U.S. stocks ended lower on Friday, their second consecutive week of declines, as investors focused on the outlook for interest rates as inflation concerns reignited.
For the week, benchmarks fell 0.1%, tech stocks fell 0.7% and blue chips fell 0.1%.
Source: Investing.com
The upcoming blockbuster week is expected to be an eventful one, packed with several market-moving events, including the Federal Reserve's latest monetary policy meeting.
The U.S. central bank is widely expected to keep interest rates on hold on Wednesday, but Fed Chairman Jerome Powell may give hints at when he will start cutting rates in his post-meeting press conference.
Source: Investing.com
A recent set of positive inflation data has investors pushing back expectations for the Fed's first rate cut until July, according to Investing.com.
Earnings filings will feature just a few companies, including Nike (NYSE:), FedEx (NYSE:), Micron Technology (NASDAQ:), Lululemon (NASDAQ:), and KB Home (NYSE:) . .
Regardless of which direction the market goes, here are stocks that are likely to be in demand, and stocks that are poised for new downside. However, my time frame is: just For the next week, From Monday, March 18th to Friday, March 22nd.
Purchased brand: Nvidia
We expect Nvidia's stock price to rise further in the coming week as the AI technology powerhouse hosts its highly anticipated “GTC 2024” conference. There you'll find generative AI, accelerated computing, large-scale language models, robotics, and more.
The four-day event, the first in-person GTC in five years, kicks off late Monday at the San Jose Convention Center in California. The company expects more than 300,000 people to register in person or virtually.
Most of the attention will be on CEO Jensen Huang's keynote, scheduled for Monday at 1pm PDT/4pm ET.
According to the description, Huang will share how emerging trends and innovations are driving the transformation of the technology industry, including the power of modern artificial intelligence, deep learning, and high-speed computing.
In addition to the keynote address, Hwang will also participate in a panel discussion with all eight authors of “'' on Wednesday morning.All you need is caution.”the groundbreaking paper that introduced the transformer to the world and revolutionized AI.
Additionally, other key members of Nvidia's leadership team are expected to reveal the latest details about the tech company's new products and features, with discussions surrounding AI GPU chips, including the upcoming B100.
The graphics chip maker is also expected to show off its latest AI accelerators and other computing innovations for data center hardware, PC gear, software and more.
Nvidia (NASDAQ:) stock tends to rise during the week of its annual GTC event. At its last conference in March 2023, NVDA's stock price soared after Huang said that “the AI moment began with the iPhone.”
Source: Investing.com
NVDA stock closed Friday's trading at $878.36, not far from its recent high of $974 on March 8th.
The Santa Clara, California-based AI giant recently overtook Amazon (NASDAQ:) and Alphabet (NASDAQ:) to become the second-most traded on U.S. stock exchanges, behind Microsoft (NASDAQ:) and Apple (NASDAQ:). It became the third largest company in market capitalization.
The continued buzz around AI has seen the stock rise like a meteor, rising 76% this year alone. In 2023, his Nvidia stock skyrocketed by 239%, solidifying his position as a leader in the AI industry.
As ProTips notes, NVIDIA is in “very strong” financial position thanks to solid earnings and sales growth prospects. ProTips also highlights that Nvidia is expected to see strong free cash flow growth due to its high operating margins.
Sales stock: Nike
I expect Nike stock to perform poorly next week. That's because the sneaker giant is likely to deliver another disappointing outlook due to the challenging operating environment, with earnings and sales growth contracting in another quarter.
Nike's fiscal third-quarter update, which is expected to be released at 4:15 p.m. ET after the close of trading on Thursday, is expected to slow consumer demand for sports apparel and equipment under the current circumstances. There is a high possibility that performance will be affected.
Market participants expect NKE stock to move significantly following the print, with options markets predicting a move of about 7% in either direction. Notably, the stock price fell 11% following the company's second quarter report in December.
Highlighting some of the headwinds Nike faces in the near term, Wall Street has turned bearish on the Air Jordan basketball shoe maker, with all 25 analysts surveyed by InvestPro raising their EPS estimates over the past three months. was lowered.
Source: InvestingPro
The Beaverton, Oregon-based company is expected to report earnings per share of $0.76 for the important holiday quarter, down 3.8% from $0.79 EPS in the year-ago period due to lower operating margins.
Meanwhile, the sportswear retailer saw sales decline 1% year over year to $12.28 billion as consumers around the world face tough economic conditions that have cut back on spending on discretionary items. It is expected that
If confirmed, it would be the fifth consecutive quarter of slowing sales growth. Like other retailers, Nike has had to step up its promotions to appeal to price-sensitive consumers in the current macro environment.
So I think Nike's management will disappoint investors with its full-year outlook and take a cautious stance, citing volatile sales in North America and weak demand from China.
Source: Investing.com
Nike (NYSE:) stock fell to a 2024 low of $97.06 on March 6, before closing at $99.67 on Friday. At current valuations, the Dow Jones sports apparel and footwear giant has a market capitalization of $151 billion.
Stock prices are expected to be weak in 2024, down 8.2% since the beginning of the year. This compares to his 4.8% gain recorded by the Consumer Staples Select Sector SPDR® Fund (NYSE:) over the same period.
Note that Nike currently has a below-average InvestingPro “Financial Health” score of 2.6 out of 5.0, due to continued concerns over declining gross margins and inconsistent sales growth.
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Disclosure: As of this writing, I am long the S&P 500, but via SPDR. S&P 500 ETF (SPY), and Invesco QQQ Trust ETF (QQQ).
I regularly rebalance my portfolio of individual stocks and ETFs based on an ongoing risk assessment of both the macroeconomic environment and corporate finances.
The views expressed in this article are solely those of the author and should not be taken as investment advice.
