With the losses since the March dip fully recouped, investors are now looking for new catalysts that could continue to fuel this unprecedented rally.
There is likely more upside for US equities as investors take into account the US economic growth outlook and the COVID-19 vaccine outlook, Goldman Sachs Group said. Stocks closed higher last week as the S&P 500 flirted with record levels reached in February. The reference index ended the week with 0.6% at 3,372.
According to Bloomberg data, it took only 175 days for the index to go from peak to low to peak, a recovery that has come faster than any comparable in the past.
Next week, tensions between the US and China and updates on the coronavirus are likely to be in the spotlight, even as some of the leading companies disclose their earnings. Nonetheless, here are three files worth keeping on your radar:
1. Walmart
America's largest retailer, Walmart (NYSE 🙂 , will report second quarter earnings on Tuesday, August 18 before the market opens. Consensus expects earnings per share of $ 1.25 on sales of $ 135.29 billion.
The retailer gets a big boost from the current coronavirus environment, where consumers mainly work from home, consume more groceries and household items. Such factors have helped Walmart's same-store sales increase by 10%, with average spending up 16%.
Walmart's large physical presence, along with its fast-growing e-commerce positioning, also helps the retailer to further expand its appeal during the coronavirus pandemic. Walmart's US e-commerce sales were up 74% in the first quarter ending April 30.
With the Bentonville, Arkansas-based retailer expected to report strong quarterly earnings and growing online sales, investors have soared WMT shares 12% this year. The stock closed 0.6% Friday at $ 132.60
2. NVIDIA
One of the world's largest chip makers, NVIDIA (NASDAQ: ), reports Q2 2021 on Wednesday 19 August after the market closes. Analysts expect earnings per share of $ 1.98 per share on revenues of $ 3.65 billion.
After a 76% rise in 2019, shares of NVIDIA have continued to rise this year despite the threat of a deep recession.
The stock hit a record high of $ 468.78 on Thursday after nearly doubling in value this year, vastly outperforming the stock, which gained just 17% when trading closed last week. NVDA shares ended at $ 462.56 on Friday after gaining about 1.06% during the session.
While the chipmaker is unlikely to escape any slowdown in demand from cyclical industries such as automobiles, analysts are focusing on the company's supplies to gaming and data center customers.
NVIDIA, based in Santa Clara, California, is the largest manufacturer of graphics chips used in PC games. In recent years, the chipmaker has successfully adapted its technology to the artificial intelligence market, creating a multi-billion dollar new company.
3. Alibaba
Chinese e-commerce giant Alibaba (NYSE 🙂 will report its first quarterly results for fiscal year 2021 before opening the market on Thursday, August 20. Analysts expect earnings per share of $ 13.82 on revenues of $ 148.06 billion
Alibaba's latest earnings will provide some insight into Chinese as the world's second-largest economy recovers from the pandemic that pushed growth into negative territory this year.
In the latest, released in May, Alibaba posted higher than estimates sales and revenues, aided by its core business in commerce and its customer management unit.
Shares of Alibaba are up 20% this year. They closed for $ 253.97 on Friday. Like US counterparts including Amazon (NASDAQ :), Microsoft (NASDAQ 🙂 and Alphabet (NASDAQ 🙂 looking to expand their presence in the growing cloud computing segment, Alibaba is also investing heavily to expand its business in this arena .
The company plans to invest 200 billion (USD $ 288 million) in cloud infrastructure such as data centers over the next three years, a major effort to expand one of its fastest-growing companies into more countries.
