|Wall Street Breakfast: The Week Ahead|
Dec. 26, 2021 7:01 AM ET7 Likes
Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Stitcher and Spotify.
Economic reports in the week ahead
A quiet week could be ahead for investors as the period between Christmas and the New Year typically sees about 30% lighter trading volume than normal and some gentle stock price gains amid window dressing moves from fund managers. The stock market has gained 1.7% on average in the final week of the trading year and first two days of the new year, but could be tested this year with Omicron headlines running up into the traditional Santa Claus Rally. The corporate calendar is razor thin next week with only a metaverse conference and semiconductors conference standing out. On the economic front, updates on home prices, jobless claims and the Chicago PMI numbers will be the numbers to watch. A first-of-its-kind metaverse hosted by Baidu (NASDAQ: BIDU) could also create some buzz in the week ahead.
Earnings spotlight: Tuesday, December 28 - Cal-Maine Foods (NASDAQ: CALM) is due to report earnings. The company has missed the consensus revenue estimate in four of the last quarters and the consensus EPS mark in five of the last eight quarters.
IPO watch: No IPOs are expected to debut during the holiday-disrupted week. The IPO lockup periods expire on Aerovate Therapeutics (NASDAQ: AVTE) on December 27 and Torrid Holdings (NYSE: CURV) on December 28. AVTE trades about 27% below its IPO pricing level, while CURV is more than 50% below its IPO pricing level. Pre-IPO shareholders with DiDi Global (NYSE: DIDI) will be allowed to sell their shares after a lock-up period expires. IPO lockup expirations have led to one-week share price gain in 68% of the expirations over the last two months.
Projected dividend increases: There are no dividend announcements expected during the week ahead, but there are plenty of dividend stock picks being circulated as part of 2022 previews. Seeking Alpha author Fredrik Arnold culled through a list of "best stocks for 2022" articles distributed by major media sources to yield Petroleo Brasileiro SA Petrobras (NYSE: PBR), AT&T Inc (NYSE: T), Enbridge Inc (NYSE: ENB), TotalEnergies SE (NYSE: TTE), Medical Properties Trust Inc (NYSE: MPW), STORE Capital Corp (NYSE: STOR), Clearway Energy Inc (NYSE: CWEN), NiSource Inc (NYSE: NI) and AES Corp (NYSE: AES) as some of the more interesting names.
SPAC votes: Shareholders with Athena Technology Acquisition (NYSE: ATHN) are scheduled to meet on December 28 to approve the SPAC deal to take concentrated solar energy company Heliogen public. Heliogen’s technology uses a field of mirrors to capture sunlight for converting into heat, electricity or clean fuels. ArcelorMittal (NYSE) has an initial investment of at least $10M in Heliogen. NextGen Acquisition Corp. II (NASDAQ: NGCA) shareholders also meet to vote on December 28 on the SPAC deal to take Virgin Orbit public. The satellite launch company was split off from Virgin Galactic (NYSE: SPCE) in 2017.
Metaverse conference: Baidu ( BIDU) hosts its annual flagship developers' conference Baidu Create. The event will also be China's first metaverse conference as it takes place on the XiRang platform with as many as 100,000 online attendees interacting in the virtual world with speakers and presenters. Baidu plans to release its technological advances and applications in areas such as artificial intelligence, autonomous driving, intelligent transportation, quantum computing and biocomputing at the conference. Baidu ( BIDU) surprised some analysts by saying it will take a six years before it will have a full launch of its metaverse concept. The upcoming BIDU event will also be a proof-of-life test for metaverse business conferences in general. As the metaverse continues to attraction heading into 2022, investors looking at wide exposure to online 3-D virtual environments have the Roundhill Ball Metaverse ETF (NYSEARCA: META) as an option. Top holdings include Nvidia (NASDAQ: NVDA), Roblox (NYSE: RBLX), Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: FB) and Unity Software (NYSE: U). Further down the list are companies like Fastly (NYSE: FSLY), South Korea-traded Krafton, Matterport (NASDAQ: MTTR), Galaxy Digital ( OTCPK:BRPHF), Limelight Networks (NASDAQ: LLNW) and Planet Labs (NYSE: PL).
Semiconductor conference: The SEMICON Taiwan Semiconductor conference runs from December 28-31 with a focus on the latest innovations that will drive the next wave of industry growth. Chip heavyweights Taiwan Semiconductor Manufacturing Company (NYSE: TSM), ASE Technology Holding Co (NYSE: ASX) and Nanya Technology ( OTCPK:NNYAF) will be exhibitors, as well as new artificial intelligence, Internet of Things, 5G and machine learning startups. Onto Innovation (NYSE: ONTO) and Tokyo Electron Limited ( OTCPK:TOELF) are being circled as exhibitors to watch at the conference.
Box office preview: Sony's (NYSE: SONY) Spider-Man: No Way Home is forecast to top the box office for a second weekend with a haul of $90M to $120M. The latest Spider-Man installment is expected to become the first and only film released this year to top $1 billion at the global box office. Warner Bros.' ( T) The Matrix: Resurrections is forecast to bring in $37M to $55M in the U.S. for the five-day weekend period even as it also streams on HBO Max. Universal's (NASDAQ: CMCSA) Sing 2 is seen hauling in $45M to $69M for the five-day weekend. Disney's (NYSE: DIS) The King’s Man is anticipated to bring in close to $20M. A strong holiday box office showing could reset expectations for AMC Entertainment (NYSE: AMC), Cineworld ( OTCPK:CNNWF), Cinemark (NYSE: CNK), IMAX (NYSE: IMAX) Marcus (NYSE: MCS), Reading International (NASDAQ: RDI), Cineplex ( OTCPK:CPXGF) and National CineMedia (NASDAQ: NCMI).
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital