Stock Charts Strategy May 1-5: Fed Policy, April Payrolls, Apple Earnings
The Nasdaq composite wrapped up the last week of April with a spirited rebound from its 50-day moving average. The Dow and S&P 500 followed suit. Earnings did most of the lifting, despite more bank woes and some nasty damage to stock charts for names like Enphase (ENPH) and MSCI (MSCI). The coming week will hinge partly on Wednesday's Fed policy news, but Friday's payrolls report, plus earnings due from Apple (AAPL), leading biotechs Vertex (VRTX) and Regeneron (REGN), and top lithium producers Albermarle (ALB) and Livent (LVNT) could also influence the week's outcome.
X
Stocks To Watch: Five Stocks Near Buy Points With Big Risk Off Table
Dexcom (Amazon.com (JPMorgan Chase (Visa (Exxon Mobil ( It's still the middle of earnings season, and the past week had some big winners and massive losers. DXCM ), AMZN ), JPM ), V ) and XOM ) are five stocks in or near buy zones that have already reported earnings. Dexcom and JPMorgan are modestly below traditional buy points. AMZN stock has an early entry near the 200-day line. Visa and Exxon are in buy zones.
Econ Calendar: Fed Meeting, ISM Services, April JOLTS and Payrolls
The Federal Reserve, which will announce its next interest-rate decision at 2 p.m. ET on Wednesday, has three options. As of now, markets overwhelmingly expect a hike in the coming week and see about 20% odds of another in June.
If the Fed opts to forgo a rate hike on Wednesday, amid bank fragility and indications that the economy and job market are softening, markets will celebrate — at least briefly. A hike and announcement of a pause on further hikes also could generate a relief rally. The third option, hiking and keeping an additional June hike on the table, likely wouldn't go down well on Wall Street.
Still, a relief rally spurred by either of the first two options won't last long if recession fears keep building. Outside of the Fed meeting, there's a full plate of data to chew on.
The Institute for Supply Management manufacturing activity index, which has been showing a moderate contraction, is out Monday at 10 a.m. The ISM services index, still in positive territory, is out Wednesday at 10 a.m.
The Labor Department's Job Openings and Labor Turnover Survey, which showed openings tumbling to just below 10 million, is out Tuesday at 10 a.m. The April Jobs report, out Friday at 8:30 a.m. ET, will be important in shaping market views of the economic outlook. Economists expect hiring to slow but remain solid, with employers adding 175,000 jobs and the jobless rate ticking up to 3.6%.
Megatech Earnings: Apple Faces Another Lesson In Gravity
Consumer electronics giant Apple will report its fiscal second-quarter results late Thursday. Analysts expect Apple to earn $1.43 a share, down 6% year over year, on sales of $92.9 billion, down 5%, in the March quarter. It would be the second consecutive quarter of declining sales and earnings as Apple faces weak demand for Mac computers and iPhones. Analysts will be looking for bright spots in the Apple report from sales in China and India and services growth.
Biotech Earnings: Vertex, Regeneron Set To Report
Biotech companies Vertex Pharmaceuticals and Regeneron Pharmaceuticals are on deck to report their first-quarter earnings late Monday and before the stock market opens Thursday, respectively. Analysts surveyed by FactSet expect Vertex to earn an adjusted $3.03 per share on $2.34 billion in sales. Earnings would fall 14% and sales would rise 11%. Regeneron's sales are expected to inch ahead 1% to nearly $3 billion while adjusted profit is projected to hit $9.56 per share, down 17%.
Earnings On Tap: Bud Light May Face Heavy Questions
Anheuser-Busch InBev (BUD) may face a spirited earnings call after a Bud Light March Madness promotion enlisted a social-media influencer who was also a transgender advocate. The political backlash led to a 17% drop in Bud light sales and two executives placed on leave. The April controversy won't affect Q1 results. But in terms of stock charts, BUD shares had gained almost 12% for the year, and has pulled back since the story broke on April 1.
Stock Charts Earnings Bullets
Monday
Arista Networks (ANET) reports Q1 earnings after the market close on May 1. Analysts project EPS of $1.35, up 61% from a year earlier. Revenue is expected to climb 49% to $1.31 billion Arista makes computer network switches for internet data centers.
Casino and gaming resort giant MGM Resorts International (MGM) is nearing the buy zone for a cup-with-handle base with a 45.01 buy point. Analysts expect adjusted earnings improving to 6 cents per share from 1 cent last year on a 26.5% revenue spike to $3.61 billion for its Q1 results late Monday.
Lattice Semiconductor (LSCC) will post its first-quarter results late Monday. Analysts see the maker of low-power programmable chips earning 50 cents a share, up 35% year over year, on sales of $180.1 million, up 20%.
Stryker (SYK) is trading at new highs and in a buy range following a late-March breakout. The maker of surgical and orthopedic implants is slated to report its first-quarter earnings after the stock market closes Monday. Analysts polled by FactSet call for adjusted income of $2.01 per share and $4.56 billion in sales. Earnings would rise 2% as sales creep up 7%.
Tuesday
Advanced Micro Devices (AMD) will release its first-quarter earnings report late Tuesday. Wall Street sees AMD earnings falling 50% to 56 cents a share. Sales are forecast to decline 10% to $5.3 billion amid weak demand for PC and server chips.
Ford (F) reports first-quarter financials after the market closes Tuesday. Analysts predict earnings will grow 10% to 42 cents per share with revenue increasing 14% to $39.25 billion. Ford earnings follow General Motors (GM) brushing aside Wall Street predictions that inflation and increased interest rates would cut into profits. The Street sees Ford full-year EPS sinking 14%, compared to 2022, to $1.62.
BP (BP) will announce Q1 2023 earnings early Tuesday morning, giving investors the first look at the company's financials since it pared carbon reduction targets at the end of 2022. Analysts forecast EPS falling 28% to $1.38 and sales growing 15% to $56.84 billion. Following a trend among U.S. oil majors, Wall Street predicts BP profits and revenue retreating in 2023 compared to the highs of 2022. Like several big oil company stock charts, BP stock is in a cup-with-handle base with a buy point at 40.80.
Pfizer (PFE) announces its first-quarter financial before the market opens Tuesday. Wall Street forecasts a nearly 40% earnings dive to 98 cents a share, minus some items. Revenue is projected to tumble 35% to $16.61 billion as sales of Covid products Paxlovid and Comirnaty hit expected declines.
Paycom Software (PAYC) reports Q1 earnings after the market close on May 2. Analysts project EPS of $2.35, up 24% from a year earlier. Revenue is expected to rise 26% to $444.2 million for the Oklahoma City-based maker of workforce-management software.
Wednesday
Qualcomm (QCOM) will deliver its fiscal second-quarter results late Wednesday. Analysts expect the wireless chipmaker to earn $2.15 a share, down 33%, on sales of $9.09 billion, down 18%, as customers work through high inventories.
FactSet analysts expect food and condiment company Kraft Heinz (KHC) to report flat year-over-year earnings at 60 cents per share and a 5.5% revenue increase to $6.38 billion for its Q1 results early Wednesday. KHC stock is trading in a flat base with a 42.90 buy point prior to earnings.
Phillips 66 (PSX) announces first-quarter financials early Wednesday morning. Wall Street forecasts earnings ballooning 170% to $3.56 per share in Q1. Revenue is projected to remain nearly flat, edging up 1% to $37.17 billion. Phillips 66 saw profits soar 229% to $18.76 per share in 2022. Analysts expect earnings to remain elevated in 2023, coming in at $15.73 per share, but not quite at 2022 levels.
Thursday
Square-parent Block (SQ) reports Q1 earnings after the market close on May 4. Analysts estimate EPS of 35 cents, up 94% from a year earlier. Revenue is expected to climb nearly 16% to $4.59 billion, including Bitcoin transactions. Other financial metrics to watch include gross profit and gross payment volume. Analysts project gross profit of $1.65 billion. They model GPV of $50.89 billion.
Shopify (SHOP) reports Q1 earnings before the market open on May 4. The Canada-based company is expected to swing to a 4-cent loss vs. 2-cent profit in the year-earlier period. Analysts project revenue of $1.43 billion, up 19%. Shopify sets up e-commerce websites for small businesses and partners with others to handle digital payments and shipping. One of the better looking stock charts among the week's tech earnings reports, shares are in a cup base with a 54.76 entry.
Cybersecurity firm Fortinet (FTNT) reports Q1 earnings after the market close on May 4. Analysts project EPS of 29 cents, up 52% from a year earlier. Revenue is expected to rise 26% to $1.2 billion. Fortinet competes in the firewall network security market.
Atlassian (TEAM) reports fiscal Q3 earnings after the market close on May 4. Analysts expect profit to fall 25% to 35 cents per adjusted share. Revenue is expected to climb 22% to $903 million. Atlassian sells project management and collaborative software for software developers and information technology engineering teams.
Cardinal Health (CAH) will report its fiscal third-quarter earnings before the stock market opens Thursday. Analysts expect the company to earn $1.49 per share, on an adjusted basis, and report $49.71 billion in sales — up 3% and 11%, respectively.
Planet Fitness (PLNT) is trading in a cup base with a 86.01 buy point ahead of Q1 earnings early Thursday. Analysts expect adjusted earnings bolt 43.8% to 46 cents per share. Revenue is projected to increase 27.3% to $238 million, which would mark the fourth consecutive quarter of decelerating gains.
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Source: Investor's Business Daily
