3 things to watch in the stock market this week

A Friday’s rebound was not enough to push stocks into positive territory last week as both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P500 (SNP INDEX: ^GSPC) lose less than 1%. The indices are off their lows for the year but remain in deep negative territory so far in 2022.

The second quarter earnings season could accelerate these declines or mitigate them if there is good news on consumer spending in the face of inflation. With that in mind, let’s take a look at three big reports rolling out this week, from netflix (NASDAQ:NFLX), Dominoes (NYSE:DPZ)and boston beer (NYSE: SAM).

1. Subscriber losses at Netflix

Netflix shocked Wall Street with its latest earnings report and rattled the wider tech market. Expectations aren’t much better ahead of the next report on Tuesday.

The streaming video giant expects to post subscriber losses of around 2 million to easily mark its worst quarter of growth since pivoting to its original, proprietary content strategy more than 10 years ago. year. Part of that slump can be blamed on a growth hangover after booming earnings in 2020 and 2021. But Netflix is ​​also losing market share to cheaper rivals that have flooded the market lately.

In response to this change, look for co-CEO Reed Hastings and his team to talk about their new ad-supported sales model being developed. We will also learn on Tuesday if the new season of stranger things helped persuade more users to stick with the platform, with the help of Netflix’s staggered content release schedule that pushed the finale into the start of the fiscal third quarter.

2. Sales volumes at Domino’s

Demand for home delivery has rarely been higher, but Domino’s is struggling to stay on top of this growing market. The pizza delivery leader said in its latest report that sales fell in the US market for only the second time in the past decade, in part due to growing competition in space.

Thursday’s earnings report will show whether Domino’s has returned to its steady growth profile now that comparisons are becoming easier with the prior year period. The fast-food chain is still among the most efficient in the industry, thanks to its relatively small stores that focus on take-out and take-out orders.

The stock could start to recover if sales trends stabilize. But these improved growth trends will need to be paired with stable profitability and continued positive cash flow for investors to feel truly comfortable that the company is back on firmer footing after a post-pandemic slump. at the beginning of 2022.

3. Seltzer sales at Boston Beer

Wall Street hasn’t been kind to Boston Beer shares this year, even compared to peers such as Constellation Brands. This is mainly because the beer giant was much more exposed to the hard seltzer niche, which fell out of favor following a surge in demand during the early stages of the pandemic. Boston Beer noted a 7% drop in burnouts, a measure of consumer sales, in its latest report in late April.

Thursday’s update is expected to show improving trends as management targets a return to growth for the full year of 2022. But that yearly forecast could get a big update this week, reflecting the latest sales of the Truly franchise.

Boston Beer also forecasts a hit to its profitability as it continues to adjust to a tougher sales environment. The stock is unlikely to return to Wall Street’s good graces until the gross profit margin trend begins to recover, perhaps by the end of 2022.

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Demitri Kalogeropoulos has positions in Netflix. The Motley Fool holds positions and recommends Constellation Brands, Domino’s Pizza and Netflix. The Motley Fool recommends Boston Beer. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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