Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Dec 8, 2022 at 10:59 PM
  • The Week Ahead
          
Published on Dec 8, 2022 at 4:27 PM
  • Market Recap

Stocks finished confidently higher today for the first time this week, as Wall Street brushed off the latest Fed fatigue. Both the Dow and Nasdaq secured triple-digit wins --the former's first of the month -- while the S&P 500 snapped its five-day losing streak.

Jobs data was front and center today, as initial and continuing unemployment claims rose last week. While that is typically negative news, today it encouraged those investors convinced that a weakening labor market indicates inflation may soon cool off. Elsewhere, the Cboe Volatility Index (VIX) snapped its three-day win streak. 

Continue reading for more on today's market, including:

  • Bank stock flashing historically bullish signal. 
  • Options traders eye embattled Beyond Meat stock
  • Plus, UL in the spotlight; XOM bucking the oil sector slump; and CRM downgraded. 

Closing Indexes Summary Dec 8

NYSE and Nasdaq Stats Dec 8

5 Things to Know Today 

  1. U.S. basketball star Brittney Griner has been released from Russian custody in a prisoner swap with notorious arms dealer and "merchant of death" Viktor Bout. (The New York Times)
  2. Latest update on the FTX collapse: FTX's bankruptcy team is meeting with federal prosecutors in Manhattan. (Bloomberg)
  3. Unilever considering billion-dollar sale
  4. This blue-chip oil stock just made investors very happy. 
  5. Analyst: short-term headwinds for Salesforce stock. 

Corporate Earnings Dec 8

Unusual Options Activity Dec 8

Oil Prices End Lower Despite Pipeline Shutdown

Oil prices fell for the fifth-straight day, though prices briefly rose after an oil spill in a Kansas creek shut down the Keystone pipeline. West Texas Intermediate (WTI) crude for January delivery dropped 55 cents, or 0.8%, to settle at $71.46 a barrel on the New York Mercantile Exchange. 

Gold prices rose for the third day to finally settle back above the $1,800 level. February-dated gold added $3.50, or 0.2%, to settle at $1,801.50 per ounce.

Published on Dec 8, 2022 at 3:30 PM
  • Buzz Stocks
 
Published on Dec 8, 2022 at 1:59 PM
  • Buzz Stocks

Rocket Companies Inc (NYSE:RKT) is seeing a bullish options surge today, with 22,000 calls across the tape so far, which is three times the intraday average. The weekly 12/9 and weekly 12/30 9-strike calls are the most active, with new positions opening at both. 

This sentiment is keeping with the past couple of weeks, as RKT has seen 3.96 calls for every put in the last 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 80% of readings from the past year, showing long calls being picked up at a faster-than-usual rate. 

Analysts are singing a different tune, however, which leaves room for bull notes. Of the 13 analysts in coverage, 12 carry a "hold" or worse rating on Rocket stock, with only one "strong buy." Plus, the 12-month consensus price target of $7.19 is a 15.3% discount to current levels. 

On the charts, RKT has been attempting to rally from its Oct. 21 record low of $5.97, though long-term pressure at its 200-day moving average could keep a cap on gains. Today, RKT is up 2% at $8.47 at last glance, down 44.3% year-over-year. 

RKT Nov8

Published on Dec 8, 2022 at 1:23 PM
  • Unusual Trading Activity

Beyond Meat Inc (NASDAQ) has been on the chopping block recently. Between the broader market's inflation issues, a report calling out food safety issues at a Pennsylvania plant, and the resignation of several executives, the former Wall Street favorite has its fair share of hurdles to overcome right now. Unsurprisingly, the equity dipped back towards its all-time lows near the $11.50 region several times during the past few months. Meanwhile, the $17.50 level and 80-day moving average both loom above as potential resistance levels. 

The stock is rising with the rest of the market today, though -- last seen up 5.8% at $16.50. A Forbes article might be fueling some of the positive price action. Forbes reported that the company is hoping to make a comeback with its Beyond Steak product, which the company hopes to roll out to a number of restaurants, including pizza chain Fired Pie. However, Beyond Meat chose to withhold its actual revenue goals for Beyond Steak sales next year. 

Regardless of what's driving today's price action, options players are glomming on. So far, 33,000 calls and 38,000 puts have exchanged hands, which is double the intraday average. The most popular position is the February 2023 10-strike put, followed by the 7.50-strike put in the same monthly series. Positions are being sold at both. 

A wider look shows calls have been unusually popular. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day call/put volume ratio of 1.87 that stands higher than 81% of readings from the past year. 

Published on Dec 8, 2022 at 1:21 PM
  • Quantitative Analysis

Morgan Stanley recently hit JPMorgan Chase & Co. (NYSE:JPM) with a double-upgrade, after noting several factors that could help the blue-chip banking giant moving forward. While the bull note has failed to provide immediate tailwinds, a bullish signal is flashing on the charts that could give JPM a big boost. 

Specifically, JPMorgan Chase stock just came within one standard deviation of its 40-day moving average, after a significant amount of time spent above this key trendline. According to additional data from White, four similar signals were observed over the last three years. JPM enjoyed a positive return one month later twice, averaging a 3.9% gain, and a move of similar magnitude from JPM's current perch of $132.18 would put the shares at $137.34.

JPM Chart December 082022

The equity could use a boost to escape 2022 without losing too much ground, as JPMorgan Chase stock currently stands 16.3% lower year-to-date. Should JPM turn its 4.1% December deficit around, it could potentially nab a three-month winning streak.

Key contrarian signals are flashing in the security's options pits, too. JPMorgan Chase stock's Schaeffer's put/call open interest ratio (SOIR) of 1.07 stands in the 84th percentile of its annual range. What's more, JPM's 10-day put/call volume ratio of 1.49 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 92% of readings from the past year. An unwinding of all this pessimism could bode well for the shares.

Now might be the perfect time for investors to speculate on the stock's next move with options. The bank stock's Schaeffer's Volatility Index (SVI) of 33% sits in the 32nd percentile of its annual range, indicating that now is an affordable time to play JPMorgan Chase stock.

Published on Dec 8, 2022 at 11:50 AM
  • Midday Market Check
 
Published on Dec 8, 2022 at 10:40 AM
  • Buzz Stocks

The world's biggest ice cream maker, Unilever PLC (NYSE:UL) is gathering headlines today, as it is reportedly considering selling some of its U.S. ice cream businesses. The sale could be valued at roughly $3 billion and include Klondike and Breyers, according to people familiar with the matter. 

On the charts, UL has steadily fallen since its Dec. 2, roughly nine-month highs, and is currently inching 0.1% lower to trade at $50.75. Several short- and long-term trendlines linger below as potential support, however, including its 20-day moving average. Year-to-date, the equity is down 5.7%. 

Analysts are leaning bearish on Unilever stock, with six of the nine in coverage carrying a "hold" or worse rating. Plus, the 12-month consensus price target of $48.37 sits at a 4.7% discount to current levels. 

It's also worth pointing out that UL ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 19 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

Published on Dec 8, 2022 at 10:28 AM
Updated on Dec 8, 2022 at 10:29 AM
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Published on Dec 8, 2022 at 9:56 AM
  • Buzz Stocks

A little more than a month after reporting record profitsExxon Mobil Corp (NYSE:XOM) announced today that it will expand its share repurchase program to $50 billion through 2024, including $15 billion in 2022. The oil giant also announced plans to increase lower-emission efforts by 15%, keep capital expenditures flat through 2027, and double "potential" earnings and cash flow, all by 2027.

Exxon Mobil stock is up 2.1% to trade at $105.86. Despite the sector slump, XOM is outperforming the Energy Select Sector SPDR Fund (XLE), boasting a 69.4% year-to-date lead versus XLE's 53.4% gain in the same time period. The shares have pulled back from their Nov. 8 peak at $114.66, but the dip was saved by their  80-day moving average. 

Despite the impressive technical performance, puts remain popular amongst options traders. This is per the equity's 10-day put/call volume ratio of 1.62 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 100% of readings from the past year. Echoing this, XOM's Schaeffer's put/call open interest ratio (SOIR) of 1.24 ranks in the elevated 96th percentile of annual readings.

The good news for options traders is that XOM's Schaeffer's Volatility Scorecard (SVS) of 73 out of 100 indicates the security has exceeded option traders' volatility expectations during the past year.

Published on Dec 8, 2022 at 9:37 AM
  • Analyst Update

Shares of Salesforce Inc (NYSE:CRM) are inching lower this morning, last seen down 0.8% at $129.38, following a bear note from Baird. The analyst downgraded the stock to "neutral," and slashed its price target by $50 to $150. The brokerage noted the upcoming departure of Salesforces' co-CEO, announced earlier this month, and said the software company's macro environment still looks rocky. Baird pointed out that this potent combination could have negative effects on CRM's revenue in the near term. 

When news broke that co-CEO Bret Taylor decided to resign, we also pointed out that downbeat seasonality could provide an additional layer of headwinds on the charts. So far, these predictions have been true. CRM gapped below recent support at the $150 level shortly after the news, and hit a series of two-year lows in the aftermath. In fact, the equity is eyeing another two-year bottom today, adding to its more than 48% year-to-date deficit. 

More analysts could follow Baird's lead. Of the 32 in coverage, 25 considered the equity a "buy" or better, heading into today. What's more, the 12-month consensus price target of $199.27 is a 53.9% premium to last night's close. 

Published on Dec 8, 2022 at 9:20 AM
Updated on Dec 8, 2022 at 9:21 AM
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