Tuesday’s Vital Data: Bank of America Corp (BAC), Apple Inc. (AAPL) and Facebook Inc (FB)

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U.S. stock futures are pointing toward a flat open this morning, as Wall Street digests recent gains amid a lull in major economic data and Federal Reserve speeches. In fact, the next time we hear from the Fed may bring news of an interest rate hike, as they enter their blackout period ahead of week’s Federal Open Market Committee meeting on monetary policy.

Tuesday’s Vital Data: Bank of America Corp (BAC), Apple Inc. (AAPL) and Facebook Inc (FB)According to CME Group, there is a 94.9% chance that the Fed will hike rates by 25 basis points at next week’s meeting to a range of 50-75 basis points from current levels at 25-50 basis points.

Heading into the open, futures on the Dow Jones Industrial Average are up 0.03%, with S&P 500 futures up 0.09% and Nasdaq-100 futures higher by 0.18%.

On the options front, volume faltered on Monday, arriving a touch below average for the past three weeks. Overall, about 13.6 million calls and 11.1 million puts changing hands on the session. On the CBOE, the single-session equity put/call volume ratio fell back to 0.63, sending the 10-day moving average ticking lower to 0.61.

Among Monday’s volume leaders, Bank of America Corp (NYSE:BAC) was unphased by Italy’s referendum and Prime Minister Matteo Renzi’s resignation, with options traders likely eyeing strength in the U.S. dollar. Elsewhere, Apple Inc.’s (NASDAQ:AAPL) Chief Executive Tim Cook touted quarterly Apple Watch sales and Facebook Inc (NASDAQ:FB) investors eyed a report on rising social media ad spending.

Tuesday’s Vital Options Data: Bank of America Corp. (BAC), Apple Inc. (AAPL) and Facebook Inc (FB)

Bank of America Corp. (BAC)

Looking for BAC stock to continue its blistering post-election rally, Bank of America options traders snapped up handfuls of call options on Monday. More than 1.2 million contracts changed hands on BAC yesterday, with calls accounting for 67% of the day’s take.

According to OptionMonster, the weekly Dec 9 series $22.50 strike was quite popular among call buyers, with some 79,000 contracts bought to open for ask prices ranging between 4 cents and 8 cents (or $4 and $8 per contract). Furthermore, volume was more than six times open interest at the strike, further supporting the buy-to-open activity.

Helping to drive BAC’s post-election rally, the U.S. Dollar Index rebounded from support near 100 yesterday, as news that an Italian referendum failed and that Prime Minister Matteo Renzi’s resigned — an indication that Italy could be headed in a Brexit direction. A stronger dollar could help bolster revenue at Bank of America’s investment unit.

Apple Inc. (AAPL)

Conflicting data arrived for the Apple Watch yesterday. According to IDC, Apple sold 1.1 million Apple Watches in the third quarter, down 71% from last year. In response, CEO Tim Cook told Reuters, “Sales growth is off the charts. In fact, during the first week of holiday shopping, our sell-through of Apple Watch was greater than any week in the product’s history. And as we expected, we’re on track for the best quarter ever for Apple Watch.”

Apparently siding with IDC, AAPL stock traders send the share down 0.72% on Monday. Options traders, however, appeared to be more bullish. Total volume rose to an above average 654,000 contracts, with calls snapping up 62% of the day’s take.

That said, call open interest has fallen below historical averages for AAPL stock, with the December put/call open interest ratio resting at 0.89 — a reading above three quarters of those taken in the past year. In short, sentiment among AAPL options traders remains well off its bullish peaks.

Facebook Inc (FB)

Facebook investors have been more than cautious ever since the company said during its quarterly report that ad revenue growth would slow in the coming years. But a report emerged yesterday stating that shifting ad revenue trends would push social media north of newspaper ad revenue by 2020.

Specifically, advertising agency Zenith Optimedia said that global ad spending on social media would account for 20% of all online spending in 2019 — hitting $50 billion — eclipsing newspapers the next year. With Facebook currently dominating the social media space, the report bodes well for FB stock.

The report may have also spurred FB stock options traders to return to their bullish ways. On Monday, FB saw volume rise to 414,000 contracts, with calls accounting for 68% of the day’s take — a reading above the recent daily average of 64% to 65%.

In fact, recent attention to FB calls has pushed the stock’s December put/call OI ratio down from a reading north of 0.70 to its current perch at 0.68. A continuation of this call trend could have bullish implications for FB stock.

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/2016/12/vital-data-bank-america-corp-bac-apple-inc-aapl-facebook-inc-fb/.

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