The stock market judgment day is only 8 days away
The stock market has soared in 2020, defying all expectations after a truly incredible rebound in the coronavirus bear market in February and March. The rebound was sparked by how quickly some companies shifted gears to adapt to sweeping changes in economic and business conditions, as well as investor optimism to look beyond the immediate impact of the pandemic. of COVID-19 to predict a better future.
Now 2021 has arrived and investors are trying to figure out which direction the stock market will go in the coming year. Bulls eagerly await the rollout of coronavirus vaccines to get the economy back on track, while bears fear anything other than a full return to normal could disappoint markets. Speculations about what the coming months will look like range from euphoric to apocalyptic.
Earnings reports give investors the truth they need to overcome emotional ups and downs and embrace reality. And on Wednesday January 27, the stock Exchange will really have his day count. On that day, investors will receive three key reports on the results of Apple (NASDAQ: AAPL), Boeing (NYSE: BA), and You’re here (NASDAQ: TSLA) that could drive up or down the markets.
Take off or run into turbulence?
Boeing will start things on the morning of the 27th. The aerospace giant is expected to release its fourth quarter results before the opening bell Wednesday morning, with a webcast and conference call starting at 10:30 am EST.
From a commercial point of view, Boeing was in free fall all year round in 2020. The company originally hoped to fly its 737 MAX early last year, but it wasn’t until December that Boeing finally got the Federal Aviation Administration green light to put the plane model back into service. flight. Even though the aircraft manufacturer received a large order for Ryanair, a large number of cancellations continued to pour in, in large part because the airline industry remains in shambles due to travel restrictions and reduced demand.
Before things even improved for Boeing, its stock fell sharply. After losing more than 70% of its value in March, Boeing has more than doubled from its worst levels at the end of the year. This has always left the share price well below where it started in 2020. But the current price reflects a lot of optimism for a company that has suspended its dividend and may continue to see its losses persist until 2021. .
Investors will be watching closely what CEO David Calhoun and his team have to say about Boeing’s outlook for 2021. If they are not convinced by Calhoun’s strategy, then Boeing could experience more turmoil and the stock market could draw many conclusions about the health of the industrial sector as a whole.
Apple has high hopes for the iPhone 12
Apple has become the largest tech stock in the world, with a market cap of over $ 2,000 billion and soaring. Yet after another meteoric rise in 2020, many investors fear that even well-deserved praise for the rollout of the 5G-capable iPhone 12 could have pushes up the Apple stock price too far too fast.
All signs suggest that Apple’s first quarter tax results, which will come after the closing bell on January 27, should be strong. Pending orders for the high-end iPhone 12 Pro remain high, even with a four-digit price, and some customers still have to wait several weeks to receive shipments. This prompted Apple to ramp up production volume in the first half of this year, and vendors have given positive indications that suggest better times ahead. Apple is also seeing service revenue arrive at a healthy pace, as App Store sales hit record highs during the holiday season.
Nonetheless, Apple stock is now trading at more than 25 times even the most optimistic forecast earnings estimates for 2022, which would require average annual growth rates of 20-25% from FY2020 levels. It’s not impossible, but it’s ambitious, even with the headwinds Apple is getting from the product upgrade cycle. Investors will want to hear what CEO Tim Cook and his team have to say at 5 p.m. EST on the 27th.
Does Tesla still have something in the tank?
To finish, You’re here (NASDAQ: TSLA) is expected to release its results after the market closes on January 27. This will be followed by a live Q&A webcast starting at 6:30 p.m. EST.
Tesla stock rose more than 700% in 2020. That has set the stakes high for the electric automaker to maintain its pace of growth.
Investors already have a good idea of what the fourth quarter looked like. Deliveries of more than 180,500 vehicles brought the total for the year to just under Tesla’s target of 500,000 vehicles. Tesla produced nearly 180,000 vehicles in the fourth quarter and nearly 510,000 for 2020, in total.
Tesla’s earnings report will fill in some blanks, however. Net income and free cash flow will give a better idea of how efficiently Tesla operates, as well as the size of the contribution of regulatory credit sales to its bottom line. Shareholders also want to know what CEO Elon Musk’s vehicle delivery target for 2021 is, as well as when to expect new vehicles to be available.
What could hurt Tesla going forward, however, is anything but an extremely optimistic outlook for 2021. Investors have grown accustomed to strong growth in the core of the automotive business and also want to see continued progress in areas. keys such as autonomous driving, battery technology, and sustainable energy equipment, more broadly. If they’re disappointed, Tesla’s great rise could come to an end.
Don’t miss it
There will be a lot of news on how the market evolves over the next eight days, so it’s not like nothing will happen by January 27. However, if you have to pick a day this profit season to watch the market, the last Wednesday in January is the one to watch.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.