2015-08-28 Weekend Market Update (Stocks Rally Back To Finish Higher On The Week)
Weekend Market Update
Stocks Rally Back To Finish Higher On The Week
Update On Options Risk Management
My Personal Accounts: @MitchellKWarren (Twitter) @MitchellKWarren (StockTwits)
Notes: On August 26th, Alvogen agreed to acquire four pharmaceutical products from Pfizer. PFE trades at a P/E ratio of 15.85x (2015 estimates), P/S ratio of 4.26x, and a P/B ratio of 3.07x. Earnings are on pace to fall 9% and revenue is expected to drop 6.6% to $46B this year.
Pfizer (PFE) Options Trade Idea
Buy the (PFE) Oct 16 $30/$33 bear put spread for a $0.90 debit or better
(Buy the Oct 16 $33 put and sell the Oct 16 $30 put, all in one trade)
Stop loss- None
1st upside target- $1.80
2nd upside target- $2.70
Notes: On August 3rd, the $5B healthcare services company reported Q2 EPS of $0.75 vs the $0.44 estimate on revenue of $4.49B vs the $4.69B estimate (+11.2% year over year growth). THC trades at a P/E ratio of 19.28x (2016 estimates), price to sales ratio of 0.28x, and a price to book ratio of 6.15x. From 2014 to 2016, earnings are projected to nearly double to $2.61 per share. On August 4th, S&P Capital IQ reiterated their buy rating and a 12-month price target of $72.
Tenet Healthcare (THC) Options Trade Idea
Buy the (THC) Jan 2016 $50/$60 bull call spread for a $3.40 debit or better
(Buy the Jan 2016 $50 call and sell the Jan 2016 $60 call, all in one trade)
Stop loss- None
1st upside target- $6.80
2nd upside target- $9.90
Notes: Vector Group is a $2.8B diversified company in the business of high end real estate and low end tobacco products. Ownership of more than 70% of Douglas Elliman Realty (as seen on Million Dollar Listings New York) and the Pyramid and Liggett cigarette brands makes it the cash free firm that can pay out a 6.8% dividend. On July 31st, Oppenheimer maintained their outperform rating and raised their price target to $27 from $25.
Weekly S&P Sectors ETF Performance: Energy (XLE) +3.53%, Technology (XLK) +2.63%, Consumer Discretionary (XLY) +1.61%, Materials (XLB) +0.95%, Industrials (XLI) +0.56%, Healthcare (XLV) +0.14%, Financials (XLF) -0.04%, Consumer Staples (XLP) -0.15%, Utilities (XLU) -4.22%
Various Asset Classes: Oil (USO) +12.47%, Nasdaq-100 (NDX) +3.14%, U.S. Dollar (UUP) +1.21%, Dow Jones Industrial Average (DJIA) +1.11%, S&P 500 (SPX) +0.91%, Natural Gas (UNG) +0.63%, Dow Jones Transportation Average (TRAN) +0.46%, Agriculture (DBA) +0.14%, Gold (GLD) -2.19%, Bonds (TLT) -3.20%, Silver (SLV) -4.72%, Spot Volatility Index (VIX) -7.06%
Economic Data (8/31-9/4)
Monday: Monday: 9:45 A.M. EST- Aug Chicago PMI (54.7)
Tuesday: 10:00 A.M.- Aug ISM Index (52.6), July Construction Spending (+0.6%); 5:00 P.M.- Aug Truck and Auto Sales
Wednesday: 7:00 A.M.- Weekly MBA Mortgage Index; 8:15 A.M.- Aug ADP Employment Change (+201K); 8:30 A.M.- Q2 Productivity-Revised (+2.7%), Q2 Unit Labor Costs-Revised (-0.8%); 10:00 A.M.- July Factory Orders (+0.9%); 10:30 A.M.- Weekly Crude Oil Inventories; 2:00 P.M.- Sep Fed’s Beige Book
Thursday: 7:30 A.M.- Aug Challenger Job Cuts; 8:30 A.M.- Initial Weekly Jobless Claims (273K), Continuing Claims (2261K), July Trade Balance (-$43.1B); 10:00 A.M.- Aug ISM Services (58.4); 10:30 A.M.- Weekly Natural Gas Inventories
Friday: 8:30 A.M.- Aug Non-Farm Payrolls (+217K), Aug Non-Farm Private Payrolls (+212K), Aug Unemployment Rate (5.2%), Aug Hourly Earnings (+0.2%), Aug Average Workweek (34.6)
Earnings Reports (8/31-9/4)
Monday: (SBLK) (DANG) and more
Tuesday: (DLTR) (DCI) (AMBA) (AVAV) (QIHU) (GWRE) and more
Wednesday: (VRA) (GIII) (NAV) (FIVE) (ABM) and more
Thursday: (CIEN) (CPB) (JOY) (MDT) (LE) (GCO) (PAY) (COO) and more
Friday: No major earnings reports
