Stock earnings yesterday, insights you don’t see on the price charts, and an Amazon slam dunk
Hi investors and traders at investingLive.com, here is a beginner friendly snapshot of stock earnings yesterday. See which companies moved more or less than expected, why priced in means size not direction, and how to read the reactions with confidence. And if you're a pro, you're still likely to appreciate the analysis we've cooked up for you. Let's dive in...
Yesterday’s Earnings at a Glance
Sixteen S&P 500 companies reported results. Half rose and half fell. On average the group barely moved. That tells us the market had already prepared for most of what came out. In other words many results were priced in.
Plain English: priced in is about how big the move might be. It does not say which way. The options market sets an expected move for up or for down.
Standouts. Actual Move Next to Expected Move
Putting the actual move right next to the expected move helps beginners see reality versus preparation.
Amazon AMZN: +13.2% vs about 5.9% expected
Apple AAPL: +2.3% vs about 3.3% expected
Cardinal Health CAH: +15.4% vs about 4.5% expected
Cigna CI: −17.4% vs about 5.2% expected
Altria MO: −7.8% vs about 3.5% expected
So a few names made big moves. Many others were quiet. Two very large companies carried most of the positive headline.
Surprise Share. Quiet Tape or Live Wire
About four in ten companies moved more than their expected move. That is meaningful for the first trading window. Option prices usually include a safety cushion. Many options also cover more than a single session. Seeing that much exceed the mark right away is worth noting.
New investor tip: if a stock moves less than expected, option buyers may have paid for protection they did not end up needing. If a stock moves more than expected, that protection helps.
Concentration Watch. Why the Headline Looked Stronger Than the Average
Two mega caps did most of the lifting: Amazon, mainly, and some more minor support from Apple (will the Apple positive move hold today? Mmm... that would be interesting to watch, mayb not for long... See below).
This can make the headline look healthy even when the middle of the pack is mixed. It is common in modern indexes and it matters for portfolio decisions.
What you can do with this: do not chase the headline alone. Look for steady names that held up beneath the surface. Calm days can still hide a change in leadership.
Stock Earnings Yesterday. What New Investors Can Do Next
No broad breakout detected. Many companies matched what the market had already prepared for.
Watch for concentration. A strong headline can hide a flat average.
Remember that the expected move is direction neutral. It describes the size of the swing. Not the direction.
Options note. Smaller than expected moves often mean a comfort premium stayed with sellers. Larger than expected moves reward those who bought protection.
Earnings Basics for Beginners
Expected move: the options based estimate of how big a stock might swing around earnings. Up or down.
Priced in: means size was anticipated. It does not predict direction.
Yesterday’s One Line Earnings Snapshot
Stable overall. A few punchy movers carried the tape. With Amazon winning yesterday' earnings slam dunk competition (a wink to its cooperation with the NBA, and who doesn't like the NBA, right?)
