Monday’s Vital Data: Amazon.com, Inc. (AMZN), Bank of America Corp (BAC) and Gilead Sciences, Inc. (GILD)

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Stocks are poised to kick February off on a sour note, after the major market indices shed roughly 5% across the board in January. Weak Chinese manufacturing data is receiving most of the blame this morning, while a retreat in oil prices is also pressuring Wall Street lower.

Heading into the open, U.S. stock futures on the Nasdaq Composite are down 0.38%, with S&P 500 futures off 0.39% and Dow Jones Industrial Average futures shedding 0.34%.

In options activity, volume was brisk as traders loaded up on calls following a string of solid quarterly reports from the tech sector. On the CBOE, the single-session equity put/call volume ratio dropped to 0.58 — its lowest level since December. The 10-day moving average was dragged lower as a result, hitting a one-month low of 0.7.

In equity option news, Bank of America Corp (NYSE:BAC) saw call volume soar on Friday, after CLSA Ltd. upgraded the stock while speculating that valuation could push speculators to call for a spinoff or other restructuring. Elsewhere, Amazon.com, Inc. (NASDAQ:AMZN) was hammered after missing Wall Street’s fourth-quarter expectations, while Gilead Sciences, Inc. (NASDAQ:GILD) fell after announcing long-time CEO John Martin was stepping down.

Monday’s Vital Data: Bank of America Corp (BAC), Amazon.com, Inc. (AMZN), Gilead Sciences, Inc. (GILD)

Bank of America Corp (BAC)

Bank of America stock was boosted to buy from sell at CLSA Ltd. on Friday. According to CLSA analyst Mike Mayo, BofA’s low valuation could spark an event like a restructuring or spinoff. “The lower stock price is not just a more attractive entry point, but it also could be the catalyst for an event,” Mayo said in a telephone interview.

BAC stock jumped more than 4.4% following the report, and options traders piled into calls as a result. In fact, some 78% of the roughly 853,000 contracts trading on BAC on Friday were call contracts.

The shares have slipped a bit in premarket activity, placing BAC squarely on $14. This strike is home to peak call open interest of 84,676 contracts in the weekly Feb 5 series. Should the shares dip too far below $14 today, BAC could see significant headwinds at this level throughout the coming week.

Amazon.com, Inc. (AMZN)

Amazon stock shed 7.6% on Friday after the company’s fourth-quarter figures whiffed Wall Street’s targets. For the quarter, Amazon earnings came to $1 per share on revenue of $35.7 billion, versus expectations for a profit of $1.56 on sales of $35.98 billion. More damning for AMZN, however, was the fact that while sales grew 22% year-over-year in the quarter, so too did operating expenses.

Options traders, meanwhile, were a bit more reserved in their disdain for AMZN stock. Volume totaled roughly 647,000 contracts on Friday, though calls still held sway with 52% of the overall take.

AMZN is down about 1% in electronic trading, placing the stock in the $582 region. Weakness shouldn’t be too big of a problem for Amazon this week, as the shares have potential put options-related support just below at $580, totaling 1,840contracts in the weekly Feb 5 series. Below $582, however, the next most popular put strike is $550 — an area that is key for AMZN technically as its 200-day moving average is rising into the region.

Gilead Sciences, Inc. (GILD)

GILD dropped more than 5% on Friday following a pair of bearish headlines for Gilead. First, Merck & Co., Inc. (NYSE:MRK) received FDA approval for its hepatitis C drug, Zepatier — a drug that costs roughly half of Gilead’s competing hep C treatment. Second, CEO John Martin announced that he was stepping down.

GILD options traders remained undaunted, however, with calls accounting for a whopping 81% of the roughly 459,000 contracts trading on Friday. The stock has rebounded above $83 in early trading this morning, though GILD is still trading well south of any major accumulation of put or call OI in the Feb 5 series.

Also of note, Gilead will step up to release its fourth-quarter figures after the close tomorrow. Wall Street is looking for a profit of $2.91 per share on $8.12 billion in revenue.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/02/mondays-vital-data-bank-america-corp-bac-amazon-com-inc-amzn-gilead-sciences-inc-gild-options/.

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