|Wall Street Breakfast: The Week Ahead|
Aug. 14, 2022 7:12 AM ET2 Likes
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Economic reports in the week ahead
Investors will get a good look at housing market trends next week with releases on the NAHB Housing Market Index, building permits, housing starts and existing home sales being thrown into the mix alongside earnings reports from Home Depot ( HD) and Lowe's ( LOW). The calendar also includes earnings reports from Target, ( TGT), Walmart ( WMT), and Macy's ( M) as well a key investor event for FuboTV (NYSE: FUBO). Meanwhile, the intense focus on inflation and interest rates will continue. While the deceleration in inflation adds some intrigue to the release by the Federal Reserve on August 17 of the minutes of the last meeting, the expectation is that they will only reinforce that members are committed to the inflation fight and the subsequent downside surprise in CPI may not alter the plan. Looking at the road ahead, Federal Reserve members will meet in Jackson Hole at the end of August and have a new inflation and jobs reports to digest before deciding whether to pull the trigger on a 50-point or 75-point rate hike at the September meeting.
Earnings spotlight: Monday, August 15 Li Auto ( LI), Tencent Music ( TME), and ThredUp ( TDUP).
Earnings spotlight: Tuesday, August 16 - Walmart ( WMT), Home Depot ( HD), Sea Limited (NYSEARCA: SEA), Agilent ( A), and Jack Henry (NASDAQ: JKHY).
Earnings spotlight: Wednesday, August 17 - Lowe's ( LOW), Target ( TGT), TJX Companies ( TJX), Brinker International ( EAT), Cisco ( CSCO), Analog Devices (NASDAQ: ADI), and Bath & Body Works (NYSE: BBWI).
Earnings spotlight: Thursday, August 18 - Estee Lauder ( EL), Tapestry ( TPR), Ross Stores ( ROST), NetEase (NASDAQ: NTES), Macy's ( M), Kohl's ( KSS), and Applied Materials (NASDAQ: AMAT).
Earnings spotlight: Friday, August 19 - Deere (NYSE: DE) and Foot Locker ( FL).
IPO watch: GigaCloud Technology ( GCT) and Innovative Eyewear (NASDAQ: LUCY) could price their IPOs next week and start trading. IPO lockup periods expire on Sunshine Biopharma ( SBFM) and Vivakor (NASDAQ: VIVK) on August 15, as well as Blue Water Vaccines ( BWV) on August 17.
Big box earnings reports: The retail sector is in the spotlight next week with big reports due in from Walmart ( WMT) and Target ( TGT). Walamrt ( WMT) will spill numbers on August 16 with analysts forecasting revenue of just under $150B and EPS of $1.60 Ahead of the report, JPMorgan said recent data showed that the retail giant may be benefiting a from a consumer trade-down effect as value shopping increases. Target ( TGT) is scheduled to follow its rival with its report on August 17. Despite an early warning from the retailer in June on margins for the quarter, analysts are still skittish over what may be the next shoe to drop. Morgan Stanley thinks it is possible Target cuts its full-year EBIT margin from the current implied ~5% level to ~4%, while Evercore ISI issued a negative trading call on the stock due to the expectation that the outlook for EPS and margins will rattle investors. Target ( TGT) is seen facing more incremental pressure than Walmart ( WMT) because it is more heavily levered to discretionary categories and the stock is not snapped up as much as a defensive play. If there is a surprise to the upside for the Minneapolis-based company, it could be based off a positive read on how the back-to-school shopping season has started and the impact of receding gas prices.
Eyes on FuboTV: FuboTV ( FUBO) will conduct its first-ever Investor Day event. FuboTV Co-founder and CEO David Gandler and CFO John Janedis, will discuss the company’s strategic initiatives and three year plan, as well as issue a 2025 profitability target. M&A speculation picked up on FuboTV ( FUBO) recently with MGM Resorts ( MGM)-Entain ( OTCPK:GMVHF)'s BetMGM property and FanDuel ( OTCPK:PDYPY) both seen as potential acquirers. Another part of the bull case on FuboTV ( FUBO) hinges on the streaming upstart seeing strong subscriber growth and close the valuation multiple gap with peers like Netflix ( NFLX), Roku ( ROKU), The Trade Desk ( TTD), and ROKU, NFLX.
Corporate events: Juniper Networks (NYSE: JNPR) CEO Rami Rahim will participate in a fireside chat hosted by J.P. Morgan on August 16. PAVmed Inc. (NASDAQ: PAVM) will host a business update conference call one the same day to provide an overview of the company’s operations over the past quarter and growth strategy. Shareholders with Silver Crest Acquisition Corporation (NASDAQ: SLCR) meet on August 18 to vote on the SPAC deal to take Tim Horton's China public. Tim Hortons China is looking to expand rapidly in China and compete with Starbucks ( SBUX), Luckin Coffee ( OTCPK:LKNCY), Yum China ( YUMC), and upstart Manner in the region. Shareholders with Social Capital Suvretta Holdings Corp. I (NASDAQ: DNAA) also meet to vote on the deal to take digital therapy firm Akili public in a SPAC deal. Read a more detailed breakdown of the events next week that could swing prices in Seeking Alpha's Catalyst Watch.
Single-stock ETFs: The universe of single-stock ETFs continues to grow with the GraniteShares 1.25x Long TSLA Daily ETF (TSL), GraniteShares 1x Short TSLA Daily ETF (NASDAQ: TSLI), GraniteShares 1.75x Long AAPL Daily ETF ( AAPB) and the GraniteShares 1.5x Long COIN Daily ETF ( CONL) all launching to track underlying shares of Tesla ( TSLA), Apple ( AAPL), and Coinbase Global ( COIN). The ETFs are aimed at providing investors short or leveraged exposure to the daily price moves of the underlying stocks by using financial instruments such as swap agreements. Last month, AXS Investments launched eight single-stock ETFs. Stocks that have or will have soon have single-stock ETFs tracking them include Nike ( NKE), Pfizer ( PFE), Microsoft ( MSFT), Netflix ( NFLX), Boeing ( BA), Wells Fargo ( WFC), Salesforce ( CRM), ConocoPhillips ( COP), Paypal ( PYPL) and NVIDIA ( NVDA). SEC Commissioner Caroline Crenshaw has warned investment advisors against recommending the ETFs to retail investors. Looking ahead, analysts think the single-stock ETFs could add even more volatility around earnings and corporate events.
Notable conferences: The conference schedule is headlined Deutsche Bank 2022 Transportation Conference from August 16-17 with appearances by senior executives from public and private companies encompassing Trucking, Rails, Logistics and Airfreight/Parcel. Presentations are expected from Union Pacific (NYSE: UNP), Landstar System ( LSTR), J.B. Hunt Transport Service( JBHT), and CSX Corporation ( CSX) to name a few. Other conferences of note include the Needham Med Tech & Diagnostics 1x1 Conference, Citi Midstream and Energy Infrastructure Conference, H.C. Wainwright 2nd Annual Ophthalmology Conference, and the Sidoti August Micro-Cap Virtual Conference.
Barron's mentions: The hunt for attractive renewable energy stocks is the focus of the cover story this week after the climate bill approved by Congress is set to unlock $370B for clean energy incentives and consumer benefits. Renewables are forecast to account for 60% of power generation in Western Europe by 2030 up from 35% today. The percentage of renewable energy is seen climbing to 38% in both the U.S. and China over the same eight-year time period. Looking even further out, annual clean energy investment globally will have to hit $4T by 2030 to meet the widely held commitment of net-zero carbon emissions by 2050, according to a forecast from the International Energy Agency. Even if those optimistic projections fall short, the rush of investments into clean energy is expected to boost share prices across the sector as the industry scales up. For investors looking to get a jump - AES ( AES), Bloom Energy ( BE), Freeport-McMoRan ( FCX), LG Energy Solution ( OTCPK:LGCLF), Plug Power ( PLUG) and Sunrun ( RUN) are the six stocks called out as having the potential to surge with the new focus on renewables.
Sources: EDGAR, Bloomberg, CNBC, Reuters