This week, attention will be focused on the US employment statistics and Powell’s speech. Tesla’s third-quarter deliveries exceeded expectations, making it a buy. Levi Strauss is selling with overwhelming returns on deck. Looking for more practical trading ideas to weather the current market volatility? Get access to InvestingPro for less than $8 per month!
U.S. stocks closed mixed on Friday, hitting all-time highs as traders digested weak inflation data and hopes for another big interest rate cut at the Federal Reserve’s November policy meeting. The trade closed at the value.
All three major US stock indexes recorded gains for the third consecutive week, with the blue-chip Dow and the benchmark both up about 0.6% over the same period. Tech stocks rose nearly 1% for the week.
Source: Investing.com
The coming week is shaping up to be an eventful one as investors continue to evaluate the Fed’s prospects for rate cuts. According to Investing.com, the market is fully pricing in a rate cut of at least 25 basis points in November, with a 48.1% chance of a 50 basis point cut.
Most important on the economic calendar is the September U.S. jobs report to be released on Friday, which shows the economy added 144,000 jobs compared to a 142,000 increase in payrolls in August. It is expected. The unemployment rate is expected to remain stable at 4.2%.
Ahead of the employment report, ISM’s manufacturing and services PMI will also be closely watched.
Source: Investing.com
As a result, there will be a number of speakers from the Federal Reserve, including Chairman Jerome Powell, scheduled to appear on Monday morning.
Next week’s earnings schedule includes reports from several notable companies. These include Nike (NYSE:), Carnival (NYSE:), Levi Strauss (NYSE:), and Constellation Brands (NYSE:).
Regardless of which direction the market goes, here are stocks that are likely to be in demand and that are poised for new downside. However, please note that my period is only for one week, from Monday, September 30th to Friday, October 4th.
Stock to buy: Tesla
The main factor driving Tesla (NASDAQ:) stock higher this week is the release of its third-quarter delivery results, which are scheduled to be released Wednesday morning.
The EV company’s third-quarter results should show improvement after a rocky first half where demand was affected by slowing growth in key international markets.
Wall Street analysts expect deliveries to reach 462,000 vehicles in the quarter, an increase of 6% compared to the third quarter of 2023. This would be the company’s third-best quarterly total, behind the record-setting 484,507 units in Q4 2023 and 466,140 units in Q2 2023.
Tesla’s strong delivery numbers have been supported by rising demand, particularly in China, where government subsidies and low-cost financing are supporting sales.
Tesla produces the Model 3, Model Y, Model X, and Model S, as well as the semitruck and Cybertruck. The Model Y crossover accounts for the majority of sales. The Austin, Texas-based company is widely recognized as a global leader in the electric vehicle market, holding dominant market shares in the United States and China.
Investors will also be keeping an eye on Tesla’s robotaxi event on October 10, when the company will share the latest information on its self-driving technology and artificial intelligence. The event could generate buzz about future business opportunities such as Tesla’s AI capabilities and self-driving ride-hailing services.
Source: Investing.com
TSLA stock rose 9.3% last week and closed Friday’s trading at $260.46 per share, its highest closing price since July 10. The stock is up 4.8% since the beginning of the year.
At current levels, Tesla’s market capitalization is $812 billion, the world’s largest company, larger than companies such as Toyota (NYSE:), Volkswagen (ETR:), General Motors (NYSE:), and Ford (NYSE:). It has become a valuable car manufacturer. ).
Source: InvestingPro
InvestingPro’s AI-backed model gives Tesla an above-average Financial Health Score of 3.0 out of 5.0, highlighting the company’s strong fundamentals, technology, and market leadership in electric vehicles and AI-based automation. The emphasis is worth mentioning. .
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Inventory for sale: Levi Strauss
In contrast to Tesla’s positive outlook, Levi Strauss is struggling with declining demand amid tough economic conditions.
The iconic denimwear company is expected to report lackluster earnings in its third-quarter financial report, which will be released at 4:10 p.m. ET after the market closes Wednesday.
Investor sentiment surrounding Levi Strauss remains bearish, with analysts downwardly revising profit forecasts ahead of the company’s earnings release. According to InvestingPro, all 12 analysts covering LEVI have lowered their earnings estimates in the past 90 days, reflecting growing concern about the company’s outlook.
According to the options market, market participants are expecting a significant move in Levi’s stock after the update, with an expected move of about 9.2% in either direction. Earnings have been the catalyst for wild swings in stock prices this year, with Levi Strauss shares falling 15% in late June, the last time the company reported quarterly results, according to InvestingPro data.
Source: InvestingPro
Analysts expect earnings per share to be $0.31, slightly up from $0.28 in the year-ago period, and sales are expected to rise 3% to $1.55 billion.
Despite this modest growth rate, Levi Strauss has been hit hard by weak consumer demand as inflation continues to squeeze household budgets around the world. With rising costs of living and inflation lasting longer than expected, many consumers are cutting back on discretionary spending, including clothing purchases.
Taking this into consideration, there is an increasing downside risk that the company may revise its full-year profit and sales growth forecasts downward due to the deterioration of the retail environment.
Source: Investing.com
Levi’s stock closed Friday at $21.65, its highest since June 26. The stock price rose 30.9% in 2024. At current valuations, San Francisco-based Levi Strauss & Co. has a market capitalization of $8.5 billion.
InvestingPro says Levi Strauss’ near-term outlook for profitability and free cash flow looks risky, noting that the company’s high earnings valuation multiple is a cause for concern. It is.
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Disclosure: As of this writing, I am long the S&P 500, but via the SPDR® S&P 500 ETF, and the Invesco QQQ Trust ETF. I’m also long the Technology Select Sector SPDR ETF (NYSE:).
I regularly rebalance my portfolio of individual stocks and ETFs based on an ongoing risk assessment of both the macroeconomic environment and corporate finances.
The views expressed in this article are solely those of the author and should not be taken as investment advice.
X/Follow Jesse Cohen on Twitter @JesseCohen For more stock market analysis and insight.
