Here's your weekly Investing Action Plan: what you need to know as an investor for the coming day.
[ibd-display-video id=2324601 width=50 float=left autostart=true]The auto industry will be in focus over the coming week, with key data due from Tesla ( TSLA ), General Motors ( GM ) and others carmakers, as well as a major event for Ford ( F ). Alphabet ( GOOGL ) will also show off a new smartphone and other gadgets just a few weeks after Apple ( AAPL ) debuted its new phones. Meanwhile, closely watched economic data are also due, after the Federal Reserve recently signaled new uncertainty about inflation.
Stocks To Watch
The FANG stocks are showing compelling chart action.
Netflix (NFLX) has now formed a handle on its cup base , providing an earlier buy point of 190.05 vs. its prior entry of 191.60, just above its July 21 all-time high. After rebounding higher off the 50-day line , the stock is now trading about 4.6% below the handle entry.
The tech-led sell-off this past Monday sent Facebook (FB) below the 50-day moving average, but the social media giant has now retaken that level Friday. Shares are now trading 2.7% below a 175.59 buy point.
After clearing the 50-day line on Wednesday, Google parent Alphabet is 3% below a 1,006.19 entry point from a cup base. Alphabet's retaking of the 50-day moving average is a bullish sign because the stock had been hitting resistance at that level for almost the entire month of September.
Amazon is in the worst position among the FANG stocks. The e-commerce leader is trying to hold within a flat-base pattern with a 1,083.41 buy point, but the stock is trading more than 10% below that level and has yet to retake its 50-day line. Amazon's Relative Strength line , which measures price performance vs. the S&P 500, recently hit a six-month low - another weak indicator.
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Tesla Model 3 Update
The electric car maker is expected to report Q3 auto deliveries early in the week, an announcement that will be scrutinized for any updates on the pace of Model 3 production. Tesla has not provided specific guidance for Q3 but has said it expects that combined deliveries of the Model S sedan and Model X SUV in the second half will likely exceed the 47,100 deliveries made in the first half. Deliveries of its Model 3 recently began and CEO Elon Musk had estimated that production would ramp up to more than 1,500 in September from 100 in August. "Looks like we can reach 20,000 Model 3 cars per month in Dec.," Musk said in a July tweet.
Tesla shares have recently slipped into profit-taking sell territory after breaking out two weeks ago amid expectations that Model 3 production is behind schedule.
New Ford CEO To Face Big Test
The auto giant is hosting its annual Investor Day/CEO Strategic Update on Tuesday, and it's the first for new CEO Jim Hackett. Ford Chairman Bill Ford has portrayed Hackett, who previously led Ford's smart mobility unit, as a Silicon Valley darling. Now analysts and investors want to know how he will lead in emerging technologies, such as self-driving cars, as well as revive the No. 2 U.S. automaker's slumping stock price. Hackett abruptly replaced Mark Fields in May, amid investors' growing uneasiness about Ford's ability to counter both established rivals like GM and newer players such as Tesla.
Monthly Auto Sales
Also Tuesday, U.S. sales figures for new cars in September are expected to come in at a seasonally adjusted annual rate of 17.5 million, according to Kelley Blue Book. That is down from 17.6 million and up from a Hurricane Harvey-depressed tally of 16.1 million in August, helped by demand to replace vehicles lost in the storm. The bounce from replacement demand could last through October or even November, as insurance payouts come in. Toyota (TM) is likely to see September sales climb nearly 10%, thanks in part to the popular RAV4 crossover, KBB estimates. GM and Ford should see sales rise 7.7% and 2.7% as demand continues to shift toward SUVs, while Fiat Chrysler (FCAU) is estimated to see an 8.8% decline.
Big Economic Indicators
Wages, not jobs, will be the focus on Friday as Wall Street dissects the Labor Department's September employment report. Payrolls were blown off course by a series of hurricanes, with new jobless claims up 28,000 in the survey week, relative to the prior month. With Treasury yields moving higher amid Federal Reserve hawkishness, the big question will be whether average hourly wage growth perks up from the tepid 2.5% annual gain prevailing in recent months. Rising wage growth is seen as evidence of a tight labor market and a precursor to rising inflation. ADP reports private-sector payroll figures Wednesday, while Challenger reports layoff numbers Thursday.
Also in the coming week, the Institute for Supply Management manufacturing survey index comes out Monday at 10 a.m. ET, followed by its nonmanufacturing index on Wednesday. With the economy cruising along at solid clip and the data potentially reflecting hurricane disruptions, neither are likely to be market movers.
Google's Pixel Phone May Have An Opening
Alphabet's Google is expected to roll out Pixel 2 smartphones, a high-end Chromebook and other hardware on Monday. Apple's delay in shipping the iPhone X could provide an opening for the Pixel 2. The first Pixel phones, which debuted in October 2016, marked a major shift in strategy for Google as it oversaw the design, engineering, inventory management, telecom partnerships and retail distribution of smartphones. Google agreed to buy part of HTC's smartphone business recently.
Google will likely unveil new additions to its voice-activated home-automation devices that compete with Amazon's Echo speaker and companion Dot. In the past week, Amazon strutted out upgrades to the Echo and cut prices. There's talk that Google may announce a new Chromecast video-streaming device. But there hasn't been much buzz about new virtual- or augmented-reality hardware from Google.
Airline Monthly Traffic Due
Delta Air Lines (DAL), United Airlines (UAL), American Airlines (AAL) and other carriers are set to report September operational results in the coming days. The results could offer more detail on the impact of natural disasters that have ravaged Texas, Florida, the Caribbean and Mexico. The results would also come after airlines have dialed back their Q3 outlooks amid higher fuel prices and more-aggressive airfare discounting.
Yum China Near Buy Zone Ahead Of Q3
The Chinese spinoff of Yum Brands (YUM) reports Q3 earnings on Thursday. Wall Street expects EPS of 55 cents on revenue of $1.98 billion. Yum China (YUMC), which operates KFC, Pizza Hut and Taco Bell locations in China, has made a bigger push in mobile payments and delivery, which made up some 40% and 13% of total sales, respectively, in Q2. However, revenue missed views during that time, and comps at Pizza Hut were weak. Shares are closing in on a 42.22 entry.
Booze Brand Nearly Back In Buying Band
Constellation Brands (STZ) EPS is expected to climb 22% to $2.16 when fiscal Q2 results come out Thursday. Analysts see the beer, wine and liquor company's sales rising 1.8% to $2.06 billion. Craft beer and liquor sales have been on the rise recently as Budweiser and Miller sales fall flat with millennials. The global craft-spirits market is seen growing at a compound annual growth rate of 26.91% from 2017 to 2021, according to a study by market research firm Technavio. Shares have are just shy of re-entering buying territory after initially breaking out in August.
Lennar Due As Builders Rally
The homebuilder reports early Tuesday, and analysts expect EPS to remain unchanged at $1.01, with revenue up 13.6% at $3.22 billion. Lennar (LEN) has said damage from Hurricane Irma was "mild" but predicted the storm would delay about 700 deliveries from Q4 2017 into the following fiscal year. Hurricane Harvey impeded about 120 new orders and deliveries in Q3 and is projected to hinder approximately 130 deliveries in Q4. Shares are in a flat base with 55.85 buy point with an early entry at 54.96. The results will come a week after KB Home (KBH) beat earnings and revenue forecasts , lifting shares sharply higher Friday.
Costco Stock Looks To Break Resistance
The wholesale membership warehouse, which reports Q4 results after the close Thursday, is expected to log 14% EPS growth to $2.01, with sales up 14% to $41.74 billion. Costco (COST) shares breached support at their 200-day moving average in late June and have been hitting resistance there since; the stock's 50-day line slumped below its longer-term counterpart in early August.