Market Overview

Can Amazon Shed Light On The U.S. Consumer?

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As a busy week of earnings season winds down, two energy giants chime in on the state of the sector and the biggest online retailer might shed light on the consumer.

Amazon.com, Inc. (NASDAQ: AMZN), the biggest online retailer, might give insight on consumer spending when it reports earnings after the close Thursday. Friday morning, ahead of the opening bell, Chevron Corporation (NYSE: CVX) and Exxon Mobile Corporation (XOM), might provide new information on one of the world’s most important industries.

Prime Results for AMZN?

So how was Prime Day? That’s the information analysts want to know when AMZN reports Q2 earnings. Many analysts say they think Prime Day, AMZN’s take on Black Friday, was a blockbuster for AMZN and Prime members. AMZN doesn’t break out the numbers, but has reported that the sales rang up some 60% higher than last year. That doesn’t include the results of people who signed up for Prime for the deep discounts. Can it help the bottom line?

At Thomson Reuters, analysts are looking for a per-share profit of $1.11 on top-line sales of $29.56 billion.

Short-term options traders have priced in a potential 6% share price move in either direction around the earnings release, according to the Market Maker Move™ indicator on the thinkorswim® platform by TD Ameritrade.

Volumes in options have been light on the put side. Activity on the call side was somewhat active in the 740-, 745- and 750-strikes. The {implied volatility} is at the 94th percentile. (Please remember past performance is no guarantee of future results.)

Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time.

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What Can XOM and CVX Reveal About Oil Patch?

Might the worst in the oil patch be over? Oil-service behemoths Schlumberger Limited (NYSE: SLB) and Halliburton Company (NYSE: HAL) indicated as much in recent reports. That might be partly because companies in the oil patch have broadly cut spending, which allows them now to think more strategically about future investments, according to some analysts.

More information is forthcoming when XOM and CVX turn in their reports ahead of the bell Friday. Is more consolidation in the wings for this industry?

XOM said last week that it will drop $2.5 billion to acquire InterOil Corporation (NYSE: IOC), the natural gas producer. What are the plans for that?

Analysts reporting to Thomson Reuters are forecasting another sharp decline in per-share profits to $0.64, a 36% drop from year-ago results. Total sales are expected to pull back 12% to $60.6 billion.

Short-term options traders have priced in a potential share-price move of 2% in either direction around the earnings release, according to the Market Maker Move.

Options volume activity looks to be more than double normal at the 90-strike line for puts while calls look lighter at the 95-strike line. The implied volatility is at the 34th percentile.

For CVX, analysts at Thomson Reuters are projecting a 64% decline in per-share profits to $0.32 while its revenues are forecast to retreat 36% to $25.8 billion.

Short-term options traders have priced in a potential share-price move of 2% in either direction around the earnings release, according to the Market Maker Move.

Put options have seen heavy volume at the 100- and 101-strike lines while call options volume, though thinner, has been active at the 104-strike line. The implied volatility is at the 34th percentile.

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