All three major stock market benchmarks ended this week lower, remaining just below their all-time highs and neatly above short-term support. oracle (ORCL), lenner (Len), dicks sporting goods (DKS) and adobe (ADBE) releases headlines for next week's earnings calendar. Meanwhile, market sentiment on inflation statistics may change.
X
Stocks to watch: Leaders in or near the buy zone
With major benchmarks slightly down from bull market highs, there aren't a ton of new buying opportunities or quality setups. But they are there. dexcom (DXCM), ServiceNow (now), XP (XP), fifth third bancorp (FITB) and square (SQ) are all in or near the buy area. Dexcom broke out Tuesday as its new product expands beyond diabetics. The stock remained in the buy zone on Friday. Super regional bank Fifth Third has broken out of a tight five-week flat base and entered buy range. ServiceNow is probably viable after a bullish pullback and working on tough new fundamentals. XP is set below the purchase point. Square broke through the cup base entry of 80.29 again on Friday, entering buy range for the fourth time.
Econocalendar: Overcoming the January Effect
Next week's inflation and retail sales data will shape market expectations about the Fed's outlook for its March 20 meeting and whether a June 12 rate cut remains likely. Markets ran through a recent set of hot inflation data as economists believed regular price increases at the start of the year were not fully offset by seasonal adjustments and were having an impact in January. But it won't be easy to ignore February's strong inflation numbers. The Consumer Price Index is expected to rise 0.4% overall on Tuesday, according to FactSet consensus. Twelve-month inflation is expected to remain at 3.1%, with core inflation falling to 3.7% from 3.9%.
Jobs: Robust employment means Fed rate cuts may be delayed. S&P 500 slip
Software: Adobe EPS up 15%
Adobe, the digital media and marketing software company, is scheduled to report first-quarter financial results later on Thursday. Analysts surveyed by FactSet expect earnings to remain strong, with earnings per share of $4.38, up 15% year over year, and revenue of $5.14 billion, up 10%. Investors will look for updates on the company's generative artificial intelligence products, including Firefly. Adobe stock fell last month after startup OpenAI announced a text-to-video generative AI product called Sora. Investors are concerned that Sora could become a competitor to Adobe's Creative Cloud suite of products for creative professionals. Adobe stock is clinging to 200-day support after a sharp selloff in February.
Fast-moving retailers report
This year has had an uneven start, with many retailers, especially A.burcrombie & fitch (ANF) — posted market-leading profits. Dick's Sporting Goods is up 25% since Dec. 31 and released holiday quarterly results early Thursday. ulta beauty (ULTA) is off to a slow start for the year, rising 12% year-to-date in Thursday's after-market report. Analysts expect Dick's to post its second consecutive quarterly profit, double its first in two years, and steady revenue growth. Ulta is targeting his highest EPS increase for the year. kohls (KSS) reported on Tuesday.
Discounts and diversity: The biggest 100-yen stores are slowing down
dollar tree (DLTR) reported fourth-quarter results early Wednesday; dollar general (DG) Thursday morning. Analysts at FactSet expect earnings to rise 31% after three consecutive quarters of double-digit declines. Revenue is expected to increase 12%. Meanwhile, analysts expect Dollar General's profits to decline 41.5%, accelerating the decline over the past two quarters. Some expect sales to fall 4.2% after three quarters of slowing growth. Still, DG stock is on the rise, up nearly 16% for the year after a sideways breakout in mid-February.
Automotive industry: top EU car manufacturers involved
Volkswagen (VWAGY) geared up for its annual investor meeting scheduled for Wednesday. Management said it expects sales growth to slow from 15% in 2023 to 5% in 2024 due to intense competition and economic challenges. The German carmaker reported an operating profit of 22.6 billion euros, similar to the same period last year. Full-year sales of 322.3 billion euros were limited by a strong fourth quarter characterized by increased deliveries in Europe and North America. Deliveries of pure battery electric vehicles (BEVs) increased by 35% to 771,000 units and increased in all regions. Total deliveries of vehicles increased by 12%.
Earnings summary
Monday
oracle (ORCL) will report its fiscal third quarter earnings after the market closes on Monday. Analysts expect Oracle's adjusted earnings to rise 13% to $1.38 per share, according to FactSet. Sales are expected to increase 7% to $13.3 billion. The focus will be on Oracle's cloud infrastructure business, OCI, whose sales growth has slowed over the past two quarters. This hurt Oracle stock's momentum. The stock has fallen 9% since September after rising 50% in the first nine months of 2023.
Casey's General Store (CASY) will report fiscal 2024 third-quarter earnings and earnings late Monday. Wall Street expects EPS to decline about 10% to $2.13 and revenue to rise 6% to $3.54 billion. The convenience store and gas station operator has seen its profits rise an average of 6% over the past three quarters. The stock is trading about 5% above the official buy point of 291.51.
Tuesday
On hold (ONON) is trading below a 35.58 buy point on a six-month basis ahead of its Q4 results early Tuesday. FactSet predicts the Swiss shoemaker's profit will rise 500% to 12 cents per share. Wall Street expects sales growth to slow for the fourth straight quarter, rising 30% to $516 million.
Wednesday
Lennar will report first-quarter earnings and sales after the market closes on Wednesday. Analysts expect earnings to increase 7% to $2.21 per share and revenue to $7.39 billion, up 14% from the first quarter of 2023. Both profits and sales decreased in the fourth quarter. Lennar stock is trading just above a flat-based buy point of 156.01.
Friday
Jabiru (JBL) is scheduled to report its fiscal second quarter results early Friday morning. Analysts expect the electronics contract manufacturer's sales to decline 15% to $6.89 billion and earnings per share to $1.66, down 12% from a year earlier. Jabil stock has expanded further since its breakout in early February. So far this year, they're up almost 20%.
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