The Week Ahead: Cisco and Macy's to Report Earnings

For the week ahead, we expect to see earnings from Cisco Systems CSCO and Macy’s M on Wednesday.

For March, Cisco’s revenue was above management’s expectations despite the pandemic’s impacts on required solutions from increased network demand, work-from-home communications, and security. The pandemic and quarantine affected sales in April, but we believe that Cisco’s strong balance sheet, resilient cash flow generation, and its shift to a more recurring revenue model will help protect the narrow-moat company from the long-lasting effects of the coronavirus.

For some time, Macy’s has struggled to stay relevant among the competitive pool of retailers. Although the no-moat company has stores in most top-tier U.S. malls, it also has stores in weaker malls that may not recover or reopen after the pandemic. We believe the coronavirus is a catalyst in the declining trend Macy’s has been experiencing for years. Sales have been weak, and Macy’s has been slow to combat the threats of other retailers.

Also on our market calendar for the week ahead are reports from the Treasury Budget and EIA Crude Oil Inventories on Wednesday, EIA Natural Gas Inventories on Thursday, and Retail Sales, Industrial Production, and Business Inventories on Friday.