The Daily Briefing For March 4th: Stocks Lower As Ukraine Evolves Into FUBAR

by Geoff Garbacz | 03/04/2022 8:17 AM

Rebel Yell Morning Market Report

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The Daily Briefing For March 4th: Stocks Lower As Ukraine Evolves Into FUBAR

Overnight Summary:  Futures fell off a cliff when the Russian Army attacked a nuclear power plant in Southern Ukraine at 8:00 p.m. EST. The low on the S&P 500 Futures was hit then at 4280. Currently,  futures are back at 4320 down -40 point or -0.91%.

Earnings Out After The Close:

  • Beats: AVGO +0.26, PBYI +0.20, COST +0.18, COO +0.14, FNKO +0.14, GPS +0.12, VZIO +0.12, ESTC +0.08, AVAV +0.02, MRVL +0.02, GDYN +0.02.
  • Flat: AQN +0.00.
  • Misses: EOLS (0.14), SWBI (0.14), DUOL (0.11), PAYO (0.04), ALHC (0.03), NCMI (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced:
    • VBTX: Pricing of Common Stock Offering .. 3,947,369 shares @$38.
  • Notes Priced of note:
    • BSX: Boston Scientific Announces Pricing of €3.0 Billion of Senior Notes.
    • ENR: Upsizing and Pricing of $300 Million Senior Notes.
    • KMPR: Kemper Prices $150 Million Fixed-Rate Reset Junior Subordinated Debentures Offering.
    • LSB Industries (LXU) Announces Upsize and Pricing of $200 Million Private Offering of 6.250% Senior Secured Notes Due 2028.
    • Lumentum (LITE) announces pricing of $750 million convertible notes offering.
  • Common Stock filings/Notes:
    • Main Street Capital (MAIN) filed prospectus supplement to sell up to 15 million shares of common stock and entered into separate equity distribution agreements.
  • Pricing of Over-Allotment:
    • iQIYI (IQ) announced a private placement of $285 million.
  • Direct Offering:
    • WPP plc (WPP) entered into an agreement with Goldman Sachs (GS) to the purchase WPP’s ordinary shares for an aggregate purchase price of up to £200 million.
  • Selling Shareholders of note:
    • Ashford Hospitality Trust (AHT) files for 1,745,260 share common stock offering by selling shareholders.
    • Affirm (AFRM) selling shareholders file to sell 22 million shares.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • AFRM: Filed Form S-3ASR — Mixed Shelf Offering.
    • GOSS: Files Form S-3ASR .. Mixed Shelf.
  • Convertible Offering & Notes Filed:
    • Secoo (SECO) Announces Refinancing of US$175 million Convertible Note.
    • SACH: Prices Registered Public Offering of $50.0 Million of 6.00% Notes.

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: SG +19%, FNKO +17%, PBYI +13%, DUOL +12%, VERI +11%, ALHC +11%, CVT +10%, GPS +9%, GDYN +8%, EVC +5%, AVGO +4%.
    • Trading Down: SWBI -15%, PAYO -4%.
  • News After The Close:
    • Stocks making the biggest moves after hours: AVGO, GPS, SWBI, SG   (CNBC)
    • International Atomic Energy Agency says that fire (following Russian shelling) at Zaporizhzhia Nuclear Power Plant in Ukraine has not affected “essential” equipment; no change reported in radiation levels; CNBC reporting that fire has been extinguished, but Russia seized control of the plant.
    • Major credit rating agency lowers Russia rating as risk of default rises.
    • Amazon (AMZN) gives FTC deadline in mid-March to act on MGM acquisition as all information provided to FTC. (MarketWatch)
    • Chip shortage forces Ford (F) to cut SUV, truck production at two plants. (CNBC)
    • Disney (DIS) Discusses Launching Ad-Supported Tier of Disney+ in U.S. (The Information).
    • Panasonic planning massive battery plant in U.S. to supply Tesla -NHK. (Reuters)
    • Sweetgreen (SG) stock rallies more than 20% after Q4 sales beat (MarketWatch)
    • Gap (GPS) beat estimates by $0.12 and guided Fiscal Year 2023 EPS above estimates.
  • Exchange/Listing/Company Reorg and Personnel News:
    • AVANGRID (AGR) Appoints Pedro Azagra CEO.
    • Eneti Inc. (NETI) Announces Purchase of Call Options by the President of the Company and Purchase of Common Shares by Scorpio Holdings Limited.
    • Evolus (EOLS) announces retirement of CFO Lauren Silvernail, effective May 31.
    • Inogen (INGN) appoints Kristin Caltrider as EVP & Chief Financial Officer, effective March 21.
    • Nam Tai Property (NTP) appointed Yu Chunhua to the role of interim CEO.
    • Ranger Oil (ROCC) announces the promotion of Julia Gwaltney to the role of Senior Vice President and COO effective immediately.
    • Sentage Holdings Inc. (SNTG) Receives Nasdaq Notification Regarding Minimum Bid Price Deficiency.
    • vTv Therapeutics (VTVT) Announces CEO Transition.
  • Buyback Announcements:
    • Cognex (CGNX) authorizes new $500 mln share repurchase plan.
    • Entravision (EVC) approves $20 million share repurchase program.
    • Sprouts Farmers Market (SFM) Announces $600 Million Share Repurchase Authorization.
  • Stock Splits:
    • See ACMR below in Dividends.
  • Dividends Announcements:
    • ACM Research (ACMR) approves 3-for-1 stock split in form of stock dividend.
    • Academy Sports + Outdoors (ASO) initiation of quarterly cash dividend of $0.075 per share.
    • Digital Realty Trust (DLR) raises quarterly cash dividend for common stock to $1.22 per share, a 5% increase.
    • Synovus (SNV) increases quarterly dividend by $0.01 to $0.34 per share.

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

S&P 500 -36Dow Jones -300 NASDAQ -99, and Russell 2000 -23.  Asia and Europe mixed. VIX Futures are at 31.85 from 30.02 yesterday morning. Gold, Silver and Copper higher. WTI Crude Oil and Brent Oil Futures higher. Natural Gas is higher. $ is higher vs Euro, higher vs Pound and lower vs Yen. US 10 year Treasury with yields at 1.78% from 1.859% yesterday.  Bitcoin is at $41,400 from $43,752 at -1.43%. As of 8:07 a.m. EST

Wednesday’s Action – 03/03/22 Close:  

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

Benchmark indexes fades the opening highs and ended in the red.  NASDAQ was down 1.56%.  Oil and Natural gas pulled back 1.18% and 2.23%.    Updated 03/03/22 close.

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

  • Friday After the Close: none of note.
  • Monday Before the Open: CIEN, SQSP of note.

Earnings of Note This Morning:

  • Beats: HIBB +0.03.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: None of note.

Guidance:

  • Positive Guidance: HLLY, DUOL, MRVL, ESTC, FNKO,AVGO, GPS, ALHC.
  • Negative Guidance: BBY, PAYO, NCMI, CVT.

Erlanger Research Advance/Decline Chart: Updated through 03/03/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SG +19%, FNKO +17%, ALHC +11%, VERI +10%, DUOL +10%, GPS +7%, EVC +6%, CVT +5%.
  • Gap Down: YNDX -21%, SWBI -20%, HHR -15%, VZIO -8%, ING -6%, PAYO -5%, WPP -4%.

Insider ActionOEC, AZO sees Insider buying with dumb short selling. NDLS, TUP sees Insider buying with smart short sellers. 03/03/22 close.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”.

  • Stocks making the biggest moves premarket: TSLA, SG, GPS, COST, MRVL, AVGO (CNBC)
  • 5 Things To Know To Start Your Day. (Bloomberg)
  • Russian forces attack Ukrainian power plant, damage it and take over. No leakage at this point. Putin warns against more sanctions. (CNBC)
  • Russian and Ukrainian talks fall to produce a ceasefire but agreed on civilian evacuations. (WSJ)
  • North American Class 8 Truck Orders fell 53% in February. (Freight Waves)
  • White House will not support a ban on Russian oil imports despite House and Senate approval from both parties. (Bloomberg)
  • U.S. nearing agreement with Iran on a nuclear deal. (CNN)
  • CDC notes “vast majority” of counties in the U.S. are in low or moderate transmission levels and as such they lower mask mandate in those areas. (CDC)
  • Google (GOOGL) suspends ad sales in Russia. (Reuters)
  • Airbnb (ABNB) suspends all operations in Russia and Belarus.
  • Robinhood Snacks looks at efforts to pressure Russian President Putin through the oligarchs and their superyachts. Women come back to workforce, new data today.

Moving Average Update:

  • Score slips to 36% from 46%.  Updated 03/03/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 10:00 a.m. EST
    • The President makes an announcement delivering on his Made in America commitments, 12:25 p.m. EST
    • Press Briefing by Press Secretary Jen Psaki, 1:15 p.m. EST
    • The President participates in a bilateral meeting with His Excellency Sauli Niinistö, President of the Republic of Finland, to continue their conversations about enhancing our strong bilateral relations, 2:30 p.m. EST
    • The President departs the White House en route New Castle, Delaware, 5:35 p.m. EST
    • The President arrives in New Castle, Delaware, 6:40 p.m. EST

Economic: 

  • February Nonfarm Payrolls is due out at 8:30 a.m. EST and is expected to fall to 400,000 from 467,000. The unemployment rate is expected to fall to 3.90% from 4.0%.
  • Baker Hughes Rig Count 1:00 p.m. EST

Federal Reserve Speakers:

  • None of note.

M&A Activity:

  • ALE IPS Solar Acquired by New Energy Equity.
  • BRP Group, Inc. (BRP) Enters Into Agreement to Acquire Westwood Insurance Agency and Separately Enters Into Agreement to Assume MGA Operations for QBE North America’s Builder-Sourced Homeowners Book.
  • FleetCor (FLT) announces acquisition of Levarti, an airline software platform.
  • IDT Corp (IDT) subsidiary net2phone acquires Integra CCS.
  • Petco Health and Wellness agrees to purchase remaining stake in JV with Thrive Pet Healthcare (WOOF).

Meeting & Conferences of Note:

  • Sellside Conferences:
    • None of note.
      • Previously Announced  Conferences:
        • Citigroup Mexico Plenaria Virtual Conference
        • Evercore ISI Payments and FinTech Innovators Forum 2022 (03/03/22-03/04/22)
        • Susquehanna 11th Annual Technology Conference 2022 (03/03/22-03/07/22)
        • Bank of America Global Securities Agriculture and Materials Conference 2022 (03/02/22-03/04/22)
        • BMO Digital Advertising Summit 2022 (03/02/22-03/04/22)
        • Cowen Mobility Disruption Conference 2022 (03/02/22-03/04/22)
  • Company Meetings: AAPL, NVS, RLGY, OCLS, STNG.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: KR, BRP.
  • Update: None of note.
  • R&D Day: NVRO.
  • Company Event: None of note.
  • Industry Meetings:
    • ESMO Targeted Anticancer Therapies Congress TAT (03/04/22-03/08/22)
      • Previously Posted and Ongoing Conferences:
        • American Glaucoma Society (AGS) Annual Meeting 2022 (03/03/22-03/06/22)
        • International Society for the Study of Women(R)s Sexual Health (ISSWSH) 2022 (03/03/22-03/06/22)
        • 2nd Annual Food, Packaging & Sustainability Sonoco Fresh Summit 2022 (03/02/22-03/04/22)

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:

       

Thursday’s Upgrades and Downgrades:

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