Hope everyone had a fantastic weekend! Time for another week of work and market fun. I’m kicking things off with another preview of the week ahead. It’s not quite as jam-packed as last week, but there are a few key earnings reports and economic reports taking place.
Alibaba (BABA) is likely going to be the big report of the week. Alibaba, a Chinese e-commerce company, is sharing its first quarterly earnings report since its IPO in September. Analysts are expecting big things out of Alibaba’s report, with estimates of 45% revenue growth.
After consideration, I purchased some Alibaba recently. I’m holding it as a long-term investment, so I’m not too concerned if it goes down after earnings. But I think there is a possibility it will go down after earnings, so I would not get in if you haven’t purchased yet.
I am worried Alibaba is too hyped up to have a big positive reactions after earnings. While I expect it to meet analyst expectations, that may not be enough to get a positive reaction. We saw a big drop even after good earnings reports with similarly hyped Facebook (FB) and Twitter (TWTR). Plus, the stock price has been increasing quite a bit up until this week, so there may not be much more room to grow. So I’d definitely consider buying, but not until after Tuesday.
Michael Kors (KORS) has tended to have very good earnings reports, and good reactions in its stock price. However, this time may be different. We saw Coach report poor North American sales last week, which were down 19% from the prior year. Since Michael Kors has a similar clientele, there’s a chance they could have been affected by similar issues this quarter.
Tuesday: Elections. Not an economic report but politics and the markets tend to have a relationship.
Wednesday: ADP’s employment report. This will tell us how many jobs were added in October.
Thursday: ECB Meeting. The European Central Bank (ECB) is the equivalent of the Federal Reserve (Fed) here. They run monetary policy for the European Union. Given the economic troubles in Europe recently, the ECB has kept interest rates low. They’re expected not to report much at this meeting, but rather stand by the moves they already made.