Stock investors invested their hopes in the US reopening and a rapid recovery once the corona virus pandemic subsided, pushing US markets higher during last week's trade, ignoring poor economic data for the same period and a dismal earnings outlook of American business.
The Friday on which employers cut an unprecedented 20.5 million jobs in April tripled that to 14.7%, the highest since the Great Depression era of the 1930s.
Despite this devastating toll on the economy, profits rose 6% in a week, wiping out losses for the year. The small cap rose 5.5%, while it rose 3.5% for the week. Since the March low, the benchmark index has risen by more than 30%, recovering more than half of the COVID-19 related losses. April was indeed the best month for equities in more than three decades.
In the next week, we will still see some big names from different sectors of the economy reporting their first quarter results. Here are three that we take a look at:
1. Tesla
Tesla (NASDAQ 🙂 CEO Elon Musk continues to make headlines through his Twitter feed, driving investors in the electric car manufacturer remain tense about what is to come.
The last tweet came on Saturday when he spoke with California about state closures that closed Tesla's factory in Fremont. Musk used the social media platform – and a blog post – to reveal that the company is preparing for a lawsuit against Alameda County and threatened to move its corporate headquarters and future operations out of California.
Hours later, the Palo Alto, California-based company filed a complaint with the United States District Court in San Francisco, arguing that the county's health declaration "companies that the federal and state governments consider critical to the well-being of the nation, between a rock and a difficult place. ”
Musk, who has called Coronavirus-related shutdown orders fascist, said Tesla will decide whether to continue producing cars in Fremont, California, based on how it will be treated in the future.
Tesla shares, which closed at $ 819.42 on Friday, are up more than 95% this year due to better-than-expected car production. A long-term shutdown of factories would make it more difficult for the company to meet the car sales target. Before the pandemic, Tesla expected a 36% increase in car production this year.
2. Duke Energy
De in Charlotte, N.C. incumbent Duke Energy (NYSE 🙂 will report Q1 2020 on Tuesday, May 12, before the market opens. Analysts expect, on average, that the utility will make $ 1.19 earnings per share on revenues of $ 6.34 billion.
Duke's shares have fallen by about 10% this year, in line with the general market trend. They closed for $ 81.78 on Friday after a 1.83% gain.
Utility stocks are generally more stable as consumers continue to use gas and electricity through the worst economic contractions. In addition, these companies offer investors higher dividends and reliable income generation.
Duke currently pays $ 0.945 a quarterly dividend, which translates to an annual return of 4.62%. The company has a development plan of $ 37 billion that will run through 2022. It is one way to support the company's inflation-proof dividend growth. Through its diversified energy, gas and storage operations, Duke plans to achieve between 4% and 6% annual dividend growth in the future.
3. Cisco Systems
Cisco Systems (NASDAQ 🙂 will report its third quarter 2020 earnings on Wednesday, May 13, after the market closes. The San Jose-based network giant is likely to report a profit of $ 0.71 on revenue of $ 11.91 billion, according to analyst consensus forecast.
Under Chief Executive Officer Chuck Robbins, Cisco has made a series of acquisitions to one. Last year, Cisco acquired Voicea, a software manufacturer that offers real-time transcription and voice search capabilities.
In July, it agreed to acquire Acacia Communications (NASDAQ 🙂 for approximately $ 2.6 billion, acquiring chips and machines that help convert optical signals into electronic data.
These, combined with the company's dominant position in the Americas – where it generates the most revenue – can help Cisco exceed expectations. The stock, which closed at $ 42.99 on Friday, fell 10% this year.
