3 Stocks To Watch In The Coming Week: Nike, Oracle, Costco Wholesale

Investors should brace for another volatile trading week in the US where large-cap technology stocks are suffering losses on concerns that their values have gotten too high, especially when the overall economy continues to struggle to overcome the pandemic-induced weakness.

The major US benchmarks fell for a third straight week, capping their longest weekly losing streaks since last year. The S&P 500 lost 0.7% and the NASDAQ dropped 0.6% over that time period.

Investors are looking for new catalysts after the Federal Reserve indicated last week that it plans to keep interest rates low for years to come to stimulate the economy, especially when the economic data continue to show a patchy path to recovery.

In this uncertain economic environment, here are three stocks we'll be focusing on during the week:

1. Nike

Nike (NYSE:NKE) will release its first quarter fiscal 2021 earnings on Tuesday, Sept. 22, after the market close. On average, analysts are expecting the sportswear giant to make $0.44 a share profit on sales of $8.89 billion.

After posting a rare quarterly loss during its previous report, the athletic footwear and apparel giant is likely to show some recovery in the period which saw coronavirus-related restrictions ease globally and its stores reopen. The company’s e-commerce sales will also be in focus. They proved a bright spot during the previous report as they surged more than 75% in the fourth quarter.

NKE Weekly TTM

Despite the difficult operating environment for retail giants in general, analysts are hopeful that the maker of Air Jordan sneakers is well positioned for long-term growth, given its strong brand recognition and its ever-improving digital capabilities.

Nike shares closed down 1.46% on Friday at $114.66. The stock has fully recovered from the pandemic-related sell-off, with shares up about 14% this year.

2. Oracle

Shares of  Oracle (NYSE:ORCL) as well as Walmart (NYSE:WMT) are likely to see some action beginning today after President Trump, over the weekend, agreed to approve a deal under which Chinese-owned video-sharing app TikTok will partner with the two American giants to become a US-based company.

The Chinese headquartered ByteDance is trying to win US approval for a transaction that would leave the parent company with majority ownership of TikTok. Trump demanded the sale of the service in August, declaring in executive orders that the popular video-sharing app is a national security threat.

ORCL Weekly TTM

According to the proposed deal, Oracle will have a 12.5% stake in the new entity called TikTok Global, while Walmart has agreed to enter into commercial agreements to provide e-commerce, fulfillment, payments and other services to the new company with a 7.5% shareholding.

TikTok, a platform for creating and sharing short videos, has grown rapidly in the US from about 11 million monthly active users in January 2018 to about 100 million. Oracle shares closed on Friday at $59.75, after falling about 1%. The stock rose more than 26% during the past six months.

3. Costco

The retail sector will once again come under scrutiny on Thursday when Costco Wholesale (NASDAQ:COST) reports its fiscal 2020 fourth quarter results after the close. Analysts are expecting $2.83 a share in profit on sales of $52.06 billion.

Costco, along with Walmart, has been one of the primary beneficiaries of pandemic-related consumer stockpiling as housebound shoppers scoop up toilet paper, cereal and other everyday essentials while sheltering in place.

COST Weekly TTM

While that buying spree is largely over, the latest results will likely show a normalized sales pattern and some impact of increased consumer buying power due to the federal cash distribution.

Costco stock, up more than 14% for the year, will need a robust earnings report to justify a further move higher from here. It closed on Friday at $335.96, after falling about 1%.