Economic reports in the week ahead
The focus of the markets next week will be on Jackson Hole and the tone from Federal Reserve members at their annual symposium. The Fed meets at a time when some analysts are warning that frenzied trading in meme stocks and overconfidence in inflation being tamed could be a signal that investors are in front of their skies. Economic reports next week could also disrupt, with updates due out on durable goods orders, home prices, PMI readings and the closely-watched PCE price gauge. Earnings reports will pour in from the consumer and tech sectors again, with Dollar Tree (NASDAQ:DLTR), Dollar General (NYSE:DG), Nvidia (NVDA), and Salesforce (CRM) some of the headliners.
Earnings spotlight: Monday, August 22 Palo Alto Networks (PANW) and Zoom Video (ZM),
Earnings spotlight: Tuesday, August 23 – Intuit (INU), Medtronic (MDT), JD.com (JD), J.M. Smucker (SJM), and Urban Outfitters (URBN).
Earnings spotlight: Wednesday, August 24 – Nvidia (NVDA), Salesforce.com (CRM), Royal Bank of Canada (RY), Snowflake (SNOW), and Autodesk (ADSK).
Earnings spotlight: Thursday, August 25 – Toronto-Dominion Bank (TD), Dollar General (DG), Marvell Technology (MRVL), Peloton Interactive (NASDAQ:PTON), Dollar Tree (DLTR), and Workday (WDAY).
Earnings spotlight: Friday, August 26 JinkoSolar Holding Co. (JKS).
IPO watch: Starbox Group Holdings Ltd. (NASDAQ:STBX) is expected to start trading. The Malaysia-based firm provides advertising services and a mobile platform for retailers to better connect with customers.
Spotlight on Jackson Hole: The Federal Reserve’s Jackson Hole Symposium could make headlines with traders looking for clues on the pace of rate hikes. The annual retreat by central bankers to the Tetons is getting more attention than normal with U.S. equities appearing to be factoring in a tamer fight against inflation than FOMC speakers have tipped off in their speeches and dot plots. Fed Chairman Jerome Powell is expected to dig in a bit and establish his hawkish credentials. The tone from Powell could shift investor sentiment if he reiterates that the risks of inflation are more significant than the risk of a hard landing for the U.S. economy. The Fed is still anticipated to raise the target range for the federal funds rate by 50 or 75 points in September and follow with 25 or 50 points hikes in November and December. Fed watchers are also looking for more details on the Fed’s balance sheet reduction strategy.
Nvidia earnings preview: Chipmaker Nvidia (NVDA) will report earnings with investors and analysts skittish over another downward guidance revision to follow on the warning in June. Nvidia (NVDA) reset expectations due to a deterioration in gaming demand and weaker than expected data center revenue due to supply chain disruptions. Bank of America is positive on the report and said even a “second cut” could clear the decks ahead of the upcoming new 5nm gaming (Lovelace) and data center (Hopper, Grace) pipeline. Looking ahead, the Nvidia (NVDA) GPU Tech Conference from September 19-22 is seen as a major catalyst.
Dollar store earnings: The retailer sector hears from discounters Dollar General (DG) and Dollar Tree (DLTR) next week in reports that could tip off just how much consumers are trading down or pinching pennies. In particular, watch for commentary from dollar store execs on if higher-income cohorts are in the sales mix. In general, analysts have pointed to dollar stores as positioned to take share amid the macro, supply chain, and inventory headwinds hitting retail. Consensus estimates on Dollar General (DG) are for revenue of $9.4B and EPS of $2.93 to be reported. Dollar General has beaten EPS estimates in 6 of the past 8 quarters, exceeding revenue expectations 7 times in that span. Meanwhile, Dollar Tree (DLTR) is seen churning up $6.78B in revenue and EPS of $1.60. Heading into report, 18 of the last 21 EPS revisions on Dollar Tree have been to the downward side. Wells Fargo thinks guidance could surprise to the upside, with the two retailers have a higher degree of earnings visibility into next year than most others.
Corporate events: Shareholders Software Acquisition Group III (NASDAQ:SWAG) will vote on August 22 on the deal to take commerce-as-a-service technology provider Nogin public as part of a SPAC merger. The combined firm will have an estimated post-transaction enterprise value of $646M, assuming no redemptions by SWAG stockholders. Rite Aid (RAD) will host a virtual shareholder investor event on August 22 with CEO Heyward Donigan and CFO Matt Schroeder scheduled to answer questions from interest parties. Heading into the event, stock has been the subject of activist speculation and has a high level of short interest outstanding on it. Also on August 22, Cisco (CSCO) and Loop Capital Host a Tech Talk on Cisco’s Optical Business. Read about more events that could move shares in Seeking Alpha’s Catalyst Watch.
Notable conferences: The conference schedule is headlined by Rosenblatt technology summit on the age of AI Scaling. The firm is hoping to support its thesis that the setup of the current semiconductor cycle is a rare planetary alignment of market forces, which include Artificial Intelligence and AI at the Edge. Companies making an appearance include AMD (AMD), Cadence Design Systems (NASDAQ:CDNS), Micron (MU), Calix (NYSE:CALX), QuickLogic (QUIK), and Altair Engineering (ALTR). Outside of the spotlight on AI, the conference schedule next week also includes the Raymond James Diversified Industrials Conference, D.A. Davidson Big Sky Tech Conference, Seaport Global Annual Virtual Summer Investor Conference, Midwest IDEAS Conference, and Needham Virtual Semiconductor and SemiCap 1×1 Conference.
Barron’s mentions: Haleon (NYSE:HLN) catches the attention of the publication this week about a month after the company’s spinoff from GlaxoSmithKline (GSK). A buy recommendation is issued on the large-cap, pure-play consumer healthcare stock on the expectation for steady growth and income for investors. Haleon is known for selling oral health products like Sensodyne and Aquafresh; over-the-counter drugs, including Advil and Theraflu, as well as vitamins and supplements like Centrum. Haleon plans a dividend payout starting in the first half of next year at the lower end of a 30% to 50% range of earning. On the valuation front, Haleon is valued at 13.5X the consensus 2023 EPS mark, which is noted to be a lower multiple than other consumer healthcare products such as Unilever (UL) and and Procter & Gamble (PG). The publication also ran through all the hedge fund filings to find five stocks picked up broadly during Q2. Disney (DIS), Salesforce (CRM), Fiserv (NASDAQ:FISV), LPL Financial (NASDAQ:LPLA), and Perimeter Solutions (PRM) stood out as intriguing picks.
Sources: EDGAR, Bloomberg, CNBC, Reuters
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