Morning Reads

Morning Reads

Futures

Options

PREMIUM

This Morning

S&P 500 futures are down 37 points and are trading 0.9% below fair value. The Nasdaq 100 futures are down 136 points and are 1.1% below fair value. The Dow Jones Industrial Average futures are down 252 points and are trading 0.7% below fair value.

The market is poised for a lower open on this options expiration day. Cryptocurrencies are down big with no news catalyst. Meme stocks are on the defensive as some speculative froth is being taken out of the market following the news that Ryan Cohen completed the sale of his BBBY stake and reports the company has hired a law firm to help address its debt load.

Separately, there is lingering anxiety is in the mix related to the Fed continuing to be aggressive with rate hikes. 

There's also weak economic data from Europe in play this morning. Germany's PPI was up 37.2% year-over-year in July while the UK's GfK Consumer Confidence Index for August fell to a fresh record low.

WTI crude oil futures are down 2.2% to $88.54/bbl. Natural gas futures are down 2.2% to $8.98/mmbtu. Unleaded gasoline futures are down 1.6% to $2.97/gal.

Treasury yields are on the rise with the 2-yr note yield up six basis points to 3.27% while the 10-yr note yield is up seven basis points to 2.94%.

There is no U.S. economic data of note today.

In corporate news:

  • Foot Locker (FL 38.40, +6.42, +20.08%): beats by $0.29, reports revs in-line; guides FY23 EPS in-line, revs below consensus; announces CEO transistion
  • Deere (DE 348.00, -19.99, -5.43%): misses by $0.52, beats on revs; lowers top end of FY22 net income guidance
  • Applied Materials (AMAT 108.42, +0.15, +0.14%): beats by $0.15, beats on revs; guides Q4 (Oct) EPS in-line, revs in-line
  • Bill.com (BILL 173.30, +23.90, +16.00%): beats by $0.11, beats on revs; guides Q1 (Sep) EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus; appoints Sofya Pogreb as COO
  • Bed Bath & Beyond (BBBY 10.64, -7.91, -42.64%): heads lower on SEC filing that Ryan Cohen completed sale of BBBY stake; hired law firm to help it address a debt load that has become unmanageable, according to Bloomberg Law
  • MSG Entertainment (MSGE 64.00, +1.30, +2.07%):  reports Q4 (Jun) results, beats on revs
  • Meta Platforms (META 171.07, -3.59, 2.06%): Morgan Stanley cuts price target to  $225 from $280 but kept its overweight rating
  • HP Inc. (HPQ 33.81, -1.42, -4.03%): downgraded to Underweight from Equal Weight at Wells Fargo

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei: UNCH (+1.3% for the week), Hong Kong's Hang Seng: +0.1% (-2.0% for the week), China's Shanghai Composite: -0.6% (-0.6% for the week), India's Sensex: -1.1% (+0.3% for the week), South Korea's Kospi: -0.6% (-1.4% for the week), Australia's ASX All Ordinaries: UNCH (+1.0% for the week).
    • In economic data:
      • Japan's July National CPI 0.5% m/m (last 0.0%); 2.6% yr/yr (last 2.4%). July National Core CPI 2.4% yr/yr, as expected (last 2.2%)
      • New Zealand's July trade deficit NZD1.09 bln (last deficit of NZD1.10 bln). July Credit Card Spending 4.9% yr/yr (last 3.9%)
    • In news:
      • Japan's Core CPI was up 2.4% yr/yr in July, representing the fastest rate of increase since 2014.
      • Japan is seeking to set up a summit with China's leadership.
      • Samsung will reportedly invest $15 bln into a new semiconductor research facility in South Korea.
      • Indonesia is reportedly looking to implement a tax on nickel exports.
  • Major European indices trade on a mostly lower note with the U.K.'s FTSE (+0.1%) showing relative strength even though the GfK Consumer Confidence index for August fell to a fresh record low. STOXX Europe 600: -0.4% (-0.4% week-to-date), Germany's DAX: -0.7% (-1.4% week-to-date), U.K.'s FTSE 100: +0.1% (+0.6% week-to-date), France's CAC 40: -0.5% (-0.5% week-to-date), Italy's FTSE MIB: -1.4% (-1.3% week-to-date), Spain's IBEX 35: -0.9% (-0.5% week-to-date).
    • In economic data:
      • Eurozone's June Current Account surplus EUR4.20 bln (last deficit of EUR4.50 bln)
      • Germany's July PPI 5.3% m/m (expected 0.6%; last 0.6%); 37.2% yr/yr (expected 32.0%; last 32.7%)
      • U.K.'s July Retail Sales 0.3% m/m (expected -0.2%; last -0.2%); -3.4% yr/yr (expected -3.3%; last -6.1%). July Core Retail Sales 0.4% m/m (expected -0.2%; last 0.2%); -3.0% yr/yr (expected -3.1%; last -6.2%). July Public Sector Net Borrowing GBP4.18 bln (expected GBP25.30 bln; las GBP20.09 bln). August GfK Consumer Confidence -44 (expected -42; last -41)
    • In news:
      • Germany's PPI was up 37.2% yr/yr in July, accelerating past its peak from May.
      • Germany's economy ministry released its monthly report, observing a gloomy outlook due to high energy prices and continued supply chain issues.


U.S. equity futures:

  • S&P 500 Futures: -40 @ 4,244
  • DJIA Futures: -263 @ 33,736
  • Nasdaq 100 Futures: -145 @ 13,361

Overseas:

  • Europe: DAX +0.7%, FTSE -0.1%, CAC +0.4%
  • Asia: Nikkei UNCH, Hang Seng +0.1%, Shanghai Composite -0.6%

Commodities:

  • Crude Oil -1.98 @ 88.52
  • Nat Gas  -0.176 @ 9.012
  • Gold -4.80 @ 1766.40
  • Silver -0.269  @ 19.195
  • Copper -0.0047 @ 3.6362


U.S. Summary:

  • Earnings/Guidance:
    • Applied Materials (AMAT) beats by $0.15, beats on revs; guides Q4 (Oct) EPS in-line, revs in-line
    • Bill.com (BILL) beats by $0.11, beats on revs; guides Q1 (Sep) EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus; appoints Sofya Pogreb as COO
    • Buckle (BKE) beats by $0.12, reports revs in-line
    • Deere (DE) misses by $0.52, beats on revs; lowers top end of FY22 net income guidance
    • Foot Locker (FL) beats by $0.29, reports revs in-line; guides FY23 EPS in-line, revs below consensus; announces CEO transistion
    • Globant (GLOB) beats by $0.02, reports revs in-line; guides Q3 EPS in-line, revs above consensus; guides FY22 EPS above consensus, revs above consensus
    • Maxeon Solar (MAXN) reports Q2 results, beats on revs, guides Q3 revs below consensus
    • MSG Entertainment (MSGE) reports Q4 (Jun) results, beats on revs
    • OSI Systems (OSIS) beats by $0.01, reports revs in-line; guides FY22 EPS above consensus, revs above consensus
    • Ross Stores (ROST) beats by $0.10, reports revs in-line, comps -7%; guides Q3 EPS below consensus; guides Q4 EPS below consensus
    • StoneCo (STNE) beats by $0.30, beats on revs; guides Q3 revs above consensus
    • Vipshop (VIPS) beats by CNY0.77, beats on revs; guides Q3 revs below consensus
  • General News:
    • Fed Chairman Jerome Powell will speak Friday, August 26 from Jackson Hole, WY, according to Reuters
    • Chinese President Xi and Russian President Putin will attend G-20 meeting later in 2022, according to Bloomberg
    • UK household energy bills will increase 80% in October, according to Bloomberg
    • Streaming has topped cable television for the first time ever, according to the Wall Street Journal
    • EU Commission approves EUR 27.5 billion German scheme to compensate energy-intensive companies for indirect emission costs
    • Agios (AGIO) Announces Publication of Phase 3 ACTIVATE-T Data in The Lancet Haematology Demonstrating Benefits of PYRUKYND (mitapivat) for Adults with Pyruvate Kinase Deficiency
    • Allstate (ALL) names Jesse E. Merten CFO, effective September 1
    • Alphabet (GOOG): On its blog, company announces that it's making updates and improvements to search functionality; this includes launch of "helpful content update" next week
    • AMC Entertainment (AMC) responds to Cineworld comments, AMC continues to be optimistic about increasing demand for Q4 and 2023
    • Apple (AAPL) advised device owners to update software to fix security flaw, according to Guardian
    • Argan (AGX) Founder, Chairman, and CEO Rainer Bosselmann retired, effective August 16; the Board has appointed David Watson as CEO; current Board member William Leimkuhler appointed Chairman
    • Axsome Therapeutics (AXSM) announces FDA approval of AUVELITY, the first and only oral nmda receptor antagonist for the treatment of major depressive disorder in adults
    • Bed Bath & Beyond (BBBY) falls -21% further after hours on SEC filing that Ryan Cohen completed sale of BBBY stake
    • Bed Bath & Beyond (BBBY) has hired law firm to help it address a debt load that has become unmanageable, according to Bloomberg Law
    • Bridgewater Bancshares (BWB) approves $25 mln stock repurchase authorization
    • Cara Therapeutics (CARA): Kapruvia receives approval in Switzerland with additional regulatory decisions expected in H2
    • Cboe Global Markets (CBOE) raises quarterly dividend to $0.50 per share, up from $0.48 per share prior
    • Chesapeake Energy (CHK) intends to resume its $2 bln board authorized share repurchase program following the completion of the offers relating to warrants
    • Enbridge (ENB) pipeline dispute with Michigan will be settled in federal court, according to Reuters
    • Endeavour Silver (EXK) founder and Executive Chairman Bradford Cooke passed away suddenly and unexpectedly at the age of 67
    • General Motors (GM) mulling Indiana site for battery plant, according to Reuters
    • Home Depot (HD) elects CEO and President Ted Decker as Chair of the Board, effective Oct. 1, 2022
    • Home Depot (HD) authorizes a new $15 bln share repurchase program, replacing its previous authorization
    • Intercept Pharma (ICPT) announces repurchase of convertible notes
    • Jacobs Engineering (J) announced that it intends to adopt a new holding company structure on Aug. 29, 2022
    • Krystal Biotech (KRYS): FDA accepts its Biologics License Application for dystrophic epidermolysis bullosa
    • KVH Industries (KVHI) announces that its Board of Directors has unanimously adopted a limited duration stockholder rights plan
    • Matterport (MTTR) partners with TD SYNNEX (SNX) to integrate 3D digital twin platform across a network of 150K resellers
    • MSG Entertainment's (MSGE) board of directors authorizes management to explore spin-off that would create separately-traded public company comprised of its traditional live entertainment business and MSG Networks business
    • Old Republic (ORI) announces share repurchase authorization and special dividend
    • POINT Biopharma (PNT) to Publish Abstract at ESMO Congress 2022 Containing Efficacy & Safety Data from Lead-In Cohort of Phase 3 SPLASH Trial
    • Rivian (RIVN) eliminated least expensive electric truck, according to Bloomberg
    • Robinhood Markets (HOOD) reports July operating data; total trading volume down slightly from June, Assets Under Customer up 16% from end of June
    • Roblox (RBLX) has poached a Meta (META) executive, according to the Wall Street Journal
    • Roku (ROKU) announces three new TV brands in Mexico: Aiwa, Daewoo, and Sansui
    • Samsung (SSNLF) plans to make $15 bln in R&D related investments by 2028, according to Reuters
    • Starbucks (SBUX) confirms COO John Culver will be departing, effective October 1, and will serve in an advisory capacity through January 1, 2023
    • Tesla (TSLA) agrees to $5 bln deal to get nickel from Indonesia, according to Bloomberg
    • Toll Brothers (TOL) and PGIM Real Estate announce joint venture to develop a 37-story, 422-unit multifamily rental community in San Diego, California
    • Verona Pharma (VRNA) receives clearance to begin pivotal clinical trials with Ensifentrine for COPD in China
    • Wayfair (W) announced a workforce reduction involving approximately 870 employees in connection with its previously announced plans to manage operating expenses and realign investment priorities
    • Wheaton Precious Metals (WPM) agrees with certain subsidiaries of Glencore plc (GLCNF) to terminate its silver stream on the Yauliyacu Mine in Peru for a cash payment of $150 mln
  • M&A:
    • Aries I Acquisition Corp (RAM) extends time to consummate a business combination with InfiniteWorld
    • Atlas Corp (ATCO) forms special committee of independent directors to evaluate previously announced "Take Private" proposal
    • Bright Lights Acquisition (BLTS) terminates previously announced business combination with men's grooming company, MANSCAPED
    • Keurig Dr Pepper (KDP) in talks to acquire VPX, owner of Bang Energy energy drink, according to Bloomberg
  • Syndicate: 
    • Imago BioSciences (IMGO) files for $400 mln mixed securities shelf offering
    • Inotiv (NOTV) files for $350 mln mixed securities shelf offering; also files for 6,964,728 share common stock offering by selling shareholders
    • Kymera Therapeutics (KYMR) announces $150 mln private placement equity financing
  • IPOs:
    • Expected to Price:
      • No IPOs expected.


Gapping Up/Down

  • Gapping up:
    • BILL +20.2%, MSGE +7.2%, VRNA +4.1%, AGIO +3.1%, EXK +0.9%, TOL +0.8%, SNX +0.8%, KRYS +0.7%, CARA +0.7%, KDP +0.6%
  • Gapping down:
    • BBBY -45%, AXDX -14.5%, STNE -12.3%, GME -10.9%, MAXN -9.1%, DE -5.4%, HOOD -5.1%, AMC -4.6%, FUBO -4.6%, APRN -3.9%, ROKU -2.6%, OSIS -2.6%, GLOB -2.6%, MTTR -2.1%, SBUX -1.7%, RAM -1.1%, GOOG -1%, ROST -0.9%, WPM -0.8%, VIPS -0.6%

Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades
    • Horace Mann (HMN) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $42
    • ZTO Express (ZTO) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $35
  • Downgrades:
    • America's Car-Mart (CRMT) downgraded to Equal-Weight from Overweight at Stephens; tgt lowered to $83
    • Apartment Income REIT Corp. (AIRC) downgraded to Underperform from Market Perform at BMO Capital Markets; tgt lowered to $43
    • Banco de Chile (BCH) downgraded to Neutral from Outperform at Credit Suisse
    • Banco Santander Chile (BSAC) downgraded to Neutral from Outperform at Credit Suisse
    • Biohaven Pharmaceutical (BHVN) downgraded to Neutral from Overweight at Piper Sandler; tgt $149
    • Enviva (EVA) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $76
    • Green Brick Partners (GRBK) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
    • HP Inc. (HPQ) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $30
    • Krispy Kreme, Inc. (DNUT) downgraded to Hold from Buy at HSBC Securities; tgt lowered to $15
    • NASDAQ (NDAQ) downgraded to Neutral from Overweight at Atlantic Equities; tgt raised to $200
    • Provident Finl (PFS) downgraded to Neutral from Overweight at Piper Sandler; tgt $26
    • UDR (UDR) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt $54
  • Others:
    • Consensus Cloud Solutions (CCSI) initiated with a Neutral at Citigroup; tgt $65
    • Construction Partners (ROAD) resumed with a Strong Buy at Raymond James; tgt raised to $35
    • CSG Systems (CSGS) initiated with a Buy at The Benchmark Company; tgt $73
    • DaVita (DVA) resumed with a Buy at UBS; tgt raised to $117
    • Eagle Materials (EXP) resumed with an Outperform at Raymond James; tgt $145
    • Installed Building Products (IBP) initiated with a Hold at Loop Capital; tgt $110
    • Martin Marietta (MLM) resumed with an Outperform at Raymond James; tgt $410
    • MasterCraft (MCFT) initiated with a Buy at Stifel; tgt $35
    • Microvast (MVST) initiated with an Outperform at Oppenheimer; tgt $8
    • Snowflake (SNOW) initiated with an Equal Weight at CapitalOne; tgt $182
    • TopBuild (BLD) initiated with a Hold at Loop Capital; tgt $220
    • Vulcan Materials (VMC) resumed with an Outperform at Raymond James; tgt $197

Upcoming Events:

  • Econ Data:
    • No economic data of note.
  • Earnings:
    • Monday (Aug 15)
      • Morning:  YOU DOYU LI TWKS WEBR
      • Afternoon: LFG BLND COMP FN FLNC GLBE NVTS SHLS TME TDUP ZIP
    • Tuesday (Aug 16)
      • Morning: GENI HD HUYA IHS LITE ONON PINC SE WMT
      • Afternoon:  A JKHY
    • Wednesday (Aug 17)
      • Morning:  ADI DNUT LOW PFGC SFL TGT TJX
      • Afternoon:  AMCR BBWI CSCO KEYS SNPS WOLF
    • Thursday (Aug 18)
      • Morning: BJ CSIQ EL KSS NTES NICE SLQT SPTN TPR
      • Afternoon:  AMAT BILL GLOB OSIS ROST
    • Friday (Aug 19)  
      • Morning:  BKE DE FL VIPS

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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