The Daily Briefing For May 24: Stocks Lower As Fears Of Debt Ceiling Breakdown Rise

by Geoff Garbacz | 05/24/2023 8:32 AM

Rebel Yell Morning Market Report

Your Daily Financial Market Briefing - Giving You An Investing Edge Before Each Trading Day Begins

The Daily Briefing For May 24: Stocks Lower As Fears Of Debt Ceiling Breakdown Rise

Overnight Summary: The S&P 500 closed Tuesday at 4145.58 lower by -1.12% from Monday at 4192.63 higher by 0.02%. The overnight high of 4166.25 was hit at 8:25 p.m. EDT. The low was hit at 4140.25 at 6:40 a.m. EDT, a range of ~26 points high to low which is a mid-vol night.  At 7:20 a.m. EDT, the current price was 4142.25 which is -0.40% and -16.50 points. The 10-day average of the overnight range is 21.10 from 20.70.

Earnings Out After The Close: 

  • Beats: TOL +0.93, INTU +0.43, NEWR +0.20, URBN +0.20, PANW +0.17, VFC +0.03, A +0.01 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:
    • Roth CH Acquisition IV Co. (ROCG) completes business combination with Tigo Energy.
  • Secondaries Priced:
    • COCO: Upsizes and prices 5 mln share common stock offering at $23 per share by Selling Stockholder.
    • PHAT: Announces prices offering of 11.125 million shares of common stock at $11.75 per share.
    • RNR: Announces Pricing offering of 6.3 million shares of common stock at $192.00 per share.
  • Notes Priced of note:
    • GAIN: Prices Public Offering of 8.00% Notes due 2028.
  • Common Stock filings/Notes:
    • HASI: Announces Public Offering of Common Stock.. $300 million of shares. (JPM, BAC and GS Bookmanagers)
    • NVTS: Announces Proposed Public Offering of Class A Common Stock.
    • OCGN: Proposed Public Offering of Common Stock. (Cantor Bookmanager)
    • PHAT: Proposed Public Offering of Common Stock. (Jefferies and Evercore bookmanager)
    • USPH: Announces $150 Million Underwritten Public Offering of Common Stock. (BAC and JPM Bookmanagers)
  • Direct Offering: None of note.
  • Selling Shareholders of note:
    • ECVT: Announces Secondary Offering of 14,000,000 Shares of Common Stock by a Selling Stockholder and Repurchase of Common Stock.
    • NSPR: Filed Form S-3.. Up to 77,484,492 Shares of Common Stock Offered by the Selling Stockholders.
  • Private Placement of Public Entity (PIPE):
    • KMDA: $60 Million Private Placement with FIMI Opportunity Funds. 12.6 million shares to FIMI at a price of $4.75 per share. FIMI to own approximately 38% of Kamada’s OS and will become a controlling shareholder.
  • Mixed Shelf Offerings:
    • ETNB – Filed Form S-3ASR.. Mixed Shelf.
  • Debt/Credit Filing and Notes:
    • HWM: Filed Form S-3ASR.. Senior Debt Securities.
    • MOS: Announces New $700 Million Term Loan Facility.
  • 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: RETA +10%, URBN +9%, PANW +4% of note.
    • Trading Down: PTCT -21%, NVTS -10%, PHAT -9%, NEWR -7%, A -6%, INTU -5% , HASI -4%of note.
  • News After The Close:
    • Stocks making the biggest moves after hours: PANW, URBN, INTU, TOL, VFC, A (CNBC)
    • Agilent (A) shares fall after ‘increased market uncertainties’ weigh on outlook. (MarketWatch)
    • DXY: There Is ‘More Room’ For Dollar Strength, Goldman Sachs Says. (Bloomberg)
    • PacWest (PACW) Sells Real-Estate Lending Unit. (WSJ)
    • Intuit (INTU) Drops After Tax Season Sales Fall Short of Estimates. (Bloomberg)
    • Urban Outfitters (URBN) stock rallies nearly 9% as retailer tops Wall Street views for profit, sales in the quarter. (MarketWatch)
    • A new China Covid Wave could result in 65 million cases per week. It could push the need for updated vaccines  (CNBC)
    • General Dynamics (GD) NASSCO Awarded $736 Million to Build T-AO 213.
    • General Dynamics (GD) Electric Boat Awarded $1.076 Billion Contract Modification for Virginia-Class Submarines.
  • Exchange/Listing/Company Reorg and Personnel News:
    • AgeX Therapeutics (AGE) Announces Appeal of NYSE American Determination.
    • Agrify (AGFY) Receives Nasdaq Notification of Non-Compliance with Listing Rule 5250(c)(1).
    • Avery Dennison (AVY) announces planned CEO succession; Mitch Butier has decided to retire as CEO.
    • Delta Air Lines (DAL) names Mike Spanos as COO. (MarketWatch)
    • Genetron Health (GTH) Announces Receipt of Notification from Nasdaq.
    • Genuine Parts Company (GPC) Announces Executive Officer Changes.
    • Granite Ridge Resources, Inc. (GRNT) Set to Join Russell 3000® Index.
    • Hyzon Motors (HYZN) Receives Additional Staff Determination From Nasdaq Regarding Q1 2023 Form 10-q
    • Kamada (KMDA) announces CFO Chaime Orlev has withdrawn his resignation, will remain at the company.
    • Kineta (KA) Set to Join Russell Microcap® Index.
    • PTC Therapeutics (PTCT) to reduce workforce by approximately 8%; terminates employment of CFO Emily Hill.
    • PyroGenesis (PYR) Receives Notice of Approval Granting 180-Day Extension to Meet NASDAQ Minimum Bid Price Requirement.
    • The Duckhorn Portfolio (NAPA) appoints Jennifer Fall Jung as CFO.
    • VIA Optronics AG (VIAO) Announces Notice of Failure to Satisfy a Continued Listing Rule or Standard of the New York Stock Exchange.
    • Wearable Devices (WLDS) Granted 180-Day Extension by Nasdaq to Regain Compliance with Minimum Bid Requirement.
    • Zenvia (ZENV) receives Nasdaq notification regarding minimum bid price deficiency.
  • Buyback Announcements or News:
    • Clarivate (CLVT) extends share repurchase authorization through December 31, 2024, and reduces the authorization to $500 million from $1 billion.
    • O’Reilly Auto (ORLY) increases repurchase authorization by an additional $2.0 billion, raising the aggregate authorization to $23.75 billion.
    • PWR: New $500 Million Stock Repurchase Program.
    • Renren (RENN) announces repurchase of 288 mln shares held by Softbank (SFTBY).
  • Stock Splits or News: 
    • APTO 1:15 reverse split.
    • RIDE trading r/s price.
  • Dividends Announcements or News:
    • HII Goes ex div tomorrow for $1.24.
    • IP Goes ex div tomorrow for $0.4625
    • Ituran Location And Control Ltd (ITRN) Announces Distribution Of A $3 Million Dividend. Raises quarterly dividend to $0.15 from $0.14 per share.

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

S&P 500 -17, Dow Jones -128,  NASDAQ -50, and Russell 2000 -10. (as of 7:59 a.m. EDT).  Asia is lower and Europe is lower. VIX Futures are at 20.50 from 19.60 yesterday.  Gold higher but Silver and Copper lower from yesterday. WTI Crude Oil and Brent Crude Oil higher with Natural Gas higher from yesterday. US 10-year Treasury sees yields at 3.684% from 3.75%  yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and lower against the Yen. Bitcoin is at $26,710 from $27,315  yesterday, lower by -1.77%.

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

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

Stocks wobbled for much of Tuesday before sliding deeper into the red, as Wall Street followed last-minute talks to stave off a U.S. default that some investors fear would upend financial markets.  Losses across major indexes accelerated throughout the afternoon as the White House and congressional Republicans offered few hints of additional progress. The S&P 500 slipped by -1.1%, with losses spanning every sector except energy, while the Nasdaq Composite slid by -1.3%. The Dow Jones Industrial Average lost -0.70%, or 231 points.  (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: 

  • Thursday Before the Open:

Earnings of Note This Morning:

  • Beats: DY +1.03, KSS +0.57, ANF +0.37, PLAB +0.10, ADI +0.07, WOOF +0.01 of note.
  • Flat: None of note.
  • Misses: CRMT (0.67), BMO (0.30), PLCE (0.22), BNS (0.08) of note.
  • Still to Report: None of note.


  • Positive Guidance: PANW, PLAB, ANF  of note.
  • Negative Guidance: NEWR, A, LSTR, ADI, PLCE of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: RTL +28%, URBN +13%, PLAB +10%, RETA +9%, LRMR +5%, DY +5% of note.
  • Gap Down: PTCT -18%, A -9%, PHAT -9%, NVTS -8%, GNL -7%, NEWR -6%, INTU -5% of note.

Insider ActionHRB sees Insider buying with dumb short selling.  CE BLFS 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 Story: Debt Limit Talks Stall as Time Runs Shorts to Avert US Default.  (Bloomberg)
  • Bloomberg  Most Shared Story: Ron DeSantis to Join Elon Musk on Twitter to Announce 2024 Presidential Run.  (Bloomberg)
  • Europe sinks the most in two months; Metals drop. Market Wrap. (Bloomberg)
  • Kohl’s (KSS) produces a surprise profit. (CNBC)
  • Urban Outfitters (URBN) shares spike as well after first-quarter earnings beat. (CNBC)
  • Abercrombie & Fitch (ANF) raises annual sales forecast, shares up 20%. (Reuters)
  • Mortgage demand drops again as rates move over 7%. (CNBC)
  • Netflix (NFLX) rolls out password crackdown. (CNBC)
  • Share Buybacks continue at a torrid pace, $600 billion, so far this year. (WSJ)

Moving Average Update:

  • Score pulls back to 57% from 85%.


  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing; The Vice President attends, 11:00 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:15 p.m. EDT
    • The President marks one year since the school shooting in Uvalde, Texas; The First Lady attends, 3:30 p.m. EDT


  • MBA Mortgage Applications 7:00 a.m. EDT
    • MBA Mortgage Applications: Composite: -4.6%, Purchase: -4.3%, ReFi: -5.4%
    • US MBA Mortgage Applications May 19: -4.6% (prev -5.7%) – US 30-Yr MBA Mortgage Rate May 19: 6.69% (prev 6.57%)
  • EIA Petroleum Report 10:30 a.m. EDT
  • The latest FOMC Minutes from the last meeting are due out at 2:00 p.m. EDT
  • The latest NYSE and NASDAQ Short Interest is due out after the close for the period of April 26th through May 10thDuring this period, the S&P 500 rose 2.01%.

Federal Reserve / Treasury Speakers:

  • Federal Reserve Bank of Dallas Lorie Logan 9:00 a.m. EDT

M&A Activity:

  • Atea Pharmaceuticals (AVIR) Confirms Receipt of Unsolicited Proposal from Tang Capital Partners’ Affiliate, Concentra Biosciences.
  • Hillenbrand (HI) to Acquire the Schenck Process Food and Performance Materials Business, a Global Provider of Processing Technologies and Systems.
  • Pyxis Oncology (PYXS) to Acquire Apexigen (APGN).
  • Ryan Specialty (RYAN) Signs Definitive Agreement To Acquire Socius Insurance.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • Barclays Gene Editing & Therapy Summit
    • B. Riley Institutional Investor Conference (05/24/23-05/25/23)
    • CIBC Technology & Innovation Conference
    • KBW Keefe, Bruyette & Woods Real Estate Finance & Technology Conference 2023
    • Santander LatAm Conference
    • Singular Research Spring Select Webinar
    • Stifel West Coast Bus Tour
    • TD Telecom & Media Conference
        • Previously posted and ongoing conferences:
          • Berenberg Conference USA 2023 (05/23/23-05/25/23)
          • Berenberg European Conference (05/23/23-05/24/23)
          • Oppenheimer 24th Annual Israeli Conference 2023 (05/21/23-05/23/23)
          • Gartner Marketing Symposium/Xpo
          • Goldman Sachs Eighth Annual Leveraged Finance and Credit Conference 2023 (05/22/23-05/24/23)
          • Jefferies Virtual Renewables & Clean Energy Conference 2023 (05/23/23-05/24/23)
          • JP Morgan 51st Annual TMT Global Technology Media and Communications Conference 2023 (05/22/23-05/24/23)
          • Morgan Stanley 8th Annual Sustainable Futures Conference 2023 (05/22/23-05/23/23)
          • UBS 24th Annual Financial Institutions Conference 2023 (05/23/23-05/24/23)
          • Wells Fargo Energy Conference (05/23/23-05/24/23)
          • Wolfe Research Transportation and Industrials Conf (05/23/23-05/25/23)

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:

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