This week will focus on big tech earnings, US employment data, and PCE inflation data.
Meta is positioned to deliver strong results, benefiting from a favorable digital advertising environment and the successful integration of AI across its platforms.
Intel continues to face significant operational and financial challenges, calling into question its ability to compete effectively in the semiconductor market.
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U.S. stock markets closed mixed on Friday, with the tech-heavy Nasdaq Composite Index hitting a new record amid gains in large-cap tech stocks.
Only the Nasdaq ended the week up 0.2%, while the S&P 500 fell 1% and the blue-chip Dow Jones Industrial Average fell 2.7%. Both the S&P 500 and Dow ended their six-week winning streaks.
Stocks have been volatile as yields soared as bets that the Federal Reserve would cut interest rates collapsed on expectations for an improved economic outlook.
Source: Investing.com
The upcoming blockbuster week is expected to be an eventful one, packed with several market-moving events, as investors continue to assess the outlook for the economy, inflation and interest rate cuts.
The most important thing on the economic calendar is Friday’s October U.S. jobs report, when the economy is expected to add 111,000 jobs. The unemployment rate is expected to remain stable at 4.1%.
Also on the agenda is the personal consumption expenditure (PCE) price index, the Fed’s preferred inflation measure.
weekly economic events
Source: Investing.com
Meanwhile, Federal Reserve officials will enter a blackout period ahead of the US central bank’s policy meeting scheduled for November 7th. As of Sunday morning, traders believed there was a 92% chance the Fed would cut interest rates next month, according to Investing. com’s Fed Monitor tool.
Elsewhere, earnings season is in full swing, with five of the giant “Magnificent Seven” tech stocks set to report their latest results. Alphabet (NASDAQ:GOOGL) is expected to report on Tuesday night, Microsoft (NASDAQ:MSFT) and MetaPlatform (NASDAQ:META) on Wednesday, and Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) later on Thursday. .
These mega-cap stocks include Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:INTC), Coinbase (NASDAQ:COIN), Uber (NYSE:UBER), PayPal (NASDAQ:PYPL), and Visa ( NYSE:V), Mastercard (NYSE:MA), McDonald’s (NYSE:MCD), Eli Lilly (NYSE:LLY), ExxonMobil (NYSE:XOM), and Chevron (NYSE:CVX).
Regardless of which direction the market goes, here are stocks that are likely to be in demand and that are poised for new downside. However, please note that my period is only for one week, from Monday, October 28th to Friday, November 1st.
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Meta Platforms stands out as a top buy this week, with its much-anticipated third-quarter earnings report expected to be a big boost for the tech giant.
Meta plans to provide a third-quarter update after the U.S. market closes at 4:05 p.m. ET on Wednesday. CEO Mark Zuckerberg and CFO Susan Lee are scheduled to discuss the results on an earnings call at 5 p.m. ET, giving investors an opportunity to explore the impact of AI and Reel & Thread’s potential growth strategy. We’ll be watching for further insights.
According to the options market, market participants expect META stock to move significantly after the paper decline, with a 7.2% move in either direction expected. The stock has increased 7.4% since its last earnings release in July.
Metaplatform earnings page
Source: InvestingPro
Analysts expect another strong quarter of revenue and bottom-line growth this year as conditions in the digital advertising market improve. Earnings estimates have been revised upward 23 times in recent weeks, according to research from InvestingPro, and downwardly just three times, reflecting growing bullishness on Meta’s earnings potential.
Meta’s earnings are expected to be $5.27 per share, up 20.1% from the year-ago quarter’s EPS of $4.39. Revenue is expected to rise 18% year over year to $40.3 billion, as the social media giant benefits from strong trends in digital advertising and strategic investments in artificial intelligence.
The company’s focus on expanding its AI infrastructure has not only increased the effectiveness of its ad targeting capabilities, but also strengthened its product ecosystem, including Facebook, Instagram, Messenger, Reels, Threads, and WhatsApp.
Looking ahead, I believe Meta’s guidance for the fourth quarter will also exceed consensus expectations as the social media company benefits from a growing user base and new AI initiatives.
Metaplatform stock price chart
Source: Investing.com
META stock, which soared to an all-time high of $602.95 on Oct. 7, closed Friday at $573.25. The stock has increased nearly 62% since the beginning of the year.
At current levels, the Menlo Park, Calif.-based company has a market capitalization of $1.45 trillion, making it the sixth-largest company traded on a U.S. stock exchange.
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In contrast, Intel reported a disappointing third quarter update to investors after the market close at 4pm ET on Thursday, as the struggling semiconductor company faces significant challenges. The company plans to announce its financial results.
Intel has struggled to regain its footing in the highly competitive semiconductor field, especially as it continues to lose market share to more nimble rivals.
Based on options market movements, traders are expecting INTC stock to move sharply following this result, with an expected 7.9% move in either direction. Since Intel last reported earnings in August, its stock price has fallen 30%.
Intel earnings page
Source: InvestingPro
Analysts are becoming increasingly bearish, with all 32 companies surveyed by InvestingPro lowering their profit estimates over the past three months, reflecting a sharp decline in investor confidence.
Wall Street expects Intel to report a loss of 2 cents per share, a sharp decline from last year’s profit of 41 cents per share. Sales are expected to decline 8.2% for the year to $13.04 billion, due to poor performance in its most important chip business, sluggish data center sales and declining demand for PCs from consumers.
Looking ahead, I’m becoming increasingly concerned about the outlook for chipmakers, and I believe Intel’s forward guidance will signal further weakness in the short term.
Once considered the undisputed leader in the computer processor industry, Intel has steadily lost market share in recent years to rivals such as AMD, Nvidia (NASDAQ: NVDA), and Taiwan Semiconductor (NYSE: TSM). . Additionally, the company’s business has suffered as Big Tech companies, including Apple, Microsoft and Amazon, increasingly choose to develop their own chips and microprocessors.
intel stock price chart
Source: Investing.com
INTC stock, which fell to a 14-year low of $18.51 on September 10, closed at $22.68 on Friday. The stock price in 2024 will fall by 54.8%.
At its current valuation, the Santa Clara, California-based chipmaker has a market capitalization of $97 billion.
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Disclosure: As of this writing, I am long the S&P 500 and Nasdaq 100 via the SPDR® S&P 500 ETF and the Invesco QQQ Trust ETF. I’m also long the Technology Select Sector SPDR ETF (NYSE:XLK).
I regularly rebalance my portfolio of individual stocks and ETFs based on an ongoing risk assessment of both the macroeconomic environment and corporate finances.
The views expressed in this article are solely those of the author and should not be taken as investment advice.
X/Follow Jesse Cohen on Twitter @JesseCohen For more stock market analysis and insight.
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