Stocks plummeted on Friday, as Powell's Jackson Hole speech was extremely hawkish and any optimism of a return to cutting rates in 2023 was put on hold. The S&P fell over 3% in its worse session since June. Asia markets closed lower overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a rough open, the Dollar, Yields, and Oil are higher while Gold is lower.
It was a painful day for markets on Friday, with stocks melting lower for the entire session with nary a bounce to speak of. The so-called 'Fed Pivot' argument was put the rest for now, as hope that the Fed will start to reverse course in 2023 have been put on hold. Powell spoke of pain for households in the coming months as they try to head off inflation. The August jobs report coming out on Friday will likely be one of the more important reports in recent memory. Hate to see Job losses, but a negative print could help stabilize the markets a bit. Any higher than expected number and things will get dicey fast - estimates are for 290k jobs added.
That $410 handle broke on Friday and now that $400 level is in reach this morning. Don't want to see a repeat of early June when the SPY dropped from $410 to $370 in a matter of a fews days and would want to see that $400 handle hold today:
If it breaks I may look to add some TZA calls as a hedge for more downside, likely Sept 16th strikes for a move over $40:
If there was any silver lining on Friday, it's that there were still some names that held up relatively well on this move. MDB and PANW are two names I watch as almost risk-off indicators and they were down much less than peers. Back in June MDB would be off 6-7%+ on a day like Friday. Will be watching those again today. Not to mention PANW looks like it could consolidate here and then start heading higher - a name I may nibble some calls on if the market finds any footing today:
APRN tested $6.44 in the morning before reversing all the gains to close down over 6%. One of these days it will break that $7 handle and not look back:
EVH is a new name I will be putting on watch. It was one of my Top 5 stocks a few years ago in the teens. It has since has taken off and is clicking on all cylinders now despite the market weakness. There are also buyout rumors and got a nice upgrade this morning. Think it trades into the mid-high $40s in the coming weeks:
Lastly, I will be in and out of the chatroom for most of the day with access on my Phone.
Here are the analyst changes of note for today:
|Evolent Health designated a new 'Best Idea' at Guggenheim|
|Guggenheim analyst Sandy Draper designated Evolent Health (EVH) as a new "Best Idea," noting that prior "Best Idea" Signify Health (SGFY) is now within 10% of the firm's price target on the shares. Draper cites a "very high degree of visibility" into 2023 estimates for Evolent, with the potential for upside from new partnership announcements, as well as a belief that its business can withstand a recessionary environment. Draper maintains a Buy rating and $45 price target on Evolent shares|
Tesla Gigafactory in Berlin 'could be a game-changer,' says Deutsche Bank
|Deutsche Bank analyst Emmanuel Rosner lowered the firm's price target on Tesla to $375 from $1,125 and keeps a Buy rating on the shares. The price target change reflects the company's 3-for-1 stock split. Rosner came away from a guided tour of Tesla's new Gigafactory in Berlin with the sense that the company's new localized vehicle production in Europe "could be a game-changer." The plan could make Tesla an "even more formidable competitor in the region, while likely boosting the company's gross margins," Rosner tells investors in a research note. All in, he believes 2023 "could be a pivotal year" for Tesla and continues to view the company "as one of the most attractive stories in the autos sector.|
Checks suggest strong demand, share gains for SentinelOne, says Morgan Stanley
|Morgan Stanley analyst Hamza Fodderwala noted that Q2 checks for SentinelOne were "strong," with 65% of resellers reporting being above plan, which the analyst points out was up from 53% in Q1. The checks suggesting strong demand and share gains point to SentinelOne sustaining 100%-plus organic ARR growth in Q2, said Fodderwala, who has an Overweight rating and $40 price target on the shares|
|Upcoming iPhone 14 launch another pivotal moment for Apple, says Wedbush|
|Wedbush analyst Daniel Ives notes that his Asia supply chain checks on Apple over the last few weeks remain very firm as Cupertino is in the final stages of setting up for its iPhone 14 release next week on September 7th. Hitting this target launch with the supply chain issues and zero COVID shutdown seen earlier this year is "another massive achievement" for the company, Ives says. He believes the initial order for 90M iPhone 14 units out of the gates has stayed firm and will be roughly flat with iPhone 13 despite the macro storm clouds building. This speaks to the underlying demand story that Apple anticipates for this next iPhone release with his estimates that 240M of 1B iPhone users worldwide have not upgraded their phones in over 3.5 years. In particular, Ives thinks Apple is expecting another heavy iPhone Pro and Pro Max mix shift which is a clear positive for ASPs heading into 2023. The analyst has an Outperform rating and a price target of $220 on the shares|
|Cardinal Health price target raised to $78 from $61 at UBS|
|UBS analyst Kevin Caliendo raised the firm's price target on Cardinal Health to $78 from $61 and keeps a Buy rating on the shares. The company's Pharma segment and the potential for meaningful capital deployment will provide support for the stock, the analyst tells investors in a research note. Caliendo further cites Cardinal Health's "cleaner" balance sheet and estimates a forward free cash flow yield of about 10% before dividends|
And here is what I am watching today: TZA, EVH, PANW, YOU, SAGE, TWLO, SPOT, ROKU, NFLX, ICPT, and SPLK.
Let's have a great day!