Stocks rumbled on Tuesday, with the S&P losing 1.5% as commodity prices rose and ahead of Powell's Testimonies today and tomorrow in front of Congress committees. Asia markets closed lower overnight while Europe stocks are mixed this morning. U.S. futures are pointing to a slightly higher open as I write this, the Dollar, Yields, and Oil are higher while Gold is lower.
And this is what UPB is reading this morning: Wednesday Morning Reads
The war in Russia continues and it has really put some serious bids in commodities... especially Oil which is at $112 this morning and at a 13 year high. Think many are having the realization that there will be a serious disruption in supply as folks can't transact with Russia and their 5 million barrels of Oil exports come out of the supply. Pretty crazy to think where Oil was only a few years ago, when futures contracts actually went negative and also shows har far away the World is from Oil independence. With Oil above $100 you now have people calling $150=200+. Pretty easy to make these claims today when Oil is over $110, so think maybe that could be a construed a bit as fear mongering. But if Oil keeps going, it will have major impacts on goods and services and if supply does not come into the market, the only thing that will really stop the rise would be demand slowing... hard to envision that.
My way to play and almost as a hedge to the war was BPT... and it has been on a roll closing up over 15% yesterday and is gapping again today over $15. Would not be surprised to see it go parabolic over $20. I already sold some of my calls for 100% and will likely sell a few more today and then hold the rest. The big risk here is if there are any cease-fire or peace agreements and Swift access is restored to Russia, so do not want to wake up one morning and see Oil down 25% and BPT down under $10:
AVAV chopped around yesterday before closing in the green., They report earnings tomorrow after the close so will look to take more of my calls off for profits before then and likely just hold a few into the report. A miss and the stock is back under $60. A beat and raise and $80+ possible:
CDLX reported a great quarter yesterday and beat on all metrics it tracks. I was looking to add calls yesterday but the strikes from $80 on were still expensive on a risk/reward basis with the stock trading at $53. Great earnings have been sold this season so not going to chase, but if it can hold $60 I may look at some $70 or $75 March strikes:
'SQ came right up to the 50dma yesterday and failed to hold, watching again for some possible spec calls or even strikes into next week for that move into the $140+ territory:
Other names I'm watching today for possible spec calls:
CMG for over $1150:
and PYPL for $115:
It was a boring melt-off yesterday but some names are holding up despite the overall market weakness. If it can chop in this $429-440 area think that bodes well for upside in the next few sessions.
Also be aware that Powell comments can move market today and tomorrow though his prepared remarks are out already.
Here are the analyst changes of note for today:
(sorry dont have them today)
And here is what I am watching: CDLX, AVAV, SQ, BPT, CMG, PYPL, NTR, MOS, and CF.
Let's have a great day!
-JB