Oscar the Grouch (James Devaney/Getty Images)

Oscar Health was losing what made the stock special. Then a peer reported awful news...

Is Centene yanking guidance just another dip to buy in Oscar Health, or a catalyst to shatter the flows story that drove the shares sharply higher?

Luke Kawa

7/2/25 10:54AM

Oscar Health is down double digits in early trading in response to health insurance giant Centene pulling its full-year guidance yesterday, a sharp reversal of the run that had seen the stock gain over 50% in 10 sessions.

While we’ve noted that Oscar had some fundamental and fundamental-adjacent factors going for it — strong top-line growth, talking up the use of AI as integral to its operations, and a Kushner as a cofounder and board member — this was always mostly a flows story, plain and simple.

People were talking about it and buying the stock and call options hand over fist.

Call options volumes set records in back-to-back sessions two weeks ago amid a ramp in volumes. The stock then traded sideways (with high volatility) from June 20 through the end of the month.

The put/call ratio on Oscar (bearish versus bullish options volumes) spiked yesterday ahead of Centene yanking guidance, with the number of puts changing hands at a one-day record. Volumes — and call demand — had already stopped crescendoing.

The company went from being one of the most mentioned tickers on the r/WallStreetBets subreddit, per SwaggyStocks, to outside the top 25 over the past day and week.

Barclays, for its part, thinks the party’s over. Analyst Andrew Mok initiated coverage with an “underweight” rating, saying “speculative retail interest” drove the shares higher and put a $17 price target on the stock.

Now, there’s a catalyst that may cause some to question the previously bullish narrative after an actuarial firm told Centene everything it thought about how its business would be doing is wrong.

Instead, however, it looks like the swoon in the shares is just being treated as an opportunity to buy the dip via the options market: just a half an hour into the session, call volumes have already hit their 20-day average, a period that begins a bit before the huge spike in demand in the back half of June.

And for the most active contract, calls that expire on July 11 with a strike price of $18, the activity is overwhelmingly taking place on the “ask” side of the trade — that is, the lowest price a seller will accept compared to the bid, the highest price a buyer is willing to pay.

This points to motivated buyers stepping in to bet that either Centene’s pain won’t have much in the way of fundamental impact for Oscar, or that others will join them in bidding up the stock back to its recent highs or beyond.

+27¢ ⛽

Rani Molla34m

What a difference a week and a war makes.

The average price per gallon for gasoline in the US shot up 27 cents from last week to $3.25, a 9% increase, according to new data from AAA, as escalating tensions in the Middle East push oil prices higher.

Higher fuel costs are rippling through markets: the Consumer Staples Select Sector SPDR Fund is down 2%, and bargain retailers like Dollar General and Walmart are also trading lower.

Toby Bochan1h

Nvidia falls on report of US government drafting regulations restricting AI chip exports

According to Bloomberg, the Trump administration will propose regulations that would require American approval for AI chip shipments worldwide, expanding existing export controls that currently apply to roughly 40 countries.

Nvidia and AMD both dropped on the news that the government would essentially act as a “gatekeeper for the AI industry,” though approval processes will vary and ramp up in complexity with the size of the order, and would only require the involvement of the host country’s government “for truly massive deployments,” according to Bloomberg’s sources. Bloomberg added that exports for the largest projects would only be approved for US allies that make stringent security commitments and “matching” investments in American AI, though the draft rule does not specify what that investment ratio would be.

Earlier this week, Bloomberg reported the US is also considering putting a cap on the number of AI chips that Chinese firms can purchase, though Nvidia CFO Colette Kress mentioned on the company’s Q4 earnings call it does not yet know whether it will be able to ship any AI chips to China regardless of US regulations.

US Drafts Rules for Sweeping Power Over Nvidia’s Global Sales

Luke Kawa3h

The war is a mega rotation trade

Coming into this week, there had been some very well-defined and well-subscribed trades:

Memory stocks > everything, especially software.
Rest of the world’s stocks > US stocks.
Within the US market, the many > the few (as in, S&P 500 equal weight over S&P 500).

War is far from kind. In fact, for markets, it is seemingly a catalyst for mean reversion: all of these aforementioned trades are reversing this week.

There’s some fundamental backing, or at least an excuse, behind all of these unwinding:

Europe, for instance, is much more adversely impacted by oil price shocks than the US;
That’s also true for South Korea (whose market is dominated by a pair of memory chip stocks);
Oil price spikes are generally negative for economic activity; tech companies (particularly the heavyweights) have tended to enjoy acyclical growth.

“Who knew that a war against Iran would cause a mean reversion trade here in the US?” wrote analysts at Bespoke Investment Group on Wednesday. “So far this week, the best-performing stocks have been ones hit hardest this year through February, and vice versa.”

War as mean reversion — Source: Bespoke Investment Group

For markets, the risk was that war would drive a pickup in correlations within US stocks and between different asset classes. On Tuesday, the price action was validating and accentuating these concerns. Since then, broadly speaking, it hasn’t.

Matt Phillips3h

As oil spikes, energy stocks again lead US markets

The S&P 500’s energy stocks (Energy Select Sector SPDR Fund) are some of the few bright spots in the blue-chip index Thursday, after continued US and Israeli bombing, and renewed Iranian attacks on energy infrastructure throughout the Middle East diminished hopes that the Islamic Republic’s military action to disrupt the flow of oil and gas out of the Gulf would quickly peter out.

“There are no signs that either the US and Israeli attacks or the Iranian retaliatory missile and drone strikes are slowing down,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, told reporters for Platt’s Commodity News early Thursday.

US gas drillers such as APA Corporation, Devon Energy, and Coterra Energy are seeing sizable gains as Qatar Energy’s ongoing shutdown of liquefied natural gas production has sent global gas prices soaring. Qatar Energy fully shut down gas liquefaction on Wednesday. It is unclear when it will resume liquefaction, but once it does, it will take a month for Qatar’s LNG production to hit peak capacity again.

US crude oil prices are also on the rise, with NYMEX continuous futures on West Texas Intermediate — the US oil benchmark — up to over $78 shortly after 10 a.m. ET. That’s the highest since the start of the war and the highest price for US crude since early 2025.

Indeed, oil market participants are currently putting almost as big a premium for a barrel of Brent crude delivered as soon as possible relative to future delivery as they did during the energy shock that followed Russia’s 2022 invasion of Ukraine.

The surge in energy prices in recent months — amid US interventions first in Venezuela and now Iran — has turned energy stocks into the biggest winner of the year among the S&P 500’s 11 so-called industry “sectors.”

The rise in crude bodes poorly for US gasoline prices, but it’s a boon to US refiners and marketers: Valero and Phillips 66 are posting solid gains on the day.

Airlines, sensitive to short-term swings in fuel prices, also fell. Budget airlines including Allegiant and Frontier were down more than 6%. Delta Air Lines, United Airlines, and American Airlines were all down more than 5%.

And since gasoline prices will mechanically work as a tax on consumption, it’s unsurprising to see that Thursday’s biggest losers early were consumer staples stocks, with that sector (Consumer Staples Select Sector SPDR Fund) down more than 2%.

Walmart and Dollar General — whose less affluent customers can be especially sensitive to higher gasoline prices — was leading the charge lower there.

Max Knoblauch5h

StubHub plunges on big earnings miss in a Taylor Swift-less Q4

Shares of ticket marketplace StubHub are down 16% in premarket trading following weaker-than-expected earnings results.

StubHub posted a loss of $1.56 per share, significantly worse than the $0.01 loss per share analysts polled by FactSet had expected. It booked $449.2 million in revenue, below the $485 million consensus and down about 16% from a year earlier.

Gross merch sales reached $2.3 billion in Q4, which StubHub pointed out would represent 6% year-over-year growth excluding the impact of Taylor Swift’s Eras Tour. The figure was also below expectations.

Looking ahead, StubHub expects full-year earnings before interest, taxes, depreciation, and amortization of between $400 million and $420 million. Analysts had expected $704.4 million.

Legal changes also threaten to squeeze StubHub in the year ahead. Earlier this month, lawmakers in both New York and California — two of the world’s largest live music markets — introduced legislation that would cap concert ticket resale prices to the ticket’s original face value.

JPMorgan analyst Doug Anmuth downgraded StubHub to “neutral” from “overweight” in the wake of these results, while slashing his price target to $10 from $22.

The company “needs to work through its lock-up expiration beginning this Monday, March 9, overcome ongoing regulatory concerns, and gain credibility with the Street,” he wrote.