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Stock Market Today: Stocks Rally Ahead of Big Earnings Week

It was a strong day in the stock market today. Small-cap stocks continue to push higher, with the iShares Russell 2000 ETF (NYSEARCA:IWM) climbing higher by 1%. Tech followed the IWM, with the PowerShares QQQ ETF (NASDAQ:QQQ) up about 0.9% on the day.

Stock Market Today

The S&P 500 and Dow Jones Industrial Average both did well too, up about 0.7% and 0.2% on Monday.

The rally comes after a funky finish to last week, where cloud stocks, high-growth tech plays and several blue-chip names took a beating. Monday’s rally also comes ahead of a busy week of quarterly results.

Earnings Preview

It is one of the busiest earnings weeks of the quarter. While SAP (NYSE:SAP) all but reported last week when it announced a CEO change, Halliburton (NYSE:HAL) jumped 6.4% after reporting its quarterly results.

On Tuesday, we’ll hear from: McDonald’s (NYSE:MCD) (here’s a preview), Procter & Gamble (NYSE:PG), UPS (NYSE:UPS) and Biogen (NASDAQ:BIIB). Snap (NYSE:SNAP) and Chipotle (NYSE:CMG) will report after the close.

On Wednesday: Boeing (NYSE:BA), Caterpillar (NYSE:CAT) and Waste Management (NYSE:WM) will report before the open. Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA), PayPal (NASDAQ:PYPL) and Ford (NYSE:F) will report after the close.

Twitter (NYSE:TWTR), Amazon (NASDAQ:AMZN), Visa (NYSE:V), Intel (NASDAQ:INTC) and 3M (NYSE:MMM) report Thursday. Verizon (NYSE:VZ) reports on Friday.

Movers in the Stock Market Today

The trade war continue to inch toward resolution. Not known for his public comments, China’s Vice Premiere Liu He said China will work with the U.S. in an effort to end the trade war. That includes solving the core issues that have been keeping a resolution off the table. Is it the exodus of production leaving China? The struggling auto market or the lower-than-expected GDP growth?

It doesn’t matter, really. Investors want a deal done — one that’s a win-win — so the global economy can breathe a sigh of relief and get back to business. Stopping the trade war would benefit both sides, He said.

In the results that SAP did report, it announced a three-year cloud partnership with Microsoft. SAP will help large companies move to the cloud, and the deal is already paying off. SAP’s has reportedly already doubled its cloud bookings for Q3. One would expect MSFT to benefit as well.

Another opioid settlement has been reached. Before a trial that was set to begin on Monday, Teva (NYSE:TEVA), McKesson (NYSE:MCK), AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH) agreed to a $260 million settlement. They will now avoid a trial as a result.

Heard on the Street

There were a lot of analyst calls on Monday, starting with Apple (NASDAQ:AAPL). It seems like each day we’re getting a new upgrade or price target hike on the iPhone maker, as it continues to hit new all-time highs. Raymond James analysts bumped their target to $250 from $280, implying almost 20% upside from Friday’s close.

Pinterest (NYSE:PINS) also caught a big boost on the day, jumping 5.7%. The move comes after RBC Capital Markets upgraded the stock to “outperform” from “sector perform.” They also raised their price target to $35 from $30, implying almost 40% upside from Friday’s close.

Boeing analysts are growing worried as headlines around the firm’s 737 jets continue to worsen. UBS downgraded the stock to “neutral” from “buy,” slashing his price target to $375 from $470.

Credit Suisse analysts also cut the stock to “neutral” from “outperform,” lowering their price target to $323 from $416. Concerns about misleading regulators over the 737 MAX safety issues are causing alarm on Wall Street.

Holy cow, what a flood of ratings investors have for Peloton (NASDAQ:PTON) now that the quiet period is over. Shares have been hammered from the stock’s $29 IPO price, but that’s not stopping a bevy of “buy” ratings from hitting the Street.

The stock racked up 15 “buy” ratings and just one “hold” rating. The ratings join the one “buy” and one “hold” rating Peloton already had.

In any regard, the highest price target rings in at $37, which comes from Goldman Sachs and implies more than 63% upside. The average price target comes out to $31, which still implies 37% upside in PTON stock. Heck, even the lowest price target of $24 from MKM Partners (Monday’s lone hold rating), implies 6% upside.

Despite the ratings, shares fell 5.4% on the day.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and PINS.

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