogerty sings, “Oh put me in, coach. I’m ready to play today.”

Earnings Out After The Close: 

  • Beats: CXM +0.04, VRNT +0.03 of note.
  • Flat: SMTC of note.
  • Misses: RH (0.48), CNXC (0.04), FUL (0.04) 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: None of note.
  • Secondaries Priced:
    • AVDL: Prices offering of 10,000,001 ADSs at $8.50 per ADS.
    • BMEA: Prices offering of 5 million shares of common stock at $30.00 per share.
    • VKTX: Prices offering of 17.242 million shares of common stock at $14.50 per share.
  • Notes Priced of note:
    • STEM: Announces Pricing of Upsized Offering of $200 Million 4.25% Green Convertible Senior Notes Due 2030.
  • Common Stock filings/Notes:
    • AVDL: Commences public offering of ordinary shares and Series B preferred shares.
    • HSCS: Filed Form S-1.. Up to 4,000,000 Shares of Common Stock.
    • VKTX: Announces Proposed Public Offering of Common Stock.
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • PRQR: Files for 13,371,562 share common stock offering by selling shareholders.
  • Private Placement of Public Entity (PIPE):
    • DCTH: Announces Closing of Private Placement of up to $85 Million.
  • Mixed Shelf Offerings: None of note.
  • Debt/Credit Filing and Notes: None of note.
  • 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:

  • After Hours: 
    • Trading Up: STIX +12%, CXM +7% of note.
    • Trading Down: SMTC -9%, PRQR -7%, CNXC -5%, RH -5%, AVDL -4% of note.
  • News After The Close:   
    • Layoffs:
      • Electronic Arts (EA) Lays Off 6% Of Staff.
      • Warner Music Group (WMG) to reduce headcount by ~270 people, or a ~4% of the Co’s overall headcount.
      • LendingTree (TREE) to cut around 13% of its workforce. (MarketWatch)
      • Disney (DIS) slices more than 300 streaming jobs in China. (MarketWatch)
      • ROKU laying off 200 employees.
      • Better Therapeutics (BTTX) to Cut 35% of Workforce in Bid to Conserve Cash.
    • Nasdaq 100 (QQQ) Rises 20% From December Low To Enter Bull Market. (Bloomberg)
    • Raytheon Technologies (RTX) awarded $619 million U.S. Navy contract modification.
    • Valero Energy (VLO): Valero Marketing and Supply awarded $906 million U.S. Defense Logistics Agency contract.
    • Granite Construction (GVA) awarded an approximately $20 million contract by the Alaska Department of Transportation.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Index Changes: Crane (CR) set to join S&P MidCap 400; PacWest Bancorp (PACW) to join S&P SmallCap 600
    • Akanda Corporation (AKAN) Has Regained Compliance with NASDAQ’s Minimum Bid Price Requirement.
    • ADTRAN (ADTN) CFO retires; appoints Uli Dopfer as new CFO.
    • Green Plains (GPRE) announces planned retirement of Chairman of the Board, Wayne Hoovestol.
    • Laser Photonics (LASE) timothy Schick, CFO Enters Separation.
    • mCloud (MCLD) Announces Receipt of Nasdaq Notification Letter Regarding Minimum Bid Price Deficiency.
    • Preferred Bank (PFBC) names interim CEO James A. Dowd as CEO of the company and the bank.
    • Syneos Health (SYNH) appointed Stanford (Ben) Rudnick as Interim Chief Financial Officer.
    • Syndax Pharmaceuticals (SNDX) appoints Neil Gallagher as President, Head of Research and Development.
  • Buyback Announcements or News:
    • Semantix (STIX) Announces Increase in Stock Repurchase Plan by $5 million.
  • Stock Splits or News:
    • FRGT did a recent reverse split.
  • Dividends Announcements or News:
    • APD Goes ex div tomorrow for $1.75
    • CAH Goes ex div tomorrow for $0.4957
    • O Goes ex div tomorrow for $0.255
    • STT Goes ex div tomorrow for $0.63

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

S&P 500 +23, Dow Jones +197,  NASDAQ +73, and Russell 2000 +14. (as of 7:57 a.m. EDT).  Asia higher ex the Nikkei and Europe higher. VIX Futures are at 20.70 from 21.10 yesterday.  Gold, Silver and Copper lower. WTI Crude Oil and Brent higher with Natural Gas lower. US 10-year Treasury sees yields at 3.558% from 3.554% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $28,599 from $28,329 yesterday, higher by 3.69%.

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

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

U.S. stocks finished higher on Wednesday as investors waited on an update on inflation due Friday that could help inform how many more rate hikes to expect from the Federal Reserve.  The S&P 500 index rose about 56 points, or 1.4%, ending near 4,027, the highest close since March 6. That was only days before the collapse of Silicon Valley Bank which put a spotlight on risks in the U.S. banking system after the Fed’s yearlong increase of rate hikes.  The Dow Jones Industrial Average rose 1% and the Nasdaq Composite Index closed 1.8% higher.   (MarketWatch – 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: EVGO +0.13 of note.
  • Flat: None of note.
  • Misses: MANU (6.21), NEOG (0.03), ANGO (0.02) of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: UNF, PAYX, CNXC of note.
  • Negative Guidance: RH, VRNT, PL, ANGO of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: CXM +14%, STIX +5%, SSYS +4%, MPW +4% of note.
  • Gap Down: SMTC -13%, CNXC -6%, RH -6%, AVDL -4%, VKTX -4% of note.

Insider ActionKSS sees Insider buying with dumb short selling.  BRT sees Insider buying with smart short sellers.

Rags & MagsRepeated 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. (CNBC)
  • 5 Things You Need to Know to Start Your Day. (Bloomberg
  • Bloomberg Lead StoryBlackstone’s Schwarzman Says U.S. Banking Crisis is Solvable. (Bloomberg)
  • Bloomberg Most Read Story: $335,000 Pay for “AI Whisperer” Jobs Appears in Red Hot Market. (Bloomberg)
  • A potential meeting between Taiwan’s leader and House Speaker McCarthy could increase tensions between the U.S. and China. (CNBC)
  • U.S. Futures, Stocks Rise As Traders Eye Peak Rates: Market Wrap. (Bloomberg)
  • Chinese Premier Li Qiang commits to reopening the Chinese economy. (Reuters)
  • Russia Detains WSJ Reporter On Spy Charges. (Bloomberg)
  • Senate voted 62-23 to end Covid-19 Emergency. President Biden opposes but will not veto. (CNN)
  • White House to ask Fed to tighten rules on mid-sized banks(WSJ)
  • Morgan Stanley downgrade of Charles Schwab (SCHW) hits on disintermediation from low interest bank accounts (sweep accounts) to money market accounts. (Bloomberg)
  • JetBlue (JBLU) to cut NYC flights on staffing shortage. (CNBC)
  • Tesla (TSLA) is far behind in solar roof installation with only 3,000. (Reuters)

Moving Average Update:

  • Green taking over.  Score jumps to 80% from 68%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Briefing, 10:45 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:00 p.m. EDT

Economic:

  • Q4 GDP (Final Estimate) is due out at 8:30 a.m. EDT and is expected to remain at 3.9%.
  • Initial Jobless Claims 8:30 a.m. EDT
  • Corporate Profits 8:30 a.m. EDT
  • EIA Natural Gas Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Boston President Susan M. Collins 12:45 p.m. EDT
  • Federal Reserve Richmond President Thomas Barkin 12:45 p.m. EDT

M&A Activity:

  • Concentrix (CNXC) combining Webhelp in a transaction valued at $4.8 billion.
  • Planet (PL) to Acquire Sinergise Business to Expand its Data Analysis Platform.
  • Stratasys (SSYS) confirms receipt of revised unsolicited acquisition proposal from Nano Dimension (NNDM) for $19.55 per share in cash.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Barclays Crypto and Blockchain Summit 2023
    • Evercore ISI NASH Renaissance
    • Guggenheim Investing in Advanced Nuclear Energy
    • JP Morgan Global Real Estate Debt Investor Event 2023 (03/30/23-03/31/23)
    • Wainwright Autoimmune & Inflammatory Disease Conference
    • Maxim Electric Vehicle & Auto Tech Conference
    • Stifel German Corporate Conference
      • Previously posted and ongoing conferences:
        • Bank of America Securities Energy, Utilities and Infrastructure Conference 2023 (03/29/23-03/30/23)
        • JP Morgan Retail Round Up (03/29/23-03/30/23)
        • National Bank of Canada 21st Annual Financial Services Conference 2023 (03/29/23-03/30/23)
        • Stifel CNS Days (03/28/23-03/29/23)
        • Truist Gulf Coast Casino Bus Tour

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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