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Investors could better understand how the Federal Reserve’s tightening cycle will unfold after inflation data arrives next week with the consumer price index, producer price index and an uptick. update on unit labor costs. For now, Fed officials indicate that they expect the target interest rate to be raised to a range of 3.50% to 4.00% by the end of the year. However, the bond market is yet to reflect that level, even after the sale of Treasuries on Friday following the arrival of the July jobs report. Should inflation reports surprise on the upside, speculation of an inter-meeting rate hike by the Fed could be stoked and lead to larger moves in the bond market. The week’s schedule includes Tyson Foods (TSN), Take-Two Interactive (NASDAQ: TWO), Disney (DIS) and Rivian Automotive (NASDAQ:RIVN) as some of the notable companies head to the earnings confessional, while the JP Morgan Auto conference is expected to include some intriguing updates, including several from electric vehicle players.
Earnings Spotlight: Monday, August 8 Luckin Coffee (OTCPK: LKNCY), Dominion Energy (D), Tyson Foods (TSN), American International Group (AIG), Palantir Technologies (PLTR) and Take-Two Interactive Software (TTWO).
Earnings Spotlight: Tuesday, August 9 – Emerson Electric (EMR), Sysco (SYY), Globalfoundries (NASDAQ: GFS), Norwegian Cruise Line Holdings (NCLH), Coinbase Global (COIN) and Wynn Resorts (WYNN).
Earnings Spotlight: Wednesday, August 10 -Disney (SAY), Honda engine (HMC), Coupang (CPNG), Jack in the Box (JACK), Wendy’s (MAGNIFYING GLASS), CyberArk (CYBR) and Fox (FOX).
Earnings Spotlight: Thursday, August 11 – Cardinal Health (CAH), Brookfield Asset Management (NYSE: BAM), Rivian Automotive (RIVN), US Foods (USFD) and Illumina (ILMN).
Earnings Spotlight: Friday, August 12 -Virgin Orbit Holdings (NASDAQ: VORB).
IPO monitoring: The reduced IPO of electric sports boat developer Forza X1 (FRZA) is set to begin trading on August 11. IPO lock-up periods expire on SKYX Platforms Corp (SKYX) and Modular Medical (MODD) on August 9. Both stocks are trading well below their IPO. pricing level.
Dividend monitoring: Companies expected to increase their quarterly dividend payouts include
Tyson Foods Revenue Snapshot: Tyson Foods (TSN) will release earnings in a report that will be closely watched in the meat and packaged goods sector for signs of a lower consumer price effect. According to consensus estimates, Tyson is expected to report revenue of $13.3 billion and EPS of $1.97. By volume, beef sales are expected to fall 3% for Tyson and pork sales are expected to fall 5%. Beef and chicken prices are higher than a year ago to help offset higher feed and transportation costs, but pork prices have actually fallen. Analysts believe Tyson’s margin outlook will determine the direction in which shares move after the earnings print. The current full year operating margin forecast is an adjusted beef operating margin of 11.5%, an adjusted pork operating margin of 5.4%, an estimated adjusted operating margin for chicken of 5.6% and an estimated adjusted operating margin for prepared foods of 9.2%. “Beef margin could contract as herd liquidations begin to accelerate amid droughts and high feed costs, which are tightening livestock supply,” Bloomberg analyst Jennifer Bartashus warned. Intelligence, before the TSN report.
Take-Two Interactive Revenue Snapshot: Take-Two Interactive (TTWO) will report results on August 8 with revenue expectations of $1.09 billion, EPS of $0.86 and net bookings of $6.5 billion, including business Zynga. Analysts were cautious with TTWO due to the risk of consumer spending coming under pressure from a recession, untested franchises and some questions about Grand Theft Auto iterations. Potential catalysts for a stock price rebound include stronger-than-expected Zynga numbers and more immersive core gaming details.
Inflation reports: Next week’s consumer price and producer price reports will again keep the focus on inflation. The July CPI report is expected to show a slight moderation in the headline number to +8.7% Y/Y from +9.1% in June. Core CPI is expected to rise 0.6% on a month-to-month comparison. Bank of America expects strong impressions in the housing, transportation and recreation sectors, as well as another month of broad-based strength in prices for basic goods. Looking ahead, air fares and used car prices are both expected to drop over the next few months to ease the pressure on the US consumer. The producer price index is expected to post a 0.3% increase in July, decelerating from the 1.1% pace in June. Excluding food, energy and commercial services, the PPI is expected to rise 0.4% month-on-month. Economists believe the price reports may support some of the peak inflation discussion, but will also support the consensus view that the Federal Reserve will raise the target interest rate by 75 points at the September meeting. .
Crypto comeback dreams: A major development in the cryptocurrency industry could occur next week ahead of the long-awaited transition of Ethereum (ETH-USD) to a proof-of-work protocol. The most anticipated event for Ethereum before the actual merger is the third and final testnet environment, which is called Goerli. A successful Ethereum merger test could add to the positive vibes already sparked after BlackRock (BLK) announced it would offer institutional clients direct access to crypto through its product Aladdin, starting with Bitcoin (BTC-USD). Crypto bulls are also reporting positive news on the regulatory front after a bipartisan group of senators introduced a new bill classifying Bitcoin and Ethereum as commodities. Digital asset broker GlobalBlock said the measure would mean these are the only cryptos that cannot be classified as securities, removing a significant concern for sidelined institutions. Watch for news on this potential regulatory development. On the crypto calendar next week, the Blockchain Futurist Conference will bring together over 100 speakers, industry experts and thought leaders to discuss blockchain technology, NFT, Metaverse, DeFi, Cryptocurrency, DAO. Ethereum founder Vitalik Buterin is expected to make an appearance.
The data reads: Nielsen’s retail outlets numbers will be released with a greater focus on how demand for packaged goods, beverages, beer and spirits has changed over the past four weeks and which companies are likely to have gained market share. Coca-Cola (KO) overtook PepsiCo (PEP) and Keurig Dr Pepper (KDP) in soft drink sales this year, and Constellation Brands (STZ) flew in the alcoholic beverage sector.
Corporate events: GlobalFoundries (GFS) will host its Capital Markets Day event on August 10. GlobalFoundries and STMicro recently signed an agreement to jointly build and operate a new 300mm manufacturing facility in Crolles, France, adjacent to STMicro’s existing facility. GFS is one of the stocks that trades with a high correlation to news around Taiwan. Myriad Genetics (MYGN) will host an Investor Day event on August 11 to provide a strategic corporate update and overview of the company’s growth opportunities, research and development pipeline and technology initiatives. Boeing (NYSE: BA) must take stock of its orders and deliveries. Learn more about next week’s events that could impact stock prices in Seeking Alpha’s Catalyst Watch.
Notable conferences: The conference program is headlined by the JP Morgan Auto Conference. Companies due to appear include Adient (ADNT0, Stoneridge (SRI), Ford Motor (F), Cepton (NASDAQ: CPTN), Gentherm (THRM), TrueCar (TRUE), TuSimple (TSP), Dana (DAN), (NASDAQ: GTEC), Blink Charging (NASDAQ: BLNK), Aptiva (NYSE:APTV) and Rush Enterprises (RUSHA). Of these names, Tu Simple (TSP) may have the most to prove after the Wall Street Journal published safety concerns over the self-driving system despite having traveled 8 million miles. Some auto stocks have seen stock price bumps in the past after presentations included tips and trading updates. Other conferences of note include BTIG Biotechnology Conference, UBS Financial Services Conference, BofA Securities 2022 SMID Cap Ideas Conference, Oppenheimer’s 25th Annual Technology Internet & Communications Conference, Wedbush PacGrow Healthcare Conference, 42nd Annual Growth Canaccord Genuity Conference, BTIG Biotechnology Conference, Jefferies 2022 Industrials Conference and Canaccord’s 42nd Annual Growth Conference.
Mentions of Barron: General Electric (NYSE:GE) is recommended this week ahead of the company’s plan to split into two separate sectors: aerospace, healthcare and power generation. The cover story argues that General Electric is trading for significantly less than the combined value of its three remaining coins. The calculations on GE’s three businesses are said to total $160 billion, which is about double what GE is currently trading. Are you worried about GE’s balance sheet? GE’s debt is about $32 billion, while total cash plus shares in oilfield services and equipment company Baker Hughes (BKR) and oilfield sales and leasing company AerCap Holdings (AER) aircraft total nearly $20 billion. According to Barron’s, the resulting net debt of $12 billion is less than 2.0 times the $6.9 billion in EBITDA GE has earned over the past 12 months compared to the industry sector average of around 2.2 times.
Sources: EDGAR, Bloomberg, CNBC, Reuters