With three of the U.S. major indices within striking distance of their all-time highs, the coming week looks like it will be all about upcoming interest rate expectations. After some weak U.S. economic data releases in the past few weeks, markets have been pricing in a 100% probability of an interest rate cut at the Federal Reserve’s next meeting on July 30-31.
But that outcome may not be a done deal, according to some analysts, after Friday's nonfarm payrolls report on Friday showed the best jobs growth of the year.
Fed Chair Jerome Powell will have the opportunity to clear any confusion—if there is any—regarding his next move, when he speaks before Congress in the week ahead. Powell will testify before the House Financial Services Committee Wednesday and in front of the Senate Banking Committee on Thursday, and is expected to answer questions on the economy and Fed policy.
Beyond these macroeconomic events, below are three big stocks which could see some action this week, the result of company-specific developments in the days ahead:
1. PepsiCo Inc.
Snack and beverage giant PepsiCo (NASDAQ:PEP) will report its second quarter earnings on Tuesday, July 9 before the market opens. Analysts expect EPS of $1.5 a share on revenues of $16.43 billion.
The upcoming quarterly report could provide additional evidence that Pepsi’s earnings momentum is backed by a strong demand revival and the success of the company’s product mix which includes such popular brands as Frito-Lay chips, Tostitos and Ruffles.
In the previous quarter, the company’s sales growth was helped by its Frito-Lay operation and North American beverage unit, with its Pepsi line of sodas and Lay’s chips each making a major contribution to the company's bottom line.
A positive earnings surprise would help Pepsi shares outperform rivals as the stock continues its strong upward move, started during the past year. Shares closed on Friday at $133.02, near a record high, after gaining more than 20% this year.
2. Boeing Co.
Shares of Boeing (NYSE:BA), the aviation giant that's still reeling from one of the worst crises in its corporate history after two fatal crashes involving its best-selling 737 MAX jet, may come under renewed selling pressure after a media report over the weekend suggested that the grounding of those planes may be in force longer than expected.
According to a Bloomberg report, the European aviation regulator has outlined five major requirements it wants Boeing to address before it will allow the plane to return to service. One of them concerns the jet’s autopilot function, an issue that previously hadn't surfaced. Airlines worldwide grounded the 737 MAX in March after two of the planes crashed within five months, killing all on board.
Boeing shares shed more than 2% last week, closing on Friday at $355.86. They are down about 20% from their highs in March amid uncertainty about the 737 MAX's future.
3. Bed, Bath & Beyond
Home merchandise giant, Bed Bath & Beyond (NASDAQ:BBBY) reports Q1 2019 earnings on Wednesday, July 10, after the market close. On average, analysts are expecting earnings per share of $0.08 on sales of $2.58 billion.
That would be a sharp drop from the same period a year ago when the home furnishings, linens and cookware retailer reported $0.32 a share profit.
Bed, Bath & Beyond is struggling to bring more customers to its stores amid stiff competition from online retailers. During the past quarter, the chain’s comparable sales, a closely watched measure in retail, fell 1.4%.
BBBY's shares are down more than 45% during the past one year, adding to the slump that started in early 2015. The stock rose more than 2% on Friday, closing at $11.47 a share.