Quite a volatile trading day on Thursday, as jobless claims rose 28k to the highest level in four months. Future pared gains on the news, and the market looked ready to break support, but found footing and closed near the high of the day. Unprecedented policies from Japan maybe one of the factors in the market holding strong after bad ADP and Jobless claim numbers this week. The Nikkei bolted over 1000k in 2 days over 13k overnight on its plans to fight chronic deflation and an economy that has struggled for years. There were some moves in the currency market that are rarely seen as the Yen weekend considerably.
The highly anticipated March employment numbers came out this morning, and they did not disappoint. Only 88k jobs were created, the lowest in 10 months although the unemployment number dropped to 7.6% due to folks leaving the looking pool. Futures slid considerably and we are looking at a 1%+ decline in the SPY at open. We are still in a heads bulls win, tails bears lose environment until the unemployment number drops under 7%. But the issue with the report this morning is showing that the Fed mandated 6.5% unemployment number may happen with folks leaving the workforce and without having to create jobs. That would be a scary scenario. Anyway, we shall see how today plays out but it could be ugly today.
Here is a nice read on China and it’s impact on some of the bigger companies in the US : http://online.wsj.com/article/SB10001424127887323916304578400463208890042.html?mod=WSJ_business_whatsNews
FFIV lowered it’s outlook yesterday afterhours and the stock is down 17% pre-market. AT least 3 analysts had raised its targets or reiterated as buys the last 2 weeks. Just shows you why sometimes it pays to be contrarian. Have to give it to the company for having the guts to come out and prevent a bigger drop in earnings.
Here are some of the analyst changes:
FFIV F5 Networks downgraded to Neutral from Overweight at Piper Jaffray
Piper Jaffray downgraded F5 Networks citing weak product sales following the company's negative March quarter preannouncement. Piper lowered its price target for shares to $82 from $107.
FFIV F5 Networks downgraded to Neutral from Buy at Citigroup
Citigroup downgraded F5 Networks citing execution concerns and deal push-outs following the company's negative March quarter preannouncement. Citi lowered its price target for shares to $80 from $125. Note F5 shares were also downgraded this morning at Piper Jaffray.
FFIV F5 Networks downgraded to Market Perform from Outperform at William Blair
FFIV F5 Networks should be opportunistically bought, says at RW Baird
Baird would be opportunistic buyers of F5 Networks following its disappointing earnings pre-announcement. The firm noted its reason for its recent upgrade was telecommunications trends but said it was not a vertical in their survey work. The vertical was offset however by strength in Security and Enterprise. Shares remain Outperform rated with a $110 price target.
William Blair downgraded F5 Networks citing structural headwinds following the company's negative March quarter preannouncement. F5 shares were also downgraded this morning at Piper Jaffray and Citigroup.
CELG Celgene upgraded to Buy from Hold at Deutsche Bank
Deutsche Bank upgraded Celgene citing the company's revenue diversification and expectations that its psoriasis drug Apremilast will be a blockbuster. The firm raised its price target for shares to $143 from $105.
CAT Caterpillar price target lowered to $90-$93 from $102-$105 at Wells Fargo
Wells Fargo reduced its target and estimates for Caterpillar, citing the lack of a substantial acceleration in the U.S. construction equipment market and continued negative trends impacting mining capital investment. The firm thinks that investments in mining capital equipment could be headed for a multiyear decline and it maintains a Market Perform rating on the shares.
CAT Caterpillar estimates lowered 6-9% below the Street at BofA/Merrill
BofA/Merrill lowered its 2013-2015 earnings estimates 6-9% below consensus estimate weaker mining trends ahead of the April 22 report. The firm reiterated its Neutral rating and lowered its price target to $95 from $104.
Will be keeping very cautious today as it’s been a rough week on some of the trades. Not sure we get a monster bounce but will be watching for one. I do have AAPL puts and will watch for it, would need to break under 419 for selling to accelerate. Then will look to play bounces on LNKD, PCLN, and more CMG.
Here are the strikes I am looking at for weeklies:
Stock Ticker | Call/Put | Strike | Expiration |
LNKD | CALL | $170.00 | Weekly |
PCLN | CALL | $700.00 | Weekly |
CMG | CALL | $325.00 | Weekly |
AAPL | PUT | $420.00 | weekly |
Lets have a great day and see you Sunday for the week ahead webinar!
- JB