Soul Kitchen

Well. the clock says it's time to close now

I know I have to go now

I really want to stay here

All night, all night, all night

- Morrison, Densmore. Manzarek, Krieger (The Doors), 1967

What a Day!

Can't say that I saw this one coming. I can say that I'll take it. The Nasdaq Composite roared to the tune of 2.11%, and the S&P 500 ran 1.53%. The dollar backed off a bit, allowing both equities and commodities to rally. Bitcoin ran hot. All 11 S&P sector-select SPDR ETFs shaded green for the session, led by Communication Services (XLC) , Energy (XLE) , and Tech (XLK) . Even Utilities, finishing the day in last place, gained ... 0.4%. all of your favorite equity indexes posted winning weeks. The odd thing is that today's rally occurred even as Fed officials such as Christopher Waller and James Bullard ratcheted up the hawkish rhetoric and forced Treasury yields higher.

Once again, the time has come to close out the day and the week. I thank you for hanging with me. I thank Doug for trusting me with his Diary. I hope I, in some way, entertained. I wish you all a great and safe weekend. May all your dreams come true and may you enjoy victory in all of your campaigns.

Sarge out.

I don't really follow Indian markets, but I found this interesting.

John Murphy at StockCharts just sent out his afternoon emails, and the S&P GSCI Commodity Index was among them.

Take a look at this action since June:



Now, check out this Indian commodities index, also since June:

Hmmm.

Every NFL fan likes to mock the NY Jets. The franchise won Super Bowl III as a member of the AFL. The Jets have never been back to the big game, having lost the AFC Championship Game in 1982, 1998, 2009 and 2010.

Over the past 40 years, the Jets have taken 5 QBs in the first round of the NFL draft... in 1983, 2000, 2009, 2018, and 2021. Name them.

- Warren Buffett inspired name. We all know that Berkshire Hathaway (BRK.B) has been buying the shares.

- Trades 10 times Forward Looking Earnings.

- Tangible book value of $19.45 per share

- Free cash flow of $4.64 per share.

- Q2 adjusted EPS of $3.16 on revenue of $10.7B (+79%), both beats.

- Q3 expectations: EPS of $2.75 (up from $0.87) on revenue of $9.5B to $10B (+53%).

Occidental Petroleum (OXY) found support at the 38.2% Fib retracement level of the December through late may run. This has created a volume shelf at the $55 level. From there, OXY forms a cup with handle, slowing at the 50 day SMA. Relative strength is not quite there, nor is the daily MACD, but we do have Warren. 

- Target Price: $92

- Pivot: $77

- Panic: $54 (break of established support)

I may disappear briefly around 3 pm ET. I'm set to appear on The Claman Countdown (top of the show) with Teddy Weisberg for an interview with Liz Claman. This will be on the Fox Business Network.

I'm told Liz wants to ask about positioning going into the Fed Blackout Period, and 9/11, being Teddy and I were both down there that day and I ended up re-enlisting after a long break in service.

MONDAY

Economics (All Times Eastern)

13:00 - Ten Year Note Auction: $32B.

The Fed (All Times Eastern)

Blackout Period.

Earnings Highlights (Consensus EPS Expectations)

After the Close: (ORCL) (1.08) 

TUESDAY

Economics (All Times Eastern) 

06:00 - NFIB Small Biz Optimism Index (Aug): Expecting 91.1, Last 89.9.

08:30 - CPI (Aug): Expecting 8.1% y/y, Last 8.5% y/y.

08:30 - Core CPI (Aug): Expecting 6.0% y/y, Last 5.9% y/y.

08:55 - Redbook (Weekly): Last 10.9% y/y.

13:00 - Thirty Year Bond Auction: 18B.

14:00 - Federal Budget Statement (Aug): Last $-211B.

16:30 - API Oil Inventories (Weekly): Last +3.645M.

The Fed (All Times Eastern) 

Blackout Period. 

Earnings Highlights (Consensus EPS Expectations) 

After the Close: (CNM) (.49) 

WEDNESDAY

Economics (All Times Eastern) 

07:00 - MBA 30 Year Mortgage Rate (Weekly): Last 5.94%.

07:00 - MBA Mortgage Applications (Weekly): Last -0.8% w/w.

08:30 - PPI (Aug): Expecting 8.9% y/y, Last 9.8% y/y.

08:30 - Core PPI (Aug): Expecting 7.1% y/y, Last 7.0% y/y.

10:30 - Oil Inventories (Weekly): Last +8.844M.

10:30 - Gasoline Stocks (Weekly): Last +333K.

The Fed (All Times Eastern) 

Blackout Period. 

Earnings Highlights (Consensus EPS Expectations) 

Before The Open:  (DOOO) (2.63) 

THURSDAY

Economics (All Times Eastern) 

08:30 - Initial Jobless Claims (Weekly): Expecting 225K, Last 222K.

08:30 - Continuing Claims (Weekly): Last 1.473M.

08:30 - Retail Sales (Aug): Expecting 0.0% m/m, Last 0.0% m/m.

08:30 - Empire State Manufacturing Index (Sept): Expecting -15.3, Last -31.3.

08:30 - Philadelphia Fed Manufacturing Index (Sept): Expecting 3.5, Last 6.2.

08:30 - Import Prices (Aug): Expecting -1.2% m/m, Last -1.4% m/m.

08:30 - Export Prices (Aug): Expecting -0.4% m/m, Last -3.3% m/m.

09:15 - Industrial Production (Aug): Expecting 0.2% m/m, Last 0.6% m/m.

09:15 - Capacity Utilization (Aug): Last 80.3%.

10:00 - Business Inventories (July): Expecting 0.8% m/m, Last 1.4% m/m.

10:30 - Natural Gas Inventories (Weekly): Last +54B cf.

The Fed (All Times Eastern) 

Blackout Period. 

Today's Earnings Highlights (Consensus EPS Expectations) 

After the Close: (ADBE) (3.35) 

FRIDAY

Economics (All Times Eastern) 

10:00 - U of M Consumer Sentiment (Sept-adv): Expecting 59.8, Last 58.2.

13:00 - Baker Hughes Total Rig Count (Weekly): Last 760.

13:00 - Baker Hughes Oil Rig Count (Weekly): Last 596.

16:00 - Net Long-Term TIC Flows (July): Last $121.8B.

The Fed (All Times Eastern) 

Blackout Period. 

Today's Earnings Highlights (Consensus EPS Expectations) 

Before the Open: (MANU) (-.18)

Earlier this week, after the earnings related selloff, I added this name to my book... 

UiPath (PATH)

- Provider of robotic software meant to eliminate the need for hands-on execution of manual and mundane tasks. 

- Q2: Adjusted EPS of a loss of $0.02 (down from $0.01) on revenue of $242.22M (+24%).

- ARR of $1.043B, Gross margin of 82%.

- Projected profitability by 2024.

- Q3 expectations: A loss of $0.04 on revenue of $270M, up from $240M.

The charts will not impress, though there are a couple of unfilled gaps to the upside. It's the balance sheet that impresses here. At quarter's end, UiPath ran with a net cash position of $1.721B and current assets of $2.108B. The firm had current liabilities that totaled $460.1M. This brings the firm's current ratio of a quite robust 3.74. Total assets add up to $2.435B, including "goodwill" and other intangibles of $113.04M. This is certainly nowhere near abusive. Total liabilities less equity comes to $585.1M. There is no dent of any duration on this balance sheet.

This balance sheet is as clean as a whistle. Tangible book value amounts to an impressive $1.737B or $3.19 per share. A lot of much larger firms with much higher stock prices can't match that. Now, if the business could just perform as well as the books. 

- Target Price: $21

- Pivot: $17 (21 day EMA)

- Panic: $9

- Q2: GAAP EPS of a loss of $0.20 on revenue of $121.23B (+7%)

- Revenue growth last four quarters in succession: +15%, +9%, +7%, +7%.

- Q3 expectations: EPS of $0.21, down from $0.31, on revenue of $128B (+15.4%).

Amazon (AMZN) has formed a cup with handle pattern over the past five months that has produced a pivot at $146. The stock has not acted well of late. In building the handle, the shares have traded lower with broader equity markets, but this stock's 50 day SMA has held. Relative Strength is neutral, while the daily MACD is showing signs of setting up for a bullish crossover of the 26 day EMA by the 12 day EMA.

Question! Is my cup with handle identification correct, or do you see a double bottom with a pivot at $130? If I am wrong, then we have already had our breakout and that obviously changes everything. 

- Target Price: $175

- Pivot: $146

- Panic: $122 (break of 50 day SMA)

From this morning's Wall Street Journal, here.

For Friday:

Economics (All Times Eastern) 

08:30 - Wholesale Inventories (July): Expecting 0.8% m/m, Last 1.9% m/m.

13:00 - Baker Hughes Total Rig Count (Weekly): Last 760.

13:00 - Baker Hughes Oil Rig Count (Weekly): Last 596.

The Fed (All Times Eastern)

10:00 - Speaker: Chicago Fed Pres. Charles Evans.

12:00 - Speaker: Reserve Board Gov. Christopher Waller.

12:00 - Speaker: Kansas City Fed Pres. Esther George.

This guy again? On a Friday, again? You bet your tail, this guy's back. We're going to have fun and try to turn a buck or two while we're at it.

You know the drill by now. Let's rip those greasy melons away from those stinkin' pillows that probably need to be changed out and get ourselves highly motivated and truly dedicated to the mission. Our mission is to stay with it, and stay at it, until the work is done. Push-ups, sit-ups, some jumping jacks if you think you can. If you cannot, then substitute, but there is no substitution for effort.

Coffee. Yes, we are going to need some coffee. Kroger (KR) reports here on Friday morning. Last night, we heard from DocuSign (DOCU) , Zscaler (ZS) and RH (RH) . Both DOCU and ZS have roared through the wee hours. The macro schedule is thin on Friday. Just wholesale inventories at 10 a.m ET. We do have a few more Fed officials who will do their very best to sound less than stupid when they speak publicly on Friday, ahead of the eight-times-a-year Fed blackout period. That starts tomorrow.

Charles Evans bats lead-off this morning, to be followed by Christopher Waller and Esther George around lunchtime. So, get fired up. The day ahead is a gift, and you have been selected as a recipient. Wind it up. I'll be back in a bit while I finish the first of my morning columns.