As we head into a jam-packed week of earnings, cyclical stocks appear to be in the spotlight yet again. For the most part, this is due to several moving parts worth considering in the stock market today. To begin with, the biggest banks in the U.S. posted their quarterly earnings last week. Most of which posted stellar quarters, exceeding analyst estimates across the board. These include the likes of Bank of America (NYSE: BAC) and Citigroup (NYSE: C) among others. With banks being key parts of financial systems, this growth could be indicative of the current state of the economy.
Alternatively, other factors to consider would also be rising inflation figures, a potential taper, and economic slowdown in international markets. Regarding the latter, China’s quarterly growth domestic product (GDP) and industrial production figures came in earlier today. In detail, GDP grew by 4.9% while industrial production rose by 3.1%, coming in below expectations. For some perspective, economists projected increases of 5.2% and 4.5% respectively. As such, some investors may be looking to play things on the defensive side before making bold bets this week.
By and large, when it comes to top cyclical stocks in the stock market now, investors could be looking at an interesting opportunity. On one hand, those looking to bank on the current momentum of earnings season would be turning to cyclicals. Accordingly, the current earnings growth outlook for the S&P 500 for the quarter is 30%, according to data from FactSet (NYSE: FDS). On the other hand, while there may be short-term volatility in the space, investors looking for long-term gains could see buying chances now. Regardless of which group you fall under, here are three cyclical stocks to consider.Best Cyclical Stocks To Watch Right NowSquare
First up, we have Square. In essence, the California-based company is a major player in the fintech market today. This is evident given its growing portfolio of increasingly relevant digital payments solutions. From consumers to businesses of all sizes, Square brings a comprehensive suite of financial services. Through the company’s offerings, merchants have access to payment, point-of-sale, and business analytics in an all-in-one package. At the same time, Square employs its Cash App ecosystem to connect consumers with its network of merchants. In a time where contactless payment services are becoming part of the norm, SQ stock could be worth watching.
Notably, the company’s shares are now looking at gains of over 550% since its pandemic era low. While it has mostly been trading sideways this year, Square remains hard at work. Over the weekend, CEO Jack Dorsey revealed plans regarding a Bitcoin mining system. This would be a timely play as the digital currency breached the $60,000 mark over the weekend and seems to be holding strong. According to Dorsey, Jesse Dorogusker, the head of hardware at Square, will be looking into the necessary tech for this.
Furthermore, Square appears intent on making crypto mining services more accessible for the general public. Dorsey added, “Bitcoin mining should be as easy as plugging a rig into a power source. There isn’t enough incentive today for individuals to overcome the complexity of running a miner for themselves.” All of this would mark a continued push by the company into the crypto space in addition to its crypto-related investment services. Could all of this make SQ stock a top pick in the stock market for you now?Source: TD Ameritrade TOS
Another name to consider among cyclical stocks now would be Qualcomm. In brief, it is an industry-leading name in the global semiconductor market now. Through its chips, software, and related services, the company serves countless tech-focused markets worldwide now. These include but are not limited to consumer, automotive, internet-of-things, and computing applications. From 5G devices to cutting-edge wireless tech, Qualcomm’s chips are more often than not present. Because of all this, any uptrend in the economy could possibly see demand for its wares increase as well. In turn, some would argue that a case for QCOM stock could be building amidst the current global chip shortages.
Well, for one thing, Qualcomm does not seem to be slowing down anytime soon. Just last week, the company released a slew of notable updates. For starters, announced an additional $10 billion stock repurchase on top of its existing $0.9 billion of repurchase authority remaining. Subsequently, Qualcomm is also raising its quarterly dividend payout to $0.68, bringing its annual yield to 2.1%. All in all, the company appears to be confident about its current growth trajectory.
If anything, we could also take a look at its latest quarterly earnings report. In it, Qualcomm raked in a total revenue of $8.06 billion for the quarter, a solid 64% year-over-year jump. Not to mention, the company also posted gains of 139% in both its net income and earnings per share for the quarter. With that said, could QCOM stock be worth watching ahead of Qualcomm’s upcoming earnings call on November 3?Source: TD Ameritrade TOS JPMorgan Chase
Next, we have JPMorgan. As one of the largest banks in the U.S., JPMorgan could be a go-to for investors looking to bet on the economy. For a sense of scale, the company currently manages over $2.6 trillion worth of assets across more than a hundred global markets. Additionally, JPMorgan is also a global leader in investment banking. JPM stock is up by over 30% this year, outpacing the S&P 500 by a fair amount.
Understandably, the current movement in the company’s shares is likely thanks to its latest quarter’s earnings figures. Simply put, JPMorgan posted an earnings per share of $3.74 on revenue of $30.44 billion for the quarter. For comparison, Wall Street’s estimates were at $3 and $29.8 billion respectively. To highlight, a key contributor to the bank’s latest performance would be its release of $2.1 billion in credit reserves. According to JPMorgan, this is thanks to an improvement in the overall economic outlook during the quarter.
To sum it all up, CEO Jamie Dimon had this to say, “We are making important investments, including strategic, add-on acquisitions that will drive our firm’s future prospects and position it to grow and prosper for decades.” Given JPMorgan’s current momentum, some would argue that JPM stock could still have room to grow. Would you agree?Source: TD Ameritrade TOS