Hello!
Headlines
- FOMC Meeting at 2pm, followed by Powell Presser at 2:30 (eastern)
- Markets pricing nearly no chance of a rate hike and about 35% chance of a hike in November
- Interest rate projections, dot plots and more will be a feature of what is expected to be a fairly uneventful
- UK CPI comes in cooler than expected, now less than 50% chance of rate hike tomorrow (was more than 50% pre-CPI)
- Fedex, KB Home report after the close.
Expected Moves into Friday:
- SPY: 1%
- QQQ: 1.2%
- IWM: 1.2%
SPY 0DTE vol is about 19 into the FOMC meeting, then resets back to about 12 next week, showing that although today is expected to be fairly uneventful, there are some option buyers expecting at least some market reaction to Powell.
Early Movers
- Nio Inc ADR (NIO) +2.81%
- Exscientia Ltd ADR (EXAI) +30.43%
- Ars Pharmaceuticals Inc (SPRY) -51.76%
- Pinterest Inc (PINS) +4.73%
- Lloyds Banking Group Plc ADR (LYG) +3.37%
- Sunnova Energy International (NOVA) -7.03%
Today’s Earnings
- FedEx Corporation (FDX) Expected Move: 4.40%
- KB Home (KBH) Expected Move: 5.27%
FedEx reports after the close. Options are pricing in about a 4.4% move. Recent earnings have seen the stock move -3%, +4%, +3% and -3%. So the expected move today is on the high side of the past 4 but the stock has been remarkably consistent in moves on earnings over the past year.
The stock has been calm into the print, with realized vol (how much the stock has actually moved) over the past 30 days just 16. That compares to option vol this week of 82, and 30-day IV of 32. In general, the stock has been less volatile in real life than options have been pricing. For reference, the realized vol over the past year is about 27.
Economic Calendar:
- At 02:00 PM (EST) Fed Interest Rate Decision Estimates: 5.5%, Prior: 5.5%
- At 02:00 PM (EST) Interest Rate Projection – Longer Impact: Medium
- At 02:00 PM (EST) Interest Rate Projection – Current Impact: Medium
- At 02:00 PM (EST) Interest Rate Projection – 3rd Yr Impact: Medium
- At 02:00 PM (EST) Interest Rate Projection – 2nd Yr Impact: Medium
- At 02:00 PM (EST) Interest Rate Projection – 1st Yr Impact: Medium
- At 02:30 PM (EST) Fed Press Conference Impact: High
Scanner:
- Overbought (RSI): BX (76), AIG (73), BRK/B (72), UUP (68), APLS (68)
- Oversold (RSI): CHWY (17), JBLU (19), M (22), AAL (23), JETS (24), SQ (25), CHPT (27)
- High IV: WKHS (+221%), BB (+123%), JBLU (+117%), PG (+113%)
- Unusual Options Volume: MGM (+818%), NIO (+800%), FDX (+673%), APLS (+619%), CVNA (+511%), AZN (+503%), GLW (+487%), AVGO (+466%), DASH (+435%), INTC (+435%), PFE (+412%), AMZN (+399%)
Full lists here: Options AI Free Tools.
Based upon publicly available information derived from option prices at the time of publishing. Intended for informational and educational purposes only and is not any form of recommendation of a particular security, strategy or to open a brokerage account. Options price data and past performance data should not be construed as being indicative of future results and do not guarantee future results or returns. Options involve risk, including exposing investors to potentially significant losses and are therefore not suitable for all investors. Option spreads involve additional risks that should be fully understood prior to investing. Securities trading is offered through Options AI Financial, LLC, member FINRA and SIPC.
