First Call September 15, 2020

  • S&P futures up 0.7%, near best levels, after US equities rallied on Monday on the back of better coronavirus vaccine headlines, a flurry of M&A activity. Asian markets mostly higher overnight with South Korea, China, and Taiwan among the better performers while Japan lagged. European markets are higher with the UK, Spain, and Italy among the standouts. Treasuries are mostly weaker. Dollar a bit better vs yen but lagging euro and sterling. Gold up 0.5%. WTI crude up 1.7%.
  • China August activity data surprised to the upside with industrial output accelerating the most in eight months and retail sales growth for the first time this year. FOMC meeting previews continued to note Fed unlikely to implement outcome-based guidance on Wednesday. Nothing incremental on the fiscal stimulus stalemate through press reports highlighted economists’ warnings about the threat to the US economic recovery. IEA cut its forecast for 2020 oil demand growth, noting easy gains have already been achieved. Holiday spending expected to eke out an increase in e-commerce strength while fitting with a K-shaped recovery scenario.
  • AAPL to unveil the latest watch and updated iPad today but 5G iPhone will be next month. C to resume job cuts. FDX announced a shipping rate increase for 2021. DELL reportedly will announce job cuts this week. LEN results and guidance much better than expected but orders disappointed and stock already a big ytd gainer on widely understood housing strength. NKLA to be examined by SEC following a recent short-seller report. IAC update highlighted August’s improvement in revenues. SMG raised FY20 (Sep) guidance on continued strength in consumer demand. CWH guided 2021 EBITDA above and announced the launch of a peer-to-peer RV rental marketplace. MDC said QTD orders up 75% y/y on continued preference for suburban living

market snapshot

key market sentiment

premarket movers

s&P and nasdaq futures charts

Overnight futures grinding higher now in 5th wave and could stall into some resistance

S&P futures had a secondary sell Countdown pending and now today we have day 12 of 13. Another 100 handles would be needed to qualify the 13 as the 13 needs to close over the 8th red bar close

Nasdaq futures now on day 7 of 13 with secondary Sequential

hedge fund telemetry institutional options flows

Single Name Flow

Bullish

APA7,729 Jan 15 – 20 call spreads tradeAppears bought to roll call down, $.70, ref. 11.51
APA4,838 Oct 2nd 14 calls tradeAppears bought to open, $11.89, ref. 11.89
UAL3,919 Sep 37 calls tradeAppears bought to open, $.90, more than 15,000 trade OTD, ref. 36.46
WFC3,000 Oct 2nd 25.5 calls tradeAppears bought, $.52, ref. 24.61
WFCBuyer 5,900 Jan 27.5 – 35 call spreadsUntied, paid $1.05, ref. 24.86
COF10,676 Sep 65 puts tradeAppears sold to open, $.12, ref. 73.41
JPM4,000 Sep 190 calls trade Appears bought to open, $.67, ref. 103.03
SNAP*Buyer 5,000 Sep 23.5 calls to Sell 12,500 Sep 24 calls to Buy 7,500 Sep 25th 23.5 callsAppears to roll ratio call spreads into outright calls, ref. 23.61
JDSeller 6,200 Oct 75 – 65 puts spreads to Buy 6,200 Oct 95 calls tied to stockCollects $2.85, possibly closing, ref. 75.20

Bearish

APASeller 190,000 Oct 23rd 11.5 puts tied to stockAppears to sell vol into Erns (10/28) via put write, slightly overhedged w stock making it slightly bearish, ref. 11.78
EOGSeller 39,000 Oct 23rd 39 puts tied to stockCollects $2.65 to open,slightly overhedged w stock making it slightly bearish ref. 39.01
SNAP*20,000 Oct 21 puts trade tied to stock Appears bought, $.51, possibly closing, ref. 23.62
BABA3,500 Oct 330 calls trade vs. 3,500 Oct 270 – 230 put spreads Appears to sell call to buy put spread, $8.00, possibly closing, ref. 275.31
MLHR4,250 Sep 25 calls trade vs. Sep 22.5 putsAppears to sell call to buy put, $.20, ref. 24.11
MRO3,906 Oct 30th 5 calls tradeAppears sold to open, $.28, ref. 4.39
PFE5,800 Nov 43 calls trade tied to stockAppears sold to open, $.46, ref. 37.01

Macro Flow

Bullish

XLF13,000 Dec 31st 28 – 31 call spreads tradeAppears bought to open, $.38, ref. 25.16
XOP5,000 Oct 51 – 53 call spreads tradeAppears bought to open, $.24, ref. 44.66
XOP7,000 Jan 60 – 70 call spreads tradeAppears bought to roll down, $.70, ref. 45.03
MXEF2,050 Nov 1010 puts trade vs. 2,050 Nov 1120 – 1160 call spreadsMSCI EM Index, appears to sell put to buy call spread to open, $2.30, ref. 1099.25 (Nov)
FXIBuyer 8,000 Sep 44 – 42 strangles to Sell 12,000 Oct 44 – 42 strangles tied to stockAppears to roll strangle out/add units, rouhgly delta neutral, short vol, ref. 42.84
EEM10,000 Dec 47 calls tradeAppears bought to open, $1.11, more than 20,000 trade OTD, ref. 44.62
SPY14,730 Sep 16th 345 calls tradeAppears bought to open, $.76, ref. 339.55

Bearish

FXIBuyer 48,000 Sep 42 – Oct 41 put spreads Paid $.32 to roll out, ref. 42.81
GDXJ5,200 Sep 25th 57 – 51 put spreads trade Appears bought to open, $.74, ref. 60.58
QQQ9,796 Sep – Sep 25th 265 put spreads tradeAppears bought to roll out, $1.89, ref. 276.18
XLI25,000 Sep 79 calls trade tied to stockAppears sold to close, $.67, ref. 78.42
XAUBuyer 5,000 Nov 137.5 putsPaid $4.65 and appears additive, ref. 154.25 (Nov)