3 Things to Watch in the Stock Market This Week

Demitrios Kalogeropoulos, The Motley Fool

Stocks dipped for the second straight week last week as both the S&P 500 and the Dow Jones Industrial Average reacted to escalating trade tensions between the U.S. and China. Indexes fell by less than 1% on the week, leaving markets still up by over 10% so far in 2019.

^SPX Chart

^SPX data by YCharts

Retailing stocks will step into the spotlight in the week ahead, with earnings reports due out from Home Depot (NYSE: HD) and TJX Companies (NYSE: TJX). Shareholders of software specialist Autodesk (NASDAQ: ADSK) might also see elevated volatility over the next few days, and below we'll look at the metrics that investors are expecting to see from these three companies.

Home Depot's sales

Investors are looking for a growth rebound when Home Depot announces its first-quarter earnings results on Monday. The home improvement leader notched another year of market-thumping sales gains in 2018 as comparable-store sales jumped 5%, or about double the rate of rival Lowe's.

A customer tries out a power tool.

Image source: Getty Images.

However, sales growth fell below expectations in the most recent quarter due to what management described as an unusually wet winter. The soggy season caused delays in many home improvement projects, which means the fiscal first quarter might show stronger growth than the 3.7% rate Home Depot last reported.

Meanwhile, investors will be watching profitability metrics for signs that Home Depot's pricing power is still holding up, and that its aggressive spending on its digital sales channel is still producing healthy returns.

TJX Companies' customer traffic

TJX Companies shareholders have enjoyed market-trouncing returns lately as the off-price retailing giant racked up some serious sales and profit wins. The owner of the TJ Maxx, Marshalls, and HomeGoods brands beat growth expectations in each of the last three quarters, in fact, culminating in a holiday-season sales spike of 6%.

On Tuesday, investors are hoping to see another healthy revenue increase to kick off fiscal 2019. Steady gross profit margin in conjunction with rising customer traffic, meanwhile, would demonstrate that the retailer is still finding plenty of quality inventory at distressed prices. It will be interesting to see if TJX Companies can continue to rely on its physical store base over its e-commerce channel, or if management decides to shift its aggressive expansion plans to focus more on digital sales. CEO Ernie Herrman and his team will likely discuss any changes to that outlook as part of Tuesday's report.

Autodesk's recurring revenue

Autodesk investors are optimistic heading into the software giant's first-quarter report set for Thursday afternoon. Its last report contained plenty of good news about the business, including surging sales growth as customers enthusiastically take up its subscription-based licensing options.

This shift in the sales model is having many positive impacts on Autodesk's finances. Most of its revenue is now coming from recurring billings, for one, which adds stability to the business. Cash flow is surging, too, just as management predicted it would. That key metric is on pace to reach $1.3 billion in fiscal 2020, just three years after dipping into negative territory.

On Thursday, look for Autodesk to discuss how its finances are improving, and how the company plans to direct that growing cash flow toward productive means like a bigger sales team or more ambitious development plans. Executives might update their full-year outlook, too, which calls for sales to rise to between $3.25 billion and $3.3 billion, for growth of between 26% and 28% in fiscal 2020.

More From The Motley Fool

Demitrios Kalogeropoulos owns shares of Home Depot. The Motley Fool recommends Home Depot, Lowe's, and The TJX Companies. The Motley Fool has a disclosure policy.