Markets rallied on Wednesday, with the S&P adding 1.50%, buoyed by FedEx and Nike earnings. Asia markets closed mostly higher overnight while Europe indexes are mixed this morning. U.S. futures are pointing to a lower open, the Dollar is lower while Yields, Oil, and Gold are higher.
Markets rallied for the second session in a row, with the S&P climbing 1.5% and closing back over its 50dma. Tomorrow we get the PCE data, which could certainly swing things. A hotter than expected number and stocks will likely give back the gains for this week and then some. A cooler than expected number and the SPY should rally into the $390s. Have to think some of the moves in the last week or two has been tax loss positioning. Some of these names continue to be sold, almost like forced liquidation. Folks who are locking in losses before years-end, may use that loss to offset gains in some names they have held for years... ie. Sell PLTR for huge loss and sell AMZN you bought in 2008 that is up big to offset the taxes. At some point some of these beaten up names will be gobbled up. But none of that will matter if the PCE comes in hotter tomorrow, so definitely something to watch. Stocks are gapping lower this morning, would want to see the SPY hold that 50dma into tomorrow. Hotter number tomorrow we are below $375 on the SPY, cooler than expected and $390+:
ROKU is one of the beaten up names that I think has been oversold due to the tax loss selling. I went and added some calls into next week and may look for some strikes into January for a move over $50 and higher - the stock is down for 6 days in a row and that is in spite of yesterdays rally:
I went and entered ZYME again. The company had positive news yesterday with JAZZ picking up their partnership option. Think this trades north of $10 in the coming weeks:
VKTX closed at $7.89 yesterday while MDGL continues its ascent. The positive MDGL data completely transforms the NASH space and opens up some of these names to M&A possibilities along with higher valuations. Will look to lock some of my calls in to cover costs when I get the chance and ride the rest:
NFLX closed up 3% yesterday and I was able to harvest most of my calls for 90%, 200%, and nearly 400%. Think a move over $305 is coming so will likely hold the rest of my calls today using the $295 handle as a possible stop area:
ALGN closed in the green yesterday but will need a big move today and tomorrow for my speculative calls. Still think there is something going on here, whether an activist loading or the companies buyback program. Like this to trade north of $220 in the coming days and possibly higher to start 2023. May look at some later dated strikes:
The tight bollie setup on BLK is playing out, as mentioned on the last few days watchlists. Spreads are tough so I couldn't find an entry yesterday. If the market is able to reverse this mornings gap lower, may look at some $720 or $725 spec calls:
Still eyeing SQ and ULTA as well.
Don't forget, markets are closed Monday. And expect lower trading volumes and less analyst rating changes for the last 6 trading days of 2022.
Here are the analyst changes of note for today:
| Cintas price target raised to $507 from $490 at Deutsche Bank |
| Deutsche Bank analyst Faiza Alwy raised the firm's price target on Cintas to $507 from $490 and keeps a Buy rating on the shares after the company "delivered on high expectations" with its Q2 results and FY23 guidance raise. Business momentum remains strong and organic growth continues to outperform, which Alwy attributes to positive pricing, a focus on new verticals like healthcare, and "good execution |
Apple's weak fundamentals to accelerate CTV ad revenue stream, says Needham |
| Needham analyst Laura Martin cuts her 2023 EPS view to $6.07 from $6.34 on Apple amid weak macro global consumer demand trends, supply-chain shortages, and growing geopolitical pressures between the U.S. and China which may lead to weak iPhone demand in China. Martin adds however that these weak core fundamentals will accelerate the development of a CTV ad rev stream because of its above-70% gross profit margins and its "best-in-class demographics". The analyst maintains her Buy rating and $170 price target on Apple |
Tesla price target lowered to $275 from $304 at Canaccord |
| Canaccord analyst George Gianarikas lowered the firm's price target on Tesla to $275 from $304 and keeps a Buy rating on the shares. The analyst noted the recent tumble in the shares is the worst in Tesla's stock history. He said while current fundamentals appear fairly uncertain, we look to potential green shoots in 2023 and sustained extraordinary growth beyond to help improve equity performance |
| ntuitive Surgical price target raised to $320 from $265 at Argus |
| Argus analyst David Toung raised the firm's price target on Intuitive Surgical to $320 from $265 and keeps a Buy rating on the shares. The analyst anticipates higher surgical volume to drive increased utilization of existing da Vinci units, which should in turn boost hospitals' orders for additional units. Toung adds that Intuitive Surgical's da Vinci devices have "strong growth prospects" in relatively underpenetrated European and Asia- Pacific markets |
| Cintas price target raised to $500 from $475 at Baird |
| Baird analyst Andrew Wittmann raised the firm's price target on Cintas to $500 from $475 and keeps an Outperform rating on the shares. The analyst said they reported a very typical quarter with solid organic revenue upside driving margin leverage, cash flow, and a guidance raise |
| Palantir selloff overdone despite unsuccessful SPAC strategy, says BofA |
| BofA analyst Mariana Perez Mora notes that Palantir reached a new low of $6.31 amid increasing market concerns about software infrastructure spending, news articles criticizing the company's unsuccessful SPAC-investment strategy, and sell-side consensus downgrades. While admitting Palantir's SPAC investments strategy "seemed to be poorly timed" and hasn't met its investment objectives thus far, Perez Mora said the selloff - which puts the stock down 65% year-to-date - has been overdone. The analyst keeps a Buy rating and $14 price target on Palantir shares |
And this is what I am watching today: NFLX, ALGN, SQ, VKTX, ROKU, ULTA, BLK, RARE, AYX, SPOT, BURL, WYNN, U, TWLO, CMG, and DPZ.
Let's have a great day!
-JB