Friday’s Vital Data: Micron Technology, Inc. (MU), Tesla Inc (TSLA) and JPMorgan Chase & Co. (JPM)

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U.S. stock futures are trading broadly higher this morning, as Wall Street looks to bounce back from yesterday’s drubbing. Tech is leading the way, with Micron Technology, Inc. (NASDAQ:MU) heading up a rally in semiconductors following a strong third-quarter earnings report. With a holiday-shortened week next week, look for a fair amount of positioning from traders today, especially in the options pits.

Friday’s Vital Data: Micron Technology, Inc. (MU), Tesla Inc (TSLA) and JPMorgan Chase & Co. (JPM)At last check, futures on the Dow Jones Industrial Average were up 0.18%, S&P 500 futures had risen 0.18% and Nasdaq-100 futures were up more than 0.11%.

On the options front, volume was impressive on Thursday, driven by a wave of buybacks and dividend increases in the U.S. banking sector following the Federal Reserve’s stress tests. Overall, about 20.1 million calls and 19.2 million puts changed hands on Thursday. On the CBOE, the single-session equity put/call volume ratio continued its recent rise, arriving at 0.69. However, the 10-day moving average slipped to 0.63.

Diving into Thursday’s options activity, Micron Technology saw a rush of call options activity ahead of last night’s third-quarter earnings report, while Tesla Inc (NASDAQ:TSLA) bulls continued to waver as deliveries data looms on the horizon. Finally, JPMorgan Chase & Co. (NYSE:JPM) layout a plan to buy back nearly $20 billion in stock after passing the Fed’s stress tests.

Friday’s Vital Options Data: Micron Technology, Inc. (MU), Tesla Inc. (TSLA) and JPMorgan Chase & Co. (JPM)

Micron Technology, Inc. (MU)

After the close last night, Micron Technology reported third-quarter earnings of $1.62 per share, blowing out last year’s loss of 21 cents per share and besting the consensus target of $1.51 per share. Revenue nearly doubled, arriving at $5.6 billion compared to $2.9 billion in the year-ago period. Wall Street was looking for sales of $5.4 billion.

What’s more, Micron lifted guidance going forward:

“We expect healthy industry demand to persist into 2018, reflecting broader trends in the data center and mobile markets,” Chief Executive Sanjay Mehrotra told analysts in the earnings call, as Micron placed fourth-quarter revenue at between $5.7 billion and $6.1 billion with earnings of between $1.73 to $1.87 per share. Analysts had been expecting fourth-quarter revenue of $5.62 billion and a profit of $1.57 per share.

Options traders were ready for the report, with volume topping 810,000 contracts and calls making up 65% of the overall haul. MU bulls are targeting even more gains, however, as the July put/call open interest ratio currently rests at 0.40, with calls more than doubling puts among options set to expire next month. Peak call OI for the series is conservative, however, with 69,000 contracts open at the in-the-money $28 strike. Should these call traders roll up and out, it could have a bullish effect on MU’s sentiment backdrop.

Tesla Inc (TLSA)

After hitting another all-time high on Monday, TSLA stock has struggled with valuation concerns — a growing sentiment for the red-hot alternative automaker that has driven many options traders toward put contracts in the past week. However, CEO Elon Musk hinted that news could be coming this Sunday on the Model 3 front. In a response to a follower on Twitter Inc (NYSE:TWTR), Musk implied that news on the Model 3’s release date would be coming on Sunday.

What’s more, it could be a part of Tesla’s quarterly update on deliveries, which, if on or ahead of target, could provide a significant boost to TSLA stock on the news.

That said, yesterday’s options activity continued the recent trend toward skepticism and protection, as puts made up 48% of the more than 460,000 contracts traded on Tesla. However, TSLA’s July put/call OI ratio has ticked fractionally lower in the past several days, slipping to 0.98 from Wednesday’s perch at 0.99. We should see this decline gain traction today after Musk’s tweet, with traders preparing for Model 3 and potential deliveries news from Tesla.

JPMorgan Chase & Co. (JPM)

The U.S. banking sector is on fire in the wake of a successful round of annual stress tests from the Fed. We’ve already seen Bank of America Corp (NYSE:BAC) hike its dividend by 60% and authorize a $12 billion share buyback program. JPMorgan also wowed investors, laying out a $19.4 billion share buyback plan of its own. Executing the plan would reduce JPM’s outstanding shares by roughly 6%.

“Given the financial strength of the company and the significant capital and liquidity advancements we have made over the last several years, we are pleased to further increase capital returns to our shareholders while continuing to invest in our businesses for long-term profitability,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase.

It was a plan that options traders couldn’t resist, and JPM stock saw more than 573,000 contracts change hands on Thursday — a near-term high for JPMorgan options activity. Additionally, calls snapped up 68% of the day’s take, as traders looked to capitalize on the current rally.

Peak short-term call OI remains conservative, however, with 24,000 contracts at the in-the-money $90 strike. However, there is a growing contingent of OI at the $95 strike, where nearly 20,000 contracts currently reside. We could see this figure grow today as more JPM bulls adjust their targets higher.

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/2017/06/friday-vital-data-micron-technology-inc-mu-tesla-inc-tsla-jpmorgan-chase-co-jpm/.

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