Article published at 9:30 a.m. CT
JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Iranian conflict continues to weigh on oil prices
- Prices at the pump hit $4 per gallon
- Earnings again will dominate week’s trading
The markets are mixed in early trading as are oil prices after an Iranian diplomat said talks with the U.S. could be pursued in hopes of ending nine straight days of heightened conflict between the two.
Chipmakers also are following a pattern we’ve seen repeated in recent trading: Shares drop, sometimes deeply as investors rotate out, but then recoup some losses as other investors see buying opportunities. Keep tabs on the day to see if this is a dead cat bounce or a buy the dip.
In the early going WTI Crude Oil prices bounced up and down, underscoring the apprehension investors still hold over the Middle East conflict that is pulling back oil supplies. WTI crude is trading just right around $82 range per barrel. Prices at the pump, however, topped $4 a gallon, up from an average of $2.98 a gallon before the war with Iran began in March, according to AAA. Prices hit a four-year high in May at $4.56 per gallon.
The three major indices were bouncing after last week’s large selloff in large-cap stocks. The Nasdaq Composite added 0.52% and the S&P 500 Index climbed 0.26% higher while the Dow Jones Industrial Average was tracking lower by 0.20%.
A number of tech stocks were on the upswing, including Micron, up 4.7%, Western Digital higher by 4.5% and Advanced Micro Devices adding 4.5%. Intel scaled better than 4% and SK Hynix was up by roughly 5%.
Last week’s earnings-packed trading had the markets jumping around, though mostly down. Friday’s trading ended with the S&P 500 down 1% for a 1.5% giveback on the week. Nasdaq shares were hit harder, falling 1.4% on the session for a 2.9% pullback on the week. The Dow Jones Industrial Average ended a tad better, down 0.08% on the day and just 0.09% on the week.
This will be another heavy week of earnings reports with General Motors opening its books before the bell tomorrow and tech heavyweights Alphabet and Tesla doing so on Wednesday. We’ll also get the final numbers from IBM, whose stock tumbled after pre-releasing expectations last week. And on Thursday, we’ll see what’s going on with Intel.
Stocks on the move today include Domino’s Pizza, which delivered revenues that outpaced Wall Street’s expectations but fell just short of per-share profit estimates. The culprit: soft consumer spending pulled down restaurant demand. U.S. same-store sales inched up 0.1%, the slowest in five quarters. But the quarter was marked higher with expanded delivery and carryout growth that fueled revenues and helped increase shares nearly 7%.
AMC shares — once the face of meme trading — increased better than 17% in early trading. The uptick came after the theater giant reported record revenues and said the opening of The Odyssey spurred strong attendance across its circuit – some expanding show times and operating continuously -- over the weekend.
SpaceX shares were trading about 1% higher in the early going as it struggled to recover some of its lost ground since the initial public offering last month. The shares traded just over $1.22 each, dipping well below its $135 a share IPO.
Jersey Mike’s road show is in play as the sandwich chain preps for its initial public offering, which it has priced at $21 to $25 per share. Operating under the ticker JMKE, the company and its shareholders plan to offer roughly 43.5 million shares that could raise up to $1.09 billion and generate nearly $8 billion market capitalization.
Private equity firm Blackstone, which paid about $8 billion for a majority stake in Jersey Mike’s last year, will continue to control two-thirds of the company.
Happy trading!
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