Interest rates, the price of oil and the Russian-Ukrainian conflict will continue to influence stock market trading next week, although investors appear more willing to take risk after several weeks of sentiment aversion. risk leading to a downward trend in stocks.
All four major averages ended the week on a high note, picking up a second consecutive winning week. The rose 0.3% for the week, while the gained 1.8% and the index rebounded around 2%.
The rebound came even as the war in Ukraine continues and key parts of the Treasury yield curve last week, raising the odds that the economy is heading into a recession. Yield curve inversions have historically preceded recessions, but not 100% of the time.
Amid these mixed signals on the macro front, here are three stocks we are watching closely, two of which will announce their latest results in the coming days.
Shares of Tesla (NASDAQ:) could continue their upward trajectory next week after the biggest electric car maker announced over the weekend that it had made a series of deliveries during the first quarter of 2022.
The Austin, Texas-based electric vehicle maker delivered 310,048 cars globally in what Elon Musk called an “unusually” difficult first quarter due to continued supply chain disruptions. The number was slightly above analysts’ expectations.
Tesla CEO Musk said in a tweet:
“It was an *unusually* difficult quarter due to supply chain disruptions and China’s zero Covid policy. The exceptional work of the Tesla team and key suppliers saved the day.”
Even before the weekend’s announcement, Tesla shares were on fire, rising more than 37% in the past two weeks on optimism that the electric vehicle maker is successfully overcoming the difficult problems of the supply chain, while demand for its cars remains strong. Shares closed Friday at $1,084.59.
2. Levi Strauss
Apparel maker Levi Strauss (NYSE:), will release its fiscal first quarter 2022 results on Wednesday, April 6, after market close. Analysts on average expect earnings of $0.41 per share on sales of $1.54 billion.
The San Francisco-based clothing maker, best known for its iconic Levi’s brand jeans, delivered stronger-than-expected January earnings and said price increases weren’t hurting demand for its products.
Levi sees no signs of slowing down despite inflationary headwinds that led the company to raise prices about 10% on a range of apparel items during the fourth fiscal quarter ended Nov. 28. The strong forecast shows that consumer demand for apparel remains strong after two years of a pandemic-related slowdown.
Despite this positive outlook, investors aren’t keen on owning Levi’s stock. The stock has fallen more than 20% this year, significantly underperforming the S&P 500 which is down around 5% over the same period. The stock closed Friday at $19.83.
3. Constellation Marks
U.S. Corona beer producer Constellation Brands (NYSE:) will report fourth quarter 2022 results before market open on Thursday, April 7. Analysts expect earnings of $2.1 per share on sales of $2.02 billion.
New York-based wine, beer and spirits maker Victor announces its latest earnings amid speculation it is in talks to merge with Monster Beverage (NASDAQ:), which makes energy drinks.
According to a Bloomberg report published in February, a merger deal could be completed in the coming weeks if negotiations go smoothly, creating an entity that could be valued at around $90 billion.
The report noted:
“Any deal would create a unique combination of energy drinks, alcoholic beverages and potentially marijuana. Constellation also owns a nearly 40% stake in Canopy Growth (NASDAQ:), a Canadian cannabis company that sells THC-infused drinks in While a tie-up with Constellation could open up growth opportunities for Monster, some analysts see limited opportunities for cost savings as they operate in different segments.
STZ shares, which have fallen about 7% this year, closed Friday at $233.71.