This week will either break the sluggish market’s back, or recharge the bulls. It’s that simple.
In the very early going, investors look to be hoping for the best. Dow Jones Industrial Average futures popped 43 points as of 6:42 p.m. on Sunday. S&P 500 futures rose slightly, while Nasdaq Composite futures gained 13 points.
Here’s what’s on tap in the week ahead.
T-Mobile and Sprint Will Try to Merge, Take on Verizon and AT&T
Sprint investors will receive 0.10256 shares of T-Mobile for each share of Sprint. Based on T-Mobile’s close at $64.52 on Friday, the deal values Sprint at $6.62 per share. Including assumed debt, the deal values Sprint at about $59 billon.
T-Mobile CEO John Legere, who will lead the post-merger company, called the deal “one of the worst-kept secrets out there” in a call with investors on Sunday afternoon.
“These companies just make sense together,” Legere said, predicting that the merged companies will disrupt 5G wireless services as video broadband and wireless industries converge.
Deutsche Telekom will hold 42% of the equity, with Softbank (SFTBY) owning 27% and the remaining 31% to be held by public investors.
Full analysis of the transaction via TheStreet’s Chris Nolter here.
Earnings Season Continues
There are 1,138 publicly traded companies scheduled to report earnings the week of Monday, April 30 through Friday, May 4. These are the highlights.
On Monday, McDonald’s Corp. (MCD) will report before the market open. Chipotle’s comeback quarter raised the bar for McDonald’s results. T-Mobile U.S. Inc. (TMUS) will also report Monday amid rumors it’s nearing a merger with Sprint (S) .
For Tuesday, the big earnings focus will be on Action Alerts Plus holding Apple Inc. (AAPL) , expected to report after the market close. Analysts polled by FactSet forecast Apple will report $2.69 in earnings per share on revenue of $61.2 billion.
The Apple bears are forgetting about how much cash the company has, says TheStreet.
Others on Wall Street agree.
“We think AAPL’s solid free cash flow (FCF) and $163 billion net cash balance will result in a meaningful step-up in capital allocation next quarter. AAPL is likely to maintain a mix between buyback & dividends while keeping some cash for possible deals. AAPL could target incremental $25 billion + buybacks (above repurchases using FCF), implying total share reduction over the next 5 years could be ~1.6 million shares (31% share reduction in total, ~7% annually),” says RBC Capital Markets analyst Amit Daryanani.
On Wednesday, CVS Health Corp. (CVS) and Humana Inc. (HUM) will report before the market opens, but the real action will come after the closing bell. Earnings are expected then from Spotify Technology (SPOT) , Square Inc. (SQ) and Tesla Inc. (TSLA) . Tesla will likely take the spotlight – analysts expect the electric car manufacturer to report a loss of $3.53 per share on sales totaling $3.27 billion.
Short-sellers are making a mistake on Tesla, says TheStreet’s Tesla expert Jonas Elmerraji.
Economic Calendar in Focus With Jobs, Fed Stats
The Federal Reserve’s Open Market Committee will meet this coming week and announce their decision on interest rates at 2 p.m. ET on Wednesday, May 2. Economists expect the Fed will keep interest rates at current levels with a target upper bound of 1.75%.
Also on the economic calendar this week is the U.S. trade balance for March. Economists expect the balance reached negative $56.1 billion, a small contraction from the previous month’s negative $57.6 billion.
The end-of-week highlight will be the April jobs report, due at 8:30 a.m. ET Friday, May 4. FactSet expects the U.S. economy added 193,500 jobs in April, which would be an increase from the 103,000 non-farm jobs added in March. Economists expect hourly earnings in April to have risen 0.3%, in line with the previous month. The unemployment rate is forecast to drop to 4%, down from the 4.1% rate at which unemployment has hovered for several months.
Trump to Send Reps to China
President Donald Trump is expected to send a delegation of some of his top economic advisors to China in the coming week in an attempt to settle ongoing trade disputes. Among the envoy are Treasury Secretary Steven Mnuchin, Trade Representative Robert Lighthizer, White House Trade Adviser Peter Navarro and National Economic Council Director Larry Kudlow. The team is expected to touch down in Beijing Wednesday or Thursday.
This could be the first move in steadying the recently-rocky trade relationship between the U.S. and China. The two countries have sparred in the last few weeks, exchanging a slew of tariffs worth many billions of dollars against one another.
Jim Cramer’s Investing Boot Camp
Just because markets are closed doesn’t mean investing stops.
TheStreet’s Founder and Action Alerts PLUS Portfolio Manager Jim Cramer will not be taking the weekend off, either. He’s hosting a conference Saturday, May 5, titled “How to Diversify Your Portfolio: A Boot Camp for Investors.” The all-day event in New York will help eager investors gain the right tools to traverse volatile markets with insightful commentary from experts on a range of topics from alternative investments to summer strategies, risk-taking to wealth management.
Cramer will also sit down for an exclusive interview with PayPal (PYPL) CEO Dan Schulman to discuss the future of technology and innovation. Don’t miss the event – get more information and sign up here.