S&P 500 in Holding Pattern Ahead of Alphabet and AMD Earnings Reports
S&P 500 in Holding Pattern Ahead of Alphabet and AMD Earnings Reports
Also, 10-year T-note, gold, crude oil and Japanese yen futures
- S&P 500 E-mini futures (/ES): -0.2%
- 10-year T-note futures (/ZN): -0.32%
- Gold futures (/GC): +0.48%
- Crude oil futures (/CL): +0.67%
- Japanese yen futures (/6J): -0.34%
We’re heading into the teeth of earnings season. U.S. equity markets are in a holding pattern today as traders await results from Alphabet and AMD after-hours. Bond markets remain pressured, although the September U.S. job openings and labor turnover survey (JOLTS) report showed fewer job openings than anticipated, underscoring the normalization—and no re-heating—of the labor market. Elsewhere, gold has hit a new all-time high as silver has tested its yearly highs, even as the U.S. dollar continues to extend its gains vs. the Euro and Japanese yen.
Symbol: Equities | Daily Change |
/ESZ4 | -0.2% |
/NQZ4 | -0.02% |
/RTYZ4 | -0.6% |
/YMZ4 | -0.41% |
It’s a big day for U.S. equity markets, with several high-profile earnings reports due out after the bell. Advanced Micro Devices (AMD), Alphabet (GOOGL), Snap (SNAP), Chipotle (CMG), Visa (V) and Reddit (RDDT) are set to report after the market close. McDonalds (MCD) fell in pre-market trading despite the fast-food chain reporting a beat on earnings per share and revenue. British Petroleum (BP) fell nearly 3% after the oil giant posted disappointing profit figures. S&P 500 futures (/ESZ4) fell about 0.16% ahead of the New York open.
Strategy: (44DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 5450 p Short 5500 p Short 6200 c Long 6250 c | 63% | +470 | -2030 |
Short Strangle | Short 5500 p Short 6200 c | 69% | +2600 | x |
Short Put Vertical | Long 5450 p Short 5500 p | 85% | +262.50 | -2237.50 |
Symbol: Bonds | Daily Change |
/ZTZ4 | -0.06% |
/ZFZ4 | -0.21% |
/ZNZ4 | -0.32% |
/ZBZ4 | -0.58% |
/UBZ4 | -0.7% |
The 30-year T-note futures (/ZBZ4) fell after the Treasury’s auction of two- and five-year notes saw weak demand, which pushed yields higher. The Treasury will announce its quarterly refunding later today for the November to January period. The Treasury will auction two-year floating rate notes (FRN) and seven-year notes today. Markets are also mulling a Trump presidency as his odds increase in the polls, which would be seen as more negative for bonds vs. Harris.
Strategy (59DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 109.5 p Short 110 p Short 111.5 c Long 112 c | 24% | +375 | -125 |
Short Strangle | Short 110 p Short 111.5 c | 55% | +2090 | x |
Short Put Vertical | Long 109.5 p Short 110 p | 68% | +187.50 | -312.50 |
Symbol: Metals | Daily Change |
/GCZ4 | +0.48% |
/SIZ4 | +1.34% |
/HGZ4 | +0.45% |
Silver prices (/SIZ4) advanced this morning despite higher yields and a stronger dollar. Traders are betting a strong economy will support precious metals as rate expectations call for more cuts from the Fed. Bulls will look to clear last week’s swing high, which marks the highest level traded in over 10 years. Friday’s jobs report could be key for taking out that level.
Strategy (58DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 34 p Short 34.25 p Short 36.75 c Long 37 c | 21% | +970 | -280 |
Short Strangle | Short 34.25 p Short 36.75 c | 56% | +14400 | x |
Short Put Vertical | Long 34 p Short 34.25 p | 57% | +600 | -650 |
Symbol: Energy | Daily Change |
/CLZ4 | +0.67% |
/HOZ4 | +0.25% |
/NGZ4 | -0.56% |
/RBZ4 | +0.26% |
Crude oil futures (/CLZ4) remain sharply lower on the week but traders stepped in to buy this morning after the United States announced plans to add more oil to the Strategic Petroleum Reserve (SPR). Earnings from oil giant BP showed weak refining margins across the globe are impacting earnings for oil producers. Today, traders will digest data from the American Petroleum Institute (API).
Strategy (48DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 65 p Short 65.5 p Short 70 c Long 70.5 c | 19% | +370 | -190 |
Short Strangle | Short 65.5 p Short 70 c | 49% | +4930 | x |
Short Put Vertical | Long 65 p Short 65.5 p | 57% | +200 | -300 |
Symbol: FX | Daily Change |
/6AZ4 | -0.35% |
/6BZ4 | +0.05% |
/6CZ4 | -0.06% |
/6EZ4 | -0.28% |
/6JZ4 | -0.34% |
Japanese yen futures (/6JZ4) gave up overnight gains to trade negative this morning. Shigeru Ishiba, Japan’s Prime Minister, said political stability would be restored after his party lost ground in the weekend’s election, but that didn’t convince traders in a meaningful way. Later this week, the Bank of Japan (BoJ) will announce an interest rate decision. Traders expect the BoJ to hold rates steady.
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.0064 p Short 0.00645 p Short 0.00665 c Long 0.0067 c | 36% | +400 | -225 |
Short Strangle | Short 0.00645 p Short 0.00665 c | 60% | +1750 | x |
Short Put Vertical | Long 0.0064 p Short 0.00645 p | 69% | +225 | -400 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts #Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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