It was a rough session for markets on Wesdneday, with the S&P falling nearly 2% while the Nasdaq fell over 3% as the Fed Minutes painted a very hawkish picture. Asia markets dropped overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a mixed open, the Dollar, Yields, and Oil are higher while Gold is lower.
And this is what UPB is reading this morning: Thursday Morning Reads
It was rough session for markets, led by growth names and the Nasdaq, which tumbled the most since February of last year. Tech stocks were already under pressure heading into the release of the Fed minutes at 2pm... the minutes added to concerns of a hawkish turn from the Fed, where they are now looking to raise rates sooner than expected and work on clearing out the balance sheet. Yields rose and growth names tumbled. The list of names down 50% from their all-time highs is growing, the question is when does this end. Today would be a good start if some of these names like SNOW, ZS, NET, and even GOOGL can hold onto green by 11am or so. The VIX is also only at 20 right now, so certainly somewhat sanguine after yesterdays action. On the flip side, if yields keep heading higher, could see some names go to places one would think would be impossible only a few months ago.
DOGZ was a bright spot yesterday during the market carnage, nearly testing $9 before closing at $8.74. I am getting a little anxious of a big down day at some point so I may look to close my Jan calls today and revisit with later dated strikes. Do think this breaks $10 in the coming weeks and months:
I put a plan of attack for the last of my NET puts on the watchlist yesterday. Sure enough, NET spikes after the open to break above that $115 level so I locked the last of my puts in for over 600%. By the end of the day those puts were over 20 bags. Premiums make it tough to re-enter so won't be watching this one anymore this week.
It is possible names that have held up well may find themselves selling off. LRCX and AVGO are two names I will be watching today. Both are great stories in the hot semi-sector but if selling continues today, don't think it will matter...
LRCX maybe to $655 or so by tomorrow(if not lower):
And AVGO to $600 or so by tomorrow:
If the market does sell-off today and starts to bounce at 2pm, may look at some lotto calls into tomorrow- we will have a squeeze at some point even if it is just a dead count bounce.
That 50dma is looming once again on the SPY. 3rd time a charm for a break below or will it serve as a launching point?
Looks like we will find out soon enough. If we break that 50dma I may start skewing my bias for longer-term puts.
Here are the analyst changes of note for today:
| Snowflake price target lowered to $330 from $360 at Jefferies | |
| Jefferies analyst Brent Thill lowered the firm's price target on Snowflake to $330 from $360 and keeps a Hold rating on the shares as he adjusted his targets across the app, infrastructure and security software spaces. Software underperformed the S&P 500 by 15% in 2021 as overall valuations contracted 10%, noted Thill, who thinks multiples in the space will continue to compress in 2022 as 80% of software names are expected to decelerate with "digital digestion" happening coming out of the pandemic | |
| Palo Alto Networks price target raised to $650 from $615 at Jefferies | |
| Jefferies analyst Brent Thill raised the firm's price target on Palo Alto Networks to $650 from $615 and keeps a Buy rating on the shares as he adjusted his targets across the app, infrastructure and security software spaces. Software underperformed the S&P 500 by 15% in 2021 as overall valuations contracted 10%, noted Thill, who thinks multiples in the space will continue to compress in 2022 as 80% of software names are expected to decelerate with "digital digestion" happening coming out of the pandemic | |
| Datadog price target lowered to $200 from $230 at Jefferies | |
| Jefferies analyst Brent Thill lowered the firm's price target on Datadog to $200 from $230 and keeps a Buy rating on the shares as he adjusted his targets across the app, infrastructure and security software spaces. Software underperformed the S&P 500 by 15% in 2021 as overall valuations contracted 10%, noted Thill, who thinks multiples in the space will continue to compress in 2022 as 80% of software names are expected to decelerate with "digital digestion" happening coming out of the pandemic | |
| Atlassian price target lowered to $355 from $460 at Jefferies | |
| Jefferies analyst Brent Thill lowered the firm's price target on Atlassian to $355 from $460 and keeps a Hold rating on the shares as he adjusted his targets across the app, infrastructure and security software spaces. Software underperformed the S&P 500 by 15% in 2021 as overall valuations contracted 10%, noted Thill, who thinks multiples in the space will continue to compress in 2022 as 80% of software names are expected to decelerate with "digital digestion" happening coming out of the pandemic. | |
| 2U price target lowered to $40 from $55 at Jefferies | |
| Jefferies analyst Brent Thill lowered the firm's price target on 2U to $40 from $55 and keeps a Buy rating on the shares as he adjusted his targets across the app, infrastructure and security software spaces. Software underperformed the S&P 500 by 15% in 2021 as overall valuations contracted 10%, noted Thill, who thinks multiples in the space will continue to compress in 2022 as 80% of software names are expected to decelerate with "digital digestion" happening coming out of the pandemic | |
| Turtle Beach price target lowered to $34 from $41 at Oppenheimer | |
| Oppenheimer analyst Andrew Uerkwitz lowered the firm's price target on Turtle Beach to $34 from $41 and keeps an Outperform rating on the shares. The analyst notes Turtle Beach updated selected financials based on preliminary unaudited information. Fiscal 2021 sales are expected to be $365M, at the lower end of previously announced guidance of $365M-$380M. This implies Q4 sales of $108M, Uerkwitz adds. The analyst remains confident in management's ability to handle its own supply chain issues and expand non-headphone categories. However, near-term industry headwinds such as underperforming AAA games and console shortages compel him to lower near-term growth expectations | |
And here is what I am watching today: NOW, LRCX, PANW, AVGO, SPOT, TWLO, ZBRA.
Let's have a great day!
-JB