The charts of today’s action tell the story of a ho-hum Monday. The Dow pulled back ever so slightly, down 24 points. The NASDAQ squeezed out a slight gain, up just 5 points and the S&P 500 dropped just a couple of points to close at 1388. All in all, a win for the majors following last week’s gains.
The real news in earnings season happens after-hours. And after-hours today, Netflix (NFLX) dropped almost 15% despite the largest subscriber gains in the online DVD rental service’s history. Indeed, earnings were up 36%. So, why the drop? The dreaded forward-looking guidance comments; a projected slowdown going forward hurt the stock in after-hours trading.
Texas Instruments also dropped after-hours to the $30 region despite its quarterly profit also rising. It was groudhog earnings day as Texas forecast results below Wall Street esimates, attributing hesitancy among its customer base in addition to reduced demand for high-end cell phones.
Chief Financial Officer Kevin March said "We’re just responding to our customers’ conservatism. They’re managing their inventory very tight"
Tuesday brings a plethora of earnings announcements:
AK Steel (AKS), Ameriprise Financial (AMP), AT&T (T), Broadcom (BRCM), C.H. Robinson Worldwide (CHRW), Chicago Mercantile Exchange (CME), Coach (COH), Dupont (DD), Jacob’s Engineering Group (JEC), JetBlu (JBLU), Kimberly Clark (KMB), Lockheed Martin (LMT), McDonald’s (MCD), Norfolk Southern (NSC), OptionsXpress (OXPS), Paccar (PCAR), Peabody Energy (BTU), UnitedHealth Group (UNH), VF Corp (VFC), VMware (VMW), Yahoo (YHOO), Yum! Brands (YUM).
Perhaps the most interesting of all will be Yahoo as they look to squeeze every available dollar into this quarter’s earnings report to make the company appear as if its firing on all cyclinders and in no need of any assistance from Microsoft.
Another one to keep an eye on is OptionsXpress. If OptionsXpress doesn’t perform despite their attractive metrics, buyback, dividend, high cash and zero debt, then it may be time to simply move on but ever-hopeful that fundamentals will win in the end, we will be sticking with our bullish position. However, hedging is a must at earnings and by now you know the drill of balancing bullish positions with bearish hedging, especially at earnings!
We’re sitting pretty so far with the FXI too. Having closed one position profitably recently in the FXI, we went back to the well a second time, and let’s hope with similar success. The early April rise pushed the upper Bollinger Band higher, now sitting at $153.61 and that $150-$153 region has proven tough resistance of late, so we’ll be monitoring that region very carefully this month. But we’re well covered whether it breaks through, hovers around the $150 region or even pulls back….the beauty of options!
FCX was another recent winner – in and out in just a few days on the most recent pop up and the chart still looks fabulous. We had considered NEM this week for a trade but last Friday’s action was disappointing and today the stock dropped 2.57%, validating our skepticism!
Later in the week, a huge number of companies will be reporting also. So, keep those puts close at hand during earnings, they can be lifesavers!
Wednesday earnings: Aflac (AFL), Allegheny Technologies (ATI), Amazon (AMZN), Ambac Financial (ABK), Anheuser-Busch (BUD), Apple (AAPL), Becton Dickinson (BDX), Biogen Idec (BIIB), Chipotle Mexican Grill (CMG), Citrix Systems (CTXS), EMC Corp (EMC), Freeport McMoRan (FCX), General Dynamics (GD), GlaxoSmithKline (GSK), Moody’s (MCO), Nutrisystem (NTRI), Philip Morris International (PM), Pulte Homes (PHM), Qualcomm (QCOM), Schering Plough (SGP), Terex (TEX), Boeing (BA), Allstate (ALL), United Parcel Service (UPS), WellPoint (WCG), Xilinx (XLNX), XTO Energy (XTO)
Thursday earnings: 3M (MMM), Aetna (AET), Altria (MO), American Express (AXP), Amgen (AMGN), AutoNation (AN), Baidu (BIDU), Black & Decker (BDK), Bristol-Myers (BMY), Bunge (BG), ConocoPhillips (COP), Deckers Outdoor (DECK), Fortune Brands (FO), Goodrich Corp (GR), Juniper Networks (JNPR), KLA-Tencor (KLAC), L-3 Communications (LLL), McAfee (MFE), MEMC Electronic Materials (WFR), Microsoft (MSFT), Motorola (MOT), Northrop Grumman (NOC), Occidental Petroleum (OXY), PepsiCo (PEP), Potash (POT), Raytheon (RTN), Safeway (SWY), Starwood Hotels & Resorts (HOT), Suncor Energy (SU), Taser (TASR), Cheesecake Factory (CAKE), Dow Chemical (DOW), Hershey Corp (HSY), Stanley Works (SWK), Union Pacific (UNP), Whirlpool (WHR), YRC Worldwide (YRCW)
Have a fantastic week!
