As bond yields continue to rise, investors are once again finding themselves nervous about the future direction of the equities market. That uncertainty was largely responsible for the broad-based sell-off in stocks last week, led by tech shares.
A continuous flow of solid economic data has pushed US Treasury yields to multiyear highs, prompting some investors to question the tenacity of a bull run that so far hasn’t shown any sign of peaking. It will also be interesting to see whether bears can cause more damage to high-flying tech names in the coming week, or if bargain hunters start to become active about taking advantage of attractive opportunities that could be developing.
In the short run, the fear of higher interest rates will continue to dominate markets until investor focus shifts to the third-quarter earnings season that’s just round the corner. Here are three stocks we believe could see some price swings in the coming week.
1. JPMorgan Chase
JPMorgan Chase & Co. (NYSE:JPM), the largest American investment bank, will be among the first companies to report their third-quarter earnings this coming Friday. Analysts on average expect $2.23 EPS for the period ending September 30, up from $1.76 from the same period a year ago. As well, the consensus expectation is for $27.53B in revenues when the multinational lender reports on October 12, before the market open.
JPM Weekly 2015-2018
At a time when the economy is strong and interest rates are on an upward trajectory, bank shares are likely to perform better. Investors will wait to see whether any of these factors are helping the US’s largest lenders improve their bottom line. Peer financial companies including Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) also report on Friday.
In the previous quarter, JPMorgan was able to beat market expectations since revenue from both fixed-income and equity trading surged. As well, fees from investment banking also topped estimates.
Elon Musk, the embattled CEO of Tesla Inc. (NASDAQ:TSLA) is at it again. Even after his recent brush with the Securities and Exchange Commission (SEC) he’s not giving his Twitter finger a rest long enough to let shares of his electric car maker trade on their fundamentals. Soon after settling with the SEC regarding his reckless tweet in August about taking the company private, he was back on Twitter this past Friday, now criticizing both the SEC and short sellers (whose expanding positions in Tesla shares have been plaguing his company’s stock for some time now).
TSLA Daily 2015-2018
Tesla stock plunged more than 7% on Friday after Musk fired off more than a dozen tweets on the subject over the course of Thursday. He mocked the agency as the “Shortseller Enrichment Commission” and sarcastically praised it for “doing incredible work.”
His latest tweets may trigger fresh action from the SEC, which is still in the middle of finalizing last week’s settlement which bars Musk from serving as chairman of the carmaker for three years. As part of the deal, the company also has to implement procedures and controls to oversee Musk’s communications. Investors should brace for another tumultuous week in Tesla shares.
Walgreens Boots Alliance Inc. (NASDAQ:WBA), the second-largest pharmacy operator in the US will report Q4 earnings on Thursday, October 11 before the market open. Analysts expect an EPS of $1.44 a share in the quarter ending August, up from $1.31 a share in the same period a year ago on revenues of $33.73B.
The chain is benefiting from its recent acquisition of Rite Aid stores. That deal helped fuel growth in back of store sales at the prescription counter, which account for more than 70% of Walgreens’ US drugstore sales.
Since the announcement of its third quarter earnings at the end of June, WBA shares are up 18%. At that time, Walgreens also authorized a $10 billion stock buyback. Investors will be especially keen to see an improvement in the drug retailer’s same-store sales which had actually declined in the previous quarter.