The stock market launched a new rally attempt on the last day of January, but a very volatile week has left many investors sitting on their cash. Things were looking a little better by Friday. The Nasdaq Composite ended 3% higher in its second straight weekly gain. The S&P 500 rose 2.1%. Both indexes ended well off the week’s highs. for next week, inflation data, bond yields and oil prices are likely to influence market action. BP kicks off a flurry of oil industry reports. GlaxoSmithKline and Pfizer headline among drugmakers. And among Dow Jones stocks, Amgen and Walt Disney report.
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Stock Market: Five Stocks Near Buy Points Without Key Risk
Despite its gyrations, the stock market is offering plenty of opportunities. Apple (AAPL), Google parent Alphabet (GOOGL), UnitedHealth Group (UNH), Mastercard (MA) and Prudential (PRU) are all in or near buy zones. All have strong or at least improving relative strength lines. And all five have reported earnings recently, taking that risk off the table. Mastercard broke out in late January, while Prudential retook a buy point after a breakout stumble. Apple is above its 50-day line, and could complete a base within a week. Google and UnitedHealth are just below proper buy points. Google has formed a not very pretty cup base and may be on its way to shaping a handle. UnitedHealth is completing the fifth week of a flat base.
More Energy Earnings As Oil Prices Soar
Another busy reporting week looms for oil and gas operations, as energy-sector issues continue to help prop up the volatile stock market. U.S. oil prices powered above $92 a barrel on Friday, notching a fresh seven-year high. BP (BP) will announce Q4 results before the market opens on Tuesday. FactSet analysts project earnings of $1.16 per share, up from 3 cents in the year-ago quarter. Revenue is seen rising 7%. Nabors (NBR) will report after the close Tuesday. Norway’s Equinor ASA (EQNR) is on tap for early Wednesday, while Plains All American Pipeline (PAA) and EQT (EQT) will announce results later that day. Enbridge (ENB) will wrap up the week with its earnings report on Friday.
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Disney Launches Its Fiscal 2022
The Dow’s reporting season is winding down, with results already in from 22 of 30 blue chips. Walt Disney (DIS) delivers fiscal first-quarter results after Wednesday’s close. Analysts project a 129% EPS rebound and a 25% jump in sales. Disney+ streaming subscriber news will be one key metric, following a disappointing subscriber growth outlook from Netflix (NFLX). Disney stock has been, more or less, in a downtrend for nearly a year.
Stock Market Inflation/Fed Watch
The consumer price index, out Thursday at 8:30 a.m. ET, will take on even greater importance following Friday’s surprisingly strong jobs report. The annual CPI inflation rate, after hitting a 39-year high 7% in December, is expected to rise to about 7.3%. Still, on a monthly basis, the pace of CPI increases is expected to moderate. Deutsche Bank economists expect a 0.3% rise in the headline CPI, with a 0.4% rise excluding food and energy.
However, Wall Street has underestimated CPI inflation in 8 of the past 10 months, Deutsche Bank says. Another such surprise would come at a bad time.
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After the jobs report showed a 467,000 rise in payrolls as annual wage growth accelerated to 5.7%, Fed rate-hike odds jumped. While a quarter-point rate hike at the March 15-16 meeting is virtually certain, the odds of a half-point hike doubled to 28% on Friday vs. the prior day.
Also on next week’s economic calendar, the IBD/TIPP Economic Optimism Index is due out at 10 a.m. on Tuesday. The near-term outlook for the U.S. economy hit an 18-month low in early January.
China: Olympics Underway As Supply Chains Look for Post-New Years Restart
China Watch: The Shanghai and Shenzhen Stock Exchanges reopen Monday after their weeklong New Year’s break. The Hong Kong market relaunched on Friday, just as the 24th Winter Olympics got underway in Beijing. Global supply chains remain on notice, watching business and industry shutdowns related to the Olympics, the New Year and to Covid lockdowns. The country’s official purchasing managers index dwindled in January to a narrowly positive 50.1. Dry bulk shipping rates have fallen sharply since October due to China’s weakened demand, especially for iron ore. Indexes for new orders and for export orders continued to show contraction.
Take-Two Earnings Dip Forecast
Video game publisher Take-Two Interactive Software (TTWO) will post its December-quarter results late Monday. Wall Street expects Take-Two to earn an adjusted $1.12 a share, down 10% year over year, on net bookings of $868 million, up 7%. The report comes after its two peers, Activision Blizzard (ATVI) and Electronic Arts (EA), disappointed with their holiday-quarter reports. Video game stocks are facing difficult year-over-year comparisons to the home entertainment boom during the first year of the Covid pandemic.
Drugmakers: Glaxo, Pfizer, Teva, Amgen
A slew of pharmaceutical companies are scheduled to report fourth-quarter earnings next week. Late Monday, analysts expect Amgen (AMGN) to report adjusted earnings of $4.04 per share on $6.87 billion in sales, growing a respective 6% and 3.5%. Early Thursday, Pfizer (PFE) is expected to post adjusted income of 87 cents a share and $24.16 billion in sales, up 107% apiece. Teva Pharmaceutical (TEVA) and GlaxoSmithKline (GSK) are on deck for early Wednesday. Teva’s sales are expected to fall 3.6% to $4.29 billion. Analysts expect 73 cents adjusted earnings per share, up 7.4%. Also Wednesday, GlaxoSmithKline is expected to report EPS of 33 cents a share on $12.82 billion in sales, rising a respective 3.1% and 7.5%. On Thursday, analysts expect AstraZeneca (AZN) to report adjusted profit of $1.54 per share on $11.13 billion in sales, up 44% and 50%, respectively.
Earnings slide for toymakers?
Toymakers Hasbro (HAS) and Mattel (MAT) report fourth-quarter earnings on Monday and Wednesday, respectively. Stock market analysts are looking for Hasbro to earn 88 cents per share, a 31% drop, on revenue of $1.868 billion, an 8% gain. Mattel was expected to earn 33 cents per share, down 18%, with sales up 2% to $1.655 billion. Still, Zacks analysts say Hasbro stands to benefit from gaming demand and “a robust content roadmap” from its media-production segment, Entertainment One, the studio behind shows like Peppa Pig. Mattel, meanwhile, recently reclaimed the rights to make toys modeled after Disney’s “Frozen” and princess characters.
Stock Market Earnings In Brief:
Tuesday:
Enphase Energy (ENPH) earnings are likely to rise 17% to 59 cents as sales jump 51% to $399.9 million.
Paycom Software (PAYC) reports Q4 earnings late. Analysts expect the company’s EPS to grow 28% to $1.08, with revenue climbing 25% to $275.7 million.
Wednesday:
Early Wednesday, CVS Health (CVS) should see a 41% EPS rebound to $1.83 on a 9% sales increase to $75.658 billion.
Yum Brands (YUM), the parent of KFC, Taco Bell and Pizza Hut, reports fourth-quarter earnings on Wednesday. Wall Street expects earnings per share of $1.09, down 5%, as revenue increases 8% to $1.879 billion.
Agricultural giant Bunge (BG), which reports Q4 results on Wednesday morning, is expect to wrap up a great year with flat EPS vs. a year ago. Still, Bunge stock is continuing to ride the farm economy’s momentum, has reclaimed a buy point and its relative strength line is at a three-year high.
Thursday:
Early Thursday, Coca-Cola (KO) is expected to see a 13% EPS rebound to 41 cents on a 4% sales hike to $8.983 billion. PepsiCo (PEP) should see a 3% EPS gain to $1.52 on an 8% revenue gain to $25.236 billion.
CyberArk Software (CYBR) also reports Q4 earnings early Thursday. Analysts expect the cybersecurity firm’s profit to drop 80% to 16 cents a share. Revenue will be flat at about $144.6 million, analysts estimate.
Qualys (QLYS) reports Q4 earnings after the market close on Feb. 10. Analysts project 12% EPS growth to 80 cents, with revenue climbing 14% to $108.3 million.
Twitter (TWTR) reports quarterly results late Thursday. The consensus is for earnings of 33 cents a share, down 13%, on revenue of $1.58 billion, up 28%.
Chemours (CC) will announce Q4 results after the market closes. Analysts expect the chemical company’s earnings will climb 46% to 89 cents per share. Revenue is seen rising 17% to $1.57 billion. The stock is in a consolidation with a 38.97 entry point.
Friday
Cleveland-Cliffs (CLF), with Q4 earnings due early Friday, is seen posting another huge quarter, with EPS up nearly 750% from a year ago on the strength of high steel prices. But the 2022 steel pricing outlook will be key, with prices falling sharply this year so far.
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