With stock markets on track to close the best half year performance in 22 years, events during the coming week could be important enough to set the tone for the second half of the year. Perhaps the most significant: the G20 summit in Japan, which begins this Friday, where President Donald Trump and Chinese President Xi Jinping are expected to meet and discuss the future of trade between the world’s two largest economies.
The past week’s gains suggest that traders have priced in the best possible outcome from these meetings, while ignoring all other potential threats, including geopolitical tension in the Middle East and a slowdown in economic growth. As of last Friday, the was on track to finish its best first half since 1997 with the gains exceeding 17%, after the benchmark was up 19.4% in the first six months.
Of course, all this could evaporate quickly if there’s bad news from the trade front by the end of next weekend. With all eyes watching the U.S.-China trade talks, the following three stocks will likely also come under investor scrutiny due to their quarterly earnings releases:
The world’s largest package shipment company, FedEx (NYSE:), will report Q4 earnings on Tuesday, June 25, after the market close, amid concerns about its business being hit by the lingering China-U.S. trade dispute and the slowing global economy.
On average, analysts expect FedEx to report adjusted profits per share of $4.91 on sales of $17.87 billion. According to media reports early this month, FedEx might be at the top of the list of companies China could pick as part of its retaliation for the U.S. crackdown on its Huawei Technologies Inc.
Though international trade is the latest negative catalyst pressuring FedEx—with the Chinese retaliatory threat in particular—the company is facing a multitude of other troubles as well. The shipper had been struggling on many fronts even before the latest setback.
The weakness in global demand, especially in Europe where FedEx was betting big after its 2016 acquisition of Netherlands-based parcel delivery company TNT Express, and challenges coming from growing competitive stress between it and Amazon (NASDAQ:) which has decided not to renew its domestic U.S. contract with the shipping company, are among the key issues . FedEx shares, which closed at $165.35 on Friday, are trading close to their lowest level in about three years.
2. Micron Technology
Chipmaker Micron Technology (NASDAQ:) will report fiscal 2019, third quarter earnings, also on Tuesday, after the close. Analysts are expecting EPS of $0.82 on sales of $4.75 billion.
MU Weekly 2016-2019
An array of headwinds have been hitting the company simultaneously, including overall demand weakness across the chip sector; the challenge of dealing with its own inventory build-up; and the U.S.-China trade war.
In March, Micron told investors that revenue in the will be about $4.8 billion, plus or minus $200 million. The middle of that range would represent a sales decline of 38%. Micron had projected profit of $0.85 a share, plus or minus $0.10, in the period ending in May.
Micron’s latest earnings release and conference call will provide further insight into the sector’s deepening woes and the outlook for the second-half of the year. Micron shares, which traded at $33.25 as of Friday’s close, have lost about a quarter of their value in the past three months.
Sportswear powerhouse Nike (NYSE:) will report its fiscal 2019, Q4 earnings on Thursday, June 28, after the market closes. Analyst expectations are for EPS of $0.66 on revenue of $10.17 billion.
NKE Weekly 2016-2019
After some weakness in May, Nike shares are rebounding fast on hopes that the U.S. and China will ultimately avoid a full-blown trade confrontation, helping the company to continue its growth in China.
The Asian country is an increasingly important market for Nike. In the quarter ended in February, revenue from greater China rose 24%, the 19th consecutive quarter of double-digit gains. The stock—which closed at $85.75 on Friday—is up about 11% since the May 31 low.
Another important number to watch when Nike reports, is the company’s performance in North America, which has been a source of concern for quite some time. Sales in its home market missed analyst expectations in the , just as they did in much of 2017 and early 2018.