QPI Note - 12/07/23: Stocks Remain In Narrow Trading Range Overnight, 10-Year Yield Near Recent Lows

Overnight Summary:The S&P 500 closed Wednesday lower by -0.39% at 4549.34 from  Tuesday lower by -0.06% at 4567.18. The overnight high was hit at 4557.25 at 3:25 a.m. EST while the low was hit at 4548.75 at 4:25 a.m. EST. The range overnight was 9 points as of 6:25 a.m. EST. The 10-day average of the overnight range is at 15.60 from 16.40.  The average for May-October average was 22.06 from 20.96. Currently, the S&P 500 is unchanged at 6:25 a.m. EST.  

Executive Summary: Stocks in the S&P 500 continue to trade in a narrow range over the last 10 trading days, 4500 to 4600. Watch for a breakout above or below these two levels. The next two days could decide the direction as the market receives several datapoints on jobs. On a stock note, watch to see if AMD can breakout above $130 0n its latest chip win over Nvidia.

• Jobless Claims 8:30 a.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: GEF +0.26, SMTC +0.17, SPWH +0.11, BASE +0.10, VRNT +0.08, BRZE +0.08, GME +0.08, OXM +0.05, VEEV +0.05, AI +0.05 of note.

• Flat: None of note.

• Misses: AGX (0.46), CHPT (0.12), CHWY (0.02), CXM (0.01) of note.

Capital Raises:

• New SPACs launched/News:

  • 10X Capital Venture Acquisition Corp. II (VCXA) and African Agriculture, Inc. announce closing of business combination.

  • Edoc Acquisition Corp. (adoc) Announces Receipt of Notice from Nasdaq Regarding Late Filing of Quarterly Report on Form 10-Q.

• Secondaries Priced:

  • BECN: Announces Pricing of Secondary Offering of 5 Million Shares of Common Stock.

  • ETNB: Announces Upsized Pricing of $150.0 Million Public Offering of Common Stock and Pre-Funded Warrants. $150 million offering. 15.13 million shares at $9.25 per share.

  • HCI: Prices offering of 1.0 million shares of common stock at $78.00 per share.

  • RCAT: Pricing of Public Offering 16,000,000 shares @$0.50. (ThinkEquity Bookmanager)

  • WVE:  Prices $100 Million Public Offering of Ordinary Shares

  • ZVSA: Pricing of $5.0 Million Public Offering - 4,000,000 shares @$1.25.

• Notes Priced of note:

  • PFSI: Announces Upsizing and Pricing of Private Offering of $750 Million of Senior Notes.

• Common Stock filings/Notes:

  • ETNB: Commences $125 million public offering; subsequent buyback.

  • HCI: Announces proposed public offering of one million common stocks.

  • NKLA: Announces proposed offerings of $100 million of common stock and $200 million of Convertible Senior Notes due 2026.

  • PHIO: Announces Exercise of Warrants for $2.8 Million Gross Proceeds.

  • PHUN: Launches Proposed Public Offering of Securities. (Roth bookmanager)

  • RCAT: Proposed Public Offering of Common Stock. (ThinkEquity Bookmanager)

  • SHOT: Filed Form RW

  • UBX: Filed Form S-3.. 2,271,580 Shares of Common Stock

  • WVE: Proposed Public Offering of Ordinary Shares and Pre-Funded Warrants - $100 million in aggregate. (JPM and Leerink Bookmanagers)

• Selling Shareholders of note:

  • BECN: Announces secondary offering of 5 million shares of common stock by CD&R Boulder Holdings, an entity affiliated with Clayton, Dubilier & Rice.

  • CNM: Announces secondary offering of 15 million shares of its Class A common stock by certain selling stockholders.

  • PYCR: Offering of Common Stock by Selling Stockholder.. 5,000,000 shares. (Jefferies Underwriter)

  • SEAT: Files for 18,500,000 shares of common stock by selling shareholder .

• Debt/Credit Filing and Notes:

  • SCI: Filed Form S-3ASR.. Debt Securities.

• Convertible Offering & Notes Filed:

  • DDD: Enters into separate privately negotiated repurchase agreements with a limited number of holders of its 0% Convertible Senior Notes due 2026 to repurchase approximately $135 million aggregate principal amount of the Notes at a 26% discount to par value.

  • RGEN: Announces private convertible transaction of $600 million principal amount of 1.00% convertible senior notes due 2028 through exchange and new subscription agreements.

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: 

  • HPCO: +79% Expands Its Reach to India and Thailand

  • CERE: +16% AbbVie to Acquire Cerevel Therapeutics

  • SHOT: +13% Filed Form RW

  • NOGN: +11% Initiates Strategic Financial Restructuring

  • BRZA: +11% Earnings

  • VRNT: +10% Earnings

  • SMTC: +7% Earnings

  • WVE: -20% Proposed Public Offering of Ordinary Shares and Pre-Funded Warrants

  • NKLA: -18% Offering

  • CXM: -16% Earnings

  • SEAT: -14% Secondary Offering of Class A Common Stock

  • CHWY: -10% Earnings

  • AI: -8% Earnings

• News Items After the Close:

  • Stocks making the biggest moves after hours: CHWY, VRNT, GME, BRZE, CHPT (CNBC)

  • McDonald's (MCD) starting testing CosMc's, a new small-format, beverage-led concept. (Release) (WSJ)

  • GameStop (GME) stock slips after revenue miss, and Ryan Cohen eyes equity investments. (MarketWatch)

  • Chewy’s (CHWY) stock falls on revenue miss (MarketWatch)

  • ChargePoint’s (CHPT) stock dips on widening loss, revenue miss. (MarketWatch)

  • JPM DESK, on $WMT: “.. Gen merch is deflating in the 5-6% range (getting to the point where we were 2yrs ago). .. they are clearly going to use price to keep/gain volume. .. a greater focus on reducing prices is directionally negative for $KR, $DG / $DLTR, and packaged food.” (Carl Q)

  • W/ WTI <$70, buying related ETFs today. Either oil prices are correct (there is an economic demand problem) or equity markets are correct (there is no problem.) OPEC+ likely to be supportive at these levels w/ US likely to have interest in refilling the SPR. Dan Niles

• Exchange/Listing/Company Reorg and Personnel News:

  • Artivion (AORT) appoints Lance Berry as CFO, announces retirement of CFO Ashley Lee.

  • Beam Global (BEEM) Appoints Lisa Potok as Chief Financial Officer.

  • BHP Group (BHP) CFO and executive leadership team update; Vandita Pant has been appointed Chief Financial Officer.

  • Chewy (CHWY) appoints David Reeder as CFO.

  • CME Group (CME) Extends Employment Agreement for Chairman & Chief Executive Officer Terry Duffy through 2025.

  • COMPASS Pathways (CMPS) appoints Teri Loxam as Chief Financial Officer.

  • Easterly Government Properties (DEA) appoints co-founder Darrell Crate as CEO to advance mission-critical real estate strategy.  CEO William C. Trimble, III entered into a Transition and Separation Agreement.

  • Farfetch (FTCH) director J. Michael Evans resigned from the Board.

  • IES Holdings (IESC) promotes Matthew Simmes to the position of President and Chief Operating Officer of the Company.

  • Knightscope (KSCP) Announces CFO Transition, Focuses on Profitable Growth.

  • PTON - Chief Marketing officer resigns.

• Buyback Announcements or News:

  • Bristol Myers Squibb (BMY) Announces Additional $3 Billion Share Repurchase Authorization.

  • CPI Card Group (PMTS) announces share purchase agreement with majority shareholder Parallel49 equity ULC.

  • Northrop Grumman (NOC) Announces New $2.5 Billion Share Repurchase Authorization.

  • Option Care Health (OPCH) announces increase to its share repurchase authorization from $250 million to $500 million.

• Stock Splits or News:

  • Avalo (AVTX) Encourages Stockholders to Vote FOR the Reverse Stock Split.

• Dividends Announcements or News: 

  • Bristol-Myers Squibb (BMY) increases quarterly cash dividend 5.3% to $0.60 per share from $0.57 per share.

  • CME Group (CME) declared its annual variable dividend amounting to $5.25 per share.

  • Eastman Chemical (EMN) increases quarterly cash dividend to $0.81 per share from $0.79 per share.

  • Erie Indemnity (ERIE) increases its quarterly dividend 7.1% to $1.275 per share; 1.7% annual yield.

  • Sunstone Hotel (SHO) adds $0.06 to current Q4 dividend.

  • Trinity Industries (TRN) increases its quarterly dividend approximately 8% to $0.28 per share; 4.4% annual yield.

• Insider Sales Of Note: None of note.

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

S&P 500 +5, Dow Jones -34,  NASDAQ +52, and Russell 2000 -5.  (as of 8:13 a.m. EST).  Asia and  Europe are lower this morning. VIX Futures are at 13.85 from 13.60 this morning.  Gold, Silver and Copper higher this morning. WTI Crude Oil and Brent Crude Oil are higher with Natural Gas lower. US 10-year Treasury sees yields at 4.155% from 4.193% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and  the Yen. Bitcoin is at $43,307 from $43,956 lower by -1.46% this morning.

Sector Action –  

• Daily Positive Sectors: Utilities, Industrials of note.

• Daily Negative Sectors: Energy, Technology, Consumer Defensive, Communication Services, Financial, Real Estate  of note.

A rally in Treasurys intensified Wednesday, dragging yields on 10-year notes to the lowest level since August, while stocks turned lower.  Major indexes wavered between small gains and losses before ending the session around their lows of the day. The S&P 500 lost 0.4%, while the Dow Jones Industrial Average shed 70 points, or 0.2%. The tech-heavy Nasdaq Composite fell 0.6%.  The yield on the 10-year Treasury note slid to 4.121% after fresh data showed that U.S. private-sector hiring unexpectedly slowed in November. It is the latest piece of data showing that the economy is cooling, leading some traders to ramp up bets that the Federal Reserve is done raising interest rates and will cut them soon.  (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: CIEN +0.06, DG +0.04, GMS +0.04 of note.

Company Earnings Guidance:

• Positive Guidance: BRZE, VRNT, JBLU of note.

• Negative Guidance: SPWH, CHWY, SMTC, OXM, NAPA of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

• Gap Up: ASLE +15%, CERE +13%, SMTC +11%, VRNT +10%, BRZE +8%, MNOV +4% of note.

• Gap Down: CXM -25%, WVE -22%, NKLA -15%, NAPA -12%, SEAT -11%, ANIX -10%, CHWY -10%, AI -9%, SPWH -8%, GME -7%, AGX -6%, GEF -6%, ETNB -6%, CNM -4%, HCI -4% of note.

Insider Action: No stock sees Insider buying with dumb short selling.  HHH, PLSE 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.

• Stocks making the biggest moves premarket: AMD, DG, RIVN, TTWO, QTWO, CXM (CNBC)

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

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

• Bloomberg Lead Story: SpaceX valued at $175 billion in tender offer. (Bloomberg)

• Bloomberg Second Most Shared Story: JP Morgan CEO Jamie Dimon says he would shut down crypto if he had government control. (Bloomberg)

• Stocks and Bonds churn as Bank of Japan rattles traders: Market Wrap. (Bloomberg)

• Russian Oil drops under G-7 price cap at $60. (Bloomberg)

• Chinese exports get a small boost but not enough to shake the trade slump. (CNBC)

• Microsoft (MSFT) exec meets with Chinese government to discuss AI co-operation. (CNBC)

• Microsoft (MSFT) and Meta (META) will buy new AMD AI chip over Nvidia's. (CNBC)

• Amazon (AMZN) CEO Andy Jassy says consumers are trading down in quality to save on price. (CNBC)

• Bloomberg  Odd Lots:  China has made a chip breakthrough that has shocked the world. (Podcast)

• NPR Marketplace:  Data privacy fatigue. (Podcast)

• NY Times Daily:  Nikki Hailey's moment. (Podcast)

• BBC Global News Daily Podcast:  UN Chief warns of "humanitarian catastrophe" in Gaza. (Podcast)

• Wealthion: Housing market reality check: Are we facing a collapse? (Podcast)

Moving Average Update:

• Down to 68% from 80%.

Geopolitical: 

• President’s Public Schedule:

  • The President receives the Presidential Daily Briefing, 11:00 a.m. EST

  • Press Briefing by Press Secretary Karine Jean-Pierre and NSC Coordinator for Strategic Communications John Kirby, 1:00 p.m. EST

Economic:

• Challenger Job-Cut Report 7:30 a.m. EST

  • US Challenger Job Cuts (Y/Y) Nov: -40.8% (prev 8.8%)

• Jobless Claims 8:30 a.m. EST

• Wholesale Inventories 10:00 a.m. EST

• EIA natural Gas Report 10:30 a.m. EST

• Consumer Credit 3:00 P.m. EST

Federal Reserve / Treasury Speakers:  

• Blackout Period until December 12-13 meeting.

M&A Activity and News: 

• AbbVie (ABBV) confirms it will acquire Cerevel Therapeutics (CERE) for $45.00 per share in cash; total equity value of approximately $8.7 billion; to be accretive to EPS in 2030. (MarketWatch)

• Patria Investments (PAX) signs agreement to acquire Credit Suisse's real estate business in Brazil for ~$130 million.

Meeting & Conferences of Note:

• Sellside Conferences:

  • Benchmark Company's Discovery One-on-One Investor Conference

  • Goldman Sachs Global Automotive Conference

  • Jefferies Specialty Finance Crossover Summit

  • Singular Research Best of the Uncovered Conference

  • Truist Securities Gaming Lodging Leisure & Restaurants Summit

    • Previously posted and ongoing conferences:

      • Barclays Global Technology Conference

      • Roth Sustainability Private Capital Event

      • Sidoti December Small Cap Conference

      • Wolfe Research Small and Mid-Cap Conference

• Top Shareholder Meetings: BILL, BMRA, LRN, PTON, RDI, ZYME

• Investor/Analyst Day/Calls: ALEC, AXSM, BR, BXSL, DPZ, EW, GWRE, LOGI, MRNA, NTGR, WWD

• Industry Meetings:

  • AI Summit New York

  • ESMO Immuno-Oncology Annual Congress

    • Previously posted and ongoing conferences:

      • Emerging Growth Conference

      • San Antonio Breast Cancer Symposium

      • United Nations Climate Change Conference

Top Tier Sell-side Upgrades & Downgrades: