Investors faced a stormy week on Wall Street as the market swooped into a correction territory amidst concerns of an impending recession after a lackluster July jobs report. The leading benchmark and blue-chip indices both stumbled by 2.1%, while the Nasdaq Composite plummeted by 3.4%.
Looking ahead, the economic calendar remains relatively light, with the focus poised on the release of jobless claims figures and insights from Federal Reserve district governors, Mary Daly and Tom Barkin. On the earnings front, the week promises updates from industry giants like Walt Disney, Etsy, Palantir, Uber, and more.
High-Flyer: Eli Lilly
Eli Lilly emerges as a beacon amidst the market turmoil, poised for a strong showing buoyed by robust sales of its diabetes and obesity treatments. The pharmaceutical giant, headquartered in Indianapolis, Indiana, looks set to unveil another quarter of impressive financial growth with a positive outlook.
Investors anticipate Eli Lilly’s earnings report before markets open on Thursday, with expectations triggering an 8% potential swing in stock prices as per options market data. Analysts’ revised forecasts project a notable 31.3% surge in earnings per share to $2.77 compared to the same period last year.
Key products like Mounjaro continue to fuel Lilly’s success, propelling revenue projections up by 20.2% to $9.99 billion. Additionally, attention will be on developments in the company’s pipeline, notably the progress of its Alzheimer’s treatment Donanemab.
Teetering near its all-time high, Eli Lilly’s stock reflects its robust financial standing, with a valuation of $724 billion. The company has been a stellar performer in the market, up by 38% in 2024, a testament to its strong sales growth and financial health.
In a Funk: Walt Disney
Conversely, Walt Disney paints a somber picture as it braces for a challenging week ahead, weighed down by lackluster performance in its streaming and TV businesses. The entertainment giant from Burbank, California faces headwinds in its streaming segment and theme park operations.
Projections for Disney’s fiscal third-quarter earnings hint at a 15.5% increase in EPS to $1.19 but with revenue edging up by only 3.3% to $23.1 billion. With streaming subscriber numbers at stake, Disney’s post-earnings call will likely address concerns around sluggish growth in Disney+ and ESPN+.
Closing near a four-year low, Disney’s stock struggles reflect a larger trend of underperformance in 2024, down by 1% year-to-date. The challenges such as slowing streaming growth, theme park disruptions, and box office setbacks pose significant hurdles for the entertainment titan.
An insightful investor must navigate these turbulent waters carefully, with Eli Lilly shining bright in a sea of uncertainty while Walt Disney braces for rough seas ahead.
