MarketBeat Week in Review – 7/17 - 7/21

Key Points

• Investors continue to climb the wall of worry as earnings reports are coming in better than expected.  
• However, economic data continues to point to a weakening economy.  
• All eyes now turn to the Federal Reserve which is expected to increase interest rates by 25 basis points on July 26. 
• Here are some of the most popular articles from this week. 

Investors face a moment where the irresistible force may soon meet the immovable object. Bullish momentum continues to drive the indexes higher. Case in point, 75% of the companies that have reported earnings have beaten expectations. That’s a relatively small sample size, but at a time when an earnings recession is being predicted, it’s impossible to ignore.  

However, investors shouldn’t quickly dismiss economic data that continues to be negative. The index of leading economic indicators and the Philly Fed manufacturing survey out this week both point to a recession.  

Next week, the earnings season really picks up steam. Investors will hear from Microsoft Corporation NASDAQ: MSFT, Meta Platforms, Inc. NASDAQ: META, and Alphabet Inc. NASDAQ: GOOGL among others. And the Federal Reserve will almost assuredly raise interest rates by 25 basis points when it meets next week.  

That’s a lot of news that can move markets, and the MarketBeat team will be on top of all of it to help you make the right decisions for your portfolio. Here are some of the most popular articles from this week.  

Articles by Jea Yu 

The intersection of AI and biotech may be a blockbuster for investors. And as Jea Yu writes, this week’s announcement by Nvidia Corporation NASDAQ: NVDA of its $50 million investment in Recursion Pharmaceuticals, Inc. NASDAQ: RXRX may be the beginning of what is likely to be more profitable pairings in the two sectors.  

And speaking of biotech partnerships, Yu explains how two key partnerships are likely to boost the stock of OPKO Health Inc. NASDAQ: OPK. The company recently received FDA approval of NGELA, a long-acting medicine for treating growth hormone deficiency in children that it has been developing as part of a partnership with Pfizer, inc. NYSE: PFE. 

Jea Yu helped investors understand the significance of the special rebalancing which the Nasdaq 100 will do after the markets close on July 21. This will reduce the overconcentration of the index on its most heavily weighted stocks. As Yu writes, the index rebalances every quarter, but this special rebalancing was triggered by the recent run-up in Tesla, Inc. NASDAQ: TSLA stock.  

Articles by Thomas Hughes 

Apple, Inc. NASDAQ: AAPL is one of the “Magnificent 7” stocks that has led the rally in 2023. And although it’s due for some reweighting, Thomas Hughes gives investors four reasons why the tech giant may be ready to power up to new highs. That’s in contrast to Tesla, Inc. NASDAQ: TSLA which Hughes believes has topped and may be ready for a correction even after reporting solid earnings.  

Investors still can’t seem to get enough of EV startups. The flavor of this week, at least, was GreenPower Motor Company, Inc. NASDAQ: GP which moved up sharply after reporting better-than-expected earnings. Hughes explains why the stock may have nowhere to go but up.  

If you’re looking for a safer stock in the midst of all this volatility, Hughes recommends Johnson & Johnson NYSE: JNJ which is at an inflection point that may support a breakout opportunity for this dividend king. 

Articles by Sam Quirke 

Sam Quirke had his eye on value this week and offered one large-cap and one small-cap for investors to consider. The big banks are finished reporting for the quarter, and while all eyes are on some of the usual suspects, Quirke suggests investors look at the stock of this hidden gem that is performing just as well but with a smaller market cap. 

Turning to the semiconductor space, Quirke put Cohu, Inc. NASDAQ: COHU on the radar of investors. The chipmaker’s stock is up 30% in 2023, but Quirke explains why this inexpensive chipmaker stock may have more upside ahead. 

Another small-cap stock that has recently taken flight (pun intended) is Joby Aviation, Inc. NYSE: JOBY. After outperforming for much of the year, JOBY stock has been in a tailspin. But Quirke explains why a recent downgrade may present an opportunity.  

Articles by Chris Markoch 

Dividend stocks can be less attractive in a risk-on market. However, Chris Markoch explains why investors shouldn’t give up on dividend stocks so soon and offered three dividend stocks that continue to offer good value for investors. 

Markoch was also identifying an opportunity that could be presenting itself for three mid-cap stocks. These stocks typically offer investors a compelling middle ground between large- and small-cap stocks. And when these stocks get upgraded by analysts as these three stocks do, it could set up a nice opportunity for investors. 

And as the market sentiment turns more risk-on, penny stocks become more attractive to speculative investors. Markoch gave investors two penny stocks that appear to be buying opportunities and one that investors should continue to avoid.  

Articles by Kate Stalter  

Investors hoping for a shallow recovery were dealt another blow when housing starts came in lower than expected. And with interest rates expected to go up next week, Kate Stalter wrote about why investors have to be cautious if considering investing in homebuilding stocks.   

Stalter offered investors a more bullish outlook on Celsius Holdings, Inc. NASDAQ: CELH. The energy drink providers is outperforming a key rival and is expected to beat on earnings when it reports earnings in August. And as Stalter notes, the stock recently pulled back into a buy zone. 

And Stalter explained how the recent rally in Uber Technologies Inc. NASDAQ: UBER may continue to have legs after an analyst upgrade. The stock recently hit a two-year high despite an ongoing legal battle in California that continues to be a headwind for UBER stock. 

Articles by Ryan Hasson 

Ryan Hasson was helping investors understand the recent price action with Unity Software, Inc. NYSE: U. The stock was outpacing the NASDAQ with a 55% gain in 2023 before a recent pullback. Hasson explains why the stock chart is offering mixed signals and suggests investors look at other metrics to size up the opportunity.  

Hasson sees a clearer technical outlook for Hewlett Packard Enterprise Company NYSE: HPE. The chart is showing a likely breakout if the stock can get past a key area of resistance.  

And while cryptocurrency is not for every investor, Hasson explains why the recent price action in Bitcoin CCC: BTC may create an opportunity for risk-tolerant investors. Although the price of these two crypto stocks is highly sensitive to the price movement of Bitcoin, they are up over 400% and could have further to run. 

Articles by Gabriel Osorio-Mazilli 

Now that bank earnings are in the books; it’s time to assess winners and losers. Gabriel Osorio-Mazilli looked at the earnings report for Wells Fargo & Company NYSE: WFC and explains why the company’s earnings report may be the catalyst WFC stock needs to break out of a year-long sideways pattern.  

Osorio-Mazilli also wrote about the pullback in American Airlines Group, Inc. NASDAQ: AAL despite a bullish earnings report. As Osorio-Mazilli explains why seemingly contradictory price action like this can be an opportunity for momentum investors to buy AAL stock before it takes the next leg higher.  

Osorio-Mazilli was also looking at the geopolitical concerns that hang, perhaps uniquely, over Taiwan Semiconductor Manufacturing NYSE: TSM. The company faces the same cyclical issues as other chip makers. However, its proximity to China and concerns over a possible invasion of Taiwan add extra risk and potentially an opportunity for clever value investors.  

Articles by MarketBeat Staff 

The MarketBeat staff was looking at Canoo, Inc. NASDAQ: GOEV. It’s been a difficult year for the EV start-up. However, recent contracts with the United States Department of Defense and NASA may offer speculative investors an opportunity to buy the news on GOEV stock.  

Acumen Pharmaceuticals, Inc. NASDAQ: ABOS is another speculative stock that risk-tolerant investors may want to consider. Many biopharmaceutical companies are developing drugs and therapeutics to combat Alzheimer’s disease. And ABOS stock spiked after recent news about positive Phase 1 trial results. Now investors have to decide if the gains will hold.

For investors looking for more of a sure thing, the staff explained the opportunity for The Hershey Company NYSE: HSY. Despite posting stellar earnings last quarter along with raising its guidance, HSY stock is down 10% from its high in May. However, the fundamentals show that investors are missing the value that’s present in HSY stock which presents a sweet buying opportunity.