Thursday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Tesla Inc (TSLA)

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U.S. stock futures are headed higher this morning, as Wall Street reacts to yesterday’s statement from the Federal Open Market Committee meeting. The Federal Reserve held rates steady at its latest policy meeting, and said that slowing growth in the first quarter was likely transitory. Additionally, French presidential candidate Emmanuel Macron continues to poll well, and is expected to win this Sunday’s election, taking pressure off EU stability concerns.

Thursday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Tesla Inc (TSLA)Heading into the open, futures on the Dow Jones Industrial Average and S&P 500 are have risen 0.22%, with Nasdaq-100 futures up 0.32%.

On the options front, Wednesday’s activity arrived in line with the past month’s average, as about 15.7 million calls and 13.3 million puts changed hands yesterday. On the CBOE, the single-session equity put/call volume ratio rebounded to 0.69 ahead of the Fed, though the 10-day moving average held at 0.65.

Driving Wednesday’s options activity, corporate earnings were the talk of the day, as Apple Inc. (NASDAQ:AAPL) offered up “ho hum” second-quarter results, Facebook Inc (NASDAQ:FB) topped Wall Street’s expectations and Tesla Inc (NASDAQ:TSLA) put forth a mixed quarter and held off on second-half guidance.

Thursday’s Vital Options Data: Apple Inc. (AAPL), Facebook Inc (FB) and Tesla Inc.

Apple Inc. (AAPL)

Apple needed “one more thing” in Tuesday night’s quarterly earnings report. For the quarter, Apple said it earned $2.10 per share, topping expectations for $2.02 per share, but revenue of $52.9 billion came up short of the consensus view for $53 billion. Furthermore, third-quarter guidance was also light, arriving in a range of $43.5 billion to $45.5 billion, versus Wall Street’s mark of $45.6 billion.

CEO Tim Cook capped off the bad news by stating that customers are delaying iPhone purchases and that iPhone sales could lag projections for a second consecutive year.

Still, Apple stock only slipped 0.31% following the report, and options traders appeared to remain faithful to the shares. On Wednesday, more than 2.2 million contracts traded on AAPL stock, hitting a near-term peak in activity. Additionally, calls made up 64% of the day’s take, falling in line with typical daily call volume percentages for the session.

That said, much of this call volume on AAPL may represent the closure of existing positions or rollouts to later months. Why? Because the May put/call open interest ratio has risen this week from 0.83 on Monday to 0.97 today, as puts are added at a faster rate than calls, or, more likely, calls are being liquidated following Tuesday night’s report. Either way, the sentiment picture is taking on a bearish tint for AAPL stock.

Facebook Inc (FB)

FB stock is struggling to make headway this morning after posting another solid quarter last night. Facebook said it earned $1.12 per share, blowing past expectations for 87 cents per share, on revenue of $8.03 billion, which also handily topped Wall Street’s view for $7.83 billion. Monthly active users also topped expectations, arriving at 1.94 billion compared to the consensus of 1.91 billion.

Expectations were clearly a bit too high, as some whisper numbers put earnings as high as $1.21 per share. FB stock is off 1% this morning, and is testing support near $150.

Call volume was well off the mark heading into the report, however. Total volume came in at nearly 1 million contracts, and calls only accounted for 57% of the day’s take, well below the average of 66%. What’s more, FB saw its May put/call OI ratio surged from 0.63 on Monday to 0.84 today. As with AAPL, FB is likely seeing call liquidation or contract rollouts as options traders look further down the road for FB to bounce back.

Tesla Inc. (TSLA)

Despite remaining on track with Model 3 production and deliveries, Tesla’s losses continue to mount. For the first quarter, Tesla said it lost $1.33 per share but that revenue rose to $2.7 billion. Earnings fell well short of expectation for a loss of only 82 cents per share, though sales bested Wall Street’s target of $2.61 billion. Tesla also held off on a second-half prediction for deliveries, noting that it will wait for Model 3 sedan production to ramp up in July.

Unlike AAPL and FB, where options activity can be explained by call rollouts and liquidation, TSLA may very well be seeing an influx of negativity in the options pits. Volume yesterday topped 405,000 contracts, with puts accounting for 52% of the day’s take. What’s more, the May put/call OI ratio has surged from 0.62 on Tuesday to today’s perch at 1.15 — a jump so severe that it can only mean an influx of open put positions in the May series.

TSLA has given up $310 this morning, and is set to open just north of $305. While the shares may not test $300 today, follow-through selling could well see TSLA hit this region before the end of next week, barring any positive updates in the meantime.

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


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/thursday-vital-data-apple-inc-aapl-facebook-inc-fb-tesla-inc-tsla/.

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