Momentum has returned to the stock market, thanks to (among other things) strong earnings reports from the likes of Apple (AAPL), which surged to all-time highs and finally broke the $1 trillion market cap threshold.
The positive earnings results from a handful of S&P 500 companies have seemingly helped investors forget about tariff-related rhetoric. U.S. stocks were also aided by solid jobs report data for July, which affirmed what we’ve known for some time: The economy is in an expansionary mode. And that’s even though the number of new job (157,000) came below the 195,000 analysts were looking for.
All told, equities closed the week on a strong note, lead by the tech-heavy Nasdaq Composite Index, which added 9 points on Friday to close out the week 1% higher. The Dow Jones Industrial Average gained 133 points to 25,459, ending the week flat, while the S&P 500, which notched out its fifth consecutive week of gains, added 13 points to 2,840 for a weekly gain of 0.8%. More positive earnings should continue to fuel the momentum in equities. Here are the stocks to keep an eye on.
Disney (DIS) - Reports after the close, Tuesday, August 7
Wall Street expects Disney to earn $1.96 per share on revenue of $15.32 billion. This compares to the year-ago quarter when earnings came to $1.58 per share on revenue of $14.24 billion.
What to Watch: How much traction has Disney’s ESPN Plus streaming platform gained with consumers. There were concerns that ESPN Plus, released last quarter, was dead on arrival. Anecdotally, it has been a sticky product for me personally as a sports addict. On Tuesday the media and entertainment behemoth will need to convince the Street that the company’s ambitions to compete with Netflix (NFLX) as a full over-the-top (OTT) streaming platform is not as far-fetched as early indication suggests.
Snap (SNAP) - Reports after the close, Tuesday, August 7
Wall Street expects Snap to report a per-share loss of 17 cents on revenue of $251.19 million. This compares to the year-ago quarter when the loss came to 16 cents per share on revenue of $181.67 million.
What to Watch: Last quarter, after much criticism, Snap rolled out a redesign to the redesign of the app it rolled out last year. The shares (down 13% year to date) have taken a merciless beating for much of 2018. Last quarter, the stock plunged to all-time lows after revenues of $230.7 million missed the consensus mark of $246.1 million, though earnings beat. On Tuesday analysts will hone in on the company’s user engagement metrics and monitor the impact that increase in infrastructure costs will have on not just this quarter, but also the ones to follow.
Roku (ROKU) - Reports after the close, Wednesday, May 8
Wall Street expects Roku to lose 15 cents per share on revenue of $141.48 million. This will be the company’s fourth earnings report as a public issue.
What to Watch: Roku shares — currently trading at $46 — have shot up 47% since its last earnings report. And analysts at Needham believes the stock can reach $60 for an additional 30% return. Describing itself as a "content distribution platform,” the company has ambitions of becoming the go-to platform for TV streaming. To realize that goal, however, it has to take on behemoths such as Amazon’s (AMZN) Fire Stick, Google’s (GOOG, GOOGL) Chromecast and Apple’s Apple TV.
Dropbox (DBX) - Reports after the close, Thursday, August 9
Wall Street expects Dropbox to earn 6 cents per share on revenue of $331.4 million.
What to Watch: This will be the tech company’s second earnings report as a public issue. Dropbox, which makes money by selling cloud subscriptions to their product, in the its first quarter beat on both the top and bottom lines, reporting 8 cents per share on $316.30 in revenue. But here’s the thing: With over 500 million registered users, spanning 180 countries, only about 2% of those users are paying for the service. On Thursday the company must demonstrate that “its strength in numbers” can translate to long-term profitability.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.