MRKT MATRIX: May 20, 2024

Today’s Top Stories:

• Market Recap (FactSet Data & CNBC)

• Morgan Stanley stock strategist Mike Wilson raises S&P 500 forecast to 5,400 after bearish call on 2024 fails to pan out (CNBC)

• S&P Profit Recovery Revs Up on Big Tech and Strong Consumer (Bloomberg)

• Target lowering prices on 5,000 items in bid to lure more shoppers (CNBC)

• Higher Debt and Delinquencies Are Challenging the Economy (SoFi)

• The Coming War Between DC and Silicon Valley (Politico)

• Apple Needs to Evolve to Compete in the Artificial Intelligence Era (Bloomberg)

• JPMorgan CEO Jamie Dimon signals retirement is closer than ever (CNBC)

Today’s MRKT Call is Presented by Fidelity

Live Trade Ideas & Updates: $SPY $NVDA $SMH $FCX

Dan Nathan and Guy Adami break down the top market headlines and bring you stock market trade ideas for Monday, May 20th

Click here to access all of the charts mentioned in today’s MRKT Call.

Buy May 24th Weekly 1020/880 Collar for No Cost

• Sell to open 1 May 24th weekly 1020 call at ~$14.50

• Buy to open 1 May 24th weekly 880 put for ~$14.50

Break-Even on May 24th Close (Friday):

• Profits of up to 75 between 945 and 1020 with max gain at 1020, Stock called away at 1020. up ~8%

Losses of up to 65 between 945 and 880 but protected below 880, down about 7%

Hedge Rationale: 

• A long-holder would do this if they were more concerned with the downside of post-earnings than the upside. The hedge benefits from skew to the calls, offering $75 of upside vs only $65 of downside for no cost.

Buy July 55 - 60 call spread for ~$1.70

• Buy to open 1 July 55 call for $2.95

• Sell to open 1 July 60 call at ~1.25 cents

Break-even on July expiration:

• Profits of up to 3.30 between 56.70 and 60, max gain above 60

• Losses of up to 1.70 between 56.70 and 55 with max loss below 55

Trade Rationale and Management:

• This trade idea risks about 3% of the stock price and has a break-even up of 5%. Again, this makes sense for longs who want to define their risk from here and play for a new all-time high in the coming months.

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Today’s On The Tape is Presented by CME Group, iConnections and SoFi

Relationship Problems In Markets + Hedging Against Calamity with Jan van Eck & Matthew Siegel

On this episode of “On The Tape,” Guy Adami and Liz Young discuss Morgan Stanley’s Mike Wilson raising his S&P 500 price target (5:00), investor sentiment (8:00), earnings growth (12:30), the VIX as a measure of complacency (16:00), inflation (18:00), Nvidia earnings (21:00).

Later, Dan is joined by Kaitlin Malin of iConnections to interview Jan van Eck, CEO of VanEck, and Matthew Sigel, head of digital assets research at VanEck. They discuss: getting into the ETF market (28:30), bitcoin ETFs (32:30), regulation (41:30), the potential for a fiscal reckoning in 2025 (52:30), hedging against calamity (56:30), semiconductors (SMH) (1:01:00).

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