Market Week: A Look At U.S. And China Consumers, And These Fast-Moving Stocks

After a steep drop on Monday, the Nasdaq, S&P 500 and Dow industrials made their way back to an almost flat performance for the week. The rebound was off a break of support at the 200-day moving average for all three major indexes. The rebound set up a positive sense of momentum for the coming week, but uncertainty over the jobs picture and the mood of the consumer remains. So, with earnings season off its peak, data may be the stock market’s best catalyst in the days ahead, with inflation and retail sales data on tap. Still, retail earnings reports could hold some surprises, with Walmart (WMT) and Home Depot (HD) set to get the ball rolling. Alibaba (BABA) and JD.com (JD) will provide a gauge on consumers in China. Some fast-moving names including Sea (SE) and Golar LNG (GLNG) also report.

↑ X NOW PLAYING This Consumer Giant’s Earnings Could Give Clues About Health Of Economy

Stocks To Watch: Opportunities Amid Volatility

The stock market is still in flux, trying to bounce back while not yet confirming a new uptrend. But some stocks are setting up. These include GE Aerospace (GE), Meta Platforms (META), Fortinet (FTNT), Waste Connections (WCN) and insurer W.R. Berkley (WRB). GE and Meta are back above their 50-day lines, showing their resilience after big shakeouts on Aug. 5. Fortinet gapped up on earnings, clocking a 24% gain for the week, and may be working on a handle. Waste Connections is in a buy zone after a rebound from support and is potentially forming another base. W.R. Berkley is just above an early entry as insurers stand out as defensive plays against a volatile market.

Economic Calendar: Sizing Up The Fed’s Rate Cut

Inflation and retail sales data in the coming week could shift expectations as to whether the Fed’s first rate cut on Sept. 18 will be a quarter point or a half point. As of Friday, odds slightly favor the latter. The consumer price index, out Wednesday, is expected to show a modest 0.2% increase, both overall and for core prices. That should lower headline inflation to 2.9%. Don’t be surprised by an undershoot. Nomura is forecasting just a 0.08% rise in the core CPI. Tuesday’s producer price index also will shape forecasts for the Fed’s primary inflation rate, the core PCE price index, out late in the month. Retail sales, out Thursday, are expected to rise 0.3% overall.

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Stock Market Earnings: Can Walmart Revive Its Rally?

Dow Jones retailer Walmart reports Q2 results early Thursday. FactSet forecasts earnings increasing 6.6% to 65 cents per share adjusted on 4.3% revenue growth to $168.5 billion. UBS expects Walmart to maintain its traffic momentum despite lower consumer spending across retail, thanks to its high nondiscretionary mix. Walmart also launched new private-label brands and rolled back prices during the quarter, which should position it well for value consumers. Analysts expect same-store sales to increase 3.5%. WMT stock rose Friday, working on a potential rebound above its 50-day line. Shares have rallied more than 28% this year and hit a record high on July 19.

Home Improvement: Home Depot Basing

The Dow’s other leading retailer, Home Depot, reports early Tuesday. A five-quarter slide in sales and earnings is expected to ameliorate but continue through to Q3 as the job market and consumer balance sheets weaken. Still, Home Depot stock is in a base, and JPMorgan on Aug. 5 raised its price target to 400, 15% above where shares traded Friday.

Tech Earnings: Awaiting Cisco’s upturn

Cisco Systems (CSCO) reports fiscal Q4 earnings on Aug. 14. Analysts expect earnings and revenue to fall for the third straight quarter, with EPS of 85 cents, down 26%. Revenue is expected to fall 11% to $13.5 billion. Cisco aims to increase recurring revenue from subscription-based software and services and shift away from its core business of selling computer network switches and routers. It has forecast fiscal 2025 revenue growth in “low to mid-single-digit growth).” It has forecast revenue growth of 4% to 6% in fiscal 2026 and fiscal 2027.

E-commerce: China’s Consumers Check In

Alibaba reports fiscal Q1 earnings early Thursday. U.S.-listed shares of the Chinese e-commerce giant have been mired in a yearslong slump that began with a government crackdown on tech firms in China in late 2020. For the quarter, analysts project EPS down 13% to $2.09, amid ongoing concerns about the strength of consumer spending in the world’s second largest economy. Sales are seen increasing 6.5% to $34.6 billion. Alibaba stock has gained 3.4% this year. Meanwhile, Alibaba rival JD.com will report earnings early Wednesday.

Gauging An Ag Equipment Leader’s Decline

Deere (DE) reports early Thursday. Analysts expect earnings to crumble 44% per share as revenue slides 23%. That would mark the third straight quarter of EPS declines and fourth straight quarter of falling sales. Deere laid off hundreds of factory workers across the Midwest in recent months as it adjusts to slower global demand. Analysts forecast more pain ahead as U.S. farmer incomes decline, leaving little room for equipment purchases. And China’s economy continues to slow, a blow to this ag and construction equipment company.

Stock Market Earnings Briefs

Tuesday

On Holding (ONON) reports Q2 results early Tuesday. FactSet expects the Swiss shoemaker to report earnings of 18 cents per share, up from 5 cents last year, on 28% revenue growth to $649 million. ONON stock rallied nearly 45% in 2024 but on Friday was about 10% below a mid-June high.

Sea Ltd. reports second-quarter results Tuesday. Analysts polled by FactSet expect the Singapore-based internet services firm to report EPS of 10 cents per share and sales to increase 20.4% year over year to $3.7 billion. Sea is the parent company of Shopee, a popular e-commerce platform in Southeast Asia and Taiwan. The stock is ahead more than 50% this year, as e-commerce sales growth has improved despite stepped-up competition from TikTok, Temu and others. Shares are rebounding from a quick test of 200-day support.

Wednesday

Cardinal Health (CAH) posts fiscal Q4 results Wednesday morning. Analysts expect EPS to rise 12% to $1.73 as sales grow 10% to $58.64 billion. CAH stock shrugged off a big June-quarter sales miss by health care distribution giant McKesson (MCK). Cardinal’s growth outlook for the year ahead was already flattened by the loss of Optum, a major customer.

Thursday

Golar LNG reports second-quarter earnings and revenue early Thursday. Analysts project Q2 EPS falling 23% to 41 cents with sales declining 5% to $73.8 million. But management comments will be closely followed, as U.S. liquefied-natural-gas exports swing higher. After booking five straight monthly advances, GLNG is down around 6% in August and 10% off its July 24 high of 36.52.

Applied Materials (AMAT) will report its fiscal third-quarter results late Thursday. Analysts expect the semiconductor equipment vendor to earn $2.03 a share, up 7%, on sales of $6.68 billion, up 4%, for the July-ended quarter. AMAT shares remain up 12% for the year but 25% off a July high.