Markets enjoyed their biggest intra-day reversal since December, with the S&P nearly closing in the green after being down over 2% in the morning on concerns over China and central banks cutting rates across the globe. Asia stocks closed mostly higher overnight while Europe stocks are in the green this morning. U.S. futures are pointing to a higher open, the Dollar, Yields, and Oil are higher, while Gold is lower.
And here is my AM rant from yesterday I you missed it:JB Chatroom Rant – August 7th, 2019
And this is what UPB is reading this morning: Thursday Morning Reads
I added some XLF puts yesterday as stocks were in a tailspin and Banks were getting punished. I think that sector will come under continued pressure if Yields continue to fall as the market starts pricing in weaker earnings. XLF hit lows in the morning only to melt higher for the rest of the day. I was looking to hold the puts as a hedge into next week but the premiums came out relatively quickly so I locked them in for a loss. I will continue to look for opportunities to play for weakness in the Banks in the coming weeks, but will likely use FAZ calls or FAS puts:
IIPR reported earnings after the close yesterday. It is a REIT so not a typical report, but they did nearly triple their net income from the year-ago period. That number should keep going up as they make more investments and acquisitions. The stock still sports a 25% short interest so could get a little squeeze today. I am still holding Aug $130s and my look for other later dated strikes if the stock can get back over $110:
ROKU reported earnings after the close. They bested estimates and raised guidance. It was a monster report:
$ROKU monetization of platform(high margin) now twice as much as hardware revenue …. Wow
(For those who think this is a hardware company) pic.twitter.com/ykFdsYakRY
— Option Millionaires (@OMillionaires) August 7, 2019
There was a 14% implied move so those holding calls should be in the green at the open, although some of the higher weekly strikes above $125 may be in the red. Think this sets the stock to trade into the $130s in the coming weeks. May look for some lotto weekly strikes to play for a move over $120 today and maybe some later dated calls for that $130+ move. Such a great story that keeps getting better:
KIDS reported earnings yesterday that slightly missed but then raised guidance for the rest of the year. Will be watching the open and may grab some calls if the stock is in the green:
DPZ and NVDA both staged slow melt-ups yesterday and will need a catalyst for either of those to come back to life. It has been a tough few days after last weeks multi-baggers. Not the first cold streak I have endured over the years, and not the last. Just will continue to have a plan and stick to it.
The SPY closed right at the $288 level, with similar candles from Monday's action. That $288 should provide some support with $286.50 underneath:
Here are the analyst changes of note for today:
| Morgan Stanley ups Carvana price target to $30 after earnings, stays Underweight | |
| Morgan Stanley analyst Armintas Sinkevicius raised his price target on Carvana shares to $30 from $22 following the company's "beat and raise" report, though he maintains an Underweight rating on the stock as he continues to believe that it will take longer for the business to scale than Bulls think and remains concerned about profitability in the meantime. He remains focused on the potential need for capital, but Sinkevicius admits the combination of 34% short interest and constructive intraquarter data on retail units "make it difficult to express a negative view in the near term. | |
| Financial impact of Amazon break-up limited for FedEx, says Morgan Stanley | |
| After various media sources indicated yesterday that FedEx (FDX) and Amazon (AMZN) each confirmed that they will not renew their ground-delivery contract, Morgan Stanley analyst Ravi Shanker said he thinks the financial impact to FedEx should be limited, but "the symbolic impact for Parcels is significant." One of the two largest e-commerce parcel delivery companies in the U.S. is no longer doing any business with the dominant e-commerce player, which "would have been unthinkable 5-7 years ago," wrote Shanker, who questions if UPS (UPS) cannot afford to similarly break up with Amazon given their outsized exposure to them as a customer. He also questions when Amazon's contract with UPS is up for renewal and what they will do when that happens given Amazon's recent history of suddenly pulling or not renewing deals, such as with FedEx and XPO Logistics (XPO). Shanker has an Equal Weight rating on FedEx and an Underweight rating on UPS | |
| Booking Holdings price target raised to $1,950 from $1,850 at Wedbush | |
| Wedbush analyst James Hardiman raised his price target for Booking Holdings to $1.950 from $1,850 saying that Q2 was "a welcome surprise" following a Q4 print and guide that "spooked investors" with regards to the European outlook and even a Q1 print that did little to alleviate these concerns. The analyst notes that the company seems to be back to its standard of comfortably exceeding quarterly expectations and providing a quarterly guidance that, while certainly not blowing away Street estimates, does encompass the consensus. Hardiman reiterates a Neutral rating on the shares | |
| Roku price target raised to $107 from $90 at RBC Capital | |
| RBC Capital analyst Mark Mahaney raised his price target on Roku to $107 after its Q2 earnings beat, with Platform and Player segments exceeding consensus on revenue and profitability. The analyst notes that the quarter was highlighted by the Platform revenue growth acceleration to 86% from last year but also keeps his Sector Perform rating on the stock citing valuation | |
| Stamps.com upgraded to Buy at Craig-Hallum | |
| As previously reported, Craig-Hallum analyst George Sutton upgraded Stamps.com to Buy from Hold and raised his price target on the shares to $60 from $48. While based largely on sentiment, along with an appreciation of the Stamps.com position within the e-commerce ecosystem, the analyst senses "key directional improvements" that give him enough enthusiasm to re-endorse the stock. First, he notes that reseller negotiations have largely been pushed out through the end of the year and the focus appears to be turning away from an administrative cost-based objective back to a business-like appreciation of the high fixed, low variable cost model and the attractive economics brought in under this program. Second, negotiations with the other large carrier partners appears to be moving in a favorable direction, Stutton adds | |
| Roku price target raised to $120 from $79 at Oppenheimer | |
| Oppenheimer analyst Jason Helfstein raised his price target for Roku to $120 from $79 after the company reported another beat and raise quarter. The analyst reiterates an Outperform rating on the shares | |
| Carvana price target raised to $85 from $81 at Cowen | |
| Cowen analyst Thomas Champion raised his price target on Carvana to $85 from $81 following Q2 results. The analyst said the quarter showed dramatic improvement in GPU while management made upward revisions to guidance. He believes the company should continue to see improving GPU and is on track to reach breakeven GPU in 2021. Champion reiterated his Outperform rating on Carvana shares | |
And here is what I am watching today:
|
Stock Ticker |
Call/Put |
Strike |
Expiration |
Closing Price |
Possible Entry Price |
|
IIPR |
CALL |
$150.00 |
Sep 20th |
.45 x 1.25 |
.75 |
|
ROKU |
CALL |
$122.00 |
weekly |
1.15 x 1.29 |
0.25 |
|
ROKU |
CALL |
$130.00 |
Aug 16th |
.82 x .88 |
1 |
|
FAZ |
CALL |
$45.00 |
Aug 16th |
.35 x .56 |
0.45 |
Let's have a GREAT DAY!
-JB