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Nike, FedEx among the big names reporting earnings next week. Here's what to watch

Key Points
  • Nike and Fedex are among the ten S&P 500 companies set to report earnings next week.
  • Virtus Investment Partners' Joe Terranova remains positive on Nike since "it marries momentum with quality."
  • Look out for FedEx on Tuesday, says Short Hills Capital Partners' Steve Weiss, since it will give a read into the health of the consumer and business sectors.
  • Jon Najarian, co-founder at Investitute, likes home builders Lennar and KB Homes, saying that he'll "double up" on his position if there's "any kind of hiccup" after they report quarterly estimates.

Nike and Fedex are among the ten S&P 500 companies set to report earnings next week. Market watchers will also be paying attention to the G20 summit, as the Trump-Xi trade talks could complicate the picture for some of these big names.

Nike, which is up 15% this year, will report on Thursday. Joe Terranova of Virtus Investment Partners remains positive on the stock. On Friday's "Halftime Report" he says, "What's gone on with Nike has been a very strong fundamental quality story…. It marries momentum with quality itself. It's a company that you're seeing strong technicals, and I think there's a resiliency to it — because I would've thought that Nike would have been much lower than it is right now, based on what we have with the trade dispute."

According to estimates from FactSet, analysts are expecting the retail giant to earn $.66 cents on $10.16 billion in revenue.

For Nike, a lot will hinge on how that trade dispute with China continues, the traders agree. T.D. Ameritrade's JJ Kinahan says Asia is "the number one issue that I think we're going to listen to on the calls going forward. What happens there? You remember the last earnings — their Asian business was off the charts." Next week's earnings report will coincide with the first day of the G20 summit, when Trump and Xi will meet.

Caterpillar cut to underweight at Atlantic Equities

China-related news is also affecting Micron, which reports earnings on Tuesday. Chip stocks fell today after the Commerce Department blacklisted five more Chinese companies from buying U.S. components. Even before that, J.P. Morgan and Baird lowered their price targets on the stock. However, Jon Najarian, cofounder of Najarian Family Partners, recommends, "I'm not saying it's a 'don't touch.' I just think those price targets being lowered are probably not subject to that [news] but are rather trade-related."

Terranova says, "I think the street is expecting a very bad quarter to come out. You're going to see revenue growth declining substantially. But I think it comes down to PC demand, I think it comes down to iPhone demand. On a quarterly basis you're talking mid-single digit declines for bulls, so there's going to be a lot to lift this to return it to the highs. But maybe Jon's right for a trade if the earnings come out better than expected."

Bulls shop with this big retailer

FedEx, which reports on Tuesday after the bell, is another big name the traders are looking at. Steve Weiss of Short Hills Capital Partners thinks it is especially important because it will give us a read into the health of other sectors: "It's going to give you consumer, it's going to give you business…and it's going to tell you about Amazon also." FedEx announced earlier this month that it will no longer provide express shipping for Amazon in the U.S.

Analysts are expecting the shipping giant to report EPS of $4.85 and $17.80 billion in revenue for the fourth quarter, according to estimates from FactSet.

As for home builders, Lennar and KB Home are both names that Jon Najarian, cofounder of Najarian Family Partners, continues to like. "I do think we're going to be lower for longer for rates and I think that's going to be good for these guys. As I mentioned, I think it's already been proven to be good for CarMax," which was up today after beating profit and sales estimates. That's why for Lennar and KB Home, which report on Tuesday and Wednesday, Najarian recommends, "I'd watch these — and I think if you do get any kind of a hiccup from an outlook or anything, I'm going to double up on my position."

Disclosure: Jon Najarian owns Micron calls.