Upcoming Financial Highlights: The Week Ahead Earnings Reports, Economic Data, and Fed Activity
July 17, 2023
The forthcoming week will be filled with vital financial announcements. This includes key earnings reports from leading entities like Netflix (NFLX), Bank of America (BAC), IBM, and Tesla (TSLA). Important economic data to watch for include the latest update on Empire Manufacturing, the June Retail Sales report, Existing Home Sales data, and the newest update on jobless claims.
As we head towards the Federal Reserve meeting scheduled for July 25-26, Fed members will enter a communication blackout period. Based on current futures trading, there’s a substantial 92% chance of a rate hike at this meeting.
According to Stone Fox Capital, the Investing Group Leader at Seeking Alpha, the issue of inflation seems to be nearing its end, suggesting that hikes in interest rates may soon slow down. This optimistic outlook has led to a rally in the Russell 2000 (IWM) stocks. Following a significant uptrend in major indexes, mainly driven by the so-called Magnificent Seven large-cap stocks, the emerging advice is for investors to shift focus towards the smaller companies listed on the Russell 2000 index.
Weekly Earnings Schedule
The week begins on Monday, July 17, with an earnings announcement from Equity LifeStyle Properties (ELS). The following day, Tuesday, brings earnings releases from Bank of America (BAC), Novartis (NVS), Morgan Stanley (MS), and Lockheed Martin (LMT). Seeking Alpha analyst Manuel Paul Dipold anticipates that Lockheed Martin will continue outperforming the market due to increasing defense budgets and current geopolitical conditions.
Earnings reports from Johnson & Johnson (JNJ), Abbott Laboratories (ABT), Taiwan Semiconductor Manufacturing (TSM), Philip Morris International (PM), Travelers (TRV), American Airlines (AAL), Capital One (COF), and CSX (CSX) are due on Thursday. Regarding TSMC’s valuation, Seeking Alpha’s JR Research notes that the company’s stock continues to be undervalued compared to its peers.
The week concludes on Friday, July 21, with earnings releases from American Express (AXP), Schlumberger (SLB), AutoNation (AN), and Huntington Bancshares (HBAN).
IPO and Spinoff Watch
The coming week will see notable activity in the IPO sphere with potential listings from Oddity Tech (ODD), BioNexus Gene Lab Corp. (OTC:BGLC), Fitell Corp. (FTEL), and SRM Entertainment (SRM) expected to price their IPOs.
Predicted Dividend Increases
Several companies are expected to raise their quarterly dividends in the upcoming week. This includes Bank of New York Mellon (BK), Goldman Sachs (GS), Regions Financial (RF), Morgan Stanley (MS), and Corteva (CTVA). For a comprehensive list of promising dividend stocks, refer to Seeking Alpha’s Quick Dividend Stock Picks.
Corporate Events to Look Forward to
Splunk Inc. (NASDAQ:SPLK) is gearing up to host its 14th annual user conference at The Venetian Las Vegas. The event is expected to majorly focus on security issues, and will also showcase the company’s proficiency in generative AI. Historically, Splunk’s shares have witnessed a surge immediately following this flagship event.
Simultaneously, Dell Technologies (DELL) will hold an “Ask the Experts” Q&A session. The discussion will include Dell’s leaders highlighting the latest technology trends and the company’s innovations in key areas, particularly AI/ML, multicloud, edge, and Zero Trust security.
On July 18-19, Microsoft’s (MSFT) largest partner event of the year will feature a keynote address from CEO Satya Nadella. The primary discussions will focus on the integration of Microsoft Cloud and AI across the company’s range of products.
Barron’s Highlights: Netflix Pre-Earnings
Netflix (NFLX) is receiving positive attention ahead of its earnings report, despite the ongoing Hollywood acting/writing strike. The upcoming quarterly results are expected to reveal changes in its business model, including the introduction of an ad-supported subscription tier and stricter measures against password sharing. Recent data on subscriber growth suggests that consensus estimates may be underestimating the company’s performance. To boost its free cash flow, Netflix may also announce a reduction in content spending, which could stimulate buybacks.