Welcome back to a regulation length week in the market. With only those companies on odd quarters reporting earnings, the market will continue to trade on economic and geopolitical news. Oddly the market expresses little concern over terrorist attacks or the political drama taking place in D.C.

Oil, however, dropped quickly on Trump’s decision to exit the Paris Agreement. Fears that oil production would surge sent it tumbling more than 4%. The drop in oil continues to weigh on portfolio holding Smart Sand (NSDQ: SND).

We have one portfolio holding reporting this week. Look below for details of Ambarella’s (NSDQ: AMBA) first quarter earnings call on Tuesday.

Around the portfolio:
Environmentally friendly chemical maker The Chemours Company (NSDQ: CC) traded down on the Paris Agreement news. Investors worry that requirements would ease for The Chemours’ green cooling chemical, Opteon, if the U.S. is not on board combatting climate change. However, regulations mandating the phase out of harsh coolants have already passed, so the exit by the U.S. (which would not be effective for three more years) will not curtail the use of Opteon. I recommend buying the stock on any weakness.

Ambarella (NSDQ: AMBA) had a tough week. As I mentioned in last week’s update, the stock was hit hard last Monday due to concerns that its chips were not used in a new low-priced drone made by industry leader DJI Technology. I am not overly concerned that competing chips are used in some of DJI’s drones, particularly at the lower price points. Ambarella’s camera chips are focused on higher end drones and security products.

An analyst at Stifel joined me in recommending buying the shares on weakness. Analyst Kevin Cassidy noted that he expects Ambarella to report “solid” Q1 results that will be in-line with or at the high end of its guidance. Cassidy says he “fully expects” DJI to utilize Ambarella’s chips in the future. However, Cassidy believes that Ambarella is focusing more on “enabling autonomous flying drones,” and he thinks that such drones will be used extensively by businesses. He keeps a $65 price target on the stock.

We’ll hear more from the company this week when it reports first quarter earnings (ended April 30) on Tuesday afternoon. Estimates are for $63 million in revenue and $.36 in earnings. For subscribers interested in listening in here are the details:

Tuesday, June 6
4:30 PM (EST)

Those in the U.S. interested in participating should dial 877-304-8963 approximately 10 minutes prior to the start of the call. International callers should dial 760-666-4834. The password is “Ambarella.” A replay will be available approximately 30 minutes after the call, and can be accessed by dialing 855-859-2056 in the U.S. and 404-537-3406 internationally. The conference ID to access the replay is 18801271.

A webcast of the conference call will be available at http://investor.ambarella.com/events.cfm

What to listen for:
Guidance for the July quarter. Currently, estimates look for $72 million in revenue and $.48 in earnings.
Last quarter Ambarella warned that orders from GoPro orders were weak as it worked through the excess inventory of Ambarella’s chips. My buy on Ambarella is based on the company diversifying away from GoPro so listen in to hear if customers producing home security and industrial drones are becoming a bigger part of the mix. Last quarter GoPro represented 32% of revenue.

Criteo (NSDQ: CRTO) fell 4% last week after a report of Google’s plans for Chrome ad blocker. It has been rumored for some time that Google had plans to introduce this new feature. I expect Criteo will bounce as the details of this blocker become available.

Google’s technology will block only non-compliant ads. These are the incredibly annoying ads that hijack your entire screen. Sridhar Ramaswamy, Google’s senior vice president of ads and commerce, wrote in a blog post. “It’s far too common that people encounter annoying, intrusive ads on the web – like the kind that blare music unexpectedly, or force you to wait 10 seconds before you can see the content on the page.”

Criteo has always worked with its customers to ensure that their ads are compliant and its technology helps to target ads that are relevant to consumers surfing the web.

Gap (NYSE: GPS) was upgraded today to Outperform with an increase in price target to $28 from $24 by an analyst at Oppenheimer. The analyst tells investors in a research note that Gap has an advantage to other retailers because its Old Navy stores are located primarily in off-the-mall locations.

Jazz Pharmaceuticals’ (NSDQ: JAZZ) new drug application (NDA) for acute myeloid leukemia (AML) candidate named Vyxeos was accepted by the FDA with Priority Review. The NDA submission includes clinical data from five studies, including the pivotal Phase 3 study. Vyxeos was also granted Fast Track Designation for the treatment of elderly patients with secondary AML by the FDA, and Orphan Drug Designation by the FDA and the European Commission for the treatment of AML.

The Priority Review for the broader indication means the FDA will attempt to review the file within six months. The Fast Track Designation for the specific use in elderly patients with secondary AML means that the FDA will review the filing and attempt to make a decision within 60 days.

The bearish trade in the grocery store sector continues to be frustrating, particularly for spice maker McCormick.

McCormick (NYSE: MKC), where we hold the July 95 puts, continues to march higher despite missing revenue estimates for its last quarter. These puts expire in 11 days so look for an alert this week on trading instructions.

Puts on laundry maker Church & Dwight (NYSE: CHD) and grocery retailer Kroger (NYSE: KR) do not expire until July 21, so we have some time for the stocks to weaken and hopefully send these puts into positive territory.