Wednesday, October 14, 2020

😕 Stocks Slump as Earnings Season Kicks Off

Good morning. You've heard of the tail wagging the dog? In the case of the stock market..
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.
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Good morning. You've heard of the tail wagging the dog? In the case of the stock market, that can often be the case when options traders get active. That's because when options trades increase, banks need to hedge their contracts by actually buying shares.

That's what happened this week with Apple ahead of its latest iPhone launch. Options trading surged on the stock to a record high on Monday, which in turn led to a large amount of share buying to hedge the options trade. On Tuesday, shares fell as the option buying slowed down. So the next time a stock is making an unusual move… look to see what the option traders are up to.


Now here's the rest of the news:

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MARKETS
DOW 28,680.33 -0.55%
S&P 3,511.76 -0.64%
NASDAQ 11,863.90 -0.10%
*As of market close
Stocks turned lower yesterday, even as some big names reported expectation-beating earnings.
Oil rose 2 percent, closing at $40.24 per barrel.
Gold slid 1.6 percent dropping to $1,897 per ounce.
Cryptocurrencies mostly moved higher, with Bitcoin rising 3 percent to $11,395.

Today's TOP TIPS
DRAM Price Trends Make this Tech Laggard A Buy Now
Deutsche Bank sees improving trends for DRAM memory. That's one sector of the tech space that has been held back lately. The push for cloud services has reduced demand for mobile device memory chips, but now that cycle is turning.

While there's some small risk of inventory accumulation leading overall, the rising demand strength in the space, particularly with server demand, could lead to higher prices for DRAM related companies.

» FULL STORY

Insider Trading Report: Selecta Biosciences (SELB)
Timothy Springer, a director and major owner at Selecta Biosciences (SELB), recently bought 3,185,394 shares of the company. That trade came to over $5.4 million. The buy increased his total holdings to just over 16.05 million shares.

Another director made a 50,000 share buy at the start of October as well. There have been some insider sales in the past year, but they have been dwarfed by insider buys. Insiders own 17 percent of all shares.

» FULL STORY

Unusual Options Activity: Carnival Cruise Lines (CCL)
Over 1,950 contracts traded on the November 27th $25 calls on Carnival Cruise (CCL). The prior open interest on the trade was 137 contracts, showing a 14-fold rise in volume.

The trade, expiring in 44 days, has a strike price 75 percent higher than where shares currently trade around $14.25. With that big of a price difference, it's no surprise that the buyer of the contract only paid about $0.13, or just $13 per contract, on average.

» FULL STORY

IN OTHER NEWS
The IMF states that the global downturn will be less severe than estimated.
The European Union wins the right to place tariffs on $4 billion of U.S goods.
Citing global demand, South Korea pushes for AI semiconductor production.
Treasury yields fall as inflation expectations decline.
OPEC states that U.S. oil production is rising faster than expected.
Disney reorganizes its business to focus on streaming.
Blue Origin successfully launches and lands New Shepard in its first flight of 2020.
AMC Theaters warns it could run out of money by the end of the year.
In earnings, J.P. Morgan beats on earnings, but warns that more stimulus is needed
Delta Airlines posts a massive loss, but cuts its cash burn down by $9 million per day.

S&P 500 MOVERS
TOP
WAT 7.085%
ZM 5.544%
MELI 4.394%
EBAY 3.991%
ETSY 3.949%
BOTTOM
RCL 13.204%
NCLH 8.241%
CCL 7.758%
TCOM 6.808%
SLG 6.116%

Quote of the Day
As long as investors believe that markets will continue to benefit from policy support, asset valuations may stay elevated for some time. Nonetheless, and especially if the economic recovery is delayed, there is a risk of a sharp adjustment in asset prices or periodic bouts of volatility.
- Tobias Adrian, the IMF's director of the monetary and capital markets department, on why the stock market may suddenly decline should the prospect of further stimulus disappear.

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We're just getting word of this… an all new way to trade - before the bell rings on Wall Street - allowing traders to achieve up to 1,139% return…

You might be wondering, "how is it possible to trade before the markets open?!"

Roger Scott, the fund manager who once took his $20 million fund to over $740 million has teamed up with the legendary pre-market trader Tom Busby - self-made millionaire who looks at two numbers before the markets open…

And by using them they've been able to score as high as 93.2% accuracy on all their trades.

Click HERE to login to the "7AM Super Surges" broadcast now.


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