June 20, 2019

Daily Wrap

DJIA -22.50 (-0.15%) to 15,082.62; S&P 500 -6.02 (-0.37%) to 1,626.67; NASDAQ -7.12 (-0.24%) to 2,961.12

The markets got started with another better than expected Unemployment claims number that came in at 323K, 10K below the consensus estimates and 1K lower than the previous month’s number.  If I remember correctly, that previous number was the lowest print in many years and one week later was taken out.  Otherwise the action was choppy and initially we rallied off the better than expected data until topping just before 10am EST and then moving lower to 10:30am.  After ultimately finding a bottom the market floundered unjust before 1pm when it again ripped higher and made new highs for the day on to then sell off hard starting around the 2pm EST time frame.  The index ultimately closed off the lows but well off the highs.  CNBC’s Rick Santelli reported there was a rumor of a an article being written by a Fed insider that stated the Fed was leaning to ceasing QE.  That rumor didn’t seem to get much traction and it will be interesting to see if the market can continue the rebound into tomorrow’s session.  I show there is Fed speak early tomorrow morning including Ben Bernanke at the open so it could get interesting.

Stock of the day for me was Tesla (TSLA) which beat earnings estimates after the closed and then to build on that positive momentum they received the highest score from consumer reports ever given, a 99 out of 100  (there have been other 99’s).  I believe the 1 point they lost was only due to uncertainty about the longevity.  TSLA shares rose over 24% today.  I like TSLA and I believe there will be a market outside of just selling cars where they can license their technology and do joint ventures like what they are doing with Toyota and the Rav4.  Would I step in today?  Well, probably not and if I did it would only be through options and this is a name to continue to watch and I will be interested how it digests this recent gap.

Another big name moving on earnings today was Green Mountain Coffee Roasters (GMCR) which actually performed better than TSLA and gained 27.85% on the day.  GMCR crushed EPS reporting 93c vs a 73c estimate but fell inline with revenues.  More importantly GMCR guided higher for next quarter with their low end of the range being 6c higher than the consensus and the same with full year 2013 guidance which they see at $3.05-3.15.  Would I be looking to enter into GMCR here?  No.  While the name sent analysts raising price targets into the $90’s I think GMCR might be one I pass on for now.

We didn’t have a merger today but we did have the rumor of one with a report from TechCrunch noting that Microsoft (MSFT) might be interested in purchasing the the digital assets of Nook Media for $1B.  This sent Barnes & Noble (BKS) up 24.25% on the day.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: SIRO, WCRX, DRH, EVEP, BECN, LXRX, HL, TRLG, LMIA, STRL

In analyst notes today, Ctrip.com (CTRP) received multiple upgrades including one from CLSA to Buy with a $31 rice target.  Deutsche Bank was busy initiating coverage on a few names including two I noted in the morning which they started with a Buy, Fluor (FLR) with an $84 price target  and MasTex (MTZ) with a $38 price target.  Also receiving an upgrade to Buy on the day was MGM Resorts (MGM) with a $19 price target from Sterne Agee.  On the downside today, Rackspace (RAX) was the big loser receiving multiple downgrades including one to Sell at CLSA with a $40 price target.  Some of these and other upgrades and downgrades for the day can be found each morning when I post my 9 @ 9 in the Upgrades/Downgrades section.

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