Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Sep 20, 2021 at 1:27 PM
  • Intraday Option Activity
  • Earnings Preview
Published on Sep 20, 2021 at 12:00 PM
  • Ezines
  • Midday Market Check
Published on Sep 20, 2021 at 10:52 AM
  • Buzz Stocks
Published on Sep 20, 2021 at 10:17 AM
  • Buzz Stocks
Published on Sep 20, 2021 at 10:03 AM
  • Buzz Stocks

Pharmaceutical company Pfizer Inc. (NYSE:PFE) just revealed trial data that showed its coronavirus vaccine is safe and effective for children ages 5 to 11. The company, along with partner BioNTech (BNTX), plans to submit its results to the U.S. Food and Drug Administration (FDA) and other regulators for approval "as soon as possible."

PFE is trading flat this morning despite the news, last seen up 0.3% at $44.03. The stock steadily worked its way lower on the charts after an Aug. 18, all-time high of $51.86, and is now below a slew of short-term moving averages. For the year, PFE still sports a 19.2% lead. 

An upward shift in sentiment could still be in the cards, as analysts are still approaching the stock with caution. Of the 13 in coverage, four say "strong buy," and nine say "hold." Meanwhile, the 12-month consensus price target of $42.97 is an 8.9% premium to current levels. 

Tailwinds could also come from an unwinding of pessimism in the options pits. This is per Pfizer stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 89% of readings from the past year, indicating puts being picked up at a faster-than-usual rate. 

Plus, now looks like a good time to speculate on PFE's next move with options. Pfizer stock's Schaeffer's Volatility Index (SVI) of 26% stands in the 17th percentile of readings from the past year, suggesting options traders are pricing in low volatility expectations right now.

Published on Sep 20, 2021 at 10:01 AM
  • Buzz Stocks

The U.S.-listed shares of Canopy Growth Corp (NASDAQ:CGC) are down 4.8% to trade at $14.01 this morning, weighed down by a price-target cut from Cantor Fitzgerald. The analyst slashed its price estimate to C$21 from C$30.50, citing the pot company's lowered sales outlook, while maintaining its "neutral" rating. 

It looks like other analysts could follow suit. The 12-month consensus price target of $22.99 is a 65.4% premium to last night's close. Meanwhile, three of the 13 in coverage consider CGC a "strong buy," compared to nine "hold" ratings, and one "sell."

It's been a rough year for CGC, which has been on a steady decline since its Feb. 10, three-year peak of $56.50. The equity has more than halved since then, and the stock is down 43.6% year-to-date. Recently, Canopy Growth stock has been struggling with pressure at the $15 region, which last acted as a ceiling in September 2020. 

An unwinding of bullish sentiment in the options pits could eventually put even more pressure on the stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 4.83 calls have been picked up for every put over the past two weeks -- creating a ratio that stands higher than 55% of readings from the past year. 

Options look like the way to go when speculating on CGC's next move. The security's Schaeffer's Volatility Index (SVI) of 61% stands in the 17th percentile of its annual range, implying options traders are pricing in relatively low volatility expectations at the moment. What's more, the stock's Schaeffer's Volatility Scorecard (SVS) sits at 72 out of 100. This mean Canopy Growth stock tends to exceed these traders' volatility expectations -- a good thing for options buyers. 

Published on Sep 20, 2021 at 9:16 AM
  • Opening View
Published on Sep 20, 2021 at 8:38 AM
  • Monday Morning Outlook

The S&P 500 Index (SPX -- 4,432.99) oscillated between the 20- and 50-day moving averages throughout the week as we worked through September options expiration week, while keeping market participants on the edge of their seats amid debates on whether the momentum of the current trend will continue or if we're finally on a precipice of a larger pullback. As we’ve previously discussed in recent Monday Morning Outlooks, we all know we are in one of the most volatile periods in the equity markets from a historical perspective. Spooky fall seasonality makes for great headlines since long-term data supports it, but that makes it a good time to review the most recent data on how the next few weeks could play out, since we all know markets do change over time.  

chart 1 mmo

First, let’s delve back into last week’s price action to further  review what might be on the horizon. When looking at the S&P 500 ETF Trust (SPY -- 441.40), it continued its downward trajectory after being rejected at the +20% year-to-date level and limped into the weekend, closing Friday at the lower end of the price channel trendline that we’ve been monitoring for the past few months. Moreover, this is the eighth test of the 50-day moving average this year, and all have held except for one that had a one-day move lower, only to find support at the 80-day moving average and pop back above the 50-day rather quickly. Although it’s been a phenomenal buy-the-dip spot throughout the year, we know it will eventually end like all other trends, but is this the time?

“…If this first area of support is breached, bulls should still continue to stay the course as long as the SPX remains in its channel or above its 50-day moving average, which is currently situated just below that channel and supportive of multiple pullbacks this year. Going back to late March, the SPX has closed within or above the bullish channel in all but three days, which is another signature of its impressive momentum higher.”

  -Monday Morning Outlook, September 7, 2021

There is potential it could be, but we could also see a gap up Monday that negates further downside as the SPY heads right back up to test the +20% YTD level once again. If we are to trade to the downside early next week, we have major support coming in right at the 80-day moving average at 4,367 on the S&P 500 Index, which happens to be nearly the exact spot of the +100% level from the pandemic lows. Beyond that, the next key level I’d be watching is the 4,250 area for a bounce if the seasonal headwinds play out.

“…only six instances in the past 50 years that the SPX had a monthly winning streak of five or more heading into September, the index closed higher during four of these months. The average return was 0.6%. This suggests that historically, positive momentum trumps negative seasonality in the few instances in the past 50 years that we have experienced a momentum scenario like this going into September.”

  -Monday Morning Outlook, September 7, 2021

chart 2 mmo

To dive a little deeper into the seasonality, we ran data from 2010 on various timeframes for the next two to six weeks to see how the market has reacted to the so-called fall swoon in recent years. First, you can see the market was positive over the next four weeks through October options expiration 64% of the time with a median gain of 1.83%. Secondly, the toughest two weeks appear to be right in front of us through the end of the month, as returns were only positive 36% of the time with a median drop of 0.54%, but an average negative return of 0.91%. Finally, returns through the end of October have been positive 64% of the time, with a median return of 1.52%. So, what gives with all the fearmongering about October? What everyone remembers though, is the two larger drawdowns through mid-October from 2014 and 2018 – the only two corrections that were greater than 5% in recent times. This is natural as humans often remember negative impacts psychologically more prominently.

chart 3 mmmo

Next, we take a look at how this compares to 20-year returns during these periods. The four weeks following September OPEX averaged a negative return of 0.47% on the 20-year data, but it’s not overwhelmingly bearish as the median return is still positive. Nothing is screaming that this isn’t just another opportunity to buy the dip with defined risk, as returns are positive through the end of October, albeit slightly.

chart 4 mmo

Bearish sentiment extremes have been fairly rare this year since we’ve been grinding higher, but we did see an extreme this past week, giving way to a potential catalyst that could be bullish for contrarians. The AAII sentiment survey bullish sentiment reading plunged from 38.9% down to 22.4%. This was the lowest level since June 2020 and is in the 5th percentile of all prior readings. Furthermore, the bearish sentiment put in its highest reading recorded since last October, surging from 27.2% to 39.3%. This scenario is similar to 2019, when survey participants got extremely bearish heading into October, expecting a large correction only to see a minor pullback before rallying into year-end. Furthermore, the SPX Components 10-day buy-to-open put/call ratio is moving towards its recent range highs. A slight move higher towards the 0.50 level may be all we need for a bounce in equities.

xhart 5 mmo

Many will continue to sound an alarm that this gloomy seasonal period could set off a larger pullback; I don’t see a reason to run to the sidelines just yet. If we don’t see a rally next week off the price channels lower rail and 50-day moving average early next week, we still have a few solid support levels just below us that easily could set us up for a snapback rally on any weakness. Thus, we need to remain tactical in the very near term but should continue to look for buying opportunities until we see a larger trend change.   

Matthew Timpane is Schaeffer's Senior Market Strategist 

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Published on Sep 20, 2021 at 7:19 AM
Updated on Sep 20, 2021 at 7:19 AM
  • Buzz Stocks

Today's Stock Market News & Events: 9/20/2021

by Schaeffer's Digital Content Team

Wall Street can expect a busy start to the latter part of September as this week is packed full of economic data. On Monday, the National Association of Home Builders' (NAHB) index is due out, while housing data is on the docket for Tuesday. Wednesday things pick up, with a news conference from Federal Reserve Chairman Jerome Powell taking the spotlight. On Thursday, the bulk of next week's data is due out, including highly anticipated jobless claims data and and purchasing managers' index (PMI) updates. Closing the week out on a quiet note, Friday features some new home sales data.

Earnings, meanwhile, will continue to trickle in this week. This week's docket features report from Adobe (ADBE), AutoZone (AZO), BlackBerry (BB), Costco (COST), General Mills (GIS), Nike (NIKE), Rite Aid (RAD), and Stitch Fix (SFIX).

Today will bring the NAHB index.

The following companies are due to release quarterly earnings today, September 20:

Cognyte Software Ltd. (NASDAQ:CGNT -- $28.17) provides security analytics software to governments and enterprises worldwide. Cognyte Software will report its Q2 earnings of 2021 before the bell today.

Lennar Corp. (NYSE:LEN -- $101.28) operates as a homebuilder primarily under the Lennar brand in the United States. Lennar will report its Q3 earnings of 2021 before the bell today.

Looking ahead to tomorrow, building permits and housing starts data is slated for release.

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

Published on Sep 17, 2021 at 4:30 PM
  • Market Recap
Published on Sep 17, 2021 at 3:08 PM
Updated on Sep 17, 2021 at 3:09 PM
  • Buzz Stocks
Published on Sep 17, 2021 at 3:02 PM
Updated on Sep 17, 2021 at 3:05 PM
  • 5-Minute Market Rundown

It was a volatile week for the major benchmarks, keeping with September's historically rocky market trends. On Monday, the Dow Jones Industrial Average (DJI) rebounded from last week's slump by snapping a five-day losing streak. Tuesday, however, the blue-chip index notched a triple-digit loss, despite upbeat inflation data, while the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) were also drowning in red ink.  A large portion of those losses were covered the next day, as the middle of the week's session ended in solid gains for the major indexes, with sentiment boosted by promising manufacturing data. The fickle week carried on Thursday, and the Dow once again slipped lower, after higher-than-expected weekly jobless claims overshadowed a surprise gain in August retail sales. The broader market is diving even deeper today, and at last check, all three benchmarks on track for weekly losses

Tech Stocks Making Moves

Plenty of tech names were in the spotlight this week, starting with China-based Alibaba (BABA) stock, which was pressured lower as China's government continues to crack down on regulations. Both blue-chip member Salesforce.com (CRM)and Crowdstrike (CRWD) pulled back to a historically bullish trendlines, with the latter poised for more record highs. Elsewhere, bull notes gave Cisco (CSCO) and SoFi Technologies (SOFI) a boost, while Oracle (ORCL) received a round of post-earnings price-target hikes. Microsoft (MSFT) made headlines this week, after the launch of a $60 billion stock repurchase program, while Dell (DELL) was added to Goldman Sachs' "Conviction Buy" list.

Crypto Highlighted This Week

Cryptocurrency was big on investors' minds this week, with several stocks targeted, including these five crypto-adjacent names. One of these, Coinbase (COIN), garnered plenty of attention this week, following news that the platform has proposed a debt offering of $1.5 billion. Meme stock AMC Entertainment (AMC) made its way into the mix as well, after the movie theater giant said it will accept cryptocurrencies beyond Bitcoin (BTC) for online ticket and concession payments. 

Busy Week Ahead

Next week is fairly busy in terms of economic data and earnings, with a news conference from Federal Reserve Chairman Jerome Powell on Wednesday. Adobe (ADBE), AutoZone (AZO), Blackberry (BB), Costco (COST), General Mills (GIS), Nike (NIKE), Rite Aid (RAD), and Stitch Fix (SFIX) are all set to announce their quarterly reports. In the meantime, see what's next for the S&P 500 Index after its recent pullback, according to Senior Quantitative Analyst Rocky White. Plus, Senior Vice President of Research Todd Salamone explains some of the historical weakness that comes with expiration week


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