Stock Trading Action Plan: Inflation Gauges And Microsoft, Amazon, Boeing, Alphabet Earnings

The Dow notched its first weekly decline since mid-March, the Nasdaq and the S&P 500 were little changed, as the market heads into what promises to be a busy final week of April. More than a third of the 30 Dow industrials are due to report, with several poised near buy points. Investors will receive a broad read of additional outlooks from the likes of Amazon.com (AMZN), Alphabet (GOOGL), General Electric (GE) and General Motors (GM). In addition, a couple of key inflation gauges could shake up stock trading near the end of the week.

Stock Trading Watchlist: Five Stocks Finding Key Support

With the stock market moving sideways in recent weeks, many leading stocks have pulled back to their 50-day/10-week lines, including Arista Networks (ANET), Advanced Micro Devices (AMD), Lattice Semiconductor (LSCC), Scorpio Tankers (STNG) and SPS Commerce (SPSC). Bullish rebounds from the 10-week line often can offer buying opportunities. Of course, breaking decisively below their 10-week lines, it would be a significant sell signal. All five of these stocks have earnings within the next two weeks.

Economic Calendar: Two Key Inflation Gauges

Some key economic reports in the coming week probably won’t dissuade the Federal Reserve from another rate hike on May 3, but they might help convince the Fed to make it the last hike. Friday is the big day for data, led by the Commerce Department personal income and outlays report for March. The focus will be on the Fed’s favorite inflation gauge, the personal consumption expenditures price index. Although food and energy prices have let up a bit, the Fed is most concerned about prices for nonhousing services, which have remained firm.

However, another report due out at the same time could also pack a punch. The Employment Cost Index is the Fed’s preferred measure of wage growth, which is seen as a key to services inflation. The hope is that the ECI will show that wage growth is easing to the 3.5% annual rate that the Fed sees as consistent with its inflation target.

Initial claims for jobless benefits, out Thursday at 8:30 a.m., also could influence the Fed. Both new claims and continuing claims have been on the rise, so weaker employment reports are likely to follow. Also on the calendar, Q1 GDP growth, due Thursday at 8:30, is expected show a 2% rise. New home sales, out Tuesday at 10 a.m., are seen dipping to an annualized pace of 632,000 units.

Aerospace: Looking For 737 Max Ramp Plans

Boeing (BA) reports early Wednesday. Wall Street expects the aviation and defense giant to post a 62% earnings rebound on a 25% sales bounce. Investors will wait to hear more about the company’s plans to ramp up production of its bestselling 737 Max passenger jet this summer, after a manufacturing issue paused some deliveries. The plans for the Max ramp follow two fatal plane crashes in 2018 and 2019, forcing Boeing to curb production to fix safety issues, which are unrelated to the current manufacturing problems.

Microsoft Earnings Seen Flat

Software giant Microsoft (MSFT) plans to report its fiscal third-quarter results late Tuesday. Analysts see Microsoft earning $2.24 a share, up 1% year over year, on sales of $51.1 billion, up 3%. Investors will focus on the company’s cloud computing business and monetization of its artificial intelligence initiatives. Meanwhile, growth in Microsoft’s PC software business has been hampered by weak personal computer sales. Microsoft is testing short-term technical support, holding its ground ahead of earnings after a mid-March breakout.

Alphabet: A Revenue Reality Check

Analysts have lowered expectations heading into Google-parent Alphabet’s Q1 earnings report, due after the close of regular stock trading on April 25. Analysts predict EPS of $1.07, down 13% from a year earlier. Revenue is expected to rise 1.3% to $68.9 billion. Analysts will focus on how well Google’s core, internet search-related digital advertising business holds up amid recession fears. Analysts expect cloud computing revenue growth to slow. YouTube ad growth likely will be pressured again by TikTok. The rise of generative artificial intelligence and its impact on internet search will be a topic on the earnings call. There’s speculation Apple could seek higher payments for making Google the default search engine on iPhones.

Streamlining A Streaming Leader

Amazon.com reports first-quarter results late Thursday with earnings estimate of 21 cents a share vs. a 38-cent loss in the year ago period. Expected revenue is $124.6 billion, up 7%. Amazon is in the process of laying off more than 27,000 workers in a move to “streamline operations” during what has been a difficult period for most all e-commerce companies, hit by a significant drop in digital advertising. Amazon earnings have suffered due to its money-losing stake in electric-truck maker Rivian Automotive

Semiconductors: Intel Poised For A Loss

Chipmaker Intel (INTC) will post first-quarter results late Thursday. Wall Street expects Intel to lose 16 cents a share on sales of $11.03 billion. Intel is navigating a downturn in personal computer sales while investing heavily in manufacturing to catch up with foundries Samsung and Taiwan Semiconductor Manufacturing (TSM) in advanced chipmaking technology. Analysts are modeling Intel to break even in the second quarter.

Dow Industrials: The Big Hammer Week For Dow Reports

With earnings season now well underway, the Dow industrials heads into its heaviest reporting week of the period. More than a third of the 30 Dow stocks are due during the final week of April. Coca-Cola (KO), Boeing (BA), ServiceNow (NOW) are below buy points in valid bases ahead of their reports. McDonald’s (MCD) is in a buy range following a breakout. The past week’s losses from Cisco Systems (CSCO) and UnitedHealth (UNH) helped drag the Dow to its first weekly slip in five weeks, leaving the benchmark up about 2% so far this year.

Stock Trading Earnings Briefs

Monday

Cadence Design Systems (CDNS) will deliver its first-quarter results late Monday. Analysts predict the maker of electronic design automation software will earn $1.26 a share, up 8%, on sales of $1.01 billion, up 12%. CDNS stock has been a top performer in 2023.

Packaging Corporation of America (PKG) announces first-quarter financials after the close of regular stock trading. Analysts forecast EPS falling 16% to $2.27 in Q1 with revenue dropping 2% to $2.08 billion. PKG saw booming profits of $11.14 per share in 2022, but analysts have 2023 earnings dropping 16%, back around 2021 levels, to $9.29 per share.

Tuesday

General Electric reports early Tuesday. GE is expected to post a 27% EPS decline on a 19% sales drop, after spinning off its health care unit in early January.

Verizon Communications (VZ) reports first-quarter earnings early April 25. Analysts predict earnings of $1.19 a share, down 12% from a year earlier. Revenue is expected to be flat at $33.6 billion. Verizon’s consumer wireless business has been struggling. Analysts expect Verizon to lose 120,000 wireless postpaid phone subscribers vs. a loss of 36,000 in the year earlier period.

General Motors (GM) reports early Tuesday. The auto giant is likely to deliver a 19% EPS decrease despite a 7% revenue gain. That would mark the second sequential quarter of slowing sales growth.

Halliburton (HAL) reports first-quarter earnings early Tuesday. The Street sees the company’s EPS skyrocketing 91% to 67 cents in Q1 with sales increasing 28% to $5.49 billion. HAL saw 2022 earnings of $2.15 per share, up 99% compared to 2021. Full-year sales shot up 33% to $20.3 billion. Analysts expect Halliburton 2023 EPS will grow 40% to $3 and full-year revenue will increase 15% to $23.47 billion, according to FactSet.

United Parcel Service (UPS) earnings are expected to tumble 28% to $2.20 per share for its early Q1 report Tuesday. Revenue is seen sliding 5.6% to $23 billion.

Biogen (BIIB) is on deck to report its first-quarter earnings before the stock market opens Tuesday. Analysts expect the company to report adjusted earnings of $3.34 per share on $2.35 billion in sales, declining a respective 8% and 7%. Investors will likely look for news on Biogen’s strategy for its new Alzheimer’s drug, Leqembi. Notably, Biogen stock is forming a double-bottom base with an entry at 296.

Chipotle Mexican Grill (CMG) is trading in the buy zone of a cup base ahead of its late Tuesday results. Analysts expect Chipotle earnings to leap 57% to $8.95 per share on 15.8% revenue growth to $2.34 billion.

Wednesday

Roku (ROKU) will release its first-quarter results after the close of regular stock trading Wednesday. Wall Street sees the streaming video platform losing $1.48 a share on sales of $708 million amid a weak advertising market. After a steep decline in 2022, Roku stock has been consolidating for the past nine weeks.

Align Technology (ALGN), maker of teeth-straightening system Invisalign, will report first-quarter earnings late Wednesday. The Street projects per-share profit of $1.69, minus some items, and $903 million in sales. Earnings would tumble 21% as sales fall 7%. Align stock is consolidating with a buy point at 368.97.

Enterprise software maker ServiceNow (NOW) reports Q1 earnings late April 26. Analysts predict 18% EPS growth to $2.04 with revenue rising 21% to $2.085 billion. Another key financial metric is current remaining performance obligations. CRPO bookings are an aggregate of deferred revenue and order backlog and serve as a sales growth metric. Management set a low bar for first quarter CRPO after CRPO missed expectations in the December quarter, mostly from lumpiness in customer payments. ServiceNow is trading just below a 482.43 buy point.

Thermo Fisher (TMO) stock is eyeing a cup-base buy point at 609.32 ahead of its first-quarter earnings early Wednesday. Analysts expect sales to decline 10% to $10.65 billion, and for adjusted earnings to plummet 31% to $5.03 a share.

Methanex (MEOH) announces first-quarter financials late Wednesday. Wall Street forecast EPS dropping 56% to 95 cents with sales expected to fall 19% to $954 million. Methanex full-year profits sank in 2020, with the company posting a $1.62 per share loss. However, Methanex rebounded in 2021 with earnings of $6.03 per share. The Street sees 2023 EPS falling 31% to $3.31.

Boston Scientific (BSX) is trading at record highs as it prepares for its first-quarter earnings report before the stock market opens Wednesday. Analysts expect the medical devices giant to report adjusted income of 43 cents a share and $3.16 billion in sales, up a respective 10% and 4% year over year.

Stocks Quiet Ahead Of Earnings Wave; What To Do Now

Thursday

AbbVie (ABBV) stock is forming a saucer-with-handle base and buy point at 168.21 ahead of its first-quarter earnings report early Thursday. Analysts call for adjusted earnings of $2.54 per share and $12.19 billion in sales. On a year-over-year basis, earnings would decline 20% and sales would fall 10%. Investors will likely zero in on Humira sales in the U.S. after biosimilar versions of the immunology drug came out.

Wall Street expects payments giant Mastercard (MA) earnings to ease nearly 2% to $2.71 per share while revenue climbs 8.5% to $5.64 billion. MA stock is trading in a flat base ahead of results early Thursday.

Merck (MRK) is on deck to report its first-quarter earnings early Thursday. Analysts expect the company’s sales to fall 13% to $13.78 billion. They project a 37% dive in per-share earnings to $1.35, on an adjusted basis. Merck stock is consolidating with a buy point at 115.59.

Crocs (CROX) stock broke out of its cup base on Friday ahead of its early Tuesday report. FactSet forecasts earnings rising 5.4% to $2.16 per share on a 30% revenue spike to $856 million.

Friday

Exxon Mobil (XOM) announces first-quarter earnings early Friday. Analysts predict EPS growing 25% to $2.60 with revenue decreasing 5% to $85.65 billion. The energy giant reported booming profits in 2022 and its highest annual revenue since 2013. Exxon Mobil earnings skyrocketed 160% to $14.06 per share in 2022 but Wall Street forecasts 2023 full-year EPS retreating 27% to $10.18. Exxon is trading just below a 117.28 cup-with-handle buy point.

Chevron (CVX) reports Q1 financials before the market opens with the Street expecting earnings of $3.38 per share, 2 cents more than last year. Chevron revenue is forecast to fall 10% to $48.94 billion. Like Exxon Mobil, Chevron’s 2022 earnings ballooned 128% to $18.83 per share while sales increased 51% to $246.25 billion. However, Wall Street also sees CVX profits returning somewhat to earth in 2023, falling 24% to $14.38 per share.