Trade, earnings, and politics dominated headlines this week
Traders had a ton to digest this week, especially considering it was cut a day short for the Martin Luther King Jr. holiday on Monday. Fourth-quarter earnings season was in full swing, but constant buzz around U.S.-China relations, the government shutdown, and the Fed kept shifting Wall Street's attention seemingly hour to hour. As of this writing, the Dow Jones Industrial Average (DJI) was outpacing both the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) for the week, setting it up for a potential fifth straight weekly win.
Big Earnings Moves This Week
Overall, corporate earnings reactions this week were mostly well-received, especially among blue chips. For some specific earnings winners, Starbucks (SBUX) shares rose thanks to another strong quarter, and semiconductor stock Xilinx (XLNX) soared after its report. Ford (F) saw heavy put trading before reporting, and it was the opposite for Intel (INTC). Meanwhile, airlines saw unusual trading around earnings, and McCormick & Company (MKC) flopped.
Short Seller Targets QCOM
Looking ahead, trade-sensitive Caterpillar (CAT) is set to report on Monday morning, and traders have been grabbing call options ahead of the event. Another name to watch will be U.S. Steel (X), after Jefferies downgraded the steelmaker.
Also generating a lot of buzz were short seller reports out of Spruce Point Capital Management and Kerrisdale Capital, with the latter predicting a 50% decline in Qualcomm (QCOM). Meanwhile, eBay (EBAY) stock jumped on hedge fund tailwinds. In tech, cybersecurity stock Palo Alto Networks (PANW) kept climbing, as well.
Analysts also said this drug stock was "too cheap to ignore," and Walmart (WMT) was upgraded. As for large options trades, few were bigger than the bearish play on this biotech ETF.
Another Huge Week Awaits
There won't be time for traders to rest, since next week brings not only FAANG earnings, but the next Fed meeting and high-level U.S.-China trade talks. And while it may not not be a good investing indicator, next Sunday's Super Bowl will also be generating plenty of buzz.