The on-again/off-again worries about a global economic slowdown, which impacted stocks last week, was in “off” mode this week. All the three major market indexes rose on Friday, completing what can only be described as an impressive week
Equities logged their best weekly performance in more than month, pushing both the S&P 500 and Nasdaq Composite to end the week at their highest levels in five months. Despite pressures from Boeing (BA), the Dow Jones Industrial Average ended Friday 138 points higher, or 0.5%, to close at 25,849. The S&P 500 Index ended up 0.5% higher to close at 2,822, while the Nasdaq Composite Index added 0.8% to close at 7,688 — both closing at their highest levels since Oct. 9.
Can these gains continue? Few analysts are willing to doubt they can. “There’s less of a reason to sell; it’s more of a reason to just sit tight and see which way things go,” said Michael Katz, managing partner at Seven Points Capital. “Everybody is looking for a dip that’s not really coming.” The positive earnings that have been reported from S&P 500 companies continue to serve as a catalyst. On that note, here are some names that are reporting this week to keep an eye on.
Tilray (TLRY) - Reports after the close, Monday, Mar. 18
Wall Street expects Tilray to report a per-share loss of 12 cents on revenue of $14.45 million. This compares to the previous quarter when it reported a per-share loss of 8 cents on revenue of $10.05 million.
What to watch: The legal cannabis industry is projected to grow between $50 billion and $75 billion in annual revenue in the next ten years, according to some estimates. For some context, that level of growth would put the cannabis industry on par with the soda industry in terms of global revenue. Figuring out which pot stocks will thrive is question investors are grappling with. Tilray, which has focused its efforts on high-margin medical marijuana patients, is one to keep an eye on. The company’s partnerships with Anheuser-Busch InBev and Novartis gives it a branding edge that’s not afforded to other cannabis peers.
FedEx (FDX) - Reports after the close, Tuesday, Mar. 19
Wall Street expects FedEx to earn $3.17 per share on revenue of $17.69 billion. This compares to the year-ago quarter when earnings came to $3.72 per share on revenue of $16.53 billion.
What to watch: FedEx shares have been under pressure, falling some 30% over the past year amid concerns that Amazon (AMZN) is entering the delivery and logistics space. But despite the e-commerce giant racing to expand its global shipping business, FedEx has shown no signs of slowing down, beating estimates strongly in the previous two quarters. On Tuesday investors will want to see not only continued strength in the company’s extensive delivery network, but also FedEx’s rising e-commerce business. Combined with the company’s ongoing cost management initiatives, long-term profitability is expected to remain.
Micron (MU) - Reports after the close, Wednesday, Mar. 20
Wall Street expects Micron to earn $1.70 per share on revenue of $5.89 billion. This compares to the year-ago quarter when earnings came to $2.82 per share on revenue of $7.35 billion.
What to watch: Softening DRAM prices have chipped away at Micron’s business, which has impacted the share price. The company is also dealing with oversupply, which is pressuring its revenue. Micron management, which has steered the company towards twelve straight earnings beats, has downplayed the issue, while expressing confidence the company can overcome the cycle. On Wednesday the company must give investors reason to fully believe that the cyclical nature of the memory chip business won’t impact its long-term prospects.
Nike (NKE) - Reports after the close, Thursday, Mar. 21
Wall Street expects the company to earn 64 cents per share on revenue of $9.57 billion. This compares to the year-ago quarter when earnings came to 68 cents per share on revenue of $8.98 billion.
What to watch: Nike stock closed Friday at $86.80, just shy of its 52-week high of $87.99. The shares have climbed 17% year to date, far outpacing the S&P 500 index. The athletic apparel giant, which has impressed Wall Street analysts with 10% revenue growth in the half of fiscal 2019, is also benefiting from investor enthusiasm about new product launches and sales growth acceleration. On Thursday the company must show these sustained trends, particularly with revenue growth in the U.S.