There are many factors pulling stocks in different directions, boosting volatility. While the U.S.-China trade war—which isn’t ending anytime soon—is keeping investors nervous about the future economic outlook, many companies are reporting strong earnings, signaling the strength of corporate America and suggesting U.S. companies are in a good position to weather global weakness.
Despite yet more equity weakness on Friday, stocks regained most of their steep losses from earlier in the week. While this uncertainty is likely to persist in the weeks to come, investors have another important week ahead when some big corporate names report earnings. These three stocks might see abnormal moves after their reports are released:
1. Walmart
With the U.S. consumer confidence still strong, America’s largest retailer, Walmart (NYSE:WMT), is expected to report another blowout quarter when it reports earnings on Thursday before the market opens. Consensus predicts EPS of $1.22 on revenue of $130 billion.
In anticipation of strong earnings and growing online sales, investors have pushed Walmart shares up 16% this year. But since hopes for a quick U.S.-China trade dispute resolution faded in July, the stock is weakening. It closed more than 1% down Friday at $107.28.
In the previous quarter, Walmart continued to show investors that it is well-positioned to take advantage of stronger consumer spending amid a low unemployment rate.
The big-box giant reported in May that comparable sales at its U.S. business rose 3.4% in the first quarter from a year earlier, its strongest performance on that metric in the period in nine years. The gain reflected both an increase in traffic as well as shoppers spending more per transaction. Online sales rose 37% from a year ago.
2. NVIDIA
The same day albeit after the close, one of the world’s largest chipmakers, NVIDIA (NASDAQ:NVDA), will also report its Q2 earnings. Analysts are expecting the company to report $1.14 a share profit on sales of $2.55 billion.
The semiconductor sector is going through a cyclical downturn as chip demand wanes and the U.S.-China trade war threatens the future growth outlook of chipmakers. Investors will be focusing on NVIDIA revenue and performance in gaming and data centers.
During NVIDIA's Q1 earnings call in May, Chief Financial Officer Colette Kress said that the server market outlook had worsened since the beginning of the quarter. Given the market is hard to predict, she said, NVIDIA didn’t update its annual forecast.
NVIDIA shares have been one of the hardest hit in this downturn, plunging 47% from the stock's record high of $293 last year. Shares closed at $154.18 on Friday.
3. Canopy Growth
The world’s largest marijuana producer, Canopy Growth (NYSE:CGC), will report Q1 2019 earnings on Wednesday, after the close. Analysts on average are expecting losses of -$0.22 per share on sales of almost $86 million.
The Smiths Falls, Ontario-based producer, whose stock closed at $32.90 on Friday, has lost more than 30% of its value since late April as the company faces growing pressure to cut losses and show profitability.
Canopy’s CEO Bruce Linton was ousted unexpectedly in July, most likely under pressure by Constellation Brands (NYSE:STZ), which made a $4 billion investment in Canopy last year, becoming the cannabis company's largest shareholder.
Canopy lost C$98 million (almost $74 million USD) before interest, taxes, depreciation and amortization in its fiscal fourth quarter. It also reported an adjusted gross margin of 16%, down from 43% in the first quarter.