Election, Fed Meeting, Earnings To Make For Wild Week: Investing Action Plan By Investors Business Daily
Here’s your weekly Investing Action Plan: what you need to know as an investor for the coming week. The presidential election, a Fed meeting, surging coronavirus infections, and more Q3 earnings are a recipe for stock market volatility in the coming week. Top economic indicators are also due, including payroll reports, amid signs of a slowing recovery.
Stocks To Watch
Pinduoduo (PDD) is below 93.29 handle buy point. Alibaba (BABA) is still in buy range from 299.10 entry. Tencent (TCEHY) has dipped back into buy range from a 73.05 pivot. JD.com (JD) is below an 85.49 buy point. Dada Nexus (DADA) is buyable at 31.55 and 35.04, but could soon form a base with a 37.48 entry.
Presidential Election May Swing Stocks
Election results that stream in on Tuesday night could usher in a big progressive shift in U.S. economic policy, a period of relative gridlock or weeks of intense uncertainty, if neither Joe Biden or Donald Trump emerges as a clear victor. Democrats are slight favorites to win control of the Senate and could expand their majority in the House. A Democratic sweep could result in major policy changes affecting the health care, energy, defense, construction, automotive and technology industries.
Fed Meeting
The Federal Reserve’s policy decision Thursday might be influenced by presidential election results, if there’s no decisive outcome. The Fed didn’t appear close to providing additional monetary support at the Sept. 16 meeting. However, the combination of lapsed fiscal stimulus and a growing fall coronavirus wave has likely moderated Fed optimism. Economists aren’t expecting any Fed action. However, Wall Street sees a good chance that the Fed will at some point shift more of its bond buying to the long end of the Treasury-yield curve.
Key Economic Indicators
On Monday, the Institute for Supply Management will release its manufacturing activity gauge and the Commerce Department will put out its construction spending report. On Wednesday, ADP will publish its private-sector payroll data. On Thursday, the Labor Department will report Q3 productivity and weekly jobless claims. On Friday, the Labor Department will issue its monthly jobs report.
Alibaba Earnings Expected To Climb
The China e-commerce giant reports Thursday before the market opens. Wall Street looks for EPS to rise 15% to $2.12 on revenue of $223.2 billion, up 39%. The earnings report comes as Alibaba (BABA) stock is trading near a record high and is up more than 40% this year. The company has been investing heavily on expansion. This includes an investment of $3.6 billion for a controlling stake in Sun Art Retail, a leading supermarket operator. Meanwhile, the company’s Singles Day shopping event is coming up Nov. 11.
Wireless Chipmakers On Deck
Makers of radio-frequency chips for smartphones will lead a busy week ahead for semiconductor company earnings. Skyworks Solutions (SWKS) will report Monday, while Qualcomm (QCOM) and Qorvo (QRVO) will follow on Wednesday. Those firms are seen getting a boost from the launch of Apple‘s (AAPL) iPhone 12 series handsets. Analysts expect Qualcomm to earn $1.17 a share, up 50%, on sales of $5.94 billion, up 24%, in its fiscal fourth quarter. Other chipmakers with quarterly reports due include Cirrus Logic (CRUS), Microchip Technology (MCHP) and ON Semiconductor (ON).
Back-Office Software Makers Due
Paycom Software (PAYC) reports late Wednesday. Analysts expect the provider of payroll software to report EPS of 55 cents, down 16%, as revenue grows 10% to $192 million. Paylocity Holding (PCTY) reports fiscal Q1 earnings late Thursday. Analysts expect the provider of workforce management software to report EPS of 15 cents, down 58%, while revenue rises 5% to $134 million. Bill.com (BILL) reports fiscal Q1 earnings late Thursday. Analysts estimate an 8-cent per-share loss on revenue of $41.73 million.
Mobile Payments Leaders Report
PayPal (PYPL) reports late Monday. Analysts estimate EPS will rise 23% to 94 cents a share, with revenue rising nearly 24% to $5.43 billion. Faster adoption of e-commerce amid the coronavirus lockdown has been a plus for PayPal. Square (SQ) reports fiscal Q2 earnings late Thursday, and analysts expect EPS of 16 cents, down 36%, even as revenue pops 243% to $2.07 billion, driven by cryptocurrency Bitcoin transactions on the Square Cash app. Square has exposure to small business but its Cash App has been a bright spot amid the coronavirus pandemic.
Waiting For Virgin Galactic Test Flights
Richard Branson’s space tourism company will report after the market closes Thursday. Analysts see a loss of 27 cents per share with zero revenue coming in, as commercial flights are still months away. The flight window for Virgin Galactic‘s (SPCE) first powered test flight opened Oct. 22, but the company has yet to set a date. Goldman Sachs analysts were the first to give the stock a neutral instead of a buy rating.
Opposing Fitness Stocks To Report
Internet-connected exercise bike maker Peloton (PTON) reports fiscal Q1 results late Thursday and EPS is expected to jump 110% to 13 cents as revenue surges 219% to $728.1 million as more people are setting up home gyms during the pandemic. Meanwhile, Planet Fitness (PLNT) is suffering from the opposite trend, as gyms remain closed or allow only limited capacity. It also reports late Thursday, and analysts see fiscal Q4 EPS sinking 69.4% to 11 cents as revenue slides 36% to $106.4 million.
Shale Producers Due Amid Consolidation
Diamondback Energy (FANG) will report quarterly results after the market closes Monday. Analysts see earnings falling 77% to 34 cents per share with revenue down 28% to $701 million. Late Wednesday, Pioneer Natural Resources (PXD) will give its first report since agreeing to buy Parsley Energy (PE). Analysts see Pioneer’s EPS tumbling 93% to 14 cents with revenue down 35% to $1.52 billion. EOG Resources (EOG) will round out the week late Thursday. Analysts see EPS plunging 86% to 16 cents on a 42% drop in revenue to $2.5 billion.
Other Earnings
- Wingstop (WING), a chicken-wing chain, reports early Monday. Wall Street expects a 60% jump in earnings per share to 32 cents, with revenue up 29% to $64.5 million
- LGI Homes (LGIH) reports early Tuesday. Analysts expect the homebuilder’s EPS to climb 6% to $2.95 with revenue up 6% at $513.9 million.
- Match Group (MTCH) reports late Wednesday. Analysts expect EPS to fall 14% to 44 cents a share with revenue rising 12% to $605.1 million.
- General Motors (GM) reports early Thursday and should see EPS fall 15% to $1.47 while sales rise 7% to $38.02 billion.
- Roku (ROKU) reports late Thursday and per-share losses are seen widening to 41 cents from 22 cents a year ago, while sales grow 42% to $370.7 million.
- Axon Enterprise (AAXN), the maker of Tasers and body cameras, reports late Thursday, and EPS is seen slipping 28.6% to 20 cents on 15% revenue growth to $150.34 million.
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