Market Outlook: Trump Inauguration and Q4 Earnings Take Center Stage
As the holiday-shortened week ahead unfolds, investors will be keenly focused on two major events: the inauguration of Donald Trump and the fourth quarter earnings season. The Dow Jones Industrial Average and the S&P 500 had their best week since the November election, with the Dow advancing 3.7% and the S&P 500 climbing 2.9%. The tech-heavy Nasdaq Composite also rose 2.5%.
Earnings Season Heats Up
Several high-profile companies are set to report their quarterly earnings, including Netflix, American Express, Procter & Gamble, Johnson & Johnson, Verizon, GE Aerospace, 3M Company, United Airlines, and American Airlines. The market will be closely watching these reports for signs of growth and guidance on the economy.
Netflix: A Compelling Growth Opportunity
One stock that stands out as a strong growth opportunity is Netflix. The streaming giant’s shift to advertising, live events, and monetization of popular content like ‘Squid Game’ are significant tailwinds that could propel the stock higher. With a market cap of $366.8 billion, Netflix is expected to earn $4.21 per share, representing a staggering 99% increase from the prior year. Revenue is forecast to increase 15% year-over-year to $10.1 billion.
Procter & Gamble: Operational Challenges Weigh
On the other hand, Procter & Gamble faces operational challenges and tepid growth, making it less attractive in the current market environment. The global consumer products company is expected to report modest growth, with earnings per share increasing just 1.1% from the year-ago period. Revenue is forecast to inch up 2.2% year-over-year to $21.6 billion. The company’s operational disruptions, including a ransomware attack, and rising competition in key markets are expected to limit profitability.
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