My name is Samuel Taube, and I’m the new Managing Editor of Investment U. You may have read some of my articles in the last year. I have a passion for data analysis, education and improving my readers’ financial literacy.
I can’t replace Andy’s folksy wisdom... but I can give you a well-researched, actionable briefing about what the coming week holds in store for investors. With that in mind, I’m excited to bring you the first issue of This Week on Wall Street below.
What do Tim Cook and Marine Le Pen have in common? Both have taken big gambles in the recent past - and this week, they’ll see if those gambles paid off.
The first week of May is not one to ignore for investors. Some of America’s biggest and most important blue chips post quarterly results on Tuesday. And the April jobs report is due on Friday. Investors are anxious to see if last month’s hiring slump has continued.
Meanwhile, across the pond, France’s presidential elections will come to an end next Sunday. And depending on how they go, the entire European Union could come to an end as well.
Big Earnings Reports: Apple (NASDAQ:AAPL), Pfizer (NYSE:PFE) and Merck (NYSE:MRK) & Co.
Tuesday will be a big day for earnings-minded traders. Two of the largest pharmaceutical companies are reporting that morning. And America’s largest company by market cap will post results after the closing bell.
Pfizer (NYSE: PFE) is expected to post its quarterly results during the premarket session Tuesday. Analysts are expecting earnings per share of $0.67. The firm has missed expectations for the last two quarters as it has struggled to compete with cheap alternatives to some of its best-selling drugs.
Merck & Co. (NYSE: MRK) will be joining its larger pharma rival on Tuesday morning. The consensus EPS estimate for the firm this quarter is $0.83. Merck & Co. has beaten its last four quarterly EPS expectations, as strong sales of its cancer drugs have propelled its profitability.
Apple (Nasdaq: AAPL) should report after hours on Tuesday, with an expected EPS of $2.01. Apple has beaten three of its last four expectations. The company has a big month ahead of it, as it has started moving workers to its brand-new $5 billion “spaceship campus.”
As you can see, Apple has been trading slightly up in the last month, while Pfizer and Merck & Co. shares have been roughly flat.
Washington: No Government Shutdown (Yet), April Jobs Report
Investors don’t quite know what to make of last Friday’s news. We still have a funded, functioning, not-shut-down government, for the moment. In recent weeks, some investors were concerned that Trump’s determination to get funding for his wall could cause a budget battle that could drag on past the April 28 deadline.
The president relented about the wall, but the battle over Obamacare funding may drag on into the next week. As a result, Congress passed a temporary measure and gave itself an extension on the real spending bill. That puts off the deadline until May 5.
The S&P 500 traded roughly flat this week on the news. Investors are realizing the crisis has been delayed, but not averted.
Meanwhile, the BLS is due to release the April jobs report on Friday, May 5. After seeing severe underperformance in job creation last month, investors should be wary of any sign of rising unemployment.
World: Brexit, Et Maintenant La France?
French voters went to the polls last Saturday for the first round of their presidential election. The highest tally went to Emmanuel Macron, a pro-EU and pro-free market centrist. On May 7, he will face the second-place finisher, populist right-winger Marine Le Pen, in a runoff election.
The election was seen as an important indicator of the strength of the Euro project, and the final runoff will be as well. After Brexit, France will be the EU’s second-largest economy. So a victory by an anti-EU nationalist like Le Pen could have grave implications for the union.
But for now, French equity markets are rallying on Macron’s first-place finish. He is widely viewed as the status-quo candidate and beat out a number of far-left populists. Current polls suggest that Macron will easily beat Le Pen on May 7, thus ending France’s threat to the EU.
But in the current political environment, we’ll have to see what happens.
This week is sure to be a momentous one, in the U.S. and abroad. Some of America’s largest companies are reporting their quarterly results, and we’ll get the latest news on the labor market. What’s more, the fate of the EU may hang on France’s elections next weekend.