Markets staged a relief rally on Thursday, with the S&P adding 2.47% while the Nasdaq soared over 3% after being up over 4% in the afternoon. Asia markets closed higher overnight while Europe stocks are in the green this morning. U.S. futures are pointing to a lower open, the Dollar is lower while Yields, Oil, and Gold are all higher.
Here is my rant from yesterday morning if you missed it: https://www.optionmillionaires.com/jb-pre-market-rant-april-28th-2022/
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-14/
Markets staged a relief rally yesterday, on the heels of a 'not as bad as feared' report from FB earnings and from the surprising strength from the US dollar, which is hitting levels not seen since in decades. And of course, the first read on Q1 US GDP came in negative and below estimates - an almost pulling off the band-aid moment - as the market likely has already priced in a recession. Headlines this weekend will be about the impending recession but the US dollar story should be getting more attention. A stronger US dollar could offset inflation, though it would hurt companies who are not hedged for a rise in the Dollar and do business internationally. Small cap names who import products and supplies should benefit. Funny how the narratives work over the years. All the parma-bear fear mongers have been calling for the Dollar to be destroyed over the years, yet here we are, with the Dollar soaring. Will be interesting to see how this plays out in the coming weeks but I think the rising Dollar will be a net positive...
I added some risky ROKU calls that expire next week into earnings yesterday. ROKU reported a solid quarter and kept their revenue guidance despite the challenging macro environment. I really think it can find legs today into the low $100s and head higher next week. My calls will be in the red. I may actually look for some speculative lotto $105 or so calls today:
SAM came up to test the 50dma for the second session in a row - it actually closed right at it. Still holding the last few calls and I may actually look to add some higher strikes if it can break and hold $380 today:
ZYME received an unsolicited buyout offer at $10.50 a share last night. It is gapping this morning into the $7s. It is a name I have been watching for a while and kicking myself for not adding anything. If the $10 strikes are .15 or so I may look to nibble some. Have to think the company will spurn the offer but would think either outcome would be construed as bullish:
IBM continues continues to tease at that $135 handle. I may look to close the last of my $140 calls out today and added later dated strikes so premiums can remain intact:
AAPL and AMZN reported earnings after the close yesterday. AMZN posted its first Q loss in years and offered up dicey guidance. Some of the loss was due to their RIVN investment but they still lost money in North America. AAPL posted a big beat and raise and also upped their buyback and DIVY. At the same time, they are cautious about Q2 with higher costs and logistical concerns. Futures fell after the reports though I think these earnings are similar to the Q1 GDP read where the band-aid is pulled off and we can move on. Will be watching both today for bounce opportunities.
Here are the analyst changes of note for today:
| Matterport price target lowered to $7 from $10 at Piper Sandler |
| Piper Sandler analyst Brent Bracelin lowered the firm's price target on Matterport to $7 from $10 and keeps an Overweight rating on the shares. The analyst reduced estimates on increasing execution risks in the short-run based on residential housing headwinds, which represents 60% of the company's of sales, camera supply chain constraints and a "quickly expanding employee base that could widen losses." With no clear catalyst over the next couple quarters, volatility in Matterport shares could remain high, says the analyst. However, with $580M in cash reserves, Bracelin remains optimistic that a leadership position in spatial data and improving growth levers later this year could create a "more promising" 2023 |
| Amazon.com price target lowered to $3,500 from $4,000 at Truist |
| Truist analyst Youssef Squali lowered the firm's price target on Amazon.com to $3,500 from $4,000 but keeps a Buy rating on the shares. The analyst notes that with eCommerce demand normalizing and cost pressures emerging, Amazon is in for a "rough patch" in Q2, though he expects the company's outlook to brighten after that. Squali adds that strong growth in AWS and Advertising, as well as the prospects for inflationary pressure, keep him positive on Amazon stock. |
| Apple still well positioned for low double digit EPS growth, says Evercore ISI |
| Evercore ISI analyst Amit Daryanani said Apple reported "impressive upside" in its March quarter revenue and EPS, driven by positive performance across all categories except iPad. While in the June quarter there are several headwinds to consider that will mute top-line growth, he expects some of these revenues to come back as they likely create more pent-up demand, Daryanani tells investors. Given his view that Apple remains well positioned to sustain mid-single digit sales and low double digit EPS growth for "multiple years," he is maintaining an Outperform rating and $210 price target on the shares |
| LabCorp price target lowered to $320 from $350 at Truist |
| Truist analyst David MacDonald lowered the firm's price target on LabCorp to $320 from $350 and keeps a Buy rating on the shares. The analyst remains positive on the company's "strong" free cash flow generation and expanding partnerships, adding that he expects its M&A activity to remain brisk and potentially further accelerate. The pandemic has further highlighted the key role clinical labs play in healthcare decision-making, MacDonald tells investors in a research note |
| Amazon price target lowered to $4,100 from $4,300 at Evercore ISI |
| Evercore ISI analyst Mark Mahaney lowered the firm's price target on Amazon.com to $4,100 from $4,300 and keeps an Outperform rating on the shares after the company's reported "mixed" Q1 results and gave a Q2 revenue outlook that was 3% below the Street consensus at the high end. However, management stated they saw no clear evidence of consumer demand softening and he believes the Street simply mis-modeled Q2, Mahaney tells investors. While he believes macro issues are transitory and that Amazon can effectively execute through them, Mahaney said "this is now likely a late-'22/early-'23 transition vs. our prior expectation of mid-'22 |
| Benchmark 'incrementally more confident' in improving Roku growth after Q1 |
| Benchmark analyst Daniel Kurnos said it "feels like the narrative we all expected" from Roku's Q1 results was "turned on its head" with a platform beat that was somewhat offset by substantially softer platform gross margins. However, fears around share loss failed to materialize, said Kurnos, who thinks skeptics will point to an in-line to slightly soft Q2 revenue guidance that will mean a material acceleration is needed in the second half to hit reiterated FY22 guidance of 35% growth. He thinks the quarter "showcased Roku's unique appeal" and feels "incrementally more confident in our call for improving growth into and through 2023" following the report, added Kurnos, who keeps a Buy rating and $240 price target on Roku shares |
And here is what I am watching today: ROKU, IBM, SAM, FB, AMZN, AAPL, ZYME, BTAI, and SPOT.
Let's have a great day!
-JB