Futures are pointing to a lower open to start a busy week, with the S&P set to open down .20% as I write this. Asia markets closed mixed overnight while Europe stocks are lower this morning. The US dollar is higher while Oil, Gold, and Yields are all lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/monday-reads-4/
It is going to be a busy week for markets coming on the heels of the worst start of the year for the S&P since 1939 and the worst month for the Nasdaq since 2000. The Fed meets on Tuesday with a statement and press conference on Wednesday and the long awaited .50 rate hike on the table. It is also another huge week for earnings with over 1,000 companies reporting, here are some of the implied moves: https://www.optionmillionaires.com/some-implied-moves-for-earnings-next-weekmay-2nd-may-6th-1607-companies-reporting/
Markets started off Friday pretty much the same way it did every session last week, with buyers. Once the buyers vanished the markets melted lower for the rest of the day with the S&P closing down over 3.6% and turning a flat week for stocks into a disaster into the weekend. That $410 area on the SPY looks like next support... under that we will start hearing the bear market call on the S&P:
ROKU ramped higher out of the gate on Friday, testing the $101s before pulling back. As I mentioned last week, still think ROKU is a great growth story and in the midst of turning into a cash generating machine as the cord cutting shift is still in the early innings. Unfortunately none of that matter right now in the current market environment. If the market finds any footing this week, will certainly be eyeing some calls for a bounce:
I added some ZYME calls as outlined on Friday's watch list as I think the stock will head over $10 in the coming days even if the company spurns the buyout offer:
SAM held its own on Friday, though it closed right below the 50dma. Still think this can get over that $400 handle in the coming weeks and will continue to hold the last of my calls for that outcome while using $360 to so as a stop:
CUTR has been decimated the past 3 sessions, taking nearly $15 off the stock price on no news or catalyst. It held the 50dma on Friday. If that holds today I may look at some calls to play for a bounce over $60 in the coming days:
I penned a quick piece on the US Dollar Friday. All the headlines these days are about inflation and negativity around the market. I don't see anyone talking about the possible benefits of a stronger US dollar with small-cap names that have little exposure overseas being the biggest beneficiaries. Not saying small-caps are going to enter a bull-market, just think they will outperform big caps - whether that is not falling as much or rising faster: https://www.optionmillionaires.com/the-dollar-is-trash/
Here are the analyst changes of note for today:
| Boeing price target lowered to $225 from $270 at Jefferies |
| Jefferies analyst Sheila Kahyaoglu lowered the firm's price target on Boeing to $225 from $270 and keeps a Buy rating on the shares. Though Q1 featured some progress on the MAX rate and 787 FAA submission, Defense was a disappointment and the report leaves questions around Defense and Commercial normalized profit, said Kahyaoglu, who reduced EBIT forecasts by 30% for 2022-24 |
| Caterpillar weakness offers buying opportunity, says Argus |
| Argus analyst John Eade keeps his Buy rating and $235 price target on Caterpillar but notes that the recent stock price weakness offers a buying opportunity. The analyst states that demand plummeted for the company early during the coronavirus crisis, but is now coming back. Eade adds that Caterpillar offers a strong balance sheet and a long-standing commitment to the dividend, which it recently boosted 8% |
Chevron price target lowered to $181 from $186 at Truist |
| Truist analyst Neal Dingmann lowered the firm's price target on Chevron to $181 from $186 and keeps a Hold rating on the shares. The company has seen notable year-to-date Permian production gains driven by stable operations and DUC activity that offset other regions, though Chevron is still likely to realize sequentially lower production this quarter due to LNG turnarounds at Wheatstone and Angola along with the expiration of the Thailand concession, the analyst tells investors in a research note. Dingmann adds that Chevron's $5B-10B buyback program should offset the dilution of employee stock options, boosting its free cash flow per share |
| Charter price target lowered to $450 from $600 at Truist |
| Truist analyst Greg Miller lowered the firm's price target on Charter to $450 from $600 and keeps a Hold rating on the shares after its Q1 results. Competition in the U.S. broadband industry is intensifying and weaker than expected high-single-digit net adds could turn negative by Q4, further weighing on valuation multiples, the analyst tells investors in a research note. While valuations are "not challenging" by historical measures, secular subscriber losses have never been a part of the cable historical narrative, Miller adds, further stating that Charter's leverage profile "might easily creep higher" |
| Encore Wire price target raised to $175 from $150 at DA Davidson |
| DA Davidson analyst Brent Thielman raised the firm's price target on Encore Wire to $175 from $150 and keeps a Buy rating on the shares. The company is generating high levels of earnings and cash flow while redeploying more aggressively toward buybacks as well as internal projects intended to enhance its long-term earnings power, the analyst tells investors in a research note. Thielman is also boosting his FY22 EPS on Encore Wire to $19.18 from $10.74, modeling higher gross margin expectations for the company |
| New York Times' penetration opportunity remains compelling, says Morgan Stanley |
| Morgan Stanley analyst Thomas Yeh notes that New York Times (NYT) shares are down 15%-20% over the last month, which he sees as likely due to concerns over a broader pull-forward in consumer demand during the pandemic that has negatively impacted the growth outlook at other major "COVID beneficiaries" such as Netflix (NFLX) and Roku (ROKU). However, unlike those others, Yeh expects accelerating digital subscriber and subscription net adds this year at New York Times and thinks its penetration opportunity remains "compelling" given its earlier stage of subscriber penetration both in the U.S. and globally along with tailwinds from a heavier news cycle and benefits from the integration of recent acquisitions. Yeh reiterates an Overweight rating and $56 price target on New York Times shares |
And here is what I am watching today: EXPE, TRIP, ALGN, IBM, ROKU, CMG, SPOT, DDOG, MDB, TEAM, RNG, and TWLO.
Let's have a Great Day!
-JB