Buy 1 stock, sell 1 stock at market open: Alibaba, Best Buy

Stocks on Wall Street ended mixed in volatile trading on Friday, with the benchmark briefly slipping into bear market territory amid worries about a surge, the economy and rising interest rates.

The benchmark S&P 500 and the tech-heavy index fell for a seventh straight week, their longest losing streak since 2001.

During the Great Depression, blue-chip stocks fell for an eighth straight week, the longest decline since 1932.

S&P, Dow Jones, Nasdaq Charts

Expect another busy week ahead, with gains from NVIDIA (NASDAQ:), Zoom Video (NASDAQ:), and retailers like Costco (NASDAQ:), Macy’s (NYSE:), Nordstrom (NYSE:) and more. Increase, and USD Generic (NYSE: ).

Aside from earnings, the bright spot on the economic calendar will be the latest data, which includes the Fed’s preferred measure of inflation.

Regardless of which direction the market is headed, we’ve highlighted below one stock that may be in demand and the other that may fall further.

But remember, our schedule is only for the upcoming week.

Stocks to buy: Alibaba

Shares in China’s largest e-retail giant Alibaba Group Holding Ltd (NYSE: ) are near their lowest levels since spring 2017, buying in the coming days as one of China’s most valuable tech companies prepares to release its latest news Activities may increase financial results.

Consensus estimates call for the Hangzhou, China-based tech giant (sometimes referred to as “China’s Amazon”) to announce earnings per share of 7.17 yen ($1.07) for the first three months of 2022, down 30.5 percent from 10.32 yen per share % ($1.54) last year.

Revenue is expected to rise 6.4% to 199.48 billion yen ($29.8 billion) Investment Professional+.

The results will be released on Thursday, May 26 before the US market opens.

Alibaba earnings

Source: InvestingPro+

If confirmed, it would mark Alibaba’s slowest quarterly sales growth since going public in 2014, reflecting a year-long tech crackdown in Beijing, (NASDAQ: ), Pinduoduo (NASDAQ: NASDAQ ) The negative impact of increased competition from companies such as DAK: ) and ByteDance, as well as lingering COVID-related macroeconomic headwinds.

Perhaps more importantly, investors will be eager to hear Alibaba CEO Zhang Yong comment on the outlook for the next few months amid recent signs that anti-tech regulations in China may be loosening.

Chinese authorities began a wide-ranging regulatory crackdown in late 2020 aimed at curbing its strong tech industry and booming platform economy, including imposing hefty fines and launching numerous antitrust investigations.

BABA daily chart

BABA has gained about 19% since falling to a six-year low of $73.28 on March 15. It closed at $86.79 on Friday. The e-commerce and cloud computing giant is currently valued at $233.2 billion.

Despite the recent rebound, Alibaba stock is down 27% so far this year and is about 73% below its record high of $319.32 set in October 2020.

Analysts remain bullish on Alibaba stock. At a fair value of $144.16 per share, quantitative model The InvestingPro+ index rose 66% from Friday’s close as investors assessed lower risks associated with a regulatory crackdown.

BABA fair value estimate

BABA fair value estimate

Source: InvestingPro+

Stock Dumping: Best Buy

Best Buy (NYSE: ) stock fell more than 16% last week to its lowest level since April 2020, as investors braced for disappointing financial results and weak guidance from one of the largest U.S. tech gadget retailers , the company is expected to suffer another turbulent week.

according to Analysts at InvestingPro+ forecast earnings to drop 29.1% year over year to $1.58 a share when the consumer electronics chain reports its first-quarter results before the market opens on Tuesday, May 24.

In the current environment, sales are expected to fall by about 10% year over year to $10.46 billion as shoppers spend less on TVs, tablets, computers and other non-essentials and shift more to essential needs and services Dollar.

BBY Earnings

Source: InvestingPro+

As a result, investors will be closely watching Best Buy’s domestic same-store sales growth, which fell 2.3% in the last quarter.

In addition to the top and bottom line numbers, Best Buy’s profit and sales guidance will come under scrutiny in the coming months as the retailer grapples with soaring inflation pressures, higher fuel and shipping costs and supply chain disruptions.

Executives’ comments on the health of the economy and the U.S. consumer will also be in focus on Best Buy’s earnings call, after downbeat comments from Best Buy (NYSE: ) and (NYSE: ) have caused the industry to falter over the past week.

Depending on where the options market moves, traders have priced BBY stock quite a bit after the report, possibly with an implied move of about 8% in either direction.

BBY daily chart

Shares of BBY closed at a two-year low of $72.36 on Friday, giving the Richfield, Minnesota-based consumer electronics retailer a market value of about $16.3 billion.

Year-to-date, Best Buy shares are down 28.8%, underperforming the broader market over the same period. Currently, it is 49% below the all-time peak of $141.97 reached in November 2021.

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