Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jan 9, 2023 at 8:53 AM
  • Monday Morning Outlook
 
Published on Jan 6, 2023 at 4:30 PM
  • Market Recap

Some much needed optimism was reintroduced on Wall Street today, after several key pieces of economic data suggested that inflation might be starting to cool. A smaller-than-expected increase in average hourly wages paired with a contraction in the ISM's non manufacturing Purchasing Managers' Index (PMI) has many investors more confident in the Federal Reserve's efforts to beat back inflation and slow the economy.

In response, the Dow added 700 points, while the S&P 500 and Nasdaq both added over 2% for the day. For the week, all three major indexes managed to score wins as well.  

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

  • Can Costco's strong December sales give the stock a boost?
  • This pharma name is a Schaeffer's favorite in 2023. 
  • Plus, a BBBY bankruptcy update; STZ hit with bear notes; and 3 solar stocks getting upgrades.

Closing Index Summary January 062023

NYSE and Nasdaq Stats January 062023

5 Things to Know Today 

  1. The U.S. House of Representatives failed to elect a new speaker today, its fourth day of voting and the longest the chamber has gone leaderless in a century. (CNBC)
  2. The flight cancellations Southwest (LUV) saw during December could wind up costing the airline up to $825 million. (MarketWatch
  3. What to know about Bed Bath & Beyond's bankruptcy drama.
  4. How Wall Street responded to Constellation's corporate earnings.
  5. Why Wells Fargo is upgrading the solar sector. 

There are no earnings of note today.

Unusual Options Activity January 062023

Gold Logs Third Weekly Win

While oil saw a slight daily win, the commodity dropped for the week, marking its first weekly loss in a month. West Texas Intermediate (WTI) crude for the now most active February delivery, added 10 cents, or 0.1%, to settle at $73.77 per barrel, though it shed 8.1% for the week.

A "Goldilocks" jobs report sent gold prices higher once more, allowing the precious metal to log its third-consecutive weekly gain. February-dated gold added $29.10, or 1.6%, to settle at $1,869.70 per ounce. For the week, it rose 2.4%. 

Published on Jan 6, 2023 at 1:25 PM
  • 5-Minute Market Rundown

The dust has settled for 2022, but the new year hasn't gotten off to the start that a lot of investors were hoping for. The major indexes stumbled into 2023 with slight losses for the first session of the year. The Dow Jones Industrial Average (DJI), Nasdaq Composite Index (IXIC), and S&P 500 Index (SPX) inched higher the following afternoon, eventually securing solid daily wins despite hawkish Federal Reserve comments.  

However, Thursday's jobless claims reading weighed on Wall Street, after the optimistic data all but confirmed more interest rate hikes to come. In the end, the Dow shed triple digits, while Wall Street's "fear gauge," the Cboe Volatility Index (VIX) ticked higher. At last check, the Dow and S&P 500 were heading for weekly wins, while the Nasdaq was on track to end at breakeven.

Stocks to Watch This Month, Year

First thing's first, our top picks for 2023 are in, and we're predicting big returns for drugmaker AbbVie (ABBV). However, if historical data is more your speed, then maybe you want to consider Chevron (CVX) or Alphabet (GOOGL), both of which have a history of outperforming in the month of January. Similarly, Celsius (CELH) and Charles Schwab (SCHW) both boast bull signals that have historically upbeat implications, and the latter's outlook was all but confirmed by an analyst note. Meanwhile, there's good reason to avoid Pfizer (PFE) in the coming month.

Headlines of the Week

What happened to Bed Bath & Beyond (BBBY)? After enjoying status as a heavy-hitting meme stock, the retailer's shares are now firmly in penny stock territory and the company looks poised to file for bankruptcy. The latter points led Keybanc to lower its price target to just 10 cents per share.

Bed Bath & Beyond's demise might be one of the most interesting stock market news stories of the year, but there's a case to be made for the tumult in the cryptospace. Stepping back from the drama, Walgreens Boots Alliance (WBA) kicked off earnings for the Dow components. Elsewhere, Salesforce announced "restructuring plans" -- a gift-wrapped way of saying it will cut 10% of its staff -- while biotech concern Novocure (NVCR) announced upbeat results for its experimental lung cancer therapy.

Inflation Data Lies Ahead

With 2023 firmly underway, investors are looing ahead towards pertinent inflation data, as well as earnings from a number of big name corporations. Before that, let's dig into what happened with the SPX in 2022 (here's a hint: it happened since 1974) as well as two scenarios that traders should be prepared for this month.

Published on Jan 6, 2023 at 11:45 AM
Updated on Jan 6, 2023 at 12:53 PM
  • Midday Market Check
 
Published on Jan 6, 2023 at 11:33 AM
  • Analyst Update

Wells Fargo upgraded solar stocks Sunrun Inc (NASDAQ:RUN), Sunnova Energy International Inc (NYSE:NOVA), and First Solar Inc (NASDAQ:FSLR) to "overweight" today. The firm is bullish on the clean energy industry due to strong underlying demand, particularly in Europe, as well as legislative support stateside, and added it favors solar over hydrogen. However, the brokerage also sees near-term headwinds from the Fed's rate tightening.

Sunrun stock is up 2.9% at $22.87 at last glance, and down 27.9% year-over-year. The security is overdue for a short-term bounce however, as per its 14-day relative strength index (RSI) of 13.9, which sits firmly in "oversold" territory. Plus, short interest represents 13.8% of the stock's available float, or nearly four days' worth of pent-up buying power. 

NOVA is staging a bigger bounce, up 3.7% at $17.73 at last check. Down 25.1% year-over-year, the stock has struggled with pressure at the $24 level over the past few months. The stock is seeing attractively priced premiums at the moment, per it's Schaeffer's Volatility Index (SVI) of 74%, which sits in the 9th percentile of its annual range. Furthermore, its Schaeffer's Volatility Scorecard (SVS) sits at a 93 out of 100, meaning NOVA has exceeded option traders' volatility expectations during the past year.

First Solar stock is having the best day out of the three, up 6.5% at $154.89 at last glance. The outperforming energy name is up 85.4% year-over-year, and the 100-day moving average caught a pullback in the last session. An unwinding of pessimism in the options pits could send FSLR higher still, as its 10-day put/call volume ratio of 2.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 98th percentile of its annual range. 

Published on Jan 6, 2023 at 10:18 AM
  • Intraday Option Activity
  • Analyst Downgrades
Options traders are chiming in, with 1,173 puts and 698 calls exchanged so far today, which is four times the volume that's typically seen at this point. Most popular is the January 2023 205-strike put, followed by the weekly 1/6 210-strike put, the latter of which is set to expire at today's close.
Published on Jan 6, 2023 at 9:45 AM
  • Bernie's Content
  • Quantitative Analysis
  • Editor's Pick

Subscribers to Chart of the Week received this commentary on Sunday, January 1.

The stock market just wrapped up its worst year since 2008. In the last calendar year, there was a lot of time spent in this space unpacking the comeuppance of growth stocks, the tech correction, and the general malaise surrounding the stock market. Tesla Inc (NASDAQ:TSLA), tech, and the flavor of the week may have gotten most of the headlines, but in the last 12 months, the energy sector quietly chugged along, roaring past the S&P 500 Index (SPX) in 2022. In the spirit of New Year and reflection, let’s look back on the energy sector’s big year and see what could be in store for 2023.

 

 

The tweet above shows just how monumental the share price growth was for energy in 2022. The global eruption of commodity prices was triggered by Russia’s invasion in Ukraine that began in February and dragged on through the year. Sprinkle in the inflation spikes and it was a goldilocks environment for oil companies — Chevron Corporation's (NYSE:CVX) roughly 52% gain paced the Dow, while Occidental Petroleum Corporation (NYSE:OXY) took home gains of about 116%.

Look down the list of oil stocks and you’ll see healthy gains throughout, even beyond the household names. One example is Vertex Energy Inc (NASDAQ:VTNR), a Schaeffer’s Top Stock Pick of 2022. The equity was attractive in December 2021 because of the company’s acquisition of the Mobile refinery from Shell PLC (SHEL). Vertex was also transitioning into waste oil refining, which offered much higher margins than traditional refining operations. There was enticing short squeeze potential 12 months ago, too, with 20% of the stock’s total available float sold short. VTNR is now up more than 34% year-to-date and traded as high as $18.10 in June.

As the calendar turns to 2023, what’s the outlook for these darlings of 2022? There’s a natural gas crisis in Europe to monitor, but many investors remain bearish on the energy sector. On Wednesday, Senior Quantitative Analyst Rocky White compiled a list of stocks where short sellers were at a loss. Six oil names – and one alternative energy company, to broaden the energy bucket -- stood out for their high short interest to float percentage, per the table below.

 

Short Squeeze Screen COTW

 

White also compiled a list of the best-performing exchange-traded funds (ETFs) in the last 10 years during January. The VanEck Vectors Oil Services ETF (OIH) averages a January return of 2.7% with 60% of the returns positive, a tally that’s fifth best of the 25 ETFs tracked. Also note that alternative energy ETF Invesco Solar ETF (TAN) is an intriguing name to watch, with an average January return of 3.3%.

 

Best ETFs January COTW

 

Of course, the last thing to monitor heading into 2023 with energy stocks is the price of crude. West Texas Intermediate hasn’t settled above $100 per barrel since June and is back at levels from before Vladimir Putin lost his damn mind. yet black gold is still on track for an annual gain, and could be ready to rumble higher again, with three macro factors to be considered.

First, releases from the U.S. Strategic Petroleum Reserve— done by the Biden administration earlier this year – addressed supply disruption, but what impact will the eventual repurchasing mean? Secondly, China’s economy will slowly be reopened, reinserting a major economic player to the equation. What does their economic status bring to the table in regard to crude? And finally, what does a potential resolution to the Russia-Ukraine conflict, or sanctions stemming from its continuity, mean for crude prices?

If these developments mean more clean balance sheets for oil companies, then 2022 could just be the jumping off point for many stocks in the sector, one that as noted above, still has plenty of bearish detractors. That could mean a green light for contrarian traders looking to start 2023 on the right foot.

Schaeffer’s Top 2023 Picks

Published on Jan 6, 2023 at 9:08 AM
Updated on Jan 6, 2023 at 9:16 AM
  • Opening View

Stock futures are higher this morning, as jobs data continues to roll in. Nonfarm payrolls rose 223,000 in December, which is higher than the 200,000 anticipated by analysts, while the unemployment rate dropped to 3.5%. Average hourly earnings rose a less-than-expected 0.3% points, which could signal easing of inflation pressures. Futures on the Dow Jones Industrial Average (DJIA) are up triple digits, while S&P 500 Index (SPX) and Nasdaq-100 (NDX) futures sit more modestly in the black. For the week, all three are eyeing a loss. 

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

Futures Jan6

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.1 million call contracts and 970,390 put contracts traded on Thursday. The single-session equity put/call ratio rose to 0.86 and the 21-day moving average stayed at 0.80.
  2. Tesla Inc (NASDAQ:TSLA) is down 7.2% premarket, after the electric vehicle (EV) giant cut its prices for its Model 3 and Model Y vehicles in China. Should these losses hold, TSLA could see another two-year low on the charts. 
  3. Wells Fargo upgraded Lululemon Athletica Inc (NASDAQ:LULU) to "overweight" from "equal weight," with a price-target hike to $380 from $360. Year-over-year, LULU is down 10%. 
  4. The shares of Bed Bath & Beyond Inc (NASDAQ:BBBY) are plummeting before the bell, down 12.4%, after reports that the company is low on cash and considering bankruptcy. No fewer than four analysts slashed their price targets on the penny stock following the news.
  5. Today will bring the Institute for Supply Management (ISM) services index, factory orders, and core equipment orders.    

buzzjan6

Europe Unpacking Inflation Data

Asian markets closed the week mostly higher, led by South Korea’s Kospi, which rose 1.1%. In China, the Shanghai Composite tacked on a paltry 0.08%, after regulators in the country signaled plans to relax restrictions on developer borrowing to boost the property sector. Hong Kong’s Hang Seng, meanwhile, fell 0.3% following the news. Rounding out the region, Japan’s Nikkei gained 0.6%, after its services sector grew for the fourth-straight month.

Inflation in the euro zone fell for a second-straight month in December, bolstering hopes that the European Central Bank (ECB) will pull back on its hawkish monetary policy. Additionally, investors in the region are eyeing the stateside nonfarm payroll data. European markets are cautiously higher this afternoon, with Germany’s DAX last seen flat, while France’s CAC 40 and London’s FTSE stand 0.4% and 0.3% higher, respectively. 

Published on Jan 6, 2023 at 9:07 AM
  • Buzz Stocks
 
Published on Jan 6, 2023 at 8:50 AM
  • Buzz Stocks

Costco Wholesale Corporation (NASDAQ:COST) is working to erase yesterday's pullback, up 2.3% at $460.34 before the bell, following the release of the retailer's December sales results. Costco posted net sales of $23.80 billion last month, marking a 7% year-over-year increase. 

In response, UBS lifted its price target to $600 from $565, while D.A. Davidson raised its price target by $8 to $478. The 12-month consensus price target already sits at $551.77, which is a 22.6% premium to last night's close. Meanwhile, 17 of the 22 in coverage call COST a "buy" or better. 

Options players aren't nearly as optimistic. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), COST sports a 10-day put/call volume ratio of 1.22, which sits in the 86th percentile of its 12-month range. In other words, puts have been more popular than usual. 

With overhead pressure at the 10-day moving average keeping a lid on shares, COST fell back toward its Jan. 3, nearly seven-month low of $447.90. The stock has been on a downward spiral after a rally failed at the $542 mark, putting shares at an 18.1% year-over-year deficit. However, the equity is sitting firmly in "oversold" territory -- with a 14-day Relative Strength Index (RSI) of 21 -- meaning a short-term bounce could be right on the horizon. 

Published on Jan 6, 2023 at 8:00 AM
  • Trader Content
  • Editor's Pick

Every day for the next week, we're going to highlight one of Schaeffer's top seven picks for 2023. First up, we have drugmaker AbbVie Inc (NYSE:ABBV). To access the entirety of the 2023 report, click here.

The shares of pharmaceutical name AbbVie (ABBV) have outperformed in 2022, and the pullback on the stock’s weekly chart found support at the year-to-date breakeven level. The rising 50-week moving average has defined the intermediate trend since the stock’s low in 2020 as well, making now an ideal time to bet big on ABBV in the coming year.

ABBV’s Relative Strength Index (RSI) on the weekly chart shows a move above the 50 mark, after previously being in an oversold condition. This comes just as the shares are breaking out of a bullish falling wedge pattern on the same chart. Analysts are mostly split on the equity, with 50% carrying a "buy" or "strong buy" and the remaining a "hold" or "strong sell." In simpler terms, this leaves plenty of room for upgrades in the weeks and months ahead.

Lastly, options are certainly an intriguing route, per the security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 71 out of 100, which means ABBV has exceeded option traders' volatility expectations during the past 12 months.

Top 2023 Picks ABBV

Published on Jan 5, 2023 at 4:27 PM
  • Market Recap

While today's upbeat private payrolls report might have been good news for some, Wall Street is viewing it as a sign that aggressive rate hikes from the Federal Reserve are far from over. The Dow wound up shedding over 300 points, while the S&P 500 and Nasdaq also suffered steep losses. Meanwhile, the Cboe Volatility Index (VIX) -- Wall Street's "fear gauge" -- is back on the rise after plummeting during yesterday's session. 

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

  • 3 stocks making big waves today.
  • Checking in with the crypto sector
  • Plus, WDC's merger update; put traders target WBA; and a surging biotech to watch.

Closing Index Summary January 052023

NYSE and Nasdaq Stats January 052023

5 Things to Know Today 

  1. Delta (DAL) announced it will start offering free Wi-Fi to customers, starting Feb. 1. (CNBC)
  2. Federal regulators are pushing to ban companies from making their employees sign noncompete clauses. (MarketWatch
  3. Merger buzz gave Western Digital stocks a boost.
  4. How options players responded to Walgreen's quarterly report
  5. The surging biotech stock to keep an eye on. 

Earnings January 052023

Unusual Options Activity January 052023

Gold Takes a Breather After 4-Day Win Streak

Oil rose after the Energy Information Act (EIA) shared a smaller-than-expected jump in weekly U.S. crude supplies. West Texas Intermediate (WTI) crude for the now most active, February delivery, added 83 cents, or 1.1%, to settle at $73.67 per barrel.

Gold cooled today amid profit taking on the precious metal's four-day win streak. February-dated gold shed $18.40, or 1%, to settle at $1,840.60 per ounce.

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

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