Sometimes one of the toughest things for investors to do in a bull market is to maintain confidence in the overall direction of stocks. Although Friday’s trading activity was muted, it doesn’t change the overall bullish trend, particularly given the gift the Federal Reserve just provided investors, who have banked on year-end Santa Claus rally.

Not only did the policymakers on the Federal Open Market Committee voted unanimously vote to hold interest rates steady on Wednesday for the third straight time, they essentially set table for multiple cuts, as many as three, to come as some point in 2024. With inflation now easing, combined with a stable economy, the Central bank telegraphed their policy, which is not something they typically do, often opting to use the phrase they will remain “data dependent.”

As to the number of rate cuts, penciled in at three, while that is fewer than the market would like, there is no longer the need to discuss when the so-called “Fed pivot” will come. It has arrived and announced its presence with some authority. After eleven rate hikes over the past two years, which pushed the fed funds rate to its highest level in 22 years, the end of the hike cycle is finally in the rearview mirror.

While there are still some questions about how aggressive the Fed will be when it comes to easing its policy, the pivot is nonetheless bullish for stocks, even though Friday’s session seem to lack some conviction, evidenced by the slight dip in the S&P 500 index, which gave up 0.36 points, or 0.01% to end the session at 4,719.19. Of the eleven S&P sectors, seven closed in negative territory, led by Utilities. The Dow Jones Industrial Average, meanwhile, rose 56.81 points or 1.15% to close at 37,305.16, while the tech-heavy Nasdaq Composite added 52.36 points, or 0.35%, to end the session at 14,813.92.

With the Federal Reserve on Wednesday proclaiming that its efforts to fight inflation have worked, and adding more hopes of a soft landing, stocks enjoyed another great week, extending its weekly winning streak to seven. For the week, the S&P 500 gained 2.6% and is now less than 1.6% away from a record close set in January 2022. The Dow added 2.7% during the week, after jumping more than 400 points on Thursday to surpass 37,000 for the first time. The Nasdaq gained 2.9% and is roughly 9% from its all-time intraday high. And it will get it if the Santa Claus rally does come.

In the meantime, although not quite in the thick of earnings season, there are still a few relevant companies worth watching:

FedEx (FDX) – Reports after the close, Wednesday, Dec. 19

Wall Street expects FedEx to earn $4.19 per share on revenue of $22.39 billion. This compares to the year-ago quarter when earnings came to $3.18 per share on revenue of $22.8 billion.

What to watch: Shares of the transportation and delivery giant FedEx have risen 25% over the past six months, including a gain of almost 12% in thirty days. With its shares surging 63% year to date, besting the 23% rise in the S&P 500 index, you would be hard-pressed to find a better performer in the Dow Jones Transportation Average. Currently trading at $283, the stock has added more than $30 since its last earnings results. Even more impressive is the fact that amid macroeconomic uncertainty the shares have gained 60% over the past year, more than tripling the S&P 500 index during that span.

But it’s not yet time to take profits, according to Susquehanna analyst Bascome Majors. Citing the long-term upside opportunity in FedEx from cost rationalization and valuation re-rating as greater than the near-term cyclical risk, Majors boosted his price target on FDX stock to $315 to represent close to 11% upside for shares.

“Our look at 25 years of FDX volumes vs. share performance suggests investors buying the volume declines we’ve seen in recent quarters typically do well over the next 12 months on both an absolute and market-relative basis,” noted Majors. But with some vulnerabilities showing in its core operations, particularly in package volume, the company still has a lot to prove in terms of execution. Its management has figured ways to offset volume weakness by improved yields and reduced expenses. But investors would much rather have volumes trend upward. On Wednesday the company will look to preserve investor confidence as it relates to profitability and volume improvements among the company’s various business segments.

BlackBerry (BB) – Reports after the close, Wednesday, Dec. 20

Wall Street expects BlackBerry to lose 3 cents per share on revenue of $172.37 million. This compares to the year-ago quarter when the loss was 5 cents per share on revenue of $169 million.

What to watch: BlackBerry shares have risen 35% year to date, including almost 20% gains in the past thirty days. As with the rest of the market, evidenced by its 12% rise over the past week, BlackBerry stock has caught a bid. But it’s hard to ignore that this is likely just a case of a rising tide lifting all boats. Despite BB’s recent strong performance, its shares are still down 15% over the past six months and have traded flat over the past year.

BlackBerry’s struggles with growth hasn’t gone away, particularly in the company’s Enterprise Software Services segment (its largest business). Chief Executive Officer John Chen is now reportedly exiting the company after ten years at the helm. Chen was hired to turn the company around, “a job that remains unfinished,” according to The Globe & Mail who reported on Chen’s departure. Chen has otherwise disappointed investors. Shares are down some 54% since he took office. The company in October said it would separate its Internet of Things and cybersecurity businesses into two independently operated entities.

Wall Street analysts have been busy slashing their projections ahead of Wednesday’s release, driven by prolonged weakness in the cybersecurity segment which has spans several quarters. The company has not shown it can make significant cybersecurity strides to capture that sort of market share needed to make a worthwhile gain in revenue. Nevertheless, with BlackBerry stock still down some 50% over the past three years, one quarter of any sort of improvement won’t change the narrative to justify a higher price.

Nike (NKE) – Reports after the close, Thursday, Dec. 21

Wall Street expects Nike to earn 78 cents per share on revenue of $12.43 billion. This compares to the year-ago quarter when earnings came to 85 cents per share on revenue of $13.32 billion.

What to watch: With a 24.5% rise in the past three months, including 15% gain in thirty days, Nike stocks has been one of the better performers in retail despite the macroeconomic uncertainty. While the stock hasn’t done much on a year-to-date basis, rising just 3.6%, compared with a 23% rise in the S&P 500 index, Nike still has a lot going for it, especially when assessing the company’s long-term potential with its Direct-to-Consumer (DTC) business. That segment is not only more profitable business than the wholesale, it also gives Nike more pricing power while allowing the company to affect the consumer buying experience.

Recently, Citigroup analyst Paul Lejuez upgrades the stock to Buy from Neutral. Citing optimism about Nike’s ability to protect earnings in the current and next fiscal year, Lejuez assigned a price target of $135, compared to its 52-week trading range of $88.66 to $131.31. While Lejuez noted its struggles with revenue, the analyst nonetheless referred to Nike as a “One-of-a-kind brand with visible margin recovery creates a favorable risk/reward in our view.” Some of the added features are the company’s ability to emerge leaner inventory, lower promotions, and more direct-to-consumer sales. As it stands, DTC now accounts for roughly 45% of the company’s total revenue, compared to 27.5% six years ago. On Thursday, to keep the stock running higher, the company will need to deliver a top and bottom line beat, along with positive guidance.

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

Original: Earnings Feed: Earnings to Watch This Week (BB, FDX, NKE)