Now that we have most of the boring banks out of the way, earnings season can truly get going.
We have a lot of big names reporting this week that could see some big moves…
And not just for the stock itself.
As often happens with earnings, a stock can gap up or down and carry other names in the industry — cousin stocks — with it.
Like the saying goes, a rising tide lifts all boats… And ,well, Weekly Blitz Alerts members were able to play this to perfection last earnings season with beverage rivals PepsiCo Inc. (Nasdaq: PEP) and Coca-Cola Co. (NYSE: KO)!
I’m starting this season with my eye on two big tech earnings reports to set the tone…
All Eyes on FAANG Stocks, Big Tech Earnings as They Report
Netflix Inc. (Nasdaq: NFLX) and Tesla Inc. (Nasdaq: TSLA) are two of the most highly traded stocks on the exchange. And when these big tech earnings reports cause bigger moves, entire indexes and the ETFs that track them go along for the ride — whether they like it or not.
Up first is Netflix, reporting after the close Tuesday. The streaming service is riding high on the strength of its latest phenomenon, “Squid Game.”
In less than a month, it’s tallied over 111 million views — making the Korean survival drama the platform’s most-watched property by a 35% margin. The company estimates the show’s “impact value,” an internal metric, at around $900 million — and it only cost $21.4 million to produce.
This won’t impact Netflix’s bottom line for the past quarter, but if you want proof of its popularity, the show is pushing shares higher for apparel company VF Corp. (NYSE: VFC) as thousands race to get their hands on the characters’ clothes and shoes, all from a little proper product placement.
After Wednesday’s close comes Tesla, which is riding high on its latest production figures. The EV automaker produced 237,823 vehicles in the third quarter while delivering 241,300 units — both quarterly records.
The options chain is always lively (and pricey) for Tesla, and there hasn’t been a shortage of bullish short-term bets for CEO Elon Musk’s baby. On Monday, they kept buying the Oct. 22 expiration $900 strike calls, with about 40,000 contracts trading on the day.
Market makers are implying around a $50 move on the big tech name’s earnings report. I haven’t ruled out taking a lotto ticket bet on the options, but traders choosing to jump in need to use proper position sizing.
It’s important to remember that Tesla earnings will also likely move other EV and automotive names where the options chains aren’t as volatile — or expensive.
Check out the video below and let me show you what we were seeing in the markets this morning and what I expect to happen with these big tech earnings reports.
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