The futures were modestly higher after a very back and forth day on Wall Street following Monday’s massive risk-off selling, which was the worst day for the markets since June 16. The major indexes all closed lower on Tuesday, with only the Russell 2000 eking out a small gain. All eyes remain focused on Friday and Federal Reserve Chair Powell’s speech at the economic symposium in Jackson Hole. While it is unlikely that he will detail the size of the rate hike for September, as more data will emerge early in September, a hawkish tone to the speech could open up the markets to increased selling.
Many top strategists feel the summer rally was driven by extreme short-covering and depressed stock positioning and may be coming to end as those two components have likely been fully played out. Toss in the “fall seasonality effect” (September and October are notoriously weak), and the corporate buyback window closing in three weeks, and we could be in for a return to the June lows.
Yields were slightly higher across the Treasury curve Tuesday, as buyers swooped in early, but some selling returned as the trading day wore on. The dreaded two-year and 10-year note inversion is stubbornly still in place with the former closing at 3.31% and the latter at 3.05%. While the spread has narrowed, the inversion hints at recession, which technically we already are in.
Both Brent and West Texas Intermediate crude closed almost 4% higher after the Saudi oil minister noted that OPEC may be looking at production cuts after a flood of Russian oil has kept pressure on prices all summer. Natural gas jumped up to the $10 level for the first time since 2008, before closing at $9.23, down almost 5% as profit taking clearly was in effect. Both gold and Bitcoin also closed higher on the day.
24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Wednesday, August 24, 2022.
Aerie Pharmaceuticals Inc. (NASDAQ: AERI): Stifel downgraded the shares to Hold with a $15 target after the company was acquired by Alcon for $770 million. The consensus target is $18.89. The shares closed Tuesday at $15.36, up 36% on the deal announcement.
Afya Ltd. (NASDAQ: AFYA): Goldman Sachs maintained a Buy rating and a $12 target price on the shares. The consensus target is higher at $16.61. The stock closed over 2% higher on Tuesday at $12.70.
Baidu Inc. (NASDAQ: BIDU): Macquarie started coverage with an Outperform rating and a $188 target price. The consensus target is $199.25. Tuesday’s close at $134.07 was up 2% for the day.
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