Stocks to Watch: Investors Focus on the FOMC, Jobs Day, Amazon Blowback and Election Ops

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Major earnings reports will continue to roll in next week with Pfizer (NYSE: PFE), Starbucks (NASDAQ: SBUX) and DraftKings (NASDAQ: DKNG) all due to make the trip to the revenue confessional. In total, about a third of S&P 500 companies will report earnings during a five-day blitz. Investors will also have a Federal Reserve meeting and a Jerome Powell press conference to digest in hopes that the central bank’s hawkish stance will be confirmed and the target rate will be raised by 75 points. Expected economic reports include updates on construction spending, PMI and factory orders before the end of the weekend with the October jobs report. Analysts will also be busy breaking down the potential implications of the upcoming US election for the market, sectors and individual stocks as November 8 approaches.

Earnings Spotlight: Monday, October 31 Stryker (SYK), NXP Semiconductors (NXPI) and Avis Budget Group (NASDAQ:CAR).

Earnings Spotlight: Tuesday, November 1 Eli Lilly (LLY), Pfizer (PFE), Toyota Motor (TM), BP (BP), Uber (UBER) and Airbnb (NASDAQ: ABNB).

Earnings Spotlight: Wednesday, November 2 – Qualcom (NASDAQ: QCOM), CVS Health (CVS), Booking Holding (BKNG), Humana (HUM) and Yum Brands (YUM).

Results Spotlight: Thursday, November 3 – ConocoPhillips (COP), Amgen (AMGN), Paypal (PYPL), Starbucks (SBUX) and Moderna (MDNA).

Earnings Spotlight: Friday, November 4 – Duke Energy (DUK), Dominion Energy (D), Hershey (HSY) and DraftKings (DKNG).

Overview of the IPO: ASP isotopes (ASPI), Alopex (NASDAQ:ALPX) and Beamr Imaging (BMR) are on the list of potential IPOs that could price and start trading, although the companies have continued to delay their public launches in the current market environment. IPO lock-up periods expire during the week for blocks of Austin Gold shares (AUST), PepGen (NASDAQ: PEPG) and Kiboko Gold (KIB: CA).

Overview of FOMC results: The Federal Reserve’s policy-making committee is expected to raise rates at the Nov. 1-2 meeting and maintain a hawkish tone with a steady stream of inflationary data since the September meeting. UBS expects the FOMC to keep its options open rather than giving hints that the pace of rate hikes will slow in December. The firm noted that there are no new economic projections released at the November meeting, so all the action will be in the FOMC statement and the president’s press conference. Kansas City FRB Chairman George is seen as a dissenter in favor of a smaller rate hike. It has also been observed that over the past few weeks, FRB Vice Chairman Lael Brainard has expressed concerns about the pace and extent of the ongoing global monetary policy tightening and FRB Chairman of San Francisco’s Mary Daly said there should at least be some discussion about slowing the pace. Federal Reserve Chairman Jerome Powell is expected to emphasize a wait-and-see stance on decisions from the December meeting.

Boeing Investor Day preview: The world’s largest aerospace company is holding a key investor day just a week after seeing its stock post the biggest one-day drop since May. Boeing reported a larger-than-expected quarterly loss and noted that losses widened amid difficulties in its defense business, while its commercial aviation unit continues to face supply chain constraints and regulatory barriers. Revenue rose 4% from a year earlier to $16 billion, but missed the consensus estimate of $1.95 billion. During the earnings conference call, Boeing executives again cut the 2022 target for deliveries of the 737 MAX single-aisle jet to 375 from 400. The event for investors should add more color to expectations from Boeing for 2023 deliveries and the mix of planes offline or removed from storage. In addition, many of the longer-term issues with Boeing should be addressed on Investor Day to perhaps ease some investor concerns.

Holiday Shopping Preview: The National Retail Federation will hold a media call on Nov. 3 to release its forecast for holiday retail sales in 2022. The NRF forecast will be another key data point for investors pricing Target (TGT), Best Buy (BBY ), Dick’s Sporting Goods (DKS) and Walmart (WMT) after Amazon (NASDAQ: AMZN) policy shock and amid lingering concerns about consumer discretionary spending. Bank of America previously released a forecast that holiday comparable sales would grow 1.3% this year, decelerating rapidly from the +6.5% pace a year ago. The firm noted that inflationary pressures are weighing on consumer spending, especially at low/middle income levels, as non-discretionary spending such as gas, groceries and rent are high. However, that doesn’t mean there won’t be any holiday winners. BofA listed Tapestry (TPR) as a top pick in specialty retail because it believes the company has sustainable pricing power and low risk of inventory shrinkage. In the hard lines, Ollie’s Bargain Outlet Holdings (OLLI) and Tractor Supply (TSCO) are called the standouts. Meanwhile, the best food and discount choices are Costco (NASDAQ: COST) and BJ’s Wholesale Club (NYSE: B.J.) with their strong value proposition that supports continued traffic and market share gains.

Corporate events: wolf speed (NYSE: WOLF) and Criteo (NASDAQ: CRTO) will hold Investor Day events on October 31. The three-day LA Blockchain Summit begins November 1 with the cryptocurrency world looking for a spark. Notable speakers include Michael Saylor of MicroStrategy (MSTR), SkyBridge partner Anthony Scaramucci, and Apple co-founder Steve Wozniak. Spartan Nash (NASDAQ: SPTN) will hold its Investor Day on November 2. Twilio (NYSE: TWLO) will host a virtual Investor Day on November 3. On the same day, AMD (NASDAQ: AMD) will host a live event with the tagline “Together we advance the game”. The chipmaker plans to unveil the next generation of AMD Radeon graphics and provide details on the new high-performance, power-efficient AMD RDNA 3 architecture. The week ends with the VMWare (VMW) shareholders’ meeting on November 4 to vote on the Broadcom (NASDAQ: AVGO) merging. Read Seeking Alpha’s Catalyst Watch for a detailed list of next week’s events.

Mentions of Barron: Visa (V) drew a bullish recommendation from the release this week with shares falling sharply amid the market’s sell-off this year. Visa has fallen back to where the shares were in January 2020 before the meteoric growth of digital payments drove the stock higher during the pandemic. On the plus side, Visa is reputed to have impressive free cash flow, zero net debt and continues to drive double-digit sales and earnings. The kicker is that on an assessment basis – Visa looks cheaper than it has in years. As worries about a possible recession dented sentiment, Barron’s said history shows Visa continued to grow even during the financial crisis of 2008-2009. This week’s cover story touched on the upside potential for small cap stocks in a market as choppy as it has been in years. It was noted that small-cap companies were predominantly domestic, which helped them avoid much of the effects of the 17% rise in the US dollar against other currencies. More importantly, multinationals are being observed to be on an offshoring trend with supply chains in what could end up being a major tailwind for small cap companies. Stocks in the small cap universe mentioned as attractive were Veritex Holdings (VBTX), Advanced Energy Industries (NASDAQ:AEIS), Patterson-UTI Energy (PTEN), ChampionX (CHX), AAR Corp, (AIR), KAR Auction Services (NYSE: K.A.R.), Flowserve (NYSE: FLS).

Sources: EDGAR, Bloomberg, CNBC, Reuters

Garland K. Long