Stocks closed lower again on Tuesday in a volatile session that saw the DOW stage another 1,000 point reversal off the lows. This time the market was unable to hold onto the green. Overnight Asia markets closed mostly lower while Europe indexes are rallying this morning with the DAX up over 2% as I write this. U.S. futures are pointing to a rally with the S&P set to open up 1.7% higher. The Dollar, Yields, and Oil are green while Gold is lower.
And this is what UPB is reading this morning:Wednesday Morning Reads
And a nice read from UPB: https://www.optionmillionaires.com/training-wheels-off-never-moving/
It was another rocky session for markets with stocks selling off after the open, bouncing mid-day, only to give some of it back into the close. Scalping is not my forte so trading an option position for 15-20 minutes is not something I do. I do better with longer-term moves. Hopefully we get some into Friday. Stock futures were looking rough after the close, despite MSFT reporting a stellar quarter. MSFT Has since reversed course over 10% and futures have done the same, reversing overnight losses. Not saying MSFT saved the market here but could be a good sign here if the market can hold the gains today. The big news of the day will be the Fed. At 2pm they will issue a statement and at 2:30pm Powell will have a press conference. If they announce a surprise rate hike, chaos will ensue. Would want to see Powell try to ease concerns and quell markets using recent Russia tensions as a possible excuse. If he does that, could be a playable bounce into Friday. Will be watching the same namesfor call opportunities: APPS, KRNT, SPOT, and TWLO. On the flips side, if there weakness after the Fed, will be eyeing those 3X bear ETFS like LABD, DRV, FAZ, ect.
KRNT announced a new manufacturing site this morning coupled with their acquisition of another company yesterday. Love that the company continues to look to scale out. The chart is in serious pincher mode, which typically precedes an outsized move. Only monthly strikes but may look at some $125 or so calls on any strength today:
CMG has lost over $400 since the start of the year. The company is well positioned with plenty of cash(over $1.2 billion), no debt, and has an active stock buyback program. Have to think this can retest the $1500s in the coming days if the market finds a bit of footing. Will be watching again today for some calls:
Big earnings after the close with TSLA, INTC, NOW, LVS and others. Likely will sit on sidelines on these names.
Here are the analyst changes of note for today:
|Polaris price target lowered to $120 from $125 at Truist|
|Truist analyst Michael Swartz lowered the firm's price target on Polaris to $120 from $125 and keeps a Hold rating on the shares. The company's Q4 print was "mixed" but its FY22 guidance was better than expected, the analyst tells investors in a research note. Swartz adds that Polaris numbers "look achievable", but there is still potential for quarter-to-quarter volatility, with production volumes expected to be constrained throughout the first half of the year due to ongoing supply limitations before a gradual improvement|
|Commvault price target raised to $68 from $64 at Lake Street|
|Lake Street analyst Eric Martinuzzi raised the firm's price target on Commvault to $68 from $64 to reflect what he calls a "solid quarter and guide" and keeps a Hold rating on the shares. Commvault "quickly shook off the negative impact of large deal delays that hurt the second quarter," though the company still feels it has some exposure to its partners' supply chain issues, Martinuzzi tells investors.|
|Lululemon price target lowered to $340 from $420 at Jefferies|
|Jefferies analyst Randal Konik lowered the firm's price target on Lululemon (LULU) to $340 from $420 and keeps a Hold rating on the shares. Given recent news of Peloton's (PTON) production halt suggests demand for at-home fitness equipment is faltering, he has increased concerns for Lululemon's MIRROR, Konik tells investors. Konik notes that despite web traffic growth trends being flat to down at Nike (NKE), Under Armour (UAA) and Lululemon in December 2021 on a year-over-year basis, all three names are now garnering considerably higher web traffic versus pre-pandemic levels as the athleisure space "continues to witness strong momentum and enduring tailwinds." Social engagement also continues to strengthen, particularly at Nike, said Konik, who views Nike and Under Armour as the best ways to play the space|
|Foot Locker should be bought on 'encouraging' Nike web data, says Jefferies|
|Jefferies analysts Randal Konik and Corey Tarlowe note that despite web traffic growth trends being flat to down at Nike (NKE), Under Armour (UAA) and Lululemon (LULU) in December 2021 on a year-over-year basis, all three names are now garnering considerably higher web traffic versus pre-pandemic levels as the athleisure space "continues to witness strong momentum and enduring tailwinds." Social engagement also continues to strengthen, particularly at Nike, said the analysts, who view Nike and Under Armour as the best ways to play the space. Given Foot Locker's (FL) significant exposure to Nike's product and the continued strength he sees ahead for Nike, he believes Foot Locker represents an attractive investment opportunity, added Tarlowe, as the analysts reiterate Buy ratings on Nike, Lulu and Foot Locker shares|
|Microsoft price target raised to $372 from $364 at Morgan Stanley|
|Morgan Stanley analyst Keith Weiss raised the firm's price target on Microsoft to $372 from $364 and keeps an Overweight rating on the shares. Declining software asset prices had begun to create an investor narrative of a weakening software demand environment, but Microsoft's "robust" fiscal Q2 report - highlighted by commercial bookings accelerating to 37% constant currency growth, total revenues up 20% on a constant currency basis and guidance looking for accelerating Azure growth into Q3 - speaks to both the company's strong secular positioning and a solid software spending environment, Weiss tells investors. A durable high teens total return profile is not reflected in Microsoft shares at current levels, argues Weiss|
And here is what I am watching today: CMG, KRNT, WYNN, MSFT, FAZ, SRS, TZA, LABD, DRV, ZBRA, PANW, NOW, TWLO, SPOT, APPS, and LRCX.
Let's have a great day!