Stock Market Week: Reaction To Iran, Berkshire Earnings, Apple Event

The coming week will revolve around the response to the joint U.S.-Israel attack on Iran by the stock market, as well as commodities, particularly oil. The S&P 500 logged its seventh slip in nine weeks this year, as it continues to ground along resistance at the 7,000 level and at its 10-week moving average. The Nasdaq is also down in seven of the past nine weeks, struggling stubbornly below resistance at its 10-week level.

The Dow industrials, down in six of the past nine weeks, clocked their first close below the 10-week level since November. For February, the Dow gained 0.2% in a tenth straight monthly gain, its longest advance since the run up ended in January 2018. The Nasdaq fell 3.4%. the S&P 500 dipped 0.9%.

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March will open with the stock market reaction to Saturday’s U.S.-Israel assault on Iran. The June 13 market reaction to the prior U.S.-Israel raid on Iran could provide a template for the market’s reaction. On that day of trade, oil prices, defense stocks and energy stocks generally shifted higher. Airlines and cruise line stocks fell due to rerouting and fuel-price concerns. Gold and the U.S. dollar gained.

The Dow dropped 1.8% on Friday, June 13 and ended the following week fractionally higher. The Nasdaq fell 1.3% on June 13, then gained 0.2% in the following week. The S&P 500 fell 1.3% on Friday, June 13 and ended the following week down 0.2%.

Stock Market Focus: Oil Prices

Regarding oil prices, there are two key differences between the raid in June and the current assault. First, Saudi Arabia was reported over the past week to be increasing output and exports in order to moderate any possible supply interruption from a potential U.S. attack on Iran. In addition, an OPEC+ meeting is set for Sunday to discuss output quotas. The group had previously pledged to pause a planned production increase until April.

Second, the U.S. military has massed a substantial naval presence in the region and specifically targeted Iranian naval assets in its attacks. Combined, those factors would aim to weaken any potential the Iranians might have to disrupt shipping in the region, particularly in the Strait of Hormuz — a key chokepoint for tankers traveling from Saudi Arabia and other key energy producers.

Trump, Israel Launch ‘Massive’ Attacks On Iran; How Will Dow Jones Futures React?

On Friday, U.S. oil prices climbed to a 7-month high as U.S.-Iran nuclear disarmament negotiations collapsed, and as fighting between Iran’s neighbors Pakistan and Afghanistan escalated, ramping tensions higher in the region.

Beyond factors related to the war, March will open with economists picking through a busy week of data releases, including the February jobs report. Broadcom (AVGO) headlines the earnings calendar, along with Target (TGT), as the retail earnings roster accelerates. Berkshire Hathaway’s (BRKB) report on Saturday, and Apple’s product event on Wednesday will also draw close attention.

Stocks To Watch: Strong Picks In A Tough Market

With the major indexes falling below their 50-day lines, investors should be cautious. However, there remains a fair amount of underlying strength. BrightSpring Health (BTSG), Globus Medical (GMED), BWX Technologies (BWXT), Construction Partners (ROAD) and GE Aerospace (GE) are all watchlist-worthy growth names. GE Aerospace slipped slightly for the week but is still holding in a buy zone. BrightSpring pared gains after a bullish rebound to end back in a buy range following earnings. Globus Medical is hovering just below an early entry. BMW Tech and Construction Partners have been trading fairly tight, above support and just below buy points.

Stock Market Econ: A Week Of Mixed Expectations

The  jobs report, which arrives along with retail sales data on Friday, highlights a big week for economic data. Economists expect nonfarm payrolls to rise by 60,000, FactSet says, after January’s 130,000 weather-boosted total. The jobless rate is expected to hold steady at 4.3%. Retail sales are forecast to rise 0.3% in January, with a 0.35% gain excluding autos. Payroll processor ADP releases its monthly estimate of private-sector job gains Wednesday. The Institute for Supply Management’s manufacturing survey index, after a surprisingly strong January, gets a February update on Monday. Forecasts call for a slight dip to 52.3, still well above the 50 neutral level.

Broadcom Earnings: AI Data Center Sales Are Key

Broadcom will report its fiscal first-quarter results late Wednesday. Analysts expect the fabless chipmaker and infrastructure software provider to earn an adjusted $2.02 a share on sales of $19.22 billion in the quarter ended Feb. 1. That would translate to year-over-year growth of 26% in earnings and 29% in revenue. Wall Street sees Broadcom’s earnings and sales growth accelerating to 37% and 36%, respectively, in fiscal Q2. Broadcom has benefited from strong sales of custom data center processors for Alphabet (GOOGL), Meta Platforms (META) and others. Shares are pulled back 23% from a December high, and testing support at their 40-week moving average.

Berkshire Earnings, Apple Product Intros

Berkshire’s operating earnings dropped nearly 30% year-over-year in the fourth quarter. The operating EPS per share was $4.73, below the Factset consensus view for $5.15. Cash holdings rose to more than $373 billion, up 12% for the year, and the company reported no share buybacks during the quarter.

Investors will take a close look on Monday at the company’s stock sales and purchases, and the strategic “housecleaning” of is portfolio under new chief executive Greg Abel, during the quarter.

Against that backdrop, Apple plans to start introducing new products Monday morning, according to an X post Thursday from CEO Tim Cook. The “Big Week” teased by Cook includes a press event on Wednesday. New products expected include the iPhone 173, powered up versions of the iPad and iPad Air, as well as other improved laptops.

Retail Reports Kick Into Gear

Target is climbing away from a breakout as it headlines the coming week’s broad array of retail earnings. Ross Stores (ROST), Costco (COST), Burlington StoresBURL and Abercrombie & FitchANF will be of interest to growth stock investors. Victoria’s Secret (VSCO) is basing nicely ahead of its report. Macy’s (M), Gap (GAP) and others also report.

The Space Race: Looking For Bluebird Insights

SpaceX rival and space-based cellular constellation developer AST SpaceMobile (ASTS) reports Q4 results late Monday. FactSet expects losses to improve by a penny to 17 cents per share. Analysts see revenue soaring to $41.8 million from $1.9 million. AST earlier this week announced a $30 million contract from the Space Development Agency to test how to use its BlueBird satellites to transmit DoD messages. A six-week decline has left the stock 40% off its January high, but with a 12-month gain of 189%.

Aerospace: Facing Sky-High Expectations

Missile maker AeroVironment (AVAV) on Monday will present at the Citizens Technology Conference ahead of its results later this month. Analysts expect earnings to increase 140% on 188% sales growth. Brazilian jetmaker Embraer (EMBJ) reports Friday. Wall Street sees earnings increasing 212% while sales grow 10%. AeroVironment has tumbled below support at its 40-week line. Embraer is in a tight consolidation with 10-week support.

Events Calendar: Global Debt, Sports Betting Conferences

Bond markets in the coming week will closely monitor the Organization for Economic Co-operation and Development’s Financial Markets Week. The gathering of financial and central bank leaders in Paris runs Monday through Friday. The global debt report was initially set to be a focal point, although circumstances in the Middle East are now likely to take precedence. The MIT Sloan Sports Analytics conference runs March 6 and 7 in Boston and often generates news on betting technologies and data-rights partnerships.

Stock Market Earnings Briefs

Credo Technology (CRDO) will post its fiscal third-quarter results late Monday. The maker of high-speed connectivity systems for AI data centers is seen earning an adjusted 91 cents a share, up 264% year over year, in the quarter ended Jan. 31. On Feb. 9, Credo announced preliminary fiscal Q3 revenue in the range of $404 million to $408 million, or up 200% at the midpoint. Credo shares are 48% off their December peak.

Sociedad Quimica (SQM) will get some close attention from investors on Monday, as it holds its conference call following a Friday night earnings release. A shutdown in Zimbabwe during the past week boosted already rallying lithium prices. SQM earnings are expected to turn sharply higher. The stock is consolidating, up 12% year to date.

Ero Copper (ERO), based in Vancouver, B.C. Canada, also has high expectations for its late-Wednesday earnings report. Copper prices driven by demand for plumping, electrical and other components have helped drive Ero to an 87% gain following a September breakout. The stock is rebounding from 10-week support within a brief consolidation.

Marvell Technology (MRVL) will release its fiscal fourth-quarter results after Thursday’s stock market close. Analysts see the fabless chipmaker earning an adjusted 79 cents a share, up 32% year over year, on sales of $2.2 billion, up 21%. Marvell makes custom data center processors for Amazon (AMZN) and Microsoft (MSFT). Marvell shares are riding support at their 40-week moving average, 21% off a December high.

Smith & Wesson Brands (SWBI) has been shooting blanks for the past six quarters of earnings declines. Analysts see that turning around for the handgun maker in its Q3 report late Thursday. Earnings are expected to rise 12%, with growth accelerating through the next three quarters. Shares sit on a 20% year-to-date gain, and are narrowly extended after a January breakout.

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