Stock Market Expectations for
The Week Ahead!

The Bull Market Expected To Continue!

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

by Ian Harvey
October 20, 2019

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The Past Week…..

Stock market expectations, with earnings kicking off last week, highlighted some insight as to how much the trade war had affected the bottom line on companies.

The good news that was revealed is that recent trade talks appear to have yielded some progress. President Donald Trump announced Oct. 11 the U.S. and China had reached a “very substantial phase one” deal.

Up until Friday last week more than 14% of S&P 500 companies had reported; with 81% posting earnings that beat analyst expectations.

Also, Friday saw a reversal of the week’s gains due to several instances that stood out.....

  • Netflix (NFLX) reversed Thursday's post-earnings pop,
  • The continuing Boeing scandal, where Reuters reported that employees may have misled the Federal Aviation Administration (FAA) about a critical 737 MAX safety system,
  • Caterpillar (CAT) suffered a pre-earnings drop after receiving a downgrade to "equal weight" from "overweight" out of Morgan Stanley,
  •  Johnson & Johnson had an asbestos recall for its baby powder, and
  • disappointing China GDP data, as Beijing posted its slowest quarterly growth in nearly 30 years. 

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!”

However, there were also plenty of positive signs.....

  • JPMorgan Chase (JPM) and UnitedHealth (UNH) had great earnings reports,
  • Also, Coca-Cola (KO) for third-quarter revenue topped estimates,
  • Cronos (CRON) soared with the pot sector as Canada legalized weed vape pens and edibles,
  • Hepion Pharmaceuticals (HEPA) gapped higher after a report published in the Journal of Pharmacology, and
  • Experimental Therapeutics indicated positive developments in the the company's liver disease drug,
  • Morgan Stanley (MS) had a great quarterly beat, and
  • Prime Minister Boris Johnson said a "great new Brexit deal" was drawn up.

The Dow Jones Industrial Average managed to be up 0.2% for the week. The S&P 500 added 0.6% and the Nasdaq Composite was up by 0.5% for the week.


EARNINGS PREDICTIONS RESULTS FOR WEEK BEGINNING OCTOBER 14, 2019

DATE TRADE EXITING BEFORE EARNINGS GAIN/LOSS AFTER EARNINGS
October 15, 2019 UNH OCT 18 2019 222.500 CALL N/A 369%
October 15, 2019 JNJ OCT 18 2019 131.000 PUT N/A 121% P.P
October 15, 2019 APHA OCT 18 2019 5.500 CALL N/A 100% P.P
October 16, 2019 BAC NOV 15 2019 29.000 PUT -31% -65%
October 11, 2019 MS NOV 15 2019 42.000 CALL N/A% P.P 64% P.P

If you wish to part of this action CLICK HERE.


Stock Market Expectations for the Week Ahead…..

Stock market expectations for the week ahead are for the stocks to break the all-time highs set earlier in the year as a slew of S&P 500 companies get set to report.

The all-time highs could be tested as about 120 S&P 500 companies, or around 24%, are scheduled to release their quarterly results in the week ahead. Some of those companies include Caterpillar and Boeing, both of which are expected to report Wednesday before the bell. Amazon, Intel, McDonald’s and Chipotle Mexican Grill are also on deck for the week.

Stock Market Calendar for the Week Ahead

Besides earnings, some important economic reports are being released, including retail sales on Wednesday and industrial production Thursday.

Monday

N/A

Tuesday

  • 8:30 a.m. Philadelphia Fed nonmanufacturing (Oct)
  • 10 a.m. Existing Home sales (Sept)

Wednesday

  • 7 a.m. Weekly mortgage applications
  • 10:30 a.m. EIA weekly inventories report

Thursday

  • 8:30 a.m. Weekly jobless claims
  • 8:30 a.m. Durable goods orders (Sept)
  • 9:45 a.m. Manufacturing PMI (Oct flash)
  • 9:45 a.m. Services PMI (Oct flash)
  • 10 a.m. New Home sales (Sept)

Friday

  • 10 a.m. Consumer sentiment (Oct final)

Stock Market Expectations for Earnings

Companies such as Caterpillar are heavily affected by the U.S.-China trade war given their exposure to overseas markets. Boeing and Intel also have overseas exposure.

And, expect plenty of scrutiny of reports from companies such as Amazon, McDonald’s and Chipotle for clues on how the consumer is going.

Monday

  • Halliburton, SAP, Lenox Intl., PetMed Express, Cadence Designs, Celanese, TD Ameritrade, Zions Bancorp

Tuesday

  • Biogen, Lockheed Martin, McDonald’s, NextEra Energy, Novartis, Procter & Gamble, Travelers, UBS, United Tech., UPS, Texas Instruments, Canadian Natl. Railway, Chipotle Mexican Grill, CoStar, Discover Fincl., Equity Residential, Snap, Whirlpool

Wednesday

  • Boeing, Boston Scientific, Caterpillar, Daimler, Eli Lilly, Alexion Pharmaceuticals, Blackstone, Freeport-McMoRan, General Dynamics, Hilton, Invesco, LG Display, Nasdaq OMX, Norfolk Southern, eBay, Ford Motor, Microsoft, PayPal, Tesla

Thursday

  • 3M, AstraZeneca, Comcast, Danaher, Dow, Equinor, Raytheon, Amazon.com, Gilead Sciences, Intel, Vale, Visa

Friday

  • A-B InBev, Ambev, Barclays, Charter Comm., Eni, Verizon

Besides some of those companies mentioned above, which will be part of our stock market expectations 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” - such as mentioned below…..

  • Lockheed Martin reports earnings Tuesday before the bell, and tops EPS estimates 94% of the time, Bespoke found. Analysts are looking for the company to report $5.02 in earnings, and $14.87 billion in revenue. Don’t be “surprised” if the company tops expectations.
  • United Technologies reports Tuesday before the bell, and the company beats estimates 93% of the time. The Street is expecting the company to report EPS of $2.03 on $19.33 billion in revenue.
  • Lam Research reports Wednesday after the close, and the company exceeds estimates 91% of the time. Credit Suisse said the company continues to have a compelling valuation, and that it is “well positioned to benefit from recovery in memory CapEx.”

Find out the answers 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.

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% through last Tuesday’s close.

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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