Markets soared on Tuesday, with the S&P closing up over 3% and is now up nearly 6% to start the week and the 4th quarter. It's the best start to a quarter in nearly a century. Asia markets rallied overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a lower open, the Dollar, Yields, and Oil are higher while Gold is lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-113/
Stocks rallied on Tuesday, continuing Monday's surge, with no real catalyst to speak of. Bears are saying this is nothing more than another bear market bounce before the next leg down. It is hard to argue against that, and maybe it is, but this rally has been strong and broad based. Q4 Earnings kicks off next week, so could provider the next catalyst without another Fed meeting until November. That $380 handle on the SPY will likely provide some resistance if we bounce today and tomorrow. As I have been saying for months, will be looking for mostly call opportunities for bounces as opposed to trying to chase puts with premiums high:
I was able to close most of my ROKU and PTON calls for nice profits yesterday.
ROKU closed back over $60 and would not be surprised to see a move near $70 in the coming days. I may actually look to add some more calls into next week today:
PTON is up over 25% so far this week. Still think PTON is a great story and possible buyout target at some point. I was able to close some of my calls for next week for 300% and will hold the rest for a possible move back over $10 using the $8 handle as a stop. Just like ROKU, I may look at some other later dated calls:
It has just been plain old nasty with APRN the last few days, even with the market rallying. The stock is getting slammed by sellers and shorts on news of another round of possible dilution. The stock trades like it is going bankrupt... I just don't agree. Not adding anything yet but will look for opportunities for some leap calls in the coming days:
WING, EVH, and BJ had some nice sessions yesterday. Need some continuation today for my calls to come back to life.
It was a huge day for TWLO closing up over 11% yesterday while SPOT closed up over 6%. Likely won't chase TWLO but may look at SPOT(like I always do) for some calls to play for a move back over $100. Folks won't stop listening to music and/or podcasts in a recession:
Here are the analyst changes of note for today:
Chemours downgraded to Hold from Buy at Argus |
| Argus analyst David Coleman downgraded Chemours to Hold from Buy. The analyst is citing the pressure faced by the company from weaker economic conditions, rising input costs, and declining demand for titanium dioxide, which accounts for over 50% of its business. Coleman adds that based on the recent volume and margin trends, along with the management's revised EBITDA guidance on September 21, he is cutting his 2022 EPS estimate to $5.20 from $5.65 and his 2023 estimate to $5.28 from $5.58 |
| Etsy price target raised to $125 from $105 at Guggenheim |
| Guggenheim analyst Steven Forbes raised the firm's price target on Etsy to $125 from $105 and keeps a Buy rating on the shares after having just assumed coverage of the stock. Though three-year GMS growth trends appear to be stabilizing, the implied CAGR remains well-above management's historical target range of 16-20%, Forbes tells investors. He is taking "a more conservative approach" to 2023 expectations, but sees significant out-year growth potential and upside to management's 30%-plus adjusted EBITDA margin target, the analyst added |
Hasbro price target lowered to $95 from $100 at Jefferies |
| Jefferies analyst Stephanie Wissink lowered the firm's price target on Hasbro to $95 from $100 and keeps a Buy rating on the shares after the company provided a long-term outlook with targets through 2027 following a nine-month strategic review. Her lower target following the event reflects Hasbro's guidance for Q3 sales to be down 15% and its FY22 guidance for "flat to slightly down" constant currency growth and also reflects market multiple compression, Wissink noted. With operating discipline strengthened with $300M of identified cost savings and the "bad news out," the stock is now linked to plan execution, Wissink added |
Bank of America price target lowered to $36 from $40 at Morgan Stanley |
| Morgan Stanley analyst Betsy Graseck lowered the firm's price target on Bank of America to $36 from $40 and keeps an Equal Weight rating on the shares. Graseck is lowering price targets across her bank coverage by a median of 3%, noting that liquidity constraints are building and that banks are having to increasingly fund loan growth with higher cost deposits, more debt, and securities portfolio runoffs. Rapidly rising and "higher for longer" rates and higher capital requirements add up to "an accelerating credit cycle," said Graseck, who suggests banks with excess capital, excess liquidity, and positive operating leverage as "where to position long |
| JPMorgan price target lowered to $126 from $127 at Morgan Stanley |
| Morgan Stanley analyst Betsy Graseck lowered the firm's price target on JPMorgan to $126 from $127 and keeps an Underweight rating on the shares. Graseck is lowering price targets across her bank coverage by a median of 3%, noting that liquidity constraints are building and that banks are having to increasingly fund loan growth with higher cost deposits, more debt, and securities portfolio runoffs. Rapidly rising and "higher for longer" rates and higher capital requirements add up to "an accelerating credit cycle," said Graseck, who suggests banks with excess capital, excess liquidity, and positive operating leverage as "where to position long. |
| Freeport-McMoRan price target lowered to $30 from $35 at Deutsche Bank |
| Deutsche Bank analyst Abhi Agarwal lowered the firm's price target on Freeport-McMoRan to $30 from $35 and keeps a Hold rating on the shares. The analyst reduced target prices and earnings estimates in metals and mining to reflect weakening demand and macro risks. While the analyst sees downside risks in the near term, he says a "lot of bad news has already been thrown at markets" with metals equities "already pricing in a mild recession." When the global cycle turns back up, the market will be faced with low inventories and structurally tight supply and prices could once again rally towards incentive price levels, Agarwal tells investors in a research note |
And here is what I am watching today: CMG, TWLO, SPOT, U, ROKU,, TZA, GNRC, WYNN, BIIB,, WIX, BJ, U, LVS, ICPT, CI, CMG, HUM, TRIP, SAGE, and PTCT
Let's have a great day!
-JB