July 25th, 2022 Watch List

Futures are pointing to a green open to start the week, with the S&P set to open .40% higher as I write this and this is on the heels of a 2.8% gain last week. Asia markets closed lower overnight while Europe indexes are in the green this morning. The US dollar is in the red while Oil, Gold, and Yields are higher.

To say it is a busy week for the markets would be an understatement. We get the Fed statement and press conference Wednesday, the first read on 2Q GDP on Thursday, and also get a slew of earnings reports led by many mega-cap names like AAPL, META, MSFT. GOOGL. and AMZN. Here are some implied moves:

The GDP data on Thursday will likely be negative 1.8% or so(maybe more) confirming we are in a recession. The White House came out last week with a piece, pretty much preparing for a negative print on 2Q GDP - which by most definitions implies an economy is in an recession - yet now the White House says that is not the definition anymore: https://www.whitehouse.gov/cea/written-materials/2022/07/21/how-do-economists-determine-whether-the-economy-is-in-a-recession/ comical. Will be nice to pull that band-aid off, get the recession speculation out of the way, and move onto other things.

It was a strong week for stocks even with Fridays pullback, and the Nasdaq is having its best month in 2 years, up over 7% so far in July. Certainly not out of the woods just yet but still think we can see some more upside here, especially if we can break thru that $400 handle. Ironically enough, we tested that $400 handle Friday at 9:50 am and then sold off for pretty much the rest of the day so looks like sellers are right there. Hoping we get a retest in the next day or two:

SNAP's earnings provided the catalyst for the weakness in Tech on Friday, even bringing names like U down. ROKU also plummeted, closing down nearly 9%. ROKU reports earnings after the close on Thursday so will definitely be a name I look at today to add some calls for premium build into the report. The shift from traditional content providers to a la carte is still in early innings. Even if folks are cutting back on subscribing to them, they still will be accessing the ROKU portal. One of these reports will put ROKU back into an uptrend... hoping this is the one :

SPOT is another name I like heading into their report which comes out Wednesday morning. Think a move back over $140 is possible:

INMD rallied over $30, testing $30.67 on Friday before giving it back and then some to close at $28.50. Still have plenty of time on my calls and may actually look to add later dated strikes so I can close the last of my freebie calls out:

I added come CI calls on Friday. As a I mentioned the previous week, think insurers and healthcare names are somewhat recession proof. HUM also reports earnings Wednesday morning and could provide more wind in the sales of CI. Will look to close some of my calls out to cover costs today and hold the rest into Wednesday. Will use the $266 area as a spot I would look to take the position off an revisit:

Still eyeing CUTR, DUST, JDST, GLL, SAGE, VRTX, and BIIB as well this week.

Here are the analyst changes of note for today:

Datadog price target lowered to $115 from $167 at RBC Capital
RBC Capital analyst Matthew Hedberg lowered the firm's price target on Datadog to $115 from $167 on peer multiple contraction but keeps an Outperform rating on the shares ahead of its Q2 results. After a "strong" Q1, the analyst sees the focus falling on the company's macro commentary, the impact of consumption pricing, and continued success around its platform strategy and multiple product adoption. Hedberg adds that he still likes the potential for long-term elevated growth and margin improvement at Datadog
Tenet Healthcare price target raised to $80 from $75 at Truist
Truist analyst David MacDonald raised the firm's price target on Tenet Healthcare to $80 from $75 and keeps a Buy rating on the shares. The analyst says he remains bullish on the stock following a solid Q2 despite a challenging ongoing environment and a noticeable volume headwind from the cybersecurity incident in April. MacDonald adds that Tenet's hospital trends "meaningfully improved" in June, and he continues to like the positioning of its Ambulatory platform as well as the "solid" remaining trends at Conifer
Cloudflare price target lowered to $62 from $100 at RBC Capital
RBC Capital analyst Matthew Hedberg lowered the firm's price target on Cloudflare to $62 from $100 to reflect peer multiple compression but keeps an Outperform rating on the shares ahead of its Q2 results. The company is likely to post an in-line quarter amid macro pressures, though he remains positive around its long-term opportunity to disrupt large and growing markets and to maintain elevated, durable growth with improving profitability, the analyst tells investors in a research note
American Express price target raised to $180 from $175 at RBC Capital
RBC Capital analyst Jon Arfstrom raised the firm's price target on American Express to $180 from $175 and keeps a Sector Perform rating on the shares. The company's Q2 results were solid as underlying billings activity remained strong and above pre-pandemic levels, with revenue trends supported by the continued rebound in T&E, the analyst tells investors in a research note. Arfstrom adds that American Express remains well positioned to drive strong sustained revenue growth over the long term
Alcoa price target lowered to $51 from $55 at Morgan Stanley
Morgan Stanley analyst Carlos De Alba lowered the firm's price target on Alcoa to $51 from $55 and keeps an Equal Weight rating on the shares after updating his estimates following Q2 results. He sees a lack of company-specific positive near term catalysts given his view that Alcoa has "successfully executed nearly all of its plans" and has already taken steps to materially improve its balance sheet and shore up profitability through its asset portfolio review, De Alba said
Loop Capital upgrades WWE to Buy on rising likelihood of company sale
Loop Capital analyst Alan Gould upgraded WWE (WWE) to Buy from Hold with a price target of $90, up from $59. The analyst states that following the announced retirement of CEO Vince McMahon, he sees a greater likelihood that the company is sold. Gould further cites WWE having been one of the best performing stocks with a 34% year-to-date run-up as the value of its sports rights continues to increase while speculating about "Comcast (CMCSA), Disney (DIS), Amazon (AMZN), and even possibly Netflix (NFLX)" as becoming its potential suitor\

And here is what I am watching today: ROKU, SPOT, CUTR, DUST, JDST, GLL, SAGE, VRTX, and BIIB.

Let's have a great day!


JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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