Tag Archives: basic materials

Business

J&J Recalls Aveeno, Neutrogena Spray Sunscreens

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Johnson & Johnson said it was recalling some sunscreens from U.S. stores.



Photo:

Mark Lennihan/Associated Press

Johnson & Johnson is recalling Neutrogena and Aveeno spray sunscreens from U.S. stores after detecting benzene, a potentially cancer-causing chemical, in some samples.

J&J said Wednesday that consumers should stop using and discard the spray sunscreens. The company said it also was notifying distributors and retailers to stop selling the products, and arranging for the return of the products.

A company spokesman said the effort would include removing products from shelves.

The New Brunswick, N.J., company said it doesn’t use benzene in the manufacturing of the spray sunscreens and is investigating the cause of the contamination. The company didn’t say whether the recall will also impact other countries.

J&J, one of the world’s biggest sellers of consumer-health products by sales, didn’t say how many bottles were affected and what the exact benzene levels were, though J&J said the levels were low and not expected to cause health issues.

The spray products affected, J&J said, are sold as Neutrogena Beach Defense, Neutrogena Cool Dry Sport, Neutrogena Invisible Daily, Neutrogena Ultra Sheer and Aveeno Protect + Refresh aerosol sunscreens.

“Out of an abundance of caution, we are recalling all lots of these specific aerosol sunscreen products,” the company said.

Benzene is a chemical that can cause cancer after high levels of exposure. High levels of exposure can also have more immediate effects, including dizziness, confusion and rapid or irregular heartbeats.

Write to Felicia Schwartz at felicia.schwartz@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Fire at Giant Auto-Chip Plant Fuels Supply Concerns

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TOKYO—A fire at a factory of one of the world’s leading auto chip makers has added to the troubles of car makers that already have slashed production because of a semiconductor shortage.

The fire Friday left a swath of charred equipment in the factory owned by a subsidiary of Renesas Electronics Corp. in Hitachinaka, northeast of Tokyo. The company said it would take at least a month to restart the damaged operations.

Shares of Japan’s three leading car makers— Toyota Motor Corp. , Nissan Motor Co. and Honda Motor Co. —all fell by more than 3% on Monday, worse than the overall market, while Renesas shares were down 4.9%.

Renesas said heat from an electrical problem inside a single piece of equipment caused the fire and contaminated clean rooms needed to make semiconductors. It said two-thirds of the chips made at the fire-affected factory were automotive chips.

Renesas’s chief executive, Hidetoshi Shibata, said Sunday the impact on global chip supplies would be significant. Mariko Semetko, a credit analyst at Moody’s Japan, said the fire was likely to damp the recovery of global auto production this year, while auto makers said they were still assessing the impact.

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Business

Toyota, Honda Shut U.S. Factories as Perfect Storm Disrupts Supply Chains

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Toyota Motor Corp. , Honda Motor Corp. and Samsung Electronics Co. said supply-chain problems were complicating their businesses, as freak weather, port blockages and the continued impact of Covid-19 combine to disrupt global supply chains.

Toyota and Honda said Wednesday that they would halt production at plants in North America because of a squeeze in crucial supplies, including plastic components, petrochemicals and semiconductors. Honda also blamed port backlogs and severe winter weather that has frozen plants and pipes across the central U.S. for the disruption.

Separately, Samsung, the world’s largest maker of smartphones, said a severe global shortage in chips would hurt its business into the next quarter. The South Korean company also said it might withhold launching a new model of one of its most popular handsets, though it said the move was aimed at keeping it from competing with an existing handset.

The disruptions underscore how a number of forces are coming together to squeeze the world’s supply chains: from the pandemic-driven rise in consumer demand for tech goods to a backlog of imports at clogged California ports and U.S. factory outages caused by severe weather. The timing is particularly concerning for manufacturers because the U.S. and some other economies are beginning to reopen thanks to vaccination campaigns.

“Automotive companies initially had to bear the brunt of these shortages, but now it has spread to pretty much all parts of the consumer-electronics sector,” said Sanjeev Rana, senior analyst at investment bank CLSA in Seoul.

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Business

Betting on the post-pandemic boom? Bank of America has 17 stock recommendations

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Here’s one possible all-clear signal. COVID-19 is no longer a “tail risk” for investors, the first time since February 2020, says Bank of America in its latest fund manager survey. A tail risk is an unlikely event that could cause outsize losses or gains.

Scroll down for that chart.

Meanwhile, the Federal Reserve’s two-day policy meeting begins on Tuesday, and investors will be on the lookout for any hawkish signals that could take some steam out of stocks. The premarket is showing some mixed action after some disappointment over retail sales.

But many remain stuck into the idea of a post-pandemic boom, at least in the U.S. as vaccinations roll out.

Read: Value stocks are making a comeback. Don’t get left behind, these analysts say

That has kept the records coming for the Dow Jones Industrial Average
DJIA,
+0.53%
and S&P 500
SPX,
+0.65%
and those stocks geared toward a recovery. Our call of the day comes from strategists at Bank of America, who offer up 17 stocks to buy for the three R’s they see coming — recovery, reflation and rerating.

Strategists Jill Carey, Savita Subramanian and Ohsung Kwon say the economy has reached the mid-cycle phase, where inflation typically is strongest. In prior such phases, excluding the technology bubble, small-caps have outperformed larger ones, and value has beaten growth.


Uncredited

The Bank of America team says there are two reasons to like those stocks: many of the companies they highlight are still not expensive, and active funds aren’t positioning for that rising inflation, with heavier exposure to mega than smaller caps.


Uncredited


Uncredited

Onto the stocks (nearly half are small-to-midcap companies)…

Alcoa
AA,
-1.49%
— BofA has a share price target $37 for the miner. Aluminum prices could go either way, but global demand growth is a plus for Alcoa.

Axalta Coating Systems
AXTA,
-0.70%
— Share price target £37 for the global coatings group. The pace of automobile recovery will be key and a stronger dollar and lower raw material costs could be a boost.

Broadcom
AVGO,
+4.34%
— Share price target $550. Risks for the semiconductor company include sensitivity to U.S.-China trade relations and competition in networking, smartphone and other markets.

Hess
HES,
-1.40%
— Share price target $95. Among the energy company’s risks are oil and gas prices, as well as slowing developments in drilling.

Marriott International
MAR,
+2.24%
— Share price objective $150. Economic weakness and worse-than-expected spending by businesses and consumers are among the risks for the hospitality company.

Walt Disney
DIS,
-0.20%
— $223 price objective for the entertainment giant that has “best in class assets.” Downside risks include slowing ESPN growth from people deciding not to keep a cable television subscription, weaker consumer confidence, and low theme park attendance. Also watch out for potential film flops.

As for the rest, they like CNH Industrial
CNHI,
+0.59%,
Comcast
CMCSA,
+0.77%,
Emerson Electric
EMR,
-1.39%,
Herc Holdings
HRI,
+1.98%,
Knight-Swift Transportation
KNX,
-0.67%,
Occidental Petroleum
OXY,
-4.34%,
Parker Hannifin
PH,
+0.75%,
Principal Financial
PFG,
-0.45%,
Robert Half International
RHI,
-1.11%,
Union Pacific
UNP,
-0.66%
and World Fuel Services
INT,
+0.08%.

The chart

Here’s that “tail risk” chart from the latest BofA monthly fund manager survey. Bigger risks are higher-than-expected inflation and a “tantrum” in the bond market.


Uncredited

The markets

Dow and S&P futures
YM00,
-0.06%

ES00,
+0.08%
are flat, while Nasdaq-100 futures
NQ00,
+0.52%
are up. European stocks are higher
SXXP,
+0.62%.
It was also an up day for Asian markets. Elsewhere, oil
CL.1,
-1.39%
and the dollar
DXY,
-0.06%
are weak and bitcoin
BTCUSD,
-2.98%
is backing further away from the $60,000 hit over the weekend.

The buzz

Retail sales dropped a bigger-than-expected 3% in February, though they surged a revised 7.6% in January. Import prices rose 1.3%. That data will be followed by industrial production and a National Association of Home Builders index. Aside from the Fed meeting kickoff, investors will also be watching the outcome of a an auction of 20-year Treasury bonds.

Ray Dalio, the founder of Bridgewater, the world’s biggest hedge fund firm, declares investing in bonds as “stupid” and investors should stick to a “well-diversified portfolio.”

AstraZeneca
AZN,
+0.72%

AZN,
+3.37%
shares are higher after Jefferies upgraded the drug company to buy from hold. AstraZeneca has been in the hot seat as several European countries suspend its COVID-19 shots over reports of blood clots from inoculations.

Finnish telecoms group Nokia
NOKIA,
+0.52%

NOK,
+1.90%
is cutting up to 10,000 jobs to save $716 million over two years.

A team from the U.S. government’s highway safety agency is headed to Detroit to investigate a “violent” crash after a Tesla
TSLA,
+2.05%
vehicle drove under a semitrailer, leaving two people critically injured.

Random reads

Office nostalgia — Redditers swap coworkers-from-hell stories.

When a hacker gets all your texts for $16.

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Business

Stocks Fall, Led Lower by Tech Shares

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The Dow Jones Industrial Average inched down 0.1% after closing Wednesday at an all-time high. The S&P 500 fell 0.3%, and the Nasdaq Composite lost 0.6%.

Stocks have wobbled the past week as investors have grappled with a sharp rise in bond yields. The shift, which money managers have broadly attributed to bets on inflation and growth picking up, has tempered enthusiasm for some of the pricier sectors of the stock market.

The S&P 500 technology sector lost 0.5% Thursday, among the worst-performing sectors in the index. Meanwhile, sectors of the market thought to benefit most from rising economic growth, like financials and energy, were higher for the day.

The KBW Nasdaq Bank Index, which tracks the performance of 24 lenders, added 0.6%.

“The market is jittery. The bond yields’ rising is putting equities, especially growth stocks, under pressure,” said

Sebastien Galy,

a macro strategist at Nordea Asset Management. “There is a bit of a risk reduction broadly.”

One group of stocks that bucked the trend: “meme” stocks that have surged in popularity among individual investors this year.

In a wave of volatility reminiscent of last month’s rally,

GameStop

jumped 50%, while

AMC Entertainment

climbed 14%. The two stocks had soared in overnight trading as well.

The moves show “there is still liquidity and a lot of access to speculative bets,” said Sophie Chardon, cross asset strategist at Lombard Odier. “We have to be prepared to live with this kind of targeted bubble, but I wouldn’t see it as a threat to the global equity market.”

Meanwhile, government bond prices fell, with the yield on the benchmark 10-year Treasury note ticking up to 1.460%, from 1.388% Wednesday.

“The rise in yields is supportive for banks, higher oil prices are supportive for energy. It is a change of leadership,” Ms. Chardon said.

Overseas, the pan-continental Stoxx Europe 600 edged up 0.2%.

Among individual equities, beer maker

Anheuser-Busch InBev

fell almost 6% after its fourth-quarter profit came in below estimates.

Traders worked on the floor of the New York Stock Exchange on Wednesday.



Photo:

Nicole Pereira/Associated Press

British packaging company

DS Smith

jumped over 6% on reports that rival Mondi is exploring a takeover.

Investors have also been selling European government bonds in recent weeks as they look for higher returns. The yield on French 10-year bonds, which moves inversely to the price, ticked up above zero for the first time since June and reached as high as 0.024%.

In Asia, most major benchmarks finished the day up.

The Shanghai Composite Index added 0.6% and Hong Kong’s Hang Seng Index climbed 1.2%. South Korea’s Kospi Index rallied 3.5% after its central bank kept interest rates at historic lows.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Akane Otani at akane.otani@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Mining stocks have surged in a struggling U.K. market — and have 2 more tailwinds

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It’s been a pretty impressive 12 months for the world’s leading miners.

The FTSE 350 mining index
156995,
-0.22%
— which includes diversified mining giants Rio Tinto
RIO,
-0.13%,
BHP Group
BHP,
+0.35%,
Anglo American
AAL,
-0.23%,
and Glencore
GLEN,
-0.33%
— has returned 46% to shareholders over the last year, according to FactSet, compared with the 7% drop for the broader FTSE 350.

The sector is benefiting from a surge in the value of the metals they unearth. Front-month copper
HG00,
+0.10%
futures have jumped 62% over the last 12 months, silver
SI00,
+0.15%
has gained 51%, and platinum
PL00,
+0.91%
has added 32%.

And there are two big trends that should further boost the sector.

The first is the decline of the dollar
DXY,
-0.14%.
A weak dollar environment increases the purchasing power of the key commodity-consuming markets, notably China, points out Ephrem Ravi, an analyst at Citigroup. A lower dollar also helps loosen global monetary conditions, as so much of the world’s corporate debt is denominated in the greenback.

As the chart shows, there is usually a strong correlation between mining sector stocks and the change in the dollar.

Another boost is coming from the rise in copper vs. gold. The copper-to-gold ratio has been edging up over the past year, which implies optimism over global growth, says Citi’s Ravi. Copper is needed for manufacturing and construction, whereas gold is often used as a safe haven in ties of financial duress.

Jeffrey Gundlach, the DoubleLine Capital chief executive and so-called bond king, has said the ratio of copper to gold closely tracks U.S. government bond yields, which tend to rise as the economy improves.

According to Ned Davis Research, citing data stretching back to 1995, the European metals and mining industry has outperformed the market by an average annual gain of 9.7% when the economic outlook is improving, but underperformed by 7.4% annually when the economic outlook is deteriorating.

Mark Phillips, European equity analyst at Ned Davis Research, says it makes sense for miners to go through booms and busts. “A boom will start when an increase in demand for commodities drives up prices while short-term supply remains relatively fixed. As elevated prices persist this incentivizes companies to invest in new projects that had previously been uneconomical,” says Phillips.

“However, long lead times typically mean that many companies invest in new projects at the same time, resulting in cost pressures and a supply glut, which may come at a time when demand begins to wane. This results in a fall in prices, and metals and mining companies high up the cost curve go out of business,” he adds.

Supercycle talk

Also behind the gains are talk by some of a commodities supercycle. That basically means a cycle lasting decades, and moving commodities as a whole. “The commitment by many nations to be carbon neutral and less energy intensive by 2050-2060 requires significant infrastructure investment which will be commodity intensive. Structural models of commodity prices have shown that at each major stage of economic development: agricultural, industrial, and service, commodity usage can change, increasing the likelihood of a supercycle in early stages of development,” says Daniel Jerrett, chief investment officer at Stategy Capital, which started a global macro fund last month.

The talk in the market is of inflation, fueled by lax monetary policy and aggressive fiscal spending. Analysts at Variant Perception, a research firm, have made the case that heightening inflation risks, the need to hedge for them, and “generationally cheap” prices will lead to a commodity supercycle. Among the major banks, JPMorgan also has endorsed the commodity supercycle view.

It is lonely betting against miners at the moment. There aren’t any short positions against the big miners that are large enough to be reported, according to the daily updates from the Financial Conduct Authority.

But there are a few with dissenting views. Ben Davis, an analyst at Liberum Capital, has a sell rating on Rio Tinto, and a hold on BHP. Dollar weakness, he acknowledges, can help the rally continue, “but feels like a lot of that in the price.” And Davis doesn’t believe commodities are in a supercycle.

But Davis anticipates a slowdown in Chinese credit, which will soon make an impact. Loan growth gradually has decelerated from 13.2% year-over-year in June to 12.7% in January.

“Chinese credit tapering will start being felt in commodities demand and whilst the restock in the rest of the world is a very powerful force, it’s unlikely to last beyond the middle of the year. The earliest and biggest beneficiary this cycle has been iron ore, and for that reason BHP and Rio Tinto have the most near-term downside in our opinion,” he says.

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Business

Vale Agrees to $7 Billion Settlement for Brumadinho Dam Collapse

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SÃO PAULO—Brazilian miner

Vale

agreed Thursday to pay $7 billion in compensation to the state of Minas Gerais where the collapse of its dam two years ago killed 270 people, polluted rivers and obliterated the surrounding landscape.

The settlement, the biggest in Brazilian legal history, is a watershed moment for a country long hampered by impunity and where miners and big businesses have often exerted more power than the state, especially in rural areas.

Public prosecutors said the $7 billion agreement is meant to compensate the state for the socioeconomic and environmental damage caused by the disaster. But it doesn’t affect the many pending homicide and other criminal charges in the case against the world’s largest iron-ore miner and former executives, including Vale’s previous chief executive,

Fabio Schvartsman.

The attorney general of Minas Gerais state,

Jarbas Soares Júnior,

said he hoped the size of Thursday’s settlement would send a message to the rest of the world: “We will not accept the exploitation of our resources without a minimum level of commitment to social and environmental responsibility.”

Vale accepted the decision and said it would book an additional expense of about $3.7 billion in its 2020 results.

“Vale is committed to fully repair and compensate the damage caused by the tragedy in Brumadinho and to increasingly contribute to the improvement and development of the communities in which we operate,” CEO

Eduardo Bartolomeo

said. “We know that we have work to do and we remain firm in that purpose.”

Mourners visited a memorial for victims of the Brumadinho dam collapse in 2019. Suicides and attempted suicides in the region soared following the disaster, particularly among women.



Photo:

douglas magno/Agence France-Presse/Getty Images

Vale’s investors welcomed the settlement as a way to avoid a drawn-out court battle, as did public prosecutors who cited other lawsuits over environmental problems in the state that haven’t been resolved after nearly 20 years.

The miner’s shares, which have increased about 60% in value since the dam collapsed, initially rose after news of the settlement, signaling investors’ hopes that the company can finally move past the disaster.

“Vale was able to get a discount of about one-third based on what the state government was asking, so they were skillful in this negotiation,” said

Ilan Arbetman,

an equities analyst at the Brazilian brokerage Ativa Investimentos. The miner has already provisioned a big part of the agreed value and is benefiting from high iron-ore prices, he said.

When Vale’s dam burst near the town of Brumadinho in January 2019, it unleashed a tsunami of mining waste speeding down the valley at up to 50 miles an hour, wiping out the on-site canteen where many workers were at lunch and destroying nearby homes and a guesthouse.

Two years later, the bodies of 11 victims still haven’t been found.

The collapse, one of the deadliest anywhere in the world, came only three years after a dam at another iron-ore mine jointly owned by Vale ruptured 100 miles away in the town of Mariana, killing 19 people and polluting more than 400 miles of river. The company vowed at the time that such a disaster would never happen again.

The settlement funds will be spent on environmental projects and shoring up local water supplies as well as improving transport networks and health services. The agreement also includes Vale’s initial costs in the aftermath of the disaster, when the company paid for temporary housing, mental-health professionals and emergency monthly stipends for residents.

Suicides and attempted suicides in Brumadinho soared in the year following the collapse, particularly among women. Some lost their husbands, sons and fathers at the mine, one of the region’s biggest employers, and were forced to wait months for rescue workers to recover the remains of their loved ones from the hardened mud.

Following the Mariana collapse in 2015, Vale and its partner at that dam,

BHP Group Ltd.

, created the Renova Foundation to manage compensation, which said it had paid out about $2.1 billion as of December last year. Prosecutors have said they believe that the second dam collapse in 2019 might not have occurred if Vale and BHP had faced tougher consequences for the first one.

In January last year, Brazilian prosecutors charged former Vale CEO Mr. Schvartsman and 10 others from the mining company with homicide. They also filed homicide charges against five people at Germany’s TÜV SÜD, the auditing company that certified the mine-waste dam as safe months before it ruptured.

All 16 people, including several high-level executives and directors at Vale, were also charged with environmental crimes, as were both companies as entities. Those charges are still being disputed in Brazil’s court system.

Prosecutors said last year it was clear that the dam had presented a critical structural risk since at least 2017 and that Vale had been fully aware of its safety problems. The German inspector certified the dam as safe despite also knowing about its structural problems, eyeing a chance to win multiple contracts with Vale and expand its Brazilian operations, they said.

As part of a year-long investigation into the disaster, The Wall Street Journal first reported in February 2019 the conflict of interest between Vale and TÜV SÜD, which worked as both an internal consultant and an independent safety evaluator for the miner.

A spokeswoman for Vale said Thursday that the miner wasn’t aware of an imminent risk at the dam. TÜV SÜD said it reiterated its commitment to “see the facts of the dam’s collapse clarified,” adding that it was cooperating with authorities. Mr. Schvartsman and the individuals facing criminal charges have denied wrongdoing in the case.

In recent years, Brazil’s public prosecutors have battled big companies with little success. After an oil spill off the coast of Rio de Janeiro in 2011, prosecutors filed lawsuits against

Chevron Corp.

for more than $7 billion. Two years later, they settled with the U.S. oil giant for $55 million.

Write to Samantha Pearson at samantha.pearson@wsj.com and Jeffrey T. Lewis at jeffrey.lewis@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Apple, Tesla and Facebook ready to report record sales in busiest week of earnings

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U.S. companies have barely managed to eke out positive earnings growth so far in this quarterly results season, but the big test arrives in the week ahead.

Nearly a quarter of the S&P 500
SPX,
-0.30%
is set to report results, with those companies representing 39% of the index by market value, according to calculations based on FactSet data. Given that the S&P 500 is weighted by market capitalization, this roster of companies will have an outsize impact on the profit trajectory for the index.

Earnings are expected to decline for the fourth consecutive quarter once all results are in for the latest period, but those companies that have reported thus far have been beating expectations in aggregate.

The FactSet consensus now models a 5% earnings decline for the index, compared with the 6.3% drop projected a week ago. If profit growth for the S&P 500 ultimately ends up positive, it would mark an end to the current earnings recession, which takes place when corporate profits drop for two or more consecutive quarters.

Apple Inc.
AAPL,
+1.61%
and Facebook Inc.
FB,
+0.60%
are among the highlights of next week’s slate, along with Tesla Inc.
TSLA,
+0.20%,
which will deliver results for the first time since it became a member of the S&P 500. All three high-profile companies are scheduled to report Wednesday afternoon and expected to have produced record revenue in the holiday quarter.

The holiday quarter is always crucial for Apple, which releases new iPhones in the fall. With a slightly later launch than usual this year due to the pandemic pushing sales into the period, Apple is widely expected to post its largest quarterly revenue total ever and its first ever total above $100 billion. The technology giant likely also continued to see benefits from remote-work and remote-schooling trends, which have driven strong iPad and Mac sales throughout the COVID-19 crisis.

Full preview: Get ready for Apple’s first $100 billion quarter in history

Facebook is also expected to post what should easily be a record quarter given strong digital advertising trends during the holiday period. Still, the company will face questions about user engagement and a decision to ban Donald Trump from the platform indefinitely over his role in inciting the violent riot at the U.S. Capitol. Bernstein analyst Mark Shmulik points to “continued usage fatigue” across social media as well as a “conversation skewed towards unmonetizable political events.”

Full preview: Facebook earnings still flourishing amid pandemic, economic slowdown and antitrust scrutiny

Tesla already disclosed delivery numbers for the full year that came in ahead of analyst expectations, and all eyes will be on the company’s outlook for 2021. RBC Capital Markets analyst Joseph Spak anticipates a delivery forecast of 825,000 to 875,000 million units for the full year, even though Chief Executive Elon Musk said on Tesla’s last earnings call that an analyst was “not far off” for expecting 840,000 to a million deliveries during 2021.

Full preview: Can Tesla’s sales growth match stock’s rise?

Here’s what else to watch for in the week ahead, which brings reports from 117 members of the S&P 500 and 13 Dow Jones Industrial Average
DJIA,
-0.57%
components.

Up in the air

Boeing Co.’s
BA,
-0.76%
journey remains turbulent even as the company’s 737-MAX jets were recertified after being grounded for almost two years. Though the company began deliveries of these aircraft, “the pace of delivering all 450 parked 737-MAX will be dictated by airline customers ability to absorb aircraft as well as air traffic demand,” according to Benchmark Company analyst Josh Sullivan.

Boeing’s Wednesday morning report will offer perspective on the company’s recovery expectations amid the pandemic, though Sullivan sees volatility ahead stemming from a recent equity offering and the impact of the COVID-19 crisis on airlines.

The fourth-quarter reports from U.S. airlines have been bleak so far, and American Airlines Group Inc.
AAL,
-0.06%
and Southwest Airlines Co.
LUV,
-0.80%
offer more on Thursday morning.

Can you hear me now?

Verizon Communications Inc.
VZ,
+0.35%
leads off a busy week of telecommunications earnings Tuesday morning, followed by AT&T Inc.
T,
+0.35%
Wednesday morning and Comcast Corp.
CMCSA,
-0.92%
Thursday morning.

For the wireless carriers, a key issue will be the impact of iPhone 12 promotions on recent results. Investors will also be looking for information about a recent wireless auction offering spectrum that will be crucial for 5G network deployments. Though the bids haven’t been made public yet, the auction drove record spending and AT&T and Verizon are both expected to have paid up handsomely to assert their standing. The question for investors is what impact these bids will have on the companies’ financial positioning.

Full preview: AT&T earnings to kick off a defining year for telecom giant

AT&T and Comcast have more media exposure than Verizon, and those two companies have been trying to contend with the new realities brought on by the pandemic. Both companies have made moves to emphasize streaming more with their film slates given theater closures, and the financial implications of these moves will be worth watching.

Paying up

The evolving situation with the pandemic is reflected perhaps no more clearly than in the results of Visa Inc.
V,
-1.52%,
Mastercard Inc.
MA,
-1.63%,
and American Express Co.
AXP,
-1.01%,
which have a pulse on the global consumer spending landscape. The companies should provide insight on a travel recovery toward the end of the year, as well as the impact of recent lockdowns.

Susquehanna analyst James Friedman wrote recently that his Mastercard revenue projection of $3.97 billion is slightly below the consensus view, though he also asked: “does anyone really care about Q4 2020?” Friedman is upbeat about mobile-payments and online-shopping dynamics that suggest “positive trends ahead” for Mastercard, which reports Thursday morning. Visa follows that afternoon, while American Express kicks of the week with its Tuesday morning report.

The chip saga continues

Advanced Micro Devices Inc.
AMD,
+1.38%
is poised to keep benefiting from Intel Corp.’s
INTC,
-9.29%
stumbles, which analysts expect to last for some time even as Intel prepares for a new, technology-oriented chief executive to take the helm.

“We have low confidence that Intel will be able to close that transistor gap quickly, and therefore expect it to continue to lose share for the foreseeable future,” Jefferies analyst Mark Lipacis wrote after Intel’s latest earnings report. AMD will show how that dynamic has played out on its side of the equation when it posts numbers Tuesday afternoon.

Full preview: If Intel gets its act together, can AMD maintain swollen valuation?

Other chip makers reporting in the week ahead include Texas Instruments Inc.
TXN,
-1.31%
on Tuesday afternoon; Xilinx Inc.
XLNX,
+1.26%,
which is in line to be acquired by AMD, on Wednesday afternoon report, when it will be joined by chip-equipment maker Lam Research Corp.
LRCX,
-0.06%
; and Western Digital Corp.
WDC,
-5.23%
on Thursday afternoon.

Busy week for the Dow

Among the 13 members of the Dow Jones Industrial Average
DJIA,
-0.57%
set to report this week are 3M Co
MMM,
-0.96%.
, Johnson & Johnson
JNJ,
+1.13%,
American Express, Verizon, and Microsoft Corp.
MSFT,
+0.44%,
all of which report Tuesday.

“Near term, we see the company’s COVID-19 vaccine readout as a key upcoming catalyst and believe efficacy in the 80%+ range would suggest a clear role for the product in the market,” J.P. Morgan analyst Chris Schott wrote of Johnson & Johnson.

Cowen & Co. analyst J. Derrick Wood sees tough comparisons for Microsoft especially in its Azure and server businesses, though he expects a more favorable situation going forward.

Full preview: SolarWinds hack may actually be a good thing for Microsoft

Wednesday brings results from Boeing and Apple, while Thursday features McDonald’s Corp.
MCD,
-0.07%,
Dow Inc.
DOW,
-0.10%,
and Visa. Honeywell International Inc.
HON,
-1.45%,
Chevron Corp.
CVX,
-0.30%,
and Caterpillar Inc.
CAT,
-0.13%
round out the week Friday morning.

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