The Daily Breakdown looks at the week ahead. That’s as the monthly jobs report looms large at the end of the week.
Monday’s TLDR
- Friday’s jobs report is a huge focus this week.
- Broadcom, Nio on watch for earnings too.
- TJX stock dips after rallying to record highs.
Weekly Outlook
US investors are looking to kick off the trading week on Tuesday, as the S&P 500 sits less than 1% from its all-time high and after the Dow hit a fresh record high on Friday.
As we kick off the week, things start slow but accelerate into Friday.
Later today, we’ll get an economic update with an ISM report, while companies like Zscaler and Gitlab will report earnings tonight.
Earnings will pick up on Wednesday, with companies like Dick’s Sporting Goods, Dollar Tree, C3.ai, Hewlett Packard Enterprise, and ChargePoint reporting. We’ll also get the JOLTs report before the open, which is a monthly economic report on job openings, hires, and separations.
On Thursday, we’ll get a few other labor-related reports (like the weekly jobless claims number), as well as earnings from companies like Nio and Broadcom.
The fireworks were saved for Friday, with the monthly jobs report due up before the open.
Remember, last month’s report came much lower than economists had expected, causing some panic about the economy. Keep this date circled on your calendar, as the monthly jobs report — which includes jobs growth and the unemployment rate — will be a big focus ahead of the Fed meeting later this month.
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The setup — TJX
TJX Companies recently hit all-time highs after the firm delivered another strong quarter. After a big rally, we’re now seeing some short-term profit taking.
That has me watching the $115 area, which was the prior high before TJX’s earnings rally. It’s also where the 21-day moving average comes into play.
As long as the $113 to $115 zone holds as support, bulls can maintain momentum. If this zone fails and TJX continues lower though, momentum could shift into the bears’ favor.
On a fundamental basis, analysts expect roughly 8% earnings growth this year on modest sales growth, but expectations call for an acceleration in both metrics next year. Currently, shares trade at about 28 times this year’s expected earnings.
Options
On a dip, buying calls or call spreads may be one way to take advantage of a pullback. For call buyers, it may be advantageous to make sure they have adequate time until the option’s expiration.
For those that aren’t feeling so bullish or who are looking for a deeper pullback, puts or put spreads could be one way to take advantage.
To learn more about options, consider visiting the eToro Academy.
What Wall Street is watching
TSLA – Tesla’s China-made EV sales grew 3% in August year over year, with Model 3 and Model Y deliveries up 17% from July, according to CPCA. Meanwhile, BYD saw a 35.3% jump in sales, hitting a record high of 370,854 units.
INTC – Intel gained more than 9% on Friday, with the stock hitting its highest level since shares plunged in early August after disappointing quarterly results. Remember, the stock fell more than 26% in a single session after that report, as disappointment mounts over the firm’s growth. Despite Friday’s rally, shares remain lower by 56.2% so far this year.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.