• U.S. CPI inflation, regional banking woes, extra earnings in focus this week.
• Airbnb inventory is a purchase with massive earnings beat on deck.
• Rivian shares are a promote amid anticipated weak Q1 outcomes, sluggish outlook.
• On the lookout for extra top-rated inventory concepts to guard your portfolio amid the more and more unsure financial local weather? Members of Investing Professional get unique entry to our analysis instruments and knowledge. Study Extra »

Shares on Wall Avenue rallied on Friday, with the posting its greatest one-day share acquire since Jan. 6, as traders cheered a robust U.S. jobs report and upbeat earnings from market-darling Apple (NASDAQ:).

Including to the bullish momentum, regional financial institution shares, comparable to PacWest Bancorp (NASDAQ:) and Western Alliance (NYSE:), rebounded from their sharp declines tied to the collapse of First Republic Financial institution (OTC:).

Regardless of Friday’s rally, the blue-chip Dow and the logged their worst week since March. The 30-stock Dow misplaced 1.2%, whereas the S&P 500 fell 0.8%. The tech-heavy eked out a small acquire of 0.1%.

The is predicted to be one other eventful one as traders proceed to gauge the outlook for inflation, rates of interest, and the financial system. Financial institution disaster developments can even be in focus amid ongoing concern over the well being of the regional banking system.

On the financial calendar, most vital will probably be Tuesday’s U.S. shopper value inflation report for April. As per Investing.com, analysts count on each the month-over-month (+0.4%) and year-over-year charges (+5.0%) to stay at elevated ranges.

The CPI knowledge will probably be accompanied by a heavy slate of Federal Reserve audio system, which is able to absolutely add to the controversy on the U.S. central financial institution’s subsequent transfer.

At present, markets overwhelmingly count on the Fed to pause its financial tightening cycle at its subsequent assembly in June, with odds for no motion standing at 91.5%, in accordance with Investing.com’s

Elsewhere, among the key earnings stories to look at within the week forward embody updates from Walt Disney (NYSE:), PayPal (NASDAQ:), Roblox (NYSE:), Palantir (NYSE:), Tyson Meals (NYSE:), and Fox (NASDAQ:).

No matter which course the market goes, beneath I spotlight one inventory more likely to be in demand and one other which may see additional draw back.

Keep in mind although, my timeframe is simply for the week forward, Might 8-12.

Inventory To Purchase: Airbnb

I consider Airbnb’s (NASDAQ:) inventory will outperform within the week forward as the web journey big’s first quarter earnings replace will shock to the upside for my part due to favorable shopper demand traits and an bettering basic outlook.

Airbnb is scheduled to ship its Q1 report after the U.S. market closes on Tuesday, Might 9. In response to the choices market, merchants are pricing in a swing of 8.8% in both course for ABNB inventory following the replace.

Regardless of a difficult working setting, I consider the San Francisco, California-based trip rental agency is poised to ship a better-than-expected print because it capitalizes on the continuing restoration within the journey business regardless of recession fears which have sparked issues about shopper spending.

Airbnb – which went public in late 2020 – operates a web-based market platform for trip leases, cabins, seashore homes, distinctive houses, in addition to tourism experiences world wide. It’s extensively seen as a aggressive menace by the resort business.

Supply: InvestingPro

Not surprisingly, an Investing Professional survey of analyst earnings revisions factors to mounting optimism forward of the report, with analysts rising more and more bullish on the web vacation-rental reserving platform’s future prospects because it advantages from a post-pandemic restoration in journey demand.

Consensus expectations name for Airbnb to put up earnings per share of $0.14, a big enchancment when in comparison with a internet lack of $0.03 a share within the year-ago interval. Income is forecast to rise 18.3% year-over-year to $1.78 billion, pushed by robust outbound journey from the Asia-Pacific area as China lifted journey restrictions.

As such, I reckon the corporate’s gross nights booked and cross-border journeys will each beat expectations in Q1 as journey continues to rebound from the fading affect of the Covid well being disaster.

Airbnb has crushed Wall Avenue’s top-line expectations in every of the final seven quarters, whereas trailing income estimates solely as soon as in that span, a testomony to robust execution throughout the corporate.

ABNB ended Friday’s session at $119.90, incomes the corporate a valuation of $75.5 billion. Shares have been on a tear for the reason that begin of 2023, scoring a year-to-date acquire of 40.2% to simply outperform the broader market over the identical timeframe.

Investing Professional at present has a 12-month value goal of about $134 for ABNB shares, implying 12% upside forward, making it a wise time to purchase.

Inventory To Promote: Rivian Automotive

I consider shares of Rivian Automotive (NASDAQ:) will endure a difficult week forward, with a possible breakdown to new file lows on the horizon, because the struggling electrical truck startup’s newest earnings will probably reveal one other quarterly loss as a result of powerful financial local weather.

Market members count on a large swing in RIVN inventory following the outcomes – that are due after the shut on Tuesday, Might 9 – with a potential implied transfer of 15.5% in both course, in accordance with the choices market.

In response to Investing Professional, Wall Avenue sees the Irvine, California-based EV maker dropping -$1.58 a share within the first quarter, worsening from a internet lack of -$1.42 within the year-ago interval, because it spends closely in an try and fend off competitors from extra established automakers comparable to Tesla (NASDAQ:), Ford (NYSE:), and Basic Motors (NYSE:).

Supply: InvestingPro

Income is seen rising 596% year-over-year to $662 million, nonetheless that may mark a slowdown from the $663 million gross sales whole recorded within the earlier quarter as Rivian struggles within the face of weakening demand amid a deteriorating EV market.

Underscoring the damaging affect of a number of near-term headwinds, Rivian at present has an especially poor Investing Professional ‘Monetary Well being’ rating of 1/5. The Professional well being metric is set by rating the corporate on over 100 elements in opposition to different corporations within the Shopper Discretionary sector.

Supply: InvestingPro

That leads me to consider that there’s a rising draw back danger that Rivian may reduce its gross sales steerage and manufacturing and supply outlook for the remainder of the yr to mirror larger price pressures and decrease gross margins.

RIVN inventory, which slumped to an all-time low of $11.68 on April 26, ended at $13.41 on Friday. At present valuations, Rivian has a market cap of $12.6 billion.

Shares are down 27.2% thus far in 2023. Much more alarming, RIVN stays greater than 90% beneath its all-time excessive of $179.47 touched shortly after its IPO in November 2021 as traders dumped high-growth non-profitable corporations with wealthy valuations which might be most delicate to rising charges and accelerating inflation.

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Disclosure: On the time of writing, I’m brief on the S&P 500 and Nasdaq 100 by way of the ProShares Quick S&P 500 ETF (SH) and ProShares Quick QQQ ETF (PSQ). I recurrently rebalance my portfolio of particular person shares and ETFs based mostly on ongoing danger evaluation of each the macroeconomic setting and corporations’ financials. The views mentioned on this article are solely the opinion of the writer and shouldn’t be taken as funding recommendation.