Investors should brace for another volatile trading week in the U.S. Coronavirus continues to spread, the administration races to mitigate the economic fallout from the deadly pandemic, and markets will likely continue whipsawing.
Losses in equity markets accelerated into the close on Friday, capping the worst week since 2008 for the Dow Jones Industrial Average. The mega cap index dropped 4.6% during the week, while the S&P 500 declined 4.4% and the NASDAQ Composite slipped 3.8% on the session.
The number of Covid-19 cases in the U.S. has surged to over 26,000 as we publish this, making it now one of the worst hit countries in the world.
According to media reports, the Trump Administration is putting together a stimulus package that may total more than $2 trillion. The package is equal to about 10% of the U.S. GDP, twice the size of the funding the administration requested only several days ago.
In this highly uncertain environment, here are three stocks we'll be focusing on during the week:
1. Boeing
Shares of Boeing (NYSE:BA), tumbled 44% last week. The airplane and avionics giant could be about to receive a government bailout in the coming week amid the global aviation industry’s worst crisis in decades.
The U.S. Congress will be debating a Senate Republican proposal to provide as much as $208 billion in collateralized loans and loan guarantees for companies and industries jeopardized by the coronavirus pandemic. According to media reports, Boeing is seeking $60 billion in aerospace aid, mostly for itself.
To make the conditions right for this bailout, the Chicago-based planemaker announced late Friday that it is suspending its dividend and extending a pause in share repurchases. Boeing halted the stock buybacks last year after regulators grounded the 737 MAX jetliner—its primary source of profit—following two deadly crashes involving the plane.
The global pandemic has disrupted travel worldwide, putting further pressure on Boeing’s finances, at a time when it was spending heavily to keep suppliers afloat ahead of the expected midyear return of the 737 MAX.
The stock closed on Friday at $95.01, the lowest in almost seven years. Shares have tumbled 73% since their 2020 high last month, wiping out $142 billion in market value.
2. Nike
Nike (NYSE:NKE) will release its third-quarter fiscal 2020 financial earnings on Tuesday, March 24 after the market close. On average, analysts are expecting the sportswear giant to make $0.60 a share profit on sales of $9.8 billion.
Nike is the first large cap stock to report earnings since this devastating coronavirus pandemic forced the company to close its stores and rely on e-commerce channels to serve its customers.
Sales during the previous quarter and the company's outlook for upcoming quarters will provide investors with some idea of how badly this virus is hurting consumer-focused companies. Nike has re-opened its stores in China, after having closed them during the Asian nation's stringent lockdown. China is where the virus outbreak started in December.
The company said on Feb. 4 that it expected a material impact to its operations in the country, without providing additional details.
China has long been considered Nike’s strongest growth area. The company generated $6.2 billion in sales in the region last year, up from $2.6 billion in 2014. Nike shares closed at $67.45 after falling 4% on Friday. The stock is down 36% from its Jan. 22 high.
3. Micron Technology
Chipmaker Micron Technology (NASDAQ:MU) will report fiscal 2020 Q2 earnings on Wednesday, March 25, after the close. The storage chip manufacturer is estimated to have made $0.37 in profit per share on $4.67 billion in revenue.
Micron provided a strong sales forecast for the past quarter in its December earnings call. The company told investors it has come through the worst of a slump in the memory-chip sector. Before the coronavirus outbreak, Wall Street was predicting a recovery in demand as the market for computer and smartphone components returned to growth.
But results from Micron, the biggest U.S. maker of memory chips, may dash these hopes as the global economy faces a recession, triggered by the outbreak. The stock closed at $36.11 on Friday, after plunging more than 38% in the past month.