Stocks closed higher on Tuesday, despite another profit warning from a major company, this time it was TGT. The S&P was able to add .95% while the Nasdaq added .94%. Asia markets closed higher overnight while Europe stocks are in the red this morning. U.S. futures are pointing to a lower open as I write this while Oil, Gold, Yields, and the Dollar are all higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-38/
It looked like it was going to be a rough day for stocks on Tuesday, after Target lowered their guidance amidst higher inventory levels. Futures fell on the news and the market opened at lows only to reverse course for the rest of the day and rally nearly 1%. Last week it was MSFT to the rescue, this week it has been Target - hopefully you sense my sarcasm. Back in 2007-2008 so much of the catalysts for the recession and housing crisis were hidden or at least not as public as they should have been. Fast forward to 2022 and all the potential catalyst for a recession are on the table. If we see negative GDP growth next Q it will not come as a big surprise. There likely will be no 'Lehman moment' or "Bear Stearns moment'. Not saying this is bullish or the start of a new bull market, just trying to put things in context. Think we can still see $420 on the SPY to close the week. Not going aggressive on either direction but would look for small put hedges on a break below $410 on there SPY, otherwise will stand pat and maybe add some more speculative calls:
I added DOCU calls at the end of the day on Tuesday for premiums build into their earnings on Thursday. I got lucky with some positive MSFT/DOCU news as MSFT and DOCU announced an expanded partnership. MSFT has been the deliverer of some nice buyouts over the past years, including one of my old favorite stocks LNKD(LinkedIn) and most recently Slack(WORK) for $27 billion.. Not saying MSFT will buy DOCU but could be another pocket acquisition that will add value as the world transitions to digital. Not sure how much my calls will be up at the open but will look to close some out to cover costs and possibly ride the rest into earnings after the close tomorrow. Not to mention the stock will be opening above its 50dma:
Business Insider posted a piece this morning speculating that NFLX will acquire ROKU. This is not a new idea, but certainly makes sense as NFLX looks to other avenues to pad revenues/profits... ie. advertising. Would not be surprised to see a buyout and may nibble some speculative $120 or so monthly strikes. Even without a buyout, I love the ROKU story that should benefit from an increasingly completive streaming landscape where content creators will pay for ad space on their platform:
Another great day for BPT though the stock closed well off the highs. It seems like no-one was talking about BPT on fintwit when I started adding calls... now everyone is onboard - hoping that doesn't mark a short-term top. Still holding my freebie July strikes and still looking to add some $30 calls for the eventual parabolic move:
IBM was trying to close in the green for the 10th time over the last 11 sessions but came up a tad short yesterday. Once I get the chance, will close my June strikes out and hold the rest of my freebie July calls. Likely will not add anything else until July calls are closed out:
U has shown some strength as of late. The chart could be described as a possible bear flag but think if the market finds any bid this name heads into the $50s. Still looking at adding some calls:
And lastly, WYNN is looking very interesting here. Like many names I am watching, it is right near a 50dma break. If it finds support today could see it going $73+ into Friday. May nibble some speculative calls today:
Still holding the last of my SAGE calls and my ZYME calls and still bullish on both.
If we break $410 on SPY will utilize TZA calls as a possible hedge as mentioned on yesterdays watchlist.
Here are the analyst changes of note for today:
| MongoDB price target raised to $345 from $315 at UBS |
| UBS analyst Karl Keirstead raised the firm's price target on MongoDB to $345 from $315 and keeps a Buy rating on the shares. The analyst cites his positive round of customer checks at the MongoDB World event this week |
| Cracker Barrel price target lowered to $110 from $115 at MKM Partners |
| MKM Partners analyst Brett Levy lowered the firm's price target on Cracker Barrel to $110 from $115 and keeps a Neutral rating on the shares after its Q3 earnings miss. The company's internal challenges and a pressure-filled macro-backdrop justify an incrementally muted take Cracker Barrel's near-term fundamental prospects and share price reaction of late, the analyst tells investors in a research note, adding that his neutral stance also reflects economic headwinds, which more than offset any improvements from execution or strategic initiatives |
| Dow Inc. price target lowered to $81 from $84 at Jefferies |
| Jefferies analyst Laurence Alexander lowered the firm's price target on Dow Inc. to $81 from $84 and keeps a Buy rating on the shares. While raising his estimates for 2022 and 2023 to reflect a more resilient near-term demand picture, tailwinds from higher oil prices and a "still-favorable" oil/gas ratio, Alexander expects "a more mixed picture in 2023" and now forecasts that EBITDA falls below mid-cycle levels in 2024, he tells investors |
B. Riley sees front line status for Novavax vaccine as mRNA alternative |
| B. Riley analyst Mayank Mamtani reiterates a Buy rating on Novavax with a $181 price target after The FDA Vaccines and Related Biological Products Advisory Committee voted 21 to 0 in favor of recommending Emergency Use Authorization be granted to the company's COVID-19 vaccine, NVX-CoV2373 for individuals aged 18 years and over. The analyst believes the panel discussion "sets up the path for steady adoption initially with vaccine-hesitant but more importantly being part of the fall immunization (booster) campaign among a broad population." Mamtani thinks the FDA is inclined to position NVX-CoV2373 as a front line vaccine to be used as an alternative to mRNA vaccines |
| arget price target lowered to $198 from $227 at Deutsche Bank |
| Deutsche Bank analyst Krisztina Katai lowered the firm's price target on Target to $198 from $227 and keeps a Buy rating on the shares following the guidance reduction. A second guidance revision lower in just three weeks is disappointing, especially in the context of other retailer reports, highlighting that this is largely a merchandising/internal problem, Katai tells investors in a research note. However, the analyst believes "cleaning up inventory as quickly as possible is the right move |
| Target price target lowered to $150 from $171 at Truist |
| Truist analyst Scot Ciccarelli lowered the firm's price target on Target to $150 from $171 and keeps a Hold rating on the shares. The company's additional markdowns, removal of excess inventory and canceling orders has driven the management to lower its Q2 operating margin guidance, and while the profitability challenges that Target experienced in Q2 were expected to linger, the headwinds are "greater than previously anticipated", the analyst tells investors in a research note. Ciccarelli adds that while sales trends remain solid overall, the operational challenges will remain the focus until improvements become more visible |
And here is what I am watching today: BPT, ROKU, SPOT. U, WYNN, SPOT, TREE, TZA, MED, HSKA, and GOOGL.
Let's have a great day!
-JB