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5 Things to watch in this week's markets

Published by MEXEM News

July 25, 2024 2:51 PM
(GMT+2)

Elevated market volatility looks set to continue this week as investors try to gauge how aggressively the Federal Reserve may act in its fight against inflation.

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Here's what you need to know to start your week:

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1. Continued earnings results

As we enter another week of earnings season, a large batch of reports is scheduled from heavyweights, including Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) on Tuesday and Thursday, respectively.

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This year, tech stocks have come under pressure from investors, having delivered underwhelming results and investors being more reluctant to pay hefty valuations for growth stocks amid rising yields. Other notable earnings this week are Meta Platforms (NASDAQ:FB), General Motors (NYSE:GM), Ford (NYSE:F), Exxon Mobil (NYSE:XOM), and Merck (NYSE:MRK).

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2. Who is buying the dip?

The steep decline in U.S. stocks this January has encouraged some investors to start looking at equity valuations and see whether it is worthwhile buying shares at reasonable prices. So far this year, the S&P 500 has dropped more than 9%, while the Nasdaq has fallen nearly 15%, sending it in correction territory.

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Barclay strategists, however, suggest that it is still "too early to buy the dip." On the other hand, a strength of fourth-quarter earnings results could bolster discount buys for investors.

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3. Stock of the week:  MTDR

Last week Matador Resources Company (NYSE:MTDR) stock gained 12% as operating momentum into 2022 increases. Moreover, three company insiders bought shares on the open market in December, indicating an upbeat outlook on the stock in the near term.

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In its third quarter of 2021, company revenue grew 132% from a year ago to $472.30 million, while this outperformance looks set to continue. The firm, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States.

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4. Bitcoin's carbon problem

Chinese regulators, as well as recent calculations from Cambridge University, have raised their concerns about bitcoin's environmental impact, estimating that bitcoin mining consumes 133.63 terawatt-hours of electricity a year while the figure keeps growing.

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Currently, Bitcoin consumes more energy than the entire countries of Norway and Ukraine, using 66 times more electricity than in 2015, with experts being unsure whether a greener version is possible.  Bitcoiners can expect reports outlining operations as it shifts towards renewable energy and the impact it could have on bitcoin's volatility.

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5. Netflix's recovery

While the market is punishing Netflix (NASDAQ:NFLX) for its weak results, some people still believe in the stock's potential.  Last week, Netflix Co-CEO Read Hastings, bought shares worth $20 million, according to regulatory filings. Moreover, Bill Ackman's Pershing Square recently bought Netflix shares worth more than $1 billion.

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According to Ackman, Netflix's improving cash flows are reason enough to remain bullish on the stock. He believes that "the opportunity to invest in Netflix at current prices offered a more compelling risk/reward and likely greater, long-term profits for the funds."

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To learn more about stocks and investments visit MEXEM.

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