3 things to watch on the stock market this week

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Stocks fell last week as investors braced for the next wave of earnings reports from the world’s biggest companies. the Dow Jones Industrial Average (DJINDICES: ^ DJI) lost 0.3% and the S&P 500 (SNPINDEX: ^ GSPC) fell 1.9% in the first trading week of 2022.

Several well-known stocks will announce their results over the next few days. Below we’ll take a look at a few highlights from this list: Reports on the way to Delta (NYSE: DAL), Taiwan Semiconductor (NYSE: TSM), and Citigroup (NYSE: C).

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1. Delta’s passenger volume

Delta reports its fourth quarter tax results Thursday morning, and investors have big questions ahead of this report. In mid-December, the management team said it planned to reach around 90% of its passenger volume before the pandemic in 2020, on track for a full rebound by 2024. Delta is aiming for more $ 9 billion in annual cash flow by then. , too, with significant profit growth along the way.

But investors are worried about what the latest wave of COVID-19 cases could do to Delta’s fragile rebound. Adjusted profits fell into positive territory in the last quarter for the first time since 2019. However, the omicron variant likely put further pressure on this rebound in volume, even as fuel costs eat away at profits further.

Either way, look for CEO Ed Bastian and his team to highlight Delta’s progress in improving efficiency and increasing operating margin and cash flow. Success in these areas should lay the foundation for better performance as the airline industry recovers completely over the next several years.

2. Taiwan Semiconductor Outlook 2022

The semiconductor shortage has been a huge story on Wall Street over the past year as it affects so many industries. We’ll have key updates on that score on Thursday when Taiwan Semiconductor releases its results. A global industry leader, TWSC counts among its clients some of the most important growth stocks in the market, including Nvidia and Apple.

Executives said in October that fourth-quarter sales are expected to reach between $ 15.4 billion and $ 15.7 billion, and that a peak of 23% would imply progress in increasing production volumes. Investors hope this rebound will also be accompanied by significant price increases that reflect TWSC’s leadership position.

Going forward, the company is expected to benefit from strong demand for technology products through 2022. Watch for these trends to support a bullish outlook for 2022 and the current fiscal quarter – assuming TWSC does not face any major input shortages or production bottlenecks.

3. Citigroup’s rebound plan

Citigroup shares stumbled in late 2021 over fears of slower growth linked to the omicron variant. But the banking giant may have better news to announce in its Friday earnings announcement.

Strong demand in its consumer and investment banking segments allowed sales to rise 3% in the previous quarter and profits grew much faster. “The recovery from the pandemic continues to boost business and consumer confidence,” CEO Jane Fraser said three months ago, “and is creating very active customer engagement.” Investors will want to see more evidence of this recovery this week, even if the omicron variant is slowing growth in a few areas.

At the same time, Citigroup must make progress in closing its performance gap with its peers on key efficiency indicators. Fraser strives to address these issues so that the company can negotiate at prices comparable to its competitors such as JPMorgan Chase and Bank of America.

Friday’s report could show progress on that score by 2022, but shareholders are likely in a story of a multi-year turnaround for this bank stock.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Demitri Kalogeropoulos is the owner of Apple. The Motley Fool owns and recommends Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Delta Air Lines and the following options: March 2023 long calls at $ 120 on Apple and March 2023 short calls at $ 130 on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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