US equity markets may face another volatile period next week as the surge in bond yields continues to pressure high growth stocks. Still, these equities have staged an impressive rebound during the past one month.
The closely watched 10-year Treasury yield reached 2.7% Friday, its highest level since May 2019, from 2.14% a week earlier. Fed Chair Jerome Powell said last week that the central bank would be willing to be more aggressive raising interest rates to curb inflation. But that fight could also land the economy into a recession, especially when supply-chain bottlenecks continue to hamper business growth and the Russian invasion of Ukraine has created shortages of some key commodities.
Below, we’ve short-listed three stocks from different sectors which we’re monitoring as the fourth-quarter earnings season begins:
1. Delta Air
Delta Air Lines (NYSE:DAL) will report its Q1 2022 earnings on Wednesday, Apr. 13, before the market open. On average, analysts are expecting a loss of $1.33 a share on sales of $8.74 billion.
DAL Weekly TTM
After facing a global demand collapse during the height of the pandemic, US airlines recently delivered upbeat outlooks. Domestic bookings are close to or above 2019 levels, though international travel still remains below par.
Delta Chief Executive Officer Ed Bastian said in a memo to employees in March:
“We’re seeing healthy demand for spring and summer travel as customers continue to return to Delta, with corporate offices re-opening, business travelers rebuilding face-to-face relationships and international restrictions lifting.”
While the Atlanta-based carrier expects to report a first-quarter loss, the carrier continues “to be optimistic in our ability to generate a profit this year,” he said in a Bloomberg report. Delta stock closed on Friday at $36.74, after rising more than 17% during the past one month.
2. JPMorgan Chase
Wall Street’s powerhouse commercial and investment bank, JPMorgan Chase (NYSE:JPM), is also scheduled to report its Q1 2022 earnings on Wednesday, before the market open as well. Analysts forecast $2.74 a share profit on sales of $31.22 billion.
JPM Weekly TTM
Despite a favorable environment where investors are expecting the Fed to hike interest rates more aggressively, banking stocks have lost some of their shine this year on concerns that the US economy may be headed into a recession due to escalating inflation and continuing supply-side challenges.
JPM stock, which closed on Friday at $133.49, has dropped by 16% this year, underperforming the S&P 500 which has fallen about 5% during the same period. During Q4, JPM earnings got a hit from rising costs. Expenses in the last three months of 2021 rose 11% from a year earlier, and could rise by 8.6% in Q1.
3. Bed Bath & Beyond
US home furnishings and housewares giant, Bed Bath & Beyond (NASDAQ:BBBY) also reports its fiscal 2021 Q4 earnings the same day, ahead of the open as well. Analysts expect the retailer to produce $0.04 a share profit on sales of $2.08 billion.
BBBY Weekly TTM
BBBY stock, which closed on Friday at $19.48, is up 33% this year on speculation that the involvement of large outside investors will speed up its turnaround.
The retailer last month reached an agreement with activist investor Ryan Cohen to include three independent directors on its board. Two of the three members will also join a special committee to weigh strategic alternatives for Buybuy Baby, an asset which the activist had identified as to potentially be sold.
Cohen’s RC Ventures has built a 9.8% stake in Bed Bath & Beyond, pushing the retailer to implement several changes, including exploring the sale of Buybuy Baby, or even the entire company. Cohen has argued that the retailer needs to narrow its focus and maintain the right inventory mix to meet demand.
Source: Investing.com
