This week, investors will focus on key events including the Federal Reserve meeting, the FOMC dot-plot release, Fed Chair Jerome Powell’s news conference, U.S. retail sales data, and the ongoing Israel-Iran conflict.
Amazon: A Buy Opportunity
Amazon (NASDAQ: AMZN) is recommended as a buy this week. The company is hosting its annual AWS re:Inforce conference in Philadelphia, starting Monday.
This event often boosts Amazon’s stock by showcasing advancements in its Amazon Web Services (AWS) cloud security solutions. The conference highlights innovations that could speed up enterprise adoption of AWS, especially among large organizations cautious about moving critical workloads to the cloud.
Amazon closed Friday at $212.10, about 12% below its February record high of $242.52. With a market value of $2.25 trillion, it ranks as the fourth most valuable U.S. company.
Despite a slight 3.3% decline year-to-date, Amazon’s financial health remains strong, showing excellent growth and profitability. The company’s recent quarterly results revealed accelerating AWS growth and improved e-commerce profitability, supporting a positive outlook for the stock.
Lennar: A Sell Warning
Homebuilder Lennar (NYSE: LEN) is advised as a sell. The company is set to report fiscal Q2 earnings after Monday’s market close, with expectations of a sharp decline in performance.
Analysts predict a 43.7% drop in earnings per share to $1.94 and a 6.7% decrease in revenue to $8.18 billion. The outlook for Lennar is weak due to high mortgage rates, softening demand, and economic uncertainty in the housing market.
Sentiment among analysts is bearish, with 10 downward revisions to earnings estimates and no upgrades ahead of the report. Lennar’s stock has historically fallen after disappointing earnings or cautious guidance. The technical trend is also negative, with shares closing at $108.61 on Friday, far below the 52-week high of $186.23.
Market Context
Last Friday, U.S. stocks fell sharply amid rising tensions between Israel and Iran, with the S&P 500 down 0.4%, Nasdaq 0.6%, and Dow Jones 1.3% for the week. Oil prices surged following Iran’s missile attacks on Israel.
The coming week is shortened by the Juneteenth holiday on Thursday but will feature important economic data, especially Tuesday’s retail sales report. The Federal Reserve is expected to keep interest rates steady on Wednesday but may offer clues on future rate cuts during Powell’s press conference. The Fed will also release updated projections for interest rates, unemployment, and inflation.
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