Tuesday’s Vital Data: Apple Inc. (AAPL), Alibaba Group Holding Ltd (BABA) and Valeant Pharmaceuticals Intl Inc (VRX)

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U.S. stock futures are trading lower this morning, as Wall Street eyes a rally in crude oil amid another influx of corporate earnings. At last check, crude was up slightly at $49.32 per barrel after Saudi Arabia said it would cut supplies to Asia by up to 10% in September. Meanwhile, oil watchers are keeping tabs on the ongoing OPEC meeting to see if the cartel will back measures to enforce production caps.

Tuesday’s Vital Data: Apple Inc. (AAPL), Alibaba Group Holding Ltd (BABA) and Valeant Pharmaceuticals Intl Inc (VRX)At last check, futures on the Dow Jones Industrial Average were down 0.08%, Nasdaq-100 futures were off by 0.23% and S&P 500 futures were lagging by 0.14%.

On the options front, volume was rather anemic on Monday, as only about 11.2 million calls and 10.1 million puts changed hands to start the week. Meanwhile, the CBOE single-session equity put/call volume ratio rebounded to 0.77, driving the 10-day moving average to another four-month high of 0.68.

Turning to Monday’s options activity, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook reportedly met with India’s Prime Minister recently to talk iPhone production and the company just bought India-based Eros Group’s entire content library of movies and music. Elsewhere, Alibaba Group Holding Ltd (NYSE:BABA) signed a deal with Marriott International Inc (NASDAQ:MAR) to book rooms for the travel company. Finally, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) released its second-quarter earnings this morning.

Tuesday’s Vital Options Data: Apple Inc. (AAPL), Alibaba Group Holding Ltd (BABA) and Valeant Pharmaceuticals Intl Inc (VRX)

Apple Inc. (AAPL)

During his recent visit to the U.S. to speak with business leaders, Indian Prime Minister Narendra Modi is reported to have spoken directly with Apple CEO Tim Cook about AAPL’s first assembled-in-India iPhone. Apple is currently attempting to open Apple stores in India, and is in talks with the government there on duty waivers.

Additionally, Apple just bought Eros Group’s entire library of music and movies for $1 billion. Eros’ streaming service, Eros Now, is often referred to as the Netflix, Inc. (NASDAQ:NFLX) of Bollywood.

Apple options traders, meanwhile, appeared to overlook the news, as volume was relatively light for AAPL stock. Roughly 824,000 contracts changed hands on AAPL, with calls nabbing about 66% of the day’s take. Despite Monday’s preference for calls, short-term AAPL traders are more heavily focused on puts. For instance, the August put/call open interest ratio currently rests at 0.93, with calls and puts in near parity.

AAPL options traders’ attention to puts may have a more technical focus, as AAPL stock is struggling with overhead resistance in the $160 region.

Alibaba Group Holding Ltd (BABA)

With earnings about a week away, Alibaba gave investors one more thing to think about yesterday. The company is partnering with Marriott to provide online hotel room booking for Chinese travelers. As a result, travelers can now use Alibaba’s Alipay service to reserve and pay for rooms and amenities. What’s more, Alibaba will eventually run Marriott’s websites and apps, according to Marriott’s global chief commercial officer, Stephanie Linnartz.

While this is a big deal for Alibaba, as it gives them yet another path into the U.S. market, options traders are more focused on next week’s quarterly report. Volume for BABA stock topped 358,000 contracts, with calls making up 71% of the day’s take. Traders are clearly bullish on BABA ahead of the event, with the August put/call OI ratio falling to 0.51, with calls nearly doubling puts among options most affected by Alibaba’s report.

A closer look reveals that August implieds are pricing in a potential post-earnings move of about 6.6% for BABA stock. This places the upper bound at $169.59 and the lower bound at $148.41.

Valeant Pharmaceuticals Intl Inc (VRX)

Shares of Valeant Pharmaceuticals have been quite volatile this morning. The company posted a loss of 11 cents per share, up from a loss of 88 cents per share last year. Analysts were expecting adjusted earnings of 94 cents per share. Revenue came in at $2.233 million, just topping expectations for $2.228 million. Valeant also cut its 2017 revenue guidance to $8.7 to $8.9 billion from $8.9 to $9.1 billion.

VRX stock initially popped more than 5% on the report, but the lowered guidance has quelled enthusiasm this morning, and VRX stock was up roughly 1% at last check.

Options traders were looking for a much bigger move ahead of the event. Volume on VRX topped 264,000 contracts, with calls taking 54% of the day’s activity. Peak call OI for the Aug 11 series totals nearly 12,000 contracts at the overhead $16 strike, but VRX may be hard pressed to breach that level before the end of the week given the poor guidance.

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/tuesday-vital-data-apple-inc-aapl-alibaba-group-holding-ltd-baba-valeant-pharmaceuticals-intl-inc-vrx-stock/.

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