Options Market Focused on Jobs and Inflation Over Tariff Reveal

Ladies and gentlemen, buckle up! The options market is on fire, and it's not just because of the tariff announcements. No, no, no! The real action is happening with jobs and inflation data. The market is screaming, "SHOW ME THE NUMBERS!" and investors are listening. Let's dive in!

First things first, the S&P 500 is on track for a fifth-straight weekly loss. Why? Economic and policy uncertainty, disappointing earnings results, and a VIX that's still elevated. But here's the kicker: the Cboe Volatility Index (VIX) has retraced from its recent high around 25 to just below 20. That's right, folks! Investor anxiety has waned, but the market is still on edge. Triple witching expiration Friday is coming, and with $4.5 trillion of equity, index, and ETF options expiring, traders have a lot of positions to unwind or roll. So, stay alert!

Now, let's talk tariffs. The trade war is raging, and it's taking a toll on certain sectors. U.S. cotton purchases from China are down almost 80%, large engine cars are down 70%, and crude oil and natural gas purchases are down 40%. But here's the silver lining: soybean imports have risen 50%, and purchases of processors and chips have nearly doubled. It's a mixed bag, folks, but the options market is all about hedging your bets.



Let's talk about some specific stocks. Alnylam Pharmaceuticals Inc. (ALNY) is rallying after receiving FDA approval for a rare heart condition treatment. Calls are outnumbering puts 3:1, with the April 17th 290.00 call seeing the most action. This is a no-brainer buy, folks! Super Micro Computer Inc. (SMCI) is also moving higher after receiving an upgrade to neutral from underweight at JPMorgan. Calls are outnumbering puts 3:1, with the March 21st 40.00 call seeing the most action. This stock is on fire, and you need to own it!

But it's not all sunshine and rainbows. NIKE Inc. (NKE) is falling to levels not seen since the pandemic lows after cautioning that its fiscal year (FY) Q4 sales will decline and be at the low end of expectations. The disappointing guidance overshadowed stronger-than-expected FY Q3 results. Calls and puts are trading roughly in line with each other, but the March 21st 65.00 put is seeing the most action. Stay away from this stock, folks! It's a disaster waiting to happen.

FedEx Corp. (FDX) is also trading to the downside after reporting FY Q3 earnings-per-share of $4.51, south of the FactSet estimate of $4.56. FDX also reduced its full-year guidance due to weakness in the U.S. industrial economy. Calls are slightly outnumbering puts, with the March 21st 215.00 put seeing the most action. This stock is a bear trap, folks! Avoid it like the plague!

Now, let's talk about the Consumer Sentiment Index. It dropped to 57.9 in March 2025, the lowest level since November 2022. Consumers are frustrated with "frequent gyrations in economic policies" that make it difficult for them to plan for the future. This uncertainty is reflected in the options market, where there has been a notable increase in put activity. Investors are positioning themselves for potential downside risk, and you should too!

Inflation expectations are also soaring. Consumers' 12-month inflation expectations jumped to 4.9%, the highest level since November 2022. Over the next five years, consumers saw inflation running at 3.9%, the highest reading since February 1993. This increase in inflation expectations has created a challenge for Federal Reserve officials as they consider the next steps for monetary policy. The rise in inflation expectations has also contributed to increased volatility in the options market, as investors seek to hedge against potential price increases and economic uncertainty.

So, what's the bottom line? The options market is focused on jobs and inflation data, not tariff announcements. The market is screaming, "SHOW ME THE NUMBERS!" and investors are listening. Stay alert, stay informed, and stay ahead of the game. The market is a beast, and you need to tame it! Boo-yah!