Wednesday saw the S&P 500 reach new records fueled by a tech rally. Investors now anticipate earnings reports from tech giants Snowflake and Salesforce, which have experienced recent stock declines. The airline industry is also under the microscope as it prepares for the summer travel season amid rising jet fuel costs, while a significant spinoff in the trucking sector is set to reshape the less-than-truckload market.
Wednesday's trading session saw a surge in Big Tech, propelling the S&P 500 to new record highs. Investors are now eagerly looking ahead to the next trading day, with several key corporate earnings and industry trends set to shape market movements.
Big Tech Earnings on Deck: Snowflake and Salesforce Under Scrutiny
The spotlight is firmly on enterprise software giants Snowflake and Salesforce as they prepare to release their quarterly earnings after the market close. Both companies have experienced recent stock volatility, making their upcoming reports crucial for investors. Sridhar Ramaswamy, CEO of Snowflake, will join Jim Cramer on 'Mad Money' to discuss the company's performance. Snowflake's stock has seen a modest 2.6% gain in the past three months, but is down 37% from its November peak. Meanwhile, Salesforce CEO Marc Benioff will also appear on 'Mad Money'. Salesforce's stock has dipped 10% over the last quarter and is down 36% from its 2023 high. Analyst sentiment suggests Salesforce may face challenges, as the company has missed Wall Street's revenue estimates multiple times in the past two years, though many analysts have maintained their estimates, anticipating a stable business outlook.
Implied volatility for Salesforce's earnings is around 8%, a level consistent with the last four quarters, yet the stock has historically underperformed these expectations by about 50%. Snowflake faces higher implied volatility at 12%. FactSet data shows a strong buy-side consensus for Snowflake, with 46 analysts rating it buy or overweight, compared to six holds and one sell. The average analyst target price stands at $231.38 for Snowflake, with the stock currently trading at $177.60. For Salesforce, 40 analysts rate it buy or overweight, with 13 holds and two sells. The average target price for Salesforce is $254.43, with Tuesday's closing price at $179.08.
Retail and Sports Stocks in Focus Pre-Market
Before the opening bell, attention will be on retail and sports-related companies. Abercrombie & Fitch is set to report, with its stock having fallen nearly 25% in the past three months and 43% from its January high. Dick's Sporting Goods, which has lost 15% in the last quarter, saw its stock hit a high on Tuesday. Manchester United's performance will also be a talking point, with shares up 12% over three months, despite being 4.3% off last week's high. The team's third-place finish in the Premier League is noted as a positive sign.
Airlines Brace for Summer Travel Amidst Jet Fuel Costs
CNBC TV's Phil LeBeau will provide insights into the airline industry as it gears up for the summer travel season, with a particular focus on the impact of jet fuel prices. Airline stocks have shown strong performance recently, with Delta Air Lines gaining approximately 16% in the past month, hitting a Tuesday high. United has climbed around 14% in the same period, though it remains 11% below its January high. American Airlines has surged 22% in the last month, down 10% from its January peak. Southwest has advanced 7% over the past month, but is 23% off its February high. JetBlue has been flat over the last month but has seen a 13% increase in May, despite being 18% below its February high. Alaska Air has climbed 5% in the past month and is up 12% in May, though it is 33% off its September high.
FedEx Spinoff and Trucking Industry Evolution
The logistics sector is set to undergo a significant shift with the upcoming trading of FedEx Freight under the ticker FDXF next week, following its board's approval of the spinoff. This move signals increased Wall Street engagement with less-than-truckload (LTL) shipping companies. While FedEx itself is down 1% from its April high, its shares have surged 45% in six months. Other LTL players are also in focus: Old Dominion is down 7% from its April high but gained about 6% in the past week. XPO is down 9% from its April high, with a 4% weekly gain. Saia reached a new high on Tuesday, boasting a 67% surge in six months. ArcBest is off 4% from its April high, with a 27% advance in three months. TFI International also hit a new high on Tuesday, adding over 8% in the past month.
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