Markets closed lower Wednesday, for the 4th session in a row, with the S&P ending the day down .45%. Asia markets fell overnight while Europe indexes are in the red this morning. U.S. futures are pointing to another lower open, the Dollar and Yields are higher while Oil and Gold are lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-60/
Stocks opened lower on Wednesday after the CPI numbers came in above expectations. Markets pared the losses, trading in the green for a while, before ending the day in the red. The argument around peak inflation will have to wait another month, although the market will likely start pricing it in before any confirmation from data. This morning we got the PPI numbers which came in around expectations. Earnings season also kicked off with JPM and MS reporting. Both posted disappointing numbers and guidance which pressured futures. Should be a theme for this quarters earnings season but do think names that can beat and raise will see some wild moves. The SPY tried to hold the $380 handle into yesterday afternoon but failed. If we can't regain that level today or tomorrow fear the $360s from early June will be next:
INMD rallied yesterday despite the market weakness, breaking into the $29s before finding some sellers to close at $28.11. I used the move to lock some of my calls in for 90% to cover costs and will hold the rest. Think this will trade north of $30 in the next week or two and have plenty of time on my August strikes:
AMLX has now closed lower for three straight sessions. Still like the story heading into their Adcom in September so will hold my calls. If anything, I may look to add some more strikes if the stock heads into the $19 level. Would like to see it back above $21 soon to resume the uptrend:
U sold off yesterday after announcing an acquisition. That $32.50 handle looks like support. If it holds that this morning I may look at some later dated calls for a move back over $40 in the coming weeks:
I continue to like the Bio sector and think if there is any area of the market that can bounce/rally, Bios will be the first, Meaning will be watching the regular names like BIIB, SAGE, REGN, VRTX, and GBT for potential call opportunities.
Also will be putting ISRG back on watch. Inflation and an impending recession should not put a damper on surgical procedures. ISRG is flush with cash, has no debt, and still has plenty of growth ahead of it. May look to get some calls ahead of their earnings next week:
And still eyeing some DUST/JDST/GLL calls for continuation in the Gold sell-off.
Here are the analyst changes of note for today:
| Roblox price target raised to $45 from $40 at Needham |
| Needham analyst Bernie McTernan raised the firm's price target on Roblox to $45 from $40 and keeps a Buy rating on the shares. The analyst cites his conversations with 17 of the company's developers who expressed a positive outlook on Roblox's monetization environment, advertising opportunities and the UGC marketplace. The discussion also reflected the e perception of rising engagement and ease of creation on the platform relative to last year, McTernan tells investors in a research note |
| Stephens says Netflix choice may leave 'no economics' for Trade Desk, Magnite |
| Stephens analyst Nicholas Zangler said "virtually all" of his industry expert contacts have expressed surprise that Netflix (NFLX) has chosen Microsoft (MSFT) as the global advertising technology and sales partner in its roll out of an ad-supported subscription tier, particularly because of the potential for traditional CTV ad-tech powers to be left out of the deal entirely. His base case assumption is that Xandr, a programmatic advertising marketplace that Microsoft previously bought from AT&T (T), will exclusively handle all ad-serving, SSP and DSP functionalities, leaving "no economics" for Magnite (MGNI) and Trade Desk (TTD). In selecting Microsoft, Netflix is effectively choosing an independent option, said Zangler, who had previously argued against Google (GOOGL) and Comcast (CMCSA) as viable partner choices given Netflix would have been sharing proprietary data with those owners of competing streaming services. Netflix has "regularly been rumored" to be an acquisition target by mega-cap tech companies, added Zangler, who contends that operating Netflix's advertising arm "may represent the start of a courtship, potentially contemplated in [Netflix's] decision to select [Microsoft] over industry-leading candidates |
Carvana price target lowered to $75 from $105 at Morgan Stanley |
| Morgan Stanley analyst Adam Jonas lowered the firm's price target on Carvana to $75 from $105 and keeps an Equal Weight rating on the shares. He is making "material cuts" to forecasts across his autos and shared mobility coverage, particularly in FY23, to reflect slowing growth and credit headwinds, said Jonas, who notes that his top line and EBITDA estimate cuts leave his forecasts 5%-10% or more below consensus expectations. Key drivers of the changes include a U.S. SAAR cut that takes his FY23 SAAR forecast to 15M units, expectations for price/mix deterioration from peak comps and auto credit pressures, Jonas tells investors |
| Harley-Davidson price target lowered to $40 from $44 at Morgan Stanley |
| Morgan Stanley analyst Adam Jonas lowered the firm's price target on Harley-Davidson to $40 from $44 and keeps an Equal Weight rating on the shares. He is making "material cuts" to forecasts across his autos and shared mobility coverage, particularly in FY23, to reflect slowing growth and credit headwinds, said Jonas, who notes that his top line and EBITDA estimate cuts leave his forecasts 5%-10% or more below consensus expectations |
| Unity price target lowered to $60 from $85 at DA Davidson |
| DA Davidson analyst Franco Granda lowered the firm's price target on Unity (U) to $60 from $85 and keeps a Buy rating on the shares. The company's deal to acquire ironSource (IS) is "very attractive" due to the confluence of revenue and cost synergies, attractive valuation, and highly complementary tech stack amidst a backdrop of privacy-driven platform changes and macro pressures, though his reduced price target reflects lower broader market multiples, the analyst tells investors in a research note |
| Dell Technologies price target lowered to $55 from $60 at JPMorgan |
| JPMorgan analyst Samik Chatterjee lowered the firm's price target on Dell Technologies to $55 from $60 and keeps an Overweight rating on the shares. The analyst is taking a "defensive stance" with his networking and hardware coverage universe as he sees increasing signs of the challenging macro feed into demand trends. Chatterjee recommends investors look for diversification away from higher risk areas like enterprise spending as well as auto exposure relative to "more resilient capex spend" from cloud customers as well as telco/cable customers. He increasingly expects smartphones and TVs to cycle past trough sentiment with a rebound likely in the out-year driven by replacement cycles. This results in upgrades Amphenol, CDW, and Juniper to Overweight, and downgrades of Cisco Systems, 5F Networks and TE Connectivity to Neutral. Chatterjee also adding Qualcomm to the firm's Analyst Focus List, while removing Ciena though maintaining an Overweight rating |
And here is what I am watching today: IBB, REGN, BIIB, SAGE, GBT, ISRG, U, TWLO, GLD, GLL, DUST, and JDST.
Let's have a great day!
-JB