Daily stock market (January 25) Forecast and Updates
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Futures contracts tied to the Dow Jones Industrial Average gained 74 points, indicating a 90-point jump at the open. S&P 500 futures advanced 0.33%, while Nasdaq 100 futures rose 0.56%, according to CNBC.
Stocks finished mixed on Friday — the S&P 500 and Dow finished in the red while the Nasdaq Composite closed at a record high — although all three posted a gain for the week. The Dow registered its fifth positive week in six while the S&P posted its third positive week in four. The Nasdaq advanced 4.19% last week for its best week since November and fifth positive week in six as shares of Big Tech names pushed the index to a new all-time high.
The move higher came as President Joe Biden tries to push through a $1.9 trillion stimulus program that many congressional Republicans oppose. The fiscal aid includes direct checks to millions of Americans, aid to state and local governments, funding for Covid vaccines and testing, a boost to the minimum wage and enhanced unemployment benefits, among other things.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value. S&P 500 futures advanced 0.5% and Nasdaq 100 futures climbed 0.8%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Apple (AAPL), Tesla (TSLA), Advanced Micro Devices (AMD), Facebook (FB), Microsoft (MSFT) and Caterpillar (CAT) are key reports to watch. Coronavirus cases and hospitalizations are falling quickly as Covid vaccinations ramp up.
Tesla, AMD, Apple, Facebook, Microsoft and Caterpillar stock are all technically interesting: Apple stock is in an official buy zone, while several others are actionable or near buy points. These are huge companies that can have a major impact on the indexes. Apple has a $2.36 trillion market cap. Microsoft stock is $1.71 trillion. Tesla is at $802 billion while FB stock is $782 billion. Even AMD stock and CAT are worth more than $100 billion.
These giants also could spur moves in rivals, customers and suppliers.
Apple's results will echo through the iPhone ecosystem, including key chipmakers such as Qualcomm (QCOM). Tesla earnings and guidance and stock action could spur big moves in EV stocks such as Nio (NIO). AMD will be key for Nvidia (NVDA) and other data center chipmakers. Microsoft will inform investors about PC demand, cloud computing — think Amazon (AMZN) and Google — and enterprise software. Facebook earnings — and commentary about political headwinds — will be important for Twitter (TWTR), Google parent Alphabet (GOOGL), as well as other social sites and online ad plays. Caterpillar is a global economic bellwether and among several cyclical stocks near buy points in the mining and materials space.
These are some key events coming up in the week ahead:
- Microsoft Corp., Apple Inc., Tesla Inc., Facebook Inc., UBS Group AG and Samsung Electronics Co. are among companies reporting results.
- Chinese President Xi Jinping is due to speak at the World Economic Forum’s “The Davos Agenda 2021” online event on Monday.
- People’s Bank of China Governor Yi Gang and European Central Bank Chief Economist Philip Lane speak at a conference on Jan 25.
- Data on U.S. home prices and consumer confidence come Jan 26.
- The Federal Open Market Committee monetary policy decision and briefing by Chair Jerome Powell are scheduled for Jan 27.
- Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Jan 28.
- U.S. personal income, spending and pending home sales come Jan 29.
These are the main moves in the stock market:
- S&P 500 futures rose 0.4% as of 12:38 p.m. in Tokyo. The S&P 500 fell 0.3% on Friday.
- Japan’s Topix index rose 0.1%.
- South Korea’s Kospi index added 1.7%.
- Hang Seng Index rose 1.9%.
- Australia’s S&P/ASX 200 Index rose 0.2%.
- Shanghai Composite added 0.6%.
Stocks in Asia-Pacific
Stocks in Asia-Pacific were mixed in Monday trade as investors continue to monitor the situation surrounding the coronavirus pandemic.
South Korea’s Kospi led gains among the region’s major markets as it advanced 1.27%. In Japan, the Nikkei 225 nudged 0.4% higher while the Topix index gained 0.15%.
Hong Kong’s Hang Seng index gained about 1%. Mainland Chinese stocks, on the other hand, slipped: The Shanghai composite was fractionally lower while the Shenzhen component dipped 0.293%.
Amid the pandemic, China surpassed the U.S. as the world’s largest recipient of foreign direct investment, according to a report released Sunday from the United Nations Conference on Trade and Development.
Preview of earnings to watch from BigTech this week
Apple (AAPL) – Preview of revenue and earnings growth after the close on Wednesday, Jan. 27
Wall Street expects Apple to earn $1.40 per share on revenue of $102.76 billion. This compares to the year-ago quarter when earnings came to $1.25 per share on revenue of $88.5 billion, Nasdaq informed.
Note: This quarter will be all about revenue and unit sales for the iPhone 12, in all its variants. Analysts have lauded the device, describing it as the most significant upgrade super-cycle of the iPhone since the iPhone 6 was launched with a larger screen. The iPhone 12, however, is deemed more important not only for its 5G capabilities, but also for features such as its world-facing LIDAR sensor which comes on the Pro models. All told, unlike prior models, there are few mere “incremental” upgrades not the device. It’s more revolutionary. The question is, will its holiday quarter sales meet such high expectations? But Apple is more than just a phones shop. The company’s Services business, which now accounts for almost 22% of total revenue, surged last quarter to a record $14.5 billion, topping consensus of $14.12 billion.
Microsoft Microsoft (MSFT) – Preview of revenue and earnings growth after the close, Tuesday, Jan. 26
Wall Street expects Microsoft to earn $1.64 per share on revenue of $40.18 billion. This compares to the year-ago quarter when earnings were $1.51 per share on $36.91 billion in revenue.
Note: Work and learn-from-home trends continue to power increased demands for Microsoft services, evidenced by the strong Q4 demands in its Productivity and Business and Intelligent Cloud segments. But the strength of Microsoft’s Commercial Cloud business has been and will continue to be the catalyst for the stock’s strong performance over the past year. Last quarter, Azure revenue was up 48% year over year — a slight deceleration from the 50% growth in Q4. Wall Street remains broadly positive about the company’s prospects to achieve double-digit revenue growth in fiscal 2021, driven by Azure's momentum. On Wednesday, investors will want some evidence that Azure and Microsoft’s Teams (a Zoom (ZM) competitor) can continue to propel the company higher.
Facebook (FB) – Preview of revenue and earnings growth after the close on Wednesday, Jan. 27
Wall Street expects Facebook to earn $3.19 per share on revenue of $26.34 billion. This compares to the year-ago quarter when earnings came to $2.56 per share on revenue of $21.08 billion.
Note: Facebook shares have gone on an impressive run over the past week, posting some 12% gains suggesting that the concerns the market has had about softness in the digital advertising market, particularly amid the pandemic, have now vanished. The company has been a model of consistency, topping consensus earnings expectations in each of the past eleven quarters. All told, the company has missed earnings estimates just once over the past five years. Yet, over the past year FB shares have bee a relative under-performer on fears of political risks brought on by its dominance. But if the company can deliver show a strong surge in daily active users and monthly active users, while providing upbeat revenue guidance the stock should continue to perform as it has over the past few sessions.
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