3 things to watch in the stock market this week

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Stocks fell last week as investors focused on geopolitical risks and the prospect of higher interest rates. Both Dow Jones Industrial Average (DJINDICES: ^ DJI) and the S&P500 (SNP INDEX: ^GSPC) lost nearly 2% and remain lower so far in 2022.

Earnings season continues to drive individual stock price movements, with several major announcements afoot over the next few days. Let’s take a look at the updates on the way to Home deposit (NYSE:HD), eBay (NASDAQ:EBAY)and Wayfair (NYSE:W).

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1. Home Depot Dividend

Tuesday morning brings Home Depot’s fourth quarter earnings report, which will be packed with important news for investors. We’ll learn how well home improvement demand held up through the end of December as the housing market continued to expand. For context, same-store sales were up 6% in the third quarter, on top of the more than 20% jump from the prior year.

Most investors expect Home Depot to report equally strong gains on Tuesday. However, monitor the balance between price and customer traffic. The growth in the last quarter was entirely due to increased spending, as traffic fell more than 5%. We will also get a better picture of market share trends in case of rival Lowe’s announces its results on Wednesday.

The big question is whether Home Depot will announce a significant increase in its annual dividend payout. This increase is usually revealed in its fourth quarter report and, given the nearly 30% rise in earnings last year, it could be much larger than the 10% increase in payments for the year. last.

2. The Growth of eBay Buyers

Investors are cautiously optimistic ahead of eBay’s earnings announcement on Wednesday. The e-commerce market giant has raised its growth expectations in each of its two previous reports, most recently following an 11% increase in organic sales in the third quarter. Of course, sales volumes are collapsing from the record results of a year ago. But eBay is offsetting these declines with increased order spend and growth in its payment and advertising segments.

The company still sees plenty of room for increased volumes as commerce moves online. Niches such as collectible sneakers, second-hand clothing and luxury watches all have great growth prospects. But eBay will need to expand its pool of buyers to continue attracting more sellers to the platform (and away from competitors like walmart, Amazonand Shopify).

While there should be some good news this week on eBay’s profitability and cash flow, it’s this buyer pool figure that will have the biggest effect on its growth rate over time.

3. Wayfair’s New Perspective

Shares of Wayfair have fallen since the end of 2021, setting the stage for a potentially big move around its earnings announcement on Thursday morning.

The growth will not be beautiful. Like eBay, Wayfair is seeing its volumes decline after nearly two years of meteoric growth. Most investors expect sales to fall around 11% for the fourth quarter as strong profits from a year ago give way to net losses at the end of 2021. Buyers point their spending on areas such as travel and restaurants after several years of prioritizing furnishings.

Wayfair’s business is still much bigger than it was in 2019. And CEO Niraj Shah and his team still think they can reasonably aim for more than $100 billion in annual sales over the long term.

But “it will take a few more quarters” for expansion rates to return to normal, Shah warned last quarter. The big question this week is whether a clear path is emerging for this stabilization in 2022.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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