What Sami’s Taking Long This Week
Sami has been trailing out of a lot of his short positions and adding on some long positions… but all of the long stocks have something in common. What do these moves say about his thoughts on the upcoming week? In this video, Sami explains: – Why he doesn’t have any shorts on this week’s watchlist – What is so interesting about AKAN – How he plans to play stocks near their all-time lows – Why it might be too late to get in EYE (and what would keep it in play) – What makes LIQT an exception to the rule
Continue Reading -->Scott Redler’s Dog Bytes: RDR in FAANG
SPX made a low of 3858 Thursday. To see 4120-4157, it needs to prove it can hold 3963 for a session or so. SPX futures are down 15 but well off the overnight lows. We had chances to switch gears Thursday when my 3850 target was reached. The Oscillator was -75 and it’s now -20. We’ll see if this bear market bounce goes for a week or so. SPY needs to hold $395ish to stay in the game to clear $403 and see $410-$414.TSLA did a Red Dog Reversal around the $700 pivot after six down sessions. It hit a high of $787 Friday. This morning it’s flattish. It might participate in a market bounce but it doesn’t feel like a huge rally is coming. If it can hold $751ish, maybe it can see $845. FB was a nice focus for us Thursday into Friday as it did a Red Dog Reversal to get me long. I sold Friday afternoon as it hit $199.87. I’m looking to buy for a red to green trade. It might even try and clear Friday’s high. AMZN has been one of the weakest F.A.N.G. -type names for a while now. The gap down from earnings never got filled, and it’s been last to rally on all oversold attempts. It got interesting Thursday when it bounced off of $2049. I sold three sets of puts into the weakness to get synthetically long. Buying calls would have been better. It hit $2263. Now we’ll see if it can hold $2156ish to show commitment.Positions Disclosure as of 5/16/2022 at 8:48 a.m. ET
Continue Reading -->Did the Fed Kill the Metaverse?
The Fed sent Wall Street into panic mode in 2022. High-growth tech stocks have been pummeled after soaring through 2020 and 2021. And even the Metaverse isn’t immune. The metaverse was all the rage at the end of 2021. Facebook even changed its name to Meta Platforms (FB) on October 28, 2021. CEO Mark Zuckerberg said, “We believe the metaverse will be the successor to the mobile internet, we’ll be able to feel present – like we’re right there with people no matter how far apart we actually are.” People were even buying real estate in the metaverse — with real money. The Metaverse Group has sunk more than $10 million into digital real estate and is the de facto “landlord” of the virtual world. The 2021 Metaverse report from crypto asset firm Grayscale said, “the metaverse represents a $1 trillion annual revenue market opportunity.” Keep in mind that according to the World Bank, only 16 countries have a GDP over $1 trillion. Cryptocurrencies and NFT’s went mainstream. And then the Fed decided to tackle inflation and ruined the party. The Central Bank has hiked the federal funds rate twice, by 0.25% in March and 0.5% in May. The Fed will also begin the runoff of its $9 trillion balance sheet in June. And 5 more rate hikes are on the schedule this year, with the federal funds rate expected to top 3% by year-end. These actions are meant to reduce the money supply in the U.S. economy to squelch consumer demand that is outstripping the supply chain. But traders are worried that will cause a recession. And that fear has driven a major revaluation of high-growth tech stocks that soared throughout 2020 and 2021. Metaverse stocks are one sector that’s been hit particularly hard… even though it’s supposed to be a trillion-dollar opportunity. Let’s take a look at my previously chosen 5 Top Metaverse Stocks to Watch and how they’ve fared in the 2022 tech rout. Unity Software (U) Unity Software (U) has crumbled more than 70% in 2022. That makes it one of the biggest losers among “metaverse stocks” in 2022. The video game software company got rocked this week by earnings. Although Unity reported Q1 results in line with analysts’ expectations after-hours Tuesday, the market was focused on guidance. The company’s Q2 forecast missed expectations and Unity slashed its full-year outlook. The stock cratered 37% on Wednesday and notched a fresh record-low during the session. The drop wiped out $5 billion of Unity’s market cap. Unity’s plunge from its all-time high is even more severe than the YTD drop. The stock hit a high of $210 on November 18, 2021. Since then, Unity shares are down more than 80%. Autodesk (ADSK) Like the rest of this sector, Autodesk (ADSK) has fallen sharply in 2022. But this drawdown isn’t as severe as Unity Software. Autodesk shares are down about 30% YTD. The stock is faring worse in the 52-week range. ADSK shares have dropped more than 40% from the 52-week high at $344.39 Nvidia (NVDA) Nvidia (NVDA) has been pummeled in 2022. The chipmaker’s stock is down about 40% this year. And the stock is doing much worse in the 52-week range. NVDA ended Friday’s session down nearly 50% from the 52-week high of $346.67. Nvidia’s focus on gaming and graphics processors makes it a key company for the future of the metaverse. The company is scheduled to report fiscal Q3 earnings on May 25. Roblox (RBLX) Roblox (RBLX) hit a fresh record-low this week before bouncing back some. The company reported mixed Q1 results after the close on Tuesday. Those results initially dented the stock but traders turned around their sentiment after optimistic comments from the CEO Wednesday morning. Roblox ended Wednesday’s session up 3.4% at $23.97. But when you zoom out, the stock looks just like the rest of this sector. RBLX shares are down nearly 70% YTD. And it’s even more discouraging when you look at the drawdown from its record high. Roblox hit a high of $141.60 on November 19, 2021. Since then, the stock is down more than 75%. Meta Platforms (FB) The collapse of Meta Platforms (FB) has been one of the biggest stock stories this year. We all remember the stock plummeting 26% on February 3 following brutal Q4 earnings. That drop alone wiped out more than $250 million of FB’s market cap and was the worst day in company history. And it’s gotten worse since then. Meta is down more than 40% YTD. And FB has plummeted nearly 50% from its all-time high of $384.33 on September 10, 2021. The company now plans to cut its metaverse-related spending… less than a year after the rebrand. Reuters reported Thursday that the Reality Labs division at Meta is bracing for a slowdown in spending. The company’s chief technology officer reportedly told employees they would not be able to afford some planned projects and would need to postpone others. The company betting its entire future on the metaverse (so much so that it changed its name) is slowing down its spending on developing the metaverse. Meta lost $2.9 billion on Reality Labs in the first quarter and $3.3 billion in Q4. Although this sector has been beaten down in 2022, analysts still believe the metaverse is the future. Citigroup says the metaverse “represents a potential total addressable market of up to $13 trillion by 2030, made up of 5 billion users.” Is now the time to buy the dip? Let us know what you think in the comments below.
Continue Reading -->Coffee With Greta: Elon Musk Gets Cold Feet
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +341 (+1.1%) SPX Futures: +57 (+1.5%) NASDAQ Futures: +246 (+2.1%) Good morning friends! Futures are higher as traders look to shake off a dramatic week of selling. Let’s get right to it! Musk Puts Twitter Deal On Hold Twitter (TWTR) shares are plunging 12.4% ahead of the open after Elon Musk announced his buyout deal is on hold. In a tweet, Musk said the deal is “temporarily on hold pending details” on fake accounts. Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn — Elon Musk (@elonmusk) May 13, 2022 In a follow-up tweet, he said he is “still committed” to the acquisition. Still committed to acquisition — Elon Musk (@elonmusk) May 13, 2022 Musk included a link to a Reuters report on Twitter’s estimation that less than 5% of accounts on the platform are spam or fake accounts. He wants this confirmed before he moves ahead with purchasing the platform. If he were to ditch the deal, he would owe Twitter a $1 billion breakup fee. Fed Can’t Guarantee Soft Landing Fed Chair Jerome Powell knows getting inflation under control may cause some pain for the economy. In an interview with Marketplace Thursday, Powell said he can’t guarantee the Fed can accomplish a soft landing. “So a soft landing is, is really just getting back to 2% inflation while keeping the labor market strong. And it’s quite challenging to accomplish that right now, for a couple of reasons,” he said. His comments came after fresh stagflation fears swept across Wall Street Thursday. But Powell steered clear of saying a recession is imminent. He said avoiding a recession “will be challenging, it won’t be easy. No one here thinks that it will be easy. Nonetheless, we think there are pathways … for us to get there.” The Fed Chair reiterated the Fed’s target to get inflation back down to 2%. The CPI jumped 8.3% annually in April while the PPI rose 11%. Cryptocurrencies Bounce The crypto market is clawing back gains after a week of intense selling similar to the moves on Wall Street. Bitcoin is up nearly 9% in the past 24 hours and nearing $31,000. Ethereum is up nearly 9% as well, topping $2,100. The global crypto market cap has risen 8.2% to $1.38 trillion. Crypto was hit hard this week as traders sold-off risk assets. The collapse of Terra’s UST stablecoin also wreaked havoc across the market. The world’s largest stablecoin, Tether, briefly dropped below $1 on Thursday but has since reclaimed that peg. Oil Rises, Gas Hits 4th Straight Record Oil prices are rising despite fears of weaker demand. West Texas Intermediate crude futures are up more than 2% to over $108 bbl while Brent crude futures are up 2% to over $109 bbl. But oil is still on track for its first weekly loss in three weeks amid heightened concerns about slowing economic growth. In the meantime, U.S. gas prices hit a new record-high today. Data from AAA shows the national average for a gallon of regular is now $4.432 while diesel jumped to $5.56/gal. This is the 4th day in a row those prices have jumped to a fresh record. Affirm Rallies On Fiscal Q3 Results Affirm Holdings (AFRM) shares are rallying 36.1% in premarket trade after beating fiscal Q3 expectations. The buy-now, pay-later company reported a loss of $0.19 per share on $354.8 million in revenue. That was better than analysts’ expectations for a loss of $0.46 per share on $344 million in revenue. Affirm said it processed $3.9 billion in gross merchandise volume (GMV) last quarter, up 73% year-over-year and better than estimates for $3.85 billion. The CEO said 81% of those transactions were from repeat customers. Affirm forecast fiscal Q4 GMV between $3.95 billion and $4.05 billion with revenue ranging from $345 million to $355 million. That was in line with analysts’ estimates. Crypto Exchange CEO Buys Stake in Robinhood Robinhood (HOOD) shares are jumping 20.3% ahead of the open after the CEO of a major crypto exchange bought a large stake in the company. A new SEC filing shows FTX CEO Sam Bankman-Fried bought a 7.6% stake in Robinhood. The rally comes after HOOD tumbled to an all-time low at $7.71 Thursday. Bankman-Fried purchased $648 million worth of the stock through his firm Emergent Fidelity Technologies. The SEC filing says he bought the shares believing they “represent an attractive investment”. Consumer Sentiment Expected to Fall The University of Michigan releases the preliminary reading of its May consumer sentiment index at 10:00 a.m. ET. Sentiment is expected to fall more than 1 point to 64. So far, consumers have weathered inflation well with spending remaining high. But many economists see Americans reaching a breaking point soon as the threat of a recession rises. In Case You Missed It The Senate confirmed Fed Chair Jerome Powell for a second 4-year term Thursday. His nomination was approved on an 80 to 19 vote. 13 Republicans and 6 progressive Democrats voted ‘no’. Powell’s term will expire in February 2026. U.S. airline bookings tumbled 17% in April as flight prices surged 8% from March. Consumers spent $7.8 billion on domestic flights last month, down 13% from March. But demand is still higher than pre-pandemic levels. Bookings rose 5% compared to April 2019 while prices jumped 27%.
Continue Reading -->Coffee With Greta: More Inflation, More Problems
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -157 (-0.5%) SPX Futures: -30 (-0.8%) NASDAQ Futures: -177 (-1.5%) Good morning friends! Futures are falling as selling continues to wreak havoc on Wall Street. Let’s get right to it! Producer Inflation Surges The Bureau of Labor Statistics’ producer price index jumped 0.5% monthly in April and surged 11% year-over-year. That was in line with economists’ expectations on a monthly basis and a slowdown from 11.5% annual inflation in March. That’s the first decline in annual price changes since the pandemic started. The core PPI, which excludes food, energy, and trade services, rose 0.6% monthly and 6.9% annually. That was also in line with expectations. Producer prices are leading indicator for consumer prices as the increases are passed down to shoppers. The CPI also came in hotter than expected in April. Consumer prices rose 0.3% monthly and 8.3% year-over-year last month vs expectations for 0.2% and 8.1% respectively. The Core CPI jumped 0.6% monthly and 6.2% annually. Weekly Jobless Claims Rise Unexpectedly The Labor Department reported 203,000 Americans filed initial claims for unemployment benefits last week. That was an increase of 1,000 from the previous week and missed economists’ expectations for claims to fall to 194,000. The previous week was also revised higher to 202,000 from 181,000. That was the biggest weekly increase since July 2021. Continuing claims fell by 44,000 to 1.34 million in the week ending April 30, the lowest level since early 1970. Oil Prices Fall, Gas Prices Hit Record Oil prices are slipping today on fears of an impending recession in the U.S. West Texas Intermediate crude futures are down 1.3% to $104 bbl with Brent crude futures falling 1.4% to $106 bbl. The International Energy Agency also warned Thursday that soaring gas prices will hurt demand. And U.S. gas prices just hit a new record high. Data from AAA shows the national average for a gallon of regular is $4.418, this is the third record set just this week. Diesel prices are also sitting at a record $5.557 per gallon. Cryptocurrencies Collapse More than $200 billion has been wiped off the global crypto market cap over the past day. Bitcoin is down 8.4% in the past 24 hours, hovering around $28,000. The coin plunged as low at $25,919 earlier this morning, which is the first time its dropped below $27,000 since December 2020. Ethereum has lost 17.4% in the past 24 hours, falling under $2,000. The global crypto market cap is down 14.8% to $1.26 trillion. Investors have been fleeing crypto amid the intense selling on Wall Street. Disney Shakes Off Earnings Miss, Rallies On Subscriber Growth Walt Disney (DIS) shares are sliding 5.2% ahead of the open after missing fiscal Q2 expectations. The company reported adjusted earnings of $1.08 per share on $19.25 billion in revenue. That missed analysts’ expectations for adjusted EPS of $1.19 on $20.1 billion in revenue. But Disney+ had 137.7 million total subscribers last quarter, beating expectations for 135 million. That subscriber beat is pumping up the stock. Disney’s theme parks business is also seeing a solid recovery from the pandemic. Theme parks and product sales nearly doubled year-over-year to $6.65 billion, better than expectations for $6.3 billion. Rivian Rallies On Outlook Rivian Automotive (RIVN) shares are down 4.1% in premarket trade after missing Q1 expectations. The electric automaker reported a loss of $1.77 per share and a $1.6 billion operating loss on $95 million in sales. That was worse than analysts’ expectations for a loss of $1.45 per share and a $1.5 billion operating loss on $131 million in sales. But the stock is up after Rivian maintained its previous 2022 production guidance. The company still expects to deliver 25,000 vehicles this year after producing 2,553 in Q1. Rivian said it had more than 90,000 reservations at the end of the quarter and nearly $17 billion in cash. Beyond Meat Tumbles On Disappointing Q1 Results Beyond Meat (BYND) shares are tumbling 23.6% ahead of the open after reporting a wider-than-expected first-quarter loss. The alternative meat company reported an adjusted loss of $1.58 per share on $109.5 million in revenue. That was worse than analysts’ expectations for a $1.01 per share loss on $112.3 million in revenue. Beyond Meat executives warned of “near-term uncertainty” due to inflation, rising interest rates, and the supply chain. The company forecast full-year revenue between $560 million and $620 million vs analysts’ expectations for $580.7 million. WeWork Earnings WeWork (WE) shares are up 2.9% in premarket trade after reporting a narrower Q1 loss than expected. The office-sharing company reported a loss of $0.57 per share on $765 million in revenue. That was better than analysts’ expectations for a loss of $0.72 per share on $768 million in revenue. Revenue rose 28% year-over-year. WeWork’s total expenses fell to $1.12 billion vs $2.1 billion a a year ago. The company forecast Q2 revenue between $800 million and $825 million and full-year sales between $3.4 billion and $3.5 billion. Instacart Files For IPO Grocery delivery platform Instacart isn’t letting the tech rout scare it off. The company announced it has filed a draft registration statement with the SEC, in its first step toward going public through an IPO. Instacart previously raised $265 million and was valued at $39 billion in March 2021. But the company cut its own valuation to $24 billion in March, citing the 2022 sell-off in tech stocks. Record-High Federal Budget Surplus The U.S. government ran a record-high budget surplus in April as tax revenue surged. The Treasury Department reported a surplus of $308 billion last month. Tax revenue nearly doubled year-over-year to a record-high $864 billion. Part of that huge annual increase was because last year’s tax filing deadline was delayed to May. Government spending fell to $555 billion, down $110 billion from a year ago. Through the first seven months of fiscal 2022,
Continue Reading -->Coffee With Greta: Inflation Is Still Poisoning the Market
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -138 (-0.4%) SPX Futures: -25 (-0.6%) NASDAQ Futures: -137 (-1.1%) Good morning friends! Futures are lower following the release of hotter than expected inflation data. Let’s get right to it! Inflation Is Still Hot U.S. inflation pressures rose more than expected in April, remaining at the highest level in nearly 40-years. The Bureau of Labor Statistics’ consumer price index jumped 0.3% monthly and 8.3% year-over-year. That was higher than economists’ expectations for a monthly gain of 0.2% and 8.1% annually. But it was a slowdown from March. Grocery prices jumped 10.8%, oil soared 80.5%, gas surged 43.6%, electricity rose 11%, utility gas jumped 22.7%, and used vehicle prices were up 22.7%. The Core CPI, which excludes food and energy prices, also rose more than expected. That index was up 0.6% on a monthly basis, an increase from 0.3% in March. The Core CPI jumped 6.2% annually. Terra Coins Collapse The two main stablecoins of crypto firm Terra are collapsing. Data from CoinGecko shows the TerraUSD stablecoin UST is down nearly 52% in the past 24 hours, at just $0.44. The coin is meant to be pegged to the US Dollar and should be steady at a value of $1. UST plunged as low as $0.31 today. Its sister token, Luna is also crumbling. Luna is down about 95% over the past 24 hours, at $1.68. Coinbase Plunges On Revenue Drop Coinbase (COIN) shares are tumbling 19.6% ahead of the open after revenue fell sharply in the first quarter. The crypto trading platform reported a net loss of $1.98 per share on $1.17 billion in revenue. That was worse than analysts’ expectations for a loss of $0.01 per share on $1.48 billion in revenue. Coinbase’s revenue tumbled 27% year-over-year. The drop came as crypto trading slowed sharply. The company had 9.2 million monthly transacting users in Q1 vs 11.4 million in Q4. Q1 trading volume fell to $309 billion vs $547 billion in Q4 and $335 billion in Q1 2021. Costs also rose sharply in Q1. Coinbase’s overall operating expenses jumped to $1.72 billion in the quarter, outstripping revenue for the first time. The weak results pushed the stock to a record low after COIN plunged 12.6% in regular trading Tuesday. Unity Software Collapses on Weak Guidance Unity Software (U) shares are falling 28.4% in premarket trade after releasing weak Q2 guidance and cutting its full-year outlook. The video game development company reported an adjusted loss of $0.08 per share on $320.1 million in revenue. That was in line with analysts’ expectations. But the market soured on Unity’s Q2 guidance. The company forecast revenue between $290 million and $295 million this quarter vs analysts’ estimates for $360.97 million. Unity also cut its full-year guidance to between $1.35 billion and $1.425 billion vs the previous forecast for $1.485 billion to $1.5 billion. The CEO struck an optimistic tone on the earnings call saying, “Unity delivered record quarterly revenue in the first quarter of 2022, the highest in the company’s history, up 36% compared with the first quarter of 2021… We remain focused on the massive opportunity we see in front of us long-term.” But traders don’t seem to agree. Roblox Sinks on Weak Q1 Roblox (RBLX) shares are down 4% ahead of the open after missing Q1 expectations. The video game company reported a loss of $0.27 per share on $631.2 million in revenue. That was worse than analysts’ expectations for a loss of $0.21 per share on $636.6 million in revenue. Roblox had 54.1 million average daily active users during the quarter, up 28% year-over-year but weaker than analysts’ estimates for 55 million. In a letter to shareholders, the company said, “While Covid and the subsequent re-opening have contributed to slowing growth in several of our metrics, based on third party data we believe we are gaining share on both users and hours relative to certain other companies in gaming and social media that compete for our users’ attention.” SoFi’s Big Oops SoFi (SOFI) shares are slipping 0.2% in premarket trade after accidentally releasing its Q1 results early on Tuesday. The fintech company reported a loss of $0.14 per share on $322 million in revenue. That was better than analysts’ expectations for a loss of $0.15 per share on $286 million in revenue. SoFi blamed “human error” for its Q1 results being released during the trading day instead of after-hours on Tuesday. And the stock tanked as the Q2 forecast came in weak. Trading was halted on SOFI at 11:19 a.m. ET Tuesday, as the stock tumbled 18%. Trading reopened 3 hours later and SOFI closed 12.1% lower Tuesday. SoFi forecast Q2 revenue between $330 million and $340 million vs analysts’ expectations for $343.7 million. Adjustable-Rate Mortgage Demand Jumps Demand for adjustable-rate mortgages is on the rise, as rates soar. The Mortgage Bankers Association reported overall mortgage demand rose 5% last week but applications were still down 8% year-over-year. The increase came despite the average 30-year fixed rate rising to 5.53% from 5.36%. But more buyers are turning to adjustable-rate mortgages, with the average 5-year rate at 4.47%. ARMs represented 11% of all mortgages last week, up from just 3% at the start of 2021. That’s the highest share since March 2008. Refinance applications fell 2% last week and were down 72% compared to a year ago. Oil Prices Jump Oil prices are rising today after tumbling nearly 10% in the past two days. West Texas Intermediate crude futures are up 4% to $103.75 bbl while Brent crude futures are up 3.6% to $106 bbl. The rally comes as the EU works to gain support for its proposed Russian oil ban. The Energy Information Administration will release its weekly report on U.S. crude supplies today. Apple Kills the iPod The Apple (AAPL) iPod is dead. The tech giant announced Tuesday it is discontinuing the
Continue Reading -->Coffee With Greta: Can Stocks Find a Parachute?
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +295 (+0.9%) SPX Futures: +225 (+1.9%) NASDAQ Futures: +46 (+1.2%) Good morning friends! Futures are higher after the S&P 500 tumbled to its lowest level in more than a year on Monday. Let’s get right to it! Stocks Rise, Yields Dip Stock futures are rising for the first time in 3 days as Treasury yields pull back. The yield on the 10-year Treasury note fell 10 basis points to 2.98% while the 30-year yield is down 11 basis points to 3.10%. The rebound comes after the major indexes plummeted on Monday. The S&P 500 closed below 4,000 for the first time since April 2021, while the Dow shed more than 600 points, and the Nasdaq plunged more than 4%. Bitcoin Follows Stocks Bitcoin is still down 3.6% in the past 24 hours, sitting at $31,800 after plunging more than 10% on Monday and dropping below $31,000. That was Bitcoin’s lowest level since July 2021. Ethereum is up 0.3% at $2,416, after falling more than 11% to under $2,300. The crypto market has recently been tracking the stock market instead of moving independently of Wall Street. Peloton Plummets on Huge Loss, Weak Outlook Peloton (PTON) shares are are plunging 21.4% in premarket trade after reporting a massive fiscal Q3 loss. The exercise bike maker reported a loss of $2.27 per share on $964.3 million in revenue. That was worse than analysts’ expectations for a loss of $0.83 per share on $972.9 million in revenue. The stock is set to open at a fresh all-time low. Peloton said it’s seen a steep drop in customer demand as pandemic lockdowns were lifted. But it did see higher treadmill sales in the quarter. Peloton added 195,000 connected fitness subscribers in the quarter, bringing the total to 2.96 million. The company forecast fiscal Q4 revenue between $675 million and $700 million vs analysts’ estimates for $821.7 million. AMC Rallies on Earnings Beat AMC Entertainment (AMC) shares are up 3.8% ahead of the open after reporting a narrower Q1 loss than expected. The theater chain reported an adjusted loss of $0.52 per share on $785.7 million in revenue. That was better than analysts’ expectations for an adjusted loss of $0.63 per share on $743 million in revenue. CEO Adam Aron said, “Our results for the first quarter of 2022 represent AMC’s strongest first quarter in two full years.” AMC had $1.3 billion in available liquidity at the end of Q1. Novavax Falls on Earnings Miss Novavax (NVAX) shares are down 26.6% in premarket trade despite reporting its first-ever profitable quarter. The biotech company reported earnings of $2.56 per share on $704 million in revenue. But that was still shy of analysts’ expectations for EPS of $2.69 on $845 million in revenue. Novavax touted the “successful” launch of its Covid vaccine globally and said it’s on track to expand its label use. The company reiterated its full-year guidance for revenue between $4 billion and $5 billion. Upstart Plunges After Cutting Guidance Upstart Holdings (UPST) shares are plummeting 58.9% ahead of the open after beating Q1 expectations but cutting its full-year outlook. The company reported adjusted earnings of $0.61 per share on $310 million in revenue. That topped analysts’ expectations for adjusted EPS of $0.53 on $300 million in revenue. But Upstart forecast Q2 revenue between $295 million and $305 million vs analysts’ estimates for $335 million. The company also slashes its full-year outlook, expecting $1.25 billion in revenue vs its previous forecast for $1.4 billion. Oil Prices Extend Losses Oil prices are down again today on continued concerns about global economic growth and the strong dollar. West Texas Intermediate crude futures are down 0.4% to $102.60 bbl while Brent crude futures are down 0.6% to $105.20 bbl. Both posted their largest daily decline since March on Monday. The energy market is concerned about rising recession risks in the U.S. as the Fed tightens its policy. Upcoming Economic Data The National Federation of Independent Business releases its April small business optimism index at 9:00 a.m. ET. Economists expect that survey to show optimism among business owners fell by 0.3 points to 92.9 last month. Small businesses have been squeezed by rising costs due to inflation as it’s more difficult for them to hike prices compared to large corporations. Business owners have also sounded the alarm on the current labor shortage in the U.S. economy. The New York Fed releases its Q1 report on real household debt at 11:00 a.m. ET. In Case You Missed It Rivian (RIVN) shares plummeted 20.9% Monday after Ford (F) announced plans to sell part of its stake in the electric automaker. The stock hit a record low at $22.45 per share before closing at $22.78. Ford’s sale comes after Rivian’s IPO lockup period expired Sunday. Rivian’s early 2022 stock plunge dented both Ford and Amazon’s (AMZN) Q1 earnings. Rivian reports earnings Wednesday morning. The New York Fed’s consumer expectations survey showed a cooldown in inflation forecasts in April. Respondents to the survey said they see inflation at 6.3% 1-year from now. That was down 0.3% from March. But consumers still expect household spending to surge 8% over the next 12 months. 3-year inflation expectations increased by 0.2% in April to 3.9%.
Continue Reading -->Scott Redler’s Dog Bytes: Why I Bet Against Apple and Microsoft
SPX futures are -65, giving big downside follow-through to the recent technical damage. We’ll see if SPX stay belows the 4060ish area, or if it gets reclaimed. I positioned for a down open with SPY, MSFT, and AAPL puts since I’ve been concerned about a capitulation move towards 3850.Tech has led us lower for most of 2022. See if the QQQ’s can stay below $305.11 or if that gets reclaimed to relieve some pressure. Watch key leading stocks like AAPL, MSFT, TSLA, and AMD for clues on the action. LastAAPL will be interesting. Last Thursday I bought $150 puts in case it plays downside catch-up. I’ll trim some and hold some. See if it stays below $153-$154 to keep pressure on. If it stays weak $150 is below.MSFT: I went out short which will help my morning. I covered some below $268. I am also long puts for Friday. We’ll see if it stays below $270 or reclaims it to relieve some pressure. (Editor’s Note: Scott covered the rest of his MSFT short at 9:28 a.m. this morning. He also sold some of his AAPL puts after the open) AMZN’s upper channel resolved lower well before the earnings report. Now the comps are bad, growth has decelerated, and they waited too long to announce the split. If the SPX sees the 3850 area in the weeks ahead, it could hit $2050, where I’d revisit options. It’s been weaker than most F.A.N.G.-type names over the past few weeks. See if it reclaims $2261. If we stay under pressure all day, I might sell some lower strike puts for a trade. ARKK has been in an accelerated downtrend since the $159 top. It then tried to form a channel but broke it around $113. It’s been below the 8/21 day since then with many bear flag continuation patterns. The recent low is $43.99. See if it stays below that or reclaims it for tactical action. The $35 area may be a good spot for long-term money.Positions Disclosure as of 5/9/2022 at 9:45 a.m. ET
Continue Reading -->Coffee With Greta: The Destruction Continues, Yields Spike
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -364 (-1.1%) SPX Futures: -59 (-1.4%) NASDAQ Futures: -232 (-1.8%) Good morning friends! Futures are tumbling, extending last week’s rout as Treasury yields rise. Let’s get right to it! Yields Rally U.S. Treasury yields are on the rise amid new concerns about inflation and slowing economic growth. The 10-year Treasury yield hit the highest level since November 2018, jumping to 3.185% this morning. The yield on the 30-year bond jumped to 3.293%. Yields have spiked since the Fed decision last week as the market worries the bank’s actions against inflation will cause a recession. Bitcoin Is Still Tumbling Bitcoin prices kept sliding over the weekend after the crypto market fell alongside the stock market last week. Bitcoin is down 4.9% in the past 24 hours at $32,995. That’s the lowest level since July 2021 and down more than 50% from its peak at $68,990.90 in November. Ethereum is down 6.3% at $2,400. XRP is down 6.2% at $0.53 and Dogecoin has fallen 6.8% to $0.11. The global crypto market cap has lost 5.6% in the past 24 hours, falling to $1.59 trillion. Tyson’s Price Hikes Boost Earnings Tyson Foods (TSN) shares are up 2.7% ahead of the open after beating fiscal Q2 expectations. The meat company reported adjust earnings of $2.29 per share on $13.1 billion in revenue. That topped analysts’ expectations for adjusted EPS of $1.89 on $12.8 billion in revenue. Tyson said the average sales price of its products rose last quarter “due to the effects of pricing initiatives in an inflationary cost environment.” Beef revenue jumped 23.8% year-over-year, pork sales jumped 10.8%, chicken revenue was up 14.4%, and sales of prepared foods rose 15.9%. Tyson hiked its full-year revenue forecast to between $52 billion and $54 billion from $49 billion to $51 billion previously. Palantir Misses Q1 Expectations Palantir Technologies (PLTR) shares are tumbling 14.9% in premarket trade after missing Q1 expectations. The company reported adjusted earnings of $0.02 per share on $446.4 million in revenue. That was weaker than the company’s own forecast for revenue of $447 million and weaker than analysts’ expectations for adjusted EPS of $0.04. Commercial revenue rose 54% year-over-year to $205 million, topping analysts’ estimates for $193 million. Palantir expects Q2 revenue of at least $470 million vs consensus estimates for $484 million. The company reiterated its long-term forecast for annual revenue growth of 30% or better through 2025. BioNTech Earnings Boosted by Covid Vaccine Sales BioNTech (BNTX) shares are up 1.1% ahead of the open as strong Covid vaccine sales boosted its Q1 earnings. The German pharmaceutical company reported earnings of €14.24 per share on €6.37 billion in revenue. That topped analysts’ expectations for EPS of €9.16 on €4.34 billion in revenue. The company said the revenue jump “was mainly due to increased commercial revenues from the supply and sales of the company’s Covid-19 vaccine worldwide.” BioNTech reiterated its full-year outlook for Covid vaccine revenue between €13 billion to €17 billion. Oil Prices Tumble Oil prices are falling as a strong U.S. dollar weighs on the market and Covid lockdowns in China prompt demand worries. West Texas Intermediate crude futures are down 2.3% to $107 bbl while Brent crude futures are down 2.1% to $110 bbl. The dollar hit a 20-year high, making oil more expensive for foreign currency holders. The EU is still working to secure a unanimous vote on its proposed Russian oil ban. The G7 nations pledged to join the bloc in that action over the weekend and Japan’s prime minister said his country would ban Russian crude imports “in principle”. Inflation Week The market got rocked by a Fed rate hike and big economic data last week and more is on the way this week. The Bureau of Labor Statistics releases the April consumer price index Wednesday morning followed by the producer price index Thursday morning. Traders will be focused on that data to see if inflation has peaked. Although headline inflation pressures soared in March, the core CPI and PPI both came in weaker than expected. That prompted optimism that inflation may start trending downward soon. The Fed also believes inflation may have peaked and will start to cool in the months ahead. The New York Fed’s 1-year and 3-year consumer inflation expectations will be released today at 11:00 a.m. ET. In Case You Missed It Peloton (PTON) shares hit a record-low at $14.70 on Friday amid investor uncertainty about the company’s turnaround plans. The exercise bike maker is scheduled to report earnings ahead of the open Tuesday morning. PTON shares are down 2.4% in premarket trade.
Continue Reading -->Markets in Turmoil: Ugly Times for Traders
Volatility is the name of the game in 2022. And a Fed rate hike and big economic data created a perfect storm on Wall Street this week. Things were looking good on Wednesday. The Fed hiked rates 0.5% as expected, voted to start its balance sheet reduction on June 1, and Chairman Jerome Powell said a 0.75% hike is not on the table. That sparked a huge relief rally. Stocks skyrocketed into the close after Powell’s 2:30 p.m. ET presser. The Dow closed 2.8% higher, the S&P 500 gained 3%, and the Nasdaq settled up 3.2%. ETFs that track the major indexes also shot up sharply. The S&P and the Dow had their biggest gains since 2020. But then reality set in overnight; the Fed might not be able to avoid a recession, no matter what Powell says. And the panic selling peaked on Thursday. The Dow plunged more than 1,000 points, over 3.1%, while the Nasdaq dropped 5.0 % to its lowest closing level since November 2020. It was the largest daily drop for both indexes since 2020. And QQQ followed suit. While the broader market sold off, one specific sector got demolished. E-commerce stocks got rocked after a series of weak earnings reports thanks to consumers returning to physical stores. Wayfair (W) plummeted 26% and hit a fresh 52-week low. Shopify (SHOP) shed nearly 15%. Etsy (ETSY) plunged 17%. And eBay (EBAY) dropped 12%. Even Amazon (AMZN) wasn’t immune from the sell-off, falling about 8%. Many were hopeful a strong April jobs report on Friday could serve as a life raft. But even a big beat on job growth was unable to rescue stocks. The major indexes slid further Friday, with the Dow closing 0.3% lower, the S&P 500 falling 0.6%, and the Nasdaq down 1.4%. It was the 6th straight weekly decline for the Dow. SPY and QQQ both also extended their losses. The session saw some stocks hit fresh all-time lows. Peloton (PTON), a one-time pandemic star on Wall Street, bottomed out at $14.70 per share and ended down 7.7%. And that drop came ahead of earnings next week with expectations being low. Other pandemic-era favorites aren’t faring much better in 2022. Cathie Wood’s Ark Innovation ETF (ARKK) is down 65.6% from its 52-week high, ending Friday’s session 4.4% lower after tumbling 8.9% on Thursday. High-growth tech stocks aren’t the only ones suffering. FAANG is down 34.4% YTD. Netflix (NFLX) has been hit the hardest, plummeting 70% in 2022. Meta Platforms (FB) is down 39.4% YTD. Alphabet (GOOGL) is down 20.1% this year while Amazon (AMZN) dropped 31.2% despite impending 20-for-1 stock splits for both this summer. Apple (AAPL) is faring the best among big tech, falling “only” 11.4% YTD. So is anything up in 2022? Energy. The energy sector has been the bright spot this year thanks to Russia’s war in Ukraine pushing commodity prices to record highs. The VanEck Oil Services ETF (OIH) is up 49.8% in 2022. And the Energy Select Sector SPDR ETF (XLE) has risen 49.4% YTD But if you don’t own energy stocks, I’d be willing to bet your portfolio is hard to look at right now. The question now is whether the market has found its bottom. But looking ahead to next week, more turmoil may be on the way. It’s inflation week with the April Consumer Price Index and Producer Price Index both on the schedule. After the March CPI report, there was some talk that inflation had peaked. We’ll find out next week whether that was true. It’s been a hard and fast fall for stocks this year. After the original Covid crash in 2020, the market was easy to play. Buy a dip and watch it rise. The Fed was pumping tons of money into the market, Congress was handing out cash to Americans, and retail traders were killing the big hedge funds. Every trade felt like a winner back then. But everything is cyclical and experts say this market was well overdue for a correction. How long we’ll stay in a bear market remains to be seen.
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