Russia, North Korea Worries Pressure Stocks, Lift VIX

U.S. stocks are set for another down week as geopolitical concerns persist, lifting the CBOE Volatility Index (VIX)

Apr 13, 2017 at 1:50 PM
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Coming off last Thursday's U.S. missile strike in Syria, geopolitical tensions were front and center on Wall Street for most of the holiday-shortened week. On top of the Group of Seven meeting in Italy and Secretary of State Rex Tillerson's visit to Russia, nuclear threats out of North Korea and the U.S. dropping a MOAB, or "Mother of All Bombs", on an Islamic State target in Afghanistan also pressured stocks. As a result, the long-awaited volatility pop came to fruition, with the Dow and its index peers set to end the abbreviated week in the red -- though it seems CBOE Volatility Index (VIX) options traders may have missed the VIX spike

Oil, Gold Stay Hot; Steel Stocks Stumble

While equities struggled, the ongoing geopolitical drama proved to be a boon for commodities. For instance, oil prices rose for a third straight week -- though Exxon stock was hit with a downgrade -- while gold futures touched five-month highs. However, it was a rough week for steel stocks due to concerns of overproduction out of China. As such, this mining stock fell south of a key technical trendline.

Travel Stocks Take Focus After United PR Mishap

One of the biggest stories of the week belonged to United Continental Holdings Inc (NYSE:UAL), after a passenger was forcefully removed from an overbooked flight. Airline peer Delta Air Lines, Inc. (NYSE:DAL) was also in focus, as the shares sank despite a brief earnings-induced pop, while UAL will unveil its own earnings next week.  As for other travel stocks, Allegiant Travel Company (NASDAQ:ALGT) was hit with a bear note, while history suggests Expedia shares could stay hot ahead of earnings.  

Tesla Options Heat Up

Despite pulling back below the $300 level, Tesla stock continued to grab headlines this week, though it's becoming increasingly pricey to buy TSLA options. As such, traders should consider put options on Ford stock, while bullish options traders may want to check out Herbalife Ltd. (NYSE:HLF). 

WFM Stock Leads List of Weekly Outperfomers

Whole Foods stock was one of the top performers this week, thanks to news Jana Partners took a significant stake in the grocery chain, and may be pushing for a sale. Shares of BlackBerry Ltd (NASDAQ:BBRY) also surged, following a major settlement with QUALCOMM, Inc. (NASDAQ:QCOM). Applied Optoelectronics Inc (NASDAQ:AAOI), Plug Power Inc (NASDAQ:PLUG), and Momo stock put in impressive weeks, as well. On the flip side, the semiconductor space struggled, led by a big weekly loss from Wall Street favorite AMD stock

Drug Stocks Make Big Moves

A number of biotechs made waves this week, too. Specifically, a key FDA approval lifted Neurocrine Biosciences, Inc. (NASDAQ:NBIX), and M&A buzz boosted generic drugmaker Akorn, Inc. (NASDAQ:AKRX). Bristol-Myers Squibb Co (NYSE:BMY) lagged behind, however, while a suspended trial of its pancreatic cancer treatment sent Oncomed Pharmaceuticals Inc (NASDAQ:OMED) shares to record lows. 

Traders Await Earnings Season

Looking ahead, traders will now be turning their attention to earnings season, which kicked off with a strong results from from Dow component JPMorgan Chase & Co. (NYSE:JPM). However, recent comments on the U.S. dollar from President Donald Trump could also be worth monitoring going forward. All the same, our research has identified 23 stocks to buy after Easter. 


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