Market Weekly: September 22 – 28 2019

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    [color=purple][b][i]Where have we been and where are we … wishing a great week to all ahead
    FALL 2019 will arrive on Monday as we transition to changing colorful leaves & the final harvest 8)

    Meanwhile GOLDMAN “SACKS” tells us to get ready for a WILD OCTOBER 😉 :woohoo:[/i][/b][/color]



    Key Analyst Calls This Morning

    Morgan Stanley is lowering its price target on Amazon to $2,200 from $2,300.
    Piper Jaffray is initiating Lululemon as overweight.
    Nomura Instinet is upgrading Chewy to buy from neutral.
    Barclays is downgrading Clorox to underweight from equal weight.
    Barclays is upgrading Kimberly-Clark to overweight from equal weight.
    J.P. Morgan is downgrading U.S. Steel to neutral from overweight.


    Nomura Instinet upgraded Chewy to ‘buy’ from ‘neutral’

    Nomura said concerns about company profit margins are overblown, and that Chewy’s fulfillment network is not easily replicated.

    “The stock has traded off since reporting 2Q19 earnings last week driven, in part, by higher-than-expected SG&A. We feel these concerns are overblown; normalizing for certain new and/or non-recurring items (such as fulfillment center buildout and public company costs), the company’s SG&A as a percent of revenue was in line with 2Q18, while gross margins expanded 300bps year over year. Considering 2Q19 and 2Q18 were both quarters in which new FCs were launched, we remain confident that the core business continues to perform.”


    Barclays downgraded Clorox to ‘underweight’ from ‘equal weight’

    Barclays downgraded the stock as it said it sees earnings “risk” over the next 12 months due to “softer” revenue growth.

    “Though the company has discussed several troubled categories in recent quarters, the latest data suggests the issues at hand are increasing both in terms of breadth (moving to other key categories such as bleach, litter, salad dressing and cleaners) and depth (affecting sales, shares, and distribution). While we have long admired Clorox’s capabilities to maneuver through cost & pricing cycles, we find this one is proving to paint a different picture.”


    J.P. Morgan downgraded U.S. Steel to ‘neutral’ from ‘overweight’[/b][/color]

    J.P. Morgan downgraded U.S. Steel as it sees steel prices heading lower.

    “The U.S. steel stocks and steel prices have been under pressure this year, which we believe is largely due to concerns about supply additions planned for the next several years, continued uncertainty surrounding trade, and some softening in demand. Additionally, after a brief rebound, steel and scrap prices are now heading lower. If current economic and trade conditions hold, we think steel prices will likely fluctuate between $500 and 600/ton over the near to medium term, with prices likely easing somewhat further over the next couple of months and then rebounding modestly heading into 2020.”


    Barclays upgraded Kimberly-Clark to ‘overweight’ from ‘equal weight’

    Barclays upgraded Kimberly-Clark on a widening of the stock’s relative discount to that of its peers.

    “We believe a widening of the stock’s relative discount to peers beyond historical levels does not mirror what we expect to see in terms of relative operating performance over the next 12-18 months. More specifically, we expect improved revenue growth coupled with a more favorable cost environment to yield EPS growth that is among the strongest across our Staples coverage universe in 2020.”


    Piper Jaffray initiated Lululemon as ‘overweight’

    Piper said in its initiation note of Lululemon that it predicted market share gains for the athletic apparel retailer.

    “We see the brand as a share gainer in a secularly growing category with accelerating opportunity in men’s and international. While shares are close to their 52-week high and investors expect on-going DD growth in women’s and steady mix shift to higher-margin digital, we believe men’s, better-than-expected performance in China (28 stores today of 460 total), improving profitability in Europe, success in recently launched selfcare, and loyalty program adoption could be upside catalysts.”


    Morgan Stanley lowered its price target on Amazon to $2,200 from $2,300

    Morgan Stanley lowered its price target on Amazon due to the impact of 1-day shipping which has led to “accelerating unit and retail revenue growth.”

    “Focusing on the long-term while acknowledging the near-term could be volatile. Our lower near-term profitability drives down our sum-of-the-parts-driven AMZN PT to $2,200 per share (from $2,300 per share) as we remain OW (with ~20% upside). This is because over the long-term, AMZN’s push toward 1-day (effectively raising shopper expectations) will likely only deepen their moats and share-gains against competitors.”


    [b]UK PM Johnson: Time to do a new nuclear deal with Iran
    He said that whatver your objections were to the old deal, it’s now time to move forward and do a new deal.
    Suggests Iran ‘plainly’ carried out Saudi attack

    on Sky News:


    [size=5][i]Nice flat & safe close for markets
    Song below is one of best end of SUMMER songs[/i][/size] 🙂
    [size=5][b]Dow 26,949.99 14.92 0.06%
    [color=red]S&P 500 2,991.78 -0.29 -0.01%
    Nasdaq 8,112.46 -5.21 -0.06% [/color]
    Gold 1,530.30 -1.20 -0.08%
    Oil 58.34 -0.30 -0.51%[/b][/size]


    Richmond Fed Manufacturing Index for September -9 v. 1 estimate

    The composite index dropped from 1 in August to −9 in September, as both shipments and new orders fell. However, the third component, employment, rose. Firms also reported a drop in backlog of orders and weakening local business conditions but were optimistic that conditions would improve in the coming months.

    Survey results indicated wage growth and a slight increase in employment in the manufacturing sector in September. However, firms struggled to find workers with the necessary skills, and the indicator for the average workweek hit a nine-year-low. Manufacturers expected wages and employment to continue to grow but finding workers to continue to be a struggle in the next six months.

    Growth of prices paid by survey respondents held fairly steady in September, while the growth rate of prices received increased, narrowing the gap between the two. Firms expected growth of both prices paid and prices received to slow in the near future.


    [size=5][i]Investors are nervous on possible impeachment of #45 according to MarketWatch
    and Ukraine, VP Joe + son, impeachment, UN speech (excellent) are all points of attack
    Consumer confidence from from 130s to 125 & that caused some selling also
    Still just another typical day for #45 who keeps fighting on — right or wrong

    Below is another great END OF SUMMER movie
    90 minutes & great surfing & beach music 8)[/i][/size]

    [color=red][size=5][b]Dow 26,807.77 -142.22 -0.53%
    S&P 500 2,966.60 -25.18 -0.84%
    Nasdaq 7,993.63 -118.84 -1.46%
    GlobalDow 3,033.50 -31.29 -1.02%
    Gold 1,538.60 7.10 0.46%
    Oil 56.85 -1.79 -3.05%[/b][/size][/color]


    [color=purple][i][b]Ohhhhh the humanity — IMPEACHMENT investigations formally declared on #45 🙁
    One cannot make enemies of media & on “K” street in DC (aka “district of crime”) :ohmy:
    although VP Joe & son appear to have been enriched politically for what was called out :whistle:
    Maybe in 2020 we will experience something new in re-electing an impeached president for 1st time 😆
    This week is national voter registration & I’m getting Bambi & HERD ready to vote for 45 – lol 😉 [/b][/i][/color]


    Ohhhh the humanity — the unredacted UKRAINE transcript has been released :woohoo: :woohoo: :woohoo: :woohoo: :woohoo:


    [size=5]EARLY ANALYSIS — #45 has nothing to worry about on this call (if fact he set this up with delayed release to out-fox everyone once again)


    There is ZERO evidence of “Quid Pro Quo” for $400M in aid to find dirt on political candidate (although media & deep state won’t say that) … All #45 noted was that VP Joe did lot of bragging of how he got UKRAINE judge fired investigating his son & VP Joe exerted “pro quid pro” influence to do so …

    The 5 page 30 min. call mainly notes that he simply & briefly requests their side look at this & if they find anything to share with Attorney General Barr thru normal channels to stop this type of political correction … all in the kindest of terms & $400M is never even mentioned in this call …. and Congress is going to IMPEACH for that? [/size]

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