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T3's Take 3: Social Media Pops and Drops


Today's financial recap and tomorrow's financial outlook.

Today on T3 Live

TechStrat author Sean Udall added a 4% stake in Twitter (TWTR) at $28.37.

He is attempting a strategy that he used with great success in Apple (AAPL), buying cheaply, with a plan to sell on bounces and swap into long-dated call options.

Click here to learn more about the Techstrat

World Equity Markets

US stocks weren't able to hold yesterday's gains following a major sell-off in Chinese markets.

The Shanghai Composite plunged 6.15% on fears that government may not interfere further with markets. On Friday, the China Securities Regulatory Commission hinted that they would not react to market fluctuations prompting fears that further stimulus action will not be taken. As same-day short selling is currently banned, investor shorts weren't covered until today. The plunge in China's markets rippled across Asia, pushing emerging markets to multi-year lows..

The S&P 500 closed down 0.3%.

Home construction rallied on positive housing data. Retail also finished up slightly.

Biotech and cybersecurity experienced major sell-offs as risky stocks remain out of favor.

Across the Atlantic, European stocks didn't perform well either. The German DAX dropped 0.2% and the French CAC fell 0.3%. 

UK markets dipped lower after July's inflation reading came in higher-than-expected.

Wal-Mart & Home Depot

Wal-Mart (WMT) released its quarterly earnings report today, disappointing investors. Earnings were $1.08 per share, missing expectations by 4 cents, while revenues beat expectations. The company also lowered earnings guidance for the year.

CEO Doug McMillion blamed currency fluctuations and wage increases for the miss. He said the company is going through a transition period as it tries to improve customer service and employee retention. Wal-Mart is also looking to increase its online presence in order to compete with companies like Amazon (AMZN), especially in China. Shares closed down 3.4%.

Elsewhere in retail, Home Depot (HP) shares rallied on the company's strong quarterly report. EPS was recorded at $1.71, beating by two cents, while revenue beat at $27.8 billion vs. the $24.7 billion consensus. Shares finished up 2.6%.

Social Media Mishmash

Twitter (TWTR) shares continued to fall lower after MKM Partners cut its target price to $31 from $39.

MKM cited user and profit growth concerns as the reason for the reduced price target.

Reuters reported that the company is looking to advance its expansion plans in Asia, appointing Rishi Jaitly to build partnerships in Asia and the Middle East.

Facebook (FB) shares rose after receiving positive analyst coverage. MKM Partners raised its price target from $105 to $120 with a reiterated buy rating, citing the company's massive reach and user growth. They also said that Instagram is increasingly building long-term value with its advertising tools and relatively untapped revenue opportunities. 

PiperJaffray said Facebook's Oculus Rift unit could become a major force in the company's revenue. The company is also investing heavily in virtual reality talent.

Wednesday's Financial Outlook

US economic data for tomorrow will include MBA mortgage applications, CPI, average weekly earnings, DOE oil reports, and the Fed's July FOMC meeting minutes.

Overseas economic data will include Japan buying of foreign bonds and stocks.

Hormel Foods (HRL), Lowe's (LOW), Staples (SPLS), and Target (TGT) will report earnings before the open. L Brands (LB), and Spartan Stores (SPTN) will report after the close.
No positions in stocks mentioned.
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