MarketBeat: Week in Review 7/26 – 7/30

Friday, July 30, 2021 | Chris Markoch

In a market that’s priced for perfection, a silver medal doesn’t cut it. That’s the overall sentiment of investors as the major indexes closed down for the week and turned negative in the month of July. Second quarter GDP came in weaker than expected and some tech stalwarts issued muted guidance. That seems to be enough to drag the market down. But the news isn’t all bad. Consumer spending was strong and the Federal Reserve is seeing enough uncertainty to maintain its status quo. Next week starts a new trading month with another batch of corporate earnings. And the MarketBeat team of writers will stay on top of the stocks and stories that are moving the market. Here’s a look at some of the stocks they analyzed this week.

Articles by Sean Sechler                                                                                                                                                                

Although this week hasn’t been great for the market, it’s still been a strong year for growth stocks. And several of the top names recently were breaking to new highs. Identifying and buying breakout stocks is a sound strategy for investors to use. Sean Sechler identified three breakout stocks that investors should consider buying. Sechler was also looking at automobile stocks. The sector has been down over concerns with the global chip shortage. However, Sechler believes that long-term trends make the narrative for three car stocks particularly appealing. Another sector that is worthy of investors selective attention is restaurant stocks. Sechler looks at three restaurant stocks that performed well during the worst of the pandemic and should maintain their growth trajectory even as concerns over the Delta variant rise.

Articles by Jea Yu

Jea Yu was asking a question that’s on many investors’ minds. Namely, where is the S&P 500 going from here? On the one hand, the market is climbing the “wall of worry” quite well. On the other hand, the conflicting, and often confusing information from the CDC regarding the Delta variant, is causing some investors to build in a risk premium. While market timing is generally a futile exercise, investors can follow the S&P 500 ETF (ASX:SPY) to get clues about the general market direction. Turning his attention to individual stocks, Yu was bullish on Levi Strauss (NYSE:LEVI). The company is coming out of the pandemic as a more focused e-commerce company. And as the company has pointed out, the growth in e-commerce is not affecting their brick-and-mortar sales at this time. Yu also encourages investors to look for opportunistic pullbacks in Alcoa (NYSE:AA) stock. The aluminum manufacturer appears to have a long runway as demand will only increase as interest in renewable energy grows.

Articles by Thomas Hughes

The furniture industry has been a tough industry even in bull markets. However, the pandemic has breathed new life into the entire home furnishings sector. That growth is exemplified with Haverty Furniture Company (NYSE:HVT). The stock is up 150% in the last 12 months and based on strong financials and appealing technical indicators, Thomas Hughes believes the stock has more left in the tank. Another company that Hughes is bullish on is the Simpson Manufacturing Company (NYSE:SSD). However, Hughes notes that even as Simpson builds strong cash flow its growth foreshadows a bearish outlook of sustained inflation in the broader economy. Hughes is less bullish on the immediate fortunes of iRobot (NASDAQ:IRBT) which reported strong earnings but sounded a cautionary tone on future growth due to the global chip shortage. Nevertheless, Hughes felt investors should look for opportunities to buy the stock on pullbacks.

Articles by Sam Quirke

Sam Quirke chose to look at two of the most polarizing stocks this week as he attempted to make sense of earnings reports from Facebook (NASDAQ:FB) and Tesla (NASDAQ:TSLA). As expected, Facebook crushed expectations. But the news wasn’t all good.  The social media giant did state that it saw ”year-over-two-year total revenue growth to decelerate modestly in the second half of 2021.” While that comment is dragging the stock lower, Quirke believes the stock would have to drop at least about 10% from current levels around $350 to trigger a broader selloff. Tesla stock is down for the year and Tela bulls were hoping for a bullish report to boost the stock. As Quirke writes, they got that. But so far it’s too early to tell if the strong report will allow TSLA stock to break out of its doldrums.

Articles by Chris Markoch

A stock that pushes past its 52-week high is often a bullish sign that institutional investors use to add shares to their position. Chris Markoch gave readers a peek at the MarketBeat stock screener to list the Top 10 Stocks that were trading at their 52-week high in July. Markoch was also focused on news of how the Delta variant could affect the stock market. Specifically, he was reminding investors that it should bring renewed interest in both Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) stock. However, Markoch cautioned that the successful launch of an mRNA vaccine may give Moderna a higher ceiling, but Pfizer still has a firmer floor. Markoch was also looking at Hershey’s (NYSE:HSY) which may struggle to exceed the expectations it has set for future earnings growth.

Articles by Kate Stalter                                                                           

One of the more anticipated earnings reports for cannabis enthusiasts was that of Tilray (NASDAQ:TLRY). This was the company’s first earnings report since it completed its merger with Aphria. The company beat on earnings but missed on revenue. Still, Kate Stalter points out that was enough to propel the stock 25% higher as it would seem to solidify the company’s position in the global cannabis market. Stalter was also taking a look at Yum Brands (NYSE:YUM) which also delivered stellar earnings that has pushed revenue past pre-pandemic levels for three of its four chains. On a more cautionary note, Stalter wrote about United Parcel Service (NYSE:UPS). The company delivered earnings that beat on the top and bottom lines yet saw its shares falling on weaker-than-expected guidance and the fact that its U.S. revenue declined.

 


7 Retail Stocks to Buy After Strong Quarterly Earnings

Earnings season follows a predictable pattern. Bank stocks report first; then big tech stocks weigh in. And now, late in earnings season, we hear from the retail sector. Investors were expecting strong numbers and, for the most part, retailers delivered.

However, for some retailers, this may become a “sell the news” event.

That’s because on August 16, before the big-name retailers reported, the U.S. Retail Sales Report showed a 1.1% decline in retail sales in July from June. So while retail sales for the last two quarters will be strong, investors are wondering if the sector is entering a period of slowing growth. Concern about the Delta variant perhaps bringing more restrictions to the retail sector adds to the concern.

However, sectors don’t move in lockstep. In every market, there are strong performers even in tough economic conditions. This was true during the pandemic. And it’s true in the recovery. Summer is traditionally a slower season overall for retail. The July numbers probably do not reflect all of the back-to-school purchases. And, of course, stores are already beginning to prepare for the holiday season.

View the "7 Retail Stocks to Buy After Strong Quarterly Earnings".


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