Wall Street Breakfast: The Week Ahead
economic report in the coming week
Earnings reports will dominate the week in the form of big names like Bank of America (BAC), Netflix (NFLX), Tesla (TSLA), and Twitter (TWTR) amid a lot of drama. While investors have already dented share prices that earnings season will show some gloom and downside correction, the latest readings on consumer demand, labor shortages and supply chain issues will still be important. Next week’s economic calendar includes updates on housing starts, current home sales, and the Philadelphia Fed Manufacturing Index. Federal Reserve speakers will be in a blackout period ahead of the FOMC meeting on July 26-27, but futures trading on fed funds contracts will be seen with the potential for a 100-point gain to rise wildly. On the corporate calendar, Nikola (NASDAQ:NKLA) shareholders will vote again on issuing more shares and GameStop (NYSE:GME)’s four-for-one stock split will go into effect at the end of the week.
Earnings Spotlight: Monday, July 18 – Bank of America (BAC), IBM (IBM), and Goldman Sachs (GS).
Earnings Spotlight: Tuesday, July 19 –Johnson & Johnson (JNJ), Lockheed Martin (LMT), Netflix (NFLX), Hasbro (HAS), Silvergate Capital (NYSE:SI), and
Earnings Spotlight: Wednesday, July 20 – Tesla (TSLA), Abbott Laboratories (NYSE: ABT), CSX (NASDAQ: CSX), Las Vegas Sands (LVS), Biogen (NASDAQ: BIIB) and United Airlines (UAL).
Earnings Spotlight: Thursday, July 21 — AT&T (T), Philip Morris International (PM), Travelers Companies (TRV), Domino’s Pizza (NYSE: DPZ), Union Pacific (UMP), Snap (SNAP), and
Earnings Spotlight: Friday, July 22 – Verizon Communications (VZ), American Express (AXP), Twitter (TWTR), and HCA Healthcare (HCA).
IPO watch: The analyst calm period on Golden Sun Education Group (GSUN) is coming to an end on July 18. The IPO lockup is expiring on the same day Yoshitsu (TKLF).
Farnborough Air Show: The global aviation industry will be watching for headlines from the Farnborough International Airshow. Boeing will display the 737 MAX 10 in a flying display and the latest 777X widebody. The company will also highlight sustainable, autonomous flight and development with the EVTOL Visc Aero joint venture. Airbus will introduce A350-900 widebody capabilities in daily flight performance and may also announce a deal with Delta Air Lines (DAL) for more A220 narrowbody aircraft. Other companies to appear at the air show include NI (NATI), Ansys (NSS), Lockheed Martin (LMT), Rolls-Royce (OTCPK: RYCEY), and BAE Systems (OTCPK: BAESF). Also watch out for Boom Supersonic, which recently won a commitment from United Airlines (UAL) last year for its Overture passenger supersonic jet, which has a proposed Mach 1.7 speed and range of 4,250 knots,
Philip Morris International Earnings Preview: Philip Morris International (PM) will report earnings for revenue and EPS expectations on July 21. CFO Emmanuel Babuy noted at a recent investor conference that underlying fundamentals remain strong, based on continued growth of IQOS and a strong stock category. Looking ahead, PM plans to broaden its vapor portfolio with the launch of the second half of the VEEBA disposable vaporizer product. The Prime Minister’s guidance will take into account the latest Russia/Ukraine situation, global inflationary pressures on consumers and a stronger US dollar than seen during the last update. Bank of America believes investors are largely looking at the underlying business, which it sees as strong with upside potential. “In addition, we like its attractive yield, strategy to move smokers to a higher margin, less harmful alternative, partially offset by near-term issues in E. Europe,” the firm updated.
Netflix earnings preview: Netflix (NFLX) will report second-quarter earnings after closing on July 19. Consensus estimates are for Netflix (NFLX) to report $8.0B in revenue and show an EPS of $2.96. Analysts are also looking to add -1.9M paid subscribers, despite Stranger Things season four working in favor. Morgan Stanley cautioned, “For 3Q, our informal poll of select institutional investors suggests that many believe the 3Q sell targets may be too high and guidance is on the Street of +2.2mn.” may fall below estimates.” There is also some concern that F/X will negatively affect Netflix’s results because the company is not being hedged. Meanwhile, UBS expects cautious guidance from NFLX management, even though the back half is generally strong seasonally. The firm estimates that 1.3M customers will be added in Q3 and 2.8M for the year. Noted analyst John Hodulik said, “We expect NetAds to bounce back to 9.5M (formerly 11.5M) in ’23 with the help of a new ad-supported level, but competition and pressure on consumer wallets will continue to push downwards.” could.” During the Netflix earnings call, see color on the new ad sales and marketing partnership with Microsoft (MSFT).
corporate events: Shareholders of Nikola (NKLA) are due to vote on Proposition 2 on July 18 to increase the number of outstanding shares from 600 million to 800 million. Microsoft (MSFT) holds its two-day Inspire event on July 19-20 to focus on opportunities in the cloud for partners. Bloomberg Crypto Summit will take place in New York on July 19. Speakers include representatives from FTX, Tezos (XTZ-USD), Ripple (XRP-USD), Binance and Coinbase Global (COIN). One of the more interesting sessions will cover Web 3.0, the metaverse, and blockchain gaming potential. Amid growing questions about consumer spending and the potential trade-down impact, the National Retail Federation will hold a webinar on July 19 to discuss consumer spending expectations for the 2022 back-to-school and college shopping seasons. This program will highlight the latest consumer data of NRF. and major retail chains such as Walmart (WMT), Target (TGT), Costco (COST), Dollar General (DG), and Dollar Tree (DLTR). Capri Holdings Limited (NYSE: CPRI) will host an Investor Day event on July 20 with presentations and a Q&A session with the management team. Versace executives, Jimmy Choo and Michael Kors will deliver business talks. Elim Therapeutics (NASDAQ:ELYM) and Creatd Inc. (NASDAQ:CRTD) investor events are scheduled for July 21.
stock splits: GameStop (GME) will begin trading on a split-adjusted basis starting July 22.
Box Office Preview: Disney (dis) Thor: Love and Thunder is expected to top the weekend box office collections for the second time in a row with almost $50 million. Paramount’s (NASDAQ:PARA) Paws of Fury: The Legend of Hank and Sony Pictures (Sony) where expected to shake off Crowdads Sing are one heavy summer. Netflix (NFLX) is playing the spy film The Gray Man in 450 theaters across the US and Canada.
Baron mentions: The publication sees an opportunity in apartment REIT stocks with rising home prices and mortgage rates. Apartment REITs are known to trade at a 21% discount to the value of their underlying assets, compared to 3% a year ago. Given the strong apartment occupancy rates across the geographies of the country, it is recommended to look at large-cap REITs with strong balance sheets, good management teams and safe dividends. Avalonbe Communities (NYSE: AVB), Equity Residential (NYSE: EQR), Camden Property Trust (NYSE: CPT), Mid-America Apartment Communities (MAA), Apartment Income REIT (NYSE: AIRC), and UDR (UDR) all make up Huh. list.
Source: Edgar, Bloomberg, CNBC, Reuters.
