Markets soared to start the week, with the S&P ending Monday up 2.65%. Asia markets also rallied overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a sharply higher open, the Dollar, Yields, and Gold are lower while Oil is higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-120/
It was a strong start to the week yesterday, with stocks rallying hard amidst some strong earnings reports, particularly BAC, and a reversal of tax policy from the U.K. This morning futures are pointing to a continuation with strong earnings from names like JNJ and GS. After the close we get NFLX which will certainly impact markets.... more on that in a bit.
The SPY closed at $366.82 yesterday. More decent earnings this morning from GS and MMM could help keep stocks bid today. Outside of any crazy miss from NFLX, think a $380 test is coming this week:
I added some U calls yesterday as outlined on the waitlist. The stock rallied a bit after I added the calls but then chopped around in a tight range. I did not want to lose my profits so locked the calls in for a small gain. May revisit today as I think this heads into the mid-high $30s:
I also went and added some weekly ROKU calls with the stock rallying... some of it in sympathy to NFLX. The stock is gapping this morning. Will look to close some of my calls to cover costs and ride the rest into the NFLX earnings after the close:
I also added some NFLX calls for some premium build into their report. I was able to close some of my calls out for some profits and will look to close some more out at the open to cover costs and may ride the rest into earnings. The WSJ came out with what can be construed as a 'hit piece' on NFLX yesterday afternoon just 24 hours before their earnings. They wrote about concerning subscriber growth trends and cited people 'familiar with the matter'.
Why put that out when we will have 100% verified sources, via the company, in 24 hours? Classic click-bait. Have a feeling we get a relief bounce after the close. Inline numbers and this is $280... any upside surprises and its $300+. A miss and sub $200. LIke I mentioned yesterday, a true binary event:
AMLX keeps churning higher and think $40+ comes soon. Still looking to close the last of my $35 calls and may add some later dated strikes:
Still eyeing GNRC for some calls:
And GWW ahead of their earnings next week:
And lastly, if BAC, GS, MMM, PEP earnings are any sign, this could be a relief quarter for some names in regards to their reports and could be some massive opportunities into earnings. Will have a list of names I may look to add like ALGN, ISRG, MELI, CMG, and others...
Here are the analyst changes of note for today:
| Microsoft price target lowered to $315 from $330 at Deutsche Bank |
| Deutsche Bank analyst Brad Zelnick lowered the firm's price target on Microsoft to $315 from $330 and keeps a Buy rating on the shares ahead of the fiscal Q1 results on October 25. Microsoft's commercial and enterprise segments "have not gotten materially worse and continue to hold up," while the weakening consumer backdrop, particularly in PCs and Windows, is well understood by investors, Zelnick tells investors in a research note. The analyst continues to rest his Buy rating on the "high-quality nature of Microsoft's business." He updated his model for lower forecasted Windows demand and currency moves |
Tesla setup 'balanced if not slightly positive' into Q3, says Citi |
| Citi analyst Itay Michaeli reduced 2022 and 2023 estimates for Tesla while maintaining out-year estimates. He keeps a Sell rating on the shares with a $141.33 price target. The analyst's Q3 earnings estimate is slightly above consensus on a modestly higher quarter-over-quarter incremental gross margin but he thinks the main focus will be on Tesla's Q4 outlook for deliveries and gross margins. The setup for the stock "seems balanced if not slightly positive," Michaeli tells investors in a research note. If Q3 beats and management delivers "some reassurance" on Q4 and 2023, the stock "likely bounces post the recent pullback," writes the analyst. However, Michaeli is not sure the Q3 update alone can fully address macro concerns into Q4 and 2023, so he thinks the stock "might quickly revert to trading on macro/industry datapoints. |
| MongoDB upgraded to Neutral at Redburn with stock below 2020 lows |
| As previously reported, Redburn analyst Alex Haissl upgraded MongoDB to Neutral from Sell. With the stock trading 20% below 2020 valuation lows, he doesn't see further downside to justify a Sell rating, though he notes that his upgrade does not change his fundamental concerns. His view remains that MongoDB has a platform disadvantage compared to the hyperscalers, which means that growth comes at high costs. In the relevant nonrelational segment, MongoDB's market share is 4.3% and although he expects the share to increase towards 5%, he views it as "unlikely that it will get much higher," Haissl said |
| MongoDB upgraded to Neutral at Redburn with stock below 2020 lows |
| As previously reported, Redburn analyst Alex Haissl upgraded MongoDB to Neutral from Sell. With the stock trading 20% below 2020 valuation lows, he doesn't see further downside to justify a Sell rating, though he notes that his upgrade does not change his fundamental concerns. His view remains that MongoDB has a platform disadvantage compared to the hyperscalers, which means that growth comes at high costs. In the relevant nonrelational segment, MongoDB's market share is 4.3% and although he expects the share to increase towards 5%, he views it as "unlikely that it will get much higher," Haissl said |
| Nvidia price target lowered to $140 from $165 at Deutsche Bank |
| Deutsche Bank analyst Ross Seymore lowered the firm's price target on Nvidia to $140 from $165 and keeps a Hold rating on the shares. Fears of fundamental deterioration are "leading to very bearish investor positioning" into the Q3 results for semiconductors, Seymore tells investors in a research note. Fundamentally, the analyst expects Q3 earnings season to "yield more pervasive signs of weakness" and for the second consecutive quarter, he sees downside risk to 2023 estimates. As for the semiconductor stocks, Seymore is becoming "incrementally more constructive," saying the drop in the sector and relative underperformance verses the S&P 500 "have clearly priced in significant rev/EPS estimate cuts" and left the group valuation 20% below the its 5-year average |
Intel price target lowered to $32 from $35 at Deutsche Bank |
| Deutsche Bank analyst Ross Seymore lowered the firm's price target on Intel to $32 from $35 and keeps a Hold rating on the shares. Fears of fundamental deterioration are "leading to very bearish investor positioning" into the Q3 results for semiconductors, Seymore tells investors in a research note. Fundamentally, the analyst expects Q3 earnings season to "yield more pervasive signs of weakness" and for the second consecutive quarter, he sees downside risk to 2023 estimates. As for the semiconductor stocks, Seymore is becoming "incrementally more constructive," saying the drop in the sector and relative underperformance verses the S&P 500 "have clearly priced in significant rev/EPS estimate cuts" and left the group valuation 20% below the its 5-year average |
| UnitedHealth price target raised to $615 from $569 at Deutsche Bank |
| Deutsche Bank analyst George Hill raised the firm's price target on UnitedHealth to $615 from $569 and keeps a Buy rating on the shares. The company posted solid Q3 results on broad-based strength as membership growth remains robust and value based arrangements continue to expand, Hill tells investors in a research note |
And here is what I am watching: GNRC, GWW, U, TWLO, SPOT, ROKU, NFLX, CMG, WING, WIX, and CI.
Let's have a great day!
-JB