Tech earnings led by Alphabet and Microsoft were lifting stocks higher to end the week. Prior to that, the multi-week sell-off was still in place as several key economic indicators cast doubt on the health of the economy.
First, housing starts and the number of finished homes came in lower year-over-year. Then, the first reading on GDP was lighter than expected. And on Friday, the March PCE reading showed the rate of inflation was hotter than expected. In the past, bad news might have been seen as good news. But for now, investors are taking the Fed at its word, which means no interest rate cuts...for now. Unfortunately, that could mean that the stagflation (i.e., elevated inflation with slower economic growth) that Jamie Dimon fears may be turning into reality.
Next week will bring a full schedule of earnings, and the MarketBeat team will be following the key stocks and stories that will move the market. Here are some of our most popular stories from this week.
Articles by Jea Yu
Stock traders know that you can make money when stocks are falling just like you can when they're rising. However, if short selling isn't your thing, Jea Yu explains why trading put options. Specifically, a put debit spread can be a profitable trading strategy that lets you make a bearish directional trade at a fraction of the cost.
GLP-1 weight loss drugs are now part of everyday conversation. The top brands, Wegovy and Zepbound, continue to see strong demand. However, enough data exists for patients to start asking which GLP-1 drug is better. That was the question that Yu was addressing this week. The answer could have a significant impact on the stocks of Novo Nordisk A/V (NYSE: NVO) and Eli Lilly & Co. (NYSE: LLY).
While many stocks sank this week, The Charles Schwab Co. (NYSE: SCHW) managed to buck that trend. After initially dropping after a mixed report, shares of SCHW stock are near a 52-week high on the strength of significant deposit inflows to the country's second-largest retail brokerage firm.
Articles by Thomas Hughes
Thomas Hughes was tracking two closely watched earnings reports. Caterpillar Inc. (NYSE: CAT) and Texas Instruments (NASDAQ: TXN) are telling investors a similar story in two very distinct sectors. The story is weak guidance now but strong dividends that offer significant value and likely growth as we get into the back half of the year.
In the case of Caterpillar, Hughes explains that the recent pullback is a case of investors getting ahead of analyst sentiment. For TXN stock, however, it appears that after trading in a defined range, analyst sentiment will start to lead the stock higher.
Hughes also wrote about Lockheed Martin Corporation (NYSE: LMT). The defense contractor is generating growth for investors now and continues to forecast long-term growth. And even with LMT stock approaching all-time highs, that guidance may be too cautious if current geopolitical concerns begin to escalate.
Articles by Sam Quirke
Sam Quirke reminds investors this week that markets can take on a life of their own. However, that can create opportunities when good results from quality companies get overlooked in a broad sector downtrend. That seems to be the case with the cybersecurity firm Zscaler Inc. (NASDAQ: ZS). Despite a strong earnings report in March, ZS stock has given up almost all of the gains it made since late 2023. Nevertheless, analysts are bidding the stock higher, which makes this a good entry point.
Sticking with the theme of quality stocks with significant upside, Quirke highlighted three stocks that outperformed their peers in the first quarter. Quirke notes that that's frequently a signal of stocks that will move higher when market sentiment turns bullish.
Articles by Chris Markoch
Did Big Tech just save the day again? You can't blame investors for thinking so after the strong earnings report from Alphabet Inc. (NASDAQ: GOOGL). As Chris Markoch explains, the company's announcement of its first-ever dividend, along with $70 billion in share buybacks, shows the company is trying to prioritize shareholder value even as it continues to increase spending in artificial intelligence.
Markoch also wrote about the final earnings report of GE Aerospace (NYSE: GE) as a conglomerate. Going forward, the company will only report as its stand-alone GE Aerospace unit. Markoch explains why analysts may be rethinking their notions that GE stock is priced for perfection.
Articles by Ryan Hasson
The semiconductor and utilities sectors couldn't be more different. The semiconductor (or chip) sector is notoriously cyclical. In early 2024, investor sentiment on the sector turned bearish as the market began to look oversupplied. However, Quirke analyzes five of the top names in the chip sector and explains what you should be looking for as you consider taking a position.
On the other hand, utilities stocks are known as steady stocks. Still, these stocks can come out of favor during bull markets. However, in a flight to safety, these stocks tend to shine. Hasson explains why that makes the Utilities Select Sector SPDR Fund (NYSEARCA: XLU) worth a look as it gains strength.
Another approach for investors in volatile markets is to buy defensive stocks. Many of these stocks have dividend yields that are higher than the yield on Treasury notes, even at their elevated levels. Hasson highlights five high-yield stocks that are looking oversold, which makes them an even better value.
Articles by Gabriel Osorio-Mazilli
Energy stocks have been a smart play for investors as the price of crude oil remains above $80 and is still expected to reach $100. But Gabriel Osorio-Mazilli points out that contrarian investors may want to take a closer look at NextEra Energy Inc. (NYSE: NEE). The renewable energy stock could be more attractive as oil prices rise and analysts begin to raise their price targets.
Osorio-Mazilli also wrote about Hasbro Inc. (NASDAQ: HAS). The toy maker's stock is up 12% after a strong double beat. Analysts are bidding the stock higher, which should support the company's high valuation relative to the rest of the sector.
And if you're an investor who has given up on The Boeing Co. (NYSE: BA), Osorio-Mazilli lays out the case to give the stock a second look. Among them are narrowing losses, the imminent departure of its CEO, and the potential for greater demand from lower interest rates.