2 Retailers Gapping Higher After Earnings

AMZN stock is trading lower, despite clearing key hurdles to its Whole Foods acquisition

Aug 24, 2017 at 10:54 AM
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U.S. stocks are wobbling between positive and negative territory this morning, as traders weigh hawkish remarks from Kansas City Fed President Esther George amid the start of the central banking summit taking place in Jackson Hole, Wyoming. Among specific equities in focus are jewelry concern Signet Jewelers Ltd. (NYSE:SIG), clothing retailer Abercrombie & Fitch Co. (NYSE:ANF), and online retail giant Amazon.com, Inc. (NASDAQ:AMZN). Here's a quick look at what's moving shares of SIG, ANF, and AMZN.

SIG Gaps Higher After Earnings Beat

Signet Jewelers is up nearly 22%, trading at $63.40 thanks to a stellar second-quarter earnings beat. The jeweler has been on a rapid downtrend since late 2015, though today's bull gap has narrowed the stock's year-to-date loss to 36.4%. Given the bleak price action, it's no surprise to find that options traders leaned towards the bearish camp in anticipation of SIG's earnings. The stock's 10-day put/call volume ratio of 17.02 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 94th percentile of all other daily readings from the past 52 weeks.

Abercrombie & Fitch Beats Earnings Expectations

Abercrombie's shares are moving big -- just as options traders predicted -- after the clothing retailer reported a narrower-than-expected second-quarter loss. ANF is trading up more than 13% at $10.94, which could have some short sellers scrambling to cover. ANF short interest has risen by 38.1% during the two most recent periods, and now represents more than 29% of the stock's float.  

Amazon Slips as Whole Foods Deal Wins Approval

The U.S. Federal Trade Commission (FTC) has approved Amazon's planned buyout of Whole Foods, shortly after AMZN shareholders voted to move the deal forward. It's a key win for AMZN, particularly on the heels of fresh competition from Wal-Mart and Google. It seems that traders are none too surprised by the regulatory clearance, though, with AMZN stock down 0.7% at $951.70 this morning. 

Despite the stock's rapid pullback from its late July peak north of $1,000, the options market isn't pricing in expectations for any big moves from Amazon shares. The retail giant sports a Schaeffer's Volatility Index (SVI) of 19%, which stands higher than just 22% of all other readings from the past year. This suggests short-term AMZN options are attractively priced, from a volatility perspective. 

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