Cisco, NVIDIA and Unemployment Could Move the Markets
Unemployment and earnings take center stage with October’s unemployment rate expected next Friday and hundreds of companies releasing quarterly results.
The unemployment rate is expected to rise from September’s rate of 6.1% as more companies announced cuts due to the slowing economy and the credit crisis. A significant rise in unemployment could take some air out of any rally.
A number of technology companies are also expected to release results including Cisco Systems
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Investors will also hear from MasterCard Inc.
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Cisco is set to release its first-quarter results after the close on Wednesday and analysts expect the world’s biggest maker of computer networking equipment to report earnings of $0.39 per share, down from $0.40 per share a year ago, on revenue of $10.3 billion. In the near-term, the stock favors a narrowing trend, cutting back or reversing its evening performance in next-day regular session trade in all of the last four quarters.
Interestingly for shorts, Cisco has seen a negative post-bell earnings-driven trade in 12 of the 20 quarters MidnightTrader.com has tracked, and in nine of those downside evening moves the stock has followed that trade with a more aggressive negative run in the next day’s regular session. On August 5, Cisco reported results that beat the Street and shares rose 6.8% in after-hours trading. Shares cut back their gains in the following regular session, ending up 5.7%.
NVIDIA will report third-quarter results after the closing bell on Thursday and analysts expect the graphics chip maker to report earnings of $0.12 per share, down from $0.44 per share a year ago, on revenue of $892.6 million.
NVIDIA generally favors a narrowing pattern between its after-hours move and the next day session following an evening earnings event, however, in the near-term the stock has reversed course in three of the last four quarters. The recent exception was on August 12 when the company reported earnings that beat the Street but revenues that missed. Shares rose 10.5% in after-hours trading and extended their gains the following session, ending up 10.8%.
Cassie Slane is a Senior Editor at www.MidnightTrader.com.
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