Best ETFs To Buy In 2022

Key Insights

  • QQQ will gain strong upside momentum in case the broader market starts to rebound. 
  • XLE has a good chance to continue its strong move as demand for energy increases during the summer season. 
  • GDX could serve as a defensive asset if markets find themselves under pressure in the second half of the year and demand for gold increases. 

Global markets remain volatile, and many investors are searching for safer options to protect their funds. ETFs offer an easy way to get exposure to indexes or market segments without picking individual stocks. In this article, we’ll take a look at several ETFs which could provide interesting opportunities this year.

Invesco QQQ Trust

Invesco QQQ Trust has been under significant pressure since the start of this year as traders moved away from higher-PE stocks. As a result, QQQ is down by more than 20% year-to-date.

QQQ dynamics are driven by the dynamics of leading tech stocks like Apple, Microsoft, Amazon, and Tesla, which are trading at a discount to their recent price levels.

In case the general market mood improves in the second half of the year, money would flow back into these stocks, which will be bullish for QQQ.

Energy Select Sector SPDR Fund

Energy Select Sector SPDR Fund enjoyed strong upside momentum this year as energy prices increased.

XLE is heavily focused on Exxon Mobil and Chevron, although it also has services stocks like Schlumberger and refiners like Marathon Petroleum among its holdings.

While Exxon Mobil and Chevron are trading at all-time highs, they are valued at roughly 12 forward P/E and have a good chance to gain additional upside momentum in case WTI oil spends this summer above the $120 level.

VanEck Gold Miners ETF

Gold has lost a lot of ground after touching highs near $2070 in March, so it’s not surprising to see that VanEck Gold Miners ETF has been under pressure in recent months.

GDX is a good bet on the gold price rebound which would be useful in case gold starts to move back towards its yearly highs due to increased uncertainty.

It should be noted that gold prices have moved lower due to rising Treasury yields, but it remains to be seen whether rates will continue to rise at a fast pace as the economy would face material problems if the 10-year Treasury yield settles above the 3.50% level. If Treasury yields settle in the 3.00% – 3.50% level, gold will have a good chance to gain upside momentum.

To keep up with the latest earnings updates, visit our earnings calendar.

Best Energy Stocks To Buy In June

Key Insights

  • WTI oil is trying to settle above the $120 level despite OPEC+ recent decision to increase oil production. 
  • Driving season and the end of lockdowns in China serve as bullish catalysts for oil markets. 
  • Exxon Mobil and Chevron are trading at 11-12 forward P/E and have good chances to continue their current bullish trend. 

WTI oil continues its attempts to settle above the $120 level, so energy stocks remain in high demand. Meanwhile, analyst estimates for major oil companies are moving higher, which could provide additional support to oil-related stocks.

Chevron

Analysts expect that Chevron will report earnings of $16.52 per share in 2022 and $14.24 per share in 2023, so the stock is trading at 12 forward P/E.

Chevron is already up by roughly 50% this year, but the stock remains relatively cheap. Analysts estimates for Chevron continue to improve, which is not surprising as WTI oil is trading near the $120 level.

The recent OPEC+ decision to increase production failed to put any material pressure on the oil market which reacts to the end of lockdowns in China. In this light, Chevron stock has a good chance to gain additional upside momentum in the upcoming weeks.

Exxon Mobil

Exxon Mobil is moving towards all-time highs that were reached back in 2014. Currently, the stock is trying to settle above the $100 level.

Analysts expect that the company will report earnings of $8.61 per share in the next year, so the stock is trading at 11 forward P/E, which is a bit cheaper in comparison with Chevron.

High oil prices and investors’ rush into energy-related assets remain the key drivers for Exxon Mobil stock. While Exxon Mobil is already up by about 60% in 2022, it will gain solid upside momentum in case WTI oil settles above the $120 level and moves towards yearly highs near the $130 level.

To keep up with the latest earnings updates, visit our earnings calendar.

Best Energy Stocks To Buy In May

Key Insights

  • WTI oil stabilized above the $100 level as traders wait for EU sanctions on Russian oil. 
  • Exxon Mobil and Chevron are valued at 11 – 12 forward P/E. 
  • Analyst estimates keep moving higher, which should provide additional support to the companies’ stocks. 

WTI oil has pulled back from March highs as lockdowns in China put pressure on demand for oil. However, oil-related stocks continue to trade near yearly highs as traders prepare for the impact of the upcoming EU sanctions on Russian oil. In this environment, shares of oil majors may get more support.

Exxon Mobil

Exxon Mobil has recently released its first-quarter report. The company reported revenue of $90.5 billion and adjusted earnings of $2.07 per share, beating analyst estimates on revenue and missing them on earnings.

The company has also announced an increase in its share repurchase program up to a total of $30 billion through 2023.

Currently, the stock is trading at 11 forward P/E. Analyst estimates keep moving higher as analysts realize that high oil prices are here to stay, so Exxon Mobil’s valuation looks conservative.

Chevron

Trading at 12 forward P/E, Chevron is a bit more expensive than Exxon Mobil. The company has recently reported its first-quarter results, missing analyst estimates on both earnings and revenue.

However, analyst estimates continue to move higher at a robust pace, which is bullish for Chevron stock. It’s hard to expect significant multiple expansion for a company like Chevron, but the continued increase in earnings estimates for 22 and 2023 should provide enough support to the company’s shares in the upcoming weeks.

In the near term, traders will need to monitor news from China. In case the situation with coronavirus in the country normalizes, oil will move higher, which will be bullish for Chevron and other oil-related stocks.

For a look at all of today’s economic events, check out our economic calendar.

Chevron Is Up By 3%, Here Is Why

Key Insights

  • WTI oil rallies as China eases the lockdown in Shanghai. 
  • This rally provides support to oil-related stocks and pushes Chevron closer to all-time highs. 
  • Analyst estimates keep moving higher, and Chevron has a good chance to test new highs. 

Chevron Stock Rallies As WTI Oil Gets Back Above The $100 Level

Shares of Chevron gained strong upside momentum after WTI oil returned to the $100 level.

The recent pullback in the oil market failed to put any material pressure on Chevron stock as traders prepared for a new world, in which oil prices would stay elevated for many months.

Analyst estimates continue to move higher at a robust pace. In the current year, Chevron is expected to report earnings of $13.44 per share, so the stock is trading at roughly 13 forward P/E.

It should be noted that at the start of this year analysts expected that Chevron would report earnings of less than $10.00 per share, so estimates are changing fast.

What’s Next For Chevron Stock?

China eased the lockdown in Shanghai, while the psychological effect of the release of oil from strategic reserves seems to be over, and traders focus on geopolitical tensions and energy scarcity.

In this environment, oil-related stocks will be in demand. Stocks of oil majors like Chevron are an obvious choice for those who are willing to get exposure to the sector but are not ready to get into the financial details of smaller companies.

Despite the strong rally in 2022, Chevron remains modestly valued, so the recent rise in Treasury yields does not present a threat to the stock. In case WTI oil settles above the $100 level and begins to move towards the $110 – $120 range, Chevron and other major oil stocks like Exxon Mobil will get more support.

For a look at all of today’s economic events, check out our economic calendar.

Which Stocks are Better to Buy – Oil, Gas or Renewable

The announcement on March 8, by president Biden, claiming all imports of Russian oil, gas, and energy sources will be banned at all American ports of entry has left investors seemingly hawkish, even as the Brent crude was trading well above $100 per barrel, an increase last witnessed in 2008.

The U.S. benchmark, the West Texas Intermediate, was also climbing sharply at the start of March, with prices per barrel toppling close to $120.

Even while consumer demand has remained steady, and countries imposing stricter diplomatic sanctions on Russia, fossil fuels, and renewable energy shares have entered some choppy waters in recent days, leaving investors on both sides of the aisle on whether the oil bubble is set to burst, or if renewables are still the safer bet?

The world is still predominantly oil and gas

While we’ve seen a lot of companies and governments trailing efforts shifting to renewable energy, the world still runs mostly on fossil fuels. From the road and transportation industry, production and manufacturing of goods, to energy and gas, there’s still a hefty reliance on fossil fuels.

As of 2019, around 84% of the world’s energy consumption primarily came from burning fossil fuels, including natural gas, coal, and oil – consumers, and governments are still relying heavily on the need for these fuels.

It does however make it a bit more clear to the investor who’s looking to make a quick buck with the oil and gas rally to see that prices for these energy resources aren’t going to come down any time soon.

With oil and gas prices rising, companies are looking for new ways to explore the market, and investors are willing to jump on the bandwagon, and rising prices are perhaps the last thing that’s putting off investors. During this time, companies in the oil and gas industry aren’t just seeing record-breaking revenues, but it’s also giving them the ability to strategize, as renewables are sweeping across markets.

Exxon Mobil (NYSE: XOM) announced at the start of the year a $22 billion expenditure budget, a hefty jump from the $17 billion in 2021. Exxon operations have gone global in recent years, with deepwater drilling in Australia, the Middle East, selected African waters, and the Permian Basin.

As demand has increased year-over-year, operations have grown bigger, and the positive outlook has for some time calmed any cuts to Exxon’s 4.5% dividend.

XOM can trail a successful year, and its $380 billion market cap is one way to attract investors who are willing to place their bets on Exxon as the fossil fuel movement remains quite strong across the world.

Even if Exxon is not delivering on its promise, there’s still Chevron, who’s been trailing XOM for quite some time, with a market cap just shy of $334 billion, and investors have been seeing positive returns as oil prices have been climbing.

Conoco Phillips (NYSE: COP) has been on investors’ watchlist for most of 2021 and so far 2022 as well. After the acquisition of Concho Resources in 2021, the company’s market cap trailed a healthy $129 billion, marking it as one of the biggest independent oil companies in the U.S.

With soaring oil prices, and its healthy balance sheet after spending more than $9 billion for Shell’s 225,000 net acres in the Texas Delaware Basin, Conoco is increasing its holdings and domestic influence.

The midstream American gas giant, Enterprise Products Partners (NYSE: EPD) is what investors are looking for, delivering increased capacity and production throughout the last few years, and its recent acquisition of Navitas Midstream Partners for $3.5 billion in cash is one indication of the current condition of the company.

As the current economic recovery takes its toll on Americans, with inflation hitting a 40 year high, EPD has been placed in a fortunate position, offering an investment with the ability to hedge inflationary price increases. With most of its debt secured for the long-term at 4.4%, increased prices can be passed off to the consumer, rather than the company itself.

EOG Resources (NYSE: EOG) is perhaps one of the more overlooked oil stocks on the market, yet its market cap of close to $68.97 billion keeps investors well on their heels, with the company constantly developing new technology and production equipment.

EOG places more interest and focus on using technology and big data in drilling operations than in the production, and exporting category. It placed them in a comfortable position, where the company now has acreage in the Eagle Ford shale, and among other giants in the Permian Delaware Basin.

Although environmental efforts and polarizing political agendas have scraped these companies from the spotlight, there’s still a hefty amount of steam left before they’ll witness renewables and sustainability taking a majority stake.

There’s still money in renewables

On the other side of the aisle, renewables have had a difficult road throughout the last few decades, but a push for Environmental Sustainability and Governance (ESG) policies by governments in developed and developing nations has helped them fast-track their global dominance.

SolarEdge Technologies (NASDAQ: SEDG) has been heading into 2022 with a strong pace, with a four-week gain of 23.6% between February and March. Analysts have been keeping an eye on SEDG as it managed to cross its 12-month target price from $327.05 to $328.91 per share.

Upcoming quarterly earnings of $1.31 per share represent a 33.7% change in the last year, with more than $600 million in expected revenues.

Perhaps Albemarle (NYSE: ALB), a global leader in the chemical industry should offer a bit more clarity to the rise in go-green stock purchases. The company which is among the largest producers of lithium saw its stocks rise by more than 58% in 2021.

With the demand for electric vehicles (EVs) and hybrids climbing to never-before-seen highs, Albemarle is perfectly positioned for another stellar year, even as some investors and consumers remain skeptical.

Renewable energy sources have increased by more than 45% in 2020, and these stocks are perhaps in for one rollercoaster year, out betting most estimates, with overall returns of more than 159% since 2019.

The real winner between oil, gas, and renewables is a hard swing, but a swing in the right direction nonetheless. Investors who are looking to increase their returns, while playing it safe are perhaps better off investing in big oil and gas companies.

Although demand for both industries has increased, there’s still no end to the consumption of fossil fuels yet, and as renewables start to take form, even in the most volatile markets there are hopes that their influence will see investors more interested.

Solar, wind, and hydropower stocks remain a stronghold, and a valuable asset to any portfolio, and for investors who are keener on adding stocks that will offer better long-term returns, you should perhaps look to lean more towards renewable stocks.

The deciding factor is irrelevant, in some cases, and investors should consider the risks that come along when choosing either or to invest in. There’s potential to grow, and whether you predict demise on the horizon or not, these stocks can become a vital asset to any portfolio.

How Would Sanctions On Russian Energy Affect The World Markets?

Key Insights

  • The U.S. signals that it is ready to consider sanctions on the Russian energy sector. 
  • The markets are nervous as sanctions on the key exporter may lead to huge price spikes.
  • The big U.S. oil producers will benefit from this scenario. 

The U.S. Remains Open To The Possibility Of Banning Russian Energy

White House spokeswoman Jen Psaki has recently stated that the U.S. was “very open” to imposing sanctions on Russia’s oil and gas industry.

Traders have already begun to price in the possibility of such sanctions. As a result, WTI oil moved above the $100 level and attempted to settle above $112.50.

In 2021, Russia produced an average 10.52 million barrels per day (bpd), and this production continued to grow as OPEC+ relaxed its production curbs. According to IEA, Russia’s total oil production in January 2022 was 11.3 million bpd. Russia is the world’s largest oil exporter to global markets, exporting 7.8 million bpd in December 2021.

Not surprisingly, the markets are nervous in the current situation, as excluding a huge player could lead to uncontrollable consequences.

The situation is even tenser in the natural gas market, although the problems are limited to Europe as the natural gas market is more fragmented. The natural gas market in the U.S. will likely remain stable regardless of any future sanctions on Russia.

Energy Demand Is Inelastic And Sensitive To Small Changes

The main problem is that energy demand is inelastic. When you need heat in winter or energy to drive a car from A to B, you cannot postpone consumption. Meanwhile, it’s not easy to store oil or gas, and even the biggest reserves in the world are limited. In this light, even small changes in the demand/supply balance can cause massive price spikes.

We had already seen this during the coronavirus crisis in 2020 when the price of oil futures temporarily went below zero as demand declined, and traders were ready to pay any price to avoid taking delivery of oil that could not be stored.

If the U.S. and EU impose sanctions on Russia, the opposite may happen. Suddenly, the world will rush to buy non-sanctioned oil, while oil producers will have a hard time boosting output. OPEC+ struggled to meet its quotas due to lack of investment during the coronavirus crisis, while Western oil companies have reduced investments due to the shift to green energy.

Who Wins If Russian Energy Is Hit By Sanctions?

At this point, it looks that big U.S. oil companies like Chevron, ConocoPhillips, Exxon Mobil (despite its exposure to Russia) will be the main beneficiaries of the hard sanctions scenario. However, it is clear that Western governments will carefully weigh such a decision as it could create true chaos in energy markets, especially in the near term.

For a look at all of today’s economic events, check out our economic calendar.

Why Chevron Stock Is Trading At All-Time Highs Today

Key Insights

  • Chevron touches new highs as traders focus on the near-term future of the energy market.
  • Earnings estimates will continue to move higher in the upcoming weeks.
  • Chevron is better positioned compared to its European peers.

Chevron Stock Rallies As WTI Oil Crosses The $100 Mark

Shares of Chevron gained strong upside momentum after WTI oil rallied above the $100 level and attempted to settle above $105.

WTI oil gained strong upside momentum due to fears that sanctions on Russia will ultimately include energy. In another scenario, Russia could retaliate against Western sanctions, which could have an impact on energy markets.

Anyway, the market is worried about the safety of oil supplies in the near future. In addition, OPEC+ is expected to maintain its schedule of increasing oil production by 400,000 barrels per day (bpd) despite the recent events as OPEC+ countries are enjoying high prices and do not want to put any material pressure on them after several years of low prices.

What’s Next For Chevron Stock?

Analysts expect Chevron to report earnings of $10.8 per share in 2022, so the stock is trading at less than 14 forward P/E. Estimates for Chevron earnings have been growing in recent weeks, together with the price of oil. Obviously, they will continue to grow as analysts take the recent events into account.

The geopolitical situation remains volatile, and any additional sanctions on Russia or Russia’s counter-sanctions may have a meaningful impact on the world’s energy market.

In addition, some customers will try to avoid Russian oil entirely, which has already led to a significant discount on Russia’s Urals and premiums for WTI and Brent.

Chevron is well-positioned to profit from the current trends, and the stock will have a good chance to gain additional upside momentum in case WTI oil stays above the $100 level. As a reminder, WTI oil briefly went above the $140 level back in 2008, so there is plenty of room to gain more momentum for oil in case of a real crisis in energy markets.

For a look at all of today’s economic events, check out our economic calendar.

Big Money Fuels Chevron

And the energy giant could rise even more due to strong demand and its dividend appeal (currently 4.09%). But another likely reason is Big Money lifting the stock.

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Chevron has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals CVX has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 31 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Chevron has been growing sales nicely. Take a look:

  • 1-year sales growth rate (+64.8%)
  • 3-year sales growth rate (+6.8%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, CVX has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

CVX has a lot of qualities that are attracting Big Money. It’s made this list nine times going all the way back to 2000 (and three times this year), with its first appearance on 04/30/2001…and gaining 520.52% since. The blue bars below show the times that Chevron was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the energy sector according to the MAPsignals process. I wouldn’t be surprised if CVX makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Chevron rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no positions in CVX at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

 

Monstrous Earnings Ahead: IBM, Microsoft, Intel, Tesla, Apple, Visa in Focus, Along With The Fed

Investors will focus on Q4 earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could also hit the stock market hard next week, making the big tech earnings that much more critical. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant in order to see how it impacts earnings in 2022. The following is a list of earnings slated for release January 24-28, along with a few previews.

Earnings Calendar For The Week Of January 24

Monday (January 24)

IN THE SPOTLIGHT: IBM

The Armonk, New York-based technology company, International Business Machines, is expected to report its fourth-quarter earnings of $3.39 per share, which represents year-over-year growth of over 60% from $2.07 per share seen in the same period a year ago.

The world’s largest computer firm’s revenue would decline over 21% to $1.96 billion from $20.37 billion a year earlier. It is worth noting that the technology company has beaten earnings in most of the quarters in the last two years, at least.

International Business Machines (IBM) 4Q earnings will be focused on standalone model mechanics and whether Software revenue can re-accelerate while Consulting demand sustains. However, we believe the setup becomes more attractive in 2H21. We update our estimates to reflect IBM standalone post-KD spin,” noted Katy Huberty, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 24

TICKER COMPANY EPS FORECAST
BRO Brown & Brown $0.38
BOH Bank of Hawaii $1.39
BMRC Bank of Marin Bancorp $0.57
CR Crane $1.12
HAL Halliburton $0.34
HMST HomeStreet $1.3
IBM International Business Machines $3.39
PETS PetMed Express $0.3
SMBK SmartFinancial $0.48
STLD Steel Dynamics $5.66
TRST Trustco Bank $0.74
ZION Zions Bancorp $1.33

 

Tuesday (January 25)

IN THE SPOTLIGHT: MICROSOFT

The Redmond, Washington-based global technology giant, Microsoft, is expected to post its fiscal second-quarter earnings of $2.28 per share, which represents year-over-year growth of over 12% from $2.03 per share seen in the same period a year ago.

The world’s largest software maker would post revenue growth of nearly 17% to around $50.3 billion. It is worth noting that with a track record of always beating earnings per share estimates in the last five years, Microsoft is one of the best FAANG stocks in terms of earnings surprises.

“We model Azure growth of 45% cc & see 2-3% of upside, translating to steady growth vs. 48% last qtr. We see potential for strong M365 demand ahead of price hikes, as well as continued execution from LNKD, PowerApps & Dynamics ERP. Although tougher PC/Server dynamics, we expect strengthening trends for C22. Expect Mar Q guide slightly above Street,” noted Derrick Wood, equity analyst at Cowen.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 25

TICKER COMPANY EPS FORECAST
MMM 3M $2.07
AGYS Agilysys $0.13
AXP American Express $1.75
ADM Archer Daniels Midland $1.19
BXP Boston Properties $1.51
CNI Canadian National Railway $1.25
COF Capital One Financial $5.15
FFIV F5 $1.97
GE General Electric $0.84
JNJ Johnson & Johnson $2.12
LMT Lockheed Martin $8.04
LOGI Logitech International $1.23
NAVI Navient $0.81
NEE NextEra Energy $0.41
VZ Verizon Communications $1.28
WSBC WesBanco $0.67

 

Wednesday (January 26)

IN THE SPOTLIGHT: FOMC MEETING CONCLUDES, INTEL, TESLA

Tuesday and Wednesday will mark the first meeting of the Fed’s policymaking arm in 2022. At around 7:30 pm GMT on Wednesday, Jerome Powell will conduct a press conference. This is expected to be the biggest market event since investors expect more details about the central bank’s plan to raise interest rates.

INTEL: The California-based multinational corporation and technology company is expected to report its fourth-quarter earnings of $0.9 per share, which represents a year-over-year decline of about 40% from $1.52 per share seen in the same period a year ago. The company’s revenue would fall nearly 8% to $18.39 billion.

Intel remains controversial. Long-term skepticism remains and share losses will continue until products ramp on the Intel 4 node (old 7nm), but with a new CFO, improving PC and server market outlooks, cash inflows from the US Govt, Mobileye on the horizon, and a February analyst day now reconfirmed, we are cautiously optimistic sentiment can continue to gradually improve. Still LOTS to prove,” noted Matthew D. Ramsay, equity analyst at Cowen.

TESLA: The California-based electric vehicle and clean energy company is expected to report its fourth-quarter earnings of $2.31 per share, which represents year-over-year growth of 180% from $0.80 per share seen in the same period a year ago.

“Q4 results on 26 Jan are critical to validate (or not) the Q3 profit dynamics that could see Tesla 1) carve out meaningful share from legacy OEMs busy protecting their own share by ramping up BEVs and 2) claim a disproportionate share of the industry profit pool. We raise 2021-23 EBIT and FCF 10%, mostly on higher volume,” noted Philippe Houchois, equity analyst at Jefferies.

The high-performance electric vehicle manufacturer would post revenue growth of over 50% to $16.65 billion. The electric vehicle producer has beaten earnings estimates only twice in the last four quarters.

Tesla 4Q deliveries were 20% above our forecast, annualizing to over 1.2mm units, which is already above our prior FY22 forecast. We raise our forecasts and target to $1,300 on this ‘opening act’ and look for more in FY22,” noted Adam Jonas, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 26

TICKER COMPANY EPS FORECAST
ABT Abbott Laboratories $1.16
ANTM Anthem $5.11
AZPN Aspen Technology $1.41
T AT&T $0.76
KMB Kimberly-Clark $1.29
LRCX Lam Research $8.46
RJF Raymond James Financial $1.77
STX Seagate Technology $2.21
NOW ServiceNow $0.22
SIMO Silicon Motion Technology $1.56
SLG SL Green Realty $1.56
URI United Rentals $6.97
VRTX Vertex Pharmaceuticals $2.92
WHR Whirlpool $5.84

 

Thursday (January 27)

IN THE SPOTLIGHT: APPLE, VISA

APPLE: The consumer electronics giant would post its fiscal first-quarter earnings of $1.88 per share, which represents year-over-year growth of nearly 12% from $1.68 per share seen in the same period a year ago.

The iPhone manufacturer would post revenue growth of 6% to $118.13 billion. It is worth noting that with a track record of always beating earnings per share estimates in the recent five years, Apple is the best FAANG stock in terms of earnings surprises.

Apple is expected to report 1QFY22 earnings after market on Thursday, January 27th and host a call with investors at 5:00 PM ET. In our view, the recent strength in shares is a reflection of investors’ willingness to reward Apple for entering new markets, including electronic vehicles (EV) and the metaverse (with an augmented reality/virtual reality product). Now, we look for comments from management on its future product roadmap to justify the increase in share price,” noted Tom Forte, Senior Research Analyst at D.A. DAVIDSON.

“We are reiterating our BUY rating for Apple (AAPL) and putting our price target of $175 under review ahead of the company reporting 1QFY22 earnings.”

VISA: The world’s largest card payment company is expected to report its fiscal firth-quarter earnings of $1.70 per share, which represents a year-over-year decline of about 20% from $1.42 per share seen in the same period a year ago.

The global technology payment company would post revenue growth of nearly 19% to $6.8 billion. It is worth noting that the company has beaten earnings in most of the quarters in the last two years, at least.

Visa (V) is one of our preferred stocks, as it is a key beneficiary of resilient global consumer spend growth, the ongoing shift from cash to electronic payments, and broadening merchant acceptance. Global Personal Consumption Expenditure and secular growth drivers should support low double-digit revenue growth in the near-to-medium term,” noted James Faucette, equity analyst at Morgan Stanley.

“While Covid-19 headwinds are likely to persist, we see upside opportunity from the faster-than-expected recovery of travel. Continued investment in longer-term initiatives (faster payments, P2P, B2B) and partnerships continue to increase its TAM and offer an opportunity for compounding double-digit earnings growth for the foreseeable future.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 27

TICKER COMPANY EPS FORECAST
AOS A.O. Smith $0.77
ALK Alaska Air Group $0.21
BX Blackstone $1.3
CNX CNX Resources $0.5
CMCSA Comcast $0.73
DOW Dow $2.16
EMN Eastman Chemical $1.88
HCA HCA Healthcare $4.57
IP International Paper $1.02
JBLU JetBlue Airways $-0.39
MA Mastercard $2.2
MCD McDonald’s $2.32
LUV Southwest Airlines $-0.39
X U.S. Steel $5.12
V Visa $1.7

 

Friday (January 28)

TICKER COMPANY EPS FORECAST
ALV Autoliv $1.18
BAH Booz Allen Hamilton $0.97
CAT Caterpillar $2.23
CHD Church & Dwight $0.59
CL Colgate-Palmolive $0.79
RDY Dr. Reddy’s Laboratories $0.64
GNTX Gentex $0.33

 

Oil Rises On Demand Outlook Despite China Fuel Reserves Release

Brent crude futures settled up 99 cents, or 1.1 %, to $84.71 a barrel after hitting a session low of $83.03.

U.S. West Texas Intermediate (WTI) crude futures gained 84 cents, or 0.6%, to $84.05, having fallen to $82.74 earlier.

A Reuters poll showed that oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel.

Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.

The increase in OPEC’s oil output in October fell short of the rise planned under a deal with allies, a Reuters survey found on Monday, as involuntary outages in some smaller producers offset higher supplies from Saudi Arabia and Iraq.

OPEC+ is expected by analysts to stick to the 400,000 figure at its Nov. 4 meeting, with members Kuwait and Iraq in recent days voicing their support for it, saying those volumes were adequate.

“We feel that their position will be one where the status quo will be maintained while a ‘wink and a nod’ will be provided in accepting violation of quotas should Brent values gravitate back up into new 7-year high territory,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.

U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery, part of a broad effort to pressure OPEC+ to raise supplies.

Prices rose despite China saying in a rare official statement that it had released gasoline and diesel reserves to increase market supply and support price stability in some regions.

Exxon and Chevron are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said on Friday.

(Additional reporting by Ahmad Ghaddar, Yuka Obayashi in Tokyo; Editing by Muralikumar Anantharaman, Mark Potter and Alison Williams)

Oil Prices Rebound, Edge Up Ahead of Next Week’s OPEC Meeting

However, Brent and U.S. crude oil benchmarks both declined on the week after reaching multi-year highs on Monday.

Brent crude rose 6 cents to settle at $84.38, while U.S. West Texas Intermediate crude rose 76 cents, or 0.9%, to $83.57.

“While more Iranian supply may come online, it looks like OPEC+ is unlikely to raise production which is giving strength to the market today,” said John Kilduff, partner at Again Capital LLC in New York.

Prices have been pressured since Wednesday by a report that U.S. crude stocks rose by 4.3 million barrels in the latest week. Iran has said talks on reviving the international deal on its nuclear programme will restart by the end of November, bringing it a step closer to boosting oil exports.

Crude has surged in 2021 as economies recover from the COVID-19 pandemic, but prices are on track to fall this week, with Brent facing its first weekly decline in about two months.

U.S. energy firms added oil and natural gas rigs for a 15th month in row in October as oil prices soared to fresh seven-year highs, spurred by rising oil prices to its highest since count April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.

Exxon and Chevron are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said Friday. Chevron said it will add two drilling rigs and two completion crews this quarter.

On Thursday, Algeria said a crude output increase by OPEC+ in December should not exceed 400,000 barrels per day (bpd) because of market uncertainties and risks. The alliance, which is gradually unwinding last year’s record output cuts, meets on Nov. 4.

British and European gas prices continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.

(Additional reporting by Alex Lawler; Additional reporting by Roslan Khasawneh in Singapore and Sonali Paul in Melbourne; Editing by David Goodman, David Holmes and David Gregorio)

CVX Trades At $114 As Chevron Reports A $44 Billion Revenue In Q3

Oil giant Chevron reported its third-quarter earnings earlier today, and the company’s stock price has been rallying since then.

Chevron’s Q Revenue Stands At $44 Billion

Chevron reported its third-quarter earnings earlier today, and the company outperformed analysts’ expectations. The surge in revenue comes on the back of crude oil prices increasingly astronomically in recent months.

The oil giant generated $44.71 billion in revenue in the third quarter, representing an 80% increase in sales from the same period last year. Chevron’s performance last year was affected by the Coronavirus pandemic and the decline in oil prices.

The $44.71 billion generated in Q3 also represented $2.96 per share, surpassing the $40.52 billion or $2.21 earnings per share expected by Wall Street analysts. Mike Wirth, Chevron’s chairman and CEO, pointed out that the Q3 sales were the company’s highest quarterly revenue since the first quarter of 2013. He attributed the growth to improved market conditions, strong operational performance and a lower cost structure.

The oil giant paid a total of $2.6 billion in dividends during the third quarter while also repurchasing $625 million worth of stock. The company also reduced its debt by $5.6 billion.

Oil Price Increase Boosted Chevron’s Performance

Crude oil prices have been increasing in recent months, leading the oil companies to record revenue levels they have experienced in more than five years. Chevron and the others are recovering from the pandemic, with most of them recording massive losses last year.

cvx
CVX stock chart. Source: FXEMPIRE

The shares of Chevron have been rallying since the company reported its Q3 earnings result earlier today. CVX is up by more than 1% today and is trading above the $114 level for the third time this month.

Year-to-date, CVX has performed excellently, similar to the other leading oil companies. CVX is up by more than 40% since the start of the year. In the past 52 weeks, the stock has also surged by 74%, making it one of the top performers in its category.

Marketmind: Halloween Scare on Markets

A look at the day ahead from Saikat Chatterjee.

Currency volatility too is close to 2021 lows. One explanation is that the strength of trailing third quarter earnings are propping up stock markets.

That may not wash for much longer though. Results from tech heavyweights Apple and Amazon missed market expectations, pushing their shares lower in after-hours.

That’s weighing on Asian stocks on Friday, putting MSCI’s ex-Japan index on track to snap three weeks of gains. U.S. stock futures are set to open in the red.

Euro zone bond yields are continuing to rise after European Central Bank President Christine Lagarde failed to dissipate bets on end-2022 interest rate hikes. Italian bond yields endured their biggest daily rise in over a year and are rising further on Friday.

Her prediction for inflation to remain below target in the medium-term hasn’t pushed German inflation-linked 10-year bond yield much away from the record low hit on Wednesday.

What it may boil down to is, in the words of Citi strategist Matt King, a “credibility gap” between inflation and real yields, already at its most stretched the 1970s.

This chasm poses a conundrum for policymakers. In Australia for instance, officials seem to have lost control of the yield target which key to the central bank’s stimulus policy. Instead, bonds saw their biggest selloff in decades and markets are howling for rate hikes as soon as April.

Things seem to have calmed a touch as the weekend approaches; the dollar is weaker, Bitcoin advanced 1% and China’s stricken Evergrande has made an interest payment for an offshore bond, making it the second time in a week it narrowly averts default.

Key developments that should provide more direction to markets on Friday:

Daimler AG reported a higher Q3 net profit on despite a 25% cut in production and expects to hit profit targets.

Ether, the world’s second largest cryptocurrency, hit an all-time high above $4,400

Data corner: Preliminary Q3 GDP readings from eurozone, Germany, France, Italy

Corporate earnings; ExxonMobil, Chevron, Natwest Group, BNP Paribas

For a look at all of today’s economic events, check out our economic calendar.

(For graphic on Aussie bonds – https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnoalopq/Aussie%20bonds.JPG)

(Reporting by Saikat Chatterjee; editing by Sujata Rao)

U.S. House Democrats Grill Big Oil in Climate Deception Probe

It was the first time executives of the top oil majors – ExxonMobil, Shell Oil, BP America and Chevron – and the heads of the American Petroleum Institute (API) and Chamber of Commerce answered questions about climate change in Congress under oath.

Democratic Representative Ro Khanna said at the House of Representatives Committee on Oversight and Reform hearing that oil companies have started to improve their talking points around climate change. But Khanna said their support of lobbying groups that either deny climate science or work to kill major climate policies contradicts their statements.

“I don’t believe that you purposely want to be out there spreading climate misinformation but you’re out there funding these groups,” Khanna said.

Appearing before the panel were CEOs Darren Woods of ExxonMobil, Gretchen Watkins of Shell Oil, David Lawler of BP America and Mike Wirth of Chevron. They all testified virtually.

Khanna asked them if any would commit to an independent audit to verify that none of their funds were going to groups that deny climate science, or whether they would commit to pulling their memberships from API even if the oil lobby group continues to lobby against policies such as electric vehicle credits and methane fees. None of the executives said yes.

Committee Democrats said the hearing opens a year of investigations into whether Big Oil has deceived Americans about its role in climate change.

The hearing came as President Joe Biden heads to Scotland for U.N. climate talks and as Congress haggles over climate provisions in major social spending and infrastructure legislation.

Environmental groups and their congressional allies hope the probe evokes the Big Tobacco hearings of the 1990s when tobacco industry executives were grilled about their knowledge of the addictive properties of their products, which began a shift in public opinion about that industry.

Democrats also said youth people will have to deal with the effects of climate change, driven by emissions from fossil fuels.

“One thing that often gets lost in these conversations is some of us have to actually live in the future that you all are setting on fire for us,” Representative Alexandria Ocasio-Cortez, 32, told the executives, all older than 50.

The United Nations this summer released a report saying that unless immediate, rapid and large-scale action is taken to reduce emissions, the average global temperature is likely to reach or cross the 1.5-degree Celsius (2.7 degrees F) warming threshold within 20 years.

Oil executives and trade group officials at the hearing used the platform to try to distance themselves from previous efforts to dismiss climate science, saying their policies evolved as the science became more clear.

Exxon’s Woods said his company “responded accordingly” when the “scientific community’s understanding of climate change developed” and maintained that he believes oil and gas will still be needed to meet growing global energy demand.

Woods and Chevron’s Wirth played up oil and gas as essential for operation of hospitals, schools and offices.

BP America’s Lawler and Shell’s Watkins talked about their recognition that climate change was a problem in the 1990s and about their current efforts to adapt their business models to add more renewable energy and lower emissions.

‘PARTISAN THEATER’

Representative James Comer, the panel’s top Republican, did not mention climate change in his opening remarks and said the panel should be addressing inflation and high energy prices he linked to Biden administration policies.

“The purpose of this hearing is clear: to deliver partisan theater for prime-time news,” Comer said.

The lone Republican witness, Neal Crabtree, a welder who lost his job after Biden canceled the Keystone XL oil pipeline, said his main crisis was not climate change but paying for his mortgage and food for his family.

The Democratic-led committee criticized the companies’ scant support for the Paris climate agreement. It released an analysis that found from 2015, when the pact was agreed, to 2021, Exxon reported in its lobbying disclosures only one instance of lobbying on the Paris Agreement, and none on any of the 28 bills related to the pact.

“That means that only 0.06% of Exxon’s 1,543 total instances of legislative lobbying since 2015 has been devoted to the Paris Agreement or related legislation,” the analysis said.

Woods emphasized Exxon’s investments in carbon capture, a technology to capture emissions for burial underground or to pump them into aging oilfields to squeeze out more crude.

The energy executives also said that more time is needed for a transition to cleaner energy.

(Reporting by Valerie Volcovici and Timothy Gardner; Editing by David Gregorio and Mark Porter)

Best Stocks, Crypto, and ETFs to Watch This Week

Facebook Inc. (FB) has sliced and diced shareholders since September, dropping more than 15% from an all-time high before bouncing strongly at a 19-month trendline on Oct. 12. It jumped more than 20 points off the low into Wednesday of last week and then plummeted after Snap Inc. (SNAP) warned about the revenue impact of new iPhone ad tracking blockers. The stock is back to trendline support, just in time for Monday’s post-market earnings report.

General Motors Corp. (GM) profits have been hurt by persistent supply disruptions so far in 2021, with the automaker forced to idle factories despite the enthusiastic reception of new models and a major commitment to electric vehicles. The stock bounced at an 8-month low in August and closed half the distance back to June’s all-time high in the 60s, before the rally stalled about two-weeks ago. All eyes are now focused squarely on Wednesday’s post-market report and further comments about supply issues.

Dow component Chevron Corp. (CVX) was left for dead in 2020, with the election of an environmentally friendly president heralding in an era of alternative energy. The crude oil futures market promptly took off for the heavens, reacting to political pressure on drilling and production that could trigger worldwide shortages until clean energy can replace fossil fuels, which might take a decade or more. Integrated oil and gas companies reacted slowly to the rally but are now getting bought aggressively and could hit new highs in 2022.

Bitcoin bottomed out at 40,000 in September after dropping nearly 25% and turned sharply higher, heading in a straight line into the April high near 65,000. The digital giant broke out for a single session last week before turning tail in a decline that’s typical when financial instruments test prior highs. The reversal left behind a weekly shooting star candlestick that predicts at least several weeks of relative weakness before the cryptocurrency can successfully break out to new highs.

The Russell-2000 ETF (IWM) more than doubled in price into March 2021 before topping out above 233. Price action since that time has carved a narrow symmetrical triangle that, when taken together with the vertical uptick, has completed a bullish ‘flag at the top of a flagpole’ that predicts a measured move equal to the prior rally. Small caps have just entered their most seasonally favorable time of year, raising odds for a breakout that could last through the first quarter of 2022.

For a look at this week’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Chevron Triples Low-Carbon Investment, but Avoids 2050 Net-Zero Goals

Oil producers globally are under mounting pressure from investors and governments to join the fight against climate change and sharply cut greenhouse gas emissions by mid-century, with U.S. majors lagging efforts by European companies.

Chevron said half of its spending will go to curb emissions from fossil fuel projects. A total of $3 billion will be applied for carbon capture and offsets, $2 billion for greenhouse gas reductions, $3 billion for renewable fuels and $2 billion for hydrogen energy.

Chevron is not ready to commit to net-zero targets. Chief Executive Michael Wirth told investors on Tuesday that the company does not want to “be in a position in which we lay out ambitions that we don’t believe are realistic and deliverable.”

Just a minority of its shareholders currently support a strategy used by European oil companies to invest in less-profitable solar and wind power, he added.

“The board is looking to see, how do you deliver a strategy that meets the needs of shareholders today and the expectations of shareholders for the future?” the CEO said. Directors may re-address a net-zero goal later this year with the company’s climate report, Wirth said.

European oil producers have set plans to shift away from fossil fuels with larger investments in renewables and 2050 emission targets. U.S. oil producers Chevron, Exxon Mobil Corp and Occidental Petroleum sought to reduce carbon emissions per unit of output while backing carbon capture and storage, and doubling down on oil.

BP Plc has said it will invest $3 billion-4 billion a year in low-carbon projects by 2025 and shrink oil and gas production by 40% in the next decade. Royal Dutch Shell Plc in February set annual investments of $2 billion-3 billion in clean energy.

Chevron maintained its goal of paring greenhouse gas intensity by 35% through 2028 compared to 2016 levels from its oil and gas output.

It said it would expand renewable natural gas production to 40 billion British thermal units (BTUs) per day and increase renewable fuels production capacity to 100,000 barrels a day to meet customer demand for renewable diesel and sustainable aviation fuel.

“We expect to grow our dividend, buy back shares and invest in lower-carbon businesses,” Wirth said.

Chevron aims to increase hydrogen production to 150,000 tonnes a year to supply industrial, power and heavy duty transport customers and raise carbon capture and offsets to 25 million tonnes a year by co-developing regional hubs.

Environmentalists said Chevron’s focus is on offsetting emissions from oil and gas output, not reducing oil output.

“Chevron’s new announcement does not represent a particularly large strategic shift,” said Axel Dalman, an associate analyst with climate change researcher Carbon Tracker. “The main item is that they plan to spend more on ‘lower-carbon’ business lines.”

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sabrina Valle in Houston, Arunima Kumar in Bengaluru; additional reporting by Laura Sanicola in New York; Editing by Arun Koyyur, Will Dunham, David Gregorio and Mark Porter)

Nasdaq Ekes Out Record Finish as Wall St Ends Higher

The energy sector rose, reversing most of the losses suffered during the first three days of the week. Thursday’s performance was fueled by U.S. crude prices jumping 2% on a sharp decline in U.S. inventories and a weaker dollar.

Cabot Oil & Gas Corp and Occidental Petroleum Corp were among the largest risers, with oil majors Exxon Mobil and Chevron Corp also posting solid gains.

The technology index slipped into negative territory, as some of the industry’s largest companies saw their recent upward momentum stall.

Amazon.com Inc, Microsoft Corp, Facebook Inc and Google-owner Alphabet Inc were all under water. A notable exception was Netflix Inc, which hit an all-time high intraday.

U.S. stocks have regularly hit record highs over the past few weeks as a solid corporate earnings season and hopes of continued central bank support underpinned confidence as data showed the country’s post-pandemic economic growth was beginning to slow.

Data on Thursday showed the number of Americans filing new claims for jobless benefits fell last week, although the focus will be on the Labor Department’s monthly jobs report on Friday to set the stage for the Fed’s policy meeting later this month.

The report is likely to show job growth slowed to 750,000 in August from 943,000 the previous month.

“You have to see very wide beats or misses in this data to really change people’s minds,” said Greg Boutle, U.S. head of equity and derivative strategy at BNP Paribas.

“Investors are either in this renormalization camp that thinks inflation will not happen, or they believe there will be some persistence to inflation. Really, it will be a collection of beats or misses that will move the needle for investors and the Fed, rather than a single data point.”

Unofficially, the S&P 500 gained 12.92 points, or 0.29%, to end at 4,537.01 points, while the Dow Jones Industrial Average  gained 129.38 points, or 0.37%, to 35,441.91. The Nasdaq Composite  rose 21.15 points, or 0.14%, to 15,330.53.

Despite deadly flash floods in New York City, trading on Wall Street was operating normally.

Wells Fargo rose after three straight sessions of losses. The lender had been weighed by a report it could face further regulatory sanctions over the pace of compensating victims of a years-long sales practice scandal.

Contracting services company Quanta Services Inc jumped to a record high after saying it would buy privately held Blattner Holding Company in a deal valued at about $2.7 billion.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Shashank Nayar in Bengaluru and David French in New York; Editing by Aditya Soni and Lisa Shumaker)

Chevron Stock Price Rally As Company Posts Second Straight Quarters Of Profits

The shares of Chevron are up by more than 1% during Friday’s pre-market trading session after the company reported profits for the second consecutive quarter.

Chevron Posts Profit Again

Oil giant Chevron reported its second quarter of the year earnings earlier today, beating analysts’ estimations and recording profits yet again. The rising demand for petroleum products and an increase in oil prices in recent months contributed massively to Chevron’s success in the last quarter.

Chevron reported earnings of $1.71 per share during the second quarter of 2021 on an adjusted basis. Meanwhile, the revenue generated during that period stands at $37.6 billion. The figures were better than expected, with analysts estimating earnings per share of $1.59 and revenue of $35.94.

The performance in this quarter far outweighs the company’s output in the same period last year. Due to the Coronavirus pandemic, Chevron lost 1.59 per share on an adjusted basis and revenue of $13.49 billion.

The results of the second quarter are also better than the first, with demand for products increasing as more countries reopen their economies. In Q1 2021, Chevron earned 90 cents per share on an adjusted basis and reported a revenue of $32.03 billion.

Chevron To Resume Share Repurchases

After recording profits for the second consecutive quarter, Chevron said it would resume repurchasing shares again in the third quarter. Mike Wirth, Chevron’s chairman and CEO, said, “Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending. We will resume share repurchases in the third quarter at an expected rate of $2-3 billion per year.”

The oil giant said it would continue to exercise discipline regarding its capital spending. The company cut down capital spending by 32% over the past year. The shares of Chevron rose by over 1.3% at Friday’s pre-market trading session, thanks to the news of the company’s positive quarter.

CVX stock chart. Source: FXEMPIRE

Year-to-date, CVX is up by over 20%, with investors appreciating the company’s performance in the first two quarters of 2020.

Today’s Market Wrap Up and a Glimpse Into Friday

Stocks rallied yet again, sending the S&P 500 to its sixth consecutive all-time high. Investors celebrated jobless claims showing that the economy is back on track. Weekly jobless claims came in at their lowest level since the pandemic reared its head.

The Nasdaq also finished higher while the Dow Jones Industrial Average added more than 100 points amid a strengthening economy and a second-quarter earnings parade that is just getting underway.

Energy stocks were a bright spot in the session after WTI crude oil surpassed USD 75 per barrel. Dow member Chevron benefited from the bullish sentiment and tacked on about 1.5%

New in the Hood

The market was abuzz about Robinhood’s IPO filing. The commission-free trading app has been generating revenue hand-over-fist as the retail-investor-fueled meme stock craze has taken shape. Now Robinhood seeks to capitalize on that demand and list on the Nasdaq under a sign-of-the-times trading symbol, HOOD. To demonstrate how popular the app has become, Robinhood generated USD 522 million in Q1 2021 revenue vs. USD 127.6 million in the corresponding year-ago period.

Stocks to Watch

Nike gained 2% on the day after touching on a new all-time high. The sports apparel company turned in impressive sales results and investors expect the momentum to continue.

Walgreens did not receive the same reception on Wall Street even though it also produced a solid quarter. The stock was down 7% in the session despite having lifted its outlook for the year. Investors are still ahead as the stock is up more than 20% year-to-date.

Meme stock AMC Entertainment shed 4% in the session. The stock’s market cap is currently just over USD 27 billion but the company has billions of dollars of debt on its balance sheet. Investors might be starting to think twice about the sustainability of the valuation.

Look Ahead

Investors should keep an eye on Virgin Galactic on Friday.  Billionaire Richard Branson will reportedly head into space on July 11, nine days before rival Jeff Bezos’ space flight. The stock is up more than 4% in extended-hours trading.

On Friday, the much-anticipated Employment Report for June will be released at 8:30 a.m. ET. Wells Fargo predicts that hiring accelerated in June vs. May and that the economy added 750K non-farm payrolls.

Stocks Mixed After Disappointing Durable Goods Orders Report

Initial Jobless Claims Decline To 406,000

The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports.

Initial Jobless Claims report indicated that 406,000 Americans filed for unemployment benefits in a week. Analysts expected that Initial Jobless Claims would total 425,000.

Meanwhile, Continuing Jobless Claims declined from 3.74 million (revised from 3.75 million) to 3.64 million compared to analyst consensus of 3.68 million.

The reports indicated that the job market continued to recover which is not surprising given the robust rebound of the U.S. economy.

Durable Goods Orders Unexpectedly Declined

Traders also had a chance to take a look at the second estimate of the first-quarter GDP Growth Rate report. In the first quarter, GDP grew by 6.4% compared to analyst consensus which called for growth of 6.5%.

Durable Goods Orders declined by 1.3% month-over-month in April compared to analyst consensus which called for growth of 0.7%.

Today, traders will also evaluate Pending Home Sales report for April. Analysts expect that Pending Home Sales increased by 0.8% month-over-month after growing by 1.9% in March.

S&P 500 futures are swinging between gains and losses after the release of these economic reports.

Traders will also keep an eye on the developments in U.S. government bond markets as Treasury yields have started to move higher, and the yield of 10-year Treasuries is currently trying to settle back above 1.60%. Higher yields are bearish for high-flying tech stocks, and the continuation of the current upside momentum may put some pressure on S&P 500.

WTI Oil Faced Resistance Near The $66 Level

WTI oil has recently made another attempt to settle above the $66 level but failed to develop sufficient upside momentum and pulled back.

Oil traders remain focused on rumors about Iran nuclear deal negotiations. The market received contradictory signals in recent days, and it looks that oil will need additional upside catalysts to move higher.

Energy-related stocks have been under some pressure in recent trading sessions, and it looks that this pressure may grow after Exxon Mobil and Chevron suffered some defeats in recent shareholder votes due to environmental concerns while Shell lost in a Dutch court and would have to set more ambitious emissions goals.

For a look at all of today’s economic events, check out our economic calendar.