Fed policy concerns and geopolitical tensions have been dominating investor’s mindset in the last few weeks of trading but the focus may swing around to corporate profitability again this week as US markets look set to open higher ahead of retail sales numbers tomorrow and earnings from Wal-Mart (NYSE:WMT), Macy's (NYSE:M) and JC Penney(NYSE:JCP) in the week.
Futures suggest the Dow will open 20 points higher at 16,573 with the S&P 500 expected to open 2 points higher at 1,933 and the Nasdaq 100 5 points higher at 3,893.
In a positive sign for stocks, the Dow was down over 200 points last week but turned it around with a strong reversal to close the week higher.
Today Priceline.com (NASDAQ:PCLN) is expected to earn $12.06 per share on revenue of $2.14bn up 24% and 27% respectively. Even if there were a slight miss on the quarter, the annual earnings trajectory for the online booking company is impressive. Investors will be looking to see if the growth can continue via online booking volumes for the quarter.
More information should also be available on the recent purchase of online restaurant-booking company ‘OpenTable’. Oil prices and geopolitical turbulence has made it a tricky year for air travel but Priceline is up 10% year-to-date and looks set to continue gains by diversifying into other booking services.
A big day for retailers this week will be Thursday with results from Wal-Mart, JC Penney and Nordstrom (NYSE:JWN).
Wal-Mart (NYSE:WMT) is expected to earn $1.21 per share down 3c from the same period last year on revenue of $119.04bn up 2% from a year earlier. Same-store sales have been declining for five quarters so the hope is that this quarter they can come in essentially flat, setting the stage for the path back to growth in the coming quarters.
There has been an uneven recovery since the financial crisis and the typical penny-pinching Wal-Mart customer has not fared well and the stock is down 5.7% this year. The company has been focusing online in the face of growing competition but online sales still only represent a tiny fraction of Wal-Mart’s total sales and may not be enough to offset the economic trends working against the company.
CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.