The Nasdaq closed at a new all-time high Friday, it’s 11th gain in the past 13 weeks. The Dow industrials slipped for the week. The S&P 500 split the difference, but still closed at a fresh weekly high. There is no shortage of breakout-ready stocks, but investors should also be carefully watching holdings that are starting to get too extended, so that they can lock in stock market profits and limit risk.
Software names Oracle (ORCL), C3.AI (AI) and Adobe (ADBE) deliver AI-focused earnings in the coming week. The stock market’s biotech sector may see action as the American Society of Hematology rolls out its annual conference. And fast-climbing retailer Costco Wholesale (COST) reports earnings on Thursday, as its diversified model sees increasing success.
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‘I’ve Never Seen Conditions This Bullish In My Life’: Hedge Fund Manager Jim Roppel
Stocks To Watch: Five Stocks Near Buy Points
Leading stocks continue to set up or move into buy areas as the market keeps notching fresh record highs. Recent IBD Stock Of The Day picks Trip.com (TCOM), BlackRock (BLK) and Dow Jones insurance giant Travelers (TRV) are right around buy points. Trip.com has tracked the travel industry’s four-month rally. It and Travelers’ charts show bullish base-on-base patterns. Electrical contractor Emcor (EME) has been trading tightly for weeks atop a year-to-date gain of 134%. And a little fabless chip operation, Nvidia (NVDA) has reclaimed a buy point in a consolidation going back to June. Despite the long dip, Nvidia leads the Dow industrials by a wide margin with its 188% year-to-date gain.
Economic Calendar: Pushing Rate Fears To 2025
Stakes are lower for the coming week’s economic releases after Friday’s jobs report cleared the way for a Fed rate cut on Dec. 18. Yet incoming data could influence a possible rate cut pause in early 2025. The inflation reports in focus will be Wednesday’s consumer price index and the producer price index on Thursday. These offer a preview of the Fed’s primary inflation gauge, the core PCE price index, due on Dec. 20. The Cleveland Fed forecasts a 0.27% November rise for the core CPI, which would help set the stage for a 0.23% rise in the core PCE price index. However, the Fed’s primary 12-month inflation rate is forecast to tick up to 2.9% from 2.8% in October and 2.7% in September.
AI Software: Oracle Rallying Like It’s 1999
Oracle will be looking to keep a strong run going when it reports earnings Monday. Its stock has made double-digit jumps after publishing its past three earnings results, including a 14% gain on its last report in September. Shares of the database software giant are up more than 75% year to date, on pace for Oracle’s best trading year since 1999. Investors will be watching for growth in Oracle’s cloud infrastructure business, particularly comments on AI startups using the service to train large language models. The report covers the November-ended quarter. Analysts expect adjusted earnings to grow 11% to $1.48 per share, according to FactSet. Sales are seen growing 9% to $14.1 billion.
AI Software: A Rebounding AI Play Reports
C3.ai reports Q3 earnings late Monday. Amid higher investments, analysts expected an adjusted loss of 16 cents a share, down 24%, with revenue rising 24% to $91 million. C3.ai has told analysts it expects revenue growth to accelerate as more AI pilot projects ramp up into commercial production. Shares surged recently on an expanded cloud deal with Microsoft (MSFT).
Retail Earnings: Costco Climbs Into Q1 Report
Costco Wholesale reports fiscal Q1 2025 results late Thursday. FactSet expects a 5.6% increase in earnings, a third quarter of slowing growth, on a 15% jump in revenue. Stifel on Thursday hiked its price target on COST stock to 1,000 from 935 following Costco’s November sales report. Baird, BofA and Jefferies also raised price targets for Costco. Overall comparable sales for Q1 increased 5.2%, with a 13% increase in online comparable sales. Costco shares have climbed 50% so far this year, and are extended and trading near record highs.
Health Care: Unveiling The Latest In Biotech
The American Society of Hematology annual meeting is taking place in San Diego, Calif., through Dec. 10. Big-name presenters include Amgen (AMGN), Gilead Sciences (GILD), Incyte (INCY), Novartis (NVS), Roche (RHHBY) and others. Amgen is planning to unveil long-term test results for its under-the-skin shot version of Blincyto, which treats a form of leukemia. Incyte will spotlight new data from a study of its drug, Monjuvi, in a form of lymphoma. Notably, Beam Therapeutics (BEAM) will unveil the first test results for its sickle cell disease gene-editing drug.
Homebuilders: This Rally Awaits Its Tailwind
Toll Brothers (TOL) reports Q4 results after the stock market closes Monday. Analysts forecast profit growing 5.6% with a 5% gain in sales. While the Federal Reserve is cutting interest rates, homebuilders have not felt the expected tailwind yet. Consumer borrowing rates haven’t tracked the Fed’s move lower and the average rate on a 30-year fixed rate mortgage has also not moved lower since the Fed’s first cut. Still, Toll’s stock has climbed 19% since its last earnings report, and it has a year-to-date gain of 50%. Rival Lennar (LEN) reports the following week.
Stock Market Earnings Briefs
Casey’s General Stores (CASY) reports Q2 results late Monday. FactSet expects earnings to tick up to $4.29 per share on a 0.9% decline in revenue, to $4.03 billion. CASY stock is trading near the top of a flat base buy zone. Shares rallied almost 53% so far this year and hit a record high of 435.60 on Nov. 25.
MongoDB (MDB) reports October quarter earnings on Monday. Analyst consensus projects adjusted earnings will decrease 30% year over year to 67 cents per share while sales increase 15% to $497.7 million. While its shares doubled as a hot AI pick last year, MongoDB has slumped 18% so far in 2024. However, shares have rallied 15% in recent weeks following strong earnings reports from industry peers such as Snowflake and Elastic.
AutoZone (AZO) reports early Tuesday. Analysts expect the auto parts retailer to deliver a 3% EPS increase on a 3% sales gain. That would mark the second consecutive quarter of low single-digit earnings growth as AutoZone laps tough comparisons. AutoZone shares climbed into a buy zone ahead of the report.
United Foods (UNFI) reports early Tuesday. Analysts project the natural and organic foods distributor will narrow its net loss per share to two cents. Revenue is seen growing 0.1%, with a weak outlook for the full year, which ends in July. UNFI stock is up 48% this year despite a deep consolidation, and extended from a 23.15 buy point cleared in November.
Adobe delivers fiscal Q4 results late Thursday. Analysts expect the digital media and marketing software maker to report its first dip into single-digit earnings growth in more than two years. Revenue gains are seen holding steady at 10%. Monetizing generative AI innovations announced during the quarter will be top of mind for investors. Adobe is struggling to climb out of a yearlong consolidation.
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