Stocks on Wall Street ended lower on Friday, with the major US indices – including the, and – experiencing their worst week since the dramatic decline in.
With nerves rising above the spike in coronavirus cases and the rapidly approaching Nov. 3 US presidential election, this coming week will be eventful.
In this environment of heightened uncertainty, some stocks have proven to be better equipped to successfully navigate the whip saws of the markets, while others are more vulnerable.
Below, we highlight a stock that is on track to continue to thrive and one that is likely to suffer further losses in the coming days:
Stock to Buy: Square
Square (NYSE 🙂 – the digital payment processor led by the CEO of Twitter – has been one of the big winners of the ongoing coronavirus crisis as it benefits from the accelerated shift to online shopping and e-commerce during the pandemic.
Stocks of the digital payment provider outperformed the S&P 500 by far in 2020, up 148%. The stock closed at $ 154.88 on Friday, giving the San Francisco-based technology company a market capitalization of approximately $ 68.7 billion.
Square – whose second quarter earnings were released in early August – is expected to report the following financial results on Thursday, November 5, after the closing bell.
The consensus calls for earnings per share of $ 0.16 for the third quarter, down from earnings of $ 0.25 per share in the same period a year ago. However, sales are expected to increase by more than 200% over the same period a year earlier from $ 602.2 million to $ 2.04 billion
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In addition to top-and-bottom-line numbers, most of the focus will be on the performance of Square & # 39; s thriving Cash App business. The mobile payment service, which allows users to buy and sell, and which recently added a stock trading feature, saw second-quarter revenue grow 140% year-on-year.
Even more impressive, the consumer-facing app generated $ 875 million in Bitcoin sales and $ 17 million in Bitcoin gross profit in the last quarter, up a whopping 600% and 711% year-on-year.
In addition, investors will pay close attention to the mobile payment processor's update regarding gross payment volume (GPV) growth. Square's GPV in the second quarter, or the value of all transactions processed on its platform, was down 15% year over year to $ 22.8 billion, mainly due to its exposure to restaurants and small businesses.
We expect Square, which has made a name for itself by offering innovative alternative payment processing methods to businesses, to report another strong quarter as the ongoing coronavirus pandemic has created an ideal environment for digital payment providers to succeed.
To Dump: Mastercard
Stocks of financial services company Mastercard (NYSE 🙂 – which ended Friday at $ 288.64 – had its worst week since sell-off in mid-March and fell 12.4% as investors rushed to the exits following the release of financial results.
The sharp weekly drop caused stocks to erase their gains for the year, while stocks are now down more than 3% since the start of the year. Even more troubling, MA shares are currently 21.4% below their all-time high of $ 367.25, which was reached in late August.
Mastercard reported a sharp decline in net profit in the third quarter last week as the coronavirus pandemic caused customers to spend less on their credit and debit cards due to low travel costs.
New York-based credit card processor Purchase announced earnings per share of $ 1.60, down 26% from the same period last year, and lacked expectations for earnings per share of $ 1.61. Revenue, meanwhile, fell 14% year-over-year to $ 3.84 billion, lower than projections for revenue of $ 3.96 billion.
The sales decline was largely driven by a sharp drop in travel-related spending during the summer months, with the company reporting a 36% drop in cross-border volume, referring to when the card issuer and merchant are from different countries.
Gross dollar volume, the dollar amount spent with Mastercard-brand credit, increased only 1% from the same quarter a year earlier to $ 1.6 trillion.
Mastercard CEO Ajay Banga said on October 28 of the company's earnings:
"We see encouraging progress in the trajectory of domestic spending, while travel spending remains a challenge."
Banga added that it will take some time for consumers to build the confidence needed to travel. The renewed rise in COVID-19 cases in the United States and Europe is likely to continue to disrupt global travel trends in the coming months.
From a technical standpoint, Mastercard shares have fallen below their respective 50-day, 100-day, and 200-day moving averages over the past few days, usually indicating more losses ahead.
Taking all this into consideration, MA stocks appear to be under additional pressure in the coming days.
