It was a mixed session to start the week, with the S&P and Dow closing slightly higher, while the Nasdaq fell .29%. Asia markets finished mixed as well overnight, with Japan equities closing at 2 year highs, while the rest of Asia ended lower. Europe markets are in the red this morning, and U.S. futures are following suit. The Dollar is lower by .61% with comments from Draghi spurring the Euro, Treasuries are also lower while Gold and Oil are higher.
And here is what UPB is reading this morning : https://www.optionmillionaires.com/tuesday-morning-reads-39/
Today is the Day of the Central Bankers with Draghi, Yellen, and Carney from the U.K. all making speeches. Draghi's is already complete and his surprisingly hawkish comments put a bid in the Euro and pressured stocks. U.S. futures have pared the early morning losses but Europe stocks remain near lows. Yellen has a speech in London at 1pm and her comments could certainly move markets, so something to be aware of.
The EU announced a $2.7 billion fine against Google though the company will fight it. Google has $90+ billion in cash so not a huge hit, the impact would be felt more in future revenues as it would force Google to change the way they rank searches. Quick read here on it : http://www.marketwatch.com/story/google-hit-with-27-billion-fine-by-eu-antitrust-regulators-2017-06-27. The stock is down over 1% in the pre-market and will likely be tough to play either side as premiums will be expensive after the open.
I added some VRX calls yesterday as the stock looked to continue its monster move from last week. Paulson & Co added to their stake in a filing after-hours. They were big losers on the VRX fall and seems they think they can make it back. There are also rumors that the company is working on changing some of their debt to equity, which would be dilutive to shareholders but would take away a lot of the risk. I also think if they changed the company name to Bausch & Lomb it would remove the stigma associated with the company. Either way, I locked some of my calls in to cover costs and will hold the rest for a possible move over $18.50. I may look for some inexpensive later dated strikes as well.
CUTR soared on yesterdays upgrade and closed at $26. I closed some of my calls to cover costs and will ride the rest for a possible break over $27.
ALGN opened near all-time highs after yesterdays upgrade, only to give it back and close down 1%. Of course I still love the name. I closed some of my $160 calls for 150%+ and will hold the rest of my calls($160s & $165s) as I still think this is over $160 very soon.
The bad news yesterday was SSYS, GRUB, and WIX. The first two were battered on downgrades, while WIX sold off in sympathy with the Tech Space. Still like all three but will need some big moves in the coming sessions.
I added some QQQ puts yesterday as Techs started to roll over. For now this still looks like rotation into underperforming stocks and Biotech. Think FB, GOOGL, NFLX, AMZN, MSFT can all be susceptible for short term profit taking, especially with the first half winding down. Will be watching for other names for possible pull-backs today and may add some AMZN puts if I can find a nice RvR setup - they looked very pricey yesterday even when the stock was over $1000. Will likely hold my QQQ puts as a continued hedge.
Still watching $242,75 as support on the SPY, and will also be watching the VIX today, which is nearing the lower bollinger band. A close below 9.63 may be a setup for a pullback(it closed at 9.90):
Here are the analyst changes of note for today:
Western Digital fundamentals still 'quite strong,' says BTIG
BTIG analyst Edward Parker says that Western Digital's (WDC) "strong preliminary results" indicate that its "fundamentals remain quite strong." The analyst says he doesn't believe that Toshiba (TOSBF, TOSYY) can sell its share in the chip joint venture while Western Digital is seeking injunctive relief. He adds that the intensity of the battle over the joint venture shows that there is widespread optimism about the memory sector. He keeps a $120 price target and a Buy rating on Western Digital
BHP Billiton weakness creates buying opportunity, says Argus
Argus analyst David Coleman notes that BHP's stock has tumbled 8.9% over the past three months. He thinks that commodity prices have "moved beyond" their bottoms, while BHP's earnings should rise in the near-term. The analyst notes that the company has cut costs and has taken a number of steps to improve its balance sheet. He keeps a $46 price target and a Buy rating on the shares
Autonomous vehicle deals positive for car rental companies, says MKM Partners
After Avis (CAR) announced a multi-year deal with on autonomous vehicles with Alphabet's (GOOG, GOOGL) Waymo and news reports stated that Hertz (HTZ) is working with Apple (AAPL) on autonomous vehicles, MKM Partners analyst Christopher Agnew says the news should ease investors' concerns about car rental companies no longer existing in five to ten years. The analyst believes that car rental companies will become "more relevant" following the launch of autonomous vehicles due to their fleet management skills. He keeps Buy ratings on Hertz and Avis
West Coast refining outlook not priced into Tesoro shares, say Goldman Sachs
Goldman analyst Neil Mehta expects West Coast inventories to remain relative balanced through 2017 despite the re-start of the Torrance refinery expected later this month due to strong export trends and demand levels. Mehta views Tesoro's risk/reward as attractive at current levels given the underappreciated value in its non-refining business segments, the completion of the Western Refining acquisition which will expand a Permian logistics network, provide access to Phoenix retail, and improves margins at the Mid-Continent refining segment, and capital allocation opportunities. The analyst reiterates his Conviction Buy and $121 price target on Tesoro shares
PayPal could free up over $5B with 'asset-light' credit model, says JPMorgan
JPMorgan analyst Tien-tsin Huang noted that PayPal shares have rallied 30% since management floated the idea of a more "asset-light" credit strategy last February and he estimates that a sale of the company's entire consumer credit card portfolio could net about $5.25B in cash. Such an asset-light strategy would reduce PayPal's revenue and EPS baseline by about 10%, though capital redeployment could offset much of the dilution, said Huang. A shift to an asset-light strategy would reduce earnings volatility and allow PayPal to avoid questions on the sustainability of the current multi-year positive credit cycle, the analyst tells investors. Huang keeps an Overweight rating on PayPal shares
Regeneron price target raised to $573 from $493 at Leerink
Leerink analyst Geoffrey Porges raised his price target for Regeneron Pharmaceuticals to $573 to reflect higher expected sales of Dupixent, lower expected sales of Eylea due to some erosion by RTH258 starting in 2019, and including for the first time revenue from REGN2810. Regeneron shares are likely to benefit from "positive" Q2 results and further pipeline disclosures throughout the year, Porges tells investors in a research note. He reiterates an Outperform rating on the name
Chipotle remains a show-me story, says UBS
UBS analyst Dennis Geiger met with Chipotle management and said it remains a show-me story. Management expressed confidence in its recovery for volumes and margins, but he believes that is already reflected in the shares. The analyst trimmed his estimates and price target to reflect the sales and margins challenges. Geiger maintained his Neutral rating and lowered his price target to $445 from $460 on Chipotle shares
Shake Shack should generate 'solid SSS' over longer term, says SunTrust
After meeting with Shake Shack's CEO, SunTrust analyst Jake Bartlett says that the company "has multiple long-term sales drivers,including digital order and pick-up, delivery, throughput, breakfast, and pricing power." He keeps a $48 price target and a Buy rating on the shares
Kite Pharma has significant manufacturing advantage over peers, says Canaccord
Canaccord analyst John Newman said Kite Pharma (KITE) has a quicker turnaround time for its axi-cel CART therapy for DLBCL versus its competition, which should translate into a commercial advantage for them. The meaningful manufacturing capability gives it a clear advantage over competitor Novartis (NVS), said Newman, who reiterated his Buy rating and raised his price target to $115 from $90 on Kite shares
Tiffany added to US 1 List at BofA/Merrill
BofA/Merrill analyst Lorraine Hutchinson added Tiffany to the US 1 List and reiterated a Buy rating and $110 price target on shares. Hutchinson sees several catalysts leading to a 2017 turnaround including an increased pace of innovation by a new Head Designer, the shakeup in management and Board, and the "wealth effect" from the rising stock market. The analyst believes second half 2017 could see a comp inflection and said Tiffany is one of the few retailers with pricing power
CVS gained largest PBM share in 2017 selling season, says Leerink
Leerink analyst David Larsen says his firm's recently published Pharmacy Benefit Manager survey shows that CVS Health is the largest share gainer in the 2017 selling season. The company is poised to win incremental PBM and Specialty Pharmacy share, while the Optum and Cigna deals will start to benefit retail volumes in the near-term, Larsen tells investors in a research note. He keeps an Outperform rating on CVS shares with a $90 price target
And here is what I am watching today:
|
Stock Ticker |
Call/Put |
Strike |
Expiration |
Closing Price |
Possible Entry Price |
|
AGN |
CALL |
$257.50 |
weekly |
.25 x .38 |
0.30 |
|
AMZN |
PUT |
$940.00 |
weekly |
.38 x .50 |
0.35 |
|
VRX |
CALL |
$20.00 |
July 21st |
.35 x .37 |
0.36 |
Let's have a GREAT DAY!
-JB