It’s likely to be another roller coaster ride for stocks this coming week as investors weigh both positive and negative macroeconomic and geopolitical developments following a week which saw indices posting a major rebound.
The coronavirus spread more widely in the U.S. and as the week drew to a close, the nation’s Congress succeeded in passing a bill which made available $2.2 trillion in aid to workers and companies, in order to stimulate the economy—the largest such stimulus package in the country’s history. The United States now has roughly 125,000 confirmed COVID-19 cases, the highest figure in the world.
During the past week, the Dow Jones Industrial Average pulled off its best three-day rally since 1938, after the mega cap index, along with the other major U.S. indices all plunged into a bear market. The Blue-Chip benchmark fell again on Friday even as the fear gauge, the CBOE Volatility Index, stayed above the 60 threshold. The index had already spiked above 80 to its highest level in history.
In this uncertain trading environment, there remains some company-specific news which could move individual share prices of the following three mega-cap stocks:
1. Boeing
Boeing (NYSE:BA) appears to be emerging as one of the major winners of the government’s stimulus bill. The financial aid package for the aerospace company’s suppliers and the airlines who are its customers could help mitigate the crisis the airplane manufacturer has been facing since the grounding of its best-selling flagship 737 MAX jets last year.
The bill approved by Congress as the week came to a close includes billions of dollars available for it and its supply chain, and billions more for its airline customers to stay in business. Lawmakers set aside $17 billion in loans and loan guarantees directed at companies deemed essential to national security.
A Boeing spokesman said Friday the company was considering all options, including not participating in the bailout which would require giving the government an equity stake in the company.
After falling to $95.01 on March 20, Boeing shares rebounded to $162 by Friday. Nevertheless, the company’s growth outlook very much depends on the recovery of airline business and the return of its 737 Max planes which are grounded globally.
2. Walgreens
Walgreens Boots Alliance (NASDAQ:WBA), the second-largest pharmacy operator in the U.S., will report second-quarter earnings for its fiscal 2020 on Thursday, April 2, before the market opens. Analysts expect an EPS of $1.46 a share in the quarter ending in January on revenues of $35.27 billion.
The Deerfield, Illinois-based company has been implementing a cost-cutting drive as its market share has come under pressure with growing competition from Amazon (NASDAQ:AMZN) and other players.
The company’s stock has lost a quarter of its value this year amid reports that the operator might seek a leveraged buyout as its challenges mount. Shares closed on Friday at $44 after falling about 4% on the day.
The drug store operator's aim is to streamline its retail operations and prioritize the digital transformation of some functions. The company said last summer it intends to close 200 U.S. locations on top of a previously announced cut of as many as 750 stores.
3. Constellation Brands
On Friday, April 3, when it reports Q4 2020 earnings, the U.S.-based producer of Corona beer, Constellation Brands (NYSE:STZ) will come under investor scrutiny. The Victor, N.Y.-based beer, wine and spirits maker is anticipated to show $1.8 billion in revenue and $1.64 of profit per share.
During its previous quarter, Constellation reported profit and sales numbers that topped analyst estimates. The company also raised its full year earnings forecast, boosted by its it aggressively advertising the Modelo Mexican import brand to boost sales and its beer business overall.
Still, the past year has been tough for STZ. Earnings were pressured by the $4 billion stake the company had taken in marijuana producer Canopy Growth (NYSE:CGC). The Canadian cannabis company is struggling to show profitability, a challenge faced as well by other pot producers in the sector.
Constellation Brands' share price has fallen more than 17% in the past four weeks amid the broader coronavirus-induced sell-off . The stock was up 3% on Friday to close at $144.88.