Tuesday’s Vital Data: Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Yahoo! Inc. (YHOO)

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U.S. stock futures are struggling to find direction again this morning, as Wall Street faced another data-filled session.

Tuesday’s Vital Data: Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Yahoo! Inc. (YHOO)The Federal Reserve begins its two-day monetary policy meeting today, while Apple Inc. (NASDAQ:AAPL), McDonald’s Corporation (NYSE:MCD) and Caterpillar Inc. (NYSE:CAT) are just a few of the earnings reports on tap.

Finally, the May Case-Shiller home prices report and the July reports on Markit services PMI, consumer confidence index and new home sales are all slated for release.

Against this backdrop, futures on the Dow Jones Industrial Average are up 0.02%, S&P 500 futures have fallen 0.05% and Nasdaq-100 futures have added 0.05%.

Options activity backed off considerably on Monday, with only 11.5 million calls and 10.7 million puts crossing the tape. Puts gained a bit of momentum on the CBOE, as the single-session equity put/call volume ratio edged rose to a three-week high of 0.71. The 10-day moving average advanced again to 0.60, extending its rebound off Monday’s multimonth low.

In equity option news, Apple options traders are gearing up for tonight’s fiscal third-quarter earnings report, which will finally shed some light on iPhone sales and guidance. Meanwhile, Netflix, Inc. (NASDAQ:NFLX) has struck a content sharing deal with Twenty-First Century Fox Inc (FOXA), while Yahoo! Inc. (NASDAQ:YHOO) is selling its core businesses to Verizon Communications Inc. (NYSE:VZ).

Tuesday’s Vital Options Data: Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Yahoo! Inc. (YAHOO)

Apple Inc. (AAPL)

Apple will finally enter the earnings confessional after the close this evening, and options traders appear to be gearing up for a rally. Wall Street is expecting Apple earnings to fall 34% year-over-year to $1.39 per share on revenue of $42.09 billion — down 15.3% year-over-year. EarningsWhispers.com places the third-quarter whisper number at $1.43 per share for Apple.

Analysts’ concerns about slipping iPhone sales appear to have had little effect on the options crowd, however, as speculative traders continue to pile into AAPL calls. On Monday, these typically bullish bets made up 63% of the roughly 1.3 million contracts traded on AAPL. That said, the weekly July 29 series put/call open interest ratio for AAPL has risen to a reading of 0.80, with most calls being added to back-month strikes.

Heading into the report, implieds on weekly July 29 series options are pricing in a potential post-earnings move of only about 4% for AAPL, which seems a bit low considering the impact strong guidance or a confirmation of flagging iPhone sales could have on the shares.

Netflix, Inc. (NFLX)

NFLX is in the midst of a bit of a post-earnings relief rally at the moment. The shares rallied more than 2% yesterday following news of a content sharing deal with Twenty-First Century Fox Inc. Netflix now has the rights to stream FX’s The People v. O.J. Simpson: American Crime Story as well as the second season of American Crime Story.

Following the news, NFLX saw nearly 270,000 contracts change hands in the options pits, with calls snapping up 59% of the day’s take — a stark reversal from the put-heavy activity that arrived in the wake of Netflix’s poorly received quarterly earnings report. But Monday’s call activity was just a drop in the bucket, as the August/September put/call OI ratio for NFLX of 0.98 continues to hover near bearish levels for the stock.

In premarket trading, NFLX is up another 3.6% as the relief rally appears poised to extend into another session.

Yahoo! Inc. (YHOO)

Yahoo!, the former king of the internet, is dead. The company has agreed to sell its core businesses to Verizon Communications for $4.8 billion in cash … a far cry from the $44.6 billion Microsoft Corporation (NASDAQ:MSFT) offered for all of Yahoo! in 2008. In response to the sale, YHOO stock dipped 2.69%, and is trending nearly 1% lower in premarket trading this morning.

Call volume dominated the options pits on Monday, accounting for a whopping 82% of the 261,000 contracts traded on YHOO yesterday.

That said, the majority of this options activity is likely related to arbitrage strategies ahead of the official sale date for Yahoo!’s core businesses.

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/tuesdays-vital-data-apple-inc-aapl-netflix-inc-nflx-yahoo-inc-yahoo/.

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