Monday Morning Reads
- ‘Digital Berlin Wall’ That Would Hurt Growth
- Zero In on Next Year’s Asset Purchases
- Bitcoin’s Outsized Drop
- Does Not Make It True
- Morgan Stanley Sees Fed as Bigger Threat to Stocks
- Wall Street Wants to Sell a Special Index
- Covid Can’t Stop Corporate Profits
- How the Supply Chain Crisis Unfolded
- Alibaba Overhauls e-Commerce Businesses
- How TikTok Reads Your Mind
- Inside Tesla as Elon Musk Push
- Evergrande Sets Up Risk Committee
- Condé Nast Knows Faded Glory Is Not in Style
- Patek Philippe Brings Back the ‘Holy Grail’ of Watches for 170 Lucky Buyers
- 10-Year-Old Entrepreneur Set to Retire at 15, Mom Says
Economic reports in the week ahead
The week ahead could see some more cautious risk-off trading with the consumer price index report arriving on Friday just five days before Federal Reserve policy makers meet to discuss inflation risks. Analysts expect the headline CPI number to reach 6.7%, which would be the highest rate since 1982. An even higher rate could rattle investors further and reset central bank expectations. On the corporate calendar, big investor events focused on longer-term targets are scheduled for Tyson Foods, CVS Health (NYSE:CVS) and Southwest Airlines. Meanwhile, analysts in the electric vehicle sector will be put to the test on Rivian Automotive (NASDAQ:RIVN) when the quiet period expires on December 6. Shares of Rivian are down more than 40% from their post-IPO high, but the market cap on the EV startup still sits a lofty $96B. There are also some thoughts that the selling action on tech stocks and riskier assets could put some pressure on Tesla (NASDAQ:TSLA), which is holding on to its $1K handle.
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Earnings spotlight: Friday, December 10: Academy Sports + Outdoors (NASDAQ:ASO).
IPO watch: IPOs expected to start trading during the week include Chicago Atlantic Real Estate Finance (REFI), Nu Holdings Ltd (NU) and HashiCorp (HCP). Meanwhile, Rivian (RIVN) and Hertz Global (NASDAQ:HTZ) are the most notable companies that fall out of their quiet periods. Expect ratings to start flowing in during the premarket session on Monday. Analysts will also be able to post ratings this week on Expensify (NASDAQ:EXFY), CI&T Inc (NYSE:CINT), Weave Communications (NYSE:WEAV), Backblaze (NASDAQ:BLZE), Lulu's Fashion Lounge (NASDAQ:LVLU), Third Coast Bancshares (NASDAQ:TCBX), Vaxxinity (NASDAQ:VAXX), Society Pass (NASDAQ:SOPA), Winc (NYSE:WBEV), Kidpik (NASDAQ:PIK) and Tivic Health Systems (NASDAQ:TIVC).
IPO lockup period expirations: IPO lockups expire on 1stDibs.Com (NASDAQ:DIBS), Lifestance Health Group (NASDAQ:LFST), monday.com (NASDAQ:MNDY) and Zeta Global (NYSE:ZETA) on December 7, as well as on Splash Beverage Group (NYSE:SBEV) on December 8.
Projected dividend increases: Progressive (NYSE:PGR) is forecast to issue a special dividend of $5.00 per share. Quarterly dividend payout increases are predicted for Abbott Laboratories (NYSE:ABT) to $0.54 from $0.45, Zoetis (NYSE:ZTS) to $0.28 from $0.25, Broadcom (AVGO) to $4.00 from $3.60, Stryker (NYSE:SYK) to $0.69 from $0.63, Toro (NYSE:TTC) to $0.285 from $0.2625, Fortune Brands (NYSE:FBHS) to $0.28 and Pfizer (NYSE:PFE) to $0.42 from $0.39.
M&A tidbits: Shareholders with Canadian Pacific Railway (NYSE:CP) vote on the Kansas City Southern (NYSE:KSU) deal on December 8. Kraton (NYSE:KRA) shareholders vote on the DL Chemical deal on December 9.
Fed watching: Investors are still looking for a more detailed roadmap to where the Federal Reserve is heading after Chairman Jerome Powell indicated last week that the central bank could step up the removal of its efforts to boost the economy. In an appearance before a Senate committee, Federal Reserve Chairman Jerome Powell said he thinks reducing the pace of monthly bond buys can move quicker than the original schedule. "At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases … perhaps a few months sooner," Looking ahead to the FOMC meeting on December 14-15, the consumer price index reports that lands on the laps of investors on December 10 is seen as critical. CPI is expected to be reported at 6.7% (year-over-year), which would be the highest rate since 1982. That could influence how Powell, Brainard and gang view inflation risk vs. the short-term negative impact on growth of the new COVID variant.
CVS investor day preview: The first investor day event in more than two years for CVS Health (CVS) is expected to feature updates to FY22 guidance and more color on the company's long-term growth targets. Bank of America thinks the event will lean heavily into the healthcare evolution of the entire CVS Health enterprise, "building on the various investments and strategic priorities that have been unveiled since the original merger and pushing forward into a broader healthcare services entity going forward."
Southwest Airlines investor day preview: Southwest Airlines (NYSE:LUV) holds its investor day event on December 8 with analysts saying it might be tough for the carrier to be aggressive with medium and long-term targets due to ongoing pandemic uncertainty. Updates on Southwest's longer term fleet plans and capacity scenarios are anticipated. Analysts thinks LUV management should also focus on the balance sheet ($3.2B in cash), which is seen as a key competitive advantage.
Other key corporate events: SL Green Realty (NYSE:SLG) holds an investor conference on December 6 and shareholders with CBRE Acquisition (NYSE:CBAH) vote on the SPAC deal with Altus Power. Meritor (NYSE:MTOR) holds a strategy event on December 7, while investor days are on tap for LivaNova (NASDAQ:LIVN) and Builders FirstSource (NYSE:BLDR). McKesson (NYSE:MKC) is in the spotlight on December 8 as it holds its first investor day event in three years. On December 9, analyst/investor day events are set for Avient Corporation (NYSE:AVNT), Aramark (NYSE:ARMK), Netgear (NASDAQ:NTGR), WideOpenWest (NYSE:WOW) and Tyson Foods (NYSE:TSN). Finally, ADM (NYSE:ADM) holds its Global Investor Day event on December 10, which will be the first event of its kind in a few years. Read a rundown of all the big events to watch next week for potential share price volatility.
Morgan Stanley Space Summit: One of the space industry's biggest investor-focused conferences of the year takes place on December 7 in New York City. The summit will cover questions on capital formation, SpaceX's (SPACE) domination, sustainability, national security issues and the satellite subsector. Participants include AST SpaceMobile (NASDAQ:ASTS), Astranis (Private), Axiom Space (Private), Black Sky Technology (NYSE:BKSY), DCVC Management (Private), In-Q-Tel (Private), Iridium Communications (NASDAQ:IRDM), Maxar Technologies (NYSE:MAXR), Momentus (NASDAQ:MNTS), Orbital Insight (Private), Palantir (NYSE:PLTR), Parsons (NYSE:PSN), Planet (Private), Redwire (NYSE:RDW), RRE Ventures (Private), SpaceFlight (Private), Spire Global (NYSE:SPIR), Ursa Major (Private), Ursa Space Systems (Private), ViaSat (NASDAQ:VSAT), Virgin Galactic (NYSE:SPCE) and Virgin Orbit (Private).
Conferences rundown: Some of the notable gatherings schedule for next week include the Capital One Securities 16th Annual Energy Conference, BofA Securities Virtual Healthcare Conference, UBS Global TMT Conference, Raymond James TMT Conference, Goldman Sachs U.S. Financial Services Conference, Barclays Global Technology, Media and Telecommunications Conference, Citi, Virtual Global Consumer Conference, Jefferies Consumer Finance Conference and Truist Securities Conference.
Annual meetings: Peloton Interactive (NASDAQ:PTON) holds its annual meeting on December 6. The shareholder gathering takes palce with share of Peloton down 50% in just six weeks due to lowered revenue expectations. Other companies holding annual meetings include Flexsteel Industries (NASDAQ:FLXS), Madison Square Garden Sports Corp. (NYSE:MSGS), Vail Resorts (NYSE:MTN), Reading International (NASDAQ:RDI), eGain (NASDAQ:EGAN) and Vipshop Holdings (NYSE:VIPS).
Barron's mentions: The cover story this week dives right into the proposition that a housing boom could last ten years amid a lack of supply and strong demand. By the numbers, construction starts on new single-family housing are noted to be finally topping one million this year after averaging fewer than 750,000 in the previous ten years, which is still be below the 1.6 million annual starts for the peak bubble years of 2004 to 2006. Builders are said to have strong balance sheets and less land inventory, which could help ramp up capital returns to investors in the coming years in the form of dividends and share repurchases. The favored stocks mentioned by the publication are D.R. Horton (NYSE:DHI), Lennar (NYSE:LEN), PulteGroup (NYSE:PHM), Toll Brothers (TOL), Century Communities (NYSE:CCS) and Meritage Homes (NYSE:MTH).