Credit: Shutterstock photoHere's your Investing Action Plan for Tuesday: what you need to know as an investor for the coming day.
[ibd-display-video id=3031068 width=50 float=left autostart=true] Congress is supposed to vote on the tax overhaul tomorrow, and while markets have priced it in as a near certainty, not everyone has an ironclad position yet. Meanwhile, a relatively quiet week for earnings will be busy with reports from Micron Technology ( MU ), Red Hat ( RHT ), FedEx ( FDX ) and Darden Restaurants ( DRI ).
Tax Vote
The House of Representatives is expected to vote on the GOP tax bill Tuesday, while a Senate vote could come Tuesday or Wednesday. Stocks have soared in recent days as passage seemed more likely, due in part to expectations that companies will unleash more share repurchases and dividend hikes with the windfall they get from lower tax rates. More mergers and acquisitions could also be on the way, providing shareholders with handsome premiums to current prices.
In the Senate, where the GOP's ObamaCare repeal attempts unraveled, Republicans believe they have enough votes. But Sen. John McCain, R-Ariz., will not be present to cast a vote as he recovers from medical treatment, and Sen. Jeff Flake, R-Ariz. has given favorable signals on the bill but stopped just short of saying they will definitely vote yes. Still, even without the two Arizonans, it appears the GOP has enough to get over the finish line.
Micron
The memory-chip maker is scheduled to report fiscal Q1 results after the market close.
Estimates : EPS to shoot up to $2.20 from 32 cents a year ago, and revenue is seen jumping 61% to $6.39 billion, according to Zacks Investment Research.
Stock : Shares closed up 3.1% at 43.71, retaking their 50-day average.
Micron has been buoyed in recent quarters by strong demand and pricing for its memory and data-storage chips. But memory-chip stocks fell last month after Morgan Stanley downgraded several names on concerns that prices will fall, though Micron was seen as less threatened by the expected fall in Nand prices due to its strength in DRAM memory chips.
Red Hat
The No. 1 provider of open-source Linux software for corporate data centers reports Q3 earnings late.
Estimates : EPS to increase 15% to 70 cents, with revenue rising 19% to $734 million.
Stock : Shares edged up 0.5% to 129.44 and have surged more than 80% this year.
The company's biggest revenue generator is Red Hat Enterprise Linux. But analysts have been looking for traction in Red Hat's public cloud business as customers shift computing workloads to cloud service providers such as Amazon ( AMZN ) Web Services, part of Amazon and a Red Hat partner.
FedEx
The delivery giant reports fiscal Q2 numbers after the close.
Estimates : EPS to climb 2.5% to $2.87 as revenue grows 5% to $15.67 billion.
Stock : Shares rallied 0.8% to 241.91, extended from its September breakout past a 220.09 entry in a first-stage flat base.
Analysts will focus on FedEx's outlook for the current holiday quarter, which is seeing another surge of online orders. Earlier this month, rival UPS (UPS) said it's struggling to handle the flood of e-commerce demand, warning of delays and more overtime, despite major investments in capacity.
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Other Earnings
- Darden Restaurants ( DRI ), the operator of Olive Garden and LongHorn Steakhouse chains, is scheduled to report fiscal Q2 results before the market opens. Analysts expect EPS to climb 9.4% to 70 cents, with revenue rising 12.7% to $1.85 billion. Shares rose 2.4% to 90.54, breaking out of a cup-with-handle base with an 88.67 entry.
- REV Group (REVG) - which owns RV companies Fleetwood and Renegade but also sells firetrucks, ambulances and other vehicles - is expected to report EPS of 46 cents on revenue of $691 million when fiscal Q4 results come out after the close.
- Carnival (CCL) reports fiscal Q4 numbers before the open, and analysts see EPS falling 25% to 50 cents, with revenue up 5.5% at $4.15 billion. The cruise operator's shares are near a 69.99 buy point.
- Navistar (NAV) issues fiscal Q4 financials before the open, and Wall Street is expecting EPS of 63 cents, swinging from a year-ago loss of 28 cents a share, as revenue rises 12.5% to $2.32 billion. Shares of the maker of commercial vehicles are near a 45.57 buy point.
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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.
