June 12-16 stock market action plan: Fed meeting, Lennar results, Oracle Adobe

A four-day rally has given Dow industrials a gain of more than 3% so far for June. The S&P 500 and the Nasdaq rose almost as much. While early gains in the stock market this year were driven primarily by a shortlist of tech names, the past week has shown increasing magnitude. Wednesday’s decision on Federal Open Market Committee rate policy will be the centerpiece of the coming week. But the income of Lennar (LEN), Oracle (ORCL) and Adobe (ADBE) will also update segments with fast-spinning stocks.


Stocks to Watch: 5 Dow Giants Near Buy Points

Boeing (BA), JPMorgan Chase (JMP), Cisco Systems (CSCO), McDonald’s (MCD) and walmart (WMT) are five Dow Jones industrial stocks close to buy points as the stock market rally shows signs of widening. All five come from different industries, which bodes well for expanding market leadership. Boeing and Walmart are already poised to take action as they resume support amid consolidations. JPMorgan is close to a breakout in a six-week flat basis as the banking giant stands out among financials. Cisco isn’t the leader in its industry, but is trying to move on and could fashion a handle on its 10-week cup model. McDonald’s performed well in a strong sector, eyeing a possible early entry into a new flat base.

The Fed meeting could mark a change

The Federal Reserve is expected to ignore a rate hike at its two-day policy meeting that ends Wednesday at 2 p.m. ET. But Wall Street’s reaction may be shaped by perceptions of what happens next. As of Friday morning, markets were still pricing in a 66% chance of a quarter-point rate hike on July 26. Those odds could change on Wednesday when policymakers put their cards on the table. New quarterly economic projections released with the policy announcement at 2pm, including the expected year-end level for the Fed’s key interest rate, will reveal the extent of support for further tightening. Investors will also be hanging on every word of Chairman Jerome Powell’s 2:30 p.m. press conference, which will outline the Fed’s latest thoughts on the impact of the banking crisis, the tight labor market and, most likely, the recent rally. scholarship.

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Stock Market Outlook: Stocks Rebound After Strong Q1 Season

A second consecutive week propelled Dow industrials to the 34,000 mark for the first time since early May. The S&P 500 is sitting on a four-week gain and is now back above 4,300. And the Nasdaq composite’s seven-week rally has put it at its highest level in 14 months. S&P Capital IQ reported Tuesday that 51% of S&P 500 stocks were in positive territory for the year. S&P 500 Q1 2023 EPS was better than expected, falling 1.2% year-over-year, compared to the March 31 forecast for a decline of 6.5%. Estimates now point to a 7.5% decline in Q2, a 0.5% decline in Q3, and an 8.3% increase in Q4. For all of 2023, S&P Capital IQ sees the S&P 500 registering a decline of 0.4%, followed by an increase of 11.7% in 2024.

Earnings Season: A Look at AI, Cloud Momentum

Oracle (ORCL) is up four months, up nearly 35% year-to-date ahead of the software heavyweight’s fiscal fourth quarter earnings report Monday night. Four analysts on Friday raised their price targets to between 106 and 130. Deutsche Bank says Oracle’s momentum appears to be lasting in the cloud and software-as-a-service sectors. Licensing revenue, “the biggest swing factor”, will be closely watched. Citi also notes strong cloud momentum in “enterprise and generative artificial intelligence.” Oracle’s earnings rose in the third quarter, following three quarters of no growth. Analysts see a modest 2.5% gain in the fourth quarter, according to FactSet, before accelerating in the coming fiscal year.

Homebuilders: Lennar agrees with Q2 report

Lennar (LEN) reports second-quarter results on Wednesday evening, as homebuilder stocks rose in a tight U.S. housing market. Wall Street expects Lennar’s earnings per share to fall 49% to $2.31, with revenue down 14% to $7.19 billion. Analysts see full-year EPS drop 36% to $10.01 and sales fall 13% to $29.35 billion. Lennar’s earnings have slowed over the past four quarters. Revenue growth slowed from 30% in the second quarter of last year.

Homebuilder stocks hit new highs ahead of Fed meeting, Lennar earnings

Industry group Building-Residential/Commercial ranks 5th out of 197 tracked by IBD, with homebuilder shares collectively up 29% year-to-date. Lennar won 24%. Companion home builder Knowledge base home (KBH) is expected to release its fiscal second quarter results on June 21. Pulte Group (MPH) and Taylor Morrison Home (TMHC) will announce its financial statements in July, which could give homebuilder stocks a boost. All three stocks are trading at new highs.

Economic Calendar: Inflation, Fed Regional Surveys, Consumer Confidence

The batch of economic data on tap in the week ahead, including a big inflation report on Tuesday, could alter Fed rate hike expectations, but likely for the July meeting, not this week’s. . The May consumer price index, released at 8:30 a.m. Tuesday, is expected to rise 0.3% over the month, with the annual inflation rate dropping from 4.9% to 4.1%. The core CPI, excluding food and energy, is expected to rise 0.4%, bringing the core inflation rate down to 5.3% from 5.5%. The producer price index, released Wednesday at 8:30 a.m., is expected to show a slowdown in wholesale inflation to 1.1% from 2.3%. Core PPI inflation is expected to decline to 2.9% from 3.2%. May retail sales, released at 8:30 a.m. Thursday, are expected to be flat from April levels, with a modest 0.1% rise excluding autos. Industrial production, released at 9:15 a.m. Thursday, is expected to show overall May output up 0.1%, but with a solid 0.4% rise in manufacturing output.

Stock market profits: from June 12 to 16

Jabil (JBL) expects to release its fiscal third quarter results early Thursday. Wall Street expects the contract electronics maker to earn $1.88 per share, up 12% year-over-year, on sales of $8.19 billion, down 2%. Jabil’s stock is in record territory after busting out of a cup base.

Kroger (KR) announces first-quarter results on Thursday after three quarters of slowing sales growth. FactSet analysts expect earnings to fall 1.4% to $1.43 per share on a 1.3% drop in sales to $45.19 billion. Kroger is trying to acquire private grocer Albertsons in a $24.6 billion deal.

Adobe (ADBE) will release its second quarter results on Thursday evening. Analysts expect the design software maker to earn $3.79 a share, up 13% year-over-year, on sales of $4.77 billion, up 9%. Adobe stock is in a cup basis with a buy point of 451.15.


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