Stock Market Expectations for
The Week Ahead!

The Bulls Are Still Coming On Strong!
Fed In Headlines! FAANG Stocks To Report Earnings!

Find out what we are considering for trades in the week to come!

by Ian Harvey
October 27, 2019

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The Past Week…..

Stock market expectations were basically correct after a positive start to the week, with encouraging news on the U.S.-China trade front.

There was plenty of reaction to the mass of earnings reports – both good and bad.

Also, a phase one deal between Washington and Beijing could be right around the corner, according to the Office of the U.S. Trade Representative.

To review the details on the trade talks read these two articles.....

“US-China Trade Talks and Its’ Effects on the Stock Market!”

“US-China Trade Talks and Its’ Effects on the Stock Market End Result!”

There were plenty of positive signs.....

  • Tesla (TSLA) surged on a surprise profit.
  • Amazon.com (AMZN) had a disappointing quarterly report.
  • Intel (INTC) posted an impressive beat-and-raise.
  • Other great reports came from Verizon (VZ), Procter & Gamble (PG), United Technologies (UTX), and Microsoft (MSFT).
  • Boeing (BA) even managed to report a revenue beat and another timely 737 MAX update; much to the opposite of our predictions.

But, on the minus side......

Caterpillar (CAT) was forced to lower its full-year profit guidance on the back of weak demand in Asia, but did make a comeback later in the week; and 3M (MMM) also slashed its full-year outlook.

The Dow Jones Industrial Average managed to be up 0.7% for the week. The S&P 500 added 1.2% and the Nasdaq Composite was up by 1.9% for the week.

EARNINGS PREDICTIONS RESULTS FOR WEEK BEGINNING OCTOBER 21, 2019

DATE TRADE EXITING BEFORE EARNINGS GAIN/LOSS AFTER EARNINGS
October 22, 2019 UTX NOV 15 2019 140.000 CALL 32.5% P.P. 160% P.P.
October 22, 2019 SNAP NOV 15 2019 14.000 CALL 60% P.P -36%
October 23, 2019 WM NOV 15 2019 120.000 CALL 56% P.P 142% P.P
October 23, 2019 BA NOV 15 2019 320.000 PUT 109% P.P. -47%
October 24, 2019 TWTR NOV 15 2019 40.000 CALL 28% P.P -96%

If you wish to part of this action CLICK HERE.


Stock Market Expectations for the Week Ahead…..

Stock market expectations are still high for the week ahead for the major indices to continue to add to last week’s positives, particularly if there is good news from Jerome Powell. The Fed’s two-day meeting is likely to be the high point.

The Federal Open Market Committee is expected to make its third quarter point interest rate cut Wednesday afternoon, followed by comments from Fed Chairman Powell.

Also, the central bank could remove the language stating it will “act as appropriate to sustain the expansion” that has been in play since June.

Tech earnings will continue to dominate Wall Street in the coming week, with FAANG names Apple (AAPL), Alphabet (GOOGL), and Facebook (FB) making their reports.

At the moment the market has been led by the defensive sectors, but there is movement witnessed that there are moves into consumer discretionary. This seems to mean that the market is seeing growth; and a move more and more into the cyclical and growth sectors. As well there appears to be a steepening of the yield curve.

Stock Market Calendar for the Week Ahead

Besides earnings, the Brexit deadline will dominate the news. But still, there will be some important economic reports being released, with a Fed meeting and the October jobs report that need attention.

Monday

  • 8:30 a.m. Advanced economic indicators

Tuesday

  • 8:30 a.m. S&P/Case-Shiller home prices
  • 10:00 a.m. Pending home sales 10:00 a.m. Consumer confidence 10:00 a.m. Housing vacancies

Wednesday

  • 8:15 a.m. ADP employment
  • 8:30 a.m. GDP Q3 2:00 p.m. FOMC statement 2:30 p.m. Fed Chairman Jerome Powell briefing

Thursday

  • 8:30 a.m. Initial claims
  • 8:30 a.m. Personal Income/spending
  • 8:30 a.m. PCE deflator
  • 8:30 a.m. Employment cost index
  • 9:45 a.m. Chicago PMI

Friday

  • Monthly vehicle sales
  • 8:30 a.m. Employment
  • 9:45 a.m. Manufacturing PMI (Oct. final)
  • 10:00 a.m. ISM manufacturing
  • 10:00 a.m. Construction spending

Stock Market Expectations for Earnings

The earnings calendar remains heavy with about 145 S&P 500 companies releasing earnings, including Alphabet Monday and big oil Exxon Mobil and Chevron Friday. On Wednesday, earnings are expected from Apple, which is setting new highs of its own.

Of the approximately 200 S&P companies that reported by Friday morning, more than 78% have beaten on earnings per share. Earnings are expected to decline by 2% for the third quarter, based on estimates and results from companies that already reported.

Monday

Alphabet, AT&T, Walgreens Boots Alliance, Beyond Meat, Restaurant Brands Intl, Enterprise Products, ON Semiconductor, T-Mobile US , Diamond Offshore, Vornado Realty, Everest Re, Akamai, Canon, CNA Financial, Check Point Software

Tuesday

BP, General Motors, Mastercard, Merck, Pfizer, ConocoPhillips, Amgen, Electronic Arts, Chubb, Cummins, Kellogg, Corning, KKR, Martin Marietta Materials, AutoNation, GrubHub, CNX Resources, Penske Auto, Advanced Micro, Mondelez, Xerox, Allstate, Boston Properties, FireEye, Mattel

Wednesday

Apple, Facebook, General Electric, Starbucks, Airbus, Bayer, AK Steel, Airbus, Sony, Samsung, Zynga, Deutsche Bank, Glaxo SmithKline, Western Digital, Cirrus Logic, Sprouts Farmers Market, Etsy, Perkin Elmer, American Water Works, MetLife, Cree, Williams Logic, Continental Resources, Wingstop, Yum Brands

Thursday

Bristol-Myers Squibb, Archer Daniels Midland, Altria, Estee Lauder, Wayfair, Fiat Chrysler, BNP Paribas, Parker Hannifin, International Paper, Marathon Petroleum, Thomson Reuters, Clorox, Dunkin Brands, Hanes Brand, Abiomed, Nintendo, Encana, Kraft Heinz, U.S. Steel, Avis Budget, Pinterest Murphy Oil, Lazard, Yeti, AMC Networks, Tenneco

Friday

Exxon Mobil, Chevron, Colgate-Palmolive, Alibaba, Abbvie, Dominion Energy, AIG, Sempra Energy, Booz Allen Hamilton, Seagate Technology, Newell Brands, TC Energy

Besides some of those companies mentioned above, which will be part of our considerations for members of “Earnings Predictions;” there are several that will be recommended to other members - of “Armchair Traders,”  “Cut-to-the-Chase” and “Mentorship.”

Find out the our "Earnings Predictions" thoughts here!

Action to Take Based on the Stock Market Expectations…..

Stock market expectations for year end, excusing the 2018 20% three-month loss by Christmas Eve, according to the seasonal rule of thumb is the fact that the broad sweep of history has shown a general bias toward strength at year end. And, yes, pre-election years have a more pronounced upside tilt.

Stock market expectations for the bullish case is starting to look even better now due to the resilience of stocks through a growth scare, trade-war flare-ups, an earnings-growth lull, yield-curve inversion and repo-market stress episode.

The current bull market started in March 2009 and is the longest on record. In that time, the S&P 500 has surged more than 300%. The S&P 500 has had a great year so far, rallying about 20%.

Global leading growth indicators might have bottomed, the Fed appears on track to offer a third “insurance” rate cut, sentiment is cautious and credit still flowing. The next rally could prove that the bull rally has plenty of steam to continue for some time yet!

However, as an investor, you need to take into consideration your own economics, your risk tolerance, time horizon and financial goals before reconfiguring your investment portfolios.  This is an appropriate time where you shouldn’t be overly bearish, or overly bullish; moderation is the name of the game at this stage!

Overall though, it appears that the way ahead points to the stock market moving upwards!

To get more overall investment insights, earnings predictions for the week ahead, and profitable trades provided to members in real time, join us at Stock Options Made Easy today!


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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