What to Expect This Week: Tesla, Coca-Cola, Boeing Earnings, Key Housing Data, and Fed Updates

Earnings Extravaganza: Tesla, Coca-Cola, and Boeing in the Spotlight

Tesla: Navigating Through Challenges

Tesla is set to report its Q3 earnings on October 23, 2024, and all eyes are on the electric vehicle giant. Analysts are projecting an adjusted earnings per share (EPS) of $0.60 and revenue expectations at $25.42 billion. This comes amidst Tesla’s recent unveiling of the Cybercab, a $30,000 autonomous vehicle aimed at revolutionizing urban mobility. However, the reception has been mixed, with skepticism surrounding its ambitious targets and production timelines.

Tesla’s stock has experienced volatility, down approximately 10% since the start of the year. Investors are keen to hear about Tesla’s strategy regarding the Cybercab and its future revenue streams, especially as competition intensifies. The earnings report will be a critical moment for Tesla, potentially influencing its stock trajectory in the coming months.

Coca-Cola: Steady Performance Amidst Volatility

Coca-Cola is scheduled to release its earnings on October 23, 2024. Analysts expect the beverage giant to report flat earnings compared to the previous year. Despite volatile external conditions, Coca-Cola has a history of raising both organic revenue and comparable currency-neutral EPS growth after the third quarter. However, UBS analyst Peter Grom suggests that the company might only remove the low end of its guidance range rather than make a significant upward adjustment.

Coca-Cola’s stock forecast indicates a potential return on investment of 7.60%, with an average trading price projected at $71.40. Investors will be watching closely to see if Coca-Cola can maintain its bullish sentiment amidst the current market conditions.

Boeing: Turbulence Ahead

Boeing’s earnings report on October 23, 2024, is expected to reveal significant financial challenges. Analysts anticipate a slight revenue increase to $18.22 billion, but a substantial net loss of $5.08 billion, more than triple the loss reported in the same quarter last year. The ongoing strike involving 33,000 workers has cost Boeing approximately $100 million a day in lost revenue, adding to its woes.

The outcome of a critical vote by the striking workers on a new proposal, which includes a 35% pay increase over four years, will be crucial. A failure to approve the deal could prolong the strike and negatively impact Boeing’s financial recovery and production capabilities. Investors will be closely monitoring these developments, as they could significantly influence Boeing’s stock performance.

Economic Data: Housing Market and Fed Insights

Housing Market: A Mixed Bag

The housing market will be a focal point this week, with September’s existing home sales reported on October 23 and new home sales on October 24. Recent trends indicate a slight improvement in housing starts, although challenges remain due to high mortgage rates influenced by firm 10-year Treasury yields.

As of October 20, 2024, mortgage rates are around 6.20%, reflecting an increase from an average of 5.74% in September. Fannie Mae projects that 30-year mortgage rates will drop into the 5% range in 2025, forecasting an average of 5.6% by the end of next year. The combination of high mortgage rates and a historically low supply of homes is likely to contribute to rising prices.

Investors will be attentive to these data releases, as they impact inflation and consumer spending. Easing bond yields could eventually lead to lower mortgage rates and stimulate housing demand, but the market remains cautious.

Federal Reserve: Key Remarks and the Beige Book

Federal Reserve officials, including Gov. Michelle Bowman, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeffrey Schmid, will deliver remarks throughout the week. Additionally, the Fed will release its Beige Book on October 23, providing insights into economic conditions across its 12 districts.

The Beige Book is expected to indicate a rapid slowdown in economic growth, with only three of the twelve regional Fed banks reporting growth. This shift is likely to cement expectations for ongoing policy easing from the Fed. Investors will be particularly attentive to jobless claims data and the Purchasing Managers’ Index (PMI) surveys, as these metrics reflect the health of the labor market and the manufacturing/services sectors.

Market Sentiment: Navigating Uncertainty

The stock market has been performing well, with the S&P 500 and Dow reaching new record highs. However, the market is nearing overbought territory, prompting caution among investors. Geopolitical risks, potential earnings downgrades, and the upcoming U.S. presidential election add layers of uncertainty.

Emerging-market assets have experienced volatility, influenced by strong US economic data and comments from presidential candidate Donald Trump regarding tariffs. The overall sentiment points towards traders positioning defensively, awaiting further clarity on both US monetary policy and the political landscape.

Conclusion: Navigating the Week Ahead

As we navigate through this eventful week, investors should remain vigilant and adaptable. The earnings reports from Tesla, Coca-Cola, and Boeing will provide valuable insights into their respective industries and could influence broader market trends. Meanwhile, housing market data and Fed insights will offer clues about the economic landscape and potential policy adjustments.

For individual investors, this week presents an opportunity to reassess portfolios and consider potential adjustments based on the unfolding developments. Staying informed and proactive will be key to navigating the complexities of the financial markets in the coming days.

In conclusion, while the week ahead is packed with potential market-moving events, it also offers opportunities for those who are prepared. By staying informed and adaptable, investors can position themselves to capitalize on the insights and trends that emerge.