Stock market action plan: cautious optimism

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Despite a mid-week dip, the stock market has risen in multiple ways over the past week. Defense stocks fell out of favor, with chip makers and several software groups posting the biggest gains of the week. This puts investors on a cautiously optimistic footing. Meanwhile, a growing number of growth stocks are cultivating new buy points as earnings season begins to wind down. Economic indicators will remain critical, as will interest rates, the dollar and oil prices. And beneath it all, the undecided races of the election hold the power to turn stocks around in no time.




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Stock Market Pick: Stocks Flash Buy Signals

With the stock market rebounding into a confirmed uptrend after jumping on the back of a subdued inflation report, investors should look to increase their exposure wisely.

General Engines (GM), GlobalFoundries (GFS), Health Acadia (ACHC), Enphase Energy (ENPH) and FirstSource Builders (BLDR) all issued buy signals at the end of last week. The five stocks come from different sectors, reflecting the widespread nature of the current uptrend. Additionally, all of these companies have recently reported earnings, so a lot of uncertainty is removed. GM shares are trading around a traditional buy point, while GFS, ACHC, ENPH and BLDR offered early entries.

Economic Calendar: Retail Sales, UI Claims, Wholesale Prices

The October retail sales report, released Wednesday at 8:30 a.m. ET, heads a busy economic calendar over the coming week. This should help clarify how growth is doing. After a flat reading in September, economists expect a strong 0.9% monthly increase in retail sales, led by auto and gasoline sales. Excluding autos, Wall Street expects an increase of 0.6%, against 0.1% the previous month.

New jobless claims, released at 8:30 a.m. Thursday, will be key to watch over the coming months to see if the recent weakening trend continues. The upcoming report, with claims in the week to Nov. 12, coincides with the Labor Department’s mid-month survey of employers, used to derive monthly payroll gains.


US economy on the rise: IBD/TIPP poll


Also on the calendar, the producer price index read on wholesale inflation is released Tuesday at 8:30 a.m. This index trended down double digits to 8.5% in September. Industrial production, released Wednesday at 9:15 a.m., is expected to slow to 0.2%. However, it posted a solid 0.4% increase in September. In the struggling housing sector, building permits and housing starts are due at 8:30 a.m. Thursday.

Stock market outlook: a strong advance in the face of rapid tests

It was a big week for the market as the major benchmarks all ripped off key levels of technical support and then moved higher. The Dow’s biggest move above 200-day support since its briefly held January high is sure to be challenged soon. More and more businesses are closing in anticipation of a possible economic downturn. Oil prices surged, raising the prospect of another spike in inflation. Former Fed chief Janet Yellen warned that rental housing costs should continue to fuel inflation. And control of Congress remains undecided after Tuesday’s hard-fought midterm elections. All of this could turn stocks around in the blink of an eye.


The CPI inflation rate is cooling much more than expected; Dow Jones jumps


The job market is reaching its inflection point

Signs of a cooling labor market are becoming more frequent. Severe cuts to companies such as Twitter and Facebook /Metaplatforms (META) are part of the table. But retailers are also hiring fewer seasonal workers as the holiday shopping season approaches, according to federal data analyzed by executive coaching firm Challenger, Gray & Christmas. Retailers added 162,000 workers in October, down 28% from the same month last year. In support industries, transportation and warehousing operations added 65,800 jobs, down 46% from a year ago. The companies had announced plans to hire 595,400 seasonal workers for the year to November 9. Last year, that number was 940,300 through November 16, a difference of 37%.

Earnings Season: Retail, Low Expectations

Early Tuesday, walmart (WMT) is expected to see EPS slip 9% to $1.32 despite a 5% rise in sales for the October quarter. Early Wednesday, Target (TGT) is likely to disclose a 29% drop in EPS to $2.16 on a 3% revenue gain for the pre-holiday quarter. Big-box retailers have had to resort to big markdowns to get products off the shelves. Their inventory management failed to anticipate reduced consumer spending this year due to rapidly rising inflation. Same-store sales are expected to rise 2% at Target in the third quarter, from 12.7% a year ago.

Home improvement retailers:

Analysts will be watching the results of home improvement companies closely this week with a potential housing slump on the horizon as house prices are expected to plunge in the coming months. For his report on Tuesday, Home deposit (HD) Q3 earnings are expected to rise 5% to $4.12 per share on revenue growth of 3% to $37.94 billion. That would mark 10 straight quarters of earnings growth. Lowe’s (LOW) earnings are expected to jump 13% to $3.09 per share while revenue edged up 1% to $23.14 billion. Lowe’s relative strength rating hit a new high ahead of its earnings release on Wednesday. Mixed signals across the housing spectrum are challenging the outlook for home improvement demand, MKM Partners analyst David Bellinger wrote in a research note earlier this week. But comparable store sales in the third quarter likely remained firm.


Stock market profits


Monday:

Tyson Foods (TSN) reports fourth quarter results early Monday. Analysts expect EPS to drop 25% to $1.71 for the US food processing giant. The Street predicts a slight 5% rise in revenue to $13.5 billion.

Early Monday, Aecom (ACM) is expected to post a 2.5% EPS gain to 83 cents on a 5% sales rebound. The ACM stock formed a cup-with-handle base with a buy point of 78.25.

Maintenance of freedom (FRHC) stock broke from its cup base on Friday ahead of its earnings report next week, but shares fell back below the 61.09 buy point.

Tuesday:

Late Tuesday, Advanced auto parts (AAP) is expected to post a 3% EPS gain to $3.32 on 0.9% revenue growth.

Consolidated waterThe third quarter report from (CWCO), due Tuesday morning, is expected to show EPS doubling to 18 cents on a 47% increase in revenue to $24.1 million. Shares of the small-cap operator of water supply and treatment plants are close to a buy point thanks to recent contract wins.

Wednesday:

Cisco Systems (CSCO) reports its fiscal first quarter results after the close of trading on Wednesday. Analysts estimate EPS at 84 cents, up two cents from a year earlier. Revenue is expected to rise 3% to $13.3 billion. Analysts expect supply chain issues to ease, while currency exchange rates and market share losses remain an issue for the computer networking equipment maker.

Nvidia (NVDA) will release its fiscal third quarter results on Wednesday evening. Analysts expect the graphics chipmaker to earn 71 cents per share on sales of $5.81 billion in the quarter ended Oct. 30. That would translate to a 39% year-over-year decline in profits and 18% in sales amid the downturn. game token request.

EZCorp (EZPW) is trading in a buy zone for its cut base after breaking above its 9.72 buy point last week. For its fourth-quarter results on Wednesday, analysts expect earnings to fall 18% to 9 cents a share while revenue climbs 8.7% to $209.1 million.

Thursday:

Palo Alto Networks (PANW) publishes its results for the first fiscal quarter at the end of November 17. Analysts expect the cybersecurity company’s earnings to rise 25% to 69 cents per share from a year earlier. Palo Alto revenue will rise 24% to $1.55 billion, analysts said. Billings are expected to be $1.652 billion. Growth in Palo Alto’s core firewall business has slowed as it builds a broader cloud-based platform.

Applied materials (AMAT) will release its fiscal fourth quarter results on Thursday evening. Wall Street expects the semiconductor equipment maker to earn $1.75 a share, down 10% year-over-year, on sales of $6.45 billion, up 5 %.

The Chinese e-commerce giant Ali Baba (BABA) publishes its quarterly results on Thursday morning. The consensus is $1.62 per share, down 8%, on revenue of $28.2 billion, down 10%. Alibaba’s stock is near its lowest level in seven years, due to factors including Covid shutdowns and legislative actions.

Late Thursday, Ross Stores (ROST) is expected to drive EPS down 26% to 81 cents as revenue falls 5%. The ROST stock forms a basis.

Early Thursday, Wholesale BJ’s (BJ) is expected to see EPS fall 9% to 83 cents despite a 9% rise in sales. BJ’s stock is in the buy range of a break past a buy point of 78.93 cup with handle.

Helmerich and Payne (HP) reports its fourth quarter results before the opening of trading on Thursday. Wall Street is forecasting earnings of 47 cents per share, compared with a loss of 62 cents per share a year ago for the oil and gas driller. Analysts see sales gaining 74%, to 600 million.

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