Welcome to August! Futures are pointing to a lower open as I write this, on the heels of the markets best Monthly performance since 2020. Here is last weeks and July's performance:
Asia markets closed modestly higher overnight while Europe indexes are also in the green this morning. The US dollar and Oil are lower, Yields are flat, while Gold is higher.
Stock rallied last week, in the face of some huge catalysts including the Fed, GDP data, and Mega-cap earnings. It was almost like another sigh of relief, as earnings are coming out better than feared. I mentioned it a week ago, that $410 could come on the SPY( https://www.optionmillionaires.com/we-are-not-in-a-recession/ ) and here we are. This week is still filled with plenty of earnings:
...and then we get the July jobs report. Outside a huge miss in the jobs report, I think a $420 test can come on the SPY and then maybe we start to find some consolidation. If the jobs report comes in under-expectations, things could get dicey. Housing prices and employment seem to be the last shoes to drop in this downturn. The June jobs report surprised to the upside in the face of all these layoff headlines. Any strong report and it could give buyers some ammo that this downturn will be short lived. A miss, and then some will start wondering if the worst is still yet to come. Would like to see that $410 area hold and then think $420 can come, likely before weeks end:
CI couldn't muster a rally past $275 on Friday and I was stuck locking the last of my freebie calls in. I was eyeing strikes into this week for earnings but premiums are somewhat pricey up to $290. May look to add some calls this morning for premium build into their report Thursday morning and with the hope of locking some/all in before the close Wednesday:
Another strong session for AMLX, testing the $27s before closing at $26.99. Calls are starting to gain some premiums and may look to take some off at 50% or so to cover costs:
TRIP reports Thursday after the close. Still holding some August strikes and will need a big beat and raise. Have to think the entire travel sector has seen better than expected traffic and activity which should only bode well for TRIP if they are finally able to monetize it. TRIP is risky so will not add anything else:
MITK is a name I have followed in the past and has been a great growth story. They own the check depositing tech on your phone and are in the midst of driving digital identification platforms that help prevent fraud ect. That side of the business is growing and looks like the company continues to excel despite the global slowdown. May look to nibble some calls for a move last $12.50 in the next week or two:
YOU is also back on watch with earnings in two weeks. Still love this name and think a revisit to the mid-$30s is coming soon:
W reports Thursday. It sports a 30% short interest and trades .5x's revenues. If there is even a glimmer of hope on the name after their earnings Thursday, the stock could see a 25%+ upside move. Premiums are pricey all the way to $68 so may just look to nibble some calls for premium build and look to close some out to cover costs before the report:
Also watching U for another entry:
Here are the analyst changes of note for today:
| Roblox price target raised to $40 from $28 at MKM Partners |
| MKM Partners analyst Eric Handler raised the firm's price target on Roblox to $40 from $28 and keeps a Neutral rating on the shares. The company's bookings trends are strengthening faster than expected and his downward revisions, after a disappointing May bookings update were overly pessimistic. the analyst tells investors in a research note. Strong July bookings seen in the company's Q2 earnings report next week could push Roblox shares even higher after momentum has turned more positive since last month, Handler adds. |
| MasterCard price target raised to $422 from $402 at BMO Capital |
| BMO Capital analyst James Fotheringham raised the firm's price target on MasterCard (MA) to $422 from $402 and keeps an Outperform rating on the shares. The company's Q2 results benefited from higher than Visa's (V) exposure to cross-border travel recovery and credit, while consumer spending remains robust, the analyst tells investors in a research note. Fotheringham adds that he continues to recommend card network stocks as core long-term holdings |
| Masco price target lowered to $60 from $68 at BMO Capital |
| BMO Capital analyst Ketan Mamtora lowered the firm's price target on Masco to $60 from $68 and keeps a Market Perform rating on the shares. The analyst cites the company's "light" Q2 performance in Plumbing and Paint businesses, stating that after a robust couple of years, demand is moderating, though positives on the stock include its "strong" balance sheet and "healthy" cash flows |
| PayPal price target lowered to $120 from $131 at DA Davidson |
| DA Davidson analyst Christopher Brendler lowered the firm's price target on PayPal to $120 from $131 but keeps a Buy rating on the shares ahead of its Q2 results. While he is "below consensus" on slowing spending and FX, these headwinds should prove to be transitory, the analyst says, noting that they also mask the strength of PayPal's underlying business. PayPal remains a dominant online payments powerhouse, Brendler adds |
Roblox price target raised to $40 from $28 at MKM Partners |
| MKM Partners analyst Eric Handler raised the firm's price target on Roblox to $40 from $28 and keeps a Neutral rating on the shares. The company's bookings trends are strengthening faster than expected and his downward revisions, after a disappointing May bookings update were overly pessimistic. the analyst tells investors in a research note. Strong July bookings seen in the company's Q2 earnings report next week could push Roblox shares even higher after momentum has turned more positive since last month, Handler adds |
And here is what I am watching today: CI, YOU, MITK, U, CUTR, BIIB, GWW, SPOT, AMLX, INMD, TWLO, NFLX, CMG, and SAGE.
Let's have a great day!
-JB