3 Issues to Watch within the Inventory Market This Week | The Motley Idiot

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3 Things to Watch in the Stock Market This Week | The Motley Fool


Shares rose final week, as each the Dow Jones Industrial Common (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) gained lower than 0.5%. The enhance was sufficient to place the Dow again into constructive territory for the yr whereas the S&P 500 is up about 8%.

Earnings season hits the next gear with tons of of corporations set announce working outcomes over the subsequent few buying and selling days. That checklist contains Netflix (NASDAQ:NFLX), Procter & Gamble (NYSE:PG), and iRobot (NASDAQ:IRBT), and beneath we’ll check out the important thing tendencies that may ship their shares shifting this week.

A man watching TV.

Picture supply: Getty Photographs.

Netflix’s money tendencies

Most traders’ consideration can be on Netflix’s development numbers when the corporate broadcasts third-quarter earnings on Tuesday. The streaming video big has gained a document variety of subscribers via the primary half of the yr as COVID-19 positioned an enormous new premium on around-the-home leisure.

Administration stated again in July that a lot of that development was merely borrowed from future quarters. However traders aren’t feeling as conservative, selecting as an alternative to consider that Netflix will sail previous its official outlook that referred to as for simply 2.5 million new customers.

Tuesday’s report will even embody contemporary cash-flow metrics. Wall Avenue was shocked to see Netflix leap into constructive money circulate final quarter.

NFLX Cash from Operations (Quarterly) Chart

NFLX Money from Operations (Quarterly) information by YCharts

That was a brief situation pushed by the worldwide pause in new content material manufacturing throughout COVID-19 lockdowns. However traders are nonetheless enthusiastic about Netflix’s march towards sustainable money circulate, which may be accelerated by elevated person engagement and elevated month-to-month charges.

Procter & Gamble’s natural development

Buyers are trying ahead to Procter & Gamble’s Tuesday report as demand seemingly remained elevated for staples like diapers, paper towels, and laundry care over the previous couple of months. These tendencies helped the trade chief trounce development targets for the fiscal yr that it closed in June, with natural gross sales rising 5% general.

Executives predicted slower beneficial properties forward in fiscal 2021 due to the mixture of elevated competitors, weak financial development, and elevated inventories in shoppers’ houses. We’ll get our first replace to that outlook — calling for gross sales to rise between 2% and 4% — on Tuesday.

CEO David Taylor and his crew may describe an intense aggressive surroundings with rivals like Kimberly-Clark working onerous to chip away at its market share leads in niches like premium diapers. P&G’s lengthy streak of defending in opposition to all these threats helps clarify why many traders contemplate it a protected inventory to carry throughout turbulent financial instances like these.

iRobot’s vacation forecast

iRobot has taken shareholders on a curler coaster experience this yr, with shares plunging by almost 40% earlier than surging to over 70% beneficial properties. The robotic cleansing system inventory is on the constructive aspect of that development heading into Tuesday’s report as revenue expectations bubbled larger in current weeks.

CEO Colin Angle stated in late July that there is been a big demand uptick as shoppers around the globe began focusing extra on house upkeep. That shift was particularly pronounced within the U.S., the place customers flocked towards premium merchandise which can be priced at $500 or above.

Tuesday’s report may embody extra proof of that shift, however the large query heading into the announcement is whether or not retailing companions — particularly Amazon — are making main orders forward of the vacation procuring season.

Wanting additional out, traders are keen to listen to whether or not iRobot continues to be predicting a major hit to profitability in 2021 as it really works to shift manufacturing outdoors of its present base in China.

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