To paraphrase Kevin Costner in Bull Durham, we’re dealing with a lot of stuff here. The U.S. economy did end up rebounding in the second quarter, with a 4 percent rate of growth that’s much better than anyone anticipated – and the first-quarter decline was revised to something less horrible, so investors worried about the economy are a bit less freaked out at this particular moment.
One of the market’s more well known short bets, Herbalife, reports earnings after the close on Monday. The company is most notable as the target of activist investor Bill Ackman, who has had plenty of choice words for the company and yet has not been able to make good on his short position just yet, despite his fervent belief it is defrauding investors and taking advantage of poor people.
One of the stocks in one of the recent go-go sectors, 3D Systems Inc, holds its analyst day on Tuesday, and it’s one of those names that’s been beaten down so much of late that it’s bound to have some kind of positive reaction to news. But like many other companies, implied volatility in the stock is pretty low right now – it’s hard to see much of anything happening during such a tranquil period when the S&P 500 adds a point or two here and there every day or so. It’s doubly difficult because stocks like this have had their big correction – in this case, falling nearly 50 percent from its all-time high reached early this year.
There’s a lot of stuff going on in the world right now, but sometimes it’s more fun to look at more provincial issues, like what promises to be the mother of all short squeezes Thursday in Green Mountain Coffee Roasters, the maker of Keurig machines which announced a big investment and partnership with Coca-Cola (y’know, the biggest beverage company in the world, which buys all the vanilla, uh, everywhere).
Okay, the year *really* ends today, as the next two weeks will feature a market holiday and some real thin liquidity. Options activity was brisk on Thursday as investors dumped positions ahead of today’s quadruple-witch expiration of index futures and options.