The market opened with this morning with the DJIA up 80 or so, and across the board good news. Some of the old reliable names like DIS, DWDP, and HD helped it higher but it spent most of the day in a range and finished +71. Unfortunately the internals didn’t show much with the NYSE volume was 1:1 and A/D 15:14. NASDAQ numbers we negative with volume 2:3 and A/D just 1:1, although you can toss those comparisons out the window because after the close many were dramatically higher. So, let’s go to the video…AMZN beat and the stock is up $75 (7.5%), GOOGL beat and is +30 (3%), MSFT beat and is +3.08 (4%), MCK beat and was +11 until the President spoke about opioid problems and it went 19 off the high to close -7.84 (5%). Others in both drug, pharma/biotech, and medical stocks got killed with the beats unable to hold gains and fell pretty sharply. I’ll address that in the Sectors section. The one significant standout was AET, rumored to being sought after by CVS is currently trading $179 +18.48 (11.5%) after trading 184.98. The price being bantered around is $200 or higher. CVS was as low as 70.78- 4, rallied back to 74 and is now 72.60 -2.22 (2%). We also added SJM 11/105 calls @ $1.70 yesterday on an order given on page 3 of the Market Letter. These closed $2.00, and a new position today in BABA 11/170 calls @ $2.52 closed today $2.45. This was before the big NASDAQ reported and BABA closed $3 higher at 173.39 with an intrinsic value of $3.39.
OTHER NAMES IN THE NEWS, There are more earnings starting with a carryover from late news yesterday with BWLD +19.80 (19.5%) on earnings, and todays from: ORLY, a miss that gapped down to 190 early but managed to close 214 +11.28 (5.5%), CHTR a miss and fell 28.62 (8.3%), BIIB, a miss earlier in the week that had already fallen from 338 to as low as 301 but rallied as high as 320 before the ETFs that hold it sold off and it fell back to 305 and closed -7 again today, CELG beat earnings but missed on revenues and added full year guidance lower. This one fell $15 late last week and also gapped down and closed 99.99-19.57 (16%). BIDU, missed and is now trading 232.60 -28 (11%). GILD beat but some of the guidance was negative and concerns have arisen about its pricing from competitors and it is currently trading $74.82 -3.06.
Oil, $52.60 +.28 after holding the lows of 51.90 a rally to 52.86 we have a new recent high close over the 9/25 was $52.52, I am long SCO (levered inverse ETF) at $32.77 awaiting a break of the recovery high of $53.11. Naturally the stocks continued but only slightly higher with CVX -.13, APC +.01, COP +1.51 (3%), BP -.13, PSX +.29, MPC +.83, MRO +.10, RIG +.07, OAS +.21, OXY -.73, XOM +.69 and XLE +.14. HES had earnings before the open Tuesday and it fell from $44.06 to $41 Wednesday and further today to $40.26 before recovering to close $41.28- .93. A subscriber with a position in HES asked my opinion and he bought the 10/27 (tomorrow) $43 puts @ $ .40 that protected his risk from a bad report and closed $2.41 today.
RETAIL, continues to hold gains and added a bit more today with M +.06, JWN +1.10, KSS +1.04, DDS +1.33, SHLD +.30 (and still terminal in my opinion), JCP -.04, WMT +.17, GPS +.27, TJX +.03, TGT +.08, DKS +.51 and XRT +.16.
FAANG, were discussed above but if you own any of these big names that didn’t have earnings today they were GOOGL +27.54 (2.8%), AMZN +74.09 (7.6%), FB +2.65, AAPL +1.52, NFLX +2.93, TSLA +3.49, BA +1.08 and IBM +.40.
BIO/PHARMA, as mentioned above this group got hammered with CELG -18.91 (16%), BIIB-7, AMGN 7176.52 -.98 (after its beat top line but miss on Revs) near the highs after trading as low as 169, REGN -5.26, ALXN-5.94 (4.5%), VRTX -3.04, CLVS -2.29(3%) , AGN -3.34, and IBB -8.25 (3%). There are some real values here but they were painted with the same brush as drugs and health groups.
HEALTHCARE/INSURANCE were mixed with CI +2.95, CNC +.37,, AET mentioned above was the standout on takeover news, ATHM-1.26, UNH +1.59, THC had a big miss and was near the lows @ $12.87 -1.30 (9%), ATHN +.10, MOH -1.09, HCA -2.70, and HUM +$6.05 after a study that showed that their method (healthy days) is a valid tool in their Medicare coverages with chronic conditions.
METALS, GOLD finished – 10 and on very important support from earlier this month at $1,262, SILVER down .11 on a slow day and is supported from here down to $16.00, while COPPER had an inside day down less than a penny and is on support here at $3.17.
FINANCIALS, were higher as the 10 yr. US notes were up again giving the banks a better margin on loans with GS +.44, JPM +.88, BAC +.21, C +.28 and XLF +.15.
Tomorrow is another day…CAM
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