Stocks on Wall Street ended lower on Friday, experiencing another losing week as the downturn in tech shares reflected growing pessimism surrounding potential Federal Reserve interest rate cuts.
Market Recap and Outlook
The S&P 500 endured a six-day decline, marking its longest losing streak since October 2022. This negative trend coincided with the decline of AI frontrunner Nvidia, contributing to existing market concerns tied to geopolitical tensions and persistent inflation pressures.
For the week, the benchmark S&P 500 fell 3.1%, while the Nasdaq plummeted 5.5%, and the Dow Jones Industrial Average remained unchanged.
The upcoming week promises to be eventful with a packed earnings calendar including stalwarts like Microsoft, Alphabet, Meta Platforms, and Tesla. Additionally, major economic indicators such as the PCE price index and the preliminary GDP reading for the first quarter are set for release, offering insights into the economy’s trajectory.
Meta Platforms: Stock to Buy
Anticipate a strong performance from Meta Platforms this week as the social media conglomerate is poised to report robust top and bottom-line growth, buoyed by favorable conditions in the digital advertising realm.
Meta’s Q1 earnings update is scheduled post-market close on Wednesday, with market watchers expecting a substantial stock movement of about 9% in either direction. Analysts have revised profit estimates upward, underlining Wall Street’s growing optimism towards the parent company of Facebook, Instagram, and WhatsApp.
Forecasts predict Meta to report earnings of $4.36 per share, representing a remarkable 98% surge from the previous year. Revenue is also expected to climb 26.3%, reflecting strong digital ad sales and increasing adoption of its innovative products.
Tesla: Stock to Sell
Tesla faces a challenging week ahead with expectations of lackluster earnings and a dim outlook due to various obstacles impacting its business. The electric vehicle leader is projected to announce a profit decline of 41.2% year-over-year, alongside a revenue dip of 4.3%, reflecting challenges in its pricing strategy and market competition.
Considering Tesla’s struggling demand, high inventory levels, and competitive landscape, investors anticipate a significant stock movement following the earnings report. The company’s shares closed at a 52-week low on Friday, with Tesla currently trading at $147.05 and facing a notable market cap of $469 billion.
Year-to-date, Tesla stock has plummeted by 40.8%, earning it the unenviable title of being the poorest performer in the S&P 500 index.
Conclusion
As market dynamics evolve, astute investors exercise caution and vigilance when navigating volatile terrains. While Meta Platforms projects a positive trajectory in the week ahead, Tesla continues to face headwinds requiring a prudent approach for investors.