U.S. stocks finished lower on Friday, with the S&P 500 and Nasdaq notching their biggest one-day losses in two weeks, as a post-election rally ran out of steam and investors anxious over the trail of rates of interest.
For the week, the S&P 500 fell 2.1%, while the tech-heavy Nasdaq Composite declined 3.1%. The blue-chip Dow Jones Industrial Average lost 1.2% throughout the period.
Source: Investing.com
The week ahead is predicted to be an eventful one as investors proceed to evaluate the outlook for the economy, inflation, rates of interest and company earnings.
On the economic calendar, flash PMI readings on manufacturing and the services sector will grab attention on Friday, together with updates on the housing market.
That can be accompanied by a heavy slate of Fed speakers, with the likes of district governors Jeffrey Schmid, Lisa Cook, Michelle Bowman, and Beth Hammack all set to make public appearances.
Weekly Economic Events
Source: Investing.com
Expectations for a 25-basis point rate cut on the Fed’s December meeting stood at 63% on Sunday morning, in accordance with the Investing.com Fed Monitor Tool.
Elsewhere, in corporate earnings, Nvidia (NASDAQ:NVDA)’s results can be the important thing update of the week because the Q3 reporting season quiets down. Other notable names lined as much as report earnings include Walmart (NYSE:WMT), Goal (NYSE:TGT), TJX Firms (NYSE:TJX), Ross Stores (NASDAQ:ROST), Lowe’s (NYSE:LOW), Palo Alto Networks (NASDAQ:PANW), and Snowflake (NYSE:SNOW).
No matter which direction the market goes, below I highlight one stock more likely to be in demand and one other which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, November 18 – Friday, November 22.
Nvidia is poised for significant gains this week, because the tech giant prepares to deliver one other beat-and-raise quarterly earnings report amid surging demand for its AI chips.
The Santa Clara-based company is ready to release its Q3 earnings after the market closes on Wednesday at 4:20PM ET, with expectations running high for an additional record-breaking performance. A call with CEO Jensen Huang is ready for five:00PM ET.
Market participants expect a large swing in NVDA shares following the print, as per the choices market, with a possible implied move of 9.8% in either direction.
Nvidia Earnings Page
Source: InvestingPro
Investor sentiment is overwhelmingly bullish, as evidenced by 30 upward earnings revisions previously 90 days, in accordance with InvestingPro. Nvidia has consistently outperformed expectations, becoming a bellwether for the tech sector as growth prospects in artificial intelligence remain strong.
Consensus expectations call for Nvidia to post earnings per share of $0.74, rising 85% from EPS of $0.40 within the year-ago period. Meanwhile, revenue is forecast to surge 82% annually to $33.1 billion, underscoring the corporate’s unmatched dominance within the AI chip market.
Of particular interest can be guidance for the present quarter, marking the debut of Nvidia’s next-generation Blackwell AI processor. CEO Jensen Huang has described demand for Blackwell as “insane,” setting the stage for better-than-expected forecasts.
NVDA stock ended Friday’s session at $141.98, just under its record high of $149.65 reached on November 12. Shares have soared 186.7% in 2024, making Nvidia considered one of the top-performing S&P 500 stocks of the 12 months. At current levels, Nvidia has a market cap of $3.48 trillion, making it the most beneficial company trading on the U.S. stock exchange.
Nvidia Chart
Source: Investing.com
It’s price mentioning that InvestingPro’s AI-powered quantitative models rate Nvidia with a solid ‘Financial Health Rating’ of three.7 out of 5.0, highlighting its solid profitability and promising growth trajectory.
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In stark contrast, Goal is facing a much more difficult outlook. The large-box retailer is grappling with high operating costs, shrinking margins, and stiff competition from rivals like Walmart.
Volatile traffic trends, seasonal weather challenges, and election impact uncertainties compound the retail giant’s struggles.
Goal – which is the seventh largest brick-and-mortar retailer within the U.S. – is scheduled to release its third-quarter earnings report ahead of the opening bell on Wednesday at 6:30AM ET.
In response to the choices market, traders are pricing in a swing of around 9% in either direction for TGT stock following the print.
Goal Earnings Page
Source: InvestingPro
Wall Street projects earnings of $2.30 per share, marking a 9.5% increase from $2.10 a 12 months earlier. Revenue is anticipated to grow marginally by 2% to $25.9 billion, highlighting weak consumer demand for discretionary goods like home furnishings and apparel.
Looking ahead, CEO Brian Cornell is more likely to deliver cautious guidance for the all-important holiday quarter because of a difficult operating environment, competitive landscape, and ongoing discounting activity. External headwinds, equivalent to weather disruptions and broader economic uncertainty, have further complicated the outlook.
With disappointing Q3 results and a cautious holiday outlook on the horizon, the stock’s downside risks outweigh potential rewards. Investors should avoid Goal amid this difficult retail landscape.
TGT stock closed at $152.13 on Friday. Shares have underperformed the S&P 500 by a large margin this 12 months, gaining 6.8%. At current valuations, the Minneapolis-based retailer has a market cap of $70 billion.
Goal Chart
Source: Investing.com
It ought to be noted that Goal currently has a below average InvestingPro ‘Financial Health Rating’ of two.6 out of 5.0 because of lingering concerns over weakening profit margins and spotty sales growth.
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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, and the Invesco QQQ Trust ETF. I’m also long on the Technology Select Sector SPDR ETF (NYSE:XLK).
I frequently rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of each the macroeconomic environment and corporations’ financials.
The views discussed in this text are solely the opinion of the creator and mustn’t be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market evaluation and insight.
