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Earnings will drive the market next week, which we expect from two stocks in the portfolio

Byadmin
May 4, 2024
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Is the stock market rally here to stay after the terrible month of April? With the Fed, Apple earnings and jobs reports coming through on a high note this week, the runway for more profits looks a lot less cluttered. The main economic update came Friday in the form of weaker-than-expected April nonfarm payrolls growth. With the market forced to accept that the Federal Reserve will keep interest rates higher for longer, as telegraphed after the central bank’s meeting this week, the jobs report was good news: still decent hiring and inflation slightly lower salary. That’s what Wall Street expected because it goes along with what Fed Chairman Jerome Powell said Wednesday afternoon. He stressed that rates would likely remain at current levels until central bankers gained confidence that inflation was on track to its 2% target. He also said the Fed’s next rate move, when it comes, will likely be a cut. The positive for Main Street was that wage growth was still above the rate of inflation indicated by the core PCE index, the Fed’s favorite measure of prices. While we see some consumers shifting to cheaper products and greater price sensitivity when it comes to discretionary purchases, we’re not seeing the kind of pain that would derail the path to a soft economic landing, or not, as Jim Cramer did . position With the Fed and excess jobs removed from the market, Apple’s better-than-feared quarter was the icing on the cake. China was not the problem that the so-called “channel check” had. In addition to a record quarterly services revenue beat, Apple issued a $110 billion share buyback, the largest in corporate history. It wasn’t long ago that Jim thought Apple could hit $160 a share. But, for all that, he said, “Own it, don’t change it.” That makes the stock’s 7% gain on Friday to $185 all the sweeter. The club raised its price target on Apple to $220 from $205. Last week was full of Club earnings: 12 portfolio companies, including Apple, posted results. The others were Eaton, GE Healthcare, Eli Lilly, Amazon, Starbucks, Estee Lauder, DuPont, Linde, Stanley Black & Decker, Bausch Health and Coterra Energy. More broadly, 80% of S&P 500 companies have now reported. Three-quarters of those were positive earnings surprises, and two-thirds issued positive sales surprises, according to data compiled by FactSet. It’s too early to tell if the old Wall Street adage “sell in May and go away” holds true. Without major financial reports, earnings, especially forward guidance and management commentary, will drive the action. For the Club, Disney and Wynn Resorts will report results on Tuesday. Disney is expected to earn $1.10 per share for its fiscal second quarter of 2024, which would be 18% higher than last year. Revenue estimates of $22.11 billion look relatively flat. In addition to any updates CEO Bob Iger can share on cost-cutting and efficiency efforts, we’ll be keeping a close eye on streaming dynamics. We want to see the streaming business on track to report its first profitable quarter by the end of fiscal 2024 and the trajectory beyond fiscal 2024. Iger will be fresh off Disney’s victory over activist investor Nelson Peltz, who lost his fight for council seats on April 3. Since then, the stock has fallen 7%. On April 4, after Peltz and Iger were on CNBC, Jim said the Club would cut our position if we weren’t restricted. Shares were around $120 when our commentary was published. When we were free to book our trade on April 15th, we had to sell it at $114. We’re glad members get a better price. Analysts expect Wynn’s earnings per share to be $1.27 versus 29 cents a year ago, when China was not fully recovered from Covid. Revenue is up 26% to $1.79 billion. Las Vegas Sands last month missed quarterly expectations due to weakness in Macau. Part of that was LVS renovations at the London resort and Cotai Arena. That renewal lasted through the Chinese New Year. However, as LVS management points out that the Macau market is still in growth mode, we’re interested to see if LVS’s pain has been Wynn’s gain. Wynn’s Las Vegas operation is expected to decline sequentially, but should still increase year over year. Boston is expected to be slightly lower sequentially and compared to last year’s period. Monday, May 6 Before the bell: Spirit Airlines (SAVE), Krystal Biotech (KRYS), Berkshire Hathaway (BRK.B), Alpha Metallurgical Resources (AMR), Axsome Therapeutics (AXSM), BioNTech SE (BNTX), Tyson Foods ( TSN), Bowlero Corp. (BOWL), CNA Financial Corp. (CNA), Jones Lang LaSalle Incorporated (JLL) After the bell: Palantir Technologies (PLTR), Symbotic (SYM), Realty Income Corp. (O), Lucid Group (LCID), Hims & Hers Health (HIMS), Rocket Lab USA (RKLB), Axon Enterprise (AXON), Teradata Corp (TDC), Coherent (COHR), Microchip Technology (MCHP), FMC Corporation (FMC), Paymentus Holdings (PAY), Shockwave Medical (SWAV), Vertex Pharmaceuticals (VRTX), AECOM (ACM), Fabrinet (FN), Goodyear Tire & Rubber Company (GT), Simon Property Group (SPG), Sterling Construction Company (STRL), Apple Hospitality REIT (APLE), Boise Cascade Corporation (BCC), BellRing Brands (BRBR), Coty (COTY), EverQuote (EVER), Fidelity National Information Services Inc (FIS), Matterport (MTTR), Vornado Realty Trust (VNO) Tuesday, May 7 Before the bell: Walt Disney Co (DIS), Celsius Holdings (CELH), Datadog (DDOG), Crocs (CROX), Madrigal Pharmaceuticals (MDGL), Nikola Corporation (NKLA), Ferrari NV (RACE), BP plc (BP), Rockwell Automation (ROK), MarketAxess Holdings (MKTX), Jumia Technologies AG (JMIA), GEO Group (GEO), Builders FirstSource Inc (BLDR), WK Kellogg (KLG), Duke Energy Corp. (DUK), Kenvue (KVUE), GlobalFoundries (GFS) After the bell: Wynn Resorts (WYNN), Rivian Automotive (RIVN), Arista Networks (ANET), Upstart Holdings (UPST), Wynn Resorts ltd (WYNN), Lyft ( LYFT), Occidental Petroleum Corp. (OXY), Twilio (TWLO), Toast (TOST), Confluent Inc (CFLT), Astera Labs (ALAB), Dutch Bros (BROS), Coupang (CPNG), Flywire Corporation (FLYW), B2Gold Corp. (BTG), Kinross Gold Corp. (KGC), Virgin Galactic Holdings (SPCE), Match Group (MTCH), iRobot Corp (IRBT), Electronic Arts Inc (EA), Reddit (RDDT), McKesson Corp. (MCK), TripAdvisor (TRIP) Wednesday, May 8 Before the bell: Uber Technologies (UBER), Shopify (SHOP), Affirm Holdings (AFRM), ACM Research (ACMR), Avadel Pharmaceuticals plc (AVDL), Toyota Motor Corp. (TM), Emerson Electric Co. (EMR), Perion Network (PERI), Editas Medicine (EDIT), Autohome (ATHM), Brink’s Company (BCO), HF Sinclair Corporation (DINO), 1stdibs.com (DIBS), New Fortress Energy LLC (NFE) ), Vishay Intertechnology (VSH), Starwood Property Trust Inc (STWD), Elanco Animal Health Incorporated (ELAN), Village Farms International (VFF), IM Cannabis Corp. (IMCC), Fox Corporation (FOXA), Formula One Group (FWONK) ), Icahn Enterprises LP (IEP), Teva Pharmaceutical Industries (TEVA) After the bell: Arm Holdings plc (ARM), Airbnb (ABNB), Robinhood Markets ( HOOD), AMC Entertainment Holdings (AMC), Trade Desk (TTD), Beyond Meat (BYND), Energy Transfer LP (ET), AppLovin Corporation (APP), Exact Sciences Corp. (EXAS), Duolingo (DUOL), Sunrun (RUN), Magnite (MGNI), SolarEdge Technologies (SEDG), Instacart ( CART) Thursday, May 9 8:30 am ET: Initial Jobless Claims Before Bell: Roblox Corporation (RBLX), GigaCloud Technology Inc (GCT), Warner Bros. Discovery (WBD), Medical Properties Trust Inc (MPW), Sundial Growers (SNDL), Plug Power (PLUG), Constellation Energy Group (CEG), Cronos Group (CRON), Fiverr International (FVRR), Viatris (VTRS), Canadian Solar Inc (CSIQ), EPAM Systems (EPAM), Cedar Fair Entertainment Empresa (FUN), Planet Fitness (PLNT), Tapestry (TPR) After the bell: Marathon Digital Holdings (MARA), SoundHound AI (SOUN), CleanSpark (CLSK ), Unity (U), RCI Hospitality Holdings (RICK), Guardant Health (GH), Akamai Technologies (AKAM), Array Technologies Inc (ARRY), Blink Charging Co. (BLNK), Indie Semiconductor (INDI), Insulet Corp. (PODD), NuScale Power Corporation (SMR), Ginkgo Bioworks Holdings ( DNA), JFrog (FROG), Sweetgreen (SG), Bloom Energy Corporation (BE), Docebo (DCBO), H & R Block (HRB) Friday 10 May Before the Bell: Enbridge (ENB), DigitalOcean (DOCN), Construction Partners (ROAD), AMC Networks Inc (AMCX), CRH Public Ltd. Company (CRH) (See a complete list of Jim Cramer’s Charitable Trust stocks here.) 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 share in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, wait 72 hours after issuing the trade alert before executing the trade. THE FOREGOING CLUB INVESTIR INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, ALONG WITH OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTOR CLUB. NO SPECIFIC RESULTS OR BENEFITS ARE GUARANTEED.

Bob Iger, CEO of The Walt Disney Co., attends Allen & Co.’s media and technology conference. in Sun Valley, Idaho, USA, on Tuesday, July 11, 2023.

David Paul Morris | Bloomberg | Getty Images

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