Market Preview: Market Shrugs Off China Trade Posturing, Earnings from Oracle and Fedex Monday


Not even the announcement by President Trump that he is ready to levy tariffs on $200B of Chinese goods could keep the market down for long Friday. Maybe the market is catching on to the President’s hard-nosed negotiation style which has resulted in a new deal with Mexico and has Canada at the table? If the Chinese agree to the high level talks the administration has proposed, the market may take it as a green light that a deal will be reached. But, if they push back over the weekend, and return the tough stance with one of their own, investors could interpret it as going too far. Either way, all eyes have turned back to monitoring the proposed trade talks, and their direction is likely to drive market sentiment short term.

Two heavyweights, both of which stand to be impacted by trade talks, report on Monday. Oracle (ORCL) is in the midst of a business model change, and the market did not take kindly to transition problems it announced last quarter. The stock has since recovered, but analysts will expect more positive progress in the move to the cloud and Oracle’s new subscription model. Also reporting on Monday is Fedex (FDX). The package delivery company also took a beating after it’s last earnings report, but like ORCL has recovered much of that ground. Investors will be looking closely at the Fedex numbers to see if they indicate a cooling economy, or if competition from UPS, and Amazon’s growing delivery service, are eating into profits.

Monday we’ll get a look at the Empire State Manufacturing Survey. Analysts will chew on the number more than usual, as it’s the only economic release on Monday. The survey of over 200 executives in New York State provides both numbers from the past month, as well as an outlook on what is coming in the next six months. The rest of the week has Redbook retail numbers, and the housing market index on Tuesday. Wednesday’s focus will be on housing, as we get mortgage applications and housing starts. Thursday is the busiest day of the week with jobless claims, the Philly Fed Outlook, existing home sales, leading indicators, and the EIA Nat Gas Report. Friday wraps up the week with PMI flash numbers and the Baker-Hughes Rig Count Report.

While the onslaught of earnings season has waned, there are still some large market moving companies reporting next week. Tuesday investors will examine numbers from General Mills (GIS) and Autozone (AZO). Wednesday we’ll see software maker Red Hat (RHT) report, along with $15B Copart (CPRT).Thursday, Micron (MU), which is trading near it’s lows for the year, will report. The semiconductor provider may have a comment on the potential tariff dispute, and how it is projected to impact future earnings. Also reporting Thursday is Darden Restaurants (DRI) and Thor Industries (THO). Currently the slate is clean for Friday of next week.

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