Stock Market

Stock Market Forecast for Next Week

Market Outlook for Next Week

Last week was flat for the stock markets yet the Dow Jones and S&P are still peaking at record heights. On Friday, Barclays analysts reported that earnings per share (EPS) growth has been very high, at 107% year-on-year in Europe and 63% in the US with the majority beating expert expectations.

The NASDAQ and Russell may start to surge too. The NASDAQ is waiting for consumer price data and perhaps for computer chip bottlenecks to clear. Tech companies are reporting earnings this week, and the news will be positive.

Markets were down very slightly last week, and tonight’s (Sunday April 25th’s) futures are flat.  Dow Jones futures tonight (Sunday) are +10.00(+0.03%),  S&P 500 futures -0.75(-0.02%),  Nasdaq 100 futures -9.00(-0.06%), and the Russell futures are +3.20(+0.14%).  Gold is down a couple of dollars.

This coming week beginning tomorrow the 26th, Tesla, Google, Microsoft, Apple, Chevron, Amazon, Exxon, Boeing, and Facebook will announce earnings.  Futures may suggest a less than breakout earnings report.  There are those talking increasingly about a pullback or even a crash so there are plenty of doubters.

IBD feels the market is in a power mode.

The stock market rally is now in what IBD’s Market School deems a Power Trend, meeting all the criteria. The Nasdaq composite is above the 50-day moving average and has held above the 21-day exponential moving average for 10 straight days. The 50-day line is in an uptrend and the 21-day line has now been above the 50-day for five straight days. A Power Trend is another signal that the current stock market rally, is in a strong uptrend. — from InvestorsBusinessDaily.

J Powell also commented that the “economy is about to start growing much more quickly with rapid job growth thanks to vaccinations and massive fiscal and monetary efforts.” He said he is in no hurry to scale back bond buying and that some asset prices are overvalued.

Banks have been reporting fantastic earnings so that should help should make this a positive week ahead.

The market weathered the poor employment news last week, but could be bogged down by rumors of a future correction.  More stock market crash talk is showing up in forums and media stories.

Stock Futures Tonight. Screenshot Courtesy of Yahoo Finance.

Learn more about Yahoo Finance and Google Finance, and check out which companies are reporting earnings this week.

If you’re a self-directed investors using the main stock market investing resources online, you might be building more sensitivity to the short term market forecasts. Smart investors are always looking ahead to tomorrow or next week or the next month, but don’t forget the long term view.

Last week, stock futures were up on new jobs (↑916,000) and wage numbers (↑4.2%) and the market had a good week. Still some investors are in waiting mode regarding Joe Biden’s infrastructure stimulus plan. The Republicans are not expected to pass it. So the waiting game continues.

Weekly forecast hunters are pursuing clues about the direction of the Dow Jones, S&P, and NASDAQ for specific stocks or ETF’s worth buying or those they should dump. I’d like to hear from you about which stocks you think are the most likely stocks that will jump next week April 19th to 23rd, and over the next 6 months.

Investor Place recommends watching these stocks this week:

  • Aphria (NASDAQ:APHA)  Canadian Cannabis Company
  • JPMorgan Chase (NYSE:JPM)  US Bank
  • Wells Fargo (NYSE:WFC)  US Bank
  • Bed, Bath & Beyond (NASDAQ:BBBY)  US Retail
  • PepsiCo (NASDAQ:PEP)  US manufacturer
  • Taiwan Semiconductor (NYSE:TSM)   Taiwan Chip Maker
  • Delta Air Lines (NYSE:DAL)  USA Airline

Is a Weekly Stock Forecast Even Possible?

Day traders especially zero in on these temporal changes in stock values.  They love that volatility if they can figure it out.  For the last few weeks, there’s been a lot of uncertainty regarding the Fed stimulus package.  With it’s passing into action, that volatility might ease and we could be back to the bull market run.

You can see consistent factors in routine Monday to Friday trading, but do weeks have consistent buying patterns?  If there was, the technical guys would have said something about it by now.

But let’s face it, there’s not many professional advisors sticking their neck out about stock price predictions for 5 to 7 days from now.  If you can see how stock investors reacted last week to news, and you know the news coming, then you may be able to figure out how they’ll react next week. Next week’s price growth will likely mirror last weeks, perhaps picking up the pace.

Here’s the Top performers

Top gaining stocks this week. Screenshot courtesy of Yahoo Finance.

This week’s stock market price surge might signal a change. The pandemic winter’s dour mood is leaving us. Retail stores are reopening and tourism is picking up vaccination numbers grow.  Airlines flights, hotel rooms and travel prices are rocketing, indicating a coming tourism bottleneck for the next 6 months at least.

Tech Stocks Still in Waiting Moe

The Dow Jones and the S&P are the market darlings right now.  NASDAQ rose about 240 points last week as tech stocks improved and Dow jumped by 600 points over that 5 day period.  Tesla, Google, Facebook, Amazon, and Apple are in waiting mode.  The OECD forecasts US GDP will double to 5.6% growth because of the stimulus hand out and vaccinations are proceeding well in the US.

What About Volatility?

The big events were consumer spending, Covid vaccinations, jobs growth, and the interpretations of Jerome Powell’s speech about interest rates, and of course the passing of stimulus relief, which many thought might never happen. Investors aren’t sure the stock market forecast looks good right now, for this week and the next 6 months.

Government bonds rates have been rising and it’s causing concerns for investors. It promotes the idea that interest rates will be on the rise. However, the economy is too fragile for interest rate rises, even with $1.9 stimulus. Some believe inflation will lose steam in the second half and perhaps set us up on the road to a market crash.

If rates rise, it could crash the housing market, creating more issues for affordability, new construction and much higher house and rental prices (supply vs demand).

Charles Schwab’s Randy Fredericks made his next week prognosis by summarizing it this way: treasuries continue to rattle equities; Fed fails to calm markets. Treasury investment supporters stirred up trouble, but no one will listen to them next week as stimulus rolls out.

The 10-year (yield) is now overbought on the short-term charts,” says Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott, adding that further pullbacks “should power better relative performance out of the tech sector over the short-run.” — from Kiplinger report today.

If that was the cause of the recent correction, the release of the Stimulus funds package should help to get business moving again and that should shrink the bond market back down. The Fed has pronounced steady low rates for years. The economy can’t take higher rates so the talk is likely just pandemic pessimism and political propaganda (like usual).

The NASDAQ, S&P, Russell, and Dow Jones are indicating a bottoming now as the stimulus relief is appearing and as vaccinations grow fast. The more reports this week about vaccination numbers, and a reopening of local and state economies will push jobless numbers down plus ease unemployment claims.

Even if a new variant Covid 19 surge, the economy will reawaken from its long slumber. Next week, next Thursday, the job numbers should be up again. February’s job numbers were up 569,000 over January. March’s numbers will likely be record breaking.

Last month’s huge winter storm really dampened economic output and has lead to higher oil prices. The glut of demand will dissipate and oil price supply will increase as needed to pull oil prices back down. It’s unlikely OPEC will be able to suppress supply for long as oil economies need the revenues.

In a nutshell, there’s not too much to be negative about, so optimism will return next week pulling the NASDAQ, Dow Jones, Russell, and S&P back up and headed to new record highs.

This might be the week we see the pandemic stocks take a dive as investors move onto post pandemic stocks.

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* Note: This post on next weeks stock prices is for informational and entertainment purposes and should not be regarded as investment advice for any market transactions. Please consult with your stock and financial advisor for investment decisions.

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