Please ensure Javascript is enabled for purposes of website accessibility

3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - Oct 27, 2019 at 9:05AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Apple is one of several stocks set to make big moves over the next few trading days.

Stocks rose last week, with the S&P 500 (^GSPC 0.40%) reaching a new high and the Dow Jones Industrial Average (^DJI 0.45%) also adding to recent gains. Overall, indexes are up over 15% so far in 2019. 

Third-quarter earnings season rolls over the next few trading days, with hundreds of companies set to announce results. Below, we'll look at the metrics that could send shares of Apple (AAPL 0.63%), Dunkin' (DNKN), and Wayfair (W -0.41%) moving following their reports.

Apple's iPhone upgrade cycle

Investor enthusiasm is riding high heading into Apple's fiscal fourth-quarter report on Wednesday. Shares are well ahead of the market so far in 2019, with the recent rally reflecting lots of potentially good news for the business.

A jogger interacts with her smartwatch.

Image source: Getty Images.

That potential starts with the massive iPhone business, which appears to be in such high demand that it could persuade millions of owners of previous models to finally upgrade their smartphone tech. Apple's flagship device might even power a resurgence in sales growth for China, a key market for the business.

Beyond those iPhone metrics, investors will be watching other revenue drivers like its soaring services segment and the small but growing Apple Watch business. The latest demand trends around each of these units will determine whether CEO Tim Cook and his team project revenue growth for the crucial holiday-season quarter ahead.

Dunkin's customer traffic

Dunkin' Brands announces its third-quarter results on Thursday, and there are many reasons for investors to follow this report. The coffee and breakfast specialist in early August announced a growth slowdown, with comparable-store sales rising by less than 1% compared with 2.4% in the previous quarter. That result reflected negative customer traffic, which is a problem affecting most large fast-food restaurants in the U.S. today.

Dunkin' isn't your typical fast-food chain, though. It is rolling out major changes to its platform, including by adding espresso-based drinks and new snack products. The company also sees a huge opportunity to break out of its regional focus and establish itself as a true national competitor.

To keep investors on board with those ambitious plans, CEO David Hoffmann and his team will need to show that their menu changes are working and that they are finding plenty of good expansion spots even in areas currently dominated by rivals like Starbucks. Success on these scores will show up this week in metrics like comps, operating income growth, and customer traffic.

Wayfair's growth outlook

Wayfair investors have endured a roller coaster ride so far in 2019 as shares almost doubled before cratering back down to simply match the returns of the wider stock market. The e-commerce company has an opportunity to change that dynamic when it announces third-quarter results on Thursday.

The home furnishings specialist spooked investors three months ago by issuing a conservative outlook calling for sales gains to slow to 30% in the core U.S. market compared with 40% last quarter. Yet Wayfair has blown past its forecast in each of the last five quarters, and other metrics like shopper engagement and advertising spending all point to sustainable market share gains. Thus, it wouldn't be a shock to see executives again announce surprisingly strong sales growth on Thursday.

The bigger contributor to stock price swings this week will likely be from the tech stock's comments on the competitive picture heading into the holiday shopping season. That outlook, plus the company's updated path toward positive earnings, will determine whether shares close out the year on a strong note.

Demitrios Kalogeropoulos owns shares of Apple and Starbucks. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Apple, Dunkin' Brands Group, Starbucks, and Wayfair. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$173.19 (0.63%) $1.09
Dunkin' Brands Group, Inc. Stock Quote
Dunkin' Brands Group, Inc.
Wayfair Inc. Stock Quote
Wayfair Inc.
$68.34 (-0.41%) $0.28
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$33,912.44 (0.45%) $151.39
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,297.14 (0.40%) $16.99

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.