3 Things to Watch in the Stock Market This Week

Stocks were little changed last week despite a sharp jump during Friday’s trading session following positive economic news. That boost, plus generally positive earnings reports from some of the market’s biggest players, still left both the Dow Jones Industrial Average(DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC)just modestly lower so far in 2018.

^SPX Chart

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Earnings season continues at peak pace over the next few trading days, with hundreds of companies set to report updated business trends. A few of the most anticipated releases this week will be coming fromDisney (NYSE:DIS), TripAdvisor (NASDAQ:TRIP), and NVIDIA (NASDAQ:NVDA).

Disney’s ESPN fix

Disney posts its earnings results after the market closes on Tuesday in a report that should be packed with news for investors. The media giant has a lot on its plate right now, after all. Its new ESPN app marks its boldest attempt yet to bypass the traditional network ecosystem that has produced such steady profits for the company for decades.

Early results from that direct-to-consumer service could inform management’s thinking as they prepare for an even bigger bet, a stand-alone TV streaming app, set to launch sometime in 2019.

Outside a Disney theme park.

Image source: Getty Images.

Meanwhile, investors will be watching for signs of growth at Disney’s parks and resorts business, which played a key role in pushing earnings slightly higher last quarter. And CEO Bob Iger and his team will likely provide an update on their proposed $50 billion acquisition of 21st Century Fox that, among other things, should keep Disney comfortably on top of the global box office industry.

TripAdvisor’s growth pace

The online travel booking market is huge, and growing, but TripAdvisor hasn’t benefited much from its leading industry position. In fact, sales growth slowed to just 5% in 2017 while profitability dove.

In response, CEO Steve Kaufer and his team are taking a new approach to the business that prioritizes profitability, likely at the expense of sales gains. Investors saw early results from that strategic shift in February when the company paired rising profit margin in its core hotel business with a decline in hotel shopper traffic growth to 3% from 7%. Shareholders will be looking for more progress along these lines in TripAdvisor’s Tuesday afternoon earnings release.

At the same time, executives have been encouraged with the demand they’re seeing in the non-hotel segment that includes things like attractions, tours, and restaurant bookings. This division has become a big source of revenue growth for the company and might soon start generating earnings to go along with those impressive sales gains.

NVDIA’s outlook

Few stocks are as loved by Wall Street right now as semiconductor giant NVIDIA, whose next-generation chips have a good shot at powering growth industries ranging from AI to autonomous driving to cryptocurrencies. Yet it was soaring revenue in its core gaming segment that played the biggest role in the company’s epic fiscal 2018 that included a 41% sales spike as net income jumped to $3.1 billion from $1.9 billion in the prior year.

An engineer working on a semiconductor.

Image source: Getty Images.

On Thursday the chipmaker is expected to extend that positive momentum into fiscal 2019, with consensus estimates targeting a 49% sales increase to $2.9 billion as earnings almost double to $1.45 per share. Whether the stock continues its epic run, on the other hand, will depend on the company’s ability to continue trouncing expectations by delivering market-leading chips that its customers demand.

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