After undergoing a major correction in September, US stock markets start October with much uncertainty as the COVID-19 pandemic continues to rage and the US presidential election approaches.
These two factors are likely to keep investors on the sidelines, who don't see major catalysts to buy again after the sharp recovery since the dip in March. The first presidential debate will take place on Tuesday evening between President Donald Trump and former Vice President Joe Biden.
In September, the tech-heavy index suffered its biggest losses since the beginning of the month. The index is down 7.32% monthly, compared to the 4.42% decline in the and 5.77% decline in the.
In addition to these macro trends, below are three stocks that could take some action after their latest earnings reports:
1. Micron Technologies
Chipmaker Micron Technology ( NASDAQ 🙂 will report the fourth quarter of fiscal 2020 on Tuesday, September 29, after the close. The storage chip maker has made an estimated $ 0.98 in earnings per share on $ 5.89 billion in revenue.
The largest US manufacturer of computer memory chips said in August that the demand outlook is deteriorating and predicted it is unlikely to meet its revenue forecast due to the economic recession triggered by the COVID-19 pandemic.
Memory chips from Boise, Idaho-based Micron are an important part of all types of computers – from laptops to servers – and also act as data storage in smartphones. The company competes with Samsung (KS 🙂 Electronics (OTC 🙂 in the dynamic random access memory and flash memory market.
Due to demand uncertainties, Micron underperformed other chip makers this year, down about 9%. It closed at $ 49.14 on Friday after falling about 1% for the day.
2. PepsiCo
Snack and beverage giant PepsiCo (NASDAQ 🙂 will report on the third quarter Thursday, October 1, before the market opens . Analysts expect an average of $ 1.48 per share on sales of $ 17.2 billion.
In its previous July earnings report, Pepsi had stronger-than-expected sales aided by homebound consumers stocking up on snacks during the pandemic. Pepsi is well positioned to take advantage of these changing eating habits as it has a highly diversified portfolio of snack items such as Tostitos, Fritos, Ruffles and Cheetos.
For example, the Ruffles potato chip brand grew single digit in the second quarter, while organic sales of Quaker oatmeal increased 23% in the spring. On the other hand, beverage sales are likely to lag in an environment where consumers don't eat out.
After recovering from the dip in March, the PEP share has risen by more than 11% in the past six months. It closed at $ 133.55 on Friday after a 1.5% rise.
3. Bed Bath & Beyond
The controversial home furnishing and home goods giant, Bed Bath & Beyond (NASDAQ :), will report its fiscal second quarter on Thursday after the market closes. Analysts expect the retailer to lose $ 0.3 per share on sales of $ 2.63 billion.
BBBY is in the midst of a massive turnaround after failing to overhaul its business model to survive the onslaught of e-commerce giants. The company is actively exploring divestitures to focus on growth opportunities in the home, baby, beauty and wellness businesses.
The company said in July that nearly all of its stores have reopened after the closures as it moves forward to save as much as $ 350 million annually as part of its restructuring plans. The retailer plans to close 200 locations in the next two years.
The company's revenues will also provide some insight into customer patterns as the US economy reopens and consumers spend more on home improvements. BBBY shares closed at $ 14.53 on Friday after an increase of more than 4%. Shares are up about 200% in the last six months.
