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Although the busiest stretch of the second-quarter earnings season is mercifully behind us, it's far from over. Among the notable names on this week's earnings calendar is entertainment giant Walt Disney (DIS, $105.71).
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DIS is slated to report its fiscal third-quarter results after Wednesday's close. Analysts, on average, estimate earnings of $1.00 per share for the three-month period ended June 30, up 44.9% on a year-over-year (YoY) basis. The Street forecasts revenue to jump 20.6% to $20.5 billion.
While Disney's theme parks likely benefited from an easing of COVID-related lockdowns, investors and traders will be interested to see what impact high inflation had on consumers' purchasing power, says Charlie Williams, equity research assistant at U.K.-based financial firm Hargreaves Lansdown.
But as important as parks are to the entertainment conglomerate's bottom line, Disney's direct-to-consumer segment will likely draw the bulk of the market's attention. After all, competitor Netflix (NFLX) last month said it lost nearly 1 million subscribers in the April-to-June period, Williams adds. In its fiscal second quarter, Disney's Disney Plus streaming service added a greater-than-expected 7.9 million subscribers.
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It was a choppy day of trading on Thursday as investors looked ahead to the market's next big catalyst: the July jobs report, which will be released tomorrow morning.
"The labor market is an extremely critical input in the debate around inflation and how many Fed rate hikes are needed to 'whip it' that has been driving markets," says Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.
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In tomorrow's report, "investors will be looking for evidence that the pace of job gains is slowing to a more sustainable pace and/or that more Americans are returning to the labor market," he says. Schutte adds that wage data is another important metric to watch, particularly to see if average hourly earnings start to moderate - something that is needed in order for inflation to push lower.
Today's weekly jobless claims data gave us a glimpse into the state of the labor market, with initial unemployment claims climbing by 6,000 to 260,000 in the final week of July.
"With the jobs report coming tomorrow, today's slight uptick in jobless claims isn't likely to be a major market nor Fed mover," says Mike Loewengart, managing director of investment strategy at E*Trade. "Remember that while jobless claims have been slowly rising, the labor market remains robust."
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The market certainly didn't have much of a reaction to today's numbers. The Nasdaq Composite rose a modest 0.4% to 12,720, as shares of Latin American e-commerce concern MercadoLibre (
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