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Business

Stock-market investors brace for busiest week of earnings season. Here’s how it stacks up so far.

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So far, so good?

Stocks ended the first full week of the earnings season on a strong note Friday, pushing the Dow Jones Industrial Average
DJIA,
+2.47%,
S&P 500
SPX,
+2.37%
and Nasdaq Composite
COMP,
-0.81%
to their strongest weekly gains since June. It gets more hectic in the week ahead, with 165 S&P 500 companies, including 12 Dow components, due to report results, according to FactSet, making it the busiest week of the season.

The bar for earnings was set high last year as the global economy reopened from its pandemic-induced state. “Fast forward to this year, and earnings are facing tougher comparisons on a year-over-year basis. Add in the elevated risk of a recession, still hot inflation, and an aggressive Fed tightening cycle, and it is of little surprise that the sentiment surrounding the current 3Q22 earnings season is cautious,” said Larry Adam, chief investment officer for the private client group at Raymond James, in a Friday note.

“We have reason to believe the 3Q22 earnings season will be better than feared and could become a positive catalyst for equities just as the 2Q22 results were,” he wrote.

Read: Stocks are attempting a bounce as earnings season begins. Here’s what it will take for the gains to stick.

Better-than-feared earnings were credited with helping to fuel a stock-market rally from late June to early August, with equities bouncing back sharply from what were then 2020 lows before succumbing to fresh rounds of selling that, by the end of September, took the S&P 500 to its lowest close since November 2020.

While earnings weren’t the only factor in the past week’s gains, they probably didn’t hurt.

The number of S&P 500 companies reporting positive earnings surprises and the magnitude of these earnings surprises increased over the past week, noted John Butters, senior earnings analyst at FactSet, in a Friday note.

Even with that improvement, however, earnings beats are still running below long-term averages.

Through Friday, 20% of the companies in the S&P 500 had reported third-quarter results. Of these companies, 72% reported actual earnings per share, or EPS, above estimates, which is below the 5-year average of 77% and below the 10-year average of 73%, Butters said. In aggregate, companies are reporting earnings that are 2.3% above estimates, which is below the 5-year average of 8.7% and below the 10-year average of 6.5%.

Meanwhile, the blended-earnings growth rate, which combines actual results for companies that have reported with estimated results for companies that have yet to report, rose to 1.5% compared with 1.3% at the end of last week, but it was still below the estimated earnings growth rate at the end of the quarter at 2.8%, he said. And both the number and magnitude of positive earnings surprises are below their 5-year and 10-year averages. On a year-over-year basis, the S&P 500 is reporting its lowest earnings growth since the third quarter of 2020, according to Butters.

The blended-revenue growth rate for the third quarter was 8.5%, compared with a revenue growth rate of 8.4% last week and a revenue growth rate of 8.7% at the end of the third quarter.

Next week’s lineup accounts for over 30% of the S&P 500’s market capitalization, Adam said. And with the tech sector accounting for around 20% of the index’s earnings, reports from Visa Inc.
V,
+1.68%,
Google parent Alphabet Inc.
GOOG,
+0.94%

GOOGL,
+1.16%,
Microsoft Corp.
MSFT,
+2.53%,
Amazon.com Inc.
AMZN,
+3.53%
and Apple Inc.
AAPL,
+2.71%
will be closely watched.

Away from the backward-looking numbers, guidance from executives on the path ahead will be crucial against a backdrop of recession fears, Adam wrote, noting that so far guidance has remained resilient, with the net percentage of companies raising rather than lowering their outlook remaining positive.

“For example, the ‘Summer of Revenge Travel’ was known to benefit the airlines, but commentary from United
UAL,
+3.56%,
American
AAL,
+1.86%
and Delta Airlines
DAL,
+1.34%
suggests demand remains strong for the months ahead and into 2023. Ultimately, the broader based and better the forward guidance, the higher the confidence in our $215 S&P 500 earnings target for 2023,” Adam said.

The soaring U.S. dollar
DXY,
-0.89%,
which remains not far off a two-decade high set at the end of last month, also remains a concern.

See: How the strong dollar can affect your financial health

“While the degree of the impact depends on the blend of costs versus sales overseas and how much of the currency risk is hedged, a stronger dollar typically impairs earnings,” Adam wrote.

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Business

Atlanta airport reclaims its title as the world’s busiest in 2021

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(CNN) — Move over, Guangzhou. Georgia’s Hartsfield-Jackson Atlanta International Airport is once again the world’s busiest airport.

The US airport was knocked off its No. 1 perch to the No. 2 slot in passenger volume in 2020 by Guangzhou Baiyun International Airport in China, breaking the Atlanta airport’s 22-year streak in the top slot.

But in the 2021 rankings released on Monday by trade association Airports Council International, ATL is back on top, a sign of recovery from 2020’s precipitous plunge in air traffic as the pandemic took hold.

In 2021, the Atlanta airport saw 75.7 million passengers. That figure is up a whopping 76% from 2020 but still nearly 32% below pre-pandemic 2019 figures.

Guangzhou’s airport dropped to No. 8 in 2021, with 40.3 million passengers. Another airport in China, Chengdu’s Shuangliu International Airport, is ninth on the 2021 list, down from No. 3 in 2020.

US airports dominated the passenger traffic rankings in 2021, with eight of the top 10 in the United States.

Dallas/Fort Worth International Airport in Texas was the second-busiest in 2021, with about 62.5 million passengers, and the international airport in Denver, Colorado, ranked third, with 58.8 million passengers.

Chicago’s O’Hare and Los Angeles International rounded out the top five.

The list shows “an encouraging trend of recovery,” Luis Felipe de Oliveira, ACI World’s director general, said in a statement.

“Although we are cautious that recovery could face multiple headwinds, the momentum created by reopening plans by countries could lead to an uptick in travel in the second half of 2022,” de Oliveira said.

In 2021, there were an estimated 4.5 billion passengers globally, according to ACI. That figure represents a nearly 25% increase from 2020 but more than 50% drop from 2019.

Baiyun International Airport in Guangzhou, China, edged out Atlanta’s international airport in 2020 as the world’s busiest. In 2021, Guangzhou’s airport dropped to No. 8.

Tian Jianchuan/Xinhua/ZUMA Press

US and China switch places

Given the much faster recovery of domestic travel compared with international travel, airports that were way down the list of the world’s busiest airports pre-pandemic have leaped up into the top 10.

The airports in Charlotte, North Carolina (No. 6); Orlando, Florida (No. 7); and Las Vegas (No. 10) are new to the top 10 this year. Vacation magnets Orlando and Las Vegas were No. 31 and No. 30 for passenger traffic before the pandemic in 2019.

The United States’ strong showing in the top 10 is a reversal from 2020, when airports in China took seven of the top 10 slots.

China’s dominance in 2020 was because of the early rebound of domestic travel in China. The country still has not reopened to international visitors.

“If we look back on 2020, China was one of the first to come out of the initial waves of the pandemic and it actually almost reached a full recovery by the end of 2020,” said Patrick Lucas, ACI World’s vice president for economics.

But in 2021, domestic traffic in China dropped significantly with renewed lockdowns, while the United States saw a big jump.

The United States has the world’s largest domestic travel market, followed by China.

Airports that routinely landed in the top 10 of the world’s busiest airports list — such as Dubai International, London Heathrow and Paris Charles de Gaulle — have been absent during the pandemic.

“Those markets that had very high proportions of international traffic were of course hurt as a result of all these restrictions and quarantine requirements,” Lucas said.

The significant role of international traffic is also part of the reason that Beijing’s Capital and Shanghai’s Pudong International airports have dropped out of the top 10. Beijing Capital — once routinely No. 2 in passenger traffic — is also seeing its traffic split by the city’s new Daxing International Airport.

Dubai International Airport, which sees a large proportion of international traffic, dropped out of the top 10 busiest airports in 2021. However, it remained No. 1 for international passengers in 2021.

Elena/Adobe Stock

Rolling back restrictions

ACI is advocating a “risk-based approach” to easing travel restrictions, following Covid-19 data, Lucas said.

“Vaccines actually have been the passport to travel, but as we can see now, many major markets are opening up and … a lot of countries have come to realize that curbing travel or imposing travel restrictions actually does not do anything,” he said.

“If anything, it creates even more harm. So meaning that it disrupts the socioeconomic gains of air transport and tourism and so on.”

As it stands, ACI expects total passenger traffic numbers to recover to pre-pandemic levels in 2024.

However, strong domestic markets, including the United States, are expected to recover by 2023. And markets with a high proportion of international traffic aren’t expected to rebound until 2025, Lucas said.

Globally, there are “different forces moving in opposite directions.”

There’s very strong pent-up demand and the lifting of restrictions that have dampened travel versus the rising cost of travel and geopolitical concerns related to what’s happening in Eastern Europe, Lucas said.

But overall, ACI is upbeat. “We have a sense that consumers, passengers, will bite the bullet, so to speak, despite the rise in the cost of travel.”

Hartsfield-Jackson Atlanta International Airport says it is within a two-hour flight of 80% of the US population.

Elijah Nouvelage/Reuters

World’s top 10 busiest airports for passenger traffic in 2021

1. Atlanta (ATL): 75.7 million passengers, up 76% from 2020

2. Dallas/Fort Worth (DFW): 62.5 million passengers, up 59% from 2020

3. Denver (DEN): 58.8 million passengers, up 74% from 2020

4. Chicago O’Hare (ORD): 54 million passengers, up 75% from 2020

5. Los Angeles (LAX): 48 million passengers, up 67% from 2020

6. Charlotte (CLT): 43.3 million passengers, up 59% from 2020

7. Orlando (MCO): 40.4 million passengers, up 87% from 2020

8. Guangzhou (CAN): 40.3 million passengers, down 8% from 2020

9. Chengdu (CTU): 40.1 million passengers, down 1.5% from 2020

10. Las Vegas (LAS): 39.8 million passengers, up 79% from 2020

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US

Canadian police arrive to remove protesters at busiest U.S. border crossing

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Canadian police moved in Saturday to remove protesters who have disrupted Canada-U.S. trade at a major bridge border crossing. Officials began issuing tickets and towing vehicles that remained parked in the area of the protest, Windsor police tweeted Saturday afternoon.

Demonstrators had spent the night at the Ambassador Bridge spanning the river between Detroit and Windsor, Ontario, in defiance of new warnings to end the blockade, which disrupted the flow of traffic and goods and forced the auto industry on both sides to roll back production. However, many of them drove away as scores of police approached shortly after dawn on Saturday.

Surrounded by dozens of officers, a man with “Mandate Freedom” and “Trump 2024” spray-painted on his vehicle left as other protesters began dismantling a small tarp-covered encampment. A trucker honked his horn as he, too, drove off, to cheers and chants of “Freedom!”

Meanwhile, in Ottawa, local police announced they had set up a command center to respond to the protests, which attracted about 4,000 people in the nation’s capital on Saturday. 

Police officers hold a line as protesters against COVID-19 restrictions march in Windsor, Ontario, Saturday, February 12, 2022.

Nathan Denette / AP


“Safety concerns – arising from aggressive, illegal behaviour by many demonstrators – limited police enforcement capabilities,” the police department wrote in a statement late Saturday. However, it said it was able to manage a 300-vehicle convoy and a “20-kilometer long car convoy from Quebec.” It also blocked a fuel delivery to downtown Ottawa.

The demonstrations at the Ambassador Bridge, downtown Ottawa and elsewhere have targeted vaccine mandates and other coronavirus restrictions and vented fury toward Prime Minister Justin Trudeau, who has called the protesters a “fringe” of Canadian society.

The protests have reverberated outside the country, with similarly inspired convoys in France, New Zealand and the Netherlands, and the U.S. Department of Homeland Security warned that truck protests may be in the works in the United States.

Anti-vaccine mandate protestors yell at a television crew as they record a live interview at a roadway near the Ambassador Bridge U.S.-Canada border crossing, in Windsor, Ontario, Canada on February 11, 2022.

Geoff Robins/AFP via Getty Images


Daniel Koss was among those who stayed overnight. Shortly before police advanced, he said the protest had succeeded in bringing attention to demands to lift COVID-19 mandates and he was happy it remained peaceful.

“It’s a win-win,” Koss said. “The pandemic is rolling down right now, they can remove the mandates, all the mandates, and everyone’s happy. The government does the right thing, and the protesters are all happy.”

He said he believed most people would disperse in an orderly fashion, “because we don’t want to cause a big problem.” 

Police clear a roadway at the Ambassador Bridge US-Canada border crossing blocked by truckers as they protest anti-vaccine mandates in Windsor, Ontario, Canada on February 11, 2022.

Geoff Robins/AFP via Getty Images


More protesters arrived to the area late Saturday morning, though, carrying flags and yelling. Police continued to back people away from the bridge, and there were no visible physical confrontations.

The previous day, a judged ordered an end to the blockade of mostly pickup trucks and cars, and Ontario Premier Doug Ford declared a state of emergency allowing for fines of 100,000 Canadian dollars and up to one year in jail for anyone illegally blocking roads, bridges, walkways and other critical infrastructure.

“The right to protest does not outweigh the right to get food, fuel and goods across our border,” he tweeted Friday. “That’s why we are ensuring our police have the tools and powers to resolve this situation and restore order.”

The Ambassador Bridge is the busiest U.S.-Canadian border crossing, carrying 25% of all trade between the two countries. 

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Sports

Sheriff: Sturgis rally kickoff among busiest in decades

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The first days of this year’s Sturgis Motorcycle Rally in South Dakota were among the busiest that local authorities say they have ever seen even as experts warn the gathering could lead to a surge in COVID-19 cases.

“There are more people here than in the 31 years I’ve been doing this,” Meade County Sheriff Ron Merwin told the Rapid City Journal in an article published on Saturday.

According to Merwin, the sheriff’s office has received 104 calls for service since Friday, when the rally officially kicked off, mostly about traffic stops and accidents which are nearly double the traffic calls received last year.

“I don’t know what it is this year, but it seems people are in a hurry to get here and are causing all kinds of traffic issues,” the sheriff said. “We are asking the public to please follow our traffic laws and be safe out there.”

Sturgis Police Chief Geody VanDewater told the Journal that 207 open container violations have been issued so far, including two arrests.

Experts have been raising coronavirus-related concerns about the rally since before it started, particularly with the more contagious delta variant spreading across the U.S. Last year’s rally was believed to be a “superspreader event” linked to thousands of cases.

Top White House medical adviser Anthony FauciAnthony FauciCNN’s Jim Acosta on delta variant: ‘Why not call it the DeSantis variant?’ Sunday shows preview: US grapples with rising COVID-19 cases Reba McEntire announces breakthrough COVID-19 infection MORE on Sunday remarked that he was “very concerned” about the potential of another surge in cases in the South Dakota region.

“I mean, to me it’s understandable that people want to do the kinds of things they want to do. They want their freedom to do that,” Fauci said on NBC’s “Meet the Press.” “But there comes a time when you’re dealing with a public health crisis that could involve you, your family and everyone else, that something supersedes that need to do exactly what you want to do.”

An analysis released year determined that the Sturgis rally was linked to more than 266,000 COVID-19 cases. South Dakota Gov. Kristi NoemKristi Lynn NoemThousands of bikers descend on Sturgis amid delta spread fears Noem to attend Sturgis charity ride amid COVID-19 spike America’s pandemic of COVID hypocrisy MORE (R) baulked at the analysis last year, claiming it was “fiction.” Noem is expected to attend the motorcycle rally this year.

According to the South Dakota Department of Health, around 60 percent of the state’s total population has received at least one dose of a COVID-19 vaccine.



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Business

Is Travel Coming Back? Airports Have Busiest Days Since March 2020

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Airline executives said they are starting to see a path out of the coronavirus pandemic as more passengers resume travel, following a weekend when airport volumes hit their highest levels in a year.

Delta

DAL 2.33%

Air Lines Inc. bookings began picking up five or six weeks ago as people have begun making plans for spring and summer, Chief Executive Officer

Ed Bastian

said at an industry conference Monday.

“We’ve seen some glimmers of hope over the last year, but they’ve been false hope,” Mr. Bastian said. “But this seems like it’s real.”

Airline stocks climbed Monday. Shares of

United Airlines Holdings Inc.

UAL 8.26%

rose 8.3%, while shares of

American Airlines Group Inc.

AAL 7.70%

climbed 7.7% and Delta shares rose 2.3%.

The pandemic brought travel to a near halt last spring. Travel restrictions and fear of infection kept people at home and out of airports for most of the year: U.S. airlines carried 60% fewer passengers in 2020 than in 2019, bringing passenger traffic to the lowest level since the mid-1980s, according to the Bureau of Transportation Statistics.

Major U.S. airlines lost about $35 billion in 2020. But on Monday, United and Delta said they could stop bleeding cash this month.

That was hard to imagine at the beginning of this year. Airline executives said January and February were even weaker than they expected, as a high numbers of cases, the rise of more contagious variants, and new Covid-19 testing requirements for people arriving from abroad had a chilling effect.

Executives said they remain cautious. The Centers for Disease Control and Prevention still advises against travel, and the number of people passing through U.S. airports is still half—or less—of what it was for most days in 2019, according to the Transportation Security Administration.

But the numbers are climbing. Airports screened nearly 1.36 million people Friday and more than 1.34 million people on Sunday, two of the busiest days since March 2020.

Numbers of new Covid-19 cases are dropping, and distribution of vaccine doses has picked up. President Biden said earlier this month that the U.S. will have enough vaccines for all American adults by the end of May.

Some states, including New York and Connecticut, are relaxing rules requiring that inbound travelers quarantine.

And there is more to do once people arrive. California, for instance, has paved the way for

Walt Disney Co.

’s Disneyland and other attractions to reopen at limited capacity if certain test positivity benchmarks are met. State and local governments—even in heavily restrictive states such as Michigan and Illinois—are allowing restaurants to seat some patrons indoors again.

Southwest Airlines Co.

LUV 1.75%

and JetBlue Airways Corp. also said Monday that more people are making plans to travel, booking vacations or trips to visit friends and family, helping to pare expected revenue declines this quarter.

Amy Curtis, who lives in Arizona, has been vaccinated since the end of February. When she learned over the weekend that her mother in Pennsylvania had also received her second shot, Ms. Curtis decided to book a visit.

“It was one of those impulsive things,” she said. “Life is so short—I feel like I need to take this opportunity. I don’t know when I may have it again.”

Ms. Curtis said she doesn’t yet feel comfortable traveling just for fun or vacation. But others are hitting beaches and ski resorts, according to airlines and analysts. JetBlue sold more bundled flight-and-hotel vacation packages last week than ever before, Chief Executive

Robin Hayes

said at the conference hosted by

JPMorgan Chase

& Co.

Bookings to destinations such as Florida and Hawaii, while still down from 2019 levels, are holding up better than other areas, according to data from ForwardKeys, a travel-analytics company. Domestic bookings were 42% of 2019 levels in the first week of January but were at 64% of 2019 levels in the first week of March, according to its data.

“There has been progressive growth in U.S. domestic bookings every week since the beginning of the year,” said

Olivier Ponti,

vice president of insights at ForwardKeys.

The recent uptick in flight bookings is helping to stem the amount of cash the carriers have been losing daily, executives said Monday. Airlines have been on track to burn through $150 million in cash a day during the first three months of this year, according to trade group Airlines for America.

United CEO

Scott Kirby

said at the conference Monday that the company expects its cash flow to turn positive, excluding debt payments, this month. Mr. Bastian also said Delta expects to stop burning cash as soon as this month.

“We know that we can’t yet put Covid in the rearview mirror,” Mr. Kirby said, noting that the airline remains unprofitable and would have to focus on repaying the debt it has taken on. But he said he expects there could be a steady travel boom on the way after a year when many people suspended or curtailed leisure experiences.

Airline executives have long said that travel demand would roar back once more people are vaccinated. While many international borders remain closed and businesses aren’t rushing to resume client meetings and conferences, executives said there are signs that pent-up demand is returning.

“Our last three weeks have been the best three weeks since the pandemic hit,”

American Airlines

AAL 7.70%

CEO

Doug Parker

said.

Airports in Paris and Singapore as well as airlines including United and JetBlue are experimenting with apps that verify travelers are Covid-free before boarding. WSJ visits an airport in Rome to see how a digital health passport works. Photo credit: AOKpass

Carriers are also on firmer financial footing, having secured three rounds of government aid to cover the costs of paying workers, in addition to billions of dollars of private funding. The American Rescue Act that President Biden signed into law last week includes $14 billion to cover salaries and benefits for airline workers in exchange for pledges not to furlough or lay off employees until the fall. That brings the total amount of government payroll support for airlines to $54 billion.

American Airlines also said last week it would raise $10 billion by putting up its frequent-flier program as collateral.

Mr. Parker said, “For the first time since this crisis hit a little over a year ago, we at American are not looking to go raise any money.”

How the Reopening Will Affect You

Write to Alison Sider at alison.sider@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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