Long-Term Market Returns: A Changing Landscape
Key Stock Stories to Watch for Tuesday’s Market
Nike’s Earnings Report
As we approach the next trading session, here are some major themes and stock movements to keep an eye on:
1. Port Strike: Potential Disruptions in Shipping
The looming strike by port workers on the Gulf and East Coasts is a key concern. Maersk, a major player in global shipping, is likely to be affected. The company’s stock rose 3% on Monday and is up 13% over the past month. If the strike materializes, expect Maersk to potentially charge higher shipping rates. Zim Integrated Shipping Services is another stock to watch, up 40% in the past month due to strong earnings. Similarly, Star Bulk Carriers and Golden Ocean have seen gains of 11% and 9%, respectively.
2. Q4 Kickoff: Analysts' Top Stock Picks
Several companies have outperformed in Q3, with D.R. Horton leading the pack, up 35%. Toll Brothers follows, increasing by 34%. DoorDash has gained 31% in Q3, and Fortinet and Howmet Aerospace both saw 28% and 29% increases. On the downside, Snap, Pinterest, and CrowdStrike suffered substantial losses, down 35%, 27%, and 27%, respectively.
3. Earnings Season: Lamb Weston, McCormick, and Cal-Maine Foods
- Lamb Weston reports earnings before the bell. Shares have dropped 23% in the last three months, now 42% below its January high.
- McCormick, up 16% in three months, also reports earnings. The stock recently hit a high but has since dropped 3.5%.
- Cal-Maine Foods, up 22% in three months, is near its 52-week high and reports before the bell as well.
4. Nike’s Earnings Report
Nike’s stock, up 17% in three months, is down 29% from its 52-week high. Investors are focused on the company’s earnings report, set to release Tuesday after the bell. The incoming CEO, Elliott Hill, is expected to take the helm in two weeks, adding additional intrigue to the stock’s future performance.
5. September and Q3 Auto Sales
Auto giants like General Motors and Stellantis have faced recent struggles. GM is down 10% over the past month, while Stellantis dropped 12% after warning of disappointing global sales. Both are expected to report Q3 auto sales, with Wall Street analysts keeping a close watch on these figures. Toyota and Honda also experienced declines of 2.3% and 1.5%, respectively, on Monday.
6. Cannabis Sector: Boost from Political Developments
Cannabis stocks like Canopy Growth, Trulieve, and Tilray saw a small jump after Kamala Harris expressed support for marijuana legalization. Canopy Growth rose 5%, Trulieve 3%, and Tilray 1%, though they remain far below their former highs.
7. Long-Term Market Returns: A Changing Landscape
While the stock market continues to deliver solid returns, investors may feel like gains have become harder to achieve compared to earlier decades. Though the S&P 500 has logged nearly 10% average annual gains since the 2000s, modern markets demand longer investment timeframes—often 20 years or more—for reliable returns. Holding periods of five or ten years may no longer guarantee the same kind of consistent performance, and many market experts warn that short-term volatility could threaten shorter investment strategies.
Conclusion
Tuesday’s trading session is poised to be eventful, with several earnings reports, the potential port strike, and geopolitical tensions looming. Key stocks in sectors like shipping, retail, cannabis, and tech will be closely monitored. Additionally, the market's long-term outlook continues to favor patient, long-term investors, despite short-term turbulence.