Tariffs and trade-related worries continue to dominate the narrative for North American markets, with no real sign these issues are going to be resolved anytime soon. US President Donald Trump has reportedly asked aides to proceed with tariffs on about $200 billion more in Chinese products. He plans to go ahead with the latest duties despite his attempt to restart talks with Beijing to resolve the trade war, according to media reports.
The threat of a full-blown trade war between the world’s largest economies will continue to weigh on investors this coming week. Apple (NASDAQ:AAPL) said last week the $200 billion round of tariffs could hit some of its most popular goods such as the Apple Watch and AirPod headphones. Retailers such as WalMart (NYSE:WMT) and Target (NYSE:TGT) may also see their cost of goods purchased from China escalating if further tariffs hit consumer goods.
Beyond trade wars, the coming week will feature earnings reports from some of the key areas of the market. Below are three closely watched stocks—a major shipper, significant chip manufacturer and software giant—that might go through big swings following their earnings releases in the days ahead:
FedEx: Swelling Deliveries, Robust US Economy
On Monday, September 17, after the close, FedEx (NYSE:NYSE:FDX) is expected to report earnings for the quarter that ended on August 31, FedEx’s Q1 2018. According to Reuters’ forecasts, the shipping giant will report $3.11 a share profit for the first quarter, a gain of 24% when compared to the same period a year ago.
FDX Weekly 2015-2018
Swelling e-commerce deliveries and a robust US economy that’s driving demand in its freight-hauling business are helping Memphis,Tennessee-based FedEx, which has invested heavily to catch up with the online orders. Its past three earning reports have shown that that investments have started to pay off.
Trading at $255.44, FedEx shares have gained 19% during the past one year. Analysts have $286 a share consensus price target for the next 12 months.
The company forecast earnings of $17 to $17.60 a share for the fiscal year that’s ending next May, excluding pension adjustments and costs from the integration of its purchase of international courier delivery service TNT Express, whose acquisition was completed in mid-2016. The midpoint of the forecast would represent a 13% gain on adjusted earnings for the year that ended May 31.
Micron Technology: Chip Demand Could Be Slowing
Micron (NASDAQ:MU) will report its Q4 2018 earnings on Thursday, September 20 after the market close for the quarter that ended in August. According to the analyst consensus estimate compiled by Reuters, the chipmaker will report $3.14 a share profit for the fiscal fourth-quarter, up $2.02 from a year ago.
MU Weekly 2015-2018
Analysts are divided on the future growth prospects for the largest US maker of memory chips amid signs that chip demand is slowing. Shares of this Boise, Idaho-based company have lost about 30% of their value during the past three months as analysts, including Morgan Stanley, said the memory chip market is deteriorating versus expectations.
The past quarter may help clear this uncertainty for the company. Shares, which closed at $44.30 on Friday, and are considered undervalued by the company, had announced $10-billion buyback plan in May.
Oracle: Struggling To Catch Up To Cloud Rivals
In all likelihood, the most interesting earnings report of the week will come from the world’s second-largest software company, Oracle (NYSE:NYSE:ORCL). The Redwood City, CA-based company reports numbers for their first quarter on Monday, September 17, amid accusations that it misled investors when its executives explained why cloud sales were growing.
ORCL Weekly 2015-2018
According to reports last month, the City of Sunrise Firefighters’ Pension Fund, claimed in a lawsuit, that Oracle engaged in coercion and threats to sell its cloud-computing products, creating an unsustainable model that fell apart. The Florida-based firefighter pension fund and other investors lost money when Oracle’s stock plummeted in March after releasing a disappointing earnings report and outlook, according to the lawsuit.
In the cloud computing software and services market, Oracle is struggling to catch up to rivals Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). Oracle stopped disclosing specific cloud sales metrics as of June, fueling speculation that it was losing the market share. Trading at $49.25, Oracle shares are up just 4% for the year.