This past week ended with the stock market at peak euphoria on Friday — we had a breakthrough after Pfizer announced a super-effective COVID-19 treatment. In even better news, PFE was my bullish free trade I gave to my readers at the beginning of last week — you’re welcome!
This news is a massive game-changer, though, for the trajectory of the economy and life in general post COVID-19… And it’s given me a good idea of the stocks to watch the week of Nov. 8.
The jobs numbers also came out Friday… Nonfarm payrolls increased by 531,000 versus the 450,000 expected — the biggest number since July — and the unemployment rate shrank to 4.6%.
There were also 604,000 of the expected 420,000 private payrolls added! This is great news for the economy.
But we have some major economic numbers coming in this week that could change that…
Stocks to Watch the Week of Nov. 8, and Data That Matters
The Consumer Price Index data for October comes out on Wednesday, Nov. 10. The month-over-month increase in inflation is expected to be 0.4%. The year-over-year increase is expected to be 5.9%.
This is a HUUUGE number for inflationistas. You can’t see a 0.5% rise in CPI month after month and still say it’s transitory.
A number like 0.6% month over month, or 6% year over year, would shake the market to its core…
Heed my warning: Pay close attention to the market Wednesday morning.
But before that, we still have some earnings we need to pay attention to as well!
One of the O.G. meme stocks, AMC Entertainment Holdings Inc. (NYSE: AMC), is still clearly a favorite among traders, and earnings come out on Monday after the market closes.
The world is beginning to heal and that means going back to the movies. However, we don’t know how much of this news was priced in at $30 a share, and now the stock is above $40!
This looks like a stock struggling to find a new catalyst, though, the short interest remains high at 18%…
The bottom line is that the stock is up 1,867% this year, but a big earnings miss could see a double-digit sell-off. A stronger recovery in earnings could lead to profit-taking, or another leg higher.
Two of the three most-likely scenarios say “sell…”
So if you want to be safe, I’d consider a straddle — buying calls and a put with the same expiration month — anticipating a big move up or down. I’d also skew bearish and buy more out-of-money puts…
Wynn Resorts Limited (Nasdaq: WYNN) also reports earnings this week on Tuesday after the close. Wynn Resorts is a stock that has lagged, as it’s overly dependent on Macau revenues — down 65% — and it’s right in the crosshairs of the Chinese Communist Party’s regulations and levies against casino companies.
The stock should face some solid resistance at $100. If it makes a clean breach above that, then it would have good momentum to form a trade to the long side.
This one is worth waiting to see the earnings report before acting, as the initial move should have more momentum.
Let me know if you have any questions about the stocks to watch the week of Nov. 8.
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