Exclusive: TD Ameritrade Strategist Looking Past Upcoming Earnings Toward Macro Data
Speaking exclusively to Benzinga, TD Ameritrade Chief Strategist JJ Kinahan said that both Krispy Kreme Doughnuts (NYSE: KKD) and Men's Wearhouse Inc (NYSE: MW) were expecting decent-sized moves following tonight's earnings reports, according to option pricing.
Looking at volatility, Krispy Kreme is expecting a 7.5 percent move, while Men's Wearhouse is looking at a 6.2 percent move.
Since the prior earnings reports, Krispy Kreme has lost 9 percent, while Men's Wearhouse has gained 17 percent, according to Kinahan.
Focus: Krispy Kreme
Specific to Krispy Kreme, Kinahan noted that it was interesting that the stock is trading with a 1 percent implied volatility, while the options are trading at 63 percent implied vol.
Focus: Men's Wearhouse
On Men's Wearhouse, Kinahan reminded that there was activity in June – $60 calls a few weeks ago. Depending on how the market reacts, those calls could be close to in-the-money following the report.
Instead of these stocks, Kinahan said that he is more interested in the retail sales report on Friday to inject some interest (and volatility) into the market. Recently, the SPDR S&P 500 ETF Trust (NYSE: SPY) has traded between $208 and $214, leaving prices relatively contained.
Kinahan said that crude oil is also in a range, with WTI trading between $56 and $61. Today's gains, Kinahan said, are attributable to a weaker U.S. dollar.
According to Kinahan, euro price swings are driving commodity prices, though he noted that the "market is not taking Greece very seriously," judging by recent price action.
Latest Ratings for MW
|Dec 2015||Stifel Nicolaus||Downgrades||Buy||Hold|
|Nov 2015||Tigress Financial||Upgrades||Sell||Underperform|
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