Big Earnings Week Ahead

Pre-market futures are slightly rolling off an impressive trading day on Friday, which saw the blue-chip Dow close over 50K for the first time in history. For all the handwringing we had been seeing last week, with AI/software investments rotating out of favor, only the Nasdaq is trading lower from the start of the year.

Currently, the Dow is trading down -55 points, the S&P 500 is -9, and the Nasdaq -56 points. The small-cap Russell 2000 is officially in the green presently, but basically flat ahead of the open. Already we are off early-session lows at this hour.

Q4 Earnings Update to Start a New Week

Q4 earnings season has already seen many of its marquee names report so far, but the sheer number of companies reporting increases this week. The focus — instead of Big Banks or most of Mag 7 — on higher-profile companies reporting is Consumer Discretionary: Coca-Cola (KO), Shopify (SHOP), McDonald's (MCD), Coinbase (COIN) and Expedia (EXPE). We’ll also hear from Ford (F), Cisco (CSCO) and many others.

Incidentally, the one remaining “Mag 7” stock, NVIDIA (NVDA) — also the biggest, with a market cap of $4.5 Trillion — doesn’t come out with earnings until two weeks from Wednesday. The Zacks Rank #2 (Buy)-rated chipmaker is still expecting absolutely stellar growth numbers: +70.8% on earnings, year over year, and +66.7% on revenues.

Ahead of today’s open, steel-producing major ClevelandCliffs (CLF) outperformed on its Q4 bottom line — reporting -$0.43 per share versus expectations for -$0.62, for a +30.65% earnings surprise. However, revenues of $4.31 billion in the quarter missed consensus by -6.7%. Shares are trading down -3.6% presently, but still up +7% from the start of the year.

Sally Beauty (SBH) was also mixed in its fiscal Q1 report ahead of today’s open, beating on earnings by a penny to 48 cents per share on $943.17 million in revenues, which was a hair light (-0.08%) of estimates. Shares of SBH are also selling off -3.5% at this hour, but still +10% year to date.

Important Week for Economic News

Thanks to another delay in the U.S. Bureau of Labor Statistics’ (BLS) Employment Situation report, the January release comes this Wednesday morning. Expectations are low: only 55K new jobs look to have been filled last month (though this would still be more than twice what ADP’s private-sector payrolls showed for January) on a steady +4.4% Unemployment Rate, which remains historically low.

Another important economic report will be Friday morning’s Consumer Price Index (CPI) for January. Month over month, we expect +0.3% growth on both headline and core (subtracting volatile food and energy prices), with an Inflation Rate (headline CPI, year over year) of +2.5% — another healthy print for the overall economy, should it come to pass.

Elsewhere, we’ll get a look at Import and Export Prices, Retail Sales and the latest NFIB Small Business Optimism survey — all expected tomorrow. Thursday morning, as per typical, brings us Weekly Jobless Claims. In all, we will have a much better view of the overall economy by the end of this week.

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This article originally published on Zacks Investment Research (zacks.com).

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