Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Apr 21, 2023 at 2:12 PM
Updated on Apr 21, 2023 at 2:26 PM
  • 5-Minute Market Rundown

Earnings season is here, but someone forgot to tell the Cboe Volatility Index (VIX). As investors pored over a slew of corporate reports, Wall Street’s “fear gauge” slumped. Despite the low volatility environment, the Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) were unable to take advantage. The blue-chip index is in the midst of a four-day losing streak and a fifth-straight weekly win looks untenable. Both the S&P 500 and Nasdaq are also headed for a week in the red. Choppy oil prices and rising bond yields were in focus throughout the week as well, all while the VIX traded at its lowest level since November 2021.

Tech News This Week

Facebook parent Meta Platforms Inc (META) is set to report earnings next week, and both analysts and options traders are chiming in ahead of the event as the stock continues to rally on the charts. Tesla Inc's (TSLA) post-earnings slide weighed on tech stocks on Thursday, and analysts hit the electric vehicle (EV) maker with bear notes ahead of the event. Netflix Inc (NFLX) gathered plenty of attention as well, following its mixed first-quarter report and disappointing forecast. 

We checked in with several semiconductor stocks this week as well, including Taiwan Semiconductor Mfg. Co. Ltd. (TSM) ahead of its quarterly report. Nvidia Corporation (NVDA) received a rare double-upgrade from HSBC, while Advanced Micro Devices Inc (AMD) is flashing a bull signal on the charts. 

Holiday Stocks This Week

This week was green in several ways as well, as we highlighted four cannabis stocks amid the 4/20 "weed holiday," and celebrated earth day with three environmentally friendly stocks. Plus, here is what cannabis industry leaders have to say about the famed holiday. 

Busy End of April Ahead

Earnings season is still in full swing next week, with plenty of economic data on tap as well. 3M (MMM), Amazon (AMZN), Boeing (BA), Caterpillar (CAT), Cleveland-Cliffs (CLF), Coca-Cola (KO), Dow (DOW), eBay (EBAY), General Electric (GE), General Motors (GM), McDonald's (MCD), PepsiCo (PEP), Pinterest (PINS), U.S. Steel (X), UPS (UPS), and Visa (V) are just some of the many corporate reports scheduled for next week. In the meantime, check out how recent SPX and VIX moves could impact options, with Schaeffer's Senior Quantitative Analyst Rocky White, as well as a key SPX level with Schaeffer's Senior Vice President of Research Todd Salamone. 

Published on Apr 21, 2023 at 11:56 AM
  • Midday Market Check
Published on Apr 21, 2023 at 10:57 AM
  • Buzz Stocks

Procter & Gamble Co (NYSE:PG) is enjoying post-earnings tailwinds today, up 4.5% at $157.68 at last glance, earlier hitting a nearly two-year high of $158.11. The Cincinnati-based company posted a fiscal third-quarter results beat and raised its 2023 forecast, noting that customers have shown little pushback to the continually raised prices. 

Today's gap higher has the Dow member breaking above recent pressure at the $152 level, as well as the $154 level, which kept a lid on gains from December through January. The stock is also breaking into positive territory for 2023, now up 3.9% year-to-date. 

In the options pits so far today, 34,000 calls and 20,000 puts have crossed the tape, which is already three times the average daily volume. Expiring at the end of the day today, the April 160 call is the most active contract, with new positions being bought to open there. 

This preference for calls has been the norm for the past 10 weeks. Procter & Gamble stock's 50-day call/put volume ratio of 2.21 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 95% of readings from the past year. 

These premiums can be had for a bargain at the moment too, as PG's Schaeffer's Volatility Index (SVI) of 17% ranks in the 5th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment. 

Published on Apr 21, 2023 at 10:14 AM
Updated on Apr 21, 2023 at 10:19 AM
  • Quantitative Analysis

Last week, subscribers to our Expiration Week Countdown service scored a 209% profit on our recommended General Electric Company (NYSE:GE) April 21, 95-strike call recommendation. Below, we'll unpack the reasoning for the bullish stance on the former Dow stock.  

At the time of this recommendation on Sunday, April 16, GE was breaking higher from a retracement back to an uptrend line and support area around the $93-$94 area. The shares' 80-unit moving average on the hourly chart was stepping up as support. Despite the favorable technical setup, TD Ameritrade client's were net sellers over the previous two months, so an unwinding of these bearish bets could help the shares higher. 

General Electric stock's relative strength index (RSI) on the charts also confirmed a move out of a short-term consolidation zone.

GE Post Mortem Chart April 212023

In the span of a week, GE added 4.6%, culminating in a new record high of $100.80 on Thursday. One day prior, we closed 100% of the position, allowing subscribers to more than triple their money in the span of three trading days.

Published on Apr 21, 2023 at 9:10 AM
  • Opening View

Futures on the three major U.S. indexes are mixed Friday, as stocks head for a losing week. Earnings continue to roll in this morning, including a report from Procter & Gamble (PG), adding to a list of companies that have beat already reduced forecasts.

At last glance, futures on the Dow Jones Industrial Average (DJIA) are slightly higher, while Nasdaq-100 Index (NDX) are modestly lower, and S&P 500 Index (SPX) futures sit flat. Meanwhile, oil prices are also heading for a significant weekly loss.

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

futures Chart April 212023

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.3 million call contracts and 1.3 million put contracts exchanged on Thursday. The single-session equity put/call ratio fell to 0.76 and the 21-day moving average stayed at 0.78.
  2. Procter & Gamble Co (NYSE:PG) is 2.1% higher premarket after the blue-chip manufacturing behemoth reported fiscal third-quarter earnings and revenue that topped Wall Street's estimates. In addition, the company upped it organic sales growth forecast for fiscal 2023. Today's gains should help PG move back above its year-to-date breakeven mark.
  3. CSX Corporation (NASDAQ:CSX) is up 2.9% before the bell and looking to overcome a fractional year-to-date deficit. This comes after the transportation firm announced better-than-expected first quarter results. In response, no less than eight analysts hiked their price targets on CSX.
  4. ContextLogic Inc (NASDAQ:WISH) is surging before the bell, last seen up 20.9% following the e-commerce platform concern's $50 million share repurchase announcement. Still, year-over-year, WISH is down more than 87%.  
  5. The S&P flash U.S. services purchasing managers' index (PMI) and manufacturing PMI are slated for release today.


Asian Markets Tumble Amid Japan's Economic Data

Markets in Asia finished lower on Friday, amid a slew of economic data out of Japan. The country’s inflation rate came in at 3.2% in March, slightly down from February’s 3.3%, while core inflation remained unchanged at 3.1%. Plus, Japan’s manufacturing purchasing managers’ index (PMI) rose to 49.5 in April, marking its slowest contraction in six months. According to Reuters, Japan’s central bank is considering making changes to its yield curve control policy later this year. China’s Shanghai Composite paced the losses with a 2% drop, while Hang Kong’s Hang Seng fell 1.6%, Japan’s Nikkei shed 0.3%, and the South Korean Kospi lost 0.7%.

European markets are mixed midday. London’s FTSE 100 is up 0.2% at last glance, amid reports that U.K. retail sales dropped by a steeper-than-expected 0.9% in March after rising 1.1% in February. Retailers blamed the unusually wet weather. Meanwhile, the French CAC 40 is flat despite private sector growth reaching a nearly one-year high last month, while the German DAX is down 0.2%.

Published on Apr 20, 2023 at 4:27 PM
  • Market Recap

Thursday's earnings barrage did not bode well for stocks, only adding to the volatility that has painted this week's trading landscape. All three major indexes closed in the red, with the Dow marking its third consecutive loss as Verizon (VZ) and Cisco Systems (CSCO) posted disappointing reports. On the flip side, however, the Cboe Volatility Index (VIX) snapped its six-day losing streak.

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

  • Cannabis industry experts weigh in on 4/20.
  • Verizon rival sees post-earnings options surge.
  • Plus, analysts circle casino stock; pharmacy retailer slips; and next week's economic and earnings schedule.

Closing Indexes Summary April 20

NYSE and Nasdaq Stats April 20

 Things to Know Today 

  1. A test launch for Elon Musk's SpaceX rocket is being deemed a "success," despite exploding after 4 minutes of flight. No crew were on board, and this came days after a failed launch attempt Monday. (CNBC)
  2. U.S. Treasury Secretary Janet Yellen called the relationship with China "tense," saying the country acted illegally in the past and the U.S. will not compromise on national security -- regardless of economic impact.  (MarketWatch)
  3. Analysts circled this casino stock after earnings.
  4. Pharmacy giant sees post-earnings slip
  5. Take a look at what's on the schedule for next week.

Corporate Earnings April 20

Unusual Options Activity April 20

Oil Falls to Multi-Week Low

Oil again settled below the round $80 level and hit their lowest mark since late-March this afternoon. May-dated crude fell $1.87, or 2.4%, to close at $77.29 per barrel.

Gold kept hold of it $2,000 level Thursday, brushing off any broader-market volatility. The June-dated commodity added $11.80 or 0.6%, to settle at $2,019.10 an ounce.

Published on Apr 20, 2023 at 3:14 PM
  • Intraday Option Activity
  • Buzz Stocks

Earth Day is this Saturday, and its important to remember that making money and combating climate change are not mutually exclusive. For the 'green' investor out there, Waste Management Inc (NYSE:WM), Canadian Solar Inc. (NASDAQ:CSIQ), and Bloom Energy Corp (NYSE:BE) are three environmentally-friendly stocks that can help accomplish both. 

2023 Top Pick Chugging Along

Waste Management may be known for trash and rowdy golf tournaments, but the company is at the forefront of recycling and landfill efforts nationwide. The stock, a top pick of 2023, is up 0.4% to trade at $167.59 today. WM has formed a bull flag pattern on the charts in the wake of a 2.9% gap higher on March 30. The shares' year-to-date breakeven level could step up as support going forward.

Solar Stock Ripe for Upgrades

Canadian Solar is one of the many solar stocks that could stand to benefit from ever-increasing renewable energy capacity and government subsidies. CSIQ is up 0.7% to trade at $40.33 today and boasts a 30% lead already in 2023. The shares traded as low as $34.31 on March 17, but their 320-day moving average stepped up as support. Despite the stock's healthy gains this year, three of the five brokerages in coverage maintain "hold" or "strong sell" ratings.

Bloom Energy Call Buyers in a Frenzy

Bloom Energy's 2022 sustainability report showed significant emissions savings. The fuel cell manufacturing stock is off by 1.8% to trade at $18.07 today and 5.1% lower in 2023. The shares' 30-day moving average has guided BE lower since 2023 peaks above $26.50, but a longer-term floor could be emerging between $16-$17. 

The equity's 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 8.32. So not only do calls outflank puts by a more than 8-to-1 ratio, that ratio sits in the 92nd percentile of its annual range, indicating that the rate of call buying is near 52-week highs. 

Published on Apr 20, 2023 at 2:28 PM
  • Strategies and Concepts

Cannabis Industry Leaders Discuss the 420 Holiday

by Schaeffer's Digital Content Team

We asked the marijuana industry experts to tell us more about the significance of 420 to cannabis culture and cannabis businesses. Here's what they had to say:

“While I’ve always celebrated 420, pre-legalization, it was a bit more about being defiant and celebrating the righteousness of legalization. Now that I live in a legal country, it’s an opportunity to celebrate cannabis culture and keep the authentic spirit of cannabis alive.” - Andy Palalas, CRO of retail-focused cannabis company High Tide Inc. (NASDAQ:HITI)

"Historically 4/20 has been a time to celebrate cannabis. Recently, 4/20 has evolved from just a celebration to a time to push sales and works similar to holiday for us. We offer discounts, promotions, and unique 4/20 holiday products, and throw events all month long. As a result, April is usually one of our highest sales months of the year. We typically see a similar uptick in cannabis sales during the traditional holiday season in November and December, similar to non-cannabis consumer brands. Additionally, Papa & Barkley and other industry folks are pushing to make 7/10 a similar holiday vibe. 7/10 (or OIL upside down) is considered a holiday for consuming cannabis oil products and we see an increase in concentrate sales for 7/10." - Guy Rocourt, CEO of Papa & Barkley

“Reepher was conceived on 4/20. Really! While celebrating 4/20 with some friends we were talking about how awesome it is that we, in some states, have such easy access to pure, safe plant medicine. During that same conversation we also talked about people being charged and jailed for simple possession or consumption. And how many of those people end up in the arrest, release, repeat cycle because they can’t afford effective legal counsel. For this conversation reepher came to be.” - Justin Kahn, Founder and CEO of insurance company for cannabis users, Reepher

“420 is simultaneously about everything and nothing at the same time. This lack of clarity makes it an inclusive holiday and celebration - one that can be embraced and rewritten without offending anyone.” - Laurel (Lo) Friesen, Founder and CEO of cannabis extract company Heylo Cannabis

“It would be great if more people used 420 to learn about the history of cannabis and the legacy markets that predate widespread legal markets." - Oliver Summers, Los Angeles Medical Cannabis advocate/Dispensary operator

“I've been fortunate to live most of my life in communities without much stigma around cannabis or being a stoner…I'm also a pretty stereotypical stoner of a certain kind - shaggy hair, tie-dye, Grateful Dead, Phish - and I'm aware of my privilege to be a stoner with little consequence because I'm a white guy from an upper-middle-class background. I just want everyone to be able to be whatever kind of stoner they want to be without judgment.” - James Eichner, CSO and Co-Founder of sustainable packaging brand Sana Packaging

“As the industry celebrates 4/20, it’s important for us to examine the history of how we got here and where we’re going. What once was a unifying goal of ending the criminalization for possession of a plant has turned into a fragmented multibillion-dollar industry. Industrial hemp is working to distance itself from psychoactive consumables, and there are competing narratives on whether cannabis is a medicine or a staple consumer good.” - Gretchen Schmidt, Faculty Program Director for the Graduate Certificate in Cannabis Control at Excelsior College

“This holiday has come to symbolize an entire industry, it was not always used in relevant case.” - Evgeny Boukreev, Head of Marketing at innovative autoflower breeder Fast Buds

“With cannabis still being widely disregarded by lawmakers and politicians, the plant and its derivatives are still surrounded by myths and misconceptions. And many of those misconceptions are spread by people who know little about cannabis, or twist the facts about cannabis for whatever agenda they’re after.” - Mikhail Heifitz, COO of premium CBD brand, Unabis

Published on Apr 20, 2023 at 12:46 PM
  • Buzz Stocks
Published on Apr 20, 2023 at 11:53 AM
  • Midday Market Check
Published on Apr 20, 2023 at 10:33 AM
  • Buzz Stocks

Las Vegas Sands Corp (NYSE:LVS) stock is up 4% to trade at $61.73 at last glance, after the casino name issued a stellar first-quarter report. Specifically, the company reported adjusted earnings of 28 cents per share on revenue of $2.12 billion, both of which came in above analysts' estimates thanks to higher visitation levels in march.

In response, no less than seven analysts hiked their price targets, including Citigroup to $80.50. The majority of analysts are bullish on LVS already. Of the 11 analysts in coverage, 10 now carry a "buy" or better rating, while the 12-month consensus price target of $61.47 is an 8.5% premium to current levels. 

Options traders are targeting Las Vegas Sands stock at six times the intraday average after the news. So far, 8,775 calls and 3,066 puts have been exchanged, with the April 63 call seeing the most activity, followed by the 60 call from the same monthly series. 

This interest in bullish bets is nothing new. LVS's Schaeffer's put/call open interest ratio (SOIR) of 0.63 ranks higher than just 15% of annual readings. This implies short-term options traders have operated with a call-bias.

Today's pop has Las Vegas Sands stock trading at more than two-year highs. The shares are up more than 61% year-over-year and now boast a healthy 29.4% year-to-date lead.

Published on Apr 20, 2023 at 10:31 AM
  • Buzz Stocks

Rite Aid Corp (NYSE:RAD) stock is down 9.3% to trade at $2.15 at last glance, after the company's wider-than-expected first-quarter losses of $1.24 per share. Meanwhile, the drugstore chain operator turned in better-than-expected revenue of $6.09 billion. On track for its third-straight loss, RAD is moving back toward its March 24 record low of $2.05. Year-to-date, the equity is down 35.4%. 

Options traders are leaning bearish in their response, with overall options running at double the intraday average. So far, 844 calls and 2,057 puts have been exchanged, with the January 2024 3-strike put seeing the most activity. 

This preference for puts is nothing new. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), RAD's 50-day put/call volume ratio of 3.17 ranks higher than all other readings from the past year. 

Analysts have yet to chime in after the event, but all three in coverage carry a "strong sell" rating. Meanwhile, short interest has been building, and currently represents 24.5% of Rite Aid stock's available float. 

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