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Inflation trends will again be the key focus of investors next week, with the U.S. PCE inflation reading and flash CPI reports from Europe due to be released. Other economic reports of interest include updates on durable goods, consumer confidence, new home sales, and the advanced goods trade balance. Analysts think the overall balance of data releases could confirm a cooling economy. Core PCE inflation, also known informally as the Fed’s preferred inflation gauge, is forecast to be up 0.2% month-over-month to push the year-over-year rate down to 3.8%. Earnings reports in the week ahead include releases from Micron Technology (MU) (analysis), Costco (COST), Nike (NKE) (preview), and Jefferies Group (JEF). In the tech sector, Meta Platforms will host its highly-anticipated Meta Connect and Huawei will hold a key product event. Energy investors will be watching the TotalEnergies (TTE) Investor Day event amid a recent rally in oil prices.
Earnings spotlight: Monday, September 25 – THOR Industries (THO).
Earnings spotlight: Tuesday, September 26 – Costco (COST), Cintas (CTAS), and United Natural Foods (UNFI).
Earnings spotlight: Wednesday, September 27 – Micron Technology (MU), Paychex (PAYX), and Jefferies Financial Group (JEF).
Earnings spotlight: Thursday, September 28 – Accenture (ACN), Nike (NKE), CarMax (KMX), and Jabil (JBL).
Earnings spotlight: Friday, September 29 – Carnival (CCL).
Volatility watch: Short interest levels are elevated again on Novavax (NVAX) and Wayfair (W). Options trading volume is higher than normal on Tilray (TLRY) and Relmada Therapeutics (RLMD).
IPO and spinoff watch: The IPO market will take a little breather in the week ahead, with no new pricing anticipated. The analyst quiet period ends on Inspire Veterinary Partners (NASDAQ:IVP), while the IPO lockup period expires on blocks of shares of Hongli Group (HLP), Jin Medical (NASDAQ:ZJYL), YanGuFang International Group (YGF), Vesta (NYSE:VTMX), Alliance Entertainment Holding (AENT), Himalaya Shipping (HSHP), and Hitek Global (HKIT). Of that group, Jin Medical has seen the biggest share price gain since the IPO launch dates. Instacart/Maplebear (NASDAQ:CART) will begin its second week of trading. At the time of publication, shares were slightly higher than the IPO pricing level.
Dividend watch: Companies projected to boost their quarterly dividend payouts include Cal-Maine Foods (CALM) to $1.35 from $0.755, Accenture (ACN) to $1.23 from $1.12, Lockheed Martin (LMT) to $3.20 from $3.00, and Honeywell (HON) to $1.08 from $1.03. See Seeking Alpha’s list of Quick Dividend Stock Picks.
Data watch: The recreational vehicle sector will be on watch next week with industry data expected to be reported. Camping World (CWH), THOR Industries (THO), Winnebago (WGO), LCI Industries (LCII) and Patrick Industries (PATK) have all seen been bouncy trading in 2023 after RV demand updates. In the casino sector, the latest report on monthly Nevada gaming win could reset expectations. Baccarat trends in Las Vegas and the sports betting handle for the state could impact how investors view DraftKings (DKNG), Caesars Entertainment (CZR), MGM Resorts (MGM), Boyd Gaming (BYD), Wynn Resorts (WYNN), Full House Resorts (FLL), Bally’s Corporation (BALY) and Red Rock Resorts (RRR).
Nike earnings preview: Nike (NKE) will disclose earnings on September 28 in a report that could have broad implications across the apparel and footwears sectors. The Oregon-based company is forecast to post revenue of $13.0B and EPS of $0.76 for the quarter. Sales growth on a constant currency is expected to be up 3.3%, with a 1.6% decline for the North America segment offset by a 4.5% gain for the Europe, Middle East & Africa segment and 16.6% jump for the Greater China segment. Digital sales are forecast to rise 15.9% during the quarter. Meanwhile, inventory is expected to be down 8.7% at the end of the quarter on an improved inventory turnover rate. On Wall Street, Wells Fargo recently joined the caravan of firms that have lowered estimates on Nike ahead of the FQ1 report. The stock has attracted 11 sell-side EPS estimate cuts in the last 90 days as caution has picked up over the report. Sentiment continues to drift lower on Nike, chiefly due to the expectation that the athletic apparel giant may pull back on guidance. Wells Fargo analyst Ike Boruchow said that on top of weaker U.S. retail reads, recent industry checks with manufacturers and Chinese retail partners point to a slower global demand backdrop relative to three months ago. The slowdown in demand was noted to be broad-based across categories and price points. Other areas of concern for Nike (NKE) are the high inventory position in the apparel sector and the worsening FX backdrop, which could both impact the full-year outlook from the Beaverton, Oregon-based company. Stifel thinks the challenges for Nike (NKE) are now appropriately represented in estimates. The firm said the case for fundamental improvement in the second half of the fiscal year is supported by evidence of brand relevance, tightening inventory positions, the abatement of transient margin headwinds, and demand drivers that include the Paris Summer Olympics in 2024. Due to choppy data points and volatile macroeconomic environment, BofA lowered estimates for Nike’s Greater China business. The recent trading on Nike (NKE) reflects the earnings jitters of investors and analysts. Shares are down 11% over the six weeks vs. -5% for the retail sector as a whole. On Seeking Alpha, analyst Luca Socci said that all the cautious trading on Nike has left investors with a buying opportunity. Heading into earnings day, options trading implies a 6% move for the stock after the new numbers drop. Nike (NKE) fell 2.7% after its last earnings report. The three stocks that have correlated the tightest with Nike (NKE) on earnings day over the last year are Foot Locker (FL), DICK’S Sporting Goods (DKS), and Skechers (SKX).
META Connect preview: Meta Platforms (NASDAQ:META) will hold its Meta Connect live event on September 27-28. The tech company will give consumers a preview of the Meta Quest 3 VR headset, which was formerly known as the Oculus Quest 3. Indications are that a new Qualcomm (QCOM) Snapdragon chip will make the Quest 3 headset the company’s most powerful ever and improve the highest resolution display by close to 30%. The Quest 3 is expected to arrive with redesigned Touch Plus controllers and hand-tracking support. Meta Platforms is also expected to update on its AI plans. During the company’s Q2 earnings, Mark Zuckerberg said Meta was building a number of new AI-powered products, some of which could act as assistants, coaches, and interact with businesses. The Meta Connect AI reveals could also include a formal announcement of new AI chatbots with different personalities, details around Meta’s GenAI Agent opportunity, and use cases for Meta’s GenAI Ad Tools & Features. While shares of Meta Platforms (META) turned lower during the Meta Connect event last year, several analysts have called it potential positive share price catalyst this time around the metaverse block.
Key events: Huawei will hold a product event for the media on September 25. Analysts will be looking for details on the latest Mate 60 Pro 5G smartphone and the chip used. The last Huaweu phone introduced used a chip made by China’s Semiconductor Manufacturing International (OTCQX:SIUIF), which caused concern in the U.S. National security adviser Jake Sullivan said recently that the U.S. needed to get more information on the precise character and composition of the chip powering Mate 60 Pro. Workday’s (NASDAQ:WDAY) four-day Workday Rising conference will begin on September 26. The two-day Code Conference hosted by Vox Media will run on September 26-27. Notable speakers include X CEO Linda Yaccarino, AMD (AMD) CEO Lisa Su, Roblox (RBLX) CEO David Baszucki, Warner Music (WMG) CEO Robert Kyncl, and General Motors (GM) CEO Mary Barra. In the energy sector, TotalEnergies (TTE) will hold its Investor Day event on September 27, with top management expected to update on strategy and the financial outlook. Shares of TotalEnergies have been volatile after prior investor day events. Check out Seeking Alpha’s Catalyst Watch for a more detailed listing of upcoming events.
Conference schedule: The conference schedule includes the TD Paper & Forest Products Conference, the Emerging Growth in A.I. Conference, the Cantor Fitzgerald Global Healthcare Conference, the William Blair’s What’s Next for Industrials Virtual Conference, the RBC Capital Markets Global Communications Infrastructure Conference, and the Jefferies 2023 Virtual Pet Care & Wellness Conference.
Quant ratings: Stocks with recent quant rating changes include Royal Caribbean (RCL) to Strong Buy from Hold, Chimerix (CMRX) to Buy from Hold, and Lumentum Holdings (LITE) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.
Stock splits: The Flotek Industries (NYSE:FTK) 1-for-6 split will become effective after the close on September 25, the Rubicon Technologies (NYSE:RBT) 1-for-8 split will become effective after the close on September 26, and the Fathom Digital Manufacturing (NYSE:FATH) 1-for-20 split will become effective after the close on September 28.
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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