3 things to watch on the stock market this week

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Shares surged last week as the US presidential election neared its conclusion. Both Dow Jones Industrial Average (DJINDICES: ^ DJI) and the Indice S&P 500 (SNPINDEX: ^ GSPC) gained more than 7% over the five trading days. The Dow Jones is now roughly flat for the year, while the S&P is up 9%.

A few widely followed companies will report their results over the next few trading days, including Beyond meat (NASDAQ: BYND), McDonalds (NYSE: MCD), and DraftKings (NASDAQ: DKNG). Below, we’ll take a look at the top trends that could move the stocks of these three companies this week.

1. Competitive outlook of Beyond Meat

Investors are optimistic as the Beyond Meat earnings report approaches on Monday. The plant-based meat substitute maker reported strong sales growth at the start of the pandemic, revealing in August that second-quarter revenue had jumped 69% year-over-year, sales to retailers offsetting lower demand from chain restaurants.

Image source: Getty Images.

Since then, its growth prospects have remained impressive. Beyond Meat recently announced an expanded distribution of its core products through Walmart, for a. It has also added Beyond brand sausage links to its portfolio, which has joined plant-based sausage patties and meatballs as popular 2020 launches.

These stocks allow investors to predict continued strong sales growth throughout the year. But Beyond Meat will also face increased competition from traditional meat producers like Tyson Foods and retailers love Kroger as it seeks to maintain its first lead in this attractive food niche.

2. McDonald’s operating margin

Investors already know McDonald’s will have good operating news to report on Monday. The fast food titan said in a mid-quarter update that it had resumed sales growth in the U.S. core market in recent weeks, after falling 9% year-over-year. other in the second quarter of the fiscal year.

But this week’s report will add important context to that revenue figure, including the split between customer traffic, which has fallen, and average order spend, which is increasing.

Meanwhile, Starbucks said in late October that profitability had plummeted due to the shift in demand towards delivery services and the aggressive use of promotions to keep customers engaged with the brand while staying closer to home. McDonald’s will likely announce similar margin pressures in anticipation of a potential full-growth rebound in late 2020 or early 2021.

3. Trends in demand for DraftKings

Investors took a roller coaster ride with DraftKings stock ahead of Friday’s earnings report. Volatility is likely to continue for this unproven discretionary consumer stock.

In addition to the share price soaring for most of the year, major investor concerns include a surprising drop in viewership for sporting events in recent months and the possibility of further event breaks in due to COVID-19 outbreaks. And the activity of DraftKings would be strongly affected by a recession, if we were to impose ourselves on the American market.

Executives won’t have much clarity to offer on the broader economic environment on Friday, but seek out CEO Jason Robins and his team to explain how they view the demand for sports viewing and the growing market access, which impact the business in early 2021. Management is also expected to inform investors of their plans to use the cash they have raised through a recent stock offering as part of DraftKings’ overall strategy to to build a profitable sports betting business.



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