14 earnings, economic data will be the stock market movers this week

October 27, 2024

9 Mins Read

14 earnings, economic data will be the stock market movers this week

It was a wild week, with the bond market in the driver’s seat. Rising yields early on gave way to some moderation, and the Nasdaq hit an all-time high on Friday. The Nasdaq did not finish above its July record-high close of 18,647 but ended less than a half-percent away. The tech-heavy index also eked out a gain for the week, extending its weekly winning streak to seven in a row. The Dow and S & P 500 finished Friday and the week lower, breaking six-week winning streaks and moving a bit further away from their record closes from Oct. 18. Bond traders were calling out the Fed last week, pushing bond yields higher and signaling that central bankers cut interest rates by too much when they kicked off their easing campaign last month with a half-percentage point reduction. While the Fed at its September meeting indicated another half-point worth of rate cuts before year-end, economic reports have been coming in stronger since then. That’s led to questions about whether monetary policymakers should proceed more conservatively to minimize the risk of rekindling of inflation. It’s a delicate balance, which will come more into focus in the week ahead. It’s packed with updates on economic growth, inflation, and jobs. It’s also the biggest week of earnings season, with 14 portfolio companies reporting. Datapalooza Starting Wednesday , the government releases its first read on third-quarter economic growth. Economists expect a 2.3% year-over-year advance in the nation’s gross domestic product , which would be a slight slowdown from the 2.6% growth seen in the second quarter. Thursday brings the Fed’s favorite inflation gauge, the personal consumption expenditures price index . Headline PCE for September is expected to be up 2%, and the core rate, excluding volatile food and energy costs, is seen rising 2.6%. Both increases would be at a slightly slower pace than the prior month’s readings. The government’s monthly employment report is out Friday . Economists expect October nonfarm payroll additions of just 125,000. That would be roughly half the number of jobs added in September. The nation’s unemployment rate for October is seen ticking up to 4.2%. October wage inflation is expected to be up 4%, matching the prior month’s increase. Pouring profits Stanley Black & Decker (before the bell Tuesday ): While further inventory optimization, cost efficiencies and supply chain improvements are our main focus as we look to grade the quarter on factors within management’s control, we’re also very interested to hear their thoughts on the interest rate environment and housing market. Lower rates are expected to eventually aid housing market demand and, in turn, the tools needed to build more homes. That dynamic has been pushed out due to stubbornly high bond yields that influence mortgage rates. We also want to find out if management is seeing any increased demand for home renovation projects. Commentary from Stanley Black & Decker will help inform our thinking on our other major home-adjacent name in our portfolio, Home Depot , which reports next month. The Street is looking for Stanley Black & Decker sales of $3.8 billion in the third quarter and earnings per share (EPS) of $1.05. Alphabet (after the bell Tuesday ): Google search performance remains a key focus for investors as the rise of generative artificial intelligence does still pose a risk to the company’s market share. Alphabet does have Gemini, and it has been able to mitigate any shift in consumer preferences away from traditional search to rival offerings — such as Perplexity, Anthropic, ChatGPT or Meta AI — by enhancing Google search with a generative AI overlay. Competition, however, is still growing, so we must continue to be aware of the risk and monitor it. YouTube engagement and cloud growth are the other big factors and so are costs and any updates on the Justice Department’s antitrust case. Waymo will also be of interest given the recently closed funding round for the autonomous vehicle business. The Street is looking third quarter Alphabet sales of $86.31 billion and EPS of $1.84. Advanced Micro Devices (after the bell Tuesday ): This report may prove somewhat of an uneventful quarter given what we just heard from management a few weeks ago at the company’s Advancing AI event. Nonetheless, MI300 chip results will be in focus, as will indications of future demand for the MI325X chip. We’re also interested to hear how the PC refresh cycle is progressing. One of the things that did not happen at that AI event was a raise to guidance. We’ll see if that happens with earnings. The Street is looking for AMD third-quarter sales of $6.71 billion and EPS pf 92 cents. Eli Lilly (before the bell Wednesday ): In addition to the headline numbers, results and commentary on the company’s GLP-1-based drugs Mounjaro for diabetes and Zepbound for weight loss will be the focus for investors. The Street is looking for third-quarter Lilly sales of $12.1 billion and EPS of $1.45. GE Healthcare (before the bell Wednesday ): Order rates, backlog growth, and profitability improvements are the main focus items. We’re not expecting much in terms of help from Chinese stimulus just yet, but the timing on when that aid may convert into orders will be something to watch. The Street is looking for GEHC third-quarter sales of $4.87 billion and EPS of $1.05. Meta Platforms (after the bell Wednesday ): What is the team is doing with artificial intelligence, how is it helping the current business, and how does management see it playing into the company’s reality labs agenda? The Street had previously freaked out about the spending on Reality Labs, reasoning that the company was dumping money into an endeavor that may not be profitable for a decade, if ever. But what we’ve since learned is that the massive AI investments not only help Meta with new products like the Ray-Ban smart glasses, but have also enhanced engagement and ad targeting capabilities on the company’s bread-and-butter social media platforms. We’re still looking for the team to keep costs under control and maintain that focus on efficiency, so the cost guide is going to be just as important as the headline results. The Street is looking for third-quarter Meta sales of $40.27 billion and EPS of $5.24. Microsoft (after the bell Wednesday ): Management doesn’t provide forward guidance until the end of CFO Amy Hood’s prepared remarks on the post-earnings conference call. That means you should take the initial move on the release with a grain of salt. Aside from the headline numbers, it’s all about the Azure cloud revenue growth rate, and we’ll listen for management to reiterate expectations for Azure growth to accelerate in the back of the fiscal year as more AI offerings come to market. The Street is looking for fiscal 2025 first-quarter Microsoft sales of $64.49 billion and EPS of $3.09. Starbucks (after the bell Wednesday ): The results won’t be the focus this time around, given that management already preannounced the quarter. Instead the focus is on what new CEO Brian Niccol says on the call about how he plans to turn things around and how fast he can get there. Wednesday’s preannouncement of Starbucks’ fiscal fourth quarter estimated revenue of $9.1 billion and EPS of 80 cents. Both were below what had been expected. Nextracker (after the bell Wednesday ): Margins, the backlog, and the state of solar projects are our key focus. Management’s thoughts on what the year ahead looks like depending on who wins the U.S. Presidential election would help, but our expectations for that discussion are low. The Street is looking for fiscal 2025 second quarter Nextracker sales of $610 million and EPS of 61 cents. Linde (before the bell Thursday ): We like industrial gases and engineering giant Linde because it’s a crucial (yet boring) name in the global supply chain. Boring isn’t bad when it means consistent earnings growth. As always, with Linde being a key player high up in the supply chain of so many industries, we’re interested to see which end markets drive the quarter’s performance. The Street is looking for Linde sales of $8.35 billion in the third quarter and EPS of $3.89. Eaton (before the bell Thursday ): We’re looking for another beat and raise. In addition to the headline results and forward guidance, overall organic sales growth and data center energy power demand will be focus items for investors. As is the case with most industrials, we’re also focused on the book-to-bill: anything above 1 indicates backlog growth, a positive sign for future sales performance. The Street is looking for sales of $6.37 billion in the third quarter and EPS of $2.80. Apple (after the bell Thursday ): This is going to be something of an inconsequential quarter given that there was only a couple of weeks’ worth of iPhone 16 sales. In other words, while the stock may get dinged on “disappointing” hardware sales, it’s likely going to prove a buying opportunity for those with patience who believe, like us, that the upgrade cycle will still likely shorten in the years to come as Apple Intelligence becomes more capable. With that in mind, we’ll be more focused on the services results and what the team has to say about Apple Intelligence, especially if they are willing to share some insight into the timing of key updates. The Street is looking for sales of $94.47 billion in its fiscal fourth quarter and EPS of $1.55. Amazon (after the bell Thursday ): Along with strong performance out of the Amazon Web Services cloud division, we’ll be focused on the company’s progress in reducing the cost to serve on the retail side of the house. Strong cloud growth and improving e-commerce profitability are going to be key if the Street is to give Amazon a pass on the costs associated with its Kuiper satellite broadband endeavor. The Street is looking for Amazon sales of $157.17 billion in the third quarter and EPS of $1.14. Coterra Energy (after the bell Thursday ): Nothing exciting here: It’s well understood by now that no single company determines the price of oil or natural gas. Therefore, the focus is on how well management is allocating resources between oil production and natural gas production. In terms of forward guidance, we’re always looking for the team to do more with less, meaning produce more without spending more — or at least not too much more — in terms of capital expenditures. The Street is looking for Coterra sales of $1.3 billion in the third quarter and EPS of 34 cents. Unlike most companies that hold their post-earnings conference calls on the same day as earnings, Coterra’s call won’t be until Friday morning. Week ahead Monday, Oct. 28 After the bell earnings: Ford (F), WM (WM), VF (VFC), Cadence Design Systems (CDNS) Tuesday, Oct. 29 10 a.m. ET: Job Openings and Labor Turnover Survey (JOLTS) Before the bell: Stanley Black & Decker (SWK), SoFi (SOFI), PayPal (PYPL), BP (BP), Pfizer (PFE), McDonald’s (MCD), Royal Caribbean Cruises (RCL), JetBlue (JBLU), Crocs (CROX), Corning (GLW), HSBC (HSBC), Phillips 66 (PSX), D.R. Horton (DHI) After the bell: Alphabet (GOOGL), Advanced Micro Devices (AMD), Snap (SNAP), Chipotle Mexican Grill (CMG), Visa (V), First Solar (FSLR), Reddit (RDDT), Electronic Arts (EA) Wednesday, Oct. 30 8:15 a.m. ET: ADP private-sector employment survey 8:30 a.m. ET: Gross domestic product 10 a.m. ET: Pending home sales Before the bell: Eli Lilly (LLY), GE Healthcare (GEHC), Caterpillar (CAT), Humana (HUM), Biogen (BIIB), Brinker International (EAT), AbbVie (ABBV), Wingstop (WING), AFortive Corporation (FTV), Fiverr (FVRR), Illinois Tool Works (ITW), Kraft Heinz (KHC), Shake Shack (SHAK) After the bell: Meta Platforms (META), Microsoft (MSFT), Nextracker (NXT), Starbucks (SBUX), Coinbase Global (COIN), Robinhood Markets (HOOD), Etsy (ETSY), Carvana (CVNA), Roku (ROKU), eBay (EBAY), Booking Holdings (BKNG), DoorDash (DASH), MGM Resorts (MGM), Bausch Health Companies (BHC), Clorox (CLX) Thursday, Oct. 31 8:30 a.m. ET: Initial jobless claims 8:30 a.m. ET: PCE price index Before the bell: Linde (LIN), Eaton (ETN), Uber (UBER), Peloton (PTON), Merck (MRK), ConocoPhillips (COP), SiriusXM (SIRI), Estee Lauder (EL), Mastercard (MA), Altria Group (MO), Kellanova (K), Norwegian Cruise Line (NCLH), Roblox (RBLX), Bristol-Myers Squibb (BMY), Comcast (CMCSA), Mobileye Global (MBLY), Shell (SHEL), Cinemark (CNK), Cheniere Energy (LNG), Regeneron Pharmaceuticals (REGN), Stellantis (STLA), Anheuser-Busch InBev (BUD) After the bell: Apple (AAPL), Amazon (AMZN), Coterra Energy (CTRA), Intel (INTC), United States Steel (X), Juniper Networks (JNPR) Friday, Nov. 1 8:30 a.m. ET: Nonfarm payrolls 8:30 a.m. ET: ISM manufacturing Before the bell: fuboTV (FUBO), Chevron (CVX), Exxon Mobil (XOM), Wayfair (W), Dominion Energy (D), Charter Communications (CHTR), LyondellBasell Industries (LYB), Cardinal Health (CAH) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

An exterior view of the New York Stock Exchange on September 18, 2024 in New York City.

Stephanie Keith | Getty Images

It was a wild week, with the bond market in the driver’s seat. Rising yields early on gave way to some moderation, and the Nasdaq hit an all-time high on Friday.

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14 earnings, economic data will be the stock market movers this week

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