Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jun 14, 2022 at 12:19 PM
  • Quantitative Analysis

Yesterday's broad-market pullback was thorough in its infiltration of every sector to the point where even the seemingly untouchable energy and oil space wasn't safe. Marathon Oil Corporation (NYSE:MRO) was one of these casualties, shedding 6.3% during yesterday's trading, and falling to its lowest level since May 24. However, MRO is roughly two weeks removed from a seven-year high of $33.23, with yesterday's pullback putting the equity back within striking distance of a historically bullish trendline on the charts. 

The trendline in question, according to a study from Schaeffer's Senior Quantitative Analyst Rocky White, is MRO's 40-day moving average. Per White's data, MRO has come within one standard deviation of this moving average after a lengthy period above it eight other times in the past three years. One month after four of these instances, the security was higher, averaging a 5.3% return. From its current perch at $29.73, a similar move would put Marathon stock at $31.31. 

mro chart jun 14

Though calls are still outnumbering calls on an overall basis, a further unwinding of pessimism could put additional wind at MRO's back. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day put/call volume ratio that sits higher than 73% of readings from the past year. In other words, puts are getting picked up at a quicker-than-usual clip. 

Now might be the time to join these options players. The security's Schaeffer's Volatility Scorecard (SVS) sits at 84 out of a possible 100. In other words, Marathon stock tends to exceed these traders' volatility expectations, which is a good thing for buyers. 

Published on Jun 14, 2022 at 10:12 AM
Updated on Jun 14, 2022 at 11:24 AM
  • Options Recommendations
Gold stock Newmont Corporation (NYSE:NEM) is bouncing off support at its 200- and 320-day moving average convergence. The stock has also found a floor right above the $62-$63 area, which marks both its year-to-date breakeven level and round $50 billion market cap. Plus, the stock is up 7.8% year-to-date and 19.2% over the past six months.

NEM Chart June 14

Of the 23 analysts in coverage, 16 carry a "hold" rating, with seven at a "buy" or better, leaving plenty of opportunity for an optimistic shift. And though short interest has increased roughly 40% since December, the shares have still rallied, pointing to underlying technical strength.
Many June 70 and 75 calls expire next week, and some recent weakness may have been caused by an unwinding of long positions associated with these calls. Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 80 out of 100, meaning NEM has exceeded options traders' volatility expectations during the past year.
Subscribers to Schaeffer's Weekend Trader options recommendation service received this NEM 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 Jun 14, 2022 at 10:34 AM
  • Buzz Stocks
Continental Resource stock's typically quiet options pits are seeing a lot more activity than usual today, with options volume running at seven times what is normally seen at this point. The September 85 call is the most popular, with new positions opening there. 
Published on Jun 14, 2022 at 10:33 AM
  • Buzz Stocks

Carnival Stock Sank 10% Yesterday, What's Next?

by Schaeffer's Digital Content Team

Carnival Corp (NYSE:CCL) is one of the world's largest leisure travel companies with a portfolio of nine cruise line brands. CCL's portfolio of brands features Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises (Australia), Costa Cruises, AIDA Cruises, P&O Cruises (UK), and Cunard, operating across North America, Australia, Europe, and Asia.

Carnival stock has already strung together three-straight monthly losses, and June could very well be its fourth, as the equity has already dropped 28.8% this month, with yesterday's 10.3% drop acting as a huge contributor. Year-to-date, CCL is 50.7% lower, pressured by the 20-day moving average. The stock was last seen down 1.3% at $9.77, and earlier hit a fresh two-year low of $9.63. 

ccl jun 14

Short sellers have been targeting the sinking cruise stock. Short interest rose 19.4% in the last two reporting periods and now makes up a solid 12.7% of the stock's available float, or over three days' worth of pent-up buying power. 

CCL continues to have more downside potential in the immediate short-term, as its forward price-earnings ratio of 33.33 and a price-sales ratio of 4.48 remain on the higher end of valuation metrics. In addition, Carnival Corporation runs significant long-term risks due to the large amount of debt it took on to keep the business afloat during the Covid-19 pandemic. CCL currently owes $36.23 billion in total debt, which is almost triple the travel company’s market cap of $16.27 billion. Carnival also holds just $6.93 billion in cash on their balance sheet, which will undoubtedly hurt its long-term growth and profits.

Still, the cruise company is estimated to generate $13.86 billion in revenues for fiscal 2022, indicating 722.3% expected top-line growth. CCL is also expected to report a profitable year by 2023. Estimates suggest the company will produce $1.29 in earnings per share and $21.47 billion in revenues, or 54.9% top-line growth, for fiscal 2023, making Carnival stock is a high-risk, high-reward stock.

Published on Jun 14, 2022 at 10:20 AM
  • Intraday Option Activity
  • Buzz Stocks
Options bulls are chiming in, with 2,757 calls across the tape so far, which is double the intraday average, compared to just 367 puts. Most popular is the July 25 call, followed by the weekly 6/10 22.50-strike. New positions are  being opened at the latter, which will expire at today's close.
Published on Jun 14, 2022 at 9:11 AM
  • Opening View

Stock futures are on the rise this morning, following yesterday's massive selloff. Dow Jones Industrial Average (DJIA) futures are up 170 points after suffering an 876-point drop on Monday, while S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures rise as well. This morning's data showed the producer price index (PPI) increasing 10.8% year-over-year in May -- slightly smaller than anticipated, though remaining near its March record high of 11.5% -- and adding 0.8% for the month. The 10-year Treasury yield pulled back a bit after the results.   

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

  • Senior V.P. of Research Todd Salamone observes risk management after Friday's selloff. 
  • Options traders have been targeting Alibaba stock
  • Plus, Bitcoin prices send COIN lower, FDA releases PFE update; and TSLA falls despite upgrade. 

Futures June14

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.2 million call contracts traded on Monday, and over 1 million put contracts. The single-session equity put/call ratio fell to 0.84, and the 21-day moving average rose to 0.63.
  2. Oracle Corp (NYSE:ORCL) is up 11.5% premarket, after the software company's better-than-expected fiscal fourth-quarter results. The stock is receiving mixed analyst notes, however, with four analysts cutting their price targets, while two turned in price-target hikes. 
  3. Coinbase Global Inc (NASDAQ:COIN) is extending its losses after the crypto landslide, having just received a downgrade from J.P. Morgan Securities to "neutral" from "overweight." COIN is down 6.2% before the bell, and already down 79.4% year-to-date heading into today. 
  4. BofA Securities downgraded Best Buy Co Inc (NYSE:BBY) to "neutral" from "buy," citing increased uncertainty about the company's 2023 earnings. BBY is down 1.8% in electronic trading. 
  5. Today will bring the National Federation of Independent Business (NFIB) small-business index.


Global Markets Keep an Eye on Monetary Policy

Asian markets were mixed on Tuesday, as investors grapple with the possibility of the Federal Reserve hiking interest rates by 75 basis points in the U.S. The Shanghai Composite in China saw a comfortable 1% win and the Hong Kong Hang Seng struggled for direction before settling flat. Meanwhile, the South Korean Kospi shed 0.5%, and the Nikkei in Japan took a 1.3% haircut.

In Europe, stocks are sinking yet again, dragged even lower by inflation fears and uncertainty surrounding central banks and their monetary policy. At last glace, the French CAC 40 is 1.1% lower, while the German DAX and London FTSE 100 are both down 0.7%.

Published on Jun 14, 2022 at 8:55 AM
  • Analyst Update
  • Buzz Stocks
Published on Jun 14, 2022 at 7:06 AM
  • Buzz Stocks

Today's Stock Market News & Events: 6/14/2022

by Schaeffer's Digital Content Team

Today the National Federation of Independent Business (NFIB) small-business index will be released alongside producer price index (PPI) final demand data.  

The following public companies are slated to release corporate earnings today, June 14:

Core & Main Inc. (NYSE:CNM -- $21.63) distributes water, wastewater, storm drainage, and fire protection products and related services to municipalities, private water companies, and professional contractors in the municipal, non-residential, and residential end markets in the United States. Core & Main will report its Q2 earnings of 2022 before the bell today.

Sprinklr Inc. (NYSE:CXM -- $9.83) provides enterprise cloud software products worldwide. Sprinklr will report its Q2 earnings of 2022 before the bell today.

Looking ahead to tomorrow, Wednesday will feature the majority of the week's economic data. The Federal Open Market Committee (FOMC) will release a statement alongside its projections, while Fed Chair Jerome Powell will hold a news conference that afternoon.

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

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Published on Jun 13, 2022 at 4:27 PM
  • Market Recap

Last week's selloff paled in comparison to the bloodbath on Wall Street today. All three major indexes logged their fourth-straight loss, with the Dow in particular shedding 876 points to close at its lowest level since February 2021. The S&P 500 closed in bear market territory and at its lowest level since March 2021, while the Nasdaq fell to levels not seen since November 2020. Session lows for stocks occurred in the wake of a Wall Street Journal report that said the Federal Reserve is "likely to consider" a 75-basis point interest rate hike later this week, much steeper than the initially expected 25-basis point hike. 

A sharp rise in the 10-year Treasury yield -- the biggest jump since March 2020 -- demolished the tech sector as well. In addition, the 2-year Treasury yield briefly crossed the 10-year rate earlier, forming a yield curve inversion that may be indicative of a recession. Meanwhile, the Cboe Volatility Index (VIX) recorded its best single-day percentage gain since May.

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

  • One blue-chip stock to buy the dip on.
  • Options traders blasted this FAANG name today.
  • Plus, Tesla shrugs off upgrade; RedBox stock rises above; and two crypto stock swimming in red ink.

The Dow Jones Average (DJI -  30,516.74) dropped 876 points, or 2.8%, for the day. McDonald's (MCD) was the only gainer, adding 0.5%. Boeing (BA), meanwhile, paced the laggards with an 8.8% drop.

The S&P 500 Index (SPX - 3,749.63) shed 151.2 points, or 3.9% for the day. Meanwhile, the Nasdaq Composite (IXIC - 10,809.23) lost 530.8 points, or 4.7% for the session.

Lastly, the Cboe Market Volatility Index (VIX - 34.02) added 6.3 points, or 22.6% for the day.

closing indexes jun 13

nyse and nasdaq jun 13

5 Things to Know Today

  1. The Federal Aviation Administration (FAA) concluded SpaceX’s Starship rocket program will need to take over 75 actions to mitigate its environmental impacts. (CNBC)
  2. The Food and Drug Administration (FDA) said  Pfizer’s (PFE) Covid-19 vaccine seems to be safe and effective for children under 5 years old ahead of a panel meeting. (MarketWatch)
  3. Tesla stock could not shake today's broader-market headwinds.
  4. A short squeeze candidate RedBox stock extended its recent rally.
  5. How a cryptocurrency landslide pushed these two stocks lower.

There were no earnings reports of note today.

uvol jun 13

Tightening Supply Boosts Oil Prices

Oil prices settled cautiously higher on Monday, reversing earlier losses to snap a two-day losing streak. Traders ultimately brushed off inflation and demand concerns amid another rise in Covid-19 cases in China. However, Libya's political protests have nearly led to a halt in production, tightening supplies by over one million barrels per day. July-dated crude added 26 cents, or 0.2%, to settle at $120.93 per barrel.

Meanwhile, gold prices fell to close at their lowest level in more than three weeks. The yellow metal suffered as U.S. Treasury yields continued to move higher, and the U.S. dollar gained strength. In turn, August-dated gold shed 2.3%, or $43.70, to close at $1,831.80 an ounce.

Published on Jun 13, 2022 at 2:01 PM
  • Most Active Options Update
Published on Jun 13, 2022 at 1:34 PM
  • Buzz Stocks
Published on Jun 13, 2022 at 12:58 PM
Updated on Jun 13, 2022 at 1:29 PM
  • Quantitative Analysis

Wall Street is brutally selling off today, as traders come to terms with the possibility of a recession to come. Blue-chip chemical company Dow Inc (NYSE:DOW) is no exception to today's profit taking, with the shares last seen down 3.7% at $59.57 and on their way to a fourth-straight loss. DOW is off 12.2% in the last month, though is clinging to a 4.8% year-to-date lead. If history is any indicator, however, the equity could reclaim some recent losses in the coming month.

Dow stock just landed on a study from Schaeffer's Senior Quantitative Analyst Rocky White after pulling back to its 200-day moving average. Per White's study, the equity has seen one similar pullback over the past three years. Despite the limited sample size, the equity flashed a 5.5% return in the following month. This would put the blue-chip stock back on track to cut its recently monthly loss nearly in half.  

DOW Chart June 13

A shift in the options pits could also put wind at the stock's back, as traders have moved in favor of bearish bets in recent weeks. DOW's Schaeffer's put/call open interest ratio (SOIR) of 1.18 stands higher than all other readings from the past year -- indicating short-term options traders have never been more put-biased than they are at the moment. What's more, the stock's 10-day put/call volume ratio of 1.27 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 91% of readings from the past year.

A round of upgrades could give DOW a boost as well. Of the 14 analysts in coverage, 11 say "hold" or worse, compared to three "strong buy" ratings. Meanwhile, the 12-month consensus price target of $73.05 is a 23.2% premium to current levels. 

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