United States. stocks are struggling to continue their advance after a major comeback since the March lows, amid mounting risks for this fragile rally.
With continuing economic uncertainty now and in the post-pandemic world, investors have begun to focus on renewed prospects of a trade war, as the Trump administration continues to blame China for mistreatment of the COVID-19 outbreak. The Department of Commerce said on Friday that it would "strategically target Huawei's acquisition of semiconductors that are the direct product of certain US software and technology."
Hu Xijin, editor-in-chief of the Chinese state publication Global Times, tweeted on the same day that China would "restrict or investigate" US companies, including Qualcomm (NASDAQ :), Cisco Systems (NASDAQ 🙂 and Apple (NASDAQ 🙂 as the US is taking further action to block Huawei's supply chain.
In the coming week, the US and Chinese tensions and coronavirus updates are likely to attract the most attention, even as some high-profile companies are reporting their earnings. Nevertheless, here are three files worth having on your radar:
1. Walmart
Walmart (NYSE :), America's largest retailer , first quarter 2020 earnings will report on Tuesday, May 19 before the market opens. Consensus expects earnings per share of $ 1.13 on revenue of $ 131 billion.
With anxious customers hoarding staples and food, and non-essential retailers closed during coronavirus locks, Walmart's great physical presence has probably helped the retailer further expand its customer base and appeal.
Huge investment in e-commerce, healthcare and the 1.5 million strong workforce is a unique winning combination that has positioned the mega retailer to supply large parts of the nation as governments and other companies struggle with how to respond to the unprecedented health and economic threat.
With expectations that the Bentonville AR-based retailer will report and online sales grow, investors have increased the WMT share by 6% this year. On Friday, the stock closed 2% at $ 125.94.
Comparable sales and Walmart's online expansion are the two critical numbers investors should focus on.
2. NVIDIA Corporation
One of the world's largest chipmakers, NVIDIA Corporation (NASDAQ 🙂 reports its first quarter earnings on Thursday, May 20 after closing the market. Analysts expect earnings per share of $ 1.66 on revenues of $ 2.97 billion.
After a 76% rise in 2019, NVIDIA shares continue to rise this year, despite the threat of a deep recession. The stock reached a record high on Friday, after rising 44% in 2020, and outperformed the price of 9.4% in 2020. NVDA closed on Friday at $ 339.63 after a profit of about 6% during the session.
While the chipmaker is unlikely to escape the slowdown in demand due to business shutdowns by COVID-19, analysts focus on the company's balance sheet, cash flow, and product categories, all expected in the current environment.
NVIDIA is likely to benefit from an increased demand for chips used in medical applications, while the trend of outside work will contribute to the general demand for cloud computing chips.
3. Alibaba
Chinese e-commerce giant Alibaba (NYSE 🙂 will publish its fourth quarter fiscal 2020 results before the market on Friday, May 21 opens. Analysts are projecting $ 0.83 EPS on revenue of $ 117.98 billion.
The from Alibaba will provide some insight into Chinese as the second largest economy in the world tries to recover from the pandemic that hit a negative area this year.
Alibaba shares are down 4% for the year. They closed at $ 203.68 on Friday. Like US counterparts such as Amazon (NASDAQ 🙂 and Alphabet (NASDAQ :), Alibaba is also investing heavily to expand its market share in the growing cloud computing segment.
The company plans to invest 200 billion yuan ($ 28 billion) in cloud infrastructure, such as data centers, over the next three years, a major effort to expand one of its fastest growing companies to other countries.
