Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jan 20, 2023 at 10:16 AM
Updated on Jan 23, 2023 at 9:55 AM
  • Intraday Option Activity
  • Analyst Update
So far, 102,000 calls and 120,000 puts have been exchanged, which is seven times the average intraday volume. Most popular is the January 2023 350-strike call, with positions being opened there but expiring at the close.
Published on Jan 23, 2023 at 9:15 AM
Updated on Jan 23, 2023 at 9:17 AM
  • Opening View

Futures on the Dow Jones Industrial Average (DJIA) are up 72 points ahead of the open, while Nasdaq-100 Index (NDX) and S&P 500 Index (SPX) futures are inching higher as well. Investors are looking ahead to a busy week of earnings, with several blue-chip names set to report, after Friday marked a steep weekly loss for the Dow.

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

  • A look at what happened with the market last week.  
  • Tech sector markers to watch as 2023 gets underway. 
  • Plus, AMD receives bull notes; ABT drops on criminal probe; and CRWD downgraded.

Futures Jan23

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.9 million call contracts and over 1 million put contracts traded on Friday. The single-session equity put/call ratio fell to 0.54 and the 21-day moving average dropped to 0.81.
  2. Barclays sees potential upside for Advanced Micro Devices Inc (NASDAQ:AMD), upgrading the stock to "overweight" from "equal weight," with a price-target hike to $85 from $70. Truist Securities added a bull note as well, raising its price target to $79 from $70. Year-over-year, AMD is down 42.5%, and sporting a 2.9% premarket lead. 
  3. Abbot Laboratories (NYSE:ABT) is down 1.7% in electronic trading, following Friday's news that its its infant-formula plant in Sturgis, Michigan is facing a criminal probe. Year-over-year, the equity is down 9.5% coming into today. 
  4. CrowdStrike Holdings Inc (NYSE:CRWD) is down 1.4% before the bell, after Deutsche Bank downgraded the shares to "hold" from "buy." Should these losses hold, the stock will move back toward its Jan. 10 two-year low of $92.25. The company also appointed Johanna Flower to its board of directors.
  5. Today will bring leading economic indicators.

buzzjan23

Tech Boosts International Markets

Most markets in Asia were closed on Monday for the Lunar New Year. Japan’s Nikkei added 1.3% on gains in the tech and semiconductor sectors.

Tech stocks are also leading the charge In Europe, while investors continue to question the global economic outlook. At last check, London’s FTSE 100 is 0.4% higher, while Germany’s DAX and France’s CAC 40 are up 0.2% and 0.1%, respectively.

Published on Jan 23, 2023 at 8:45 AM
  • Buzz Stocks

Western Digital Corp (NASDAQ:WDC) is advancing its merger talks with Japan's Kioxia Holdings Corp, per a report from Bloomberg News. The proposed combined entity would trade in the U.S. and become a major competitor of Samsung Electronics in the NAND flash market.

Before the bell, WDC was last seen 4% higher. Should these premarket gains hold, the shares will open at their highest level since Sept. 13. Fresh off its fourth-straight weekly win -- its longest streak in a year -- Western Digital stock now sports a 21.9% year-to-date lead. 

There's room for analysts' pessimism to unwind, too, which could boost the equity. Coming into today, eight brokerages rated WDC a "buy" or better, though nine recommended a "hold" or worse. Meanwhile, the 12-month consensus price target of $44.01 is a roughly 10% premium to the stock's premarket levels.

Published on Jan 23, 2023 at 8:41 AM
  • Monday Morning Outlook
 
Published on Jan 20, 2023 at 4:32 PM
Updated on Jan 20, 2023 at 4:45 PM
  • Market Recap

The Dow tacked on 330 points, but pummeled to its worst week since December in today's trading. The Nasdaq also nabbed a triple-digit gain, thanks in part to Alphabet (GOOGL) layoffs, while the S&P 500 managed to snap its three-day losing streak. Despite an encouraging subscriber report from Netflix (NFLX), the Dow and S&P 500 logged their first weekly losses in 2023. Also worth noting, the Cboe Volatility Index (VIX) saw its biggest weekly percentage gain since Dec. 9, and the Nasdaq managed to walk away a with a third-straight weekly win. 

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

  • Keep tabs on these tech sector markers.
  • FDA rejection weighed on Eli Lilly stock.
  • Plus, NFLX's subscriber growth; cloud stock downgraded; and looking back at this week's main happenings.

Closing Index Summary January 202023

 NYSE and Nasdaq Stats January 202023

5 Things to Know Today 

  1. Alphabet today joined a growing list of tech companies announcing layoffs, as the Google parent announced plans to let go of 12,000 employees in a memo. (CNBC)
  2.  Bed Bath & Beyond (BBBY) has not yet filed its Form 10-Q quarterly report with the Securities and Exchange Commission (SEC), putting it at risk of Nasdaq delisting. (MarketWatch
  3. Netflix stock surged after beating subscriber growth estimates.
  4. Cowen downgraded Salesforce.com stock on risk of disruption.
  5. Revisiting this week's biggest earnings reports and headlines.

Earnings January 202023

Unusual Options Activity January 202023

Gold, Oil Prices Score Weekly Gains

Oil prices settled higher on Friday to score a back-to-back weekly gain of 1.8%. Traders continued to brush off an Energy Information Administration (EIA) report showing an 8.4 million rise in U.S. crude inventories, as they remained optimistic about demand growth out of China. March-dated crude, which is now the front-month contract, rose $1.03, or 1.3%, to settle at $81.64 per barrel on the day.

Gold prices also finished higher, and marked its fifth consecutive weekly win to boot. Boosting the yellow metal was household demand for gold ahead of the Lunar New Year holidays in China. February-dated gold added $4.30, or 0.2%, to settle at $1,928.20 per ounce. For the week, gold prices rose 0.3%.

Published on Jan 20, 2023 at 2:50 PM
Updated on Jan 20, 2023 at 2:53 PM
  • 5-Minute Market Rundown

The holiday-shortened week was not short on volatility, with the S&P 500 Index (SPX) kicking things off by breaching the psychologically-significant 4,000 level, while the Nasdaq Composite Index (IXIC) managed to extend its winning streak to seven, before snapping it on Wednesday. Sentiment quickly soured, however, despite upbeat inflation data rolling in, and the Dow Jones Industrial Average (DJI) logged its worst single-day percentage drop in over a month. Fear of the Federal Reserve overtightening continues to weigh, and as of this writing all three major indexes are on track for their first weekly loss of 2023.

The Week's Biggest Earnings Reports

With 2023 firmly underway, a new earnings season is upon us. Traders were most interested in bank earnings this week, especially the reports from Morgan Stanley (MS), Goldman Sachs (GS), and Fifth Third Bancorp (FITB). Earnings from Netflix (NFLX) were also in focus, and the results gave Wall Street a much-needed boost. At least one analyst hiked its price target on United Airlines (UAL) following an upbeat forecast, while Alcoa's (AA) bleak shipment outlook dented the company's shares. Lastly, Procter & Gamble (PG) posted a mixed quarterly report, citing that it anticipates higher prices moving forward.

In Case You Missed It

Party City (PRTY) -- a giant during the "meme stock" craze -- filed for Chapter 11 bankruptcy following months of slowing sales and store closures. The recent barrage of layoffs in the tech sector show no signs of slowing down, with Teladoc Health (TDOC) and Microsoft (MSFT) joining the bunch with a hefty round of job cuts. Elsewhere, Carvana (CVNA) adopted a "poison pill," while bear notes rolled in for Tesla (TSLA) and Rivian Automotive (RIVN) on a plethora of challenges ahead.

Inflation Data, Blue-Chip Earnings Ahead

As we head into the end of January, investors will turn their attention towards a fresh batch of inflation data, as well as several blue-chip earnings. In the meantime, check out the possible bullish implications for the SPX, in the event of a ratio rollover.

Published on Jan 20, 2023 at 1:16 PM
  • Quantitative Analysis
  • Editor's Pick

Subscribers to Chart of the Week received this commentary on Sunday, January 15.

The Nasdaq Composite (IXIC) is wrapping up its best weekly win since Nov. 11. While Friday’s broad-market breather halted the tech-heavy index’s five-day winning streak, the dominant headlines this week remained all about the Federal Reserve, inflation, and the upcoming earnings season. With the IXIC and its corresponding tech indices getting the short end of the stick from media, we want to start off 2023 with some major technical milestones to monitor.

The Nasdaq settled above 11,000 for the first time since Dec. 14 on Thursday night. Schaeffer’s Senior Market Strategist Chris Prybal has noted in the past that the Nasdaq has shown the propensity to respect 1,000-point levels. Per the chart below, you can see the index’s Covid low was at 7,000, while its post-Covid high was clocked at 16,000.

IXIC COTW

With that in mind, let’s turn to the Nasdaq-100 Index (NDX), a large-cap growth index of 100 of the top domestic and international non-financial companies based on market cap. The NDX’s 10-day buy-to-open put/call volume ratio was at a record high of 0.96 heading into the new year. Fast forward a week, and it has cooled to 0.91, per the chart below, but you can see that it remains at elevated levels in the last three years. And among index component short sellers, NDX short interest has fallen in 4.2% in the most recent report, but remains up 31.7% year-over-year, and in the 92.5% rank of the last five years. Senior Market Strategist Matthew Timpane highlighted this trend last week, Jan. 5, on Twitter. Note how he acknowledges the rebalancing effort, but considering this percentile still remains elevated a week later, it’s proven worth monitoring.

NDX pc ratio

Breaking it down further, consider the Invesco QQQ Trust Exchange Traded Fund (ETF) (QQQ) for a moment. The NDX’s ETF is once again facing off with its 1,000-day moving average, a long-term trendline that’s been popular in this space in the last 24 months.

QQQ COTW

And if you want to dig deeper and monitor individual equities, per Senior Quantitative Analyst Rocky White, Netflix (NFLX) and Alphabet (GOOGL) are historical outperformers in January. NFLX averages a 15.7% monthly return with 70% of the returns of the positive in the last 10 years, while GOOGL’s average 10-year return comes out to 3.9%, with eight out of 10 of the returns positive. Considering the combined holdings of NFLX and GOOGL comprise 8.8% of the QQQ, keep an eye on these FAANG heavyweights while the larger tech indices dance with contentious trendlines.

Published on Jan 20, 2023 at 11:53 AM
  • Midday Market Check
 
Published on Jan 20, 2023 at 11:15 AM
  • Buzz Stocks

The U.S. Food and Drug Administration (FDA) rejected the accelerated approval of Eli Lilly and Co's (NYSE:LLY) experimental Alzheimer's drug due to a lack of enough trial data from patients treated for at least a year. Jefferies called this setback a "modest positive" for rival Biogen (BIIB). 

At last glance, Eli Lilly stock was down 1.2% at $347.01, earlier as low as $344.58. The stocks 100-day moving average kept losses in check, however. Year-over-year, LLY is outperforming with a 42.7% year-over-year lead. 

The majority of analysts are bullish on LLY, with 14 of the 16 in coverage carrying a "buy" or better rating. Plus, the 12-month consensus price target of $389.52 is a 12.3% premium to current levels. 

Options bears are targeting LLY after today's news. So far, 3,121 puts have been exchanged, which is double what's seen at this point. The weekly 3/3 320-strike put is the most popular, where new positions are being sold to open. 

Published on Jan 20, 2023 at 9:37 AM
  • Buzz Stocks
  • Analyst Update

Cowen downgraded Salesforce.com, Inc. (NYSE:CRM) to "market perform" from "outperform" this morning, pressuring the shares 1% lower to trade at $144.88 before the bell.

The Wall Street broker also cut its price target on the cloud computing concern to $160 from $175, citing slowing growth for front-office vendors after saying it sees "elevated levels of disruption risk" if consumer spending is dented by a volatile macro backdrop.

Evercore ISI yesterday cut its price target on Salesforce stock to $175 from $200. A further unwinding of optimism could pressure CRM lower, especially considering the 12-month average target price of $190.96 is a 30.4% premium to last night's close and 23 of 34 covering analysts still rate the shares a "buy" or better. 

On the charts, CRM is trying to recover from a mid-December dip to nearly three year lows. Pressure from its 100-day moving average has weighed for the past six months, a time during which CRM shed more than 20%. A look further back shows Salesforce stock sports a 35.3% year-over-year deficit.

For those wishing to speculate with options, now looks like the time to do so. Salesforce stock's Schaeffer's Volatility Index (SVI) of 35% sits in the relatively low 15th percentile of annual readings, suggesting options traders are pricing in low volatility expectations. 

Published on Jan 20, 2023 at 9:17 AM
  • Opening View

Futures on the Nasdaq-100 Index (NDX) are up 66 points ahead of the open, as Netflix's (NFLX) larger-than-expected quarterly subscriber report gives the benchmark a mild boost, while Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) futures see more muted trading. January's market rally appears to be losing steam, as all three major indexes are on track for weekly losses.

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

  • Deutsche Bank hits EV stocks with bear notes. 
  • The end of January is packed with economic data
  • Plus, PD surges on upgrade; JWN drops alongside forecast; and more layoffs from tech. 

Futures Jan20

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.2 million call contracts and 984,967 put contracts traded on Thursday. The single-session equity put/call ratio fell to 0.80 and the 21-day moving average rose to 0.82.
  2. PagerDuty Inc (NYSE:PD) is up 6.1% premarket, after Morgan Stanley upgraded the stock to "overweight" from "equal weight," with a street-high price-target hike to $36 from $32. Year-over-year, PD is down 10.6% heading into today. 
  3. Nordstrom Inc (NYSE:JWN) is down 7% before the bell, after the company cut its annual profit forecast following weak holiday sales. No fewer than eight analysts slashed their price targets after the news. Should these losses hold, JWN will be headed back toward its recent two-year lows
  4. Alphabet Inc (NASDAQ:GOOGL) is up 3.5% in electronic trading, after the FAANG giant announced it will be laying off 12,000 employees. Year-over-year, GOOGL is down 31.1%. 
  5. Today will bring existing home sales.

buzzjan20

Stocks Higher in Asia, Europe

Stocks in Asia were higher to close out the week, led by a 1.8% pop from Hong Kong’s Hang Seng. In Japan, core inflation rose to its highest level since December 1981 after climbing to 4% last month, while the yield on the 10-year Japanese Government Bond fell further below the Bank of Japan’s (BoJ) upper ceiling. In response, the Nikkei managed to add 0.6%. China’s Shanghai Composite, meanwhile, tacked on 0.8%, after the country’s central bank left the 1- and 5-year loan prime rates unchanged. Rounding out the region, South Korea’s Kospi rose 0.6%.

In Europe, markets are also digging out of yesterday’s rut. Today also marks the conclusion of the World Economic Forum in Davos. France’s CAC 40 was last seen up 0.7%, while the FTSE in London and Germany’s DAX are 0.2% and 0.5% higher, respectively.

Published on Jan 19, 2023 at 4:26 PM
Updated on Jan 19, 2023 at 4:29 PM
  • Market Recap

Stocks extended their slide on Thursday, as the lowest unemployment level since June sparked fears on Wall Street that the Federal Reserve will stay the course on aggressive interest rate hikes, despite signs of a cooling economy. The Dow shed 252 points, marking its third-straight session in the red alongside the S&P 500. The Nasdaq also settled firmly lower, as traders eyed the current earnings season that is quickly heating up, with Netflix (NFLX) set to report quarterly results after the bell.

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

  • Energy stock popular with options traders.
  • Why Nordstrom stock could pull back further.
  • Plus, Procter & Gamble reports earnings; what dented Alcoa stock; and 2 stocks drawing bear notes. 

Closing Index Summary January 192023

NYSE and Nasdaq Stats January 192023

5 Things to Know Today 

  1. Federal Reserve Governor Lael Brainard squashed hopes of lower interest rate hikes, with prices still at near four-decade highs despite easing inflation. (CNBC)
  2. Uber Technologies (UBER) is working with auto makers to create electric vehicles (EVs) for its ride-hailing and delivery businesses at a lower cost. (MarketWatch
  3. Unpacking Procter & Gamble's mixed quarterly results.
  4. How a bleak forecast overshadowed Alcoa's revenue win.
  5. Bear notes sent these 2 stocks substantially lower today.

Earnings January 192023

Unusual Options Activity January 192023

Investors Seek Potential Recession Refuge in Gold

Oil prices edged higher on Thursday to settle back above the psychologically significant $80 level. Investors brushed off a fourth consecutive weekly gain in U.S. crude supplies due to strong demand expectations out of China. February-dated crude added 85 cents, or 1.1%, to settle at $80.33 per barrel.

Gold prices also rose to once to once again settle at their highest level since April. Fears of recession drove investors to the safe-haven metal today. February-dated gold added $16.90, or 0.9%, to settle at $1,923.90 per ounce.

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