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Central banks will be in the spotlight next week with the Federal Reserve, Bank of England, and Bank of Japan all scheduled to meet to discuss monetary policy and interest rate. Just before the Fed’s FOMC meets, the August U.S. Retail Sales will be released. While that report is expected to show a 0.1% decline on a month-over-month basis, the year-over-year retail sales number is anticipated to be solid. At the time of publication, futures trading implied a 57% probability of a 25-point cut and a 43% probability of a 50-point cut.
The event calendar features a flurry of investor conferences and meetings, including the high-profile Dreamforce event hosted by Salesforce (NYSE:CRM). There will also be earnings reports turned in by General Mills (GIS) (analysis), FedEx (FDX) (analysis), and Lennar (LEN) (full preview). The FedEx (FDX) report will be of high interest across several sectors, as it could delve into expectations for the holiday season.
While recession fears are clearly back in the mix. Seeking Alpha analyst Dilantha De Silva thinks the strength of the U.S. economy and a few other macroeconomic variables suggest that the U.S. is most likely to see slow and steady growth in the next few quarters. In particular, De Silva is focused on homebuilders that have gone out of favor among investors in the last two years due to the unfavorable rate environment. “Since large-scale homebuilders have continued to perform well, I believe the best opportunities are hidden among small companies that are likely to benefit from the positive impact of rate cuts,” he highlighted.
Earnings spotlight: Tuesday, September 17 – Ferguson Enterprises (FERG) See the full earnings calendar.
Earnings spotlight: Wednesday, September 18 – General Mills (GIS) and Steelcase (SCS). See the full earnings calendar.
Earnings spotlight: Thursday, September 19 – FedEx (FDX), Lennar (LEN), Darden Restaurants (DRI), and FactSet Research (FDS). See the full earnings calendar.
Volatility watch: Options trading volume is elevated on AST SpaceMobile (ASTS), as well as Trump Media & Technology (DJT) ahead of the anticipated expiration of the post-SPAC lock-up period. Trump Media (DJT) is down more than 50% over the last two months. The most overbought stocks per their 14-day relative strength index include Instil Bio (TIL), Ventas (VTR), and Elite Pharmaceuticals (OTCQB:ELTP). The most oversold stocks per their 14-day Relative Strength Index include Icahn Enterprises (IEP), Vital Energy Inc (VTLE), and Cybin (CYBN). Short interest is elevated on BioCardia (BCDA) and Childrens Place (PLCE).
Dividend watch: Companies that have an ex-dividend date coming next week include AIG (AIG), Iron Mountain (IRM), Broadcom (AVGO), and DICK’s Sporting Goods (DKS). Companies forecast to increase their quarterly dividend payouts include Graphic Packaging (GPK) to $0.12 from $0.10, Microsoft (MSFT) to $0.83 from $0.75, and Starbucks (SBUX) to $0.61 from $0.57. Read through some of the dividend stock picks from Seeking Alpha analysts.
FOMC preview: The Federal Reserve is expected to cut rates by either 25 or 50 points next week, after a long stretch of holding the benchmark rate at 5.25% to 5.50%. Analysts think the Fed will continue to emphasize data dependence and reserve its right to change the pace of cuts at future meetings. Chairman Jerome Powell is seen acknowledging higher downside risks, but maintaining a soft-landing base case for the U.S. economy. Investors will be highly focused on the dot plot, which could show consensus around 75 points of rate cuts in 2024 and another 125 points of rate cuts in 2025. Heading into the FOMC spotlight, Bank of America advised investors to fade any strong hawkish or dovish interpretation of the outcome of the meeting. Debate over the size of the potential first rate cut since 2020 has continued has inflation and the labor market have been cooling, with inflation heading toward its 2% target. Market expectations for a 50bp move dropped earlier this week after the August Consumer Price Index showed core prices rising more than expected, by 0.3% M/M vs. 0.2% estimate. On Friday, former New York Federal Reserve President William Dudley reportedly said there was a “strong” case to be made for a half-point rate cut next Wednesday, with weakening in the labor market a key risk.
Investor events: The Denver Gold Forum will take place over three days. Companies scheduled to present at one of the world’s most well-known mining equities investment forums include Solitario Resources (XPL), Equinox Gold (EQX), U.S. Gold (USAU), Hecla (HL), and Coeur Mining (CDE). Microsoft (MSFT) will hold a special event during which CEO Satya Nadella and Corporate Vice President Jared Spataro will discuss the next phase of Copilot innovation. Salesforce (CRM) will hold it Dreamforce 2024 event. The high-profile event will include talks from Salesforce (CRM) CEO Marc Benioff, AMD (AMD) CEO Dr. Lisa Su, FedEx (FDX) CEO Raj Subramaniam, and Camping World (CWH) CEO Marcus Lemonis. The KeyBanc Capital Markets Energy Transition Symposium will include participation from Ballard Power Systems (BLDP), FuelCell Energy (FCEL), Plug Power (PLUG), First Solar (FSLR), and SolarEdge Technologies (SEDG). Other notable investor events scheduled for the week, include HubSpot’s (HUBS) Analyst Day, T-Mobile’s (TMUS) Capital Markets Day, Arthur J. Gallagher & Co.’s (AJG) quarterly investor meeting with management, Thermo Fisher Scientific’s (NYSE:TMO) Investor Day, Union Pacific’s (NYSE:UNP) Investor Day, Arcadium Lithium’s (ALTM) Investor Day, QUALCOMM’s (QCOM) Investor Day, and Roblox’s (RBLX) Developers Conference.
FedEx earnings preview FedEx (FDX) will report FQ1 earnings on September 19. Analysts expect the parcel delivery giant to report revenue of $22.0 billion, consisting of $10.7 billion from the Express segment, $8.6 billion from the Ground segment, $2.3 billion from the Freight segment, and $69 million from the Services segment. FedEx (FDX) is also expected to disclose EPS of $4.85, an operating income rate of 7.6%, and free cash flow of $1.14 billion. Key topics for the earnings conference call will include the guidance update, expectations for the compressed holiday season, and the implications of the end of the USPS contract. Options trading implies a 7% swing in share price after the report is released. FedEx soared more than 15% after its last earnings report. The stocks with the highest trading correlation with FedEx (FDX) on its earnings day are United Parcel Service (UPS), Expeditors International (EXPD), and Landstar System (LSTR). The stocks with the highest trading correlation with FedEx (FDX) on its earnings day are United Parcel Service (UPS), Expeditors International (EXPD), and Landstar System (LSTR).
Electronic Arts event: Electronic Arts (NASDAQ:EA) will hold its first investor day event since 2016. Analysts think that EA management could discuss the game pipeline and set some new financial targets. There could also be an update on the recent launch of EA’s college football video game. “Launch month dollar sales of EA Sports College Football 25 more than tripled the total lifetime dollar sales of the previous best-selling college football game, NCAA Football 07,” noted Circana analyst Mat Piscatella on the initial consumer response. Bank of America also expects the company to devote time to opportunities outside its core user-pay games business. The event is seen as a significant opportunity to reset investor expectations on GME’s priorities and growth drivers. Shares of Electronic Arts (EA) are up 6.4% on a year-to-date basis.
