It was a mixed start to the week, with the S&P and Dow closing in the green on Monday, while the Nasdaq closed lower in a choppy session. Asia markets closed mostly higher 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.
Futures are pointing to a lower open this morning, after WMT issued a profit warning and lowered their guidance based on higher food costs and a glut in inventory - 3 weeks ago it was Target. Nothing new here and not much of a surprise, though it does give folks an excuse to take profits. After the close today we get earnings from MSFT and GOOGL. Nearly 25% of the S&Ps weighting comes from 5 companies: AAPL, AMZN, MSFT, GOOGL, and META and they all report this week. Any major downside surprises on these names and things could certainly get interesting... though I don't think that will be the case. A nice read here from Marketwatch: https://www.marketwatch.com/story/big-tech-earnings-are-about-to-determine-the-direction-of-the-market-11658769593?mod=home-page
I posted some more quick thoughts on where I think we are ahead of the Q2 GDP read Thursday:
Just continue to find it comical that the current administration will change the rules of a recession in the middle of the game - GDP is(or has been)the benchmark for recession calls. To now say there are other data points that need to be factored in sounds desperate and, to me, confirms that the GDP data coming out Thursday will be negative.
CI rallied at the open yesterday, nearly breaking into the $275s before pulling back to close at $272.63. I used to the morning ramp to lock some in to cover costs and for some profits. Still holding some for the possible $275 break and run. Will use the $272 handle as a spot I would likely take the rest of the position off and revisit:
I also added some ROKU calls ahead of their earnings for late this week. The stock is trading lower this morning on a downgrade. Never makes sense to me why an analyst would change their rating days before updated data. Still like it into earnings but the calls will take a hit this morning and the opportunity to close some out to cover costs before Thursday's close is likely gone so will just hold them into the report:
Not much to add here on AMLX and INMD... both closed lower yesterday but still think they are headed higher in the coming weeks... AMLX over $25 and INMD into the mid $30s:
AMLX
MCD reported some strong earnings this morning. Could bode well for CMG that reports tonight. Not saying folks trade down for burritos when things get tough but do think the company can weather the storm... not to mention they have no debt, plenty of cash($1.2 billion), and are actively buying back stock. Could see a move back to $1450-$1500 this week on any decent numbers. Premiums are expensive so would look at a few $1450 or so speculative calls:
MMM reported a mix bag of results this morning but also announced they will be spinning off their healthcare division. The stock is up in the pre-market and think it could see some continuation over $140. May look to add some speculative calls:
Here are the analyst changes of note for today:
| Walmart price target lowered to $120 from $135 at Evercore ISI |
| Evercore ISI analyst Greg Melich lowered the firm's price target on Walmart (WMT) to $120 from $135 and keeps an In Line rating on the shares after the company updated its Q2 and full year outlook to reflect incremental profit pressure. Walmart's warnings that deeper pricing actions are needed to clear excess inventory and that sales mix is an incremental headwind is consistent with Target (TGT), which issued two guide downs over the past few months, Melich noted |
| Disney price target lowered to $125 from $135 at Truist |
| Truist analyst Matthew Thornton lowered the firm's price target on Disney to $125 from $135 but keeps a Buy rating on the shares ahead of its Q3 results. The analyst states that investors do not believe in the company's 230M-260M Disney+ subscriber target by 2024 given the loss of IPL Cricket streaming rights, and he is also targeting 206M, though he is bullish on the opportunity to bolster gross adds, retention, and average revenue per user. Disney's Parks business could also recover to higher revenue and profitability while benefiting from increased DTC content spend, Thornton tells investors in a research note |
| Rocket Pharmaceuticals price target lowered to $56 from $67 at Stifel |
| Stifel analyst Dae Gon Ha lowered the firm's price target on Rocket Pharmaceuticals to $56 from $67 and keeps a Buy rating on the shares. After having caught up with the company's management to discuss progress across RPA501 in Danon disease and RP-L102 in Fanconi anemia, Gon Ha said the substance of the near-term updates "may fall on the side of incremental" versus binary given the timing of the recent updates across both programs. While he does not see these events as "hugely needle-moving on their own," he does think that "reactive volatility" is possible in Rocket shares around important upcoming FDA actions on gene therapy |
| Walmart price target lowered to $120 from $135 at Evercore ISI |
| Evercore ISI analyst Greg Melich lowered the firm's price target on Walmart (WMT) to $120 from $135 and keeps an In Line rating on the shares after the company updated its Q2 and full year outlook to reflect incremental profit pressure. Walmart's warnings that deeper pricing actions are needed to clear excess inventory and that sales mix is an incremental headwind is consistent with Target (TGT), which issued two guide downs over the past few months, Melich noted |
| Walmart guide down a 'potential warning signal' for Amazon, says Morgan Stanley |
| Walmart's (WMT) profit guide down last night amid expectations for increased markdowns and general merchandise margin pressure in the second half is a "potential warning signal" that raises risk around Amazon's (AMZN) first-party merchandise margins, argues Morgan Stanley analyst Brian Nowak. The analyst, who thinks Amazon can take steps to offset some of this pressure, calls discounting "an incremental headwind to monitor" heading into Amazon's Q2 report due later this week. Nowak has an Overweight rating and $175 price target on Amazon shares, which are down $3.89, or 3%, to $117.25 in pre-market trading following last night's warning from Walmart |
| Agile Therapeutics upgraded to Buy from Hold at Maxim |
| Maxim analyst Naz Rahman upgraded Agile Therapeutics to Buy from Hold with a $1 price target. The analyst cites the company's closed $24M equity offering as well as the management's austerity efforts, which should preserve its cash runway into Q1 of next year. In addition to Agile having some 'breathing room' to focus on its commercial strategy for Twirla, Rahman further cites several potential tailwinds in the women's health space that could benefit Twirla's trajectory, which include the SCOTUS decision in June brining increased focus on contraceptive options and access for women to the forefront |
| MasTec price target lowered to $87 from $108 at Craig-Hallum |
| Craig-Hallum analyst Christian Schwab lowered the firm's price target on MasTec (MTZ) to $87 from $108 and keeps a Buy rating on the shares. The analyst notes MasTec announced it has entered into a definitive agreement to acquire Infrastructure and Energy Alternatives (IEA). The acquisition provides improved competitive size and adds scale in a market undergoing strong growth, Schwab argues |
And here is what I am watching today: CMG, MMM, CUTR, TWLO, SPOT, DUST, JDST, GLL, SAGE, VRTX, and BIIB.
Let's have a great day!
-JB