The market has been in correction mode since topping record highs in February. A 5% plus pullback in recent weeks has aroused concerns given the sell-offs that have come into play. Amid the sell-off, fundamentals have continued to improve, affirming that the recent pullback might be a minor correction pending further upside action.
Market Bounce Back
New rounds of stimulus backed by an aggressive vaccination campaign have once again affirmed that the bull rally in the market is far from over. A stellar march job report indicating that the US economy added 929,000 new jobs against an expected 647,000 should signal that economic recovery is on course.
The Dow Jones Industrial Average has already started edging higher, clocking a new all-time high of 33,171 the S&P 500 has powered through the 4,000 level affirming buying spree in the market. According to Mad Money host Jim Cramer, Bad news is starting to be good news for the market.
The recent bounce back has once again shed more light on unstoppable growth stocks likely to benefit from the Biden bull market. Google is one such company that has kept up its stellar track record of strong financial performance, which has seen its stock rally to record highs.
Investors are increasingly shunning bad news and turning to pull back to buy stocks that most feels are highly undervalued given the ever-improving underlying fundamentals. Heading into the earnings session, solid quarterly results could be the catalyst to steer stocks back to all-time highs after recent corrections.
According to Cramer, investors will likely push a stock higher on strong earnings reports from the last quarter. Likewise, there should be more non-inflationary news with the potential of discouraging the Federal Reserve from hiking interest rates.
Stocks have pulled lower amid rising inflation concerns. Yield rallying to 14-month highs has triggered concerns over borrowing costs rallying. Similarly, investors resorted to shrugging highly-priced tech stocks in favor of value and cyclical stocks
For traders looking to trade earnings reports this week, a string of notable earnings reports is poised to shake the market.
Stocks To Watch
Paychex, Inc. (NASDAQ: PAYX) is poised to post its third-quarter financial report on Tuesday before the market opens. The company is expected to report earnings of 92 cents a share on revenues of $1.11 billion. Cramer expects the stock to trade lower regardless of how the earnings report pans out as it’s become the post-earnings pattern.
However, the Mad Money host believes any sell-off will present an opportunity to buy the stock at a discount.
On Thursday focus should be on Constellation Brands, Inc. (NYSE: STZ) which are expected to report its fourth-quarter financial results. The analyst expects the company to report earnings per share of $1.55 on revenues of $1.86 billion. According to Cramer, the beer and liquor company is fantastic, and the grower could deliver a light quarter as it continues to reel from the devastation of the Superstore Uri.
Conagra Brands Inc. (NYSE: CAG) is another company to watch out for on Thursday as it reports its Q3 earnings. Analysts are projecting earnings of 58 cents a share on revenues of $2.72 billion. However, Cramer has warned that the company could disappoint on guidance given the growing concerns about reopening.