Stock Market Investing Action Plan: Holiday-Week Earnings From Walmart, Home Depot, Nvidia

The stock market heads into a short week as the Presidents Day holiday closes markets on Monday. The Investing Action Plan shows plenty of action crammed in the remaining four days. Earnings from Walmart (WMT) and Home Depot (HD) kick off the late season retail reporting rush. Nvidia (NVDA) gives a critical chip industry update, while Baidu (BIDU), Alibaba Group (BABA) and other key China-base names produce some insight into the economic rebound on which a large share of the world is hanging its hat for this year.

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Stocks To Watch: Five Stocks Showing Strength As Rally Wavers

With the major indexes retreating late last week on revived inflation and Fed fears, some leading stocks came under pressure. But some are still showing strength or constructive action. Lamb Weston (LW), Deere (DE), DoubleVerify (DV), Dexcom (DXCM) and Vertiv (VRT) are five recent IBD Stock Of The Day selections trading near buy points. Many are trading tight, showing resilience: Lamb Weston and Deere are working on flat bases. DoubleVerify and Dexcom are shaping handles. Vertiv posted six straight tight weekly closes before closing the gap with its 16.17 entry. These stocks come from different sectors, reflecting market breadth and the importance of diversifying your leaders.

Economic Calendar: In Search Of February Sparks

The latest data suggests the U.S. economy accelerated in January. We’ll get an early look as to whether that continued this month with Tuesday’s 9:45 a.m. ET release of the S&P Global Flash PMI for manufacturing and services for February. Personal income and outlays for January, out Friday at 8:30 a.m., is the week’s other big release. We already know retail sales were hot in January, but we’ll find out whether services spending also saw sparks. We’ll also get the Fed’s favorite inflation report, the personal consumption expenditures price index. Data from the CPI and PPI releases suggest the PCE price index also will be uncomfortably strong, including the nonhousing service categories the Fed cares most about.

Minutes from the Jan. 31-Feb. 1 Fed meeting are due out Wednesday at 2 p.m. Fed meeting minutes can often move the stock market, but probably not this time. That’s because the January jobs report that came two days later sent Treasury yields surging and rate-hike odds jumping, changing the outlook for Fed policy. New home sales, out Friday at 10 a.m., also will attract interest. Housing stocks have surged to the market’s top tier. However, the increase in mortgage rates over the past couple of weeks could stall their progress.

Stock Market Perspective: Small Caps Flex Some Muscle

The 21-day exponential moving average appears to be the key for the Nasdaq composite and S&P 500, with both indexes wrestling to hold support at that technical gauge. The Dow notched its third straight weekly decline. Small caps showed strength, with the Russell 2000 and S&P Smallcap 600 rising about 1% for the week. Among industry groups, coal producers led the advancers while oil-related groups took six of the 10 largest losses. China stocks suffered more than most, with the iShares MSCI China ETF (MCHI) and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) each off about 2.5% in a third weekly decline, putting them back below 10-week support for the first time since November.  

Blue Chip Earnings: Walmart, Home Depot Launch Big Retail Reporting

Fresh off a shake-up in its technology operations, Walmart’s fourth-quarter results are due early Tuesday. Analysts look for flat earnings and a low-digit sales increase. Home Depot also reports Tuesday, targeting very modest sales and earnings increases. Cost pressure will be critical in both reports, as investors plot the path of inflation. The reports effectively wrap up the Dow’s reporting season, leaving only Salesforce.com (CRM) and Nike (NKE) to report in March. 

Semiconductors: Nvidia Riding High On AI Chips

Graphics-chip maker Nvidia will report its fiscal fourth-quarter results late Wednesday. The Santa Clara, Calif.-based company is seen earning 81 cents a share, down 39% year over year, on revenue of $6.01 billion, down 21%, amid soft sales of gaming chips. But Nvidia shares have been rising ahead of the report on excitement over the use of its graphics processors for artificial intelligence applications such as generative AI tool ChatGPT.

China Leaders: Baidu, Iqiyi resist pullback

Baidu, Alibaba, Vipshop Holdings (VIPS) and Iqiyi (IQ) headline some of the top Chinese companies set to report this week. Baidu and Iqiyi are each working on a fourth-straight monthly advance, while others pull back as China’s rebound rally eases. Analysts expect  search-engine leader Baidu to report $2.02 EPS Wednesday, up 10%, on revenue of $4.7 billion, down 10%. Iqiyi, which operates an online entertainment website for young audiences, reports Thursday morning. Analysts target EPS of 7 cents, a fourth-straight profit, up from a 35-cent loss last year.

Stock Market Earnings

Monday:

Williams Companies (WMB) reports fourth-quarter financials Monday, despite the fact that the stock market will be closed. Analysts project earnings rising 28% to 50 cents per share for the natural gas transportation company, while sales are expected to fall 10% to $2.92 billion. In 2021, Williams Companies posted its best top and bottom line numbers since 2008. Wall Street predicts WMB will outperform last year but still fall short of 2008 levels.

Helix Energy Solutions (HLX) announces Q4 earnings late Monday. HLX has had a string of seven straight quarterly losses, dating back to Q1 2021. Analysts forecast a one cent loss per share in Q4 while revenue increases 49% to $251.3 million. Wall Street does not expect a quarterly profit for the offshore energy services provide until Q2 2023.

Tuesday (Early):

Ingersoll Rand (IR) reports Q4 results Tuesday morning. Analysts see Ingersoll’s adjusted earnings falling for the first time in two years, dipping 8.8% to 62 cents per share. Sales are seen rising 8.8% to $1.54 billion for the industrial machinery company. IR stock is trading just below the buy zone for a cup with handle base.

For Q4 results Tuesday morning, Huntsman (HUN) earnings are seen tanking 88% to 11 cents per share as revenue drops 32.6% to $1.555 billion. The results would mark the second straight quarterly earnings and sales decline. 

Trinity Industries (TRN) announces Q4 earnings before the stock market opens Tuesday. Wall Street forecasts earnings ballooning 475% to 46 cents per share. Revenue is also expected to grow 74% to $822 million. The 475% EPS increase would come after the company averaged a 15% quarterly earnings loss year over year throughout 2022.

Transocean (RIG) will report fourth-quarter financials early Tuesday. The company has recorded five straight years with losses and analysts expect that trend to continue. Wall Street forecasts a loss of 22 cents per share in Q4, up from a 19-cent per-share loss in 2021. Meanwhile, revenue is predicted to fall around 8% to $620 million in the fourth quarter.

Tuesday (Late):

For its Q1 results Tuesday afternoon, Nordson (NDSN) earnings are seen sliding 4.8% to $1.97 per share as sales edge up 2.5% to $624 million. NDSN stock is trading in a buy zone for a cup-with-handle base.

Palo Alto Networks (PANW) reports fiscal Q2 earnings late Tuesday. Analysts expect the cybersecurity firm’s profit to rise 34% to 78 cents a share from a year earlier. Palo Alto revenue will rise 25% to $1.65 billion, analysts estimate. Billings are projected to come in at $1.96 billion, up 22%. Growth in Palo Alto’s core firewall business has slowed as it builds a broader cloud-based platform. Morgan Stanley says PANW stock could soon join the stock market S&P 500 index.

Matador Resources (MTDR) reports fourth-quarter financials late Tuesday. Analysts expect EPS grew 56% to $1.97 and revenue increased 14% to $647 million. If analyst predictions hold true, it would mark a dramatic slowdown in EPS growth, down from an average 194% increase over the last three quarters.

Wednesday:

Toll Brothers (TOL) is expected to report a 12% increase in earnings for its Q1 results Wednesday morning. Sales are seen dipping 3% to $1.737 billion, marking the first decline in two years. TOL stock is trading in a cup-with-handle base.

Etsy (ETSY) reports Q4 results late Wednesday, with EPS expected to jump 28% to 80 cents a share, on revenue of $754 million, up 5%, for the arts and crafts website company. Etsy stock has formed a cup with handle.

NetApp (NTAP) reports fiscal Q3 results late Wednesday, with EPS estimates of $1.31 a share, up 9%, and revenue of $1.6 billion, flat vs. a year ago, for the provider of data storage and networking gear.

Rio Tinto (RIO) is set to post results early Wednesday. The diversified miner is seen reporting a 44% EPS drop to $3.20 for Q4. RIO stock, which has gone on a big run since China ended its Covid lockdown, has found support in the stock market at its 50-day moving average.

Thursday:

Square-parent Block (SQ) reports Q4 earnings after the stock market close Feb. 23. Analysts estimate EPS of 30 cents, up 11% from a year earlier. Revenue is expected to climb nearly 13% to $4.62 billion, including Bitcoin transactions.

Northern Oil & Gas (NOG) announces Q4 earnings after the market closes Thursday. Wall Street forecasts EPS growing 55% to $1.64 and sales increasing 22% to $391 million. This is well off NOG’s 2022 quarterly earnings and sales growth pace, which began with a 1,571% revenue increase in Q1 2022. 

EOG Resources (EOG) reports fourth-quarter financials late Thursday. Analysts project earnings growing 9% to $3.37 per share while revenue is expected to fall 4% to $5.81 billion in Q4. Over the last three quarters, EOG’s EPS has grown on average 92% while sales have averaged a 48% increase.

Booking Holdings (BKNG) reports Q4 results in the stock market late Thursday. Analysts expect EPS of $22.05 a share, up 42%, on revenue of $3.89 billion, up 3%, for the online travel company. BKNG stock has formed a long and deep cup base.

Newmont (NEM) reports Q4 results on Thursday morning. The gold miner is seen earning 45 cents a share, down 42% vs. the year ago-quarter. Sales are seen down 4% to $4.34 billion. NEM stock has fallen 14% in February, amid gold-price weakness as Treasury yields climb and the dollar rebounds.

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