Stock Market Action Plan, July 10-14: Amazon Prime Day, JPMorgan, UnitedHealth, Delta Launch Q2

A soft first week of July was no surprise after the stock market clocked a record setting first half advance. Heading into mid-month, Amazon.com‘s (AMZN) Prime Day shopping event will garner attention early in the week. Among Dow Jones Industrials stocks, JPMorgan Chase (JPM) and UnitedHealth Group (UNH) report during the week. Delta Air Lines (DAL) sets earnings season in motion for the market-leading travel trades.

Stocks To Watch: Five Stocks In Or Near Buy Areas

After wrapping up a surprisingly strong first half of the year, the stock market rally is still acting well, although it paused in a recent trading range. That’s given several stocks a chance to consolidate. Nvidia (NVDA) continues to trade tight, now sitting in a four-weeks tight pattern after clearing a three-weeks tight in June. Mastercard (MA) and Dexcom (DXCM) are hovering around traditional buy points, and aren’t extended from their 50-day lines. Datadog (<strong>DDOG</strong>) made a strong move Friday, clearing an early entry and nearing an official buy point in its five-week pattern. Arista Networks (ANET) is near a trendline entry after a test of support at its 50-day moving average.

Economic Calendar: Eyeing The Rate Hike Horizon

Surprisingly solid U.S. economic data already has Wall Street basically locking in a Fed rate hike on July 26 and looking ahead to the next policy announcement on Sept. 20. We’ll get three CPI reports between now and then, starting with June data out Wednesday at 8:30 a.m. ET. Economists are expecting 0.3% monthly increases in both the overall and core CPI, which strips out food and energy prices. The core CPI inflation rate could fall from May’s 5.3% to 5% or possibly lower as the hefty 0.6% monthly rise in June 2022 falls out of the 12-month calculation. Also on Wednesday, the Fed’s anecdotal Beige Book report of economic conditions is out at 2 p.m.

Jobs Report: Friday’s Stakes Rise As 10-Year Treasury Yield Bolts Above 4%, S&P 500 Falls

Some other economic reports worth watching: The IBD/TIPP Economic Optimism Index, which has been stuck in a rut but could show some life, is out Tuesday at 10 a.m. The producer price index, out Thursday at 8:30 a.m., will provide a look at wholesale price trends. The health care inflation reading, which feeds into the Fed’s primary inflation rate (the PCE price index), is of particular importance. The University of Michigan Consumer Sentiment Index is out Friday at 10 a.m.

Stock Market Perspective: After A Record-Setting First Half

The Nasdaq composite’s 31.7% gain in the first half of the year was the best of any year since 1983. The Nasdaq 100 surged 38.8%, the best first half in its history. The S&P 500 was more modest, up 16.5% in its best first-half showing since 2019. The Nasdaq and the S&P 500 pulled back slightly in the first week of July. The Dow industrial Average also pulled back during the July 4 week, but still held neatly above its short-term 10-day moving average.

Amazon Prime Day Gauges Consumer Sentiment

Online retail juggernaut Amazon launches its 48-hour Amazon Prime shopping day event on Tuesday. The shopping festival will act as an economic indicator, providing a quick snapshot of how consumers are feeling, and how much they are willing to spend as the specter of more Fed rate hikes and a rumored recession continue to rise. Other retailers also plan to conduct sales on the same days, attempting to grab a piece of the Amazon disrupter pie. Target (TGT), Best Buy (BBY), Kohl’s (KSS) and Macy’s (M) were just a few of the names running Prime Day sales last year. In 2022, overall U.S. online sales totaled $11.9 billion during the 48-hour Prime Day sale, and $22.4 billion for the entire week. Some 63% of Americans have Prime accounts, vs. 65% last year, according to a RetailMeNot.

Delta Air Lines Fires First Q2 Salvo

Delta Air Lines sets the second-quarter earnings season in motion early Thursday. Analysts expect earnings of $2.36 per share, jumping 64% year over year, on an 8% revenue increase. That would mark the eighth consecutive quarter of slowing sales growth with a further slowdown seen in the next two quarters. Nonetheless, Delta stock continues to outperform though still below pre-pandemic levels. In June, the carrier gave an upbeat earnings outlook for 2023. It also resumed paying a dividend, which had been suspended during the Covid-19 outbreak. Strong travel demand, particularly for international trips, lower fuel prices and premium fares are driving growth. UAL reports July 19.

Q2 Earnings Launch: JPMorgan, Citigroup, Wells Fargo

The Q2 earnings season gets its official launch on Friday, when JPMorgan, Wells Fargo (WFC), and Citigroup (C) deliver results. Analysts expect a fourth straight quarter of earnings and revenue growth acceleration for JPMorgan. Wells Fargo is expected to post its biggest revenue jump since Q3 2021. Citigroup is forecast to see a sharp drop in earnings. Investors will listen for how banks plan to manage capital after the latest round of Fed stress tests, and ahead of more Fed rate hikes. JPMorgan is in a buy range ahead of its report. Wells Fargo is back above its 10-week support.

Big Asset Managers Report

Investment management giant BlackRock (BLK) and rival State Street (STT) both post Q2 earnings before the open on Friday. BlackRock is expected to end a string of four straight quarterly profit declines, with EPS rising 14.5% against a weak year-ago period, to $8.43. State Street earnings, down in three of the past four quarters, should rise 9% to $2.11 per share.

Stock Market Earnings Bullets

Monday

Helen of Troy (HELE) posts fiscal Q1 earnings before Monday’s open. The maker of personal care and other consumer products is expected to post a 30% drop in EPS to $1.69 as revenue slips 8% to $465.36 million.

WD40 (WDFC) reports late Monday. Analysts expect a 14% EPS rebound on a 12% sales bounce. That would mark a big improvement from flat to lower earnings and sales growth in the prior two quarters.

Tuesday

Latin American wireless operator America Movil (AMX) reports Q2 earnings late July 11. It hosts an earnings call with analysts early July 12. Analysts expect profit to surge 115% to 43 cents per share. Revenue will rise 14% to $10.48 billion, analysts estimate. AMX stock has gained 19% in 2023. America Movil sold its U.S. wireless business, TracFone, to Verizon Communications (VZ) in late 2021.

Thursday

PepsiCo (PEP) posts Q2 earnings early Thursday. The food and beverage giant, after double-digit sales and earnings gains in Q1, is seen lifting profit 5% to $1.96 as sales rise 7% to $21.7 billion. After hitting an all-time high in mid-May, shares have slipped below the 50-day moving average.

Conagra Brands (CAG) reports before the stock market opens Thursday. Wall Street sees an 8% EPS decline for the packaged foods maker on a 3% sales gain. That would mark the third straight quarter of slowing sales growth.

Cintas (CTAS) fiscal Q4 earnings are due early Thursday. The supplier of company uniforms and other equipment is expected to post EPS of $3.19, a second straight quarter with 17% growth. Analysts expect revenue of $2.26 billion, moderating to 7% after multiple double-digit gains. CTAS stock is in a buy zone and on the watchlist for IBD Long Term Leaders.

Fastenal (FAST) reports early Thursday. The industrial supplies distributor should see a 5.5% EPS gain on a 6% sales increase. That would mark the fifth straight quarter of slowing sales growth.

Friday

UnitedHealth, which warned in June of higher-than expected costs amid increased demand for hip and knee surgeries, posts Q2 results before Friday’s stock market open. Analysts see EPS for the managed care and medical services behemoth up 9% to $6.06, slowing from double-digit gains. Revenue should grow 15% to $92 billion.

Sweden-based wireless network gear maker Ericsson (ERIC) reports Q2 earnings early on July 15. Analysts expect the company to swing to a 4-cent loss from a 13-cent profit a year earlier. Revenue will rise 4% to $6.13 billion, analysts predict. ERIC stock is down 6% in 2023. Ericsson aims to spur growth with cloud-based software and services with 5G network spending weak.