As the second-quarter earnings season gains momentum, investors are eagerly awaiting the reports of several key companies to determine the future direction of the stock market. Last week, major players such as Citigroup, JPMorgan Chase, Delta Air Lines, and PepsiCo set the tone with their earnings releases. With FactSet data showing an impressive 18% earnings growth among S&P 500 companies that have already reported, the upcoming week holds even greater significance.
Among the companies scheduled to report earnings this week, some are expected to experience notable postearnings moves based on investors’ expectations. Streaming giant Netflix, which has seen a 35% surge in its stock price in 2024, stands out with one of the highest implied moves at 7.4%. Following a previous quarter that exceeded Wall Street estimates with a 16% subscriber growth, analysts predict a 40% earnings per share growth for Netflix this time around.
Another stock to watch is D.R. Horton, a homebuilder that is expected to react to its latest financial release. With shares up 1% since the beginning of the year, the firm is projected to experience a 5% movement based on implied probabilities in the options market. Last week’s positive performance by D.R. Horton was influenced by lower-than-expected inflation data, prompting investors to shift away from technology stocks in anticipation of reduced interest rates.
In the tech sector, Taiwan Semiconductor will also be releasing its latest quarter numbers this week. The company has witnessed an impressive 80% increase in shares in 2024, driven by strong demand for artificial intelligence chips. With an implied postearnings move of over 6%, Taiwan Semiconductor is expected to further capitalize on its growth momentum. Bank of America’s decision to raise its earnings forecasts for the company reflects optimism surrounding AI and cloud demand.
Other stocks to keep an eye on for postearnings movements include United Airlines and Equifax. As the market awaits these crucial reports, the potential impact on stock prices and overall market sentiment remains uncertain. Investors will be closely monitoring the earnings releases and corresponding reactions in the market to gauge the direction of future investment strategies.