Markets closed higher to start the week, with the S&P adding .69%, with an afternoon surge pushing stocks into the green. Asia markets closed higher overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a lower open, the Dollar, Yields, and Oil are higher while Gold is lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-102/
Markets looked like they were ready to continue their collapse on Monday, only to find late morning and afternoon bids to close solidly in the green. This morning futures are pointing to a lower open, and looks like most of yesterdays gains will be erased. That $380 level on the SPY is still in play so would want to see that hold today. The big catalyst of the week is the Fed, which starts their meeting today and will have a statement and press conference tomorrow. Most are expecting a .75% rate hike while the odds for a 1% hike continue to increase. It almost seems like the Fed should surprise with the 1% hike, pull the band-aid off, and get on with things. Actually think the market would rally if that happened. Any dovish commentary and think markets would be under pressure... the irony that hawkish commentary over the past 10 years would have caused markets to fall, now it may spark a rally:
ROKU found buyers yesterday, mostly in sympathy with a NFLX upgrade. I added some weekly calls and may actually look for some later dated strikes. $DIS and $NFLX will be rolling out ads and think this only adds more credibility to the ROKU business model and makes them more attractive as a buyout candidate. A break and hold of that $75 and think $80+ comes quick:
It was another flat session for CI. HUM received another upgrade this morning. Will be watching for potential entry on some calls for the eventual move over $295 and into the $300s:
This bull-flag setup on WING is tantalizing. Typically you take half of the staff of the flag and that is the next upside target($40 move/2 = $20). So next target is near $160. Will be watching for green today and them may enter some calls for that move:
Still holding the rest of my AMLX and likely won't add anything more ahead of their Pdufa date of Sept 29th - the news can come at anytime though. If their drug us approved have to think $40+ comes:
APRN held the 200dma yesterday. Maybe the start of a reversal. Once this gets back going think $10+ comes:
Also watching WIX after the Starboard activist stake.
And here are the analyst changes of note for today:
| AutoZone price target raised to $2,450 from $2,350 at Jefferies |
| Jefferies analyst Bret Jordan raised the firm's price target on AutoZone to $2,450 from $2,350 and keeps a Buy rating on the shares after the company's Q4 comp growth and EPS beat his estimates and consensus. He believes expected LIFO charges from higher shipping costs are only a short-term negative in a long-term share growth story, said Jordan, who sees the "Do-It-For-Me" side of the business growing by a double-digit percentage into FY23 |
| CarGurus price target lowered to $21 from $27 at Needham |
| Needham analyst Chris Pierce lowered the firm's price target on CarGurus to $21 from $27 but keeps a Buy rating on the shares. The analyst states that industry data-points have further weakened since the company reported Q2 results in early August, leading to a lower near-term revenue opportunity for CarGurus. Pierce adds however that CarGurus is still "much better positioned" following the CarOffer acquisition as it is expanding beyond their legacy used vehicle lead generation addressable market into "much larger" Wholesale and Retail markets |
| Morgan Stanley would be buyer on weakness in Ford below $14 per share |
| After Ford pre-announced the impact of part shortages and inflation-related supplier costs on quarterly adjusted EBIT and reiterated its FY22 adjusted EBIT view of $11.5B-$12.5B, Morgan Stanley analyst Adam Jonas said Ford's announcement shows that "we are not yet out of the woods" in terms of supply chain tightness in autos. Ford announced that, based on recent negotiations, inflation-related supplier costs will run $1.0B higher than originally expected in the third quarter, noted Jonas, who adds that "it was only a matter of time before supplier cost recoveries began to flow" and points to this as a reason he likes suppliers over OEs and dealers over the coming months. Jonas, who said he has "been warming to the risk-reward for Ford throughout FY22" and would be a buyer on weakness below his unchanged $14 price target, keeps an Equal Weight rating on Ford shares. |
ADP price target raised to $236 from $230 at Cowen |
| Cowen analyst Bryan Bergin raised the firm's price target on ADP to $236 from $230 and keeps a Market Perform rating on the shares. The analyst said the momentum exiting 4Q and ADP's healthy demand commentary appears likely to persist in the near term, with key drivers of outperformance including mid-market, HRO/PEO, and retirement services apt to remain strong |
| Royal Caribbean price target lowered to $58 from $65 at Truist |
| Truist analyst Patrick Scholes lowered the firm's price target on Royal Caribbean to $58 from $65 and keeps a Hold rating on the shares as part of a broader research note on Cruise Lines. The analyst states that given his conversations with senior executives at large travel agencies specializing in cruises and based on "big data" on future bookings and pricing, the announcements in early-to-mid-August that lifted most vaccine and testing rules have driven a material increase in booking volumes. Scholes adds however that the cruise companies are hardly "out of the woods" as balance sheets remain in precarious positions, and the stocks offer "different stories at the moment" - one is benefiting from "recovering revenues" but the others are managing interest expense and possible equity dilution from equity issuance |
| 'Surprise' $1B cost headwind to weigh on Ford shares, says Citi |
| Ford (F) preannounced Q3 EBIT at $1.4B-$1.7B, below the Street's $3B estimate, but confirmed 2022 guidance, Citi analyst Itay Michaeli tells investors in a research note. Though the Q3 guide-down did not impact the year guidance, the "surprise" $1B cost headwind tied to inflation-related supplier costs and greater reliance on a strong Q4 will likely weigh on the shares, says the analyst. Michaeli adds that the read-through to General Motors (GM) from Ford's news "isn't clear at the moment as it hinges on the degree to which Ford's guide-down is industry-related or company-specific." He keeps a Neutral rating on Ford shares with a $16 price target. |
And here is what I am watching today: CI, WING, APRN, HUM, ZS, TZA, ICPT, ROKU, BHC, U, SPOT, TWLO, CMG, , PTCT, and SAGE.
Let's have a great day!
-JB