Stock Market Expectations for
The Week Ahead!

The Bulls Were Down Last Week But Certainly Not Out!
Retail Earnings Continue To Be In The Spotlight!

Also, find out what we are considering for trades
in the week to come!

by Ian Harvey
November 24, 2019

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Past Week…..

Stock market expectations were quite different compared to the past few weeks. Monday started with a promising feel for the week, but this deteriorated for a three-day losing streak for the Dow.

Note that Monday saw the Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) all managed to produce fresh highs as investors brushed off ongoing trade uncertainties.

However, several factors caused the pull-back of the indexes.....

  • highly anticipated earnings from Blue Chip Home Depot (HD) fell flat, along with poor results from Kohl's (KSS), Urban Outfitters (URBN), and Macy's (M) – which members of Stock Options Made Easy made potential profits of 182% on a put option,
  • comments from President Donald Trump threatening to raise tariffs if a deal between the U.S. and China could not be reached,
  • a report from Reuters that a "phase one" trade deal wouldn't happen until next year, and
  • a Wall Street Journal report suggesting China may have invited U.S. officials to continue negotiations in Beijing.

Despite the bad news there were plenty of positive signs.....

Again, Stock Options Made Easy members scored well on Target (324% P.P.), TJX Companies (88% P.P.) and Splunk (275% P.P.).

Other companies that performed well were Victoria's Secret parent L Brands (LB) with a strong full-year forecast, Lowe's (LOW) and Nordstrom (JWN) posting well-received results.

U.S. House Judiciary Committee approved a bill to legalize marijuana at a federal levels that saw U.S.-traded pot stocks move upwards; particularly Canopy Growth (CGC), Aurora Cannabis (ACB) and Cronos (CRON), as well as Tilray (TLRY) earlier in the week.

The Dow Jones Industrial Average was down overall by 0.5% for the week, ending a four-week streak. The S&P 500 ended its six-week win streak with a 0.3% loss and the Nasdaq Composite’s seven-week streak also ended after it dropped 0.3%.

EARNINGS PREDICTIONS RESULTS FOR WEEK BEGINNING NOVEMBER 18, 2019

DATE TRADE EXITING BEFORE EARNINGS GAIN/LOSS AFTER EARNINGS
November 19, 2019 TJX DEC 20 2019 60.000 CALL 12% P.P. 88% P.P.
November 20, 2019 TGT DEC 20 2019 115.000 CALL 32% P.P. 324% P.P.
November 21, 2019 M DEC 20 2019 17.000 PUT 155% P.P. 182% P.P.
November 21, 2019 SPLK DEC 20 2019 120.000 CALL 96% P.P. 275% P.P.
November 21, 2019 NVDA DEC 20 2019 215.000 CALL 37% P.P. -1%

If you wish to part of this action CLICK HERE.


Stock Market Expectations for the Week Ahead…..

Despite last week’s downess, stock market expectations are still high for the week ahead as the major indices will continue to fight back to positiveness.

Although the markets will be closed for the Thanksgiving holiday Thursday, and Friday will be a shortened session, there's still plenty of action for the week based on earnings and economic activity.

The retail sector will remain at the forefront, with the Black Friday shopping event, and the unofficial start to holiday shopping season.

There are also many companies still to report their earnings, including Dick's Sporting Goods, Dollar Tree, Ambarella, Nutanix, Palo Alto Networks, Best Buy, Analog Devices, Keysight Technologies and Nio, to name a few.

On the economic front, durable goods, gross domestic product (GDP) and housing data is due out. 

Holiday Shopping and Santa Rally.....

A Santa Rally is one particular phenomenon that falls within the broader subject of market seasonality…..read more…..

Analysts think both could be pretty good this year. The Friday after Thanksgiving could provide an early glimpse of how much the consumer will spend this year. The National Retail Federation estimates sales should grow by about 4% in the holiday shopping season, enough to keep the economy rolling along.

JP Morgan analysts, in a note Friday, said they expect sales to be up 4.9% during the holidays, much stronger than last year.

Other Issues.....

Investors are also watching impeachment proceedings in the House, but analysts do not expect the potential impeachment of President Donald Trump to affect markets, since there is little chance he would be convicted by the Republican majority in the Senate.

Developments on trade talks between the U.S. and China are by far the most important event for markets.

“It’s a call on trade in our view. You can’t really predict what Xi and Trump will do,” said Michael Schumacher, director rates, at Wells Fargo.

Stocks have not reacted as much too any disappointing trade headlines, and are instead looking forward to a new round of talks between U.S. and Chinese officials.

Last week, both chambers of Congress passed a pro-Hong Kong rights bill by near unanimous margins amid crackdowns on protests. Now, the bill is with President Donald Trump’s desk. Investors will monitor any signal from the White House as to where the president stands on the bill because his doing so could anger China at this delicate time.

Federal Reserve Chair Jerome Powell is scheduled to speak at the Greater Providence Chamber of Commerce annual dinner.

Powell said the central bank is unlikely to adjust interest rates anytime soon so long as the economy remains on its present path. The Fed cut rates three times this year.

Stock Market Calendar for the Week Ahead

Fed Chairman Jerome Powell speaks Monday night on the economy, and there are some economic reports worth watching, including durable goods and personal income and spending Wednesday.

Monday

  • 8:30 a.m. Dallas Fed manufacturing
  • 1:00 p.m. 2-year Treasury note
  • 7:00 p.m. Fed Chairman Jerome Powell speaks on building on gains from long expansion, Greater Providence Chamber of Commerce

Tuesday

  • 8:30 a.m. Advance economic indicators
  • 8:30 a.m. Philadelphia Fed manufacturing 9:00 a.m. S&P/Case-Shiller home prices 9:00 a.m. FHFA home prices
  • 10:00 a.m. New home sales
  • 10:00 a.m. Consumer confidence
  • 1:00 p.m. 5-year note auction
  • 1:00 p.m. Fed Governor Lael Brainard

Wednesday

  • 8:30 a.m. Initial claims
  • 8:30 a.m. Durable goods
  • 8:30 a.m. Real GDP Q3
  • 10:00 a.m. Personal income
  • 10:00 a.m. Pending home sales
  • 1:00 p.m. 7-year note auction
  • 2:00 p.m. Beige book

Thursday

  • Thanksgiving Day
  • Markets closed

Friday

  • Black Friday
  • 9:45 a.m. Chicago PMI

Early Closing: The NYSE, NYSE AMEX and NASDAQ will close trading early (at 1:00 PM ET) on Friday, November 29, 2019 (the day after Thanksgiving).

Stock Market Expectations for Earnings

Retail will dominate in the week ahead, as markets watch the final group of store chains report earnings. Dollar Tree, Dick’s Sporting Goods and Best Buy report on Tuesday.

Also, Investors will get earnings reports from Hewlett Packard Enterprise and cybersecurity company Palo Alto Networks on Monday.

Monday

  • Hewlett Packard Enterprises, Palo Alto Networks, Agilent, Jacobs Engineering, PVH Corp, Nutanix, Ambarella

Tuesday

  • Best Buy, Dell, HP, DollarTree, Autodesk, Box, Hormel, VMWare, Dick’s Sporting Goods, Cracker Barrel, Bank of Nova Scotia, Analog Devices, Keysight Technologies, Burlington, Momo, Nio, Guess?, Abercrombie & Fitch

Wednesday

  • Deere, DoYu, Tiffany, Frontline

Thursday

  • Thanksgiving Day
  • Markets closed

Friday

  • Black Friday

Early Closing: The NYSE, NYSE AMEX and NASDAQ will close trading early (at 1:00 PM ET) on Friday, November 29, 2019 (the day after Thanksgiving).

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 our "Earnings Predictions" thoughts here!

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

Stock market expectations should see the market continue to reach for new highs, and some analysts say that shouldn’t change as the calendar progresses deeper into a seasonally strong time of year for stocks.

The week around Thanksgiving is often positive for stocks. There will likely be a Santa rally this year, but the market typically dips in the middle of December before moving higher.

Also, for stock market expectations, the S&P 500 could surge in a powerful rally to 3,850, if stocks stage the same type of breakout they had after the last two similar downturns, according to technical research strategists at Bank of America Merrill Lynch.

The strategists said there should be a sustained breakout of about 25%, if the market’s move from 2018 to earlier this month was a cyclical consolidation.

“History suggests that breakouts from these ranges should be powerful,” the strategists wrote in a note. On the S&P 500, the 3,063 level was the “bears’ last stand.”

As well, Credit Suisse’s Jonathan Golub predicts a 10% upside to the S&P 500 from current levels and finishing next year at 3,425.

While the strategist acknowledged that economic data has decelerated over the past year, he instead focused on what he expects to be weaker profit headwinds, plentiful buybacks and multiple expansions.

So.....

To stay up-with stock market expectations, 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!

Keyword; stock market expectations


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


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