- Warnings from Meta and Micron cast a shadow on the 4th of July trading week.
- Tesla's deliveries report was a miss while Exxon Mobil's earnings preview was a hit.
- Coinbase may be under pressure again after continued crypto space challenges.
- For tools, data, and content to help you make better investing decisions, try InvestingPro+.
After capping the worst first half since 1970, equity markets in the US will resume trading next week amid fears that the rising borrowing costs and inflation, running at the highest level in four decades, could hurt corporate earnings and further pressure share prices.
Companies in the US will start reporting their second-quarter earnings within the next two weeks. Consumer demand has so far held up despite the looming recession, but there have been signs recently that consumers are holding back on their spending plans.
Micron Technology Inc. (NASDAQ: MU ), the largest US maker of memory semiconductors, gave a weak sales forecast last week after demand for phones and computers weakened. Meta Platforms Inc (NASDAQ: META ) is slashing its hiring goals for engineers by at least 30% this year and warned all staff to brace for a severe economic downturn.
Chief Executive Officer Mark Zuckerberg told employees last week that he’s anticipating “one of the worst downturns that we’ve seen in recent history,” according to an audio recording of the weekly Q&A session, obtained by Reuters.
Beyond those macro trends, below we’ve picked three stocks that could see some action in the upcoming week, due to company and sector-specific developments:
Tesla (NASDAQ: TSLA ) shares may see some action when markets open on Tuesday after the electric vehicle (EV) maker reported over the weekend that its vehicle deliveries fell quarter-over-quarter amid China COVID shutdowns and global supply-chain disruptions.
The electric-car maker reported Saturday that it had delivered 254,695 vehicles to customers in the three months ended in June, down from 310,048 in the prior quarter, ending a two-year stretch of consecutive quarterly gains.
Deliveries were up roughly 27% from last year’s second quarter, when Tesla handed over 201,304 vehicles. Analysts surveyed by FactSet forecast that Tesla would deliver around 264,000 vehicles in the second quarter.
Tesla stock, which closed on Friday at $681.79, has weakened more than 35% this year, underperforming the broader market. Many analysts in recent weeks had lowered their expectations after the company had to temporarily shut down its mega production facility in Shanghai because of local COVID-19 restrictions.
2. Exxon Mobil
Exxon Mobil Corp.’s (NYSE: XOM ) earnings from its refining division rose by as much as $5.5 billion in the second-quarter, signaling that the energy giant is on course to post another set of strong numbers when it reports its earnings later this month.
In a regulatory filing released late Friday, the Irving, Texas-based Exxon said it expects refining margins to increase by as much as $4.6 billion in Q2, while the value of unsettled derivatives provided up to $900 million boost during the period which ended on June 30.
Exxon shares have gained more than 40% this year, fueled by rising oil and gas prices. It closed on Friday at $87.55. The stock, however, has lost about 17% since hitting the 52-week high on June 8 amid concerns that a looming recession could hurt demand for energy products going forward.
Exxon is paying down its debt and returning more cash to investors during the current commodity boom. The company announced in April that it will increase the size of its share buyback plan to $30 billion after posting the biggest profit since 2014.
Shares of Coinbase Global (NASDAQ: COIN ), the largest cryptocurrency exchange in the US, may come under renewed selling pressure amid more bad news for the industry which is reeling from one of the worst crises of its short history, and facing contagion risk.
Crypto hedge fund Three Arrows Capital (3AC) is seeking protection from creditors in the US under Chapter 15 of the U.S. Bankruptcy Code, which allows foreign debtors to shield US assets, according to a court filing on Friday.
The same day, digital asset brokerage Voyager Digital paused all customer trading, deposits, withdrawals and loyalty rewards, saying it’s “exploring strategic alternatives with various interested parties” and that they will provide additional information at “the appropriate time.”
Coinbase stock, which closed on Friday at $49.04, has lost more than 80% of its value year-to-date amid the so-called “crypto winter” in which about $1.2 trillion has been wiped off the entire cryptocurrency market and the risk of contagion has increased.
The San Francisco-based exchange last month reported lower-than-expected first-quarter revenue and warned that trading volume and user monthly transactions will be lower in the second quarter.
The current market makes it harder than ever to make the right decisions. Think about the challenges:
Interest rate hikes
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