The Unlucky Investor's Guide to Options Trading guides readers through the world of options and teaches the crucial risk management techniques for sustainable investing.
S&P 500 Outlook: Strong Tesla Earnings Kick Off Event-Laden Week
Jul 27, 2021
Tesla posts strong second quarter, beating earnings and revenue estimates
S&P 500, Dow Jones, Nasdaq 100 little changed ahead of FOMC, tech earnings
Bitcoin climbs over 10%, breaks above $40,000 for the first time since June
Major US benchmarks were relatively flat on Monday ahead of a week packed with earnings, central bank decisions, and key economic data. Many large-cap technology names report this week, including the likes of Apple, Alphabet, eBay, Facebook, and Amazon. Market participants may remain tepid ahead of this week’s FOMC interest rate meeting as investors and traders look for clues regarding rate hikes and tapering. Despite modest gains in US equity benchmarks, the VIX briefly traded back above 18 on Monday, perhaps signaling choppy waters may be ahead given the amount of event-risk in the near term.
Tesla reported second quarter fiscal results after the bell on Monday, posting solid beats on earnings and revenues. 2Q revenues came in at $11.96 billion, against a consensus estimate of $11.36 billion. Earnings per share (EPS) for the quarter totaled $1.45, far higher than the estimate of $0.97. Following the release, Tesla’s stock traded marginally higher above $660. Tesla’s stock has cooled off after its impressive run in 2020, as higher rates saw reflationary trades outperform in the first half of 2021. The recent cooldown in US Treasury yields has seen the stock rebound from a May low of $546. The formation of a symmetrical triangle on the daily timeframe would indicate that an explosive move in either direction may happen soon, either in tandem with a move in broader markets or after a specific risk event such as this week’s earnings report.
Chart provided by TradingView
Despite the lure of high-profile earnings, market participants will be looking to Wednesday’s FOMC policy statement and press conference as the paramount risk event on the calendar. Following June’s hawkish surprise and dot-plot shift, Fed Chair Jerome Powell’s statement and choice of words when answering questions will be scrutinized at a forensic level. Further discussions of tapering, liftoff, and inflation will be the hot topics on Wednesday, with all three having the ability to considerably impact the path of financial markets. While Jerome Powell may continue to tread lightly as to not “upset” financial markets or cause a “taper tantrum,” questions will be asked about the state of monetary policy and whether or not $120 billion of asset purchases per month can still be justified.
Courtesy of the DailyFX Economic Calendar
Written by Brendan Fagan, Intern for DailyFX
To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com.
tastytrade is a trademark/servicemark owned by tastytrade.
tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”).
Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.
Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information on this site should be considered general information and not in any case as a recommendation or advice concerning investment decisions. The reader itself is responsible for the risks associated with an investment decision based on the information stated in this material in light of his or her specific circumstances. The information on this website is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading in derivatives and other financial instruments involves risk, please read the Risk Disclosure Statement for Futures and Options. tastytrade is an investor in Small Exchange, Inc.