U.S. Stock Futures Edge Higher From Strong Jobs Report
I hope everybody has enjoyed the Good Friday holiday weekend. We’re set to kick-off April on a strong note on Wall Street this week. U.S. stock futures climbed in pre-market trading on Monday. This came after investors cheered on a strong rebound in U.S. job market recovery amid accelerating vaccine rollout. The Labor Department reported Friday that nonfarm payrolls increased by 916,000 in March. That is the highest since August 2020. Meanwhile, the unemployment rate fell to 6%. Economists surveyed by Dow Jones were expecting an increase of 675,000 and a jobless rate of 6%.
“This reflects the lifting of restrictions, ramp-up in vaccinations and boost provided by the fiscal stimulus,” said Anu Gaggar, senior global investment analyst at Commonwealth Financial Network. “Faster jobs and wage growth can have an upward pressure on prices and test the Fed’s patience with easy monetary policy.”
The stock market gains from last week came after President Joe Biden introduced his $2 trillion infrastructure plan. With strong economic data backing the recovery of the U.S. economy, Wall Street is expected to kick off the second quarter with a strong rally. From the stock futures, investors could finally expect a strong start to the week after months of a downtrend. The Dow, S&P 500 and Nasdaq futures are all trading in the positive territory, rising 0.62%, 0.54%, and 0.45% as of 5.54 a.m. ET.
Central Bank Minutes
Investors will likely turn their attention to more commentary from central banks this week. From the International Monetary Fund’s (IMF) spring meeting to minutes from the Federal Reserve, investors will be on the lookout for any fresh insights on inflation.
The central bank said it expects real GDP to grow 6.5% this year. That compares to the 4.2% rate is anticipated in December. The Fed also said it sees the unemployment rate improving to 4.5% by year-end. It expects the figure to return to its pre-pandemic level of 3.5% by 2023. After the bank’s meeting last month, Fed Chairman Jerome Powell downplayed concerns of inflation.
He added that inflation would need to be “on track to exceed 2% moderately for some time” before the Fed considers letting rates increase. However, market participants appear to be interpreting this in various different ways. Some speculate that there could be a rate increase sooner than later.
Tesla’s Smashing Quarter Likely To Send Bullish Waves Among EV Stocks
Tesla (NASDAQ: TSLA) could be shooting out of the gate this week after a smashing quarterly report announced last Friday. Following the stronger-than-expected quarterly deliveries, Daniel Ives from Wedbush Securities has upgraded his price target for Tesla to $1,000 per share.
In case you’ve missed it. The largest EV manufacturer reported first-quarter deliveries, it’s proxy for sales, totaling 184,800 vehicles. That blew past the FactSet consensus of 168,000. Tesla also said it produced just over 180,000 vehicles in the period in what Ives called a “drop the mic” number.
“We now believe Tesla could exceed 850k deliveries for the year with 900k a stretch goal, despite the chip shortage and various supply chain issues lingering across the auto sector,” Ives said Sunday. He added “eye popping delivery numbers coming out of China cannot be ignored with the trajectory on pace to represent ~40% of deliveries for Musk & Co. by 2022.”
Don’t be surprised if other electric vehicle stocks are also getting the spillover effects from Tesla. Buying TSLA stock may be obvious. But it is also worth noting that there are many other top EV stocks in the stock market that are equally attractive. Not only that, but the pick-and-shovel plays from the EV space are also likely to feel the lift. With this bullish sentiment in place, will you be putting up a list of top EV stocks to buy before the market opens today?
Levi Strauss Earnings
No doubt, it will be a quiet week for the earnings calendar. But that doesn’t mean there are no notable companies that are reporting this week. Jeanswear specialist Levi Strauss (NYSE: LEVI) is slated to report its fiscal first-quarter results on Thursday afternoon. LEVI stock may have skyrocketed in the past year. But the great thing here is, many investors are expecting bigger gains ahead. Here’s why.
The bullish case here is the company’s further differentiating its small but fast-growing e-commerce platform. More importantly, the jeanswear maker is aiming to diversify its complementary categories beyond its core denim focus. With the changing fashion habits and the rise of Lululemon Athletica (NASDAQ: LULU), the diversification makes perfect sense. After all, wearing jeans may no longer be as fashionable as before.
With the stock price rally in recent months, investors will be focusing on management’s outlook for 2021. Following last year’s 23% decline, investors may be better off waiting for the outlook before diving straight into LEVI stock. After all, there’s a possibility of a pull-back in case investors are not happy with the outlook.
Constellation Brands Earnings
The U.S.-based producer of Corona beer, Constellation Brands (NYSE: STZ) is slated to report its fourth-quarter earnings before the opening bell on April 8. Analysts are projecting earnings per share of $1.55 on sales of $1.86 billion. From its most recent quarter, Constellation reported a nearly 22% surge in sales from a year ago. Earnings per share also jumped 44% in comparison with the same period a year ago.
The company has been quite successful in managing the difficult operating environment it encountered during the pandemic. As CEO Bill Newlands told CNBC in January: “We’ve got the brands that are in demand and one of the things that people do when they’re buying for home is they stick with things that they know and they stick with things that they trust, and we have brands that people trust.”
Investors will most probably be looking at the evidence of strong growth in its imported beer brands like Modelo and Pacifico. Having said that, it is also worth noting that sales gain will most likely be slow compared to last quarter because of shipping and inventory shifts. Despite that, the company has proved resilient through turmoil. And the company could see more tailwinds ahead. Overall, whether it’s the central bank minutes, the performance of EV stocks, or quarterly results, there is enough to keep investors busy this week.