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3 Things to Watch in the Stock Market This Week

^SPX Chart

Stocks ticked lower last week, but remain up slightly through the first few weeks of 2017. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) each remain near all-time highs as investors brace for an avalanche of quarterly earnings reports over the coming weeks.

^SPX data by YCharts .

Hundreds of companies are set to post results for the final quarter of 2016 this week. A few of the most anticipated reports include Starbucks (NASDAQ: SBUX) , McDonald's (NYSE: MCD) and Microsoft (NASDAQ: MSFT) .

McDonald's sales growth

Fast-food giant McDonald's starts the week off for investors with fourth-quarter results due out on Monday morning. After a disappointing two-year stretch, the restaurant chain is on a winning streak of five straight quarters of comparable-store sales growth, including a 6% spike early in 2016.

The company's latest report wasn't as impressive, but global comps still accelerated to a 3.5% pace from the prior quarter's 3.1% uptick due to continued help from its all-day breakfast shift and a popular McPick 2 value platform. Growth might be harder to come by this quarter given the overall weak selling environment in the fast-food industry.

Shareholders will likely hear updated thinking from management on industry trends and how they plan to keep improving the guest experience through menu additions and store remodels. On the financial side, McDonald's will complete most of its refranchising plan in 2017, which should raise significant funds for reinvesting in the business and returning cash to shareholders through dividends and stock buybacks.

Starbucks' customer traffic

Starbucks kicks off its 2017 fiscal year with results due out after the market closes on Thursday. The coffee titan has seen its traffic gains slow recently, with transactions rising 2% in the past year following a 3% bump in the prior period. Beverage innovations and increased food sales helped average customer spending jump higher. However, the traffic decline muted overall gains.

Msft Azure

Image source: Microsoft.

Consensus estimates call for a 2% sales decline and flat earnings when Microsoft posts results on Thursday. CEO Satya Nadella is likely to focus his management comments on high-growth cloud services, including an Azure offering that the company aims to grow into a $20 billion business by fiscal 2018.

"The cloud is winning significant customer support," Nadella said following Microsoft's blockbuster July quarterly report. The key question for the company going forward is whether those growth engines will ramp up quickly enough to offset declines in legacy business like PC software and video gaming.

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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's Board of Directors. LinkedIn is owned by Microsoft. Demitrios Kalogeropoulos owns shares of McDonald's and Starbucks. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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