Futures are pointing to a green start this morning, coming off a volatile week that saw markets tumble on Friday. Asia markets closed in the red overnight while Europe indexes are mixed this morning. The US dollar is higher while Oil, Gold, and Yields are lower.
Stocks enjoyed their best start to a quarter last week, only to give back most of the gains, as the September Jobs report came in better than expected - good news is bad news for now. The Fed is trying to tame inflation by pretty much saying we need to push up unemployment and possibly put the US economy into a recession. Stronger economic data means they will likely keep pressing the rate hike button and remain hawkish in their tone. Despite Fridays carnage, the S&P still finished up 1.5% for the week. We are now headed into the 3Q earning season which could provide another catalyst. Looks like that $360 handle will be support this week. If that holds, maybe a constructive bounce back to $375 or so:
Looking further out on the weekly chart, that $350 will be a key spot. If that can hold, maybe we are closer to bottoming out:
If you have a chance, some nice reads this morning from the WSJ:
https://www.wsj.com/articles/strong-dollar-pressures-u-s-manufacturing-rebound-11665307981
The Q3 earnings season kicks off this week with Banks leading the way. Here are some of the implied moves:
If there are names on the list I may trade, it would be DPZ and BLK:
DPZ has a huge international presence and the stronger US dollar will continue to weigh on their earnings along with food inflation. It came and tested $300 last week. Would think a move under that could come on another poor report. May look at some speculative puts today:
BLK could be another interesting name. I love the story but have to think as asset prices decline their profits and revenues will decline in lock-step. May look at some lotto puts there as well for a possible move under $525 on a weak report:
Still holding the rest of my PTON calls that expire this week. It is flat in the pre-market and held up nicely during the end of the week sell-off. If the market finds footing, could see $10+. May actually look to add some later dated calls strikes today:
GNCR fell over 13% last week on a Bank of America downgrade. Really like the setup now. GNCR procures many of their components from abroad... the stronger US dollar should be a boon to their margins not to mention the recent hurricane helping with orders. Will be eyeing some calls today:
Certainly not going to be overly aggressive on the call side but continue to be open to bounces while using TZA as a hedge if the SPY breaks $360 today.
Here are the analyst changes of note for today:
Etsy price target lowered to $119 from $122 at BTIG |
| BTIG analyst Marvin Fong lowered the firm's price target on Etsy to $119 from $122 but keeps a Buy rating on the shares. The analyst states that his clickstream tracking suggests "meaningful upside" to the company's Q3 gross merchandise volume guidance, as well as Street expectations, with as much as 6% sequential growth, though his reduced price target reflects higher interest rates and a roll in his base year valuation model to FY24 from FY23. Fong remains positive on Etsy's "dominant position" within the handmade/special vertical with low risk of displacement by competitors given their prior unsuccessful efforts |
Hasbro price target lowered to $90 from $105 at MKM Partners |
| MKM Partners analyst Eric Handler lowered the firm's price target on Hasbro to $90 from $105 and keeps a Buy rating on the shares. The analyst cites the company's Q3 guidance cut announced last week, but notes that beyond this "transition period", he came way "impressed" with Hasbro's Blueprint 2.0 reveal as the management is emphasizing fewer, bigger franchise brands with an increased focus on games, digital, and direct to consumer. While he is cutting his FY23 EPS view by 55c to $5.50, that forecast could prove conservative based on equity participation upside if next year's two movies, Dungeons & Dragons: Honor Among Thieves and Transformers: Rise of the Beasts are successful, Handler tells investors in a research note |
Snowflake assumed with a Buy at Canaccord |
| Canaccord analyst Kingsley Crane assumed coverage of Snowflake with a Buy rating with a price target of $220, up from $200. Snowflake has shown "a remarkable ability to grow at scale," doubling total revenue each of the past three fiscal years, noted Crane, adding that he cannot overstate the extent to which the company's "simple and flexible" consumption-based pricing model has been critical to rapid growth. He views its FY29 financial targets as "surprisingly reasonable" and argues that they suggest upside to shares from current levels |
| General Electric price target lowered to $80 from $88 at Citi |
| Citi analyst Andrew Kaplowitz lowered the firm's price target on General Electric to $80 from $88 and keeps a Buy rating on the shares. Despite the prospects for weakening macro conditions to over time "dampen" sales and earnings growth for the diversified industrials, in the near-term, the Q3 reports and 2022 outlooks "could remain largely resilient," albeit with some incremental headwinds largely associated with currency, Kaplowitz tells investors in a research note. However, the analyst sees growth as increasingly likely to moderate over the course of 2023, especially in the second half, as elevated backlogs could begin to normalize and given the potential for slowing end market conditions and likely moderating pricing related tailwinds |
And here is what I am watching today: DPZ, GNRC, BLK, PTON, ROKO, TWLO, TZA, CMG, TWLO, SPOT, U, WIX, CI, TRIP, SAGE, and PTCT.
Let's have a great day!
-JB