It was a fitting end to the first half of the year on Thursday, with markets closing lower on the heels of the PCE data that actually came in below expectations. The S&P dropped .88% while the Nasdaq fell 1.33%. Asia markets closed lower overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a lower open, the Dollar and Oil are higher while Yields and Gold are lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-53/
And a nice read from UPB: /https://www.optionmillionaires.com/its-happening/
The 1st half of the year is in the books and it was the worst in over 50 years. Let's hope the last half is better. A nice chart here from Marketwatch on the other 5 times in history markets closed down over 15% thru the first 6 months of the year:
A small sample size but certainly bodes well unless there are any black swan events on the horizon like surprise defaults, bankruptcies, escalation of the war... ect. In 2008 it was Lehman brothers in September before things really took a downturn and the eventual Auto bailout in December of that year. Hopefully nothing of that magnitude is in store. Yesterday's PCE data was the third in a row of declines. Will need to see the same for the CPI numbers next month and maybe we have seen peak inflation. Rates have been dipping as well - if inflation starts to recede the Fed will likely pause rate hikes in September. There are also reports that the log jams and logistical issues are receding which could bode well for prices - lower demand coupled with higher supplies should bring costs down.
I am going to put together a webinar on some stock ideas into the back half of 2022. So many names have been absolutely pummeled so it is tough to scan, but I will have a list of some new names I will be watching. With the stronger US dollar, I think small-caps can do well. Also think names with low debt, and high cash positions may find support after being thrown into the toilet with all the other names. Stay tuned.
I added some speculative U calls yesterday. The stock seems to squeeze when the markets are green and figured the start of the new quarter and 2nd half of year would see some buyers. Still hopeful for a green move and rally today and may actually look for some July monthly strikes as well today:
IBM closed in the green yesterday despite the market weakness. I have two weeks left on my calls so will need a break above that $145 handle in the next few days:
Gold has been losing its luster as of late. I had $20 DUST June calls and should have went into July... hindsight is 20/20. It closed over $20 yesterday and could see $25+ if Gold breaks into the $1600s. That $1780 handle is key support for GOLD:
May look to nibble some calls today on DUST and maybe some GLL calls:
Oil is rallying and BPT is gapping higher this morning. It's had a rough few days but won't take much to revisit that $25 handle. May eye some August calls on strength today:
Lastly, think if Yields continue to melt, some financials may get some support... I like BLK and may look to add some speculative calls there as well:
Don't forget markets are closed Monday, Have a great extended weekend and Happy 4th of July!
Here are the analyst changes of note for today:
| Acuity Brands delivers 'strong organic beat' in Q3, says Oppenheimer |
| Oppenheimer analyst Christopher Glynn maintained an Outperform rating and $210 price target on Acuity Brands following the company's Q3 earnings, which beat on the top and bottom line. The analyst highlighted the consistent market conditions and a generally uniform backdrop into Q4. Glynn estimates a modest majority in the rise in organic sales from price, and ~7% volume, and as such, does not believe the volume cycle is over-extended |
| Evercore reiterates Outperform rating on Micron, sees EPS bottoming in February |
| Evercore ISI analyst C.J. Muse notes that estimates for Micron are moving materially lower following the company's Q3 report and Q4 guidance amid an inventory correction across both DRAM and NAND, led primarily by weakness in PC and smartphone demand. Given that Micron has a "very new" CFO, he believes "there is some excess conservatism in the updated outlook" and he now models an EPS bottom in February, with gradual recovery thereafter supporting EPS of $6.00 in calendar year 2023, Muse tells investors. With the current cut to estimates now behind it versus many other semi names yet to cut, Muse continues to like the risk/reward for Micron and reiterates his Outperform rating and longer-term price target of $90 on the shares |
| Etsy price target lowered to $95 from $130 at Evercore ISI |
| Evercore ISI analyst Shweta Khajuria lowered the firm's price target on Etsy to $95 from $130 and keeps an Outperform rating on the shares after lowering FY23 GMS and EBITDA estimates by 7% to account for the firm's proprietary U.S. online shopper survey results, incrementally negative intra-quarter data points and cautionary macro trends that imply softening retail demand. However, Khajuria continues to view Etsy as "a high-quality asset" with healthy EBITDA margins, attractive free cash flow yield and a unique value proposition, the analyst added. |
| Micron price target lowered to $64 from $80 at Needham |
| Needham analyst Rajvindra Gill lowered the firm's price target on Micron to $64 from $80 and keeps a Buy rating on the shares. The culprit in the company's below-consensus Q4 guidance was a marked decline in smartphones, PCs, and CEs, which accounts for over 50% of overall sales, the analyst tells investors in a research note. Gill adds that he expects one to two quarters for the smartphone and PC customers to burn off the excess inventory before starting a rebuild, stating that Micron is prepared to be disciplined with its CapEx as it reduces bit supply |
Constellation Brands price target lowered to $292 from $295 at Credit Suisse |
| Credit Suisse analyst Kaumil Gajrawala lowered the firm's price target on Constellation Brands to $292 from $295 and keeps an Outperform rating on the shares. The analyst said the company's "strong" Q1 results reflect a "thriving Beer business despite margin pressure and a Wine portfolio still trying to find its footing," which are dynamics that he expects to continue. Gajrawala added that he sees "brand momentum and share gains, not price, as the primary drivers taking Beer topline above guidance. |
And here is what I am watching today: DUST, JDST, GLL, BLK, GS, APPS, SPOT, U, ROKU, BHC, BPT, HSKA, SITE, SAGE, and POOL
Let's have a great day!
-JB