3 Things to Watch for in the Stock Market This Week

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meIt was another tough time for investors last week, as both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) shed 5%. Most of that drop came after news that inflation was still near a 40-year high, suggesting more aggressive interest rate hikes are on the way from the Federal Reserve.

However, many individual stocks outperformed, especially in the case of positive earnings announcements. With that in mind, let’s preview this week’s road reports from Kroger (New York Stock Exchange: KR), jolly (New York Stock Exchange: JBL)Y Adobe (NASDAQ:ADBE).

1. Kroger earnings outlook

Kroger stock took a hit after rival walmart (NYSE:WMT) it lowered its earnings outlook for 2022 last month, and we’ll learn on Thursday whether the supermarket chain avoided those earnings challenges.

There’s good reason to believe that Kroger can outperform its biggest rival. The chain closed the growth gap last quarter, thanks in part to excitement around its fresh produce and prepared food niches. Follow comparable store sales for signs that Kroger is gaining market share. That metric was up 3% in Walmart’s latest report.

Kroger navigated through skyrocketing costs in early 2022, and investors are hoping it can extend that positive momentum in this report with the help of its vertically integrated supply chain.

When costs rise, it helps to have your own dairy farm, trucking company, and retail network. Follow Kroger’s earnings outlook, which currently calls for a big annual earnings increase, for evidence of continued pricing power.

2. Jabil Operating Margin

Electronics manufacturing specialist Jabil is set to announce its latest earnings results on Thursday, and investors have big questions ahead of the report. The company exceeded expectations in its latest launch, which showed an 11% increase in sales. Even more impressive was Jabil’s 23% rise in earnings per share.

Follow Jabil’s operating profit margin for signs that the company continues to benefit from growing demand in the smartphone, cloud services and automotive niches. That metric was under 5% of sales last quarter, but has the potential to increase with rising prices.

jolly raised its outlook for 2022 in March, and management now sees revenue hit $32.6 billion, or about 11% more than in 2021. The big question is how its partnership with Apple you could set it up for even faster profits in the future.

3. Adobe growth rate

Despite setting new sales and cash flow records last quarter, Adobe shares have fallen since that late March report. Investors’ main concern is that growth will slow after two years of booming demand for its digital media products during the early phases of the pandemic.

That slowdown isn’t likely to threaten the long-term prospects of Adobe, which will announce fiscal second-quarter results on Thursday. In March, executives predicted sales would grow about 15% for the period, compared with a 17% rise in the first quarter.

In addition to hitting those numbers, investors are hoping Adobe can project a brighter earnings outlook over time as more businesses and consumers move creative work to its cloud services platform.

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Demitri Kalogeropoulos has positions at Apple. The Motley Fool has positions and recommends Adobe Inc. and Apple. The Motley Fool recommends the following options: $420 long calls in January 2024 at Adobe Inc., $120 long calls in March 2023 at Apple, $430 short calls in January 2024 at Adobe Inc., and $130 short calls at March 2023 at Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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