Futures are pointing to a red start to the week, with the S&P set to open .54% lower as I write this after last weeks 1.94% gain. Asia markets closed mostly lower overnight as China looks to be starting more lockdowns as Covid is making a comeback. The outlier was the Nikkei, which rallied on election results. Europe indexes are also in the red this morning. The US dollar is higher while Oil, Yields, and Gold are all lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-57/
Futures are pointing to a pullback to start the week on reports China is imposing new restrictions/lockdowns on a resurgence of Covid. This week is the start of Q2 earnings season with the Banks kicking things off, along with CPI and Retail sales data. Friday's strong jobs report takes some of the importance off of Wednesday mornings CPI numbers, but will be something that can move markets this week. If it comes in lower than expectations, could be another possible catalyst for upside. Retail sales numbers come out on Friday. I think any positive number can also be construed as a good sign.
The big news this weekend was Elon Musk pulling out of the Twitter deal citing misleading information regarding the percentage of bots on the platform. Twitter plans to sue to enforce the deal. This will likely play out for months...
Have to think this is a good thing for TSLA shares here. Also should be a net-positive for a name like DWAC which could see a multi-day squeeze. Haven't traded this one in a while but may look to nibble some speculative calls.
This week is the start of the Q2 earnings season with banks kicking things off. Not names I will be trading but banks could set the tone. Expectations are low so think even inline numbers could be good enough for companies this Q:
Biotechs continued their rally off the lows, closing higher on Friday which makes it 13 green closes out of the last 17 sessions. I am adding AMLX to the watchlist - the company IPO'd in January and is in the early stages of a drug that may have the potential to treat ALS, Alzheimer's disease, and Wolfram syndrome. The FDA is set to reconvene for an ADCOM in September after voting down its drug in March, a positive sign. Have to think this trades up to $30 and beyond in the coming weeks:
Still looking to add SAGE along with some of the bigger cap Bio names like REGN, VRTX, and BIIB:
Everyone is always looking for inflation proof sectors... not going to say inflation will not hit healthcare but people on recurring prescriptions don't just stop refilling them. Medicare and insurers don't just stop paying for prescriptions. So some of these names that have been brought down with the market should rebound first... and of course the ones that trade less than cash.
I was able to close the last of my U calls on Friday for 1200% with the stock nearing that $46 handle before pulling back. Defiantly a name - along with TWLO, ROKU, and SPOT - that I will continue to watch for opportunities to play for upside.
Markets have been alternating between weekly gains and weekly losses for a month now. Hoping this is not another down week and that $380 in the SPY can hold. If so, think $400 test comes:
Here are the analyst changes of note for today:
|Truist says Twitter 'nightmare scenario playing out,' 30% more downside possible|
|Following Elon Musk's letter to Twitter's board on Friday announcing his termination of his merger agreement, Truist analyst Youssef Squali notes that the company is trying to force him to go through with the deal on the agreed-upon terms of $54.20 per share, or a $44B valuation, which he sees as "an unlikely scenario." However, he believes a scenario whereby Musk terminates the transaction and walks away unscathed is also "highly unlikely." Noting that Twitter's "nightmare scenario" is now playing out with Musk looking to terminate the deal, Squali said that if Twitter fails to bring this acquisition to completion, he would see the base case for the shares as trading in the high $20s, reflecting about 25%-30% further downside from current levels. However, his fair value for Twitter shares remains at $50, which assumes that the company reaches its 2023 target of about $7.5B in revenue on 315M DAUs, and Squali keeps a Hold rating on the stock|
|Bank of America price target lowered to $33 from $43 at Jefferies|
|Jefferies analyst Ken Usdin lowered the firm's price target on Bank of America to $33 from $43 and keeps a Hold rating on the shares as he adjusted estimates for the banks under his coverage ahead of Q2 reports from the group. He sees rate hikes and strong loan growth lifting net interest income estimates, but thinks quarter-over-quarter NII growth starts to top-out toward year-end 2022 and notes that sentiment remains weak for the group with "catalysts tough to find.|
|Upwork price target lowered to $30 from $34 at BTIG|
|BTIG analyst Marvin Fong lowered the firm's price target on Upwork to $30 from $34 but keeps a Buy rating on the shares. The analyst states that his proprietary tracking data reflected a consistent downward trend in Talent Marketplace job listings during Q2, with global job listings on June 30th coming 18% below where they began the quarter. Fong adds that he is cautious heading into Upwork's Q2 results and sees risk that the company will miss its revenue guidance of $147-$151M. The analyst remains bullish on the stock's long-term opportunity given the immensity of the labor market and that shares remain significantly off their highs|
|BlackRock price target lowered to $718 from $825 at UBS|
|UBS analyst Brennan Hawken lowered the firm's price target on BlackRock to $718 from $825 and keeps a Buy rating on the shares as part of a broader research note on Banks and Asset Managers. The Q2 market pullback is pressuring estimates for the group while driving lower fee-earning assets and deteriorating the flow outlook, the analyst tells investors in a research note. Hawken adds that while the net interest income realization partially offset the broader beta headwinds, risks from balance sheet declines still loom large|
Bumble price target raised to $37 from $25 at Raymond James
|Raymond James analyst Andrew Marok raised the firm's price target on Bumble to $37 from $25 and keeps an Outperform rating on the shares. Marok expects Q2 Bumble app paying users of 1.93M vs. consensus of 1.91M, Badoo app paying users of 1.13M vs. consensus of 1.11M, with third-party data indicating a roughly in-line quarter, the analyst tells investors in a research note|
And here is what I am watching today: AMLX, U, REGN, BIIB, VRTX, SAGE, SPOT, TWLO, ROKU, and IBB.
Let's have a great day!