It was a bloodbath for markets on Tuesday, as CPI data had folks running for the exits. The S&P dropped over 4% while the Nasdaq fell over 5% in their worst sessions in 2 years. Asia market closed lower overnight while Europe indexes are in the red this morning. U.S. futures are flat as I write this, the Dollar and Yields are higher while Oil and Gold are lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-98/
Stocks gapped lower in the pre-market, after a hotter than expected core-CPI number, and failed to find any sustained bid throughout the day closing near the lows of the session. At first glance, the CPI read came in lower than expected, but once you remove falling energy prices, it showed widespread inflation in nearly every category. All this does is give the Fed more ammo to continue to aggressively raise rates. Tomorrow we get retail sales data and then next week comes the Fed meeting and decision. Things may continue to be dicey here and would want to see the SPY hold the $390 handle today or I think we visit the low $380s into the end of the week:
APRN battled in the morning, reversing early morning losses to trade in the green by 10am but failed to hold. Still think this is headed over $10 in the coming weeks:
EVH actually held up quite well considering the market sell-off. Would like to see this back over $39 today:
TZA premiums were high after the open yesterday, so I waited until the afternoon to add some calls as a hedge. I locked some in for profits late in the day and held some into today. If the SPY is holding $390 into the afternoon will likely close the calls out and revisit. If SPY does break, then TZA could see $39+ in the next few sessions and provide a nice hedge:
Yesterdays pullback created some opportunities. I was watching CI yesterday and will continue to watch today for some possible calls to play for a move over $300 in the coming weeks:
U has lost nearly $20 since August. If that $35 handle holds today I may look at some lotto calls to play for a move back near $40 into Friday:
Sill holding my AMLX and ICPT, and will look to add something on ICPT by Friday.
Here are the analyst changes of note for today:
| Workday durability not priced in, says Morgan Stanley |
| Morgan Stanley analyst Keith Weiss said Workday management "could have done more to de-risk the outlook" at the company's analyst day meeting, noting that CEO Aneel Bhusri informing an analyst that 20%-plus growth is a "plan" and not a "commitment" does not "exude confidence in that 20%" even if his comments that a volatile macro backdrop are not in their control were "very much true." However, management laid out well why the longer-term durable free cash flow growth potential at Workday outweighs the near-term macro risk, said Weiss, who thinks this durability is not priced in at current levels. The company is sustaining 20%-plus top-line growth with best in class unit economics that give it a clear line of sight for operating margins to improve from 19% today to 25%, likely over the next three years, added Weiss, who has an Overweight rating and $282 price target on Workday shares |
| Woodward downgraded to Hold from Buy at Jefferies |
| Jefferies analyst Sheila Kahyaoglu downgraded Woodward (WWD) to Hold from Buy with a price target of $90, down from $107. The analyst sees risk from supply chain issues and the continued push-out of China's MAX certification. Investors are baking in Boeing (BA) stepping up MAX production beyond 31 per month in 2023, says Kahyaoglu, whose Woodward model assumes MAX production of 31 per month and 42 per month in fiscal 2023 and fiscal 2024, respectively. In addition, Woodward's industrial segment lacks organic top-line or EBIT growth, the analyst tells investors in a research note |
Corteva remains a 'Top Pick' at Morgan Stanley following investor day |
| Morgan Stanley analyst Vincent Andrews said Corteva remains his "Top Pick" following the company's investor day on Tuesday, telling investors that the event marks the start of the "simplification, accountability, and acceleration" paradigm embedded in its new growth and cost optimization strategy out to 2025. While the company did not address Q3 or Q4 targets, he thinks it is "likely that things are trending at least in line with the company's guidance given its enthusiasm for 2023," said Andrews, who thinks consensus forecasts for 2023-2025 are set to move higher following the event. Andrews has an Overweight rating and $70 price target on Corteva shares |
| Southern Company price target raised to $87 from $83 at Argus |
| Argus analyst Marie Ferguson raised the firm's price target on Southern Company to $87 from $83 and keeps a Buy rating on the shares. The company offers a well-run base of regulated utility assets and a presence in states with favorable population trends, the analyst tells investors in a research note, adding that its new Vogtle nuclear plants will help to drive long-term growth. Ferguson further states that as Southern retires coal-fired plants and increasing its use of renewables, the company's platform for growth looks "solid" |
| RH price target raised to $325 from $300 at JPMorgan |
| JPMorgan analyst Christopher Horvers raised the firm's price target on RH to $325 from $300 and keeps an Overweight rating on the shares. The analyst updated his model post the Q2 results and says second half of 2022 estimates "look beatable |
| Moderna price target lowered to $150 from $180 at Argus |
| Argus analyst Jasper Hellweg lowered the firm's price target on Moderna to $150 from $180 but keeps a Buy rating on the shares. The analyst contends that the stock's discounted price offers a "buying opportunity" as the company's Omicron-containing bivalent COVID-19 booster vaccine was recently authorized by the FDA in the U.S. Hellweg still warns however that any unexpected negative developments for Moderna's coronavirus vaccine or pipeline products could result in a sharp stock sellof |
And here is what I am watching : U, SPOT, TWLO, TZA, CI, UNH, ICPT CMG, WING, PTCT, SAGE, APRN, ZS, TWLO, SPOT, and ROKU.
Let's have a great day!
-JB