QPI Note - 02/06/24: Futures Modestly Lower

Overnight Summary: The S&P 500 closed Monday lower by -0.32% at 4942.81 from Friday higher by 1.07% at 4958.61. The overnight high was hit at 4971.50 at 2:35 a.m. EST while the overnight low was hit at 4955.50 at 4:05 p.m. EST. The range overnight was 16 points as of 6:25 a.m. EST. The 10-day average of the overnight range is at 20.90 from 20.10.  The average for May-January average was 20.88 from 20.87 during May-November. Currently, the S&P 500 is lower by -1.75 points at 6:20 a.m. EST.

Executive Summary: We are quiet this week with economic data. However, Fedspeak is busy, see below. Earnings remain in focus as well.

• Federal Reserve Cleveland President Loretta Mester speaks, 12 p.m. EST

• Federal Reserve Minneapolis President Neel Kashkari speaks, 1:00 p.m. EST

• Federal Reserve Boston President Susan M. Collins speaks, 2:00 p.m. EST

• Federal Reserve Philadelphia President Patrick Harker speaks, 7:00 p.m. EST

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.

Earnings Out After The Close: 

• Beats: ALGT +0.52, SPG +0.36, SKY +0.18, VRTX +0.13, ACM +0.10, COHR +0.10, RMBS +0.08, AMKR +0.07, CBT +0.06, NXPI +0.06, FN +0.05, VRNS +0.04, KFRC +0.04, KRC +0.03, BRBR +0.03, CHX +0.01, HI +0.01  of note.

• Flat: CHGG +0.00, PLTR +0.00 of note.

• Misses: JJSF (0.26), SSD (0.21), CCK (0.19), SYM (0.04), GBDC (0.04), FMC (0.01) of note.

Capital Raises:

• Secondaries Priced:

  • HESM: Prices secondary offering 10.0 million shares of Class A stock for gross proceeds of $331 million.

• Notes Priced of note:

  • POST: Announces Pricing of Senior Secured Notes Offering.

  • SR: Prices $350 Million Debt Offering.

• Common Stock filings/Notes:

  • CRKN: FORM S-1 - 200,000,000 Shares.

  • FDMT: Has commenced an underwritten public offering of $250.0 million of shares of its common stock. (see Mixed Shelf)

  • LAES: FORM F-1 - 45,000,000 Ordinary Shares.

  • REVB: Announces Closing of $6.2 Million Public Offering.

  • RVSN: FORM F-3 - 8,885,503 Ordinary Shares.

• Mixed Shelf Offerings:

  • BREA: Filed Form F-3.. $100,000,000 Mixed Shelf.

  • CISS: FORM F-1 - 43,750,000 Mixed Shelf Offering.

  • FDMT: Files mixed shelf securities offering.

  • OCTO: FORM S-3 - $4,000,000 Mixed Shelf Offering.

• Debt/Credit Filing and Notes:

  • GSM: Announces the Full Redemption of its Remaining 9.375% Senior Secured Notes Due 2025.

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 Movers: 

  • UP: PLTR +16, COHR +7%, CHX +6%, VRNS +4%, PINC +4%

  • DOWN: SYM -19%, CCK -14%, FMC -13%, FN -12%, KE -10%, SSD -8%, RMBS -8%

• News Items After the Close:

  • Stocks making the biggest moves after hours: PLTR, NXPI, CHGG, VRTX, RMBS, SPG, ACM. CBT (CNBC)

  • Palantir’s (PLTR) stock surges nearly 20% as company rides AI wave to upbeat earnings, outlook. (MarketWatch)

  • Reddit Revenue Rises 20% Ahead of IPO, But It Isn’t Profitable Yet. (Bloomberg)

  • US expects to make chips funding awards in coming eight weeks. (Reuters)

  • NYCB’s Tense Talks With Watchdog Led to Moves That Rocked Market. (Bloomberg)

  • RTX receives subpoenas from the SEC relating to the co's disclosures in 2023 of issues arising from Pratt & Whitney's use of powder metal.

  • Primoris Services (PRIM) announces several awards with a combined value of approximately $1.1 bln secured by the Company’s Energy Segment.

• Exchange/Listing/Company Reorg and Personnel News:

  • Build-A-Bear Workshop (BBW) terminated the employment of Jennifer Kretchmar, Chief Digital and Merchandising Officer effective February 3, 2024.

  • Chegg (CHGG) appoints David Longo as CFO.

  • Globus Medical (GMED) announces the promotion of Keith Pfeil as chief operating officer and chief financial officer.

  • I-Mab (IMAB) appointed Mr. Joseph Skelton to serve as the Chief Financial Officer of the Company.

  • Kroger (KR) CFO Gary Millerchip is stepping down to fill role at another public company; Todd Foley, Chief Accounting Officer, named interim CFO.

  • Natura &Co (NTCO) exploring possible separation of Natura &Co Latam and Avon, resulting in two independent, publicly-traded companies.

  • Two Harbors Investment (TWO) announces that Mary Riskey intends to retire from her position as Vice President and Chief Financial Officer of the company.

• Buyback Announcements or News: 

  • ArcBest (ARCB) Buyback increased to $125 million.

  • ChampionX (CHX) increases share repurchase authorization to $1.5 billion (see dividend)

  • UBS to reinstate share repurchases in 2H24.

• Stock Splits or News: None of note.

• Dividends Announcements or News:

  • BP to commence share buyback of up to $1.75 billion.

  • ChampionX (CHX) raises dividend.

  • Golub Capital (GBDC) increased quarterly base distribution by over 5%.

  • Kforce (KFRC) increases quarterly dividend and repurchase plan.

  • Rexford Industrial Realty (REXR) increases quarterly common stock dividend to $0.4175 per share from $0.38 per share.

  • Tradeweb Markets (TW) raises quarterly dividend by 11.1%.

  • UFP Industries (UFPI) increases quarterly dividend to $0.33 per share from $0.30 per share.

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

S&P 500 -4, Dow Jones -39, NASDAQ +5, and Russell 2000 -8.  (as of 7:52 a.m. EST).  Asia is lower ex China and Europe is higher ex Germany this morning. VIX Futures are at 14 from 14.25 from this morning.  Gold and Silver lower with Copper higher this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas higher as well. US 10-year Treasury sees its yield at 4.154% from 4.094% from yesterday morning. The U.S. Dollar is higher versus the Euro, lower versus the Pound and higher against the Yen. Bitcoin is at $42,759 from $43,109 higher by +0.89% this morning.

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

• Daily Positive Sectors: Healthcare, Technology of note.

• Daily Negative Sectors: Basic Materials, Real Estate, Utilities, Consumer Cyclical, Industrials, Financial, Consumer Defensive, Energy of note.

The S&P 500 backed off its record high and bond yields jumped Monday after investors’ hopes for a Federal Reserve interest-rate cut next month were all but dashed.  The moves came after Fed Chair Jerome Powell indicated that central-bank officials aren’t in a rush to lower interest rates. Given recent economic strength, “we feel like we can approach the question of when to begin to reduce interest rates carefully,” Powell said during an interview broadcast on CBS’s “60 Minutes” on Sunday.  He also repeated his statement after last week’s Fed meeting that a cut in March wasn’t likely.  The S&P 500 fell 0.3% to kick off the week, and the Dow Jones Industrial Average was 0.7% lower after both closed at records on Friday. The Nasdaq Composite dropped 0.2%. (WSJ - edited by QPI)

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

• Tuesday After the Close:

• Wednesday Before the Open:

Earnings of Note This Morning:

• Beats: PDS +7.82, SPR +0.83, J +0.46, WTW +0.39, ATHM +0.27, ARCB +0.25, ULCC +0.23, IT +0.21, CRNC +0.20, LLY +0.19, MSGS +0.12, BP +0.11, GEHC +0.11, LIN +0.11, CHKP +0.10, PJT +0.08, KKR +0.08, WAT +0.07, AME +0.05, ARMK +0.04, NVT +0.04, FI +0.04, PNM +0.04, DCPH +0.04, CNC +0.03, XYL +0.03, HIMX +0.03, ENR +0.02, NJR +0.02, DD +0.02, SPOT +0.01 of note.

• Flat: VVV, TW of note.

• Misses: UBS (0.40), CMI (0.31), HTZ (0.31), AGCO (0.24), INGR (0.22), HLNE (0.21), LEA (0.09), ST (0.05), FSV (0.02) of note.

• Still to Report: CTS, SCSC, WFRD of note.

Company Earnings Guidance:

• Positive Guidance: AMG, COHR, ARMK, LLY, CARR, NJR, AGCO of note.

• Negative Guidance: ON, AMKR, KFRC, CHGG, VRNS, SPG, VRNS, CCK, KRC, HI, FMC, PINC, LIN, ST, DD, NVT, WAT, ENR, AME, CRNC of note.

Erlanger Research Advance/Decline Chart:  

Gap Ups & Down In Early Pre-Market:

• Gap Up: PLTR +17%, COHR +9%, VRNS +7%, CHX +6%, BP +5%, VLRS +5%, PINC +5%, AUDC +4% of note.

• Gap Down: SYM -18%, FMC -15%, CCK -13%, FN -12%, KE -10%, RMBS -10%, CHGG -7%, UFPI -7%, JJSF -7%, IRS -6%, AMKR -6% of note.

Insider Action: MKL, UPS sees Insider buying with dumb short selling.  ATXS 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.

• What You Need To Know To Start Your Day. (Bloomberg)

• 5 Things To Know Before the Stock Market Opens Today. (CNBC)

• Bloomberg Lead Story: Xi To Discuss Stocks With Regulators As Rescue Bets Build.(Bloomberg)

• Bloomberg Second  Most Shared Story: Blackstone may bid for L'Occitane with founder Reinold Geiger. (Bloomberg)

• Stocks, Bonds pause as Traders await more Fedspeak: Markets Wrap. (Bloomberg)

• Spotify (SPOT) beats forecast for subscriber growth and cut workforce significantly last year, stock up 5%. (Bloomberg)

• Eli Lilli (LLY) sees sales above Wall Street estimates as weight-loss drugs beat consensus, stock up 4.5%. (Bloomberg)

• Bloomberg: The Big Take: Investors have sky high hopes for AI. Can Tech Deliver? (Podcast)

• NY Times Daily: U.N. funding on hold as major donors have suspended funding, threatening (Podcast)

• NPR Marketplace: Hydropower could help renewable energy flow. (Podcast)

• Wealthion: Jim Rickards: Ukraine, China and Stock Market. (Podcast)

Podcasts are presented to provide interesting viewpoints on current issues. We do not necessarily support each viewpoint. They are more meant to get you thinking!

Moving Average Update: Score bumps down to 80% from 88%.

Geopolitical: 

• President’s Public Schedule:

  • The President receives the Presidential Daily Briefing, 10:00 a.m. EST

  • Press Briefing by Press Secretary Karine Jean-Pierre, 1:30 p.m. EST

  • The President and The First Lady host a reception in recognition of Black History Month; The President and The Vice President deliver remarks; The Second Gentleman attends, 5:30 p.m. EST

Economic: None of note.

Federal Reserve / Treasury Speakers: 

• Federal Reserve Cleveland President Loretta Mester speaks, 12 p.m. EST

• Federal Reserve Minneapolis President Neel Kashkari speaks, 1:00 p.m. EST

• Federal Reserve Boston President Susan M. Collins speaks, 2:00 p.m. EST

• Federal Reserve Philadelphia President Patrick Harker speaks, 7:00 p.m. EST

M&A Activity and News: 

• DNOW Inc. (DNOW) to acquire Whitco Supply in an all-cash transaction.

Meeting & Conferences of Note:

• Sellside Conferences:

  • Alliance Global Partners Virtual Technology Conference

• Investor/Analyst Day/Calls: ASM, BRAG, HBH, DOCM, OHT, TWST, BEN, DLB, ROK

• Company Event: NSTG

• Industry Meetings:

  • NIH HEAL Initiative Scientific Meeting

  • BIOUTAH Life Science Conference

    • Previously posted and ongoing conferences:

      • 121 Mining Investment Cape Town

Top Tier Sell-side Upgrades & Downgrades: