Travel stocks could headline this week’s flood of earnings reports, say two traders.
The second week of higher earnings season activity will see companies in a mass of industries release their quarterly results. Twenty-eight percent of the S&P 500 is expected to report.
Uber, Take-Two Interactive, Square, Eli Lilly, Beyond Meat, General Motors, Alibaba, Booking.com and DraftKings are just a few of the names they report.
A trader has his eye on Marriott International, which reports Tuesday before the bell.
“This will be a great indication of how the reopening trade has really gone and whether this delta variant is really starting to influence late summer travel plans,” Craig Johnson, senior technical research analyst at Piper Sandler, said. he told CNBC’s “Trading Nation” on Friday.
The stock is in a strong position in the report, Johnson added.
“You can see a lot of optimism if it is implemented,” the paper’s analyst said. “You can see the beautiful reversal of the downward trend that has taken place. You can see how the shares have returned to their 200-day moving average. [and] he gathered from there. “
With the options market implying a 4% higher or lower move for stocks after the gain – historically moving around 2.7% – the stock could predict what is ahead for exchange reopening similarly, Johnson said.
“This will be a key stock to understanding what the reopening is [how] the feeling changes with the delta variant and the travelers, ”he said.
Although gains have far exceeded expectations for many metrics, travel, entertainment and food stocks are still worth keeping in the midst of concerns around the delta variant, said Steve Chiavarone of Federated Hermes.
With the Centers for Disease Control and Prevention tightening up the mask’s guidance, “is that going to impact behavior or are consumers going to push for it?” Chiavarone, portfolio manager, capital strategist and vice president of his company, said in the same interview “Trading Nation”.
“When we think about some of the guidance coming from these companies in the next week, here’s what we’re going to look at very acutely,” he said.
You can also take advantage of returns if opportunities arise.
“There might be a bit of weakness and we’re looking to buy,” Chiavarone said. “I don’t know if we’ll do it right away, but we’d definitely put those names on our shopping list.”