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3 Things to Watch in the Stock Market This Week

Stocks were mixed last week, with the Dow Jones Industrial Average (DJINDICES: ^DJI) ticking lower as the S&P 500 (SNPINDEX: ^GSPC) gained ground. Both indexes remained close to all time highs, up about 10% so far on the year.

^SPX data by YCharts

Earnings season spins into high gear over the next few trading days, with dozens of second-quarter reports due to come out. A few of the most anticipated will be from Facebook (NASDAQ: FB), iRobot (NASDAQ: IRBT), and McDonald's (NYSE: MCD).

Here's what investors will be looking for in the announcements.

McDonald's profit spike

McDonald's shares are riding high -- up over 20% so far this year -- heading into Tuesday morning's report. Investors cheered the fast food giant's latest operating results, which in late April showed a healthy 4% uptick in global comparable-store sales. Importantly, the core U.S. segment returned to growth by posting a 2% gain in the fiscal first quarter, compared to a 1% decline in the prior quarter.

Image source: Getty Images.

Micky D's is still struggling with declining customer traffic, which is a problem management hopes to fix through initiatives like improving food quality, modernizing stores, and expanding the all-day breakfast menu.

The company's finances should continue to improve thanks to a refranchising strategy that will push company-owned locations down to just 5% of the store base from 15% today. That move will make McDonald's even more profitable -- at the expense of sales growth. Consensus estimates call for the company to post a 5% revenue dip this quarter as earnings jump 12% to $1.62 per share .

iRobot's sales growth

iRobot posts its results after the market closes on Tuesday. Shareholders have enjoyed market-thumping returns since the company trounced sales and profit expectations in its last earnings report. Revenue spiked by 32% to start off its 2017 fiscal year, thanks to surging demand for its consumer robotic cleaners. Rising prices helped the gross profit margin soar to 52% of sales from 47% in the year ago period. "We are off to a great start...and tracking well to our near and longer term plans," CEO Colin Angle said in a press release.

Image source: Getty Images.

Angle and his team raised their full-year outlook in April and currently expect sales to come in at between $780 million and $790 million as earnings rise to between $1.45 per share and $1.70 per share. Investors, including those with a bearish outlook, will be closely watching for any updates to that prediction on Tuesday

Facebook's ad revenue

Investors are looking for jaw-dropping results from Facebook on Wednesday afternoon. The social media king is expected to post a 43% revenue spike for a quarter that saw its active user base pass 2 billion people. Earnings should jump to $1.12 per share from $0.97 per share.

Beyond those headline numbers, CEO Mark Zuckerberg and his team are likely highlight Facebook's success at monetizing its massive user base. At the last check in, average revenue per user leapt to over $17 in the U.S. market from $12 a year ago .

Improvements of that scale will be harder to come by now that the company has essentially reached full advertising volume on its feeds. However, management is optimistic that video content will make the site both more engaging for users and extra valuable for advertisers. At the same time, Facebook's other huge platforms, including Messenger, might begin generating meaningful revenue as the company slowly introduces ads to the services.

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Demitrios Kalogeropoulos owns shares of Facebook and McDonald's. The Motley Fool owns shares of and recommends Facebook and iRobot. The Motley Fool has a disclosure policy.