Thursday’s Vital Data: Apple Inc. (AAPL), Target Corporation (TGT) and United States Steel Corporation (X)

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U.S. stock futures are indicating a lower open this morning, as Wall Street digests the latest Federal Open Market Committee Meeting minutes and news that President Donald Trump has disbanded his advisory business panels. Additionally, traders will be focused on earnings from Alibaba Group Holding Ltd (NYSE:BABA) and Wal-Mart Stores Inc (NYSE:WMT) as well as weekly jobless claims.

Thursday’s Vital Data: Apple Inc. (AAPL), Target Corporation (TGT) and United States Steel Corporation (X)Heading into open, Dow Jones Industrial Average futures have faltered 0.15%, Nasdaq-100 futures are off 0.29% and S&P 500 futures have slipped 0.16%.

On the options front, volume lingered just below average as about 13.9 million calls and 13.1 million puts changed hands on Wednesday. On the CBOE, the single-session equity put/call volume ratio dipped to 0.62, while the 10-day moving average ticked lower to 0.74.

Taking a closer look at Wednesday’s options activity, Apple Inc. (NASDAQ:AAPL) saw call volume spike following news the company planned to spend $1 billion on original content creation next year. Elsewhere, Target Corporation (NYSE:TGT) drew mixed activity despite posting strong second-quarter results. Finally, United States Steel Corporation (NYSE:X) has seen a pop in options activity this week as base metals rallied following Chinese environmental restrictions on smelters.

Thursday’s Vital Options Data: Apple Inc (AAPL), Target Corporation (TGT) and United States Steel Corporation (X)

Apple Inc. (AAPL)

According to a report in The Wall Street Journal, Apple is projecting a budget of $1 billion for original content creation next year. Apple has already launched a few of its own original shows, including “Carpool Karaoke” and “Planet of the Apps,” and the increased budget shows Apple’s commitment to entering the online streaming fray.

However, Apple still lags far behind key competitors Amazon.com, Inc.’s (NASDAQ:AMZN) Prime TV and Netflix, Inc. (NASDAQ:NFLX), which have said they will spend $4.5 billion and $7 billion, respectively, in 2018.

AAPL stock options traders, meanwhile, appeared to take profits following the news. Volume came in north of 464,000 contracts, just shy of Apple’s daily average, while calls made up an above average 70% of the day’s take. That added call volume was most likely the result of call liquidations, as AAPL’s September put/call open interest ratio rose to 0.49 from Tuesday’s reading of 0.40 — indicating that put open interest rose in comparison to call open interest amid higher call volume.

Target Corporation (TGT)

While Target has garnered its fair share of negativity this year, the company gave bullish investors hope yesterday. For the second quarter, Target said it earned $1.23 per share on sales of $16.43 billion. Wall Street was looking for revenue of $16.26 billion and earnings of $1.17 per share.

Even more impressive, Target said e-commerce sales rose a better-than-expected 32%. E-commerce has been an historically weak point for the company that has lost ground to Walmart and Amazon.com in the online space.

TGT options traders received the news with caution. Volume surged to 136,000 contracts, nearly quadrupling Target’s average daily trading volume. However, calls only eked out 54% of the day’s take, underscoring doubts from speculative traders despite the positive results. Looking ahead to September, though, we can see those doubts are falling by the wayside. The September put/call OI ratio has fallen in the past week to rest at 0.45, with calls now more than doubling puts among near-term options.

That said, a looming confrontation with TGT’s 200-day moving average could make or break this budding wellspring of optimism next month.

United States Steel Corporation (X)

U.S. Steel investors are beginning to see a bit of optimism on the horizon. X stock rallied nearly 4% on Wednesday as base metals prices gained ground and zinc prices hit a decade high. Zinc is a key component in steel smelting.

The driver for base metals prices has been a crackdown by Chinese regulators on the smelting industry amid the country’s push toward more environmentally friendly policies. As a result, steel production has fallen in the country, boosting global prices.

Overall, this is a positive development for X stock investors, and speculators have responded by diving heavily into call options. On Wednesday, volume jumped to 1.5 times the daily average at 110,000 contracts. Calls were the most popular option on the day, making up 70% of all Wednesday’s activity on X.

Looking out to September, it appears that optimism is in full swing for X stock. The September put/call OI ratio has plunged during the past month to a reading of 0.43, indicating that calls now outstrip puts by a factor of more than two-to-one. The most popular September call strike is $26, where more than 12,000 contracts currently reside. X is trading about 5.7% below this strike at last check.

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/2017/08/thursday-vital-data-apple-inc-aapl-target-corporation-tgt-united-states-steel-corporation-x/.

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