Day Ahead: Top 3 Things to Watch
Investing.com – Here’s a preview of the top 3 things that could rock markets tomorrow.
1. Intel’s Guidance Will Hamper Stocks
The and the will face some headwinds from chipmaker Intel (NASDAQ:) after its shares plunged after hours following .
Intel topped first-quarter estimates, but for the second quarter it said it expects to earn 89 cents a share on revenue of $15.6 billion. The projection compares with an estimate of $1.02 from S&P Capital IQ and a revenue estimate of $16.88 billion.
Fellow semiconductor stocks Nvidia (NASDAQ:), Advanced Micro Devices (NASDAQ:) and Micron (NASDAQ:) also fell postmarket.
Meanwhile, Amazon (NASDAQ:) reported a quarterly profit the blew away forecasts, with sales in line.
But cautious guidance kept the stock from really rallying in after-hours trading.
2. First Glimpse at Q1 GDP
Amid all the intrigue about earnings, there’s a big economic report out before the bell tomorrow.
The government will release its first measure of first-quarter GDP at 8:30 AM ET (12:30 GMT).
Economists, on average, expect that rose at an annual rate of 2% in the first three months of the year, according to forecasts compiled by Investing.com.
That would be down from the final measure of fourth-quarter economic growth, which came in at 2.2%, but would indicate momentum in the latter part of the first quarter following the partial government shutdown.
Looking to inflation, core personal consumption expenditures (PCE) prices, which exclude food and energy, are forecast to have risen 1.3%, down from 1.8% in the fourth quarter.
3. Big Reports From Big Oil
Friday gives investors a break. They don’t have to think much about bank or tech earnings.
What they do get to think about is Big Oil with ExxonMobil (NYSE:) and Chevron (NYSE:) both reporting before the open in an environment of sharply higher oil prices.
ExxonMobil is expected to report 72 cents a share in earnings, down from $1.09 a year ago, according to analysts polled by Investing.com. Revenue is projected at $69.47 billion, up 1.86%.
Exxon is making a big investment push this year, with spending in the Permian Basin of West Texas and in Guyana in South America and an expansion in Beaumont, Tex. to make its refinery the nation’s largest. It’s also building a petrochemical complex near Corpus Christi. The stock is up about 21% this year after falling 18.5% in 2018.
Chevron is expected to earn $1.28 a share, down from $1.90 a year ago. Revenue is expected to be flat at $37.84 billion. Shares are up 8.4%.
Chevron has offered to buy oil-and-gas producer Anadarko Petroleum (NYSE:) for $33 billion in cash and stock, but the bid was topped this week by Occidental Petroleum (NYSE:), which offered $38 billion.
Consumer products giant Colgate-Palmolive (NYSE:) also reports before the open.
Analysts estimate the maker of Colgate toothpaste, Ajax cleaners, Murphy’s Oil Soap and related products will report earnings of 66 cents a share, down 11% from a year ago. Revenue of $3.87 billion would be down 3.3% from a year ago.
Companies like Colgate-Palmolive and archrival Procter & Gamble (NYSE:) face pricing pressures. A rising U.S. dollar doesn’t help either. The shares, however, are up more than 15% this year.
American Airlines (NASDAQ:) is expected to report earnings of 52 cents a share, down from 75 cents a share last year. Revenue is projected at $10.61 billion, up 1.9% from a year ago.
Watch for how the company discusses the impact of higher fuel prices on results. As important is how much the grounding of its Boeing (NYSE:) 737 MAX jetliners will affect results going forward.
Among companies also reporting on Friday are Weyerhaeuser (NYSE:), Archer-Daniels-Midland (NYSE:), Goodyear Tire & Rubber (NASDAQ:) and Sony (NYSE:).
Tech comes back next week with Google-parent Alphabet (NASDAQ:) reporting after Monday’s close and Apple (NASDAQ:) after Tuesday’s finish.