The markets came back strong with the DOW 30, S&P 500, and NASDAQ ending +4.15%, +4.85%, and +5.38%, respectively.
SPY
QQQ
What happened this week?
This week, SPY retraced back into its upwards trending channel in yellow and may have potentially broke some resistance, denoted in blue.
QQQ hasn't broke its downward trendline in blue, but it also bounced back into its upwards trending channel, denoted in yellow. We might start to see a Santa Claus rally soon, as we are closing in into the holiday season.
The Federal Reserve stated that interest rates will pause for now. Once the Fed states that they will lower the interest rates, we could see a further potential market rally since we know that the stock markets thrive in low-interest environments. However, this might not happen until mid-next year because they would have to hold the rates for a while to see how inflation reacts. If inflation continues to drop, they'll have more incentive to lower interest rates.
Steve's Trades
AMZN
AMZN Cash Secured Put
Expiration Date: December 1, 2023
Step 1: Have $13,500 of cash as collateral
Step 2: Sell 1 $135 strike put option (delta 0.33) for $216
Credit/premium received: $216
AMZN had a huge recovery from its drop last week. With the overall markets going up, I'm pretty bullish on the stock right now in the short-term.
I'm also planning on buying some LEAPS after we see how the stock performs next week. I'll let you guys know on Discord if I get into this trade.
If you had shares called away from your covered calls or had cash-secured puts shrink in value by at least 50%, you can close those positions and restart the wheel with another cash secured put. As always, you can tweak these positions to whatever you feel comfortable with and fits your risk tolerance.
As a friendly reminder, I'm also getting a 5% APY by having my cash sit in my Fidelity account as I sell my cash-secured puts. Here's the link if you're interested in getting started!
Manage Your Cash Against Rising Costs | Compare Our Rate | Fidelity
Investing
SPY
I'm looking to buy more shares of SPY if it breaks and holds above $436.
QQQ
I'm also looking to buy more shares of QQQ if it breaks above the $373 level.
SCHD
If SCHD can break above $72, I'll buy some more shares. AMZN
MSFT
I'm buying some more shares of AMZN and MSFT next week. I'm very bullish on these two companies right now since they're making new short-term higher highs.
Earnings
Here are the earnings dates for the companies that we currently invest in:
Reported: GOOGL Oct 24, 2023 MSFT Oct 24, 2023 MA Oct 26, 2023
V Oct 26, 2023 AMZN Oct 26, 2023 AAPL Nov 1, 2023 AMD Nov 1, 2023
SBUX Nov 2, 2023
Upcoming:
DIS Nov 8, 2023
HD Nov 8, 2023
AAPL
Apple had a 2% drop in early trading on Friday despite reporting higher-than-expected earnings on Thursday. This is the fourth consecutive quarter of year-over-year revenue decline.
Record-breaking iPhone sales reached $43.8 billion, and for the first time, service revenues exceeded $22 billion. Despite these gains, Apple reported decreases in Mac, iPad, and Wearables sales compared to last year, with total annual revenue falling to $383.3 billion from $394.3 billion.
CFO Luca Maestri forecasted similar revenues to last year for the current quarter and anticipated significant deceleration in iPad and Wearables sales. This stands in contrast to analysts' higher revenue projections. Maestri also commented on the challenging market conditions for Mac sales but noted the influx of new Mac buyers.
Revenue: $89.5 billion versus $89.34 billion expected ($90.15 billion in Q4 2022)
iPhone revenue: $43.8 billion versus $43.73 billion expected ($42.63 billion in Q4 2022)
Services revenue: $22.3 billion versus $21.36 billion expected ($19.19 billion in Q4 2022)
Mac revenue: $7.6 billion versus $8.76 billion expected ($11.51 billion in Q4 2022)
iPad revenue: $6.4 billion versus $6.33 billion expected ($7.22 billion in Q4 2022)
Wearables revenue: $9.3 billion versus $9.41 billion expected ($9.65 billion in Q4 2022)
It doesn't seem like Apple has been innovating as much with their recent products. I recently got the new iPhone 15 and barely noticed any differences compared to my previous iPhone.
Of course, Apple is still generating large amounts of revenue due to their sticky ecosystem, but they will need to make sure to come out with new updates or products to continue to captivate their customer base.
AMD
In Q3 2023, AMD reported revenues of $5.8 billion slightly surpassing expectations. However, their Q4 revenue forecast of $6.1 billion fell short of the anticipated $6.4 billion. Despite this, AMD is optimistic, particularly with their new MI300 data center chip, which they expect to rapidly generate $1 billion in sales—a record for the company. AMD's gaming revenue declined by 8% year over year, and its embedded segment revenue also dropped by 5%.
Revenue: $5.8 billion vs. $5.7 billion expected
With a focus on AI and data centers, AMD plans to increase R&D and market investments to drive growth, aiming for revenue to outpace operating expense growth. The company's stock has risen about 50% year to date.
SBUX
Starbucks reported quarterly earnings of a 9.28% earnings surprise continuing a trend where the company has beaten EPS estimates three times in the last four quarters. The coffee giant also reported revenues of $9.37 billion for the quarter ending September 2023, an increase from the previous year's $8.41 billion.
Revenue: $9.37 billion vs. $9.29 billion expected
Overall, I'm still going to hold my shares and continue to sell calls against my initial positions to further lower my cost basis.
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Be patient everyone! It looks like Santa might be coming this year. 🙌🏻
-Steve and the Call to Leap Team
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