Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jul 5, 2022 at 4:27 PM
Updated on Jul 5, 2022 at 4:34 PM
  • Market Recap

Stocks saw a mixed settlement on Tuesday as investors kept a wary eye on the 10-year Treasury yield and the 2-year Treasury yield, which made a brief inversion earlier in the day. This has been a strong indicator of an upcoming recession in the past. In response, the Dow lost 129 points, after earlier shedding over 700 points, while the S&P 500 finished the day with a muted gain. The Nasdaq, meanwhile, managed to bounce back from its earlier losses, and settled the day with a more than 1% pop, as growth-focused tech stocks gained some steam.

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

  • Why 1 analyst hit Tesla stock with a bear note today. 
  • The exchange stock staring up at stiff resistance on the charts. 
  • Plus, a breakdown of PSMT; LEVI gears up for earnings; and; HPQ gets a downgrade.

The Dow Jones Average (DJI -  30,967.82) lost 129.4 points, or 0.4% for the day. Nike (NKE) led the gainers, adding 3.1%. Chevron (CVX) paced the laggards with a 2.6% drop.

The S&P 500 Index (SPX - 3,831.39) gained 6.1 points, or 0.2% for the day. Meanwhile, the  Nasdaq Composite (IXIC - 11,322.2) rose 194.4 points, or 1.8% for the session.

Lastly, the Cboe Market Volatility Index (VIX - 27.54) added 0.01 point, or 0.04% for the day.

closing summary July5

nyse nasdaq July5

5 Things to Know Today

  1. Over in the U.K., British Chancellor Rishi Sunak has put in his resignation, joining health Secretary Sajid Javid, in what appears to be a protestation against Prime Minister Boris Johnson's leadership. (CNBC)
  2. The suspect in the Highland Park, Illinois Independence Day Parade shooting, which killed six and injured 30, bought his rifle legally, according to officials. (Reuters)
  3. Breaking down this retail stock's ideal entry point
  4. Here's everything you need to know about Levi Strauss stock before earnings. 
  5. Evercore ISI downgraded this tech stock over the holiday weekend. 

There are no earnings reports of note today.

UVOL July5

Gold Stumbles as U.S. Dollar Hits 20-Year High

Oil futures suffered a sharp selloff back below the $100 mark, to turn in their lowest settlement in nearly two months as investors began to worry that a potential recession could put a dent in demand. For the day, August-dated crude lost $8.93, or 8.2%, to settle at $99.50 per barrel.

Gold prices dropped to their lowest level of 2022 on Tuesday, breaching the closely watched $1,800-per-ounce level as the U.S. dollar rose to its highest mark since November 2002. August-dated gold fell $37.60, or 2.1%, to close at $1,763.90 an ounce.

Published on Jul 5, 2022 at 3:33 PM
  • Analyst Update

The shares of HP Inc (NYSE:HPQ) are being pushed lower by a downgrade from Evercore ISI to "in line" from "outperform," with a price-target cut to $36 from $43. The firm is concerned by the potential for "more severe" PC headwinds. Today's adjustment has Evercore joining the bearish majority, with 16 of the 18 analysts in coverage now carrying a "hold" or worse rating. HPQ is down 2.7% to trade at $31.01 at last glance. 

Former support at the 180-day moving average rejected the shares near the end of June, and HPQ has been careening lower since -- on track for its fifth-straight daily loss. Now trading at its lowest levels since November 2021, HP stock is down 17.6% year-to-date.

It's worth noting, however, that HPQ's relative strength index (RSI) of 31.8 sits on the cusp of "oversold" territory. This means the tech stock could be due for a short-term bounce. 

HPQ July5

Options traders appear to be betting on the stock's next leg higher. In the past two weeks, 6.10 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 98% of readings from the past year, showing calls being picked up at a much faster-than-usual rate. During this time, the August 40 call was the most popular, followed by the July 35.50 call. 

Meanwhile, short interest represents 5.7% of the stock's available float, or over four days' worth of pent-up buying power. 

Published on Jul 5, 2022 at 12:19 PM
  • Analyst Update
  • Stock Market News

The shares of Tesla Inc (NASDAQ:TSLA) are down 2.8% at $663.07, after the electric vehicle (EV) maker reported a worse-than-expected 254,695 units delivered in the second quarter, which marks a 17.9% drop from Tesla's first quarter. The company noted disruptions to its production and supply chains due to Covid-related lockdowns in China. Meanwhile, reports were released last Friday that Tesla was slapped with a recall order from Germany on its Model Y and Model 3 vehicles. 

In response, J.P. Morgan Securities slashed its price target to $385 from $395 and cut its second-quarter and full-year profit outlook. The analyst recognized production slowdowns in Shanghai, but also pointed to "execution issues" at its Austin and Berlin factories. 

When we last checked in on Tesla, the stock was struggling to capitalize on an upgrade from RBC Capital. A broader look at analyst sentiment shows 12 brokerages in coverage carrying a "buy" or better rating, compared to eight "hold" or worse ratings. Meanwhile, the 12-month consensus price target of $893.46 is a lofty 34.3% premium to current levels. 

Options traders, on the other hand, have taken a much more bearish stance in recent weeks. This is per TSLA's 50-day put/call volume ratio of 1.01 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the top-most percentile of its 12-month range. In other words, long puts are getting picked up at their fastest pace in a year. 

Today's price action has TSLA adding to its 37.1% year-to-date deficit, though it's managed to hold above a recent floor near the $630 level. The 40-day moving average kept a late-June rally in check, however, while the stock's 20-day is providing a more immediate ceiling. 

tsla july 5
Published on Jul 5, 2022 at 12:12 PM
  • Options Recommendations
Intercontinental Exchange Inc (NYSE:ICE) recently broke below its 1,000-day moving average before failing at the $100 level. Plus, equity and options trading volumes have been flat year-over-year versus the growth we witnessed a year ago post-Covid stimulus, and year-over-year comps could disappoint. Year-to-date, ICE sports a 30.4% year-to-date deficit.
 
The shift in sentiment in the options pits could provide headwinds. ICE’s 50-day call/put volume ratio of 2.74 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 98% of readings from the past year. In the same vein, the stock's Schaeffer's put/call volume ratio (SOIR) of 0.45 sits higher than just 6% of readings from the last 12 months, showing a strong penchant for calls of late.
 
The equity is ripe for bear notes as well. Of the 10 analysts in coverage, seven carry a “strong buy” rating, plus, the 12-month consensus price target of $134.71 is a 41.8% premium to current levels.
 
Meanwhile, though still low, short interest increased 43% since the end of March as the equity has lurched lower, suggesting perhaps, that the short players have control of the exchange operator. Lastly, our recommended put has a leverage ratio of -5.8 and will double in a 15.8% drop in the underlying equity.
 
Subscribers to Schaeffer's Weekend Trader options recommendation service received this ICE commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Published on Jul 5, 2022 at 12:06 PM
  • Midday Market Check

The Dow Jones Industrial Average (DJI) is off 709 points at midday, as recession concerns stew on Wall Street. Investors are watching for signals, including the 10-year Treasury yield as it declines toward the 2-year yield, and the very real possibility of a second-straight quarterly decline in U.S. gross domestic product (GDP), which would meet the technical definition of a recession. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are seeing calmer losses, though Tesla (TSLA) and Microsoft (MSFT) are weighing on the latter. 

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

  • Why Stellantis stock is moving lower today. 
  • Analyst sees attractive entry point for this shoe retailer. 
  • Plus, options bears target LAZR; TD considers buying COWN; and STAF plummets into penny stock territory. 

MMC Stats July5

Luminar Technologies Inc (NASDAQ:LAZR) is seeing a surge in bearish options activity this afternoon, with 123,000 puts across the tape so far, which is seven times what is typically seen at this point. The July 5.50 and 6 puts are the most popular, with new positions being bought to open at both. LAZR was last seen down 1.9% to trade at $5.92 -- a fresh record low. Year-over-year, the stock is down 71.7%. 

One of the best performing stocks on the Nasdaq today is Cowen Inc (NASDAQ:COWN), after news that TD Bank (TD) is considering a takeover deal for the firm. COWN was last seen up 19.2% to trade at $28.67, though the stock's 180-day moving average still lingers as overhead pressure. Year-to-date, the equity is still down 18.7%. 

COWN July5

Staffing 360 Solutions Inc (NASDAQ:STAF) is one of the worst stocks on the Nasdaq today, down 21.4% at $4.85 and dipping into penny stock territory for the first time ever. The company yesterday reported better-than-expected fiscal fourth-quarter earnings of $1.60 per share, though revenue came in lower than anticipated. Plus, the employment services name announced a $4 million private placement priced at-the-market under Nasdaq rules after the close on Friday. Year-over-year, the equity is down 90.2%. 

Published on Jul 5, 2022 at 9:06 AM
Updated on Jul 5, 2022 at 10:49 AM
  • Opening View

Markets are returning from the holiday weekend poised for more losses. Futures on the Dow Jones Industrial Average (DJIA) are set for a 343 point drop, while Nasdaq-100 Index (NDX) and S&P 500 Index (SPX) are looking at substantial premarket losses of their own.

Yesterday while U.S. markets were closed, U.S. Treasury Secretary Janet Yellen and Vice Premier of China Liu He convened for a virtual meeting regarding macroeconomic concerns. Over the holiday weekend, there was also a sharp drop in the 10-year Treasury yield, which was last seen inching lower at 2.8%. 

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

futures july 5

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw over 1.07 million call contracts and 820,892 put contracts traded on Friday. The single-session equity put/call ratio fell to 0.69, and the 21-day moving average stayed at 0.64.
  2. HP Inc (NYSE:HPQ) was just downgraded to "in line" from "outperform" by Evercore, which noted weaker demand for personal computers among customers. In response, the tech stock is down 2.5% ahead of the bell, set to to its 16.2% year-to-date deficit and open at its lowest level since late-November 2021. 
  3. The shares of Exxon Mobil Corp (NYSE:XOM) are inching higher ahead of the bell, last seen up 0.7% after the oil concern predicted that its second-quarter earnings could hit $18 billion, thanks to surges in oil and natural gas prices. The energy stock is coming off a record high of $105.57 from early June, and looks to have found support near the $84 level. 
  4. Tesla Inc (NASDAQ:TSLA) announced it delivered a lower-than-expected 254,695 vehicles in the second quarter. This marks a 17.9% quarter-on-quarter drop. The firm pointed to Covid-related restrictions in China for the slowdown. At last glance, Tesla stock is down 1.8%. The equity is still clinging to a year-over-year lead of 3.4%, but it's lost a whopping 43.2% in 2022 so far. 
  5. Today will bring factory orders and a core capital equipment orders revision.

July 5 OV Buzz Chart

Asian Markets Rise on Back of Economic Data

Asian markets settled mostly higher today amid a whirlwind of economic data. China’s Shanghai Composite was the only loser with a 0.04% loss, while Hong Kong’s Hang Seng and Japan’s Nikkei added 0.1% and 1%, respectively. The South Korean Kospi led the gains with a 1.8% win. Both China and Japan’s purchasing manager’s indexes (PMI) showed growth in June, with the latter expanding at its fastest pace since October 2013. Elsewhere, the consumer price index (CPI) in Korea rose 6% year-over-year in June – the fastest rate since November 1998, a time of economic crisis in Asia. Investors are speculating on a big rate hike from the Bank of Korea after the news.

Over in Europe, the major bourses are struggling midday as recession fears fester. The French CAC 40 and German DAX are both down 1.5%, while London’s FTSE 100 drops 1.4%. The euro services PMI for June came in at 53, just above the anticipated reading of 52.8 but down from the previous month’s 56.1. 

Published on Jul 5, 2022 at 10:38 AM
  • Buzz Stocks

At What Price Should Investors Buy PriceSmart Stock?

by Schaeffer's Digital Content Team
 
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.

Begin the New Year With Schaeffer's 7 FREE 2022 Stock Picks!

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