Earnings season is here, and if you’ve been following along, you know this is when things can get extra interesting in the market.
We’re kicking off with some heavy hitters this week — PepsiCo (PEP) on Tuesday, Delta (DAL) on Thursday, and the financials rolling in by Friday.
JPMorgan (JPM), Wells Fargo (WFC), BlackRock (BLK), and Bank of New York (BK) are all on deck before the open, and we’re going to see how they navigate through the current environment.
Now, if you’ve been paying attention to the bigger picture, you know this market is sitting in a weird space — we’re not breaking highs or lows. The Fed is being cautious, inflation data is being watched like a hawk, and non-farm payrolls just threw a wrench into any easy predictions.
So, with earnings season kicking off, what are we expecting?
The market may not be positioned for massive moves yet, but I wouldn’t be surprised if we see some volatility begin creeping in. In fact, the VIX is up over 12% today…
These earnings reports could be the first real catalysts we’ve had in a while. The financials, in particular, are a good barometer of how this market could shake out in the near term. I’m keeping an eye on how JPMorgan and Wells Fargo report — the health of these institutions is a solid reflection of broader market sentiment.
But it’s not just the financials…
Delta and Domino’s (DPZ) are also reporting, and I’m particularly interested in Delta. We’ve seen a lot of travel this year, but the question is whether the company will beat expectations, especially considering rising costs and labor issues in the airline industry.
My approach, as always, is to look for potential gaps in market expectations.
A lot of times, options pricing reflects the full expected move, which doesn’t leave much room for surprise profits — but I’ll be looking for those opportunities where we can squeeze out some premium.
Credit spreads and straddles will be on my radar, especially for companies with solid volatility like Delta and Domino’s.
Overall, I’m expecting a few surprises this earnings season, and I’ll be positioning myself for whatever comes our way. Stay tuned for live trading updates and breakdowns!
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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