Thursday’s Vital Data: Microsoft Corporation (MSFT), Intel Corporation (INTC) and Facebook Inc (FB)

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U.S. stock futures are bouncing around breakeven Thursday morning, as Wall Street weighs its options ahead of a flood of corporate earnings and economic data. At the top of the list is the European Central Bank’s monetary policy decision, slated for release this morning. Additionally, weekly jobless claims, the June Philly Fed’s business conditions index, June existing home sales and the June Conference Board index of leading indicators will all arrive ahead of the open.

Against this data chocked backdrop, futures on the Dow Jones Industrial Average are down 0.11%, S&P 500 futures have dipped 0.07% and Nasdaq-100 futures have added 0.09%.

Options activity came roaring back on Wednesday, with 16.1 million calls and 12.2 million puts crossing the tape on the session. Call dominance was apparent on the CBOE, where the single-session equity put/call volume ratio dipped to a one week low of 0.57. Meanwhile, the 10-day moving average has pulled back to worrisome levels, dipping to 0.58, its lowest point since June 11, 2015 and reflecting an overabundance of optimism in the options pits.

In equity option news, Microsoft Corporation (NASDAQ:MSFT) drew heavy call volume and topped Dow gainers in the wake of better-than-expected fourth-quarter earnings. Meanwhile, Intel Corporation (NASDAQ:INTC) also saw increased call volume following earnings, but INTC stock is set to fall on weak quarterly revenue. Finally, Facebook Inc’s (NASDAQ:FB) Messenger just topped 1 billion users ahead of the social media giant’s quarterly report next week.

Thursday’s Vital Data: Microsoft Corporation (MSFT), Intel Corporation (INTC) and Facebook Inc (FB)

Microsoft Corporation (MSFT)

While Microsoft handily bested Wall Street’s fourth-quarter expectations, cloud revenue was the highlight of the report. MSFT earned 69 cents per share on revenue of $22.6 billion, versus expectations for 58 cents per share on sales of $22.1 billion. Annualized cloud revenue, meanwhile, ballooned to more than half of Microsoft’s total sales at $12.1 billion — providing proof that the company’s shift away from traditional enterprise offerings and toward cloud services is paying off big time.

Options traders took advantage of the 5.3% rally in MSFT shares, sending some 1.1 million contracts across the tape. Furthermore, calls made up 65% of the day’s take. MSFT stock flirted with the $57 level on Wednesday, closing the day just shy of $56.

Looking at weekly July 22 series open interest, MSFT is staring up at some potentially stiff options-related resistance. The $57 and $56 strikes represent the two biggest accumulations of call OI in the July 22 series, with nearly 17,000 contracts at $57 and 13,000 contracts at $56.50.

Intel Corporation (INTC)

Intel also took to the earnings stage on Wednesday, posting second quarter earnings of 59 cents per share on revenue of $13.53 billion. While earnings easily topped expectations for 53 cents per share, sales came up just shy of the consensus target for $13.54 billion. INTC placed third-quarter guidance at $14.9 billion in revenue, compared to expectations for $14.63 billion.

Options traders piled into calls following the results, with calls snapping up 60% of the more than 611,000 contracts changing hands on INTC stock. Most of the call attention was focused on the July 22 series $35 strike, where 12,400 contracts are open. However, more puts were added at the $34.50 strike, bringing the total OI here to roughly 17,000 contracts.

These puts may be smart money, as INTC has retreated nearly 3% so far this morning, meaning the $34.50 put is now within striking distance of finishing in the money.

Facebook Inc (FB)

Facebook Messenger hit a major milestone this week. The messaging service hit one billion users, more than doubling its base in the past 20 months. Furthermore, Messenger joins an elite crowd in the mobile realm, with only Facebook’s WhatsApp and Google Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) YouTube in the billion-user club.

It’s also worth mentioning that Facebook will release its second-quarter earnings figures after the close on Wednesday next week. Analysts are expecting earnings to rise 61% year-over-year to 81 cents per share, with revenue up 48.8% at $6.01 billion.

Options traders had a call field-day on Wednesday, with these typically bullish bets accounting for 69% of the 582,000 contracts traded on FB. Looking at weekly July 29 series options activity, calls more than double puts for the series as the put/call OI ratio arrives at 0.40. Additionally, July 29 weekly implieds are pricing in a potential post earnings move of about 6.4%.

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/2016/07/thursdays-vital-data-microsoft-corporation-msft-intel-corporation-intc-facebook-inc-fb/.

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