Stocks on Wall Street plunged into risky trading Friday, with its biggest weekly loss since 2020, pushing the tech-heavy index further into correction territory.
In fact, the NASDAQ is off to its worst start to a year since 2008, falling 12% so far in January amid a broad sell-off in many highly valued technology stocks. The index is now 15% below its all-time high.
NASDAQ Composite Daily Chart
This week we will see the quarterly earnings season kick into high gear, with reports expected from mega-cap tech stocks including Apple (NASDAQ:), Microsoft (NASDAQ:), Tesla (NASDAQ:) and Intel (NASDAQ) :).
Unbeatable additional high-profile companies, such as Johnson & Johnson (NYSE:), Boeing (NYSE:), Caterpillar (NYSE:), General Electric (NYSE:), Visa (NYSE:), Mastercard (NYSE:) , AT&T (NYSE:), Verizon (NYSE:), Chevron (NYSE:) and Nucor (NYSE:) will also release their latest earnings results.
To top it off, we'll see fourth-quarter growth numbers and hear from the Fed as it releases its final monetary policy with subsequent , making it a busy week indeed.
Regardless of which direction the market goes, below we highlight one stock that is likely to be in demand in the coming days and another that could suffer new losses.
Remember, however, that our timetable is for the coming week only. week, as investors await the latest financial results, to be released before the opening bell on Jan. 27 by one of the world's largest restaurant chains. Consensus expectations call for the Chicago, Illinois-based fast food giant — which has beat Wall Street estimates for three consecutive quarters — to hit Q4 earnings per share of $2.34, up 37.6% from earnings per share of $1.70 in the period.
Revenues are expected to grow 13.5% year-over-year to $6.03 billion, benefiting from higher menu prices, a successful digital loyalty program and unique marketing promotions that drive consumer demand for its iconic lineup of &# 39;Big Mac' did increase burgers and chicken 'McNuggets.'
As such, market players will focus on US same-store sales, tracking sales in stores open for at least 12 months, after the key metric grew 9.6% in the previous quarter.
Outside the US, international same-store sales are expected to improve from a year ago, when they increased 12.7%, as consumers flocked back to the fast food chain's brick-and-mortar restaurants amid easing of COVID -19 restrictions.
Besides the top and bottom-line numbers, McDonald's outlook for the coming months will take center stage as the chain deals with concerns about higher labor, raw material and transportation costs, as well as staff shortages.
Fast food chains are closely watched for their ability to pass on the cost of inflation to consumers.
MCD hit a record high of $271.15 on January 4; it ended Friday's session at $254.59. At its current level, the fast food restaurant chain has a market cap of $190.2 billion.
Despite a 5% loss since the beginning of the year, McDonald's stock outperformed other notable names in the industry, such as The Wendy's Co (NASDAQ:), Burger King parent restaurant Brands International (NYSE:) and Yum! Brands (NYSE:), owner of KFC and Taco Bell.
Not surprisingly, 27 of the 37 analysts surveyed by Investing.com rate the stock as "outperforming," representing an increase of nearly 8% from current levels with a 12-month price target of $274, 55/share.
]MCD Consensus Estimates Chart
Source: Investing.com
Stock To Dump: Robinhood Markets
After correctly forecasting a few weeks ago that shares of Robinhood Markets (NASDAQ:) will fall to new lows, stocks will Expectations suffer another challenging week as investors brace for disappointing financial results from beleaguered trading app.
Consensus estimates call for the struggling trading platform in Menlo Park, Calif., to post a loss of $0.37 a share on revenue of $374.8 million when it reports fourth-quarter figures after the closing bell on Thursday, January 27 .
The fintech company warned that lower retail trading activity and seasonal headwinds were likely to continue through the end of the year, when it announced disappointing financial results in October.
Based on moves in the options market, traders are pricing in a big move for HOOD stocks after results, with a possible implied move of about 17% either way.
Another potential cause for concern is what insiders plan to do with their shares after a lockdown period that prevented them from selling shares following the company's IPO last year, which ended Tuesday, January 25. If they own even a fraction of their holdings, it could put great technical selling pressure on Robinhood's stock.
HOOD began trading on the New York Stock Exchange at $38 after a much-hyped IPO in July 2021. It closed Friday at a record low of $12.98, nearly 85% below its all-time high of $84.12 on 4 August. At its current level, the financial services company has a market cap of $11.1 billion.
Year-to-date, Robinhood shares are down, -26.9%, as investors dumped shares of unprofitable tech companies amid rising interest rates due to the Federal Reserve's plans to accelerate monetary policy than previously expected.
Yet, despite recent losses, HOOD stock still appears to be overvalued according to InvestingPro models and may see a 25% drop to its fair value of $9.70 per share.
Source: InvestingPro
Taking this into account, the shares of the stock and crypto trading app are likely to remain vulnerable to sharp swings in the coming days.
