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3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - Dec 15, 2019 at 7:38PM

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

Stocks rose last week, as both the S&P 500 (^GSPC 2.47%) and the Dow Jones Industrial Average (^DJI 1.76%) gained less than 0.25%. That left both indexes in sharply positive territory, up more than 20% with just a few trading days left in 2019.

Earnings results will continue pulling investors' attention in the week ahead, and below, we'll look at the metrics that could send shares of Nike (NKE 2.70%)CarMax (KMX 1.14%), and Winnebago (WGO 0.94%) moving over the next few days.

Inside a busy shopping mall.

Image source: Getty Images.

Nike's holiday outlook

Investors are optimistic heading into Nike's second-quarter report on Friday. The footwear giant kicked off its fiscal year in strong fashion back in September, after all, with sales gains and profits each beating management's targets.

This week, investors will be looking for signs that the growth stock still has momentum on its side in the U.S. and in China, which accounted for a full quarter, or $1 billion, of its global sales gains in the prior fiscal year. Wins in these two markets will help determine if the retailer can log its third straight year of accelerating growth in fiscal 2020.

Expect CEO Mark Parker and his team to stress the company's innovation pipeline in this week's report, since those releases support long-term growth. Yet investors will likely be most interested in hearing Nike's updated outlook for the current quarter, which will be informed by data from the recent Black Friday and Cyber Monday promotions.

CarMax's online spending

Wall Street has pushed shares of CarMax higher in recent months, and that rally sets the stage for a potentially volatile week ahead. The used-car retailer is enjoying far better returns than new-car manufacturers thanks to its positive track record of sales growth and steady profitability through a wide range of selling conditions. Sales last quarter rose 3% as rising e-commerce demand offset a small drop in customer traffic at its lots.

Investors are excited about CarMax's potential to use its national store network as a competitive advantage as car buying moves online. Yet while this shift could begin seriously lifting results in 2020, this week's report will largely include costs from the digital rollout. Executives told investors that CarMax is still in the process of learning and creating efficiencies in this new selling channel, so it could be a few more quarters before it's clear how the online shift is impacting core metrics like sales growth and profitability.

Winnebago's market share

Winnebago also posts its results on Friday, and investors have a few reasons to expect good news from the company this week. The RV giant outperformed a slumping industry in fiscal 2019, including showing surprising strength in the most recent quarter. CEO Michael Happe noted several positive trends lifting the business back in October, too, including slim dealership inventories, robust demand for towables, and attractive new revenue streams in the boating segment. We'll find out on Friday whether that momentum carried over into the new fiscal year.

Investors will likely stack Winnebago's results up against those of rival Thor Industries to judge market share and broader industry trends. For its part, Thor said in early December that sales declines were "modest" in the U.S. market and that RV shoppers are tilting their spending toward lower-priced models. Winnebago is expected to sail past those challenges, with most investors who follow the stock predicting revenue will rise by 11% this year, to $539 million.

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Stocks Mentioned

NIKE, Inc. Stock Quote
NIKE, Inc.
NKE
$115.99 (2.70%) $3.05
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,212.96 (1.76%) $575.77
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,158.24 (2.47%) $100.40
Winnebago Industries, Inc. Stock Quote
Winnebago Industries, Inc.
WGO
$49.51 (0.94%) $0.46
CarMax Inc. Stock Quote
CarMax Inc.
KMX
$100.29 (1.14%) $1.13

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

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