Stocks started the week in the red, with the S&P dropping over 1%, as fears over a new lockdown in China over a resurgence in Covid had folks taking profits. Asia stocks closed lower overnight and Europe stocks are following suit. U.S. futures are pointing to a mixed open as I write this, the Dollar and Gold are higher while Oil and Yields are lower.
Stocks fell to start the week on concerns China was set to go back into lockdown mode due to Covid, and as folks took profits after last weeks rally. Futures are pointing to another red open. CPI numbers come out tomorrow morning and the Q2 earnings season kicks-off. As I mentioned on yesterdays watchlist, any inline or lower CPI number and stocks should get a bid. Rarely do I cite Cramer but think he may have something here from yesterdays Mad Money -> https://www.cnbc.com/2022/07/11/jim-cramer-says-the-market-could-see-pleasant-surprises-going-forward.html
Certainly not putting on my bull horns just yet, but optimistic we could see a slow melt up in the coming weeks as the Q2 earnings season picks up steam. That $380 handle on the SPY is key support and still think the SPY has a shot at $400 in the next week or two:
Of course, MarketWatch has this on their main page today:
This almost makes me nervous, typically they post the bearish stuff during a down day and bullish stuff after an up day. But comical to say the least.
I added AMLX calls as outlined on yesterdays watchlist. They are getting a second AdCOM on their ALS drug in September... it is a rarity to get a second chance and likely a good sign it will be approved. I wanted to get calls to encompass that date so added October strikes. After I added the calls hundreds of buys hit those strikes and the open interest nearly doubled this morning. Think AMLX will melt up to $30+ in the coming weeks and will look to close some of my calls out for 100%, when I get the chance, to cover costs and hold the rest:
The Biotech sector took a breather yesterday. Still eyeing SAGE, BIIB, REGN, and VRTX calls and also putting BTAI back on watch. Think Bios can do well even if the market falls:
Tech/Momo names all took breathers yesterday. TWLO closed down 7.38%, SPOT down 4.88%, U down 8.60%, and ROKU down 9.06%. U was up over 25% last week, so some consolidation is to be expected. If stocks find any footing this week may look at some speculative calls again on these names for some upside. Only a matter of time before U takes out the $50 handle:
DWAC gapped higher at the open yesterday but then chopped around for the rest of the day to close at $29.45. Still think this can be a great trade as a proxy on the Twitter/Musk deal. May look at some speculative calls for play for a move into the $30s in the coming days:
INMD updated their guidance this morning and it came well above estimates - one of the few upward revisions we have seen ahead of this Q2: earnings season.
Not only is this bullish INMD but could see a sympathy move in CUTR. May look at some calls in both at the open:
CUTR:
Here are the analyst changes of note for today:
| Deere price target lowered to $325 from $370 at JPMorgan |
| JPMorgan analyst Tami Zakaria lowered the firm's price target on Deere to $325 from $370 and keeps a Neutral rating on the shares. The analyst cut fiscal 2023 growth estimates across her coverage |
| XPO Logistics price target lowered to $72 from $81 at JPMorgan |
| JPMorgan analyst Brian Ossenbeck lowered the firm's price target on XPO Logistics to $72 from $81 and keeps an Overweight rating on the shares |
| Caterpillar price target lowered to $205 from $250 at JPMorgan |
| JPMorgan analyst Tami Zakaria lowered the firm's price target on Caterpillar to $205 from $250 and keeps an Overweight rating on the shares. The analyst cut fiscal 2023 growth estimates across her coverage |
U.S. Bancorp price target lowered to $50 from $53 at Citi |
| Citi analyst Keith Horowitz lowered the firm's price target on U.S. Bancorp to $50 from $53 and keeps a Neutral rating on the shares. The analyst refreshed U.S. bank models ahead of Q2 earnings and dropped price targets to reflect the losses from the recent Federal Reserve stress test, which he views as a "conservative measure of inherent risk on bank balance sheets." Horowitz upgraded JPMorgan (JPM) to Buy and downgrading Regions Financial (RF) to Neutral. He also launched negative catalyst watches on KeyCorp (KEY) and PNC Financial (PNC) largely on expectations of negative net interest income revisions. A lot of uncertainty is priced into the bank stocks, making the risk/reward setup for the group "very attractive," Horowitz tells investors in a research note. While higher interest rates are a clear positive for bank returns, investor sentiment remains negative due to concerns that Fed action will lead to large credit losses, says the analyst |
| Goldman Sachs price target lowered to $360 from $400 at Citi |
| Citi analyst Keith Horowitz lowered the firm's price target on Goldman Sachs to $360 from $400 and keeps a Buy rating on the shares. The analyst refreshed U.S. bank models ahead of Q2 earnings and dropped price targets to reflect the losses from the recent Federal Reserve stress test, which he views as a "conservative measure of inherent risk on bank balance sheets." Horowitz upgraded JPMorgan (JPM) to Buy and downgrading Regions Financial (RF) to Neutral. He also launched negative catalyst watches on KeyCorp (KEY) and PNC Financial (PNC) largely on expectations of negative net interest income revisions. A lot of uncertainty is priced into the bank stocks, making the risk/reward setup for the group "very attractive," Horowitz tells investors in a research note. While higher interest rates are a clear positive for bank returns, investor sentiment remains negative due to concerns that Fed action will lead to large credit losses, says the analyst |
Travelers price target lowered to $156 from $172 at Jefferies |
| Jefferies analyst Yaron Kinar lowered the firm's price target on Travelers to $156 from $172 and keeps a Hold rating on the shares. His P&C insurance and insurtech estimates for the quarter "skew below Street" due to modeling for modest Russia-related losses and below average alt investment returns, but his core underlying EPS view is above the Street for the group, Kinar tells investors in an earnings preview note. The analyst, who expects investors to focus on pricing and higher loss trends, has lowered his forward estimates for the group as he models a meaningful economic slowdown in 2023 |
And here is what I am watching today: INMD, CUTR, REGN, SAGE, IBB, VRTX, DWAC, TWLO, U, SPOT, and ROKU.
Let's have a great day!
-JB