Big Earnings This Week and the Market Outlook
Jason Lubin June 22, 2020 11:07 PM
Can the S&P hold up?
On Tuesday, IHS Markit (INFO) is awaited to post 2Q EPS of $0.66 vs. $0.71 the prior year on revenue of $1.1B, in line with last year. The Co provides global data and analytics, and on June 11th, Altium, a provider of PC-based design software for engineers, announced a partnership with the Co in order to give its users actionable lifecycle status updates during the design process to phase out delays due to components becoming obsolete. Technically speaking, the RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $70.97 and $68.04). We are looking at the final target of $80.30 with a stop-loss set at $69.40.
On Thursday, Nike (NKE) is anticipated to release 4Q EPS of $0.12 vs. $0.62 the prior year on revenue of $7.6B compared to $10.2B last year. The Co designs and manufactures sportswear, and on June 11th, Chief Executive Officer John Donahoe stated that the Co will take steps to better support racial equality, including but not limited to adding the June 19 commemoration of the end of slavery to the company's list of paid holidays, according to Bloomberg. From a chartist's point of view, the RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is below its 20 day MA ($97.93) but above its 50 day MA ($91.22). We are looking at the final target of $110.90 with a stop-loss set at $92.20.
Additionally on Thursday, Accenture (ACN) is expected to announce 3Q EPS of $1.85 vs. $1.93 the prior year on revenue of $10.9B compared to $11.1B in the year before. The Co is a leading global information technology services provider and on June 15th, Accenture Federal Services, a subsidiary of the Co was awarded a 341 million dollar contract to assist the U.S. Department of Commerce in updating its business systems and data platforms. From a technical point of view, the RSI is above 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is trading under its 20 day MA ($203.11) but above its 50 day MA ($189.61). We are looking at the final target of $228.70 with a stop-loss set at $193.40.
Finally on Thursday, Darden Restaurants (DRI) is likely to unveil 4Q LPS of $1.64 vs. an EPS of $1.76 the prior year on revenue of $1.2B compared to $2.2B last year. The Co owns and operates a variety of branded restaurants, and its current analyst consensus rating is 20 buys, 10 holds and 0 sells, according to Bloomberg. Looking at a daily chart, the RSI is below 50. The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the share stands below its 20 and 50 day MA (respectively at $78.59 and $72.86). We are looking at the final target of $58.40 with a stop-loss set at $81.90.
Looking at the S&P 500 CFD, the index appears to be in a consolidation range after breaking out of a short-term down trend on Monday, last week. The index is currently finding rough support on its 20-period moving average, which is below its 200-period moving average, a bearish signal. However price is advancing and the bias remains bullish as long as the S&P can stay above its low of the week at 3038. Price is expected to chop around before retesting 3116 and making its way back to 3156. If price cannot hold above 3038 support, we could see the index fall back to 2998.
Source: GAIN Capital, TradingView
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