U.S. stocks rallied on Friday ahead of the inauguration of Donald Trump, because the Dow Jones Industrial Average and the S&P 500 had their best week for the reason that November election amid signs of easing inflation.
For the week, the Dow and S&P 500 advanced 3.7% and a couple of.9%, respectively, while the tech-heavy Nasdaq Composite climbed 2.5%.
Source: Investing.com
The week ahead is predicted to be one other eventful one as investors proceed to gauge the outlook for the economy and rates of interest.
U.S. markets can be closed Monday for the Martin Luther King holiday. President-elect Trump’s inauguration also can be Monday, with the incoming president expected to issue a flurry of day one executive orders.
Source: Investing.com
Meanwhile, the fourth quarter earnings season shifts into high gear, with reports expected from several high-profile firms, including Netflix (NASDAQ:NFLX), American Express (NYSE:AXP), Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ), Verizon (NYSE:VZ), GE Aerospace (NYSE:GE), 3M Company (NYSE:MMM), United Airlines (NASDAQ:UAL), and American Airlines (NASDAQ:AAL).
Bitcoin and cryptocurrencies will even be closely watched.
No matter which direction the market goes, below I highlight one stock prone to be in demand and one other which could see fresh downside. Remember though, my timeframe is only for the week ahead, Monday, January 20 – Friday, January 24.
For investors seeking to allocate capital this week, Netflix stands out as a robust growth opportunity. The streaming giant’s shift to promoting, live events, and monetization of popular content like ‘Squid Game’ are significant tailwinds that would propel the stock higher within the week ahead.
The Los Gatos, California-based Web television network is scheduled to release its fourth-quarter update after the U.S. market closes on Tuesday at 4:00PM ET. A call with co-CEO’s Ted Sarandos and Greg Peters is ready for five:00PM ET.
Market participants expect a large swing in NFLX stock after the print drops, in keeping with the choices market, with a possible implied move of nearly 9% in either direction. The stock rose 8.8% after the last earnings report got here out in mid-October.
Source: InvestingPro
Profit estimates have been revised upward 27 times within the last 90 days, reflecting growing confidence amongst analysts. Only 4 downward revisions have been noted, underscoring Wall Street’s bullish sentiment toward the entertainment powerhouse.
Netflix is seen earning $4.21 per share, representing a staggering 99% increase from the prior yr. Meanwhile, revenue is forecast to extend 15% year-over-year to $10.1 billion.
The corporate has shifted its focus from pure subscriber growth to prioritizing operating margins and revenue expansion. This pivot includes a sturdy promoting model, which is becoming a cornerstone of its growth strategy.
On the content front, the blockbuster release of ‘Squid Game Season 2’ and other high-profile projects ensures a gradual stream of engagement. Netflix can also be venturing into live events, including NFL games and boxing matches, expanding its appeal to a broader audience.
NFLX stock ended at $858.10 last Friday. At current levels, Netflix has a market cap of $366.8 billion. Shares are down 3.7% to start out 2025 after scoring an annual gain of 83% last yr.
Source: Investing.com
It’s value mentioning that Netflix has an amazing InvestingPro Financial Health Rating of three.1/5.0, reflecting its strong financials, robust growth prospects, and revolutionary strategies.
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Alternatively, Procter & Gamble faces operational challenges and tepid growth, making it less attractive in the present market environment. The worldwide consumer products company is scheduled to report its fiscal second quarter earnings report before the stock market opens on Wednesday at 6:55AM ET.
The expected move in the choices market is about 3.4% up or down. Shares fell 1.6% after the last earnings report got here out in October.
Underscoring several challenges facing Procter & Gamble, 18 out of the 19 analysts surveyed by InvestingPro cut their sales estimates ahead of the print, citing soft consumer demand and a difficult outlook.
Source: InvestingPro
P&G is seen earning $1.86 per share, increasing just 1.1% from EPS of $1.84 within the year-ago period. Meanwhile, revenue is forecast to inch up 2.2% year-over-year to $21.6 billion. These modest growth projections reflect increasing challenges for the corporate.
The buyer goods giant recently faced operational disruptions, including a ransomware attack on one among its shipping vendors. The attack could weigh on distribution efficiency and hurt margins within the short term.
Furthermore, rising competition in key markets and inflationary pressures on raw materials are expected to limit profitability.
As such, CEO Jon Moeller may strike a cautious tone and provides soft guidance to reflect supply chain disruptions and weakening margins.
PG stock closed last Friday’s session at $161.13, not removed from its lowest level since April 2024. At its current valuation, the Cincinnati-based consumer goods company has a market cap of $379.5 billion. Shares are down 3.8% to start out the brand new yr.
Source: Investing.com
Although P&G stays a dominant player in the buyer goods sector with strong brands like Tide and Gillette, its growth is slowing, and the stock appears fully valued. Trading at a forward price-to-earnings (P/E) ratio of 23.7, the shares may not offer much upside at current levels.
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Disclosure: On the time of writing, I’m long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I’m also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I repeatedly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of each the macroeconomic environment and firms’ financials.
The views discussed in this text are solely the opinion of the creator and shouldn’t be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market evaluation and insight.
