In the latest Options Income Weekly, I discuss last week’s results, recent market action, and what goes into the decision of whether to roll a put versus accepting shares.
Last week, the S&P 500 rose 0.4% to log its third straight week of gains. Yet, at Friday’s close, the index was still down 13% for the year.
A surprisingly strong July jobs report didn’t exactly paint a picture of a slowing economy. So, it has investors questioning whether the Federal Reserve will stop raising interest rates anytime soon.
Whether stocks will continue their recent ascent is anyone’s guess. So far, 87% of S&P 500 companies have reported results, according to FactSet. Three-quarters have beat estimates, which is only slightly below the five-year average of 77%.
While earnings have exceeded estimates by 3.4%, below the five-year average of 8.8%, stocks have delivered larger-than-average upside moves following positive earnings surprises.
However, we are seeing analysts cut earnings estimates at a faster-than-usual pace, which makes stocks more expensive. And of the 72 companies that have issued EPS guidance for the third quarter, 58% have issued negative guidance.
I don’t write any of this to scare you into thinking the sky is falling (i.e., we are headed for a definitive recession and prolonged bear market). Rather, I write it to warn against the dangers of becoming complacent in the current market environment.
It’s important to actively manage your positions, which includes deciding how to proceed if a stock moves against you.
To that end, I hope today’s video, in which I discuss my decision about whether to roll our Devon Energy (DVN) put or accept shares, helps you understand what goes into the decision-making process.
February 7th, 2023Is The Stock Market Cycle Pointing To A New Bull Market Already?Are we in another bear market rally or the start of something new? That’s what everyone wants to know, especially as we
February 6th, 2023Job Creation Shocks The MarketIf we’re heading into a recession, how were we met with better-than-expected job growth numbers last week? Unemployment dropped, despite the headlines of tech companies planning to lay off
February 3rd, 2023Job Cuts And Stock Buybacks Keys To Success In 2023 The thing I’ve learned from this earnings season is that a company can have consecutive quarterly drops in revenue and provide a lower
February 2nd, 2023Fed Raises Rates But Bulls Are Still In ControlOk, bulls. You win. I will start lifting my bearish stance on the market. Despite the final 10-minute market sell-off and a Dow that finished
February 1st, 2023What Past Fed Announcements Tell Us The Market Will Do TodayWatch out - this article is going to have some math.Here we are once again on Fed Announcement day. Most of the folks
January 31st, 2022The Hidden Profits Of 2023There is still one more trading day left in January, but if the adage “as the S&P 500 goes in January, so goes the year” holds true, the markets
January 30th, 2022 The Fed Goes Up Against Earnings This Week We are in peak earnings season with some heavy hitters like Pfizer (PFE), Snap (SNAP), Meta Platforms (META), Amazon (AMZN), Alphabet (GOOGL), and Apple
January 17th, 2022Smoother Sailing in 2023 Nothing has changed since the end of 2022, yet traders have already decided that this year won’t be as bad as the last. Bulls have been piling into stocks
January 12, 2023 The Rise Of Bing Over Google - That’s No Joke Before we talk about two tech giants getting ready to battle it out once again, let’s look at the overall market. The
January 9th, 2022 Why I Ignore Most Of The News It’s easy to get caught up in the financial headlines. I’ve certainly done it. Last week shows why I ignore most day-to-day stories. I know
267 Kentlands Blvd #225
Gaithersburg, MD 20878
P. (866) 257-3008
(Monday-Friday 9:00 AM-5:00 PM EST)
Publisher of actionable and proven strategies and tactics to help investors build wealth and reach seven-figure portfolios.
Get notified about new articles, special events, training, and much more