Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Sep 15, 2023 at 10:32 AM
  • Analyst Update
  • Buzz Stocks

Shares of Nasdaq newbie Arm Holdings (NASDAQ:ARM) are 1.1% lower at $62.88 at last glance, one day after the semiconductor and software concern went public. The company's initial public offering (IPO) was successful, with ARM jumping nearly 25% in the previous session from $51.

Nevertheless, Needham initiated coverage with a "hold" rating, saying the company's valuation looks "full." In his note, Needham analyst Charles Shi said, "Arm's architecture is a foundation of smartphones, but we believe the world is entering a post-smartphone era that will see high-performance computing and IoT lead the next phase of semiconductor growth."

There's not much to comment on concerning Arm stock's technical setup. With just a day of trading under its belt, every tick higher marks a new year-to-date high, including today's peak of $69 earlier in the session.

Published on Sep 15, 2023 at 10:26 AM
  • Buzz Stocks

Nucor Corporation (NYSE:NUE) is down 2.4% at $161.60 at last check, after the steel producer placed its outlook for the fiscal third quarter below analysts' estimates. NUE still sports a 21.7% year-to-date lead, and the 100-day moving average looks ready to contain today's losses, meaning now may be a good opportunity to take advantage of its pullback.

Options traders are already chiming in on the update, with 2,670 puts and 1,182 traded so far, which is five times the intraday average volume. Most popular by far is the September 160 put, though new positions are today being opened at the 142 put in that same series.

The options pits have been majorly bullish. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security carries a 50-day call/put volume ratio of 1.58 that sits higher than 98% of readings from the past year.

Premiums are affordably priced at the moment, too. This is per Nucor stock's Schaeffer's Volatility Index (SVI) of 28% that sits higher than only 15% of annual readings, suggesting these traders are currently pricing low volatility expectations.


Published on Sep 15, 2023 at 10:26 AM

FedEx Corp (NYSE:FDX) is gearing up for earnings next week, with its report scheduled for Wednesday, Sep. 20, and the stock received a pair of bull notes ahead of the event. BMO lifted its price objective to $280 from $270, while Barclays raised its price target to $300 from $280 today. FDX was trading flat at last glance, down 0.4% at $255.93. 

The stock has a mixed post-earnings history over the past couple years, closing four of its last eight sessions positive -- including an 8% pop in March. The options pits are pricing in a 6.1% next-day swing this time around, which is larger than the 5.2% move FDX has averaged over this time. 

Of the 32 analysts in coverage, 20 analysts carry a "buy" or better rating on FedEx stock, with 12 a tepid "hold," and no "sell" ratings in sight. Meanwhile, the 12-month consensus price target of $266.96 is just a slim premium to current levels. 

On the charts, FDX has been slipping since its July 31 roughly two-year high of $270.95. This has happened despite an unwinding of short interest, which is down 25% in the last month, pointing to potential technical weakness. 

Published on Sep 15, 2023 at 9:22 AM
  • Opening View

It's a fairly quiet morning on Wall Street following yesterday's rally, but with quadruple witching looming, it could be a choppy day for investors. Stock futures are inching lower at last glance, though all three major benchmarks are eyeing weekly wins. The New York Fed’s Empire State business conditions index rebounded 21 points to 1.9 in September, reversing August's steep loss and wiping out analyst expectations of negative 10. Elsewhere, U.S. import prices rose 0.5% for the biggest gain so far this year. 

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

  • Smooth sailing for these 2 cruise stocks
  • Semiconductor stocks get halo lift from Arm's IPO
  • Plus, NKLA extends gains; auto workers strike; and another airline lowers forecast. 

futures sep15

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw over 1.3 million call and more than 1.1 million put contracts exchanged on Thursday. The single-session equity put/call ratio fell to 0.85 and the 21-day moving average stayed at 0.66.
  2. Nikola Corp (NASDAQ:NKLA) is up 13.9% premarket, after news that the company is partnering with ITD Industries to expand in Canada. The stock is extending yesterday's 32.3% pop, after newly appointed CEO Steve Girsky addressed key investor concerns. Year-to-date, the equity is down 46.8%. 
  3. General Motors Company (NYSE:GM) is down 0.3% before the bell, while Ford Motor Co (NYSE:F) drops 1%, as workers continue to strike at key auto plants. Since the start of the year, GM is flat, while F sports a 14% lead. 
  4. Delta Air Lines Inc (NYSE:DAL) has been in the spotlight this week. The airline yesterday cut its earnings forecast amid higher fuel costs, and earlier this week made it harder for customers to get into exclusive airport lounges. Delta stock is down 0.1% premarket and up 19.7% since the start of the year. 
  5. See what economic data is scheduled next week. 


China Posts Upbeat Economic Data

Stocks in Asia closed out the week mostly higher, bolstered by upbeat economic data out of China. Specifically, the country’s retail sales and factory output beat expectations in August, but fixed asset investment missed the mark. Surprisingly, China’s Shanghai Composite was the only laggard, losing 0.3%, while Hong Kong’s Hang Seng tacked on 0.8%. Rounding out the region, South Korea’s Kospi and Japan’s Nikkei both rose 1.1%, the latter nearing 33-year highs.

European markets are higher midday, as investors continue bask in rumors that the European Central Bank (ECB) may have just issued its last interest rate hike. In a statement, the ECB said, “Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached level that… will make a substantial contribution to the timely return of inflation to the target.” At last glance, London’s FTSE 100 was 0.8% higher, while France’s CAC 40 and Germany’s DAX were up 1.7% and 1%, respectively.

Published on Sep 14, 2023 at 4:27 PM
  • Market Recap

Wall Street's IPO market -- and a healthy batch of economic readings -- helped stocks stage a rally today. Investors cheered the debut of Arm (ARM) on the Nasdaq, which jumped triple digits. Meanwhile, the Dow added more than 330 points for its best session in a little over a month, while the S&P 500 also finished substantially higher. 

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

  • Historically bullish signal has never let retail stock down.
  • Bull note helps e-tail stock recover from multi-year lows.
  • Plus, interest rate decision on deck; homebuilder readies for earnings; and Warren Buffett bearish on HPQ.

closing summary sep14

nyse nasdaq sep14

5 Things to Know Today

  1. According to a court filing, Hunter Biden, son of U.S. President Joe Biden, was indicted today on three criminal counts related to his possession of a firearm. (CNBC)
  2. Iconic German sandal and clog maker Birkenstock is going public, with plans to list on the New York Stock Exchange (NYSE) as BIRK. (MarketWatch)
  3. Interest rate decision on deck next week.
  4. Homebuilder stock ready to build on 2023 gains. 
  5. Warren Buffett losing faith in this tech stock?

There were no notable earnings reports today.

uvol sep14

Oil Prices Mark $90 Close 

Oil prices finally cleared a $90 per barrel close for the first time this year on supply tightening expectations. Crude for October delivery added $1.64, or roughly 1.9%, to settle at $90.16 per barrel for the day.

After yesterday hitting a three-week low, gold prices posted modest gains. December-dated gold gained 30 cents, or less than 0.1%, to settle at $1,932.80 an ounce for the day. 

Published on Sep 14, 2023 at 2:25 PM
Updated on Sep 14, 2023 at 3:54 PM
  • Buzz Stocks

The semiconductor sector is getting more attention than usual today, following the Nasdaq debut of Arm Holdings (NASDAQ:ARM). The company was valued at $54.5 billion in the biggest initial public offering (IPO) so far this year, with the 95.5 million shares sold at $51 each. At last check, ARM is up 18% at $60.17.

The event is boosting Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) as well, which was last seen up 1% at $91.63. However, Nvidia Corp (NASDAQ:NVDA) erased earlier gains, down 0.2% at $453.97 at last glance. TSM and NVDA sport healthy leads for the year, up 23% and 210.4%, respectively.

Options traders lean bullish toward NVDA. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 50-day call/put volume ratio of 1.26, which sits higher than 85% of readings from the past year.

The same cannot be said for TSM, which carries a Schaeffer's put/call open interest ratio (SOIR) of 1.46 that sits in the 97th percentile of annual readings. This indicates short-term options traders have been more bearish than usual.

Now looks like an ideal time to bet on either stock with options. The Schaeffer's Volatility Index (SVI) for both TSM and NVDA sits higher than only 13% of readings from the past year. In other words, traders are currently pricing low volatility expectations for the two equities.

Published on Sep 14, 2023 at 11:57 AM
Updated on Sep 14, 2023 at 3:47 PM
  • Midday Market Check



Published on Sep 14, 2023 at 2:39 PM
  • Analyst Update

Redburn Atlantic upgraded Norwegian Cruise Line Holdings Inc (NYSE:NCLH) and Carnival Corp (NYSE:CCL) to "buy" today. For CCL, the firm noted that improvement in European trading has boosted its outlook, while NCLH has benefited from reduced cost inflation expectations. The analyst also stated that the current pricing of cruises is at an almost 40% discount to leisure hotels. 

At last glance, NCLH was up 5.3% to trade at $17.23. The stock has been sliding on the charts, posting weekly losses in five out of the past six weeks, though support at its 180-day moving average seems to have caught the extended pullback. Since the start of the year, the equity is still up 40.9%. 

Carnival stock, meanwhile, is up 4% at $15.63. CCL has been falling since its July 5, 52-week of $19.55, though still up an impressive 93.1% in 2023. The security's overhead 20- and 80-day moving averages are converging as lines of pressure on the charts, however. 

Options bulls are targeting both equities today. So far, CCL has seen 59,000 calls cross the tape -- double the intraday average amount -- compared to 20,000 puts. The September 16 and 15.50 calls are the most popular, with new positions opening at the weekly 9/22 16-strike call. In NCLH's options pits, 20,000 calls have been exchanged, which is triple the amount typically seen at this point, though the most active contract is the September 17 put. 

Published on Sep 14, 2023 at 1:03 PM
  • Strategies and Concepts
  • Expectational Analysis

As Schaeffer's Investment Research is not affiliated with thinkorswim® by TD Ameritrade, this article can only provide general steps on how to buy a put debit spread on thinkorswim®. However, keep in mind that financial processes and platforms may change over time, so it's always a good idea to double-check with the latest information from thinkorswim® by TD Ameritrade or consult a financial advisor if you're unsure about any options trading strategy.

Bernie Schaeffer has recently launched two new debit spread trading programs (Vertical Options Trader and Grand Slam Countdown) in which our members can take advantage of the powerful debit spread strategy. Both programs offer call debit spreads and put debit spreads. We will discuss buying put debit spreads on thinkorswim here, but you can review how to buy call debit spreads on thinkorswim® by clicking here.

Here is how to buy a put debit spread (aka a put vertical spread) on thinkorswim®:

Step 1: Log In to Your thinkorswim® Account

If you already have a thinkorswim® account, log in. If not, sign up for a new account and complete any necessary verification processes.

Step 2: Access the Trade Tab

After logging in, click on the "Trade" tab at the top of the thinkorswim® platform to access the trading section.

Step 3: Select the Underlying Stock

In the trading section, use the search bar to find the name or symbol of the underlying stock for which you want to buy a put debit spread. Once you select the stock, its options chain will be displayed.

Step 4: Choose the Put Option for the Long Leg

Within the options chain, find the specific put option you want to use as the long leg of your put debit spread. The long leg is the put option you're buying. Click on the ask price of the put option to open a buy order ticket.

Step 5: Choose the Put Option for the Short Leg

To create a put debit spread, you'll also need to sell a put option with a lower strike price than the one you're buying. Locate the specific put option you want to use as the short leg. Click on the bid price of the put option to open a sell order ticket.

Step 6: Set the Number of Contracts

In the order tickets for both the long and short put options, specify the number of contracts you want to trade. Double-check that you're setting up a put debit spread and review all the order details.

Step 7: Place the Trade

Once you're satisfied with your selections and have reviewed all the order details, click the "Confirm and Send" button to place the put debit spread trade.

Step 8: Monitor Your Position

After placing the put debit spread trade, you can monitor it in the thinkorswim platform. Keep track of the trade's performance and be aware of any potential risks associated with options trading.

Options trading can be intricate, and buying put debit spreads involves specific risks. It's crucial to have a good understanding of options trading strategies and the risks involved before executing any trades. If you're new to options or need further guidance, consider seeking advice from a qualified financial advisor or exploring thinkorswim®'s educational resources.

Learn better through video? Here is a great video that we found on YouTube that will visually walk you through placing a put debit spread on thinkorswim® by TD Ameritrade:

SIR is not affiliated with any brokerage firm and does not endorse or recommend any specific brokerage firm. SIR is not and will not be responsible for any trades made by a broker on the subscriber's behalf under any circumstances. 

Published on Sep 14, 2023 at 12:59 PM
  • Quantitative Analysis

American Eagle Outfitters Inc (NYSE:AEO) was one of a select few stocks that sat out of the broader market's August pullback, with the shares adding 20.7% last month. September is a different story, however, with AEO down nearly 10% already this month; and though it was last seen 2.5% higher at $15.27, a historically bullish signal indicates that this pullback could be a fresh start start for the retail name. 

This is because American Eagle Outfitters stock just came within one standard deviation of its 50-day moving average after a lengthy period above the trendline. Per Schaeffer's Senior Quantitative Analyst Rocky White, there were three similar instances in the past three years. The security was higher after all of these occurrences, averaging a one-month pop of 22.7%. A similar move from its current perch would put AEO back above $18.75, or its highest level since March 2022.

AEO Chart September 142023

An unwinding of pessimism amongst the brokerage bunch could add even more tailwinds. Of the 10 in coverage, just two call the security a "strong buy." What's more, the shares sold short account for 8.8% of American Eagle stock's available float, so a short squeeze could be in the fold. 

A further shift in sentiment in the options pits could also bode well for the security. At the  International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AEO sports a 10-day put/call volume ratio of 1.72, which stands higher than 76% of readings from the past 12 months. In other words, calls are being picked up at a quicker-than-usual clip of late. 

These options are affordably priced at the moment, too. This is per the stock's Schaeffer's Volatility Index (SVI) of 35% that sits higher than just 1% of annual readings, meaning these traders are currently pricing low volatility expectations.

Published on Sep 14, 2023 at 11:00 AM
  • The Week Ahead
Published on Sep 14, 2023 at 10:59 AM
  • Buzz Stocks

Warren Buffett's Berkshire Hathaway (BRK) sold 5.5 million shares of tech name HP Inc (NYSE:HPQ) for about $158 million. This brings the conglomerate's stake in HP down to roughly $3.27 billion, per a new filing with the U.S. Securities and Exchange Commission (SEC). 

HPQ was last seen down 3.3% at $27.40, and earlier slipped to its lowest trading level since January. The stock's 20-day moving average has been guiding it lower since August, capping a rally later that month. Quarter-to-date, HP stock is now down more than 10%.

Options volume is running at double the intraday average today, with 6,362 calls and 4,175 puts traded. The most active contract is the October 30 call, with positions being opened at the weekly 9/15 27-strike call.

These options are affordably priced at the moment, too. This is per HPQ's Schaeffer's Volatility Index (SVI) of 33% that sits higher than just 12% of annual readings, meaning these traders are currently pricing low volatility expectations.

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