U.S. stock futures are rebounding sharply this morning. Wall Street was set for a selloff after the U.S. imposed steel and aluminum tariffs on Canada, Mexico and the EU. However, the May jobs report is stealing the focus this morning.
According to the report, the U.S. economy added 223,000 jobs in May, up from 164,000 in April.
Heading into the June, Dow Jones Industrial Average futures are up 0.78%. S&P 500 futures have added 0.63% and Nasdaq-100 futures have risen 0.56%.
In options activity, volume remained elevated for the last day of May. Overall, about 18.2 million calls and 15.9 million puts changed hands on the session. On the CBOE, the single-session equity put/call volume ratio rebounded to 0.63. The 10-day moving average ticked higher for the first time in a week, arriving at 0.61.
Options traders returned Facebook, Inc. (NASDAQ:FB) near the top of the most actives listing yesterday following the company’s annual stockholder meeting. Elsewhere, Snap Inc (NYSE:SNAP) was inundated with calls in the wake of a bullish call from Citron Research. Finally, Deutsche Bank AG (USA) (NYSE:DB) put options were quite popular following a raft of bad news.
Let’s take a closer look:
Facebook Inc. (FB)
Facebook’s annual shareholder meeting was filled with vitriol. Shareholders declared that Facebook’s data handling bungles were equivalent to human rights violations and that the company was turning into a “corporate dictatorship.” There was even a plane flying over the event with a banner stating “YOU BROKE DEMOCRACY.”
Despite the spectacle, Facebook rejected all of its shareholder proposals and elected all eight of its director nominees. Wall Street took the news as positive and sent FB stock more than 2% higher yesterday as a result.
FB stock options traders were also bullish. Volume rose to more than 409,000 contracts, with calls claiming 57% of the day’s take. While below FB’s historic average for daily call volume percentage, it was still above recent activity and could mark a shift in sentiment.
Short-term sentiment, meanwhile, is rather mediocre. The June put/call open interest ratio rests at 0.77. This reading is fresh off a three-month high following yesterday’s call adds. In other words, there is still plenty of room for bullish sentiment to rise and lift FB stock along with it.
Snap Inc (SNAP)
While Facebook was circling the wagons, Snap was enjoying a major boost yesterday. Citron Research said that short selling on SNAP stock was overdone. It issued a $17 price target, representing a nearly 50% upside.
As of the most recent reporting period, some 17.5% of SNAP’s total float was sold short. However, Citron said this hate is overblown and that Snap is still more popular than Facebook and its other competitors with the teens — a fact I reported on about a year ago that still holds true today.
SNAP stock options traders chased the stock’s nearly 4% rally yesterday. Volume soared to more than 203,000 contracts, more than double Snap’s daily trading average. Calls gobbled up 73% of the day’s take. What’s more, the June put/call OI ratio arrives at 0.79, indicating plenty of room for additional call adds going forward before bullish case becomes too oversaturated.
Deutsche Bank Aktiengesellschaft (DB)
It might be easier to ask what didn’t go wrong for Deutsche Bank yesterday. The Wall Street Journal reported that the Federal Reserve declared Deutsche Bank’s U.S. operations in “troubled condition” a year ago. Australian regulators are filing criminal cartel charges against the banking giant and S&P Global Ratings cut the long-term issuer credit rating on DB to “BBB+” from “A-”on the bank.
When the smoke clearly, DB stock was smacked for a loss of more than 4.2%. DB stock options traders were, naturally, bearish on the news. Volume came in at 140,000 contracts, or more than nine-times DB’s daily average. Puts made up 54% of the overall volume.
Surprisingly, short-term sentiment in the options pits remains considerably bullish. For instance, the June put/call OI ratio comes in at 0.62, with calls on the verge of doubling puts for the series. Peak call OI numbers more than 23,000 contracts at the overhead $14 strike — above which DB has not traded since late April.
As of this writing, Joseph Hargett was long on Snap Inc. stock.