As investors struggled to understand the depth of the ongoing correction in equity markets, the flow of negative news continued to push share values of cyclical stocks lower in the past week.
The arrest of the chief financial officer of China’s Huawei Technology Co Ltd (SZ:002502) in Canada was the biggest setback for some growth stocks as the development diminished the chances of a pact between the U.S. and China in their escalating trade war.
Investors exited their positions in high-growth stocks and financial companies over concerns that the rising tension between the world’s two largest economies will crimp global growth and hurt consumer demand.
With that macro environment unlikely to improve in the coming days, here are three top stocks that could move in the coming week due to their earnings reports and developments in their sectors.
Adobe (ADBE) – 1-Month Chart
Adobe Systems (NASDAQ:ADBE), the maker of Photoshop, is one of the few technology stocks that hasn’t entirely lost its momentum in this market selloff. We will see more evidence of the company’s business strength when it reports its earnings for the quarter that ended on Nov. 30 on Thursday after the market close.
According to the company forecast, revenue in the last quarter will be about $2.42 billion and profit, excluding some costs, may reach $1.87 a share, the San Jose, California-based company informed investors in September.
Adobe is benefiting from strong demand for its creative products, even as the company pushes more into software for businesses. Adobe, which competes with Salesforce.com (NYSE:CRM) in marketing and e-commerce technology, is trying to boost growth by expanding its business offerings while strengthening its core creative software business.
Despite a decline of about 10% during the past three months, its shares are still up about 35% for the year, trading around $240 at the time of writing.
Costco (COST) – 1-Month Chart
The recent turmoil in the markets has clearly taken its toll on investor sentiment, but the nation’s top retail stocks have done much better and outperformed other sectors.
Retail stocks will come under scrutiny again on Thursday, Dec. 13, when Costco Wholesale (NASDAQ:COST) will report its fiscal 2019 first-quarter results.
Analysts are expecting $1.62 a share in profit for the period that ended in November on sales of $34.54 billion. Given the strong showing by top retailers in their third quarters, including Walmart (NYSE:WMT), the chances are that Costco will beat expectations and report a strong bottom-line number.
But the company’s future guidance will be more important for investors at a time when cost pressures are rising with the U.S.-China tariff hikes that have started to pinch retailers who import a lot products from China.
3. Exxon Mobil
Exxon Mobil (XOM) – 1-Month Chart
With oil producing nations reaching an agreement Friday to cut their output, the next week will be crucial for investors who were betting on the rebound in energy stocks, such as Exxon Mobil (NYSE:XOM).
OPEC, along with Russia and its allies, will curb oil output by a collective 1.2 million barrels a day under the deal. OPEC nations would cut 800,000 barrels and the Russia-led group would handle the rest.
Brent crude jumped as much as 5.2% on London’s Intercontinental Exchange on news of the deal that could brighten the outlook for some of the largest U.S. oil producers, including Exxon and Chevron (NYSE:CVX).
Exxon has lost about 10% of its value from its October high of $86.89 as a massive plunge in oil prices reduced their near-term profit outlook. If oil continues to gain on supply cuts, oil stocks will offer a refuge to investors seeking a shelter in a deepening downturn.