The Daily Briefing For May 31st: Stocks Lower As House Vote Nears Later Today On Debt Ceiling

by Geoff Garbacz | 05/31/2023 8:34 AM

Rebel Yell Morning Market Report

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The Daily Briefing For May 31st: Stocks Lower As House Vote Nears Later Today On Debt Ceiling

Overnight Summary: The S&P 500 closed Tuesday at 4205.52 basically unchanged from Friday at 4205.45 higher by 1.30%. The overnight high of 4217.50 was hit at 7:50 a.m. EDT. The low was hit at 4194.50 at 2:15 a.m. EDT, a range of ~23 points high to low which is a mid-vol night.  At 7:55 a.m. EDT, the current price was 4198 which is -0.40% and -17 points. The 10-day average of the overnight range is 20.90 from 20.20.

Earnings Out After The Close: 

  • Beats: AMBA +0.05, BOX +0.05, HPQ +0.04, HPE +0.03 of note
  • Flat: None of note.
  • Misses: SPWH (0.02) 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:
    • ATMU: Announces Closing of Initial Public Offering.
  • New SPACs launched/News:
    • Atlantic Coastal Acquisition Corp. (ACAB) Receives Notification of Deficiency from Nasdaq Related to Delayed Quarterly Report on Form 10-Q.
    • Crown PropTech Acquisitions (CPTK) Announces Receipt of Notice of Late Filing From NYSE.
    • The SCHMID GROUP to List on NYSE through Business Combination with Pegasus Digital Mobility Acquisition Corp (PGSS).
  • Secondaries Priced:
    • ASLE: Prices secondary offering of 4.0 million shares of common stock by selling shareholders.
    • BLTE: 2 Million shares offering priced at $15 per ADS.
    • FMX: Announces the pricing of the offering of shares of Heineken N.V. (HEINY) and Heineken Holding N.V.
    • HRZN: Prices offering of 3.25 million shares of common stock at $12.50 per share.
    • TCRX: Priced $140 million public offering
  • Notes Priced of note:
    • AER: Announces Pricing of $1 Billion Aggregate Principal Amount of Senior Notes.
  • Common Stock filings/Notes:
    • BLTE: Announces Proposed Underwritten Public Offering of American Depositary Shares and Warrants.
    • FGF: Announces Pricing of Public Offering.
    • HRZN: Announces proposed offering of 3.25 million shares of common stock.
    • RXRX: Filed Form S-3ASR.. Up to 5,904,827 Shares of Class A Common Stock Issuable Upon Exchange of Exchangeable Shares.
    • WISA: Filed Form S-1.. Up to 2,972,264 Shares of Common Stock Issuable Upon Exercise of Certain Common Stock Purchase Warrants.
  • Direct Offering:
    • NAAS: Announces US$21 Million of Registered Direct Offering to Certain Investors.
  • Selling Shareholders of note:
    • ASLE: Announces Secondary Offering of Common Stock. Certain of its stockholders, including affiliates of Leonard Green & Partners, L.P. intend to offer for sale in an underwritten secondary offering 4 million shares of common stock.
    • BIOX: Files for 14,759 ordinary share offering by selling shareholders.
  • Private Placement of Public Entity (PIPE):
    • CYBN: Announces US$30 million Common Stock Purchase Agreement from Lincoln Park Capital Fund.
  • Mixed Shelf Offerings:
    • APDN: Filed Form S-3.. $75,000,000 Mixed Shelf.
    • DLHC: Files for $100 million mixed securities shelf offering.
    • XOS: Filed Form S-3.. $100,000,000 Mixed Shelf.
  • 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: LL +18% of note.
    • Trading Down: BLTE -38%, PEPG -18%, AMBA -13%, ASLE -8%, LTRX -7%, SPWH -7%, HPE -7%, HRZN -6%, EGO -5%, HPQ -4% of note.
  • News After The Close:
    • Boeing (BA) boosts 787 Dreamliner production rate to four a month. (Reuters)
    • Twilio (TWLO), Set to Lose Supervoting Protection Next Month, Has Been Meeting With Activists. (TheInformation)
    • Former Wells Fargo (WFC) Senior Executive Carrie Tolstedt Agrees to Settle SEC Fraud Charges for Misleading Investors About Abusive Sales Practices to Inflate a Key Performance Metric. (SECRelease) (MarketWatch)
    • Former Coinbase (COIN) Manager and His Brother Agree to Settle Insider Trading Charges Relating to Crypto Asset Securities. (SECRelease) (WSJ)
    • Great Lakes Dredge & Dock (GLDD) awarded a $157 million US Army contract.
    • CAE awarded US$455 Million subcontract for U.S. Army Flight School Training Support Services.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Aceragen, Inc. (ACGN) Receives Nasdaq Notice Regarding Delayed Form 10-Q Filing.
    • Air Industries Group (AIRI) Receives Notice from NYSE American Regarding Late Filing of Quarterly Report on Form 10-Q.
    • Alpine 4 Holdings (ALPP) Announces Receipt of Nasdaq Notice of Additional Staff Determination.
    • Bumble Inc. (BMBL) reports in a filing that Tariq Shaukat, President of the company, notified the company of his decision to resign, effective September 1, 2023.
    • CANO: Concerned Shareholders of Cano Health Issue Presentation to Underscore the Urgent Need for Changes in Leadership and Strategy Following Massive Value Destruction at the Company.
    • GE HealthCare Technologies Inc. (GEHC) to Join the Nasdaq-100 Index® Beginning June 7, 2023
    • Immersion (IMMR) CFO Aaron Akerman will step down upon the appointment of a successor and will depart from the co, effective August 11; co names Michael Dodson as new CFO.
    • Lantronix (LTRX) Announces CEO Transition and Continuity Plan.
    • MariaDB (MRDB) Announces New Management Appointments.
    • Mawson Infrastructure Group (MIGI) Set to Join Russell Microcap® Index.
    • Nortech Systems (NSYS) Announces the Departure of Christopher D. Jones as CFO & Senior Vice President of Finance.
    • Omnicell (OMCL) Announces Leadership and Organizational Changes.
    • PINS: Julia Brau Donnelly to join Pinterest as Chief Financial Officer. (MarketWatch)
    • Primo Water (PRMW) Announces CEO Retirement and Transition Plan.
    • Prudential Plc (PUK) CFO resigns; appoints Ben Bulmer as CFO.
    • Ra Medical Systems (RMED) Receives Notice from NYSE American Regarding Late Filing of Quarterly Report on Form 10-Q.
    • Semtech (SMTC) Empowers Future Growth With Industry Trailblazer Paul H. Pickle As President And Chief Executive Officer.  He will be leaving Lantronix (LTRX).
    • United Airlines (UAL) CFO Gerry Laderman to retire in 2024.
    • Vera Bradley (VRA) Set to Rejoin Russell 3000® Index.
    • VerifyMe (VRME) Appoints new Chief Executive Officer.
    • Wolverine Worldwide (WWW) Announces New Leadership Appointments to Drive Future Growth.
  • Buyback Announcements or News:
    • Sharecare (SHCR) announces $50 million share repurchase program.
    • Taboola (TBLA): Israeli court approves motion to extend share buyback date.
  • Stock Splits or News:
    • Panbela (PBLA) Announces 1-for-30 Reverse Stock Split Effective June 1, 2023.
  • Dividends Announcements or News:
    • ChipMOS TECHNOLOGIES (IMOS) shareholders have approved a cash dividend distribution of approximately US$1.50 per ADS.
    • D Goes ex div tomorrow for $0.6675.
    • GPC Goes ex div tomorrow for $0.95.

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

S&P 500 -16, Dow Jones -82,  NASDAQ -46, and Russell 2000 -10. (as of 7:59 a.m. EDT).  Asia and Europe is lower. VIX Futures are at 19.05 from 18.85 yesterday.  Gold lower with Silver higher and Copper lower from yesterday. WTI Crude Oil and Brent Crude Oil lower with Natural Gas lower as well. US 10-year Treasury sees yields at 3.65% from 3.727% yesterday. The U.S. Dollar is higher versus the Euro, higher versus the Pound and higher against the Yen. Bitcoin is at $27,086 from $27,961.20 yesterday, lower by -2.61%.

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

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

Tech stocks kept ticking higher and Treasury yields declined Tuesday following a tentative deal over the weekend to raise the U.S. debt ceiling.  Investors are waiting to see if the agreement reached by President Biden and House Speaker Kevin McCarthy can be implemented by June 5, next Monday, after which Treasury Secretary Janet Yellen said the U.S. would be unable to pay all of its bills on time.   The yield on the benchmark 10-year Treasury note reversed course after climbing into the weekend. It ended Tuesday at 3.697%, down from 3.820% at the previous close. The yield on one-month Treasury bills dropped to 5.224%, from 5.496% before the debt deal.  Stocks were mostly higher. Enthusiasm for companies involved with artificial-intelligence (AI) and the ongoing flight to the market’s biggest tech stocks lifted the Nasdaq Composite, which rose 0.3%. The S&P 500 inched up less than 0.1%. The blue-chip Dow Jones Industrial Average gave up about 51 points, or 0.1%. (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: CPRI +0.03, DCI +0.02 of note.
  • Flat: None of note.
  • Misses: AAP (1.84), FRO (0.08) of note.
  • Still to Report: CAE of note.


  • Positive Guidance: BOX, AAL of note.
  • Negative Guidance: AMBA, HPE, AAP of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: LL +21%, CCO +5%, CPRI +4%  of note.
  • Gap Down: BLTE -37%, AAP -25%, AMBA -17%, PEPG -16%, ASLE -9%, HRZN -8%, HPE -8%, SPWH -8%, LTRX -7%, FRO -5%, EGO -5%, HPQ -5%, PUK -4% of note.

Insider ActionJKHY, OXY, HI sees Insider buying with dumb short selling. HHC, INVA 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 StoryDebt Limit Deal Heads to House After Clearing A Key Committee Vote.  (Bloomberg)
  • Bloomberg  Most Shared Story: A Cross Country Road Trip Where Its Always 70 Degrees. (Bloomberg)
  • Stocks Waver on China Economy Worries; Bonds Gain: Market Wrap(Bloomberg)
  • JP Morgan CEO Jamie Dimon hints at life after JP Morgan, public office? (Bloomberg)
  • Dimon calls for Washington-Beijing engagement during his visit. (CNBC)
  • Commodity Crash Signals Disinflation is Taking Hold For N0w. (Bloomberg)
  • Mortgage demand drops to lowest level in three months. (CNBC)
  • Advance Autoparts (AAP) plunges 20% after earnings miss. (MarketWatch)
  • Capri (CPRI) up 4.4% in pre-market as beats on earnings but misses on sales. (MarketWatch)

Moving Average Update:

  • Score levels off at 71% from 74%.


  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:00 a.m. EDT
    • The President meets with leaders of his federal emergency preparedness and response team to receive the annual briefing on extreme weather preparedness, 12:00 p.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre and NSC Coordinator for Strategic Communications John Kirby, 1:30 p.m. EDT
    • The President departs the White House en route to Joint Base Andrews, 4:15 p.m. EDT
    • The President departs Joint Base Andrews en route to Colorado Springs, Colorado, 4:35 p.m. EDT
    • The President arrives in Colorado Springs, Colorado, 7:40 p.m. EDT


  • MBA Mortgage Applications 7:00 a.m. EDT
    • U.S. MBA Mortgage Applications (Wow) Actual: -3.7% Vs -4.6% Previous
    • MBA Mortgage Applications: Composite: -3.7%, Purchase: -2.5%, ReFi: -6.9%
    • US Average 30-year Mortgage Rate Rises 22 Bps To 6.91 Pct In May 26 Week
  • Redbook Sales 8:55 a.m. EDT
  • May Chicago PMI is due out at 8:30 a.m. EDT and is expected to fall to 46.1 from 48.60.
  • JOLTS 10:00 a.m. EDT
  • The latest Federal Reserve Beige Book is due out at 2:00 p.m. EDT
  • Farm Prices 3:00 p.m. EDT
  • API Crude Oil Data 4:30 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve Board of Governors Michelle Bowman 8:50 a.m. EDT
  • Federal Reserve Boston President Susan M. Collins 8:50 a.m. EDT
  • Federal Reserve Boston President Susan M. Collins 12:20 p.m. EDT
  • Federal Reserve Philadelphia President Patrick Harker 12:30 p.m. EDT
  • Federal Reserve Board of Governors Philip N. Jefferson 1:30 p.m. EDT

M&A Activity:

  • Bowlero Corp. (BOWL) to Acquire Lucky Strike.
  • Eastman Kodak (KODK) announces acquisition of Graphic Systems Services Inc.
  • LL Flooring (LL) Confirms Receipt of Unsolicited, Non-Binding Proposal from Cabinets To Go, Subsidiary of F9 Brands, Inc.
  • MEI Pharma (MEIP) Confirms Receipt of Unsolicited Acquisition Proposal.

Meeting & Conferences of Note:

  • Sellside Conferences:

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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