Events in the US Today (EDT):

• 7:50am - NASA to launch its Mars 2020 Perseverance Rover to Mars from Cape Canaveral
• 8:30am - GDP (QoQ-Q2) [3/3 Volatility]
  • (Economists expect a 34.7% decline)
  • GDP Price Index (QoQ-Q2) [2/3 Volatility]
  • Initial Jobless Claims [3/3 Volatility]
  • Real Consumer Spending (Q2) [1/3 Volatility]
• 9:00am - The House meets to debate a six-bill fiscal 2021 spending package for defense, commerce, justice, science, energy, financial services, labor, health and human services, education, transportation, housing and urban development
• 10:00am - The Senate convenes for session
• 2:45PM - POTUS tours the American Red Cross National Headquarters
  • American Red Cross, Washington, DC
• 3:00pm - POTUS participates in a roundtable on donating plasma
• The NBA starts playing in a “bubble” at Walt Disney World Resort in Orlando
• Maryland Gov. Larry Hogan ordered an expansion of a statewide mask order and announced a “pause” in reopening the state to the next planned phase
• Universal & AMC Theatres struck a deal to shorten the exclusivity window for major theatrical release films to 17 days, meaning they will stream to audiences faster
• Two-year Treasury yields are two basis points away from falling below the record set in May
• There are 2 days before the existing enhancements to unemployment benefits under the CARES Act are set to expire

Events in the World Today (EDT):

• 3:00am - Switzerland KOF Leading Indicators (Jul) [2/3 Volatility]
  • Spain CPI & HICP (YoY) [2/3 Volatility]
• 3:55am - Germany Unemployment Change (Jul) [3/3 Volatility]
• 4:00am - Germany GDP (QoQ-Q2) [3/3 Volatility]
  • Euro Zone ECB Economic Bulletin [2/3 Volatility]
• 5:00am - Euro Zone Unemployment Rate (Jun) [2/3 Volatility]
• 5:45am - Italy 10-Year BTP Auction [2/3 Volatility]
• 7:00am - Mexico GDP (QoQ) [2/3 Volatility]
• 8:00am - Germany CPI (MoM-Jul) [2/3 Volatility]
• 7:30pm - Japan Jobs/Applications Ratio (Jun) [2/3 Volatility]
• 7:50pm - Japan Industrial Production (MoM-Jun) [2/3 Volatility]
• 9:00pm - China Manufacturing PMI (Jul) [3/3 Volatility]
  • China Composite PMI (Jul) [2/3 Volatility]
  • China Non-Manuf. PMI (Jul) [2/3 Volatility]
• 9:30pm - Australia PPI (QoQ) [2/3 Volatility]
  • Australia Private Sector Credit (MoM-Jun) [2/3 Volatility]
• Germany, Europe's largest economy, GDP Plunged Into Record 10% Slump. The DAX index fell 2.3%
• Huawei overtakes Samsung to be No. 1 smartphone player in the world thanks to China as overseas sales drop

Earnings Before Open:

• UPS, MasterCard, AstraZeneca, P&G, KraftHeinz, ABInBev, Cliffs, Eli Lilly, Newmont, Comcast, Dunkin' Brands Group, Hilton Grand Vacations, Northrop Grumman, PG&E, Wyndham Destinations, Yum Brands

Earnings After Close:

• Amazon, Apple, Facebook, Ford, Alphabet, Gilead, MGM, Mercado Libre, EA, Vertex, Xilinx, 8x8, Expedia Group, GrubHub, United States Steel Inc.,

Earnings Friday Before Open:

• ExxonMobil, Abbvie, Pinterest, Caterpillar, Merck, L3Harris, Chevron, Under Armor, Dominion Energy, Charter Communications

Today’s Bearish Activity 

Multiple “big tech” names are trading lower on news that the U.S. Justice Department has launched an antitrust probe on technology giants:

• Alphabet Inc. – Class A (GOOGL - $6.46 to $1,141.59): Puts are outnumbering calls roughly 5:4 but the August 16th 1250.00 call is the most actively traded contract (volume is 550).
• Amazon.com Inc. (AMZN - $12.28 to $1,982.21): Calls are outnumbering puts roughly 3:2 with the July 26th 2000.00 call being the most actively traded contract (volume is 659).
• Apple Inc. (AAPL - $1.11 to $207.73): Calls are outnumbering puts roughly 5:3 with the July 26th 210.00 call being the most actively traded contract (volume is 20,022).
• Facebook Inc. (FB - $1.28 to $201.08): Calls are outnumbering puts roughly 3:2 with the July 26th 205.00 call being the most actively traded contract (volume is 9,426).

Several stocks are also moving lower on disappointing earnings:

• Boeing Co. (BA - $4.29 to $368.78): The airplane maker reported a Q2 loss of $5.82 per share, excluding non-recurring items ($0.84 beat) on revenue that fell 35.1% year-over-year to $15.75B (above the $15.05B expected). Note: Boeing suspended its full-year guidance last quarter and the company said that remains due to the 737 MAX issues. Calls are slightly outnumbering puts with the July 26th375.00 call topping the most actives list (volume is 4,861).
• Caterpillar Inc. (CAT - $5.51 to $132.59): The maker of construction and mining equipment reported Q2 earnings of $2.83 per share, excluding non-recurring items ($0.28 miss) on revenue that rose 3.0% year-over-year to $14.43B (below the $14.47B expected). The company reaffirmed its full-year 2019 EPS guidance of $11.75-12.75 but said that it now sees earnings coming in at the lower end of that range (vs. the $12.20 consensus estimate). Shares of CAT briefly traded below the 50-day SMA ($129.86) earlier in the session. Calls are slightly outnumbering puts but the July 26th 131.00 put is topping the most actives list (volume is 2,278).
• iRobot Corp. (IRBT - $17.35 to $72.28): The maker of consumer robots reported Q2 earnings of $0.25 per share ($0.07 beat) on revenue that increased 15.0% year-over-year to $260.17M (below the $267.96M analysts had expected). The company issued downside guidance as full-year 2019 EPS is now expected to come in a range of $2.40-3.15 on revenue of $1.20-1.25B (from prior respective views of $3.15-3.40 and $1.28-1.31B). Calls and puts are trading roughly even with the August 16th 75.00 put seeing the most action from traders (volume is 996).

New 52-week lows (106 new lows today): Bed Bath & Beyond Inc. (BBBY + $0.15 to $9.31), Inogen Inc. (INGN + $1.84 to $59.19), Nutanix Inc. (NTNX - $0.85 to $24.00), Systemax Inc. (SYX - $0.44 to $19.64)

Notable Put Activity

Some unusual put activity (~10:1 over calls) is being seen in Diodes Inc. (DIOD + $1.85 to $41.48) which is mostly due to three large blocks that simultaneously traded activity on the August 16th expiration:

• 40.00 put: a 2,000 contract block was bought for $1.70 when the bid/ask spread was $1.30 x $1.80 (open interest is 9)
• 35.00 put: a 1,500 contract block was bought for $0.50 when the bid/ask spread was $0.35 x $0.55 (open interest is 8,707)
• 30.00 put: a 3,500 block was sold for $0.05 (open interest is 3,123)

We know the blocks on the 40.00 put and 30.00 put are new positions and we can assume the overall intent of this three-legged position has a bearish-bias, but beyond that it’s difficult to say exactly what is being established here.

Volume Signals

ON Semiconductor Co. (ON + $1.22 to $22.22): Option volume is running at nearly 10x the daily average of 1,567 contracts which is primarily being driven by activity on the August 16th 23.00 call. Volume on this contract is 13,050 (vs. open interest of 268) which included a 3,850 block that was bought for $0.55 (suggesting bullish intent). ON is scheduled to report Q3 earnings on August 5th before the market open so this positioning captures the potential impact of that event.  

Keysight Tech Inc. (KEYS + $4.48 to $93.26): Option volume is running at roughly 18x the daily average of 351 contracts which is primarily being driven by activity on the September 20th 92.50 call. Volume on this contract is 2,165 (vs. open interest of 245) which mostly consisted of a 1,284 block that was bought for $5.30 when the bid/ask spread was $5.00 x $5.50 (suggesting bullish intent). Shares of KEYS are trading roughly 1% below the all-time high of $94.52 today.