Consumer confidence, Conagra earnings: What to know in markets Tuesday

Heidi Chung

As the novel coronavirus continues to dominate markets around the world, investors will get a read on how it is affecting consumer sentiment Tuesday.

The Conference Board will release its consumer confidence reading for March, and economists surveyed by Bloomberg expect it drop sharply to 110.0 from 130.7 in February.

The March report will only capture part of the impact from COVID-19 because the survey was conducted during the third week of the month. “Although lower mortgage rates and gasoline prices would provide some relief to household cash flows, the country-wide shutdown measures, sharp stock market sell-off, and worse news on contagion should push optimism lower,” Credit Suisse said in a note March 26. “The deterioration in consumer sentiment is likely to get worse in April as shutdowns and layoffs take a toll on confidence.”

Various packaged canned pasta

Meanwhile, Conagra Brands (CAG) is the only major company scheduled to report earnings Tuesday morning. The food giant is expected to report adjusted earnings of 49 cents per share on $2.58 billion in revenue during its fiscal third quarter.

As with other major food companies, COVID-19 impact on business has been one of the main themes. With the recent surge of at-home eating, analysts anticipate that Conagra also benefited from panic buying of packaged goods.

JPMorgan analyst Ken Goldman pointed out that Conagra brings in roughly 80% of sales from North American food retail and only 10% from U.S. food service. Recent announcements from rival companies like Campbell Soup (CPB) have noted a boost in sales in categories such as soup and pasta. Thus “we would expect CAG’s key products – frozen entrées, frozen vegetables, canned goods (e.g., pasta, tomatoes, chili), and meat snacks – to show a significant uptick in consumption,” Goldman wrote in a note March 26.

Shares of Conagra have tumbled 17.5% so far this year, while the broader market fell nearly 19% in the same time period.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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