Futures on the Dow Jones Industrial Average have jumped more than 100 points heading into the open, as Wall Street cheers another round of positive corporate earnings. U.S. stock futures are broadly higher overall, with better-than-expected results from Pfizer Inc. (NYSE:PFE) helping to lift sentiment ahead of a key report after the close from Apple Inc. (NASDAQ:AAPL).
What’s more, a flood of economic data is on tap today, including the June PCE deflator reading — a key inflation gauge watched by the Federal Reserve — June personal income and consumer spending, as well as the July Markit manufacturing PMI and the July ISM manufacturing reading.
Against this backdrop, futures on the Dow have added 0.5%, Nasdaq-100 futures are up 0.38% and S&P 500 futures have added 0.31%.
On the options front, volume was anemic on Monday, as only about 12.3 million calls and 11.7 million puts changed hands on the last day of July. Meanwhile, the CBOE single-session equity put/call volume ratio slipped to 0.62, while the 10-day moving average held its ground at 0.62.
Diving into Monday’s options activity, Apple saw heavy call volume yesterday, and should continue to see the same in today’s trading ahead of tonight’s closely watched second-quarter earnings report. Meanwhile, Advanced Micro Devices, Inc. (NASDAQ:AMD) received a considerably bullish note from Wells Fargo, and Snap Inc (NYSE:SNAP) was delisted from the S&P 500 Index.
Apple Inc. (AAPL)
Apple will step into the earnings confessional after the close this afternoon, and the company is running out of momentum. The iPhone is all Apple really has left in terms of bottom line growth, and the company really needs to settle delay and production rumors on the devices this evening — or face a brewing investor backlash. Josh Enomoto recently summed up Apple’s current situation with one succinct phrase: “Apple is running out of ideas, and the markets are taking note.”
By the numbers, Wall Street is looking for a profit of $1.57 per share on revenue of $44.89 billion. Meanwhile, EarningsWhispers.com indicates a whisper number of $1.61 per share. But, barring a major blowout above the consensus, all eyes will be focused on the iPhone, and not the bottom line … and that’s a growing problem for Apple.
Even options traders are taking note. Volume came in at a healthy 718,000 contracts on Monday, but calls only made up 60% of the day’s take — noticeably below the stock’s average in the 62%-63% range, and well below the typically bullish call activity Apple usually sees ahead of earnings.
In fact, the Aug 4 put/call open interest ratio rests at an elevated reading of 0.95, with puts and calls in near parity. This heavy attention to pre-earnings puts for Apple is highly unusual, and could be a sign that options traders are looking for a sell off following the event.