Stock Market Investing Action Plan: Powell Speech, Transport Tech, Trading Volume

The stock market exited August with its tail between its legs as the big benchmarks clung to a three-week decline that shattered multiple levels of critical support. Leading stocks have taken a beating, leaving few healthy names near buy points. Trading volume normally picks up in September, although it does not tend to be a winning month for the market. Still, the march of progress and innovation continues, highlighted by Cowen’s transportation conference, which intersects neatly with the energy-focused Inflation Reduction Act signed into law in August.




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Stocks To Watch: 5 Medical Stocks Stabilizing

Neurocrine Biosciences (NBIX), Vertex Pharmaceuticals (VRTX), BioMarin Pharmaceuticals (BMRN), Centene (CNC) give Insulet (PODD) are all finding support in a tough market. While the big market benchmarks all undercut support over the past week, NBIX stock has pulled back gradually to its 21-day line, consolidating nicely after a strong breakout. Vertex, BioMarin and Centene pulled back to their 50-day lines, trading near the edge of recent buy zones. Insulet’s recent breakout quickly failed. But PODD found firm support and rebounded from its 50-day and 200-day lines; it now has a new handle entry forming. That lowers the stock’s buy point to 283.38.

Econ Calendar: Powell Speech, Beige Book, Services PMI

The coming week’s slate of economic data looks like the calm before the storm, with investors looking ahead to the following week’s CPI release. Still, investors always perk up when Federal Reserve Chairman Jerome Powell makes an appearance. He’ll participate in a discussion at the Cato Institute’s monetary policy conference at 9:10 am ET. His comments will be of particular interest because Powell emphasized the negative in his Aug. 26 Jackson Hole speech. A key question is whether he’ll strike a more balanced tone this time around after sparking a four-day stock market rout. His take on the August job report’s uptick in labor force participation may be noteworthy.


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Also on the econ calendar, the Fed’s Beige Book anecdotal survey of economic conditions, released ahead of the Sept. 21 meeting, is out Wednesday afternoon. The Institute for Supply Management’s survey index of service sector activity, which has shown solid growth all year, is due out at 10 am on Tuesday.

Stock Market Perspective: Looking For Influx Of Volume

The big market benchmarks flashed bearish signals in the past week, with resistance around the 200-day moving averages marking the end of the summer rally. The IBD 50 index also undercut its 50-day moving average, hurt by weakness in energy, metal and industrial stocks. With a broad swath of the leadership wounded, there are precious few stars still holding up above buy points. With the earnings season winding to a close, only about 100 companies plan to report during the coming week. Stock market volume has been lackluster, typical in late summer. That should change after the Labor Day weekend, as the unofficial end of summer brings a fresh round of trading to the market.

EV Industry Watch: News From The Cutting-Edge

The coming week could provide updates on EVs and transport infrastructure as Cowen’s Global Transportation & Sustainable Mobility Conference launches on Wednesday. Fuel cell leader Ballard Power Systems (BLDP), EV makers Canoe (GOEV), Fisker (FSR) give Workhorse Group (WKH), and charging station leaders ChargePoint (CHPT) give EVgo (EVGO) are among the participants.


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Earnings Outlook: S&P 500 EPS set to turn

Average revenue and earnings rose to record highs among S&P 500 companies during the second quarter. Revenue jumped 12.1% year over year. Earnings advanced 9.5%. But the S&P 500’s forward earnings estimates are more mixed. Yarden Research projects earnings will slip 5.4% in Q3 and 3.8% in Q4. For the entire year, Yarden puts S&P 500 EPS at $215, up 3.1%, followed by a 9.3% gain in 2023.

Market Timeline: September — The Fall Season

In the 22 years going back to the turn of the century, the S&P 500 has averaged a 1.3% loss in the month of September. Over the past 10 years — erasing the impact of the dot-com crash and the Great Recession — the average decline has been a more modest 0.6%. The largest September gain during the 22-year period was an 8.8% advance during the Great Recession rebound. The heaviest loss was an 11% drop in September 2002.


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Stock Market Sector Watch: Industry Strength In August

Five industry groups posted double-digit advances in August. Department stores rallied 21%, with Dillard’s (DDS) soaring 30% for the month while Macy’s (M), Kohl’s (KSS) give Nordstrom (JWN) declined. Mail-order retailers jumped 20% and dairy product makers sailed 18% higher. Coal miners climbed 12%, boosted by a 52% spike in natural gas prices. Accident and health insurers swung more than 10% higher. Unum Group (UNM) clocked a 17% gain, scoring s breakout along the way. Alternative energy stocks collectively gained 10%, boosted by passage of the energy-focused Inflation Reduction Act, as Constellation Energy (CEG) powered up 23% and Bloom Energy (BE) notched a 26% gain.


Stock Market Earnings Briefs


Tuesday

Coupa Software (COUP) will report its fiscal second-quarter earnings late Tuesday. Analysts expect the provider of business spend management software to earn 9 cents a share, down 65% year over year, on sales of $203.8 million, up 14%.

HealthEquity (HQY) reports Q2 results after Tuesday’s close. Analysts expect EPS for the health savings account administrator to slip 17.5% to 33 cents as revenue rises 8% to $203.9 million. Still, HQY, a defensive stock, has been a relatively solid performer this year and is within 10% of a buy point.

Guidewire Software (GWRE) plans to post its fiscal fourth-quarter results late Tuesday. The insurance software firm is seen losing a penny a share on flat sales of $229.6 million.

GitLab (GTLB) will deliver its fiscal second-quarter results after the stock market closes Tuesday. Wall Street predicts the DevOps software and services firm will lose 23 cents a share on sales of $94.4 million, up 62% year over year.

Wednesday

Nio (NIO) announces second-quarter earnings on Wednesday before the market opens. Analysts expect a loss of 17 cents per share for the China EV startup. In the second quarter in 2021, Nio reported a loss of 6 cents per share. Revenue is predicted to increase by 8% to $1.4 billion in the second quarter.

AeroVironment (OPENING) reports results Wednesday afternoon. The drone maker’s earnings are expected to improve to a loss of 11 cents per share, from an adjusted loss of 17 cents. Its revenue is seen growing to $102.9 million for the quarter from $101 million last year.

Casey’s General Stores (CASY) is expected to report 7.5% earnings growth to $3.43 per share, from $3.19 last year. For Wednesday’s after-market results, analysts see the convenience-store chain’s revenue leaping 40.7% to $4.48 billion, from $3.182 billion.

Dave & Busters Entertainment (PLAY) reports second-quarter results Wednesday after the market closes. Inside Wall Street, earnings falling 3% to $1.04 per share. Analysts predict sales will increase 14% to $433 million for the Dallas-based restaurant chain.

GameStop (GME) is expected to disappoint meme-stock investors with its results Wednesday afternoon. Analysts target an adjusted loss of 42 cents per share for the video game chain, vs. its adjusted loss of 19 cents a year ago. Sales should tick up slightly to $1.26 billion, from $1.18 billion in 2021.

Rev Group (REVG) releases third-quarter earnings Wednesday morning. Earnings are expected to fall more than 40% to 22 cents per share while revenue is expected to hold steady at $593 million for the RV and emergency services vehicle manufacturer.

Friday

Kroger (KR) announces results premarket Friday. Forecasts see the grocer’s EPS coming in relatively flat, falling to 79 cents from 80 cents over the year. But revenue is predicted to grow to $34.2 billion, up 7.9% from $31.68 billion for the period in 2021.

ABM Industries (ABM) reports third-quarter financials Friday after the market closes. Analysts predict earnings of 90 cents per share, remaining flat year over year. Wall Street forecasts the facility management company’s revenue will grow 24% to $1.9 billion in the third quarter.

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