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S&P 500 Sectors Play Musical Chairs: How To Win the Game With Options

The trading week started with investors worried about tariffs, but the 30-day delay of tariffs on imports from Canada and Mexico shook off those worries. The three broad stock market indexes — S&P 500 ($SPX), Nasdaq Composite ($COMPQ), and Dow Jones Industrial Average ($INDU) — closed higher. Then came the retaliation on US tariffs from China, but that didn’t do much damage to the market.

 Let’s face it; the stock market is headline-driven at the moment. Based on the news, investors may favor healthcare stocks one day and tech stocks the next. For individual investors, playing the sector musical chair game makes for a difficult investment environment. So, instead of getting caught up in catching the right sector at the right time, it’s best to focus on the big picture and look at the longer-term trends and patterns. One way to do this is to examine the performance of different sectors, industry groups, and indices through the Bullish Percent Index (BPI).

StockCharts Tip: If you haven’t done so, download the Essentials ChartPack (Charts & Tools tab > ChartPacks). The Market & Index Bullish Percent Indexes list has seven charts in the ChartList (see below).

FIGURE 1. DOWNLOADING CHARTPACKS. From the Charts & Tools tab, select ChartPacks to download the Essentials ChartPack.Image source: StockCharts.com. For educational purposes.

You could add more charts to the list. For example, I use a BPI ChartList each day to determine which sectors are bullish, overbought, or oversold. The image below displays some of the charts in my BPI ChartList.

FIGURE 2. VIEWING THE BULLISH PERCENT INDEX (BPI) CHARTLIST. The Summary view helps to see which sectors are bullish, bearish, overbought, or oversold.Image source: StockCharts.com. For educational purposes.

Viewing the ChartList in the Summary view helps to identify if the BPI is bullish, bearish, overbought, or oversold. You can also identify which sectors had the biggest changes for the day.

In the above image, the S&P Financial Sector BPI was the only one above 70, and Consumer Staples Sector BPI or $BPSTAP (not visible in the image; you’ll have to scroll to the next page) was the only one below 30.

Which Sectors Are Feeling the Love?

On Wednesday, the Predefined Alerts panel flashed that the Consumer Staples Sector BPI crossed above 30. This was a bull alert trigger warranting a closer look.

The chart below displays $BPSTAP with the Consumer Staples Select Sector SPDR ETF (XLP).

FIGURE 3. CONSUMER STAPLES BPI VS. CONSUMER STAPLES SELECT SPDR ETF (XLP). The BPI for the Consumer Staples Sector has crossed above 30, which is a bull alert trigger. The XLP chart still has to confirm a bullish move.Chart source: StockCharts.com. For educational purposes.

Although the $BPSTAP has crossed above 30, the XLP chart doesn’t display a bullish trend. Given that inflation is a big concern among US consumers, it’s worth monitoring the Consumer Staples sector for a chance to buy some stocks.

We posted an article on three stocks in the Consumer Staples sector, focused on Walmart, Inc. (WMT), Costco Wholesale Corp. (COST), and Sprouts Farmers Market (SFM). These stocks are still looking strong, but come with a high price tag. So, instead of purchasing the stock outright, I decided to explore options strategies for these stocks.

Options To the Rescue

After analyzing all three stocks using the Options tool (see image below), I considered a call vertical spread on COST and WMT. SFM wasn’t under consideration since it had a low-scoring strategy.

  • COST had an OptionsPlay score of 108. The call vertical trade would cost me $4,250 with an 182.35% potential return.
  • WMT had an OptionsPlay score of 106. The trade would cost me $508 with a 172.05% potential return.

WMT was the lower-risk play, so I placed the April 17 100/115 call vertical, a strategy displayed in the OptionsPlay Explorer tool, with my broker (see image below). I got filled at a price slightly higher than $508 due to price fluctuations and broker fees.

FIGURE 4. OPTIONSPLAY EXPLORER DISPLAYS THREE OPTIMAL TRADES FOR WMT. The April 17 100/115 call vertical was the most optimal trade with a good risk/reward tradeoff. Image source: OptionsPlay Add-on at StockCharts.com. For educational purposes.

Closing Position

There are 71 days till expiry. If WMT closes above $105.08 the trade will be profitable. The target price is $113.82.

There’s a 38.89% probability of the stock closing above $105.08 by expiration, all else equal. I’ll monitor the position and, if the price target is reached, I will close my position. Another point to keep in mind is that WMT reports earnings on February 20 before the market opens. Volatility will likely increase around that time and could significantly move the stock price in either direction.

Missed Amgen’s 5% Surge? Here’s What You Need to Know Now!

On Wednesday morning, the markets wavered, with cautious trading across the board, except for the Dow, which outpaced the S&P 500 and Nasdaq. Looking for stocks showing strength amid the uncertainty, I turned to the Market Movers tool on my Dashboard. What I found caught my attention.

FIGURE 1. MARKET MOVERS TOOL. AMGN, third from bottom, caught my attention, as the sector has been showing up on quite a few bullish StockCharts scans.Image source: StockCharts.com. For educational purposes.

The Health Care sector has been showing up on various scans over the past week, and Amgen, Inc. (AMGN) has been on my radar for quite some time due to several developments that I’ve been following.

To begin, I needed to get a wider perspective, so I switched to MarketCarpets and zoomed-in on the one-day performance of the Health Care sector.

FIGURE 2. MARKETCARPETS FOR THE HEALTHCARE SECTOR. Notice AMGN at the top of the list on the table to the right.Image source: StockCharts.com. For educational purposes.

Amgen’s stock surged over 5% (top of the table on the right) despite an FDA hold on its obesity drug trial, as strong Q4 earnings beat Wall Street’s expectations. On top of this, its sales for Repatha soared 45%, and its promising weight-loss drug MariTide is set for late-stage trials in mid-2025.

At this point, I wanted a clearer picture of how AMGN stacked up against its peers. I compared its performance to the biotech industry ($DJUSBT), the pharmaceutical sector ($DJUSPR), and the broader healthcare market (XLV) using PerfCharts. Here’s what I got:

FIGURE 3,. PERFCHARTS COMPARING THE HEALTH CARE SECTOR WITH BIOTECH AND PHARMA INDUSTRIES AND AMGEN. The one-year comparative lookback shows AMGN dragging significantly.Chart source: StockCharts.com. For educational purposes.

Over the past year, AMGN significantly underperformed both industries and the broader sector. So, does Wednesday’s rally indicate strong optimism on weak prospects, or does it present an undervalued opportunity with plenty of room to run?

Let’s take a longer-term view of AMGN’s price action and analyze its weekly chart.

FIGURE 4. WEEKLY CHART OF AMGN. Note how price respected the 100- and 200-period EMAs.Chart source: StockCharts.com. For educational purposes.

AMGN’s fluctuations over the last five years may have been volatile, but the underlying trend has been relatively steady and bullish. Notice how AMGN’s price respected the 100-period and 200-period exponential moving averages (EMAs). Also notice how this dynamic is captured by the Stochastic Oscillator, which reflects the upward bounces in its oversold range below the 20 level signaling renewed buying pressure. Based on the current reading, the indicator is barely reaching the 50-line, suggesting that if AMGN maintains its bullish momentum, it has plenty of room to run before it’s in overbought territory.

But things may look different on a daily scale, so let’s shift over to a daily chart.

FIGURE 5. DAILY CHART OF AMGN. Watch the support and resistance levels for entry and exit points.Chart source: StockCharts.com. For educational purposes.

Following a steep descent last November, AMGN found support the next month near $257.50, coinciding with its April 2024 low. That level was retested twice before the sharp rally that culminated in Wednesday’s price spike.

While the On Balance Volume (OBV) shows strong buying pressure fueling the surge, the Relative Strength Index (RSI) suggests the current swing is overbought. Considering the parabolic trajectory of the move, it’s likely that momentum will stall and price will eventually pull back in the next few sessions.

Key levels to watch:

Upside Resistance:

  • AMGN faces resistance at $310 and $327.50, which mark the lower and upper boundaries of its most recent consolidation range.

Downside Support:

  • If AMGN pulls back before breaking these resistance levels, the first key support to watch is $291, a level that held multiple times during May–June 2024, signaling strong buying interest.
  • The second level of support would be at $275, the November swing low.

If price falls below $275, the likelihood of a bullish reversal becomes uncertain, as this breakdown could signal weakening technical (and also fundamental) momentum.

At the Close

AMGN is another relatively expensive stock. If this is the case, then you might want to take a look at the OptionsPlay Strategy Center to find alternative strategies that better align with your capital resources and risk tolerance. AMGN’s recent rally, while impressive, raises important questions about its sustainability. You can use the tools mentioned above to find similar stocks if AMGN doesn’t interest you. If it does, however, the key levels discussed above should help guide you in your analysis.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Lynette Zang: A Battle Royale is Coming, Sound Money is Safety

‘This is a very dangerous time. I mean, it’s extremely dangerous, whether you’re in the market or you’re wondering what to do,’ she said on the sidelines of the Vancouver Resource Investment Conference.

‘You’ve got to get to safety. And safety is sound money — physical silver, physical gold. They have different functions, but for me this is a battle royale. I’m going to the sidelines, I’ve got my safety net.’

Zang also outlined how she’s approaching the other core tenets she’s focused on: food, water, energy, security, barterability, shelter and community.

Watch the interview above for more of her thoughts on those topics. You can also click here to view our Vancouver Resource Investment Conference playlist on YouTube.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

Stardust Power Shares Boosted by Sumitomo Lithium Offtake Deal

Stardust Power (NASDAQ:SDST) shares rose as high as US$1.20 on Monday (February 3) after the announcement of a non-binding offtake agreement with Sumitomo Corporation of Americas.

It outlines a potential long-term supply deal for lithium carbonate from Stardust’s refinery in Oklahoma, US.

According to a Form 8-K filing with the US Securities and Exchange Commission, the companies have signed a letter of intent for the supply of 20,000 metric tons of lithium carbonate annually from Stardust’s first production line.

There is the possibility to increase the amount to 25,000 metric tons.

Under the proposed terms, Sumitomo would commit to purchasing lithium carbonate at prices based on market rates published by Fastmarkets, or another mutually recognized price-reporting agency. The deal also includes provisions that would allow the parties to adjust pricing as necessary to accommodate specific customers.

The agreement is structured for an initial term of 10 years, with an option to extend for an additional five years.

Additionally, before Stardust’s lithium product reaches battery-grade qualification for end users, Sumitomo would purchase technical-grade lithium at agreed annual volumes or in amounts equivalent to Stardust’s production capacity.

These purchases would also be priced according to prevailing market rates.

The agreement further outlines joint marketing efforts to promote Stardust’s lithium carbonate. Sumitomo has committed to conducting minimum marketing activities, with specific obligations to be determined in the final contract.

The transaction remains non-binding, with both parties working toward a definitive offtake agreement. The agreement comes as Stardust advances construction of its US$1.2 billion lithium refinery at the Southside Industrial Park.

The company recently broke ground on the facility, which will be among the largest lithium-refining operations in the US.

Once operational, the refinery’s first production line will have the capacity to produce 25,000 metric tons of lithium carbonate per year, with a planned second line doubling capacity to 50,000 metric tons. Output is expected to support growing demand for lithium in battery manufacturing, particularly for electric vehicles and energy storage.

Stardust acquired the 66 acre site near the Port of Muskogee in December 2024. The company selected the location following an independent environmental assessment in 2023, which determined the site’s suitability for lithium refining.

The project has received support from local and state officials, who view it as a key part of the region’s economic development strategy.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

Global Trade War: U.S. Tariffs and China’s Retaliation

The global trade war is intensifying as the United States enforces tariffs on major trading partners. This move has prompted retaliatory measures from China, Canada, and Mexico, increasing economic uncertainty worldwide. The U.S. aims to correct trade imbalances and protect domestic industries, but the impact on global supply chains and markets remains significant.

Why the U.S. Imposed Tariffs

The U.S. administration introduced 25% tariffs on goods from Canada and Mexico, while Chinese imports face 10% levies. The primary reasons include:

  • Reducing trade deficits
  • Countering unfair trade practices
  • Addressing intellectual property concerns
  • Responding to illicit drug distribution

In response, Canada and Mexico secured a temporary 30-day tariff pause, agreeing to strengthen border security and immigration controls.

China’s Countermeasures

Unlike Canada and Mexico, China retaliated aggressively by imposing tariffs on U.S. exports, including:

  • 15% tariff on coal and liquefied natural gas LNG
  • 10% tariff on crude oil and heavy machinery
  • Restrictions on rare earth mineral exports

Additionally, China has placed export controls on critical minerals essential for high-tech products and listed certain U.S. companies as “unreliable entities,” restricting their operations within China. 

Market Reactions and Economic Impact

The trade war is affecting global markets, causing volatility in:

  • Stock indices
  • Currency exchange rates
  • Commodity prices

The Canadian dollar and Mexican peso have shown temporary gains, while Asian markets remain unstable due to China’s stance. Analysts warn of potential disruptions in supply chains, rising consumer prices, and lower investor confidence.

Conclusion

The intensifying global trade war is escalating as the U.S. imposes tariffs, prompting China, Canada, and Mexico to respond with retaliatory actions. Consequently, this situation highlights the fragile nature of international economic relations. As a result, nations must now carefully navigate trade policies and economic strategies. Moreover, with increasing uncertainty, the global community is closely watching developments unfold. In the meantime, analysts warn that these trade disputes could trigger major economic shifts. Ultimately, businesses and policymakers must prepare for potential disruptions in the financial landscape.

The post Global Trade War: U.S. Tariffs and China’s Retaliation appeared first on FinanceBrokerage.

Mattel says Barbies and Hot Wheels could soon get more expensive under Trump’s tariffs

Mattel could soon raise the prices of toys such as Barbie and Hot Wheels in response to new tariffs imposed by President Donald Trump, executives said Tuesday. 

The toy giant, which manufactures about 40% of its toys in China and less than 10% in Mexico, told analysts it will look to move around its supply chain to mitigate the effect of tariffs, but it is also considering price hikes.

“Certainly against the tariff, we have a range of mitigating actions,” said finance chief Anthony DiSilvestro on the company’s fiscal fourth-quarter earnings call. He said those actions include leveraging Mattel’s supply chains and “potential price increases.” 

“We do work closely with our retail partners to achieve the right balance and always keep consumers in mind when we consider pricing actions,” he added. 

The comments come after Trump imposed a 10% tariff on Chinese goods this week. He also paused planned 25% duties on imports from Mexico and Canada for 30 days.

Mattel Inc. Hot Wheels cars.Daniel Acker / Bloomberg via Getty Images file

Economists on both sides of the aisle have agreed that the levies will likely lead to price increases for consumers. There is no guarantee Trump will impose the tariffs on Mexico and Canada, as he has often used the threat of duties as a negotiating tactic to bend foreign governments to his will. 

Shortly after Trump announced the 25% tariff on goods from Canada and Mexico, both countries announced they would bolster security at their respective borders, leading Trump to suspend the duties. The two nations had already been enhancing border security before Trump’s threat.

China and the U.S. have yet to come to a similar agreement to avoid the tariffs. If the 10% duty remains in effect, it will have a significant effect on the toy industry, which sources about 80% of its goods from the region. 

While companies such as Mattel have said publicly that they plan to leverage their supply chains and work with suppliers to mitigate the effects of the tariffs, executives have admitted privately that they are loath to take on the cost themselves and reduce profits. If they are not able to pass on the entire cost of the tariffs to suppliers, some plan to have consumers pay the rest through price hikes.

Some companies with diversified supply chains such as Mattel, which operates its own and third-party factories in seven different countries, have more flexibility to move production and lean on suppliers to lessen the hit to profits. It also does about 40% of its business outside of North America, where tariffs are not being imposed in the same way they are in the U.S. 

By 2027, Mattel expects sourcing from Mexico and China to represent more than 25% of total global production, down from about 50% now. It does not currently source from Canada.

This post appeared first on NBC NEWS

Disney tops quarterly profit estimates but starts to lose Disney+ streaming subscribers

Disney posted fiscal first-quarter earnings Wednesday that beat on the top and bottom lines, but revealed the beginnings of expected streaming subscriber losses at Disney+.

The company’s streaming business reported another quarter of profitability despite a 1% decline in subscribers for Disney+, the company’s flagship service. While domestic subscriptions for the platform increased around 1%, international numbers declined around 2%. 

Disney warned during its fiscal fourth-quarter report in November that it expected a “modest decline” in subscriptions during the December period. Disney told investors Wednesday that it expects another “modest decline” in subscribers during the second quarter. 

Total paid Disney+ subscriptions stand at 124.6 million, compared to 125.3 million at the end of the company’s fiscal fourth quarter. Total Hulu subscriptions rose 3% during the period to 53.6 million.

The slowdown in streaming subscriber growth follows an increase in prices for its services last year. Disney+’s average monthly revenue per paid subscriber increased roughly 4% to $7.99 due to those price hikes, the company said.

Disney’s stock was up about 2% in premarket trading.

Here is what Disney reported for the period ended December 28 compared with what Wall Street expected, according to LSEG

Disney’s net income increased nearly 23% to $2.64 billion, or $1.40 per share, from $2.15 billion or $1.04 per share, during the same quarter last year. Adjusting for one-time items including restructuring charges and impairments related to intangible Hulu assets, Disney reported adjusted earnings of $1.76 per share. 

Revenue increased 4.8% to $24.69 billion compared to $23.55 billion in the year-earlier period.

The company saw revenue gains across the board for its entertainment, sports and experience segments. 

Its entertainment division saw a 9% jump in revenue, reaching $10.87 billion. Operating income for the unit, which includes its direct-to-consumer, linear and content sales businesses, increased 95% to $1.7 billion during the quarter thanks to higher content sales and licensing. Linear continued to drag on overall results. 

Still, CEO Bob Iger remained positive on Wednesday’s call with investors when it came to the linear TV business, echoing similar comments made in November’s earnings call.

“They are not a burden at all. They are actually an asset,” Iger said Wednesday, noting that Disney is programming and funding the networks so they can feed into streaming.

While he said he wouldn’t rule out the possibility of changes to the TV networks in the future, he said that wouldn’t be now.

“We actually feel good about the hand that we have and the manner in which we’re managing both the linear and streaming businesses across the board,” Iger said.

Disney’s box office success helped lift the company’s results during the quarter.

The debut of “Moana 2” over Thanksgiving weekend helped push the box office to new heights. The animated sequel was still going strong at the box office through the new year, topping $1 billion during the Martin Luther King Jr. Day weekend. The company noted Wednesday its content sales/licensing and other operating income got a boost from “Moana 2.”

Overall, Disney dominated the box office in 2024, with the help of other films like Marvel’s “Deadpool & Wolverine” and Pixar’s “Inside Out 2.”

The company said it expects double-digit growth in operating income for the entertainment segment in fiscal 2025, with an increase in direct-to-consumer operating income of around $875 million.

Over at its experiences business, which includes parks, cruises and resorts as well as consumer products, revenue rose 3% during the quarter to $9.42 billion. 

Domestic theme park revenue accounted for 68% of the division’s total, or $6.43 billion. While that revenue marked a 2% improvement over the same quarter last year, the combination of Hurricanes Milton and Helene coupled with declines in attendance and investments in Disney’s fleet of cruise ships weighed on domestic operating income. 

The experiences division posted a 5% decline in domestic theme park operating income for the quarter, at $1.98 billion. 

Disney expects its experience segment to see operating income growth of between 6% and 8% in fiscal 2025.

Theme parks in the U.S. have recently experienced a slowdown in foot traffic following the post-Covid surge in attendance.

Disney CFO Hugh Johnston said Wednesday on CNBC’s “Squawk Box” that the experiences segment performed better than expected for the fiscal quarter.

“In fact, the consumer is a bit stronger than we would have expected,” Johnston said Wednesday. “I think what we’re seeing is consumers are just very value focused, and you deliver value to them, they’re willing to pay the price for it.”

Disney’s parks recently turned a record revenue and profit, even as the company has raised prices for its destinations. The company is in the midst of a 10-year, $60 billion investment in the segment.

In sports, Disney’s ESPN reported revenue growth of 8% year over year, reaching $4.81 billion, and operating income that was up 15% from the prior-year period to $228 million. 

The company expects operating income for its overall sports segment, which houses ESPN as well as Star India, to grow 13% in fiscal 2025.

Disney said on Wednesday that its sports segment operating incoming for the fiscal second quarter would be “adversely impacted” by about $100 million related to the shifting of three College Football Playoff games from the first quarter into the second quarter as well as an additional NFL game during the period.

This fall Disney’s networks broadcasted the entirety of the Southeastern Conference college football schedule.

Disney’s broadcaster ABC averaged 5.8 million viewers for 46 regular season college football games, which was a 56% year-over-year increase, Disney executives noted in a commentary release on Wednesday. The recent college football season helped lift Disney’s advertising revenue this past season.

Meanwhile, Disney also said that guidance for unit operating income includes a roughly $50 million hit tied to its exit from the Venu sports joint venture. Disney and its joint venture partners, Warner Bros. Discovery and Fox, called off their efforts to move forward with Venu, which was supposed to be a streaming app that included all of the live sports from its parent companies.

The change in strategy came after legal headaches that halted the launch of Venu last fall.

The rise of skinny bundles — traditional pay TV distributors’ slimmed-down offerings focused on sports and news networks — were a contributing factor, too. Iger said on Wednesday’s call with investors that Venu “basically looked redundant to us,” next to skinny bundle offerings.

As a result of the Venu stoppage, Fox on Tuesday announced it would move forward with its own streaming service after years of staying largely on the sidelines of the direct-to-consumer streaming game. Fox executives also noted that skinny bundles would benefit its portfolio of networks.

Disney has been looking into various ways to grow its streaming options, from merging its apps into Disney+ to exploring different options for ESPN, such as Venu.

The company also plans to launch its own direct-to-consumer streaming app for ESPN this fall, which has been the priority, company executives said Wednesday.

“We’re obviously leaning into the development of what is now called ‘Flagship,’ which is essentially ESPN with multiple, mulitple elements to it,” Iger said Wednesday, noting sports betting and consumers’ ability to customize the platforms to their preferences.

Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.

This post appeared first on NBC NEWS