US stock markets are likely to remain in the week ahead as investors remain resolutely focused on the outlook for interest rates and their impact on economic growth.
Fed Chairman Jerome Powell is due to speak at a Wall Street Journal conference on Tuesday afternoon amid speculation that the central bank will be more aggressive in its fight to slow, which continues to hit a peak in four decades.
Investors are anticipating a half-point interest rate hike at the June Fed meeting and another in July, with perhaps a third in September. The central bank raised its target federal funds rate by half a point this month, following a quarter-point hike in March.
Although markets recovered some lost ground on Friday, Thursday’s tumble from 3,858.87 sent the index down 19.55% from its peak on an intraday basis, very close to the official decline. 20% for a bear market.
Along with inflation and growth concerns, investors will also be watching for important earnings releases over the coming week. Here are three that we follow:
1. Focus on video communications
Zoom Video Communications (NASDAQ:) will report its first quarter results for its fiscal year 2023 after market close on Monday, May 23. Analysts expect earnings per share of $0.87 on sales of $1.07 billion.
The video communications platform leader thrived during the pandemic, when stay-at-home requirements and remote work trends significantly boosted sales for the San Jose, Calif.-based tech company. During this period, sales and earnings have steadily increased each quarter, and the company has continued to raise its guidance.
But Zoom is now struggling to maintain that pace of growth as many in-person activities, including working in offices and classrooms, resume, making investors skeptical about the future potential of ZM shares.
To cope with this slowdown, the company has expanded its product line in a bid to broaden its business and ease investor fears. This year, Zoom unveiled a new cloud contact center product. The company also sells an internet replacement for landline phones and technology to help organizations improve meetings that involve remote and in-office employees.
ZM stock closed Friday at $89.74, down more than 50% this year.
2. NVIDIA Corporation
Semiconductor giant NVIDIA (NASDAQ:) will release its first quarter fiscal 2023 results on Wednesday, May 25 after market close. Analysts expect the chipmaker to produce EPS of $1.30 on revenue of $8.12 billion.
The Santa Clara, Calif.-based chipmaker is the largest producer of graphics chips used in personal computers and games. Over the past several years, NVDA has successfully adapted its technology to the artificial intelligence market, creating an additional new multi-billion dollar business line.
NVIDIA has achieved revenue growth of more than 50% over the past nine quarters. This performance helped make it one of the top 10 companies by market value on the S&P 500 and one of the most popular stocks in the chip industry.
Despite growing demand for its products, NVDA shares have lost more than 50% of their value since last peaking in November as investors shun high-growth companies amid rising interest rates and concerns about future growth.
The stock closed Friday at $166.94, its lowest level in about a year.
3. Wholesale Costco
One of the largest discount retailers in the United States, Costco Wholesale (NASDAQ:) will report its third quarter fiscal 2022 results on Thursday, May 26 after the close. Analysts expect $3.06 per share profit on sales of $51.28 billion.
After a string of disappointing results from (NYSE:) and (NYSE:) last week, investors have lowered their expectations of retailers, many of whom are facing a variety of challenges.
Shares of Walmart, Target and other major chains have fallen dramatically, the most since the 1987 stock market crash, amid fears that these companies may not be able to pass higher prices on to consumers even as they continue to manage supply. chain disturbances.
Costco shares fell more than 15% last week, closing at $416.43 on Friday.