U.S. stock futures are trading modestly higher this morning, as Wall Street bets on a rebound in employment data. Economists are looking for 170,000 new jobs, on average, for June compared to May’s dismal 38,000 jobs added. The unemployment rate rose 4.9% from 4.7%.
Ahead of the jobs data, set for release at 8:30 a.m., futures on the Dow Jones Industrial Average are up 0.20%, while S&P 500 futures have gained 0.23% and Nasdaq-100 futures added 0.15%.
Options activity ticked higher on Thursday, with calls gaining ground yesterday. Overall, some 14.5 million calls and 11.5 million puts changed hands on the session. The situation was similar on the Chicago Board Options Exchange, as the single-session equity put/call volume ratio dropped to 0.60, sending the 10-day moving average to 0.69 — just shy of last week’s multi-month low.
In equity option news, Apple Inc. (NASDAQ:AAPL) attracted a resurgence of call activity after AAPL stock broke above its 50-day moving average for the first time in months. Meanwhile, Bank of America Corp (NYSE:BAC) was downgraded at Raymond James, and a General Electric Company (NYSE:GE) trader made a $4.7 million bullish options bet on GE stock.
Apple Inc. (AAPL)
After weeks of negative reports on iPhone 7 and AppleWatch sales, sentiment may be making a turn for the better on Apple stock. The beaten down shares managed to eke out a close north of their 50-day moving average on Thursday — a trendline that has rejected all rally attempted for AAPL since April 26.
If Apple stock can hold this perch through today’s close, it could pull in sideline money from technical traders, leading to a potential return to the $100 region for AAPL.
Options traders picked up on the bullish breakout on Thursday. Total volume rose to more than 726,000 contracts, with calls snapping up 62% of the day’s take — a figure more in line with AAPL’s historical daily activity.
Holding above $95 is key for AAPL, as the strike is home to peak July 15 series put open interest, totaling some 75,000 contracts. Peak call OI for the series, meanwhile, numbers 117,000 contracts at the deep out-of-the-money $110 strike.
Bank of America Corp (BAC)
An increased dividend and buyback program has done little to rally the troops around BAC stock. It has done even less to bolster analyst favor in the stock post-Brexit. Case in point: Raymond James downgraded BAC stock to “market perform” from “outperform” on Thursday, marking the third-consecutive downgrade for Bank of America since March. Currently, BAC sports 27 “buys” and six “holds,” according to data from Thomson/First Call.
Options traders largely shrugged off the news, as calls dominated the BAC options pits yesterday. More than 660,000 contracts traded on Bank of America, with calls accounting for an above-average 76% of the day’s take.
Overall, sentiment is skewed heavily toward the bulls’ camp, with BAC’s July-August put/call open interest ratio arriving at 0.65, with calls nearly doubling puts among options set to expire within the next two months.
General Electric Company (GE)
The Brexit hasn’t kept GE stock down. In fact, the shares have rebounded more than 9% since the post-Brexit selloff ended, and GE is now challenging overhead technical resistance in the $32 region. With buyers back on board, speculators have emerged en masse in the options pits.
On Thursday, GE saw total volume of more than 418,000 contracts, with calls accounting for a sizeable 79% of the day’s take. Part of yesterday’s call volume was accounted by one block trade totaling 87,763 contracts.
According to Trade-Alert.com, this block crossed at the October $33 call strike for the ask price of 54 cents, or $54 per contract, bringing the total outlay to roughly $4.7 million. Breakeven for the trade lies at $33.54, meaning that the trader needs GE to rally more than 5.4% before October options expire in order to realize a profit.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
