Earnings in aisle 5

  • Stocks drift lower to start busy week
  • Inflation takes center stage with CPI and PPI
  • HELE releases earnings, shoots past Street target

Will the market hold its breath until the Consumer Price Index (CPI) comes out?

It looked that way for most of Monday. The S&P 500 (SPX) rallied early but soon drifted lower, spending much of the day near breakeven. The market climbed in the final minutes of trading to end the day modestly higher. But the Russell 2000 (RUT) small cap index was a standout, gaining 1.6% for the day.

Bond prices mostly rose as yields retreated from Friday’s highs. The 10-year T-note yield closed 88 basis points below Friday’s eight-month intraday high of 4.094%.

LiveAction hits: After releasing earnings on Monday, consumer goods stock Helen of Troy (HELE) quickly rallied nearly 20% intraday on larger-than-average call volume:

Chart 1: LiveAction scan: Unusual call options volume, 7/10/23. Unusual options activity. Calls active after earnings.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

The bulk of the options trading took place in contracts expiring this Friday, mostly in out-of-the-money strikes where yesterday’s volume was less than the existing open interest. It was the stock’s second-largest earnings-day rally in at least nine years. At yesterday’s high of $134.96, HELE was roughly 14% above the average Street 12-month target price of $118.50.1

Market Mover Update: Despite rallying more than 2% intraday on Monday, BridgeBio Pharmaceuticals (BBIO) extended its consolidation on Monday—although it also appeared on the LiveAction scan for 52-week high implied volatility (see “Traders make their moves”).

From Morgan Stanley: Will Treasury Secretary Janet Yellen’s China visit help thaw US–China economic relations? “Investing in New Geographies” discusses how this scenario may play out, and what it could mean for investors.2

Today’s numbers include (all times ET): NFIB Small Business Optimism Index (6 a.m.).

Today’s earnings include: AngioDynamics (ANGO), MillerKnoll (MLKN).


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1 TipRanks. Helen Of Troy (HELE) Stock Forecast & Price Target. 7/10/23.
2 MorganStanley.com. Investing in New Geographies. 7/5/23.

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