Weekly equities forecast: Netflix, Bank of America, Procter & Gamble

Netflix reports on April 18
Bank of America reports on April 16
Proctor & Gamble reports on April 19

Last week, the S&P500 fell just shy of 1%, with the index down almost 2% in two weeks. Hotter-than-expected US CPI data pushed back rate cut expectations, and rising geopolitical tensions in the Middle East saw investors sell out of riskier assets such as stocks and buy into safe havens such as Gold.

Earnings season kicked off on Friday with earnings from JP Morgan, Wells Fargo Group, and Citigroup. In the coming week, earnings will ramp up with numbers from Goldman Sachs, Bank of America, Netflix, TMC, and many more.

US economic data will be scarce next week, leaving earnings to take centre stage. However, geopolitics in the Middle East and Fed speakers could still impact sentiment.

Netflix Q1 earnings

Netflix will report earnings on Thursday 18^th, April.

After posting gains of over 20% across the first quarter, the market will want to see numbers that support the lofty valuations. In Q4 2023, Netflix surprised to the upside, adding 13.1 million new subscribers, well above the 8.76 million in Q3. Meanwhile, revenue rose 12% annually, but EPS was below forecasts at $2.11 due to an unrealized FX loss.

Will Netflix be able to maintain this strong growth? Slower subscriber growth is expected due to the pull-forward effect from Q4’s strong numbers. Attention will be on the efforts to curb password sharing and the impact of recent price hikes. While Netflix is ahead in the streaming war competition is intense.

The daily chart shows that Netflix and the S&P500 have started to diverge. The 20 day correlation is negative for the first time since November, although the 3-month correlation remains positive. Netflix trades above its rising trendline. Encouraging earnings could see bulls look to push the price towards $700.99 ATH. It would take a move below 595.00 for bears to gain traction, and strong support can be seen at 537.00.

Bank of America Q1 earnings

Bank of America will report on Tuesday, 16^th April.

Expectations are for EPS of $0.77 in the current quarter, which is a decline of 18% compared to the same period last year. Sales are expected to be $25.28 billion, down 3.7% annually. The earnings come after JP Morgan’s earnings on Friday, which is used as a guide, Q1 beat expectations while guidance was a touch weaker than expected. The difference between the interest a bank pays out and receives NII will be slightly lower going forward. The key takeaway is that bank shares have rallied hard across the past quarter, and the bar is high so that slight disappointment can lead to a negative reaction.

The chart shows that BAC trades in correlation with the S&P 500. The price has fallen below the rising trendline dating back to November. Sellers could watch support around 35.00 to 34.00 zone. Meanwhile, buyers could look for a rose back towards 38.00 on upbeat results.

Procter & Gamble Q3 earnings

Procter & Gamble is due to report Q3 earnings on April 19.

In the previous quarter, the consumer staple giant reported unexpectedly strong volume growth in its core markets, in the US and Europe, even after further price increases. The bellwether’s earnings are often watched closely for clues over the health of the consumer, who could be reaching their limits over what they are willing to pay for household brands. Last quarter, there were signs of robust consumer demand. However, this quarter's sales could come under pressure, with possible weaknesses in China and Middle Eastern sales. EPS is expected to rise to $1.41 on improved margins. Geographically speaking

On the daily chart, Procter and Gamble have moved approximately in line with the S&P 500. Although the share price has found support around its current level around 155, while the S&P 500 continued falling.

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