After recovering from the political uncertainty caused by the tight US presidential race, markets are entering a new phase of potential volatility as escalating COVID-19 infections force many states to re-introduce restrictions.
Media outlets reported over the weekend that three states on the US west coast were jointly calling for non-essential travel. California, Oregon and Washington urged residents to avoid travel as the daily increase in COVID-19 cases in the US has hit a new record.
Investors have so far focused on the post-pandemic economic recovery on optimism that successful vaccine candidates would soon receive emergency use permits. This may be why there was a demand for economically sensitive stocks last week, even with a surge in coronavirus cases. Both the index and the small cap index rose to record highs, while the index rose to pre-pandemic levels.
Aside from escalating coronavirus infections and news of vaccine development, investors will also hear from the largest US retailers about their latest earnings reports. We have shortlisted three stocks that could see some trading action after reporting their quarterly figures:
1. Walmart
America & # 39; s largest retailer, Walmart (NYSE 🙂 will report its fiscal 2021, third quarter results on Tuesday, Nov.17, before the market opens. The consensus expects earnings per share of $ 1.18 on revenue of $ 132.08 billion.
The shopkeeper was during the pandemic when people stayed home with groceries and consumed more daily staples. In the second quarter, the Bentonville, Arkansas-based retailer's e-commerce division delivered strong growth as online sales grew 97% year-on-year, with both takeout and delivery options once high in sales volumes. achieved.
With the retailer expected to report strong quarterly earnings and growing online sales, investors have risen WMT shares 27% this year. The stock closed 1.56% up at $ 150.54 on Friday. Continued uncertainty about the government's second stimulus package could weigh on future sales.
Walmart mentioned the importance of government incentives several times in its latest profit statement, saying that consumers who had that money in their wallets boosted sales in high-margin general categories.
2. Home Depot
Home Improvement giant Home Depot (NYSE 🙂 will also report its Q3 earnings Tuesday before the market opens. Analysts expect earnings per share of $ 3.05 on sales of $ 31.78 billion.
HD also benefited from lockdowns as people trapped in their homes spend more money on home renovations. Since the plunge in March, Home Depot's stock has recovered sharply, up more than 80%.
But that vigorous rally has taken a breather over the past three months as rising spending hurt the company's margins and ended the peak period of spring and summer. Shares closed at $ 277.17 on Friday, virtually unchanged in the past quarter.
Selling, general and administrative expenses were up 26%, with Morgan Stanley & # 39; s Simeon Gutman noting that the company is spending more than expected on virus-related costs and benefits.
3. NVIDIA
One of the world's largest chipmakers, NVIDIA (NASDAQ :), reports its third quarter earnings on Wednesday, November 18 after closing of the market. Analysts expect earnings per share of $ 2.57 on sales of $ 4.41 billion.
NVIDIA stock has had a tremendous run this year, fueled by the rising demand for chips used in data centers and game consoles. The stock hit a record high of $ 588.01 on Nov. 6 and is up about 130% in 2020, significantly better than the 36% up in 2020 so far.
NVDA closed Friday at $ 531.88.
After the stock's surge this year, NVIDIA is now one of the most highly regarded chip stocks with a price-earnings ratio of 97.7, more than twice the semiconductor group's average multiple of 43.64.
This makes the stock open to correction, especially if the economic and geopolitical environment remains fragile. Based in Santa Clara, California, NVIDIA is the largest maker of graphics chips used in PC gaming. In recent years, the chipmaker has successfully adapted its technology to the artificial intelligence market, creating a multi-billion dollar new company.
