The Daily Ideas For June 29th: Stocks Up Modestly Overnight Despite More Fed Speak From Chairman Powell

Overnight Summary: The S&P 500 closed Wednesday at 4376.86 lower by -0.04% from Tuesday at 4378.41 higher by 1.15. Overnight ranges saw the high hit at 4433 at 6:20 a.m. EDT while the low was high at 4414.50 at 3:40 a.m. EDT. The range overnight was 19 points. The 10-day average of the overnight range is at 20 from 19.60.  The average for May was 21.63. Currently, the S&P 500 is higher by points and is up by % at 7:15 a.m. EDT.

Short Interest – Initial Review:   Top Increases for NYSE and NASDAQ Jumps in Shares Short.

Earnings Out After The Close: 

• Beats: WOR +0.84, MU +0.18, BB +0.12, FIZZ +0.01 of note
• Flat: None of note.
• Misses: FUL (0.11), CNXC (0.06) 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:
  • Savers Value Village™ (SVV) Announces Pricing of Initial Public Offering. (MarketWatch).  NYSE: Prices 18.75 million share IPO at $18.00 per share, above the $15.00-$17.00 expected range.
  • Kodiak Gas Services (KGS) IPO prices below earlier range. (MarketWatch).  NYSE: prices 16.0 million share IPO at $16.00 per share, below the $$19.00-$22.00 expected range.
• New SPACs launched/News:
  • Freedom Acquisition I Corp. (FACT) merger partner Complete Solaria appointed T.J. Rodgers Executive Chairman.
  • LF Capital Acquisition Corp. II (LFAC) Announces Approval of Proposal and Amendment to Charter.
  • Vision Sensing Acquisition Corp. (VSAC) Announces Intention to Extend Period to Consummate Initial Business Combination to August 3, 2023.
• Secondaries Priced:
  • CRMD: Announces Pricing of $40 Million Public Offering of Common Stock and Pre-Funded Warrants.
  • FLEX: Announces Pricing of Offering of Class A Common Stock.
• Notes Priced of note: None of note.
• Common Stock filings/Notes:
  • BDTX: Proposed Public Offering of Common Stock.. $75Million in shares. (Piper Bookmanager)
  • BXRX: Filed Form S-3.. 785,402 Shares of Common Stock.
  • CRMD: Proposed Public Offering of Common Stock and Pre-Funded Warrants. (RBC, Truist and JMP Bookmanagers)
  • LODE: Filed Form S-3..1,805,620 Shares of Common Stock.
  • LYRA: Form S-3.. 21,967,353 Shares Common Stock.
  • MYNZ: Secures up to $50M in New Funding.
  • STRM: Form S-3.. proposed resale from time to time of up to 394,127 shares of our common stock.
  • ZIVO: Form RW Filed.
• Direct Offering: None of note.
• Selling Shareholders of note:
  • NVGS: Form F-3 Filed ..Up to 42,558,858 Shares of Common Stock Offered by the Selling Shareholders.
• Private Placement of Public Entity (PIPE):
  • JOBY: Welcomes $100 Million Investment as It Expands Partnership With SK Telecom.
• Mixed Shelf Offerings:
  • ADTX: Filed Form S-1.. Mixed Shelf.
  • BITF: Filed Form F-10.. US$375,000,000 Mixed Shelf.
  • GSIT: Files for $100 million mixed shelf securities offering.
  • LEU: Filed Form S-3.. $200,000,000 Mixed Shelf.
  • URG: Filed Form S-3.. $175,000,000 Mixed Shelf.
• Debt/Credit Filing and Notes:
  • ADC: Announces $350 Million 5.5-Year Term Loan.
  • MEC: announces upsized $250 million credit facility.
  • SWKH: Announces New Credit Facility with $45 Million Committed at Close.
  • TRN: Announces Pricing of Senior Notes Offering.
• Tender Offer:
  • KEYS: Entry Into Exclusive Negotiations Between Keysight and ESI Group’s Main Shareholders to Acquire a Controlling Block Followed by the Launching of a Mandatory Cash Tender Offer.
• 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: BB +8%, OSTK +5%of note.
  • Trading Down: CRMD -18%, BDTX -11%, LOCO -7%, CNXC -6%, SENEA -5%, GIST -5%, URG -4% of note.
• News After The Close:
  • Federal Reserve says 23 biggest banks weathered severe recession scenario in stress test. (CNBC)
  • Big News Publishers Look to Team Up to Address Impact of AI. (WSJ)
  • Micron (MU) CEO calls bottom in memory-chip market, but weak PC, smartphone forecasts cut into expected AI gains (MarketWatch)
  • BlackBerry (BB) shares rally after results top expectations. (MarketWatch)
  • American Outdoor Brands (AOUT) stock rallies 8% after surprise profit for company. (MarketWatch)
  • US Treasury Secretary Yellen: Monitoring Commercial Real Estate Sector Very Closely – Expects Some Losses To Banks From Changes In Commercial Real Estate.
  • Overstock (OSTK) could become ‘Bed Bath & Beyond’ (BBBYQ) after snapping up bankrupt chain’s website, loyalty program. (MarketWatch) (Conference Call)
  • Transocean Ltd. (RIG) Announces $184 Million Award for Harsh Environment Semisubmersible.
  • Raytheon Technologies (RTX) awarded $625 million U.S. Air Force contract.
• Exchange/Listing/Company Reorg and Personnel News:
  • Index Changes:
    • Fortrea Holdings (FTRE) will replace Seneca Foods (SENEA) in the S&P SmallCap 600.S&P 500 constituent Laboratory Corporation (LH) is spinning off Fortrea Holdings in a transaction expected to be completed on July 3.
    • PHINIA (PHIN) will replace El Pollo Loco Holdings (LOCO) in the S&P SmallCap 600.S&P 500 constituent BorgWarner (BWA) is spinning off PHINIA in a transaction expected to be completed on July 5.
  • Babylon (BBLN) Proceeds With Previously Announced Transaction and Announces the Receipt of Continued Listing Standards Notice from NYSE and Upcoming Delisting.
  • Carriage Services (CSV): Board has initiated a process to explore potential strategic alternatives.
  • DTE Energy (DTE) appointed Joi M. Harris as President and Chief Operating Officer of the Company.
  • Elme Communities (ELME) appoints Tiffany Butcher as EVP and COO.
  • Franklin Covey (FC) discloses elimination of executive chairman position.
  • IronNet (IRNT) Announces Receipt of Notification Letter from NYSE.
  • Lumos Pharma (LUMO) Announces Departure of Chief Medical Officer.
  • MKC: Brendan Foley promoted to McCormick Chief Executive Officer; Lawrence Kurzius to continue as Executive Chairman of the Board. (MarketWatch)
  • NeuroPace (NPCE) Announces CEO Transition.
  • PAVmed (PAVM) Receives 180-Day Extension to Regain Compliance with Nasdaq Minimum Bid Price Requirement.
  • Rallybio (RLYB) announces that Stephen Uden, M.D., Rallybio’s President, Chief Operating Officer and Co-Founder has been appointed to the role of Chief Executive Officer.
  • TScan Therapeutics (TCRX) Announces Transition of Chief Financial Officer.
  • Tidewater (TDW) appoints Dick Fagerstal as non-executive Chairman of the Board; the Board reduced the size of the Board from nine to eight members.
  • WisdomTree (WT) appointed Win Neuger to serve as Chair of the Board.
• Buyback Announcements or News:
  • Ashland (ASH) announces new $1 billion evergreen share repurchase authorization.
  • LightInTheBox (LITB) Announces a $10 million Share Repurchase Program.
  • Tuya Inc. (TUYA) Announces US$50 Million Share Repurchase Program.
• Stock Splits or News:
  • ANY trading r/s price.
  • MRAI trading r/s price.
• Dividends Announcements or News:
  • Greenbrier (GBX) increases quarterly dividend by 11% to $0.30 per share.
  • ParkeBancorp, Inc. (PKBK) announces cash dividend.
  • Worthington (WOR) increases quarterly dividend 3% to $0.32 per share.
• Insider Sales Of Note: GMS CEO $2 million, ABNB CTO $680k, CSGP CTO $8 million, UBER CEO $4.5  million

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

S&P 500 +13, Dow Jones +96,  NASDAQ +55, and Russell 2000 +7. (as of 7:55 a.m. EDT).  Asia is lower ex the Nikkei and Europe is higher ex the FTSE. VIX Futures are at 15 from 15.45 yesterday.  Gold, Silver and Copper lower this morning for a second day in a row. WTI Crude Oil and Brent Crude Oil higher with Natural Gas lower. US 10-year Treasury sees yields at 3.749% from 3.739% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $30,725 from $30,345 from yesterday, higher by 2.12%.

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

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

Stocks wavered. The Dow Industrials were off 0.2%, or less than 100 points. The S&P 500 edged lower, while the tech-focused Nasdaq Composite rose 0.3%.  Yields on U.S. government bonds moved lower. The yield on the benchmark 10-year Treasury note declined to 3.711%, from 3.767% Tuesday.  Bitcoin’s rally appeared to be slowing, with the cryptocurrency declining nearly 2% over the past 24 hours, according to CoinDesk. It remained above $30,000 however.  Apple (AAPL) stock, which finished Tuesday at a record high, again crept higher. Tesla’s (TSLA) stock rose as investors awaited second-quarter deliveries numbers.  (WSJ – edited by QPI)

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: RAD +0.77, GBX +0.42, SMPL +0.04, AYI +0.03, MKC +0.02 of note.
• Flat: None of note.
• Misses: LNN (0.61), MSM (0.01) of note.
• Still to Report: PAYX of note.

Guidance:

• Positive Guidance: UNF, GBX of note.
• Negative Guidance: MU, FUL, CNXC, ASH of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

• Gap Up: BB +15%, OSTK +11%, FC +6%, MU +4%, WOR +4% of note.
• Gap Down: BTAI -31%, CRMD -20%, BDTX -9%, CNXC -7%, ALVO -6%, LOCO -5%, SENEA -5%, ASH -4% of note.

Insider Action: OXY, MLTX 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.

• Five Things You Need to Know to Start Your Day. (Bloomberg)
• 5 Things To Know Before You Start Your Thursday. (CNBC)
• Bloomberg Lead Story: Powell Says Likely Need Two or More Hikes to Cool Inflation. (Bloomberg)
• Bloomberg  Most Shared Story: Biden Has Begun Using CPAP Machine to Aid With Sleep Apnea. (Bloomberg)
• Stocks Gain As Upbeat Earnings Offset Policy Hawks: Market Wrap. (Bloomberg)
• Federal Reserve Chairman Powell notes that SVB Failure calls for tougher bank rules. (Yahoo Finance)
• Justice Department charges 78 in $2.5 billion healthcare fraud. (CNBC)
• UPS Teamsters said a nationwide strike is imminent if a Friday deadline is not hit. (The Hill)
• FTC to target Amazon (AMZN) marketplace in an antitrust suit. (Bloomberg)
• McCormick (MKC) beat profit expectations and lifts its full-year outlook while sales were a bit light. (MarketWatch)
• Berkshire Hathaway (BRKA) ups stake in Occidental Petroleum (OXY) to over 25%. (MarketWatch)

Moving Average Update:

• Score inches up to 88% from 85%.

Geopolitical: 

• President’s Public Schedule:
  • The President departs the White House en route to Joint Base Andrews and New York, 12:45 p.m. EDT
  • The President joins Nicolle Wallace of MSNBC for a live interview, 4:00 p.m. EDT
  • The President participates in a campaign reception, 5:30 p.m. EDT
  • The President participates in a campaign reception, 7:40 p.m. EDT
  • The President departs New York, New York en route to Queens, New York and White House, 9:05 p.m. EDT

Economic:

• Q1 GDP (third estimate) is due out at 8:30 a.m. EDT and is expected to remain at 1.30%.
• Initial Jobless Claims 8:30 a.m. EDT
• Corporate Profits 8:30 a.m. EDT
• May Pending Home Sales is due out at 10:00 a.m. EDT and is expected to come in at -0.8% from 0.0%.
• EIA Natural Gas Report 10:30 a.m. EDT

Federal Reserve / Treasury Speakers:

• Federal Reserve Chair Jerome Powell 2:30 a.m. EDT
  • Overall, US Bank Sector Is Strong And Resilient.
  • Powell Says Bank Failures Underscore Need For Stronger Regulation, Supervision. (WSJ)
  • There Is A Valuation Adjustment Going On In Commercial Real Estate In The U.S.
  • Expects Moderate Pace Of Interest Rate Decisions To Continue.
• Federal Reserve Atlanta President Raphael Bostic 3:20 a.m. EDT
  • We’ve only been in restrictive territory for 8-10 months and are just at the beginning stage of what tightening should look like.
  • Says I’m looking for more signs that a slowdown is happening in the next several months.
  • Says I don’t see as much urgency to move as stated by others, including my chair.

M&A Activity:

• Lilly (LLY) to acquire Sigilon Therapeutics (SGTX) for a purchase price of $14.92 per share in cash + CVR
• Overstock (OSTK) Acquires Bed Bath & Beyond Brand and Other Intellectual Property.
• Visa (V) to Acquire Pismo.

Meeting & Conferences of Note:

• Sellside Conferences:
  • Morgan Stanley 2nd Annual Biotechnology AI Summit 2023
  • Stifel Europe, European Healthcare Summit (06/29/23-06/30/23)
  • TD Cowen Off-Price Retail Bus Tour
    • Previously posted and ongoing conferences:
      • Nareit REITworks Conference

• Top Shareholder Meetings: HUGE, QFIN, QOMO
• Fireside Chat: SIDU
• Investor/Analyst Day/Calls: ALDX, AVDL, EIGR, GMDA, MMAT, OSTK, SNY, TEF
• Update: None of note.
• R&D Day: None of note.
• Company Event:
  • Snowflake (SNOW) Summit 2023 (06/26/23-06/29/23)
• Industry Meetings:
  • Semicon China 2023 (06/29/23-07/01/23)
  • Parent Project Muscular Dystrophy (PPMD) Annual Conference 2023 (06/29/23-07/01/23)
  • 1st Annual Spinal Cord Injury Investor Symposium (SCIIS)
  • Texas Digital Government Summit 2023
  • 2023 Annual Cure SMA Conference (06/29/23-07/02/23)
    • Previously posted and ongoing conferences:
      • 2023 NIIMBL National Meeting (06/27/23-06/29/23)
      • Laser World of Photonics 2023 (06/27/23-06/30/23)
      • 49th Annual Power Sources Conference (06/27/23-06/30/23)
      • European Pharmaceutical Market Research Association (EPHMRA) Annual Conference 2023 (06/27/23-06/29/23)
      • Modern Day Marine Expo 2023 (06/27/23-06/29/23)
      • American Hotel & Lodging Association (AHLA) The Hospitality Show 2023 (06/27/23-06/29/23)
      • Drug Information Association (DIA) Global Annual Meeting 2023 (06/25/23-06/29/23)
      • American Society for Metabolic and Bariatric Surgery (ASMBS) Annual Meeting 2023 (06/25/23-06/29/23)
      • Hospitality Industry Technology Exposition & Conference (HITEC) 2023 (06/26/23-06/29/23)
      • ESMO World Congress on Gastrointestinal Cancer (ESMO GI) 2023 (06/28/23-07/01/23)
      • United Mitochondrial Medicine Symposium (UMDF) 2023 (06/28/23-07/01/23)
      • NATO Chemical, Biological, Radiological & Nuclear Medical Symposium 2023 (06/28/23-06/30/23)

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: