Insights on 29/2019 Week’s Quarterly Earnings Reports

Earnings Season’s Stocks to watch: McDonalds, Comcast and Boeing

Last week, the unofficial earnings season for American companies started on a high note. It was a significant week for banks, which were the most-watched companies to report.

In total, the five biggest banks in the country reported combined profits of more than $30 billion. This was the first time they reached that milestone. In the same week, Netflix announced that it had started to lose consumers in the United States (the number of customers dropped by more than 130k in the quarter).

In total, 14% of companies in the S&P 500 have reported.

With the bulk of the remaining ones expected to report this week, investors will be focusing on the following.

Consumer Spending

Some of the companies that will report this week are integral measures of the health of the consumer. This health is measured by reports of companies like Visa and Mastercard. These companies have the biggest share of the debit and credit card market in the US.

As such, increased transactions is an indicator that consumer spending is increasing. It will also be seen in companies like McDonalds, Starbucks, and Chipotle. A decline in their sales is viewed as a way to show that consumers are cutting on discretionary spending.

Technology Sector

Following the disappointing earnings from Netflix last week, investors will be looking at the performance of other technology companies. Among the biggest tech companies expected to release this week are Google, Twitter, Snap, and Tesla.

Growth in these companies will be an indication that the Nasdaq index will continue beating its S&P and Dow peers.

Banking

As mentioned, American banks had a solid second quarter. This week, investors will focus on Europe, where its biggest banks are expected to release. Investors expect data from the region’s banks to show further weakness compared to the American banks.

Already, Deutsche Bank has said that it expects to make a loss in the quarter on restructuring charges. BNP Paribas is expected to answer questions related to the integration of Deutsche Bank’s hedge fund investors.

Credit Suisse is expected to answer questions on the sudden departure of a leading executive who was seen as a likely successor to the CEO.

Our Focus on Deutsche Bank

Industrial Companies

Some of the biggest industrial companies like Caterpillar and Boeing will release their reports this week. On Boeing, investors will be focusing on the 737-Max, which is undergoing maintenance to fix the fault that led to two air crashes.

Last week, Boeing announced that the company has set aside more than $8 billion to compensate the 737-Max customers. It has also set aside more than $100 million to compensate the diseased customers.

Investors will also want to know more about the merger of Raytheon and United Technologies (our analysis).

Entertainment and Communications

Companies like Comcast and AT&T are expected to release this week. While the focus will be on their upcoming streaming services, the companies will also need to address their declining legacy businesses.

Further, casino companies like Las Vegas Sands and MGM resorts will report. The results of these companies will likely show the strength of the Asian consumers.

Other Useful resources

Airlines prepare for more pain from Boeing 737 Max grounding – CNBC

Earnings Calendar by Merkets Insider

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