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3 Things to Watch in the Stock Market This Week

Demitrios Kalogeropoulos, The Motley Fool

Stocks held their ground last week after a sharp sell-off in the previous week sent both the S&P 500 and the Dow Jones Industrial Average lower by 3%. After slipping by less than 0.5% over the last few trading days, indexes remain up by over 12% so far in 2019.

Earnings results continue to pour in over the next few days, and below we'll take a look at the metrics that could send shares of Canopy Growth (NYSE: CGC)Walmart (NYSE: WMT), and NVIDIA (NASDAQ: NVDA) moving in the week ahead.

Canopy Growth's strategic shift

Canopy Growth investors have had a wild ride so far in 2019, with shares nearly doubling by late spring before falling back to roughly match the wider market in recent weeks. That volatility sets up an important earnings report for the cannabis specialist when it announces results on Wednesday.

Marijuana in a jar.

Image source: Getty Images.

The largest marijuana stock by market cap left investors wanting more in its last report. Sure, sales soared when compared to the prior-year period as Canopy Growth capitalized on its dominant position in the Canadian market. But international sales disappointed, and the cannabis giant booked significant net losses.

On Wednesday, investors will be looking for signs that the company can grow its influence while heading toward profitability. Its recent management shake-up suggests Canopy Growth is taking those goals more seriously as it begins its fiscal 2020.

Walmart's new outlook

Walmart will announce its latest results on Thursday morning, and investors have high expectations for the world's biggest retailer. Its last report contained mostly good news, including solid sales growth, improving profitability, and record membership in its Sam's Club business.

On Thursday, there's every reason to expect the chain to extend that winning streak and post its fifth consecutive quarter of over 3% comparable-store sales growth. However, investors will be scrutinizing the report for signs of slowing growth, or falling profit margins, due to spiking tariff rates. In addition, Walmart's international business barely grew in the previous quarter, and another weak result here might threaten to derail the retailer's broader 2019 targets. Both of these issues will be reflected in any change that CEO Doug McMillon and his team make to their outlook as they enter the critical second half of the fiscal year.

NVIDIA's growth rate

NVIDIA shares have been whipped around in recent months, with those swings reflecting the chip giant's leverage to volatile market forces like Chinese trade and cryptocurrency demand. But the company has a chance to recapture control of its narrative when it announces second-quarter results on Thursday.

Its last report contained encouraging signs of a rebound. The struggling gaming business returned to growth, for example, by ticking higher by 1% after cratering in the prior period. Similarly, gross profit margin improved when compared to the end of fiscal 2019.

NVIDIA's ability to extend that positive momentum will depend on several factors, including healthy demand for new gaming laptops. Investors will be watching for signs of firming sales trends in the data center business, too, as well as in emerging niches like artificial intelligence and autonomous driving. Shifts in demand in these areas, plus the impact of trade disruptions, will determine whether CEO Jensen Huang and his team issue a cautious outlook for the fiscal third quarter on Thursday afternoon.  


Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com