25.04 +0.15 (0.60%)
Before hours: 8:21AM EDT
|Bid||25.00 x 1400|
|Ask||24.99 x 3000|
|Day's range||24.44 - 25.15|
|52-week range||14.33 - 40.20|
|Beta (5Y monthly)||1.42|
|PE ratio (TTM)||23.53|
|Earnings date||29 Jul 2020|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||05 Mar 2020|
|1y target est||38.76|
(Bloomberg Opinion) -- You might think that 2020 was the year everyone gave up on petroleum-powered transport. Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden has expressed doubts about whether oil demand will ever return to pre-Covid levels. The world’s largest carmaker Volkswagen AG pledged that more than a fifth of its vehicles will be battery-driven by 2025.The International Energy Agency is pushing for 30% of vehicle sales to be electric by 2030 and expects gasoline demand to peak late this decade even under current policies. Major oil refineries are switching to manufacture raw materials for plastics and jet fuel on the expectation that consumption in their core market of powering road transportation is in decline.Seven & i Holdings Co. has a different view. It’s impossible to see the 7-Eleven owner’s $21 billion offer to buy Marathon Petroleum Corp.’s Speedway convenience stores as anything but a wager on the future of their main sales item: gasoline. Seven & i’s motivation is straightforward. Speedway has 3,900 sites concentrated in the Midwest and South of the U.S. That’s equivalent to about 40% of 7-Eleven’s existing North American network, and turns over about $1.5 billion of annual earnings before interest, taxes, depreciation and amortization. By using its convenience-store expertise, Seven & i(1) can upgrade Speedway’s shelves to a more attractive and profitable mix of own-brand products. Fuel, which accounts for about three-quarters of revenue and half of gross profit, will largely look after itself.As we've written, that prediction looks like a mistake. Even under a Trump administration that’s worked hard to tear up fuel-economy rules, gas demand has stood still for four years. Despite evidence that urban traffic has rebounded close to pre-pandemic densities and long holiday road trips are exceeding former levels, on a trailing 12-month basis, gasoline consumption is currently at its slowest since the early 2000s.The increasing efficiency of conventional vehicles is already enough to reduce the amount that car owners spend filling the tank and the number of trips they make to gas stations, a dynamic that will hurt both the fuel and non-fuel sides of the business.Add in the impact of electric vehicles and the effect will be compounded. At present, there are just 1.5 million on U.S. roads; by the end of the decade, General Motors Co. expects to see at least twice that number sold there every year, equivalent to nearly 20% of annual sales. While gas stations can install chargers to accommodate this market, battery vehicles charged at home or in workplaces won’t have to make the regular visits to the pump and convenience store that even hybrid cars require.The risk for Seven & i is that it’s willfully blind to these looming changes. Battery cars as a share of U.S. vehicle sales will rise to just 5% in 2030 and 11% in 2050, according to its presentation. That’s drastically lower than most carmakers and oil companies are predicting (BloombergNEF pegs the share at around 25% in 2030 and above 60% by 2040). Remarkably, Seven & i posits as one of the “reasons for the acquisition” the way that taking control of Marathon’s store network will help it achieve environmental, social and governance goals such as installing energy-efficient lighting, switching stores to renewable power, and reducing use of plastic packaging. This misses the forest for the trees. The overwhelming majority of emissions from a gas station aren’t the Scope 1 and Scope 2 type generated on-site and from buying electricity, but the Scope 3 carbon generated when the fuel it sells is burned in car engines.Unlike the ESG initiatives that Seven & i boasts about, this isn’t just a nice-to-have factor to stick in the corporate responsibility report. The shift that the automotive and petroleum industries expect to see in the power-trains of road vehicles over the coming decade is a challenge to the core of the fuel retail model. With this deal, 7-Eleven will go from depending on gas for 20% of its gross profit to 30%. It’s heading the wrong direction down a one-way street.(1) Although the 7-Eleven brand is used around the world, we're using "7-Eleven" in this article to refer to the North American unit owned by the Japanese parent company, Seven & i.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Ford's second-quarter results weren't nearly as bad as management had initially expected, but the iconic automaker remains a work in progress.
(Bloomberg) -- General Motors Co. is unhappy with Facebook Inc.’s efforts to keep hateful and disparaging content away from the automaker’s brands and has joined peer Ford Motor Co. and other companies that have stopped advertising with the social-media company.GM said Friday it has paused placing ads on Facebook in recent weeks and is in talks with the company about improving efforts to eliminate harmful content on its popular platform.GM’s move is a sign that the pressure on Facebook will continue in August and potentially longer. Ford and Honda Motor Co.’s U.S. subsidiary also said Friday they have no plans to resume spending on Facebook. On Thursday, Unilever NV-owned ice-cream brand Ben & Jerry’s extended through the end of the year its halt of paid social-media advertising.“We are not satisfied with the progress Facebook has taken to date and therefore have paused our media investment with the platform,” GM said in a statement. “We are encouraging them to move faster to implement meaningful change so that we can quickly return to a safer digital space that mirrors our brand values.”Ford Reloads YouTubeFord said it is evaluating efforts to curb hate speech on social media operated by Facebook and its unit Instagram Inc., as well as by Snap Inc., Twitter Inc. and TikTok Inc. platforms. However the automaker announced it will resume ads on Alphabet Inc. unit YouTube and Pinterest Inc. after a 30-day pause.“This is an ongoing evaluation and we will continue to monitor all platforms with checkpoints on progress towards our ad accountability agenda,” Ford spokesman Said Deep said in an email. “We will continue to be actively engaged with industry initiatives led by the Association of National Advertisers to drive more accountability, transparency and trusted measurement to clean up the digital and social-media ecosystem.”A month ago, when the StopHateForProfit campaign started, many big corporations said they would stop advertising for the month of July. At that time, GM said it was reviewing its marketing.The automaker qualified its Friday announcement by saying it already had cut its advertising during the pandemic, reflecting lower production and less traffic in showrooms. Its budget for Facebook advertising did not involve a large sum of money, said GM spokesman Jim Cain.(Updates with Ford and Honda keeping ads off Facebook in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The top U.S. automaker did a remarkable job of keeping losses in check last quarter, despite a complete production shutdown in North America for the first half of the period.
(Bloomberg Opinion) -- As if to symbolize U.S. decline, a giant of American industry is being overtaken by foreign rivals. Intel Corp., the company that once marked U.S. dominance of the semiconductor industry, has announced that the introduction of its new flagship series of computer chips, 7nm CPUs, will be a year behind schedule. This is after its previous generation of chips, 10nm CPUs, took much longer than expected.Intel, unlike many semiconductor companies, designs and fabricates its own chips. On the design front, it’s being overtaken by domestic rivals and U.K.-based ARM Ltd., which recently snatched Apple Inc.’s business away from Intel. On the fabrication side, Intel is losing ground to Taiwan’s TSMC, which specializes in manufacturing chips for other companies and which has had little trouble making its own new generations of chips on time. TSMC now has a higher market value of the two companies:Intel’s failures probably come as a result of various factors that are specific to the company itself. Some observers say that by insisting on vertical integration, Intel missed out on the opportunity to learn from the innovations generated by other companies (it’s now working on switching to a less integrated model). Its focus on its existing high-end markets caused it to stumble in newer markets for cheaper chips -- a classic case of the so-called innovator’s dilemma. It also made some bad decisions about fabrication technologies, and it suffered from various personnel issues at the top.Some, however, will probably see Intel’s stumbles as a sign that the U.S. isn’t doing enough to back the semiconductor industry. That will intensify calls for the government to step in and support the ailing giant. Already, lawmakers are considering a $25 billion subsidy program for chip manufacturers, ostensibly to compete with China, which heavily underwrites its own companies. Intel, already one of the biggest recipients of government subsides, and whose chief executive officer has lobbied for the new bill, would undoubtedly reap a significant portion of the windfall.Indeed, there are some good reasons for the U.S. government to boost the chip industry. National defense is one. Computer chips are essential to modern warfare, and it’s too risky to let China have a stranglehold on high-level control circuitry. Taiwan is a de facto U.S. ally, but if it gets blockaded in a conflict with China, the U.S. could be cut off from TSMC’s factories and lose access to critical chip supplies at the worst possible moment.Industrial clustering is a second reason to want a domestic semiconductor industry. Chipmakers, like all high-tech companies, employ lots of skilled workers; having those workers in the U.S. creates a deep pool of talent and ideas that other companies located nearby can take advantage of, encouraging other tech industries to locate in the country as well.But there are more efficient ways to accomplish those goals than to throw money at one big, dominant company. Intel has been spending tens of billions of dollars on stock buybacks in recent years, halting only recently during the coronavirus pandemic. Buybacks, like dividends, are a way of returning cash to investors; basic corporate finance theory says that companies do this when they have more cash than they know how to invest productively. Thus, throwing government money at an existing champion such as Intel is likely to fatten shareholders’ pockets wallets rather than galvanize a wave of world-beating new investments.Instead, the government can pursue semiconductor dominance in more effective ways. The first is to encourage TSMC to put chip plants in the U.S., reducing the risk of Taiwan being isolated in a conflict. This already is beginning, and the Taiwanese chipmaker is planning a $12 billion facility in Arizona.Second, the U.S. can help encourage new chip manufacturers to get better at competing with Intel. An analogy is the auto industry, where the most cutting-edge innovation in recent years has come not from established -- and heavily subsidized -- giants such as Ford Motor Co. and General Motors, but from upstart innovator Tesla Inc., a beneficiary of tax breaks for clean-energy vehicles and which is now worth more than both older companies combined. In addition to encouraging innovation, new companies provide diversification, so that an industry doesn’t pin all its hopes in one or two big established players. And adding more companies fosters healthy competition as well.The U.S. needs more dynamic new companies of the Tesla variety. But as Andy Grove, one of Intel’s founders, warned in 2010, it can be difficult for smaller U.S. companies to scale up to compete with giant foreign rivals; it’s difficult for modern upstarts to do what Intel managed to do. Although capital is cheap on paper, the U.S. financial system isn’t set up to dish out the large sums of cheap money that young manufacturing companies need to scale up to Intel-like size; even Tesla has skirted the edge of bankruptcy multiple times. GlobalFoundries, a U.S. company whose business model is similar to that of TSMC, has been unable to bear the research and development costs necessary to stay at the leading edge.This could be addressed with a version of Grove’s suggestion for a government-led scaling bank, which would provide cheap financing for young companies to grow and reach the technological frontier. Instead of unconditional cash subsidies, these loans would be contingent on investment and growth. And they would be temporary in nature; whether a company succeeded in becoming a new high-tech giant, its access to the spigot of cheap financing would be finite. Industrial policy is sometimes necessary, but it’s a tricky thing to get right. By helping upstart high-tech manufacturing companies scale up, the U.S. might be able to support strategic industries while retaining the benefits of market competition.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Power companies are loaning out Teslas in Washington, electrifying bus fleets in Virginia and lobbying for electric vehicle tax credits on Capitol Hill.San Diego Gas & Electric Co. even went so far as to help train salespeople on how to convince consumers to buy electric cars and then paid them as much as $500 per sale. It’s all part of a $1.5 billion effort by utilities such as Exelon Corp. and Dominion Energy Inc. to promote vehicles that run on electricity.The companies see it not just as a chance to sell more power, but to balance electricity demand and meet sustainability goals, said Max Baumhefner, a senior attorney with the Natural Resources Defense Council.“The grid is built for the one hour of the year when electricity demand peaks,” Baumhefner said. Pushing energy consumption to after hours, when many drivers charge their cars at home, helps smooth out the swings in usage and could even reduce power costs for everyone, he said.But some aspects of the industry’s campaign -- such as lobbying for tax credits or against President Donald Trump’s rollback of efficiency standards -- put the companies at odds with powerful oil interests. Half of U.S. oil demand is for gasoline.Electric and plug-in hybrid vehicles are a threat to that, even if they currently account for about 1.4 million, or 0.7%, of the vehicles on U.S. roads. Within five years, BloombergNEF predicts they will represent as many as 7% of U.S. car sales due to declining battery costs and a growing number of options.That’s a promising figure for utilities, which have seen electricity demand flatten as household appliances become more efficient. According to BloombergNEF projections, 10% of electric demand will come from electric vehicles by 2040.Electric Vehicles Set for Rapid Growth, Defying Recession: ChartYet some motorists still have qualms.“When we did focus groups, customers were telling us, ‘We have apprehension. We’re uneasy,’ whether it’s range anxiety or the upkeep,” said Calvin Butler, the chief executive of Exelon Utilities.That’s led to some extraordinary efforts on the part of the electric companies to put consumers at ease, such as San Diego Gas & Electric’s collaboration with pro-EV PlugStar to train showroom salespeople.“Who better to sell somebody on an EV than the salesperson?” said Estela de Llanos, San Diego Gas & Electric’s chief environmental officer.“By incentivizing some of these dealer employees, we like to think we planted the seed for more of that to happen,” de Llanos said.An Exelon startup called EZ-EV has helped motorists take test drives, calculate mileage needs and winnow down options -- then score discounts at local dealerships. And motorists who sign up for a monthly car subscription with Exelon’s Steer can shift between electric models, from a Tesla Model X to a Porsche Cayenne.Utilities also have asked state regulators to approve more than 80 plans for advancing electric vehicles and charging infrastructure, according to Atlas EV Hub, which tracks the efforts. The bulk of the programs - some 78% of the requested initiatives -- have won approval, said Nick Nigro, founder of Atlas Public Policy.But the proposals are meeting steep resistance from the oil industry, in some cases joined by the Koch-backed Americans for Prosperity and large power consumers wary of higher costs. With about half of U.S. oil demand today tied to gasoline, the sector is fighting electric vehicles on all fronts, from statehouses and state regulatory commissions to Capitol Hill.In Congress, oil and utility interests have squared off over efforts to expand a $7,500 tax credit for electric vehicles. The utility industry’s leading trade group, the Edison Electric Institute, has lobbied alongside automakers Tesla Inc. and General Motors Co. to expand the tax credit, while oil interests argue climbing sales and the surge in Tesla’s value show subsidies are no longer needed to jump-start a new industry.Refiners and their trade associations “have waged a state-by-state campaign” to block utility investments in electric vehicle infrastructure, the Edison Electric Institute said in a May court filing. They are using “all available tools in all available forums to attempt to slow or stop the general move toward electric and other clean energy transportation, which they view as an existential threat.”National GridLast October, Massachusetts regulators turned back much of National Grid Plc’s $167 million plan to install thousands of charging stations at parking lots, government offices, apartment buildings and other spots, after the American Petroleum Institute, gas station chain Cumberland Farms Inc. and fuel supplier Global Partners LP blasted the initiative.And in Minnesota, a coalition including Marathon Petroleum Corp., and Koch Industries Inc. refining company Flint Hills Resources Pine Bend have mounted a legal challenge to Xcel Energy Inc.’s $25 million electric vehicle plan.Oil industry interests also lobbied states to impose annual fees on electric vehicle users they argue are needed to ensure electric car drivers who don’t pay gas taxes help fund roads and bridges.“It’s fundamentally unfair to take the monopoly power that the utility has and charge everybody higher rates to build out infrastructure that 2% of today’s purchasers use,” said Derrick Morgan, senior vice president of the American Fuel and Petrochemical Manufacturers. “It’s a very big gamble with other people’s money.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
GM earnings call for the period ending June 30, 2020.
If you frequent the pixels of Alphaville regularly, you might know that we have a particular fondness for Morgan Stanley’s Adam Jonas. One of the most vocal analysts on the Street, Adam has, over the years, provided some of the most colourful moments — both via his research and his conference call questions — in recent corporate memory. Video: How far will electric transport take us?
Steel construction has begun on the nearly 3-million-square-foot factory that will mass produce Ultium battery cells and packs, the cornerstone of General Motors' strategy to bring 20 electric vehicles to market by 2023. The Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio is part of a joint venture between GM and LG Chem that was announced in December. At the time, the two companies committed to invest up to $2.3 billion into the new joint venture, as well as establish a battery cell assembly plant on a greenfield manufacturing site in the Lordstown area of Northeast Ohio that will create more than 1,100 new jobs.
General Motors (NYSE: GM) said that it lost $758 million in the second quarter, much less than expected, thanks to resilient pickup-truck sales, strong results in China, and aggressive cost cutting before and during the quarter. On an adjusted basis, excluding one-time items, GM lost $0.50 per share in the second quarter. GM's revenue fell 53% from a year ago, to $16.8 billion, on lower shipments as its factories in North America were closed for 8 of the 13 weeks in the quarter.
With large cap technology stocks outperforming during the pandemic, one strategist warns “tech has been looking for an excuse to sell off.”
(Bloomberg) -- General Motors Co. reported its first quarterly loss since it emerged from bankruptcy but said it sees a path to full-year profit and paying off debt if the economy remains stable during the second half of 2020.With plants running and customers returning to dealers following closures earlier this year, GM is rebuilding inventory, said Dhivya Suryadevara, the company’s chief financial officer. Barring another economic shutdown from the coronavirus, GM expects to chalk up $4 billion to $5 billion in earnings before interest and taxes for the balance of the year.“This assumes a stable economy going forward,” Suryadevara told reporters on a conference call. “This is a scenario, not a guidance, and these factors are inherently difficult to predict.”The automaker said Wednesday it lost 50 cents a share in the latest three-month period, compared with a consensus forecast for a loss of $1.66 per share. The unexpectedly strong performance underscores the company’s financial resilience in the face of the pandemic in the U.S. and China -- its two biggest markets.GM’s financial results signal the company may have weathered the worst of the Covid-19 outbreak. Loftier prices for its new large pickup trucks helped offset the springtime pause at its plants and showrooms. Sales climbed in May and June after crashing in April. And the automaker plans to repay by year’s end the $16 billion it borrowed to stay flush.GM said it burned through $9 billion in cash over the last three months but still has cash on hand totaling $30.6 billion.The automaker should be able to generate between $7 billion and $9 billion in cash in the second half with a stable economy, Suryadevara said. That would be enough to pay down the entire $16 billion that the company borrowed from a revolving credit line in March, a move triggered by the rapid spread of the coronavirus and its paralyzing impact on vehicle sales.Inventory RebuildThe bullish profit-recovery expectation comes as GM works to rebuild a depleted inventory of popular and profitable sport utility vehicles and trucks. It ended the quarter with 444,000 vehicles on dealer lots, down from 809,000 a year ago. Suryadevara said the total may recover to about 600,000 vehicles by the end of the year.Read more: GM to Repay Deferred Employee Compensation Ahead of ScheduleDespite exceeding Wall Street estimates, GM’s stock fell 2% to $25.80 as of 1:47 p.m. in New York.Morgan Stanley analyst Adam Jonas said in a research note that GM has pushed some vehicle-development costs into the future, which could have boosted second-quarter results at the expense of third-quarter performance.“Taking nothing away from 2Q, we believe it may have borrowed a bit from what we and the market expect to be an extremely strong 3Q improvement,” Jonas wrote.In the U.S., GM’s vehicle sales fell 34% in the second quarter, but demand for its profitable pickups mitigated the blow. With its full-size truck plants running on three shifts, the company expects to show better financial numbers for the full year. In another positive sign, GM said it will boost pickup production at its plant in Fort Wayne, Indiana, by 1,000 trucks a month.China RecoveryGM’s sales in China declined only 5% in the latest three-month period, and it turned a $169 million profit after losing money in the first quarter. Suryadevara said Chinese demand for new SUVs and the Cadillac CT4 sedan is helping its results in that market.“In the second quarter, we’ve seen a nice recovery” in China, she said.The problem for GM, Jonas said, is that investors don’t seem to take notice of its earnings power and bold electrification plans. On a call for analysts, he asked GM Chief Executive Officer Mary Barra how she can get investors to see that GM shares are worth buying when so much interest is being given to Tesla Inc. and a slew of unproven EV startups.To make a case that GM has electric-vehicle chops, Barra affirmed the Cadillac Lyriq is on schedule for a 2021 launch and the GMC Hummer EV is also on track for 2022. She pointed out GM has greater production capacity and scale than any electric-car venture.“As we move forward, people will see all the strength we bring as it relates to scale manufacturing capability,” Barra said. “So we’ve got to keep telling our story. We’ve got to deliver and that’s exactly what we intend to do.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Overall second-quarter 2020 earnings and revenues for the auto sector are projected to be down a whopping 228.1% and 47.7%, year over year, respectively.
General Motors fell to a loss in the second quarter, dragged down by a collapse in profits and falling sales from its traditionally lucrative North American operations. Global sales at the Chevrolet and Buick owner halved to $16.8bn in the quarter, with a net loss of $758m, compared with a $2.4bn profit in the same period in 2019. Its North American arm posted a $101m net loss for the quarter, compared with a $3bn profit in the same period a year earlier.
While low vehicle sales amid waning consumer demand and soft economic conditions might have hurt General Motors' (GM) Q2 performance, solid cost-containment efforts are likely to have offered respite.
A look at the shareholders of General Motors Company (NYSE:GM) can tell us which group is most powerful. Large...
General Motors is on track to deliver 20 electric vehicles by 2023, the company said in its latest sustainability report. Most of these vehicles utilize GM's new modular EV architecture, called Ultium. With this platform, GM says some vehicles will have a range of 400 miles, acceleration of 0-60 in three seconds and come in front-wheel drive, rear-wheel drive and all-wheel-drive configurations.
The Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite were all up sharply, with the Dow leading the higher. Nowhere has that been clearer than in the auto industry, where Tesla (NASDAQ: TSLA) and a host of electric-vehicle upstarts have made well-established automaker giants seem hopelessly out of date. On Tuesday, though, Ford Motor (NYSE: F) and General Motors (NYSE: GM) managed to post bigger gains than Tesla's stock did.
Tesla’s biggest bull predicts the electric vehicle maker’s stock to reach $2,322, prompting founder and CEO Elon Musk to tweet “Wow” to the new Street-high price target.
(Bloomberg) -- Trading ideas are stacking up for what’s set to be a difficult second-quarter earnings season featuring a wide variation in performance due to the coronavirus pandemic.Stocks have surged from March’s lows despite the bleakest profit outlook since the global financial crisis, with S&P 500 earnings expected to drop about 44%. Megacap technology firms led the stimulus-fueled rally and a key debate is whether they will keep that role as the earnings picture becomes clearer.“For all but a fortunate few -- notably among the FAANGs -- the earnings numbers will be abysmal,” Tan Kai Xian, a statistician and U.S. analyst at Gavekal Research, wrote in a note, using a common acronym for big tech stocks. But there’s a “reasonable prospect” of brighter estimates and positive second-half surprises, which would support stock prices, he said.Here’s a rundown of some recent thinking going into the earnings season:Performance ReversalJulian Emanuel, head of equity and derivatives strategy at BTIG LLC, raises the prospect of leaders and laggards swapping roles, after stocks such as eBay Inc. and Amazon.com Inc. rallied 20% or more from a June 8 peak in the S&P 500, while companies like JPMorgan Chase & Co. and General Motors Co. fell more than 10% over the period.“We view earnings season as a potential catalyst for performance reversion,” he wrote in a note, while also adding that “if 2020 has taught us anything, it is that anything can happen -- and probably will.”Tech Risk?Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, flags the possibility that disappointing earnings and guidance from technology companies may be an “underappreciated” risk. Investors should consider adding gold, corporate credit and non-U.S. stocks to portfolios that are overweight the S&P 500, she wrote in a note.OptionsAmy Wu Silverman, derivatives strategist at RBC Capital Markets, sees an opportunity for investors to use the current high premiums in call options in their favor. Specifically, she recommends call spreads on Amazon and Netflix Inc. -- a strategy that involves both buying and selling the bullish options but with different strike prices -- as a way to profit from further modest gains in their stock prices.Long FinancialsEvercore ISI strategists led by Dennis DeBusschere have recommended going long financials into the earnings season because “there’s upside potential for a battered-down sector that’s priced in negative headlines already.”IndustrialsStuart Kaiser, head of equity derivatives research at UBS Securities LLC, recommends call options on the Industrial Select Sector SPDR Fund to position for upside in earnings, as the firm’s “big data” analysis shows revenue for industrials above consensus heading into the reporting season.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.