|Wall Street Breakfast: The Week Ahead|
Sep. 04, 2022 7:00 AM ET
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Economic reports in the week ahead
Central bank meetings are front and center globally in the week ahead with the with the Reserve Bank of Australia, European Central Bank and the Bank of Canada all ready to tackle inflation. The ECB is expected to hike rates 75 basis points after recent remarks from members turned more hawkish, although there is still some speculation of a 50-point increase. For Federal Reserve watchers, the Beige Book report will be released and Jerome Powell will make a notable conference appearance. In the energy market, the OPEC+ meeting will take place amid more talk about output cuts with some producer nations forecasting near-term oil surpluses. The earnings calendar slows down for the holiday-shortened week, although the reports from GameStop (NYSE: GME), DocuSign (NASDAQ: DOCU), and Kroger (NYSE: KR) are likely to create some buzz. Meanwhile, Apple's (NASDAQ: AAPL) 'Far Out' event is expected to reveal the next generation of iPhones.
Earnings spotlight: Tuesday, September 6 - Gitlab (NASDAQ: GTLB), Guidewire Software (NYSE: GWRE), and Coupa Software ( COUP).
Earnings spotlight: Wednesday, September 7 - Nio ( NIO), GameStop ( GME), Casey's General Stores ( CASY), American Eagle Outfitters (NYSE: AEO), and Academy Sports And Outdoors (NASDAQ: ASO).
Earnings spotlight: Thursday, September 8 - Zscaler (NASDAQ: ZS), Docusign ( DOCU), and SMith & Wesson Brands ( SWBI).
Earnings spotlight: Friday, September 9 - Kroger ( KR).
IPO watch: Jupiter Neurosciences ( JUNS) is scheduled to start trading on September 7. The quiet periods expire on Treasure Global ( TGL) and Reborn Coffee ( REBN) next week, while the IPO lockup period ends for a block of shares on Bausch + Lomb ( BLCO).
Apple event preview: Apple ( AAPL) is widely expected to announce the iPhone 14 lineup of four models (Pro, Pro Max, Max and base model) at a launch event being held September 7 at the company's headquarters in Cupertino, California. The pricing on the models will be a big focus amid the inflationary backdrop. Some analysts thinks Apple could choose to increase the price of the Pro models and leave the lower end models unchanged from the iPhone 13. The event this year has the tagline "far out" in a possible reference to night-sky photography. Other products that could be announced at the event include the Apple Watch Series 8 with a faster processor and a new AirPods Pro product. Ahead of the event, Morgan Stanley noted that investors are "slightly more positively skewed" on Apple ( AAPL) than they were prior to its most recent earnings report, but institutional investors are still leaning negative on the tech giant. Analyst Erik Woodring said Apple ( AAPL) continues to be a "battleground" for investors, as bears believe it over-earned in fiscal 2021 and fiscal 2022, while bulls see it as more immune to macro challenges. The analyst noted that Apple ( AAPL) shares have outperformed the S&P 500 by 3% since the tech giant reported its most recent quarterly results. Count Wedbush Securities as being in the bull camp on its view that Apple's ( AAPL) services business is worth north of $1T all by itself. The risk-reward profile is called very compelling at current levels when the flagship hardware business is also factored in. "In a nutshell, we believe Apple's growth story remains well intact with clear momentum around iPhone 14 around the corner despite the shaky macro," updated analyst Dan Ives.
Casinos, sports betting and football: The NFL season kicks off on September 8 with NBC covering the Thursday nigh matchup between the Los Angeles Rams and Buffalo Bills. The following Thursday night games will be carried by Amazon ( AMZN) Prime. The beginning of the pro and college football season has thrown a big spotlight on the casino sector in the past due to the sports betting potential. In its look at the sector, Macquarie said the healthy underlying trends keep it the most positive on names with strong underlying free cash flow, an online gaming growth strategy, and with lower leverage. The firm's top gaming stock picks are Penn National Gaming ( PENN), MGM Resorts ( MGM), and Caesars Entertainment (NASDAQ: CZR) - although growth names like Flutter ( OTCPK:PDYPY), Bally's Corporation ( BALY), and DraftKings ( DKNG) are still seen as attractive over the long term.
Box office preview: More than 3,000 theaters in the U.S. plan to participate in the first ever National Cinema Day on September 3. The flat $3 price for any movie in any format is meant to drive up traffic for chains like AMC (NYSE: AMC) and Regal and encourage moviegoers to check out premium formats such as Dolby and IMAX ( IMAX). The initiative is also aimed at promoting upcoming fall movies from studios like A24, Amazon Studios ( AMZN), Disney ( DIS), Focus Features, Lionsgate, Neon, Paramount ( PARA), Sony Pictures Classics, Sony (SNE), United Artists Releasing, Universal ( CMCSA), and Warner Bros. (NASDAQ: WBD).
Corporate events: Hippo Holdings Inc. (NYSE: HIPO) will hold an Investor Day event on September 6 with updates on the company's financial outlook and operating strategy expected, while HubSpot (NYSE: HUBS) has its analyst day event scheduled for September 7. Moderna ( MRNA) will host a virtual R&D Day on September 8 with presentations from top execs and clinical team leaders. Clear Channel Outdoor Holdings (NYSE: CCO) and D.R. Horton ( DJI) also have investor day events on the same day. On September 9, Tapestry ( TPR) will host an Investor Day event with a focus on the company’s long-term strategic initiatives and financial outlook, while Nike ( NKE) has its annual shareholder meeting scheduled.
Notable conferences: The conference schedule heats up in a big way following the traditional summer slowdown. This week may be headline by the Citi Global Technology Conference, which features appearances by Ciena (NYSE: CIEN), Applied Materials (NASDAQ: AMAT), Juniper Networks ( JNPR), Autodesk (NASDAQ: ADSK), and many more tech players. Other big conferences scheduled for the week include the Barclays Global Consumer Staples Conference, the Goldman Sachs 29th Annual Global Retailing Conference, the Bank of America Media, Communications and Entertainment Conference, the Wells Fargo Healthcare Conference, the Evercore ISI 2nd Annual Technology, Media & Telcom Conference, the KBW Insurance Conference, the Citi BioPharma Conference, and the Bank of America Gaming & Lodging Conference.
Barron's mentions: The shortage in the labor market is a situation that the U.S. may not easily solve, warns the publication this week. The average annual growth of the U.S. prime working-age population is projected to slow sharply to just 0.2% over the next three decades vs. the 1% average annual growth over the past 40 years. Other major factor are that retirees as a percentage of the population has climbed sharply and immigration to the U.S. has dropped by more than 50% since 2010. Those harsh realities indicate that hiring challenges could continue and are not transitory due to pandemic or stimulus factors. Economists warn that an entrenched labor shortage could continue to cut into productivity and economic growth, as well as counteract the Federal Reserve's efforts to curb inflation. If there is a fix to the labor problems, it may be through technology. Annual global sales of industrial robots and factory automation are forecast to more than double by 2027 to more than $100B. Currently, the market leaders are Switzerland’s ABB ( ABB), Japan’s Fanuc ( OTCPK:FANUY) and Yaskawa Electric, ( OTCPK:YASKY) and Germany's Kuka ( OTCPK:KUKAF). Companies such as United Parcel Service (NYSE: UPS) and Amazon ( AMZN) are also well ahead of the curve on automation. Meanwhile, Casella Waste Systems ( CWST) is a waste-management firm known for using robots to load trucks and to sort trash and recyclables, while McDonald's ( MCD) is well ahead of its peers with the use of ordering kiosks at restaurants. Other potential beneficiaries of a shortage of skilled labor could be staffing firms like Korn Ferry (NYSE: KFY), Robert Half International ( RHI), and ManpowerGroup ( MAN).
Sources: EDGAR, Bloomberg, CNBC, Reuters