The Daily Breakdown takes a closer look at the week ahead, which has plenty of jobs-related data set to drop. Oh, and a few earnings too.
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Monday’s TLDR
- This week is all about jobs
- Costco jumps on earnings
- A few key earnings remain
Weekly Outlook
Today is the first trading session of June, as markets wrap up a pretty good month in May. The S&P 500 gained 4%, the Nasdaq 100 climbed 6.2% and even Bitcoin jumped over 10% and hit a new record high.
As we turn our attention to the new month, one thing stands out this week: Jobs.
On Tuesday, we’ll get the JOLTS report — the Job Openings and Labor Turnover Survey — which shows us whether the number of job openings expanded or contracted last month. Bulls are looking for an expansion.
Then on Thursday we’ll get the weekly jobless claims report.
This number actually jumped up to 240,000 last week and has been quietly inching higher. While not the most focused-on labor report, it’s considered a leading indicator in the jobs data. Bulls don’t want to see this figure — which has been hovering between 215K and 240K over the past year — gain momentum.
Lastly, on Friday we’ll have the monthly jobs report. This will tell us the updated unemployment rate (currently 4.2%) and shed light on how many jobs were added or lost last month. Currently, economists expect 142K jobs were added. This is generally considered to be the most important jobs report of the month.
On the earnings front, these names stick out to me this week: Nio, Dollar General, Dollar Tree, Crowdstrike, Lululemon Athletica, and Broadcom.
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The Setup — Johnson & Johnson
Far from being the fastest-growth stock out there, Johnson & Johnson is a steady blue-chip consumer healthcare stock.
Some fundamental observations include a 3.4% dividend yield and an annual dividend that the company has not only paid but has raised for 63 consecutive years. Analysts currently expect about 6.3% earnings growth this year, followed by almost 5% growth in 2026.
Not blistering growth by any means, but at the current valuation, fundamental investors are taking a closer look. Over the last 10 years, JNJ’s forward price-to-earnings ratio has sat between 13.5 and nearly 20. Currently trading at 14.5 times this year’s earnings estimates, it’s on the low end of the range and cheap relative to its valuation of the last 10 years.
Technically speaking, J&J has hit resistance in the upper $160s, but lately, has found support near $146 to $148. Now clearing downtrend resistance (the blue line), bulls are hoping that JNJ can find some momentum — and if it does, there’s some hope that it can charge back up toward the larger resistance area near $168.
On the downside, a break back below downtrend resistance could negate the technical breakout from Friday, putting recent support in the $146 to $148 area back in play.
Options
For some investors, options could be one alternative to speculate on JNJ. Remember, the risk for options buyers is tied to the premium paid for the option — and losing the premium is the full risk.
Bulls can utilize calls or call spreads to speculate on further upside, while bears can use puts or put spreads to speculate on the gains fizzling out and JNJ rolling over.
For those looking to learn more about options, consider visiting the eToro Academy
What Wall Street is Watching.
Shares of Costco jumped over 3% on Friday on the heels of better-than-expected quarterly results. Earnings of $4.28 a share inched past expectations, while revenue of $63.2 billion was mostly in-line with estimates although just shy of the consensus. Still, investors found comfort in the results, bidding shares higher during what turned out to be a tough market session.
At one point, Nvidia stock was up more than 9% last week as shares rose on earnings. But as trade tensions and uncertainty came back into the conversation, the stock’s weekly gain was chiseled down to about 3%. Investors will be looking for direction from NVDA — which has rallied in five of the last six weeks — as we enter the last month of Q2. Check out the chart for Nvidia.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.