Options markets expect a lively earnings season
QQQ•Options markets are pricing for the most volatile US stock reactions to earnings since 2020 and the third-largest in Europe since then, UBS said. Average moves of more than 7% are priced for tech stocks in both regions.
1. Volatility expectations rise
UBS said options markets are pricing for the most volatile set of US stock reactions to earnings since 2020, and the third-largest in Europe since that period. It said earnings seasons have become progressively more volatile, with excess dispersion widening the gap between stock and index volatility.
2. Tech stocks in focus
Tech stocks are expected to see the most volatility, with an average move of more than 7% priced in both Europe and the United States. Next week, markets are focused on US banks, where a 3% to 4% reaction is priced, and on European companies ASML and LVMH, with expected moves of 4.9% and 4.8%, respectively.
3. French stocks
UBS said it sees no incremental risk premium priced for French companies around their results, despite France being in focus.
