Three numbers to start your day:
Advanced Micro Devices is Expected to Report 31 Cents
—in adjusted earnings per share. That would be a big jump from last year—almost 300%. The chipmaker will announce its fourth-quarter results after the close of trading today, and it sure looks as if investors are optimistic. Advanced Micro Devices (AMD) was the best-performing stock in the S&P 500 last year, and it’s up almost 8% so far this year.
(INTC) had a blowout quarter, though, and it isn’t clear whether that bodes well for AMD. On one hand, Intel’s strong quarter might be the result of stronger demand for processors in general—which is good for both companies. On the other hand, it could also be a sign that AMD isn’t taking much market share away from Intel. We’ll know more later today.
The S&P 500 Fell 1.6% on Monday
It was the biggest single-day decline for the benchmark stock index since October.
Stocks sold off because investors are worrying that a deadly Coronavirus outbreak in China could spread—and hurt global economic activity. Oil prices also fell sharply on Monday, down around 2%.
Wondering what’s next for markets? Well that depends on how bad the outbreak becomes. One question is whether global travel will grind to a halt; that’s why stocks of companies that operate airlines, cruises, and hotels got hit the worst on Monday.
It’s still too early to tell just how serious the outbreak will be. It’s also important to consider that stocks hit new all-time highs just one week ago. And with those lofty valuations, it doesn’t take much to scare investors away.
Stock has Rallied 5.2% So Far This Year
The tech giant reports quarterly results today after the close—and expectations are high. Wall Street analysts are forecasting that the company’s fourth-quarter earnings per share rose 9% from last year. They think sales grew 5%. The company’s services business is expected to do well; same with its iPhone 11 and AirPods. And analysts are upbeat about the outlook for a line of 5G phones that Apple (AAPL) is expected to unveil later this year.
But there’s no guarantee that Apple stock will keep rallying this way. Chip prices are rising, and the future of trade between the U.S. and China remains uncertain—even after the latest progress. If tariffs are introduced on iPhones and parts that Apple gets from China, that could dent the company’s profitability.
Numbers by Barron’s is our daily podcast. Find out more here.
Write to today’s host Alexandra Scaggs at firstname.lastname@example.org