Despite concerns that the economic recovery in the US could lose momentum, stocks on Wall Street rose Friday, with , , and all soaring to all-time highs.
The coming week is expected to be another busy week on Wall Street, given the start of the second-quarter earnings season, testimony from Federal Reserve Chairman Jerome Powell, as well as key economic data, including the latest consumer price report and numbers.
No matter which way the market moves, we've highlighted one stock that is likely to be in high demand in the coming days and another that could suffer new losses.
Remember, however, that our timetable is for the coming week only.
Stock To Buy: Morgan Stanley
Morgan Stanley (NYSE:) will take center stage this year week as investors await the latest financial results from one of the country's largest investment banks. The bank has beaten or equaled Wall Street estimates for four consecutive quarters.
The Wall Street powerhouse, which has broken earnings and earnings expectations in recent years, is scheduled to report financial results before the US market opens on Thursday, July 15.
Consensus estimates call for the investment banking giant to post earnings per share (EPS) of $1.66 for the second quarter, down about 19% from earnings per share of $2.04 in the same quarter. period a year ago.
However, revenues are expected to grow approximately 4% year-over-year to $13.98 billion as booming IPO and M&A activity is expected to soften the blow of a slowdown in fixed income and equity trading.
Morgan Stanley Daily Chart
MS shares — which are up 31.8% in the past 12 months and 81.4% in the past 12 months — ended Friday at $90.33, marking New York City, New York-based financial service provider yielded a valuation of $168 billion.
Morgan Stanley announced last month that it plans to significantly increase its shareholder payouts after the Federal Reserve gave it a clean bill of health last month after the banks' annual "stress tests."
The company said it would double its dividend to $0.70 per share from the third quarter of 2021. It also said it would repurchase up to $12 billion of its shares over the next 12 months.
Morgan Stanley CEO James Gorman said in the announcement that the investment bank could return so much capital because of the "significant surplus" it has built up in recent years.
Stock To Dump: Citigroup
Citigroup (NYSE:) shares could fall to new lows in the coming days as investors position themselves for a disappointing earnings report from the fourth largest banking institution in the United States.
Citi's financial results – expected before the opening bell on Wednesday, July 14 – are likely to take a hit from a slowdown in consumer banking activities.
Analysts expect second quarter earnings of $1.99 per share, up 298% from earnings per share of $0.50 in the challenging period from a year ago. However, sales are expected to fall 12% from the same quarter last year to $17.36 billion.
In addition to the top-and-bottom numbers, CEO Jane Fraser's comments should provide more information about how she expects the bank to perform for the rest of the year.
Based on moves in the options market, traders estimate a potential implied move of 4% either way in Citigroup stock after results.
C shares — which fell to a four-and-a-half-month low of $65.76 on Thursday — ended Friday's session at $68.45, giving the New York City, New York-based megabank a market cap of Earned $142.8 billion.
Citigroup stocks underperformed the other major banks this year, gaining just 11% in 2021. By comparison, the financial industry's leading ETF – Financial Select Sector SPDR® Fund (NYSE:) – is down year on year increased by about 24.5%. to date. The S&P 500, in turn, is up 16.3% over the same period.
The company disappointed investors last month when it failed to raise its dividend following the Fed's stress tests, leaving it the only one of the six major banks not to do so. Nor did it announce a new share buyback plan.
Unlike the other companies, Citi — which left its dividend payout at $0.51 — said its stress capital buffer requirement will actually increase this year, decreasing its ability to increase its capital payouts compared to peers.
