22 – 26 Nov | Zoom, Fashion Industry, and Black Friday

Caution may be in order this week, as a wave of partial lockdowns sweeps across parts of Europe. These new restrictions may even dampen the economy. On the other hand, the strong corporate earnings this quarter have helped offset the uncertainty in the stock market. So, how should you approach your week ahead? Let’s take a look at what’s coming up.

Will Zoom continue its growth?

Zoom will report its earnings on Monday, November 22nd. Since the first lockdown in March 2020, the US video call company has been an essential part of our lives, and the stock grew 422% by the end of 2020. Zoom also hit its first billion in revenue last quarter.

After reaching something of a climax, it seems that Zoom is now returning to a more moderate level of growth. Earnings per share (EPS) is expected to hover around $1.09, up 10% year-over-year. Net sales could reach $1.02 billion, which is still up 31% on last year.

Beyond the results, Zoom is expanding its business with a new cloud platform called Zoom Phone. Analysts believe this could counter the slowdown in growth from the main business.

Sector to watch this week: fashion

After a sluggish 2020, the fashion industry is up 59% so far this year, outperforming the S&P 500 considerably. Among the most promising companies is Urban Outfitters, which will publish its quarterly results on Monday, November 22nd. Shares are already up 20% year-over-year, boosted by an exceptional second quarter. Can they do it again this time? The company’s revenue is expected to increase 13% over the last two years. In addition, Urban Outfitters is focusing heavily on e-commerce to diversify its sales channels.

Competitor American Eagle Outfitters will also reveal its figures this week, on Tuesday, November 23rd. The clothing chain recently saw its share price rise by 13% after announcing the acquisition of Quiet Logistics. Sales this quarter could reach $1.27 billion, up 19.4% year-over-year.

Finally, we’ll get figures from Nordstrom that same Tuesday. Despite a decline in share price over the recent months, the clothing giant could post solid growth with higher revenue. Indeed, sales are expected to more than double compared to the third quarter of 2020. Nordstrom has therefore raised its outlook for the year like many of its competitors (Macy’s and Kohl’s).

What direction for the PMIs?

France, Germany, the United States and the eurozone all have one thing in common this week: on Tuesday, November 23rd, they publish their Purchasing Manager’s Manufacturing and Services Index (PMI) for the month of November.

The PMI is a measure of activity in the manufacturing industry as well as the services industry. Together they provide a better overview of GDP growth. The final PMI data for October was particularly disappointing, reaching its lowest level since February. The problem here is supply chain disruptions which could again have a detrimental effect on the month of November.

You should therefore monitor the PMI data closely since they contain precise figures about the underlying economy. They can influence the European and American markets, and have an impact on your portfolio.

Black Friday is coming

This Friday, November 26th, online sales could explode due to Black Friday. This could be a good opportunity to watch e-commerce stocks like Amazon and eBay.

Economic and earnings calendar

Monday – Trade balance in Spain (September). Flash index of consumer confidence in the eurozone (October). Quarterly figures from Zoom, Trigano, Urban Outfitters, Prosus.

Tuesday – Flash manufacturing and services PMI index in the eurozone, Germany, France and the United States (November). Quarterly figures from HP Inc, Best Buy, Analog Devices, Ackermans van Haaren, American Eagle Outfitters, Gamestop, Nordstrom, Greenyard, Abercrombie.

Wednesday – Unemployment rate in the United States. FOMC minutes. Quarterly figures from Elior, Pinduoduo.

Thursday – Final GDP in Germany (Q3). Unemployment rate in France (October). Quarterly figures from Remy Cointreau, Laurent-Perrier.

Friday – Consumer confidence index in France (November). Black Friday.

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

This BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.