Watch these two stocks for big moves this week

The stock market remained fairly strong in 2023 as it was trying to recover from its struggles in 2022. Despite that Bank earnings reports heavily heavier on Dow Jones Industrial Average (^ DJI -1.14%)the NASDAQ Composite (^ix) It managed to post other modest gains, losses for Standard & Poor’s 500 (^ GSPC -0.20%) It was relatively young.


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With the stock markets mixed on Tuesday, many investors are looking forward to quarterly financial reports from some of the major players across various industries. Among the most notable reports this week are those of the video streaming giant Netflix (NFLX -1.98%) and consumer products specialist Procter & Gamble (PG -0.29%).

Below, you’ll get a better idea of ​​why investors are watching these two companies so closely and what you should expect from their respective reports.

It’s time to watch the show

Netflix is ​​set to report its financial results for the fourth quarter After the closing bell on Thursday. Even though the stock suffered a major crash in the first half of 2022, it spent most of the rest of the year regaining much of its lost ground, and investors are hoping that what Netflix says about the quarter just ended will keep its positivity. The momentum continues.

Shareholders were impressed by Netflix With the third quarter report three months ago. Although revenue growth continued to slow year over year and was actually down slightly from the second quarter, Netflix returned to net subscription growth after two periods of declining membership.

Profits were down slightly, but it came out better than most people expected. On top of that, free cash flow also boosted, and Netflix projected that it would generate about 4.5 million new paid memberships in the fourth quarter.

More important than Netflix’s short-term numbers, however, are the trends the company is seeing in the video streaming business in general. Perhaps the most significant long-term impact comes from Netflix’s decision to introduce an ad-supported tier, which would allow it to keep monthly costs low for price-sensitive subscribers. Although the current advertising environment is vulnerable to macroeconomic turmoil, the long-term potential for ad broadcasting could be huge for Netflix.

Investors can expect a taste of the announcements on the table in this quarter’s report, but the full impact probably won’t come for a few more months. However, you can expect a lot of attention paid to Thursday night’s Netflix report.

P&G looks forward to continuing to hold out

Stocks of consumer goods They did a great job of defending against bear market dips, and Procter & Gamble stock is down only slightly from its heights. Still, investors are ready to see at least some pressure on the company behind major brands like Tide and Pampers when it reports its second-quarter financial results before the opening bell on Thursday morning.

Most investors expect P&G’s quarterly numbers to be slightly lower than last year’s numbers. Sales are likely to decline by about 1%, with earnings expected to drop slightly more to $1.59 per share.

The cost increase has put pressure on P&G’s profit margins, but arguably not quite as high as some other companies. P&G’s brand strength gives it pricing power to pass on some of its higher costs to consumers, and the business has been a cash cow in the long run, too.

In general, investors will benefit from obtaining reports from companies in two different but important areas. By taking a more comprehensive look at consumer health both in the US and abroad, it will be easier to get a sense of how the rest of the earnings season might go.

Dan Caplinger He has no position in any of the aforementioned shares. The Motley Fool has and recommends positions on Netflix. The Motley Fool has a file Disclosure policy.

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