Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jul 5, 2022 at 9:57 AM
  • Buzz Stocks
  • Earnings Preview
 
Published on Jul 5, 2022 at 9:50 AM
  • Buzz Stocks

Loop Capital upgraded Crocs Inc (NASDAQ:CROX) to "buy" from "hold" this morning, seeing an attractive entry point for the stock after its recent selloff. The firm also cited "encouraging checks" that point to investor sentiment being overly negative, and potential for growth due to the Hey Dude acquisition. At last check, CROX was up 1.5% to trade at $48.70. 

On the charts, CROX is coming off a July 1 low of $46.08, its lowest level since October of 2020. The 40-day moving average has acted helped pressure the shares lower since December, and Crocs stock is sporting a 62.6% year-to-date deficit coming into today. 

Options traders have been betting on CROX's comeback, however. In the past two weeks, 4.40 calls have been bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 96% of readings from the past year, showing calls being picked up at a much faster-than-usual clip. 

Options look like a decent way to go when weighing in on Crocs stock. The security's Schaeffer's Volatility Scorecard (SVS) sits at a 93 out of 100, meaning CROX has exceeded option traders' volatility expectations during the past year.

 

Published on Jul 5, 2022 at 9:45 AM
  • Buzz Stocks

Stellantis NV (NYSE:STLA) just shared its vehicle sales for the first half of 2022, which saw a 14% drop from a year ago. Further, a recent union workers report was just released noting that the global chip shortage could bring the Italian auto concern's vehicle production down to 220,000 units this year. In response, STLA is down 7% at $11.53.

The equity is set to breach the $12 mark for the first time since November 2020. The stock's 80-day moving average has kept a lid on shares for the better part of this year, putting it at a 33.9% year-to-date deficit, and a 37.5% year-over-year loss. 

Analysts are split on STLA. Of the six in coverage, three say "strong buy" and three say "hold." Meanwhile, short interest has been on the rise, up 11.3% in the last reporting period, though it still represents just a slim 0.7% of the stock's available float. 

Short-term options traders, meanwhile, have been quite put-biased. This is per STLA's Schaeffer's put/call open interest ratio (SOIR) of 0.91, which sits higher than 89% of readings from the past year. 

Published on Jul 5, 2022 at 9:14 AM
  • Monday Morning Outlook
 
Published on Jul 5, 2022 at 7:00 AM
  • Buzz Stocks

Today's Stock Market News & Events: 7/5/2022

by Schaeffer's Digital Content Team

The first full week of July this week will be a short one, as the markets were closed on Monday in observance of Independence Day. The remainder of this week is loaded with employment data, while a few notable indexes are on the docket as well. Meanwhile, the earnings confessional won't have a whole lot of visitors this week, though some notable names set to report include Levi Strauss (LEVI), PriceSmart (PSMT), and WD-40 (WDFC).

Today factory orders and a core capital equipment orders revision are due out.  

There are no public companies slated to release corporate earnings today, July 5.

Looking ahead to tomorrow, Wednesday will feature the S&P Global U.S. services purchasing managers' index (PMI), as well as the Institute for Supply Management (ISM) services index. Additionally, job openings and quits are slated for release.

All economic dates listed here are tentative and subject to change.

Published on Jul 1, 2022 at 4:27 PM
Updated on Jul 1, 2022 at 4:28 PM
  • Market Recap

Stocks pivoted higher on Friday, as traders snapped out of the pessimism that assailed Wall Street for the first six months of the year. The Dow added 321 points, while the S&P 500 and tech-heavy Nasdaq also broke into the black to nab notable gains of their own, even amid lackluster manufacturing activity data for June. Despite today's rally, all three benchmarks still logged weekly losses.

A batch of corporate profit warnings from big names including General Motors (GM) has investors on high alert heading into the holiday weekend, though. Nevertheless, Wall Street's "fear gauge," the Cboe Volatility Index (VIX), saw its lowest close since June 9.

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

  • Preparing for the Fourth of July market holiday.
  • Rounding up this week's cannabis stock news.
  • Plus, Cincinnati staple a sure bet in July; FDX downgraded; and Kohl's quits buyout negotiation.

The Dow Jones Average (DJI -  31,097.26) added 321.8 points, or 1.1% for the day, but shed 1.3% for the week. McDonald's (MCD) led the gainers, adding 2.5%. Intel (INTC) paced the laggards with a 2.9% drop.

The S&P 500 Index (SPX - 3,825.33) gained 40 points, or 1.1% for the day, but lost 2.2% for the week. Meanwhile, the  Nasdaq Composite (IXIC - 11,127.85) rose 99.1 points, or 0.9% for the session, but fell 4.2% for the week.

Lastly, the Cboe Market Volatility Index (VIX - 26.70) lost 2 points, or 7% for the day, and 1.9% for the week.

closing summary july 1

nyse and nasdaq july 1

5 Things to Know Today

  1. The World Health Organization (WHO) warned urgent action is needed to contain a monkeypox outbreak in Europe, with cases tripling in the past two weeks. (CNBC)
  2. General Motors' (GM) second-quarter sales fell 15% year-over-year amid supply and production disruptions, leading it to lower quarterly projections. (MarketWatch)
  3. Cincinnati-based stock that could rally this month. 
  4. FedEx stock downgraded on unreliable execution and inflation. 
  5. Kohl's stock gapped lower after halting recent acquisition talks.

earnings july 1

 uvol july 1

Oil Prices Eke out Daily, Weekly Wins

Oil futures settled higher on Friday, closing out the week with a modest 0.8% win. The commodity is still enjoying tailwinds from a pandemic-led supply crunch, made worse by the Russia-Ukraine war, though recession fears are keeping a lid on gains. For the day, August-dated crude added $2.67, or 2.5%, to settle at $108.43 per barrel.

Gold prices were lower, on the other hand, despite erasing a big chunk of the losses that had the precious metal slipping below the psychologically significant $1,800 level. A drop in the 10-year Treasury yield and the manufacturing data helped prices partially bounce back. August-dated gold fell $5.80, or 0.3%, to close at $1,801.50 an ounce, and shed 1.6% this week.

Published on Jul 1, 2022 at 2:52 PM
Updated on Jul 1, 2022 at 4:07 PM
  • 5-Minute Market Rundown

It was a momentous week as Wall Street wrapped up June, the second quarter, and first half of 2022. After trading on both sides of the aisle on Monday, the Dow Jones Industrial Average (DJI) settled just below breakeven, as investors pondered whether stocks were oversold or had bottomed out. Upbeat durable-goods orders for May pared those losses, though the tech sector still tumbled as the 10-year Treasury yield rose. The Dow then went on to fall 491 points on Tuesday, while the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) sold off as well, after the retail and semiconductor sectors took a beating. 

Modest gains finally came for the Dow on Wednesday, but comments from Federal Reserve Bank of Cleveland President Loretta Mester suggesting support for a 75 basis point rate hike in July weighed. Plus, revised gross domestic product (GDP) data for the first quarter showed the U.S. economy contracted. A massive hit followed on Thursday, with the S&P 500 logging its worst first half of the year since 1970, and the Dow and Nasdaq seeing their worst quarters since March 2020 and December 2008, respectively. Inflation and a possible recession was still at the top of traders' minds on Friday. At midday, the thee major indexes were looking to kick off the third quarter with steep weekly losses.

Seasonality Trends

As we enter the second half of 2022, it's a good opportunity to look into seasonality trends. Schaeffer's Senior Quantitative Analyst Rocky White has some key insights on how to play the Fourth of July holiday, and has conjured up a list of the best and worst stocks to own next week. For a more long-term perspective, White also has come up with a list of the best stocks to own this month, and the 25 stocks to avoid. If you are looking for an outperformer in the tech sector, Alphabet (GOOGL) is the best FAANG stock to own in July, while Costco (COST) and Cintas (CTAS) could also climb.

 

Blue-Chip Headlines

A handful of blue-chip stocks were in the spotlight this week. Nike (NKE) was among them, stepping into the earnings confessional to report a quarterly top-and-bottom line beat, though that was overshadowed by the company's weaker-than-expected current-quarter revenue expectations. Meanwhile, Walgreens Boots Alliance (WBA) ditched plans to sell its U.K. business following a lack of suitable offers, while Merck (MRK) looked like a solid bet for options bulls. Apple (AAPL) also drew attention, after J.P. Morgan Securities reiterated its "overweight" rating.

Movers & Shakers

Spirit Airlines (SAVE) was a big mover this week, after announcing plans to accept Frontier's (ULCC) improved cash-and-stock bid of $2.7 billion. Axsome Therapeutics (AXSM) surged after the Food and Drug Administration (FDA) proposed labeling for its depression drug candidate. Meanwhile, Bed Bath & Beyond (BBBY) shed over 20% after the departure of CEO Mark Tritton, and Kohl's (KSS) said it called off recent acquisition talks.

Employment Data in Focus Next Week

Though markets will be closed on Monday for Independence Day, the first full week of July brings a slew of employment indicators, such as nonfarm payrolls and jobs opening data, an unemployment rate update, and the labor force participation rate. A few notable indexes are also on tap, including the S&P Global U.S. services purchasing managers' index (PMI). Meanwhile, the earnings docket looks bare, with few names set to report aside from Levi Strauss (LEVI), PriceSmart (PSMT), and WD-40 (WDFC). Plus, now may be the right time to scale back into equities using the S&P 500 as a guidepost.

Published on Jun 29, 2022 at 4:29 PM
Updated on Jul 1, 2022 at 2:49 PM
  • Market Recap

The Dow retained its afternoon gains on Wednesday, adding 82 points, though Wall Street is still heading for the worst first half of the year since 1970. The S&P 500 and Nasdaq both settled slightly below breakeven, after Federal Reserve Bank of Cleveland President Loretta Mester reignited recession fears when she noted she may support a 75 basis point interest rate hike in July. In other news, revised gross domestic product (GDP) data showed the U.S economy contracted in the first quarter.

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

  • What you need to know about Shopify's stock split.
  • Unpacking General Mills' latest earnings beat.
  • Plus, 25 stocks to target in July; a cruise stock capsizing; and Bed Bath & Beyond CEO hits the road.

The Dow Jones Average (DJI -  31,029.31) added 82.3 points, or 0.3% for the day. McDonald's (MCD) led the gainers, adding 2%. Caterpillar (CAT) paced the laggards with a 2.1% drop.

The S&P 500 Index (SPX - 3,818.83) shed 2.7 points, or 0.07% for the day. Meanwhile, the Nasdaq Composite (IXIC - 11,177.89) lost 3.7 points, or 0.03% for the session.

Lastly, the Cboe Market Volatility Index (VIX - 28.16) fell 0.2 point, or 0.7% for the day.

closing indexes june 29

nyse and nasdaq june 29

5 Things to Know Today

  1. Alphabet-owned Google (GOOGL) executive Nick Fox is to lead the company's commerce and payments business, after Bill Ready's move to Pinterest (PINS). (CNBC)
  2. Electric vehicle (EV) name Nio (NIO) is disputing a Grizzly Research short-seller report, noting it contained errors and unsupported speculations. (MarketWatch)
  3. Hologic stock is among the best 25 names to own in July.
  4. This damning bear note sent Carnival stock even lower.
  5. How BBBY responded to its CEO's departure.

earnings june 29

 uvol june 29

Oil Prices Snap Win Streak on Production Boost Talks

Oil prices settled lower on Wednesday, snapping a three-day win streak. Black gold brushed off Energy Information Administration (EIA) data that showed a decline in U.S. crude inventories in the last two weeks, with investors expecting the Organization of the Petroleum Exporting Countries and their allies (OPEC+) to confirm a production boost for August. August-dated crude lost $1.98, or 1.8%, to settle at $109.78 per barrel.

Gold prices were also lower for a third consecutive day. The yellow metal suffered as the U.S. dollar regained strength after the central bank reinforced its hawkish policy. August-dated gold shed $3.70, or 0.2%, to close at $1,817.50 an ounce.

Published on Jul 1, 2022 at 1:57 PM
  • Buzz Stocks
 
Published on Jul 1, 2022 at 12:13 PM
  • Midday Market Check

The major indexes continue to languish below breakeven as the third quarter gets underway. The Dow Jones Industrial Average (DJI) is off 25 points at midday, while the S&P 500 Index (SPX) and the Nasdaq Composite (IXIC) are both sporting muted losses as well. A slew of corporate profit warnings are weighing on investor sentiment, with names like Kohl's (KSS), Micron Technologies (MU) and General Motors (GM) all sharing cautious quarterly projections.  

Meanwhile, the Institute for Supply Management (ISM) released worse-than-expected manufacturing activity data for June, with its index of national factory activity falling to 53 -- the worst reading since June 2020. What's more, the ISM's new orders index fell into contraction territory for the first time since May 2020.

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

    • Apple stock is still a buy, says analyst. 
    • Rising inflation risks could hurt shipping stock
    • Plus, why options traders are flocking to CPNG; UBS turns bullish on Wall Street newbie; and unpacking TALS' record low.

    mmc stats july 1

    Coupang Inc (NYSE:CPNG) is seeing a surge in options activity this afternoon, with 18,000 calls and 6,693 puts across the tape so far, which is six times what is typically seen at this point. Most popular is the January 2023 25-strike call, followed by the 7/1 15-strike call, with positions being opened at the latter, which expire later today. CPNG was last seen up 14.3% at $14.58, after Credit Suisse raised its rating to "outperform" from "neutral," but cut its price target to $19 from $28. Though it still suffers a 65.6% year-over-year deficit, the equity is now set to close back above its 60-day moving average for the first time since early March. 

    cpng july 1

    One of the best performing stocks on the Nasdaq today is Inter & Co Inc (NASDAQ:INTR). The Brazil-based fintech concern was last seen up 31.9% at $2.77, after UBS yesterday initiated coverage on the security with a "buy" rating, and a $6 price target. The stock, which went public late last week, hit a low of $2.10 during yesterday's session. 

    Talaris Therapeutics Inc (NASDAQ:TALS) is one of the worst stocks on the Nasdaq today. Though the pharma concern posted mostly upbeat data from its ongoing phase 3 trial of its FCR-001 allogenic cell therapy treatment for living kidney donors, the stock is down 51.9% at $2.17. The update also sparked a downgrade from SVB Securities to "market perform" from "outperform," and price-target cut to $7 from $21. The equity earlier hit a record low of $2.04, and is down 85.1% year-to-date. 

    Published on Jul 1, 2022 at 12:02 PM
    • Strategies and Concepts

    Fourth of July Stock Market Holiday Facts

    by Schaeffer's Digital Content Team

    If you're wondering if the stock market is open on the Fourth of July, you're not alone. A lot of people are unsure on which holidays the stock market is closed.

    In this blog post, we will go over all the important details related to the Fourth of July stock market holiday. We'll answer questions like "Is the stock market open on the Fourth of July?" and "What stocks are popular after the Fourth of July?" so that you can be fully prepared for the Independence Day holiday.

    So, let's get started with some Fourth of July stock market holiday facts!

    Is the Stock Market Open On the Fourth of July?

    First off, it's important to note that the stock market is closed on Independence Day. This includes all major exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq.

    The bond market is also closed on the Fourth of July, with most banks and financial institutions following suit. ATM services will still be available, however, so you can access cash if needed.

    Now that we've answered the question "Is the stock market open on the Fourth of July?" let's move on to another common question:

    Facts About Fourth of July Stock Market Holiday

    The stock market in the United States has indicated a modest positive bias around the Fourth of July holiday throughout history. Although some years have been negative, generally speaking, the Fourth of July is a positive for the market.

    If you are planning to trade around the Fourth of July holiday, it is best to tread cautiously as conditions can change quickly and trading volume is much lighter during holiday-shortened trading weeks.

    Now that we've gone over some facts about the Fourth of July stock market holiday, let's look at some popular stocks to trade around this time!

    What Stocks are Popular Around the Fourth of July Holiday?

    While there's no surefire answer to this question, there are a few stocks that tend to do well after the Independence Day stock market holiday. By looking into these industries, you may be able to find a stock that's right for you!

    Retail: One example is retail stocks. This is because the Fourth of July is typically a big shopping holiday, as people take advantage of sales and discounts on summer items. Imagine how many people are buying swimsuits, grilling supplies, and patriotic decor in the days leading up to the holiday!

    By finding the companies that benefit the most from this holiday spending, you can get a head start on investing in the right stocks. Of course, the stock market itself will be closed on the Fourth of July, so you'll need to do your research ahead of time. However, it's always a good idea to stay up-to-date on which stocks are doing well and which ones might be worth investing in.

    Travel: Another type of stock that does well after the Fourth of July is travel stocks. This is because a lot of people take advantage of the long weekend to go on vacation. Airlines, hotels, and rental car companies tend to see an uptick. Although, it should be noted that this depends on the year.

    For example, in 2020, due to the pandemic, travel stocks took a hit. Even on the Fourth of July, when people were supposed to be traveling, the number of people flying was down significantly from years past.

    So, if you're thinking of investing in travel stocks around the Fourth of July stock market holiday, it's important to do your research first and see how they've performed in past years. It's also crucial to understand that past performance does not guarantee future results.

    Leisure: Stocks that do well after the Fourth of July stock market holiday can also be anything related to leisure. This is because many people use the long weekend as an opportunity to relax and enjoy themselves.

    Some stocks in this category include amusement parks, golf courses, and restaurants. Again, it's important to remember that these industries can also be affected by external factors, such as the weather.

    For example, if it rains on the Fourth of July, people might be less likely to go out and enjoy themselves. As a stock market trader, it can be difficult and even financially dangerous to try and predict the economic weather. Remember that observance of the Fourth of July stock market holiday is just one of many holiday-shortened trading weeks and that stocks can go up or down at any time for a whole host of reasons completely unrelated to the holiday. 

    Consumer Staples: Last but not least, consumer staples stocks may do well following the Fourth of July stock market holiday. This is because people tend to spend a lot of money on food and drinks during the holiday weekend.

    Companies that make food and alcohol might see an uptick in revenue. If you're looking for a safe bet, consumer staples stocks is always a pretty safe option.

    These are a just few sectors that you may want to consider if you plan on participating in the stock market immediately before or after the Fourth of July stock market holiday. Remember, it's important to do your research and understand all of the risks before investing in any stock regardless of it being proximal to a stock market holiday like Independence Day.

    Keep these Fourth of July stock market holiday facts in mind when making your investment decisions. We hope you found this blog post helpful. Now you have a bunch of valuable information about the Fourth of July stock market holiday. Have a happy and safe Independence Day, if you celebrate!

    Published on Jul 1, 2022 at 11:03 AM
    • Strategies and Concepts

    Everything Investors Need to Know About Stock Splits

    by Schaeffer's Digital Content Team

    Do you have questions about stock splits? You are not alone. A lot of people don't know what a stock split is or what it does.

    In this blog post, we will explain everything you need to know about stock splits. We'll cover what they are, why companies do them, and how they affect shareholders. By the end of this article, you'll be an expert on stock splits!

    What Is a Stock Split?

    If you're new to the stock market, you may have heard about stock splits and are wondering what they are. A stock split is simply a corporate action in which a company divides its existing shares into multiple shares. They can also be more complex, like a reverse stock split. But for now, let's discuss what a traditional stock split is in more detail.

    Stock splits can be 2-for-1, meaning each shareholder gets two new shares for everyone's old share. For example, if a company has 1,000 shares of stock and it performs a 2-for-1 split, then the company will have 2,000 shares of stock.

    The shares will be worth half as much as they were before the split, but there will be twice as many shares. So if each share was worth $100 before the split, then each share will be worth $50 after the split.

    However, the value of the company will remain the same. This is because a stock split does not add any new value to the company, it simply divides the existing shares into multiple shares. It also does not take away any value from the company. It is simply a way to divide the shares among more shareholders.

    Stock splits can also be for other denominations such as four-for-one or eight-for-one etc. These larger splits can be helpful for expensive stocks such as Shopify. At its peak, it reached close to $2000.

    A four-for-one split would have made it more affordable for many investors ($500 per share) who may have been interested in the company. If they didn't want to spend that much money on a single share, they could have bought one share for 75% of what the original cost would have been.

    Now that we know what a stock split is, let's briefly discuss what a reverse stock split is and how it works.

    What Is a Reverse Stock Split?

    A reverse stock split is when a company's board of directors decides to decrease the number of outstanding shares. For example, if a company has 100 million shares outstanding and does a two-for-one reverse stock split, then the company would have 50 million shares outstanding after the split.

    Shareholders would own half as many shares, but each share would be worth twice as much. So if each share was worth $100 before the split, then each share would be worth $200 after the split. Like a traditional stock split, a reverse stock split does not add or take away any value from the company. It's just a method to decrease the number of outstanding shares.

    The reason why a company would do a reverse stock split is to increase the price per share. Some exchanges have rules about the minimum price per share that a company can have to be listed on the exchange. By doing a reverse stock split, a company can increase its stock price so that it meets the listing requirements.

    Why Do Companies Perform Stock Splits?

    There are a few reasons why companies might choose to perform stock splits.

    One reason is that it can make the shares more affordable for small investors. For example, if a company's shares are trading at $200 each, it may be too expensive for some people to buy just one share. But if the company does a two-for-one split, then the price of each share will drop to $100 and more people will be able to afford to buy the shares.

    Another reason companies perform stock splits is to increase the liquidity of their shares. This means that it will be easier for people to buy and sell the shares. A lack of liquidity in the stock can make it difficult to find buyers or sellers, which can lead to a lack of interest in the stock.

    Stock splits can also make a company's shares look more attractive to investors. This is because when a company's shares are trading at a high price, it can look like the company is overvalued. But if the company does a stock split and the share price drops, then it can look like a bargain.

    How Do Stock Splits Affect Shareholders?

    Stock splits can have different effects on shareholders depending on the reason why the company is doing the split.

    If a company is doing a stock split to make its shares more affordable, then it will likely have a positive effect on shareholders. This is because more people will be able to buy the shares, which will increase demand and drive up the price.

    When it comes to increasing liquidity, stock splits will also be positive for shareholders. They may be able to get a better price for their shares, which leads to more trading volume and higher profits.

    In general, stock splits tend to be positive for shareholders since they usually result in higher demand for the shares and a higher share price. But it's important to remember that each situation is different and you should always do your own research before investing in any company.

    Should I Buy a Stock Split?

    If you see that company's high-priced stock you've had on your watch list announce a stock split, you might ask yourself, "Should I buy a stock split?"

    As we've discussed, stock splits can have a positive effect on shareholders, but that doesn't mean you should automatically buy the shares just because there's a split.

    You should always do your own research before investing in any company. This includes looking at the financials, the management team, the competitive landscape, and any other factors that might affect the company's performance.

    A stock split is simply a corporate action and it doesn't necessarily mean that the company is doing well or that its shares are a good investment. So make sure you do your due diligence before buying any shares. Some companies might even trap unwary investors by doing a stock split just before announcing bad news.

    Why Do Stocks Split?

    Stock splits can be a confusing topic, but we hope this article has helped to clear some things up. Don't let the change of price fool you into believing that your investment has lost value.

    A stock split simply indicates that a company's share price has become too expensive for some investors, so the company splits the shares to make them more affordable. It changes nothing about the underlying value of the company.

    In most cases, stock splits are positive for shareholders since they result in higher demand for the shares and a higher share price. But fundamental analysis is still the key to finding good investments. Don't forget to do your own research before investing in any company, even if it's doing a stock split.

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