By Jesse Cohen
- This week, watch for CPI inflation, retail sales, producer prices and other earnings.
- Shopify (NYSE:SHOP): Attention as a stock to buy as the end of the year approaches
- Occidental (NYSE:OXY): Requires careful approach due to difficult environment
U.S. stock markets closed higher on Friday, posting their best weekly performance of the year. After Donald Trump‘s decisive presidential victory, the Dow S&P 500 The index reached a new high.
Investors are hopeful that the Trump administration will stimulate the U.S. economy through deregulation and tax cuts.
This week, blue chips Dow Jones Industrial Averagerose 4.6%, and the benchmark S&P 500 index rose 4.7%, centered on technology stocks. Nasdaq Composite Indexsoared 5.7%. major index charts
Source: Investing.com
This week is expected to be an important one for investors as they evaluate the economic outlook, inflation, interest rates, and corporate performance.
The most notable item on the economic calendar this week is the October U.S. Consumer Price Index (CPI) report to be released on Wednesday, with the annual CPI expected to rise 2.4% year-on-year.
Other economic indicators to watch include US retail sales data and the Producer Price Index (PPI) report, which will help provide a more detailed picture of the inflation situation. economic calendar
Source: Investing.com
On Thursday, a number of Fed speakers, including Chairman Jerome Powell, are scheduled to speak.
A number of remarks are scheduled from Federal Reserve members this week, including a speech from Chairman Jerome Powell on Thursday.
Meanwhile, earnings season continues, and companies to watch this week include Walt Disney (NYSE:DIS), Home Depot (NYSE:HD), Cisco (NASDAQ:CSCO), Applied Materials (NASDAQ:HUGE), Shopify (NYSE:SHOP), Spotify (NYSE:SPOT), Alibaba (NYSE:BABA), etc.
Regardless of market direction, below we highlight one stock that is expected to be in demand this week and one that could be under downward pressure. This recommendation is from a short-term perspective and runs from Monday, November 11 to Friday, November 15.
Recommended stock to buy: Shopify
Shopify (NYSE:SHOP) is a top buy this week, with the e-commerce software leader expected to post another strong revenue growth and a positive outlook thanks to solid growth in key metrics.
Shopify’s earnings announcement is scheduled for Tuesday at 7 a.m. ET, and according to the options market, SHOP stock is likely to move around 14% after the announcement. After the earnings announcement last August, the stock price soared 26%. Shopify performance
Source: InvestingPro
Analysts have upgraded their profit forecasts 33 times in recent weeks, showing confidence in Shopify’s continued expansion. According to an InvestingPro survey, Wall Street expects Shopify’s adjusted earnings per share (EPS) to rise 14% to $0.27, with revenue rising 23% driven by positive merchant growth and demand for software and payment tools. It is expected to increase to more than $2.1 billion.
Shopify also offers Black Friday and Cyber Monday ((NASDAQ:MNDY)(BFCM)) has a seasonal advantage with upward momentum in the stock price. From 2016 to 2023, stock prices have risen about 7% on average in the two weeks before BFCM, showing solid performance at a time when demand for holiday shopping increases.
Shopify has plenty of upside as more merchants leverage e-commerce in preparation for the holiday shopping season.
SHOP stock closed at $87.12 on Friday, its highest closing price since Feb. 12 and up 11.8% since the beginning of the year. Currently, the Ottawa-based e-commerce company has a market capitalization of $112.5 billion. Shopify Chart
Source: Investing.com
According to InvestingPro, Shopify received a high financial strength score of close to 4.0 out of 5.0, leveraging a solid business model and strong profit growth thanks to its favorable position in the software application industry.
Recommended Sell: Occidental Petroleum
On the other hand, Occidental (NYSE:OXY) This is a highly recommended stock to sell this week due to the unpredictable energy market and oil price volatility.
The company is scheduled to release its third quarter earnings report after the market closes at 4:15 PM ET on Tuesday, and OXY stock is expected to see around 6% volatility following the earnings release, according to the options market.
Occidental’s growth prospects are becoming more complex due to uncertainties in the energy sector, and it faces the challenge of overcoming complex circumstances such as global demand and strategic changes within the industry. Occidental Performance
Source: InvestingPro
The oil and gas producer’s earnings outlook has worsened, with 16 out of 17 analysts lowering their EPS forecasts in recent weeks, reflecting difficult market conditions.
Performance is expected to reach $0.75 per share, a 36.4% decrease from the previous year, and sales are expected to decrease 4% annually to $7.1 billion. The decline comes amid volatile oil prices and controversy surrounding the global energy demand outlook.
Occidental has recently moved to strengthen its position in the sector through strategic initiatives, but near-term pressures continue to weigh on the stock. As a result, the risk of stock price underperformance appears to be greater in a situation where uncertainty in the broader market and industry-specific challenges must be overcome.
OXY stock closed at $50.53 on Friday, close to its most recent 52-week low of $49.51, hit on November 1. The stock has fallen 15.4% since 2024, and at its current valuation, the Houston, Texas-based company has a market capitalization of $47 billion. Occidental Chart
Source: Investing.com
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