3 Things to Watch in Markets This Week

3 Things to Watch in Markets This Week

Stocks rose last week as they moved into positive territory under the Dow Jones Industrial Average (DJINDICES: ^ DJI) and S&P 500 (SNPINDEX: ^ SPX). Just a few days before the second half of 2020, Dow was 9% behind, while S&P fell only 2%. Both indices fell more than 30% at the end of March. The big picture of economic growth and COVID-19 outbreaks will be on the headlines for the next few days, but the earnings period is also on the rise. So, this week we can take a closer look at PepsiCo (NYSE: PEP), Netflix (NASDAQ: NFLX) and Domino's (NYSE: DPZ) shares.

Pepsi's Cash Flow

Pepsi's recent operation update only covered the period ending on March 21, so investors will review Monday's report to learn how the COVID-19 outbreak affected its global business by June. Drinks sales were damaged due to the drop in demand for entertainment and restaurants. Competitor Coca-Cola (NYSE: KO) said that the amount of drinks dropped 25% in April due to the cancellation of sports events and concerts. Pepsi's snack business helps offset this decline thanks to the increasing demand in supermarket chains and markets. Overall, investors expect sales to decrease by about 6% in the second quarter to $ 15.4 billion. Management's comments on its subsequent recovery will be key to monitoring this week. In 2020, all kinds of updates will take place, including the thought of paying over $ 7 billion through dividends and stock repurchases.

Netflix's Subscriber Trend

Netflix surpassed the $ 500 per share barrier last week as investors are even more optimistic about the video leaders' growth prospects. Three months ago, CEO Reed Hastings and his team tried to lower expectations on the first quarter earnings report, which included 16 million new subscribers. As the governments around the world began to abolish orders to stay home, management predicted 7.5 million slower growth in the second quarter. However, his estimates were that he was unusually high. "This is mostly an estimate. Actual subscriber numbers can be well below or above this, depending on many factors," Hastings said. Managers will repeat estimates that TV consumption will decrease, as people now prioritize entertainment outside the home. In any case, we can expect Netflix to rely on its forecast for improving cash flow trends in 2020 and beyond.

Domino's Market

Domino's has been one of the best performing stocks in the fast food business because its delivery-oriented sales approach has been tailored specifically for the current sales environment. Consumers flocked to Dominos' eligible offers during the epidemic days when most restaurants were closed. The chain announced that similar store sales increased by more than 20% in late April and early May. CEO Richard Allison warned investors in May that these trends cannot change in the coming weeks and months, which means there are a wide range of potential sales figures that Dominos can report on Thursday. Dominos took part in a nearly unbroken 10-year streak in this arena, but rivals inside and outside the pizza niche are doing their best to stop this positive momentum.