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Investors will be focused on the last Federal Reserve meeting of the year next week. While the FOMC is expected to hold rates steady, the tone from Jerome Powell and gang will still be of high interest to market watchers. As it stands now, the Fed’s favored inflation gauge, core PCE inflation, looks on track to end the year comfortably below the central bank’s forecast and not too far off the Fed’s 2% target. Outside of the Fed meeting, the economic calendar also includes the consumer price index and producer price index reports, as well as updates on retail sales and industrial production. Meanwhile, the earnings calendar finally slows down, with reports from Oracle (ORCL), Costco (COST), and Darden Restaurants (DRI) standing out. Big corporate events during the week will include the 65th American Society of Hematology conference taking place in San Diego, California, Chewy’s (NYSE:CHWY) first-ever investor day event, and AI-related reveals from Intel (INTC).
Earnings spotlight: Monday, December 11 – Casey’s General Stores (CASY) and Oracle (ORCL).
Earnings spotlight: Tuesday, December 12 – Johnson Controls International (JCI).
Earnings spotlight: Wednesday, December 13 – Adobe (ADBE) and ABM Industries (NYSE:ABM).
Earnings spotlight: Thursday, December 14 – Costco (COST), Jabil (JBL) and Lennar (LEN).
Earnings spotlight: Friday, December 15 – Darden Restaurants (DRI).
Volatility watch: Crypto-related names Coinbase Global (COIN), MicroStrategy (MSTR), Marathon Digital (MARA), CleanSpark (CLSK), Hut 8 (HUT), TeraWulf (WULF), and Riot Platforms (RIOT) are still being watched for short squeeze potential. Options trading volume rose on GameStop (GME) amid buzz about the board’s decision to allow management to make stock buys of other companies. The most overbought stocks per their 14-day relative strength index are Altimmune (ALT), Sera Prognostics (SERA), and Snap (SNAP). The most oversold stocks per their 14-day Relative Strength Index are reAlpha Tech (AIRE), Ventyx Biosciences (VTYX), and R&Q Insurance Holdings Ltd. (OTCQX:RQIHF).
Dividend watch: Companies projected to boost their quarterly dividend payouts include ABM Industries (ABM) to $0.24 from $0.22, WD-40 (WDFC) to $0.89 from $0.83, American Tower (NYSE:AMT) to $1.70 from $1.62, and WEC Energy (NYSE:WEC) 40.83 to from $0.78. See Seeking Alpha’s list of Quick Dividend Stock Picks.
IPO watch: Inno Holdings (INHD) is the only IPO expected to launch next week. The company is offering 2.5M shares at an indicative price range of $4 to $5. Quiet periods expire on Shimmick (SHIM), Signing Day Sports (SGN), DDC Enterprise (DDC), and CAVA Group (NYSE:CAVA) to free up analysts to post ratings. Shares of CAVA have seen some selling pressure already ahead of the lockup expiration on concerns that some insiders will cash out. S3 Partners’ Ihor Dusaniwsky said the lockup expiry may make the stock much more shortable. “If insiders sell in size, which is a strong possibility with its +48% advance above its $22 IPO offer price, stock loan availability may boost significantly if shares land in accounts which either lend their shares or are marginable and their shares are rehypothecated by their brokers,” he warned.
FOMC preview: The Federal Reserve is expected to hold its benchmark rate at 5.25% to 5.50% for the third consecutive meeting. While Fed officials do not appear to be ready to say the hiking cycle has ended, the pivot toward discussing lower rates has been made. Nomura expects the median rate projection for 2024 to factor in three 25-point rate cuts next year. The economic forecasts from the Fed are also expected to show a significant dovish shift, reflecting slowing growth momentum and faster-than-expected disinflation in recent months. Bank of America said the committee is not ready to shift from a tightening bias all the way to an outright easing bias, but could take the initial step of making its policy rate outlook more balanced by changing the existing language in the interest rate statement. Looking ahead, futures trading implies a 4% probability of a rate cut at the late January FOMC meeting and a 45% probability of a rate reduction at the March meeting.
Spotlight on Chewy’s: Chewy (CHWY) will hold the first investor day in the company’s history next week, just a few days after rattling investors with guidance for the holiday quarter that came in below expectations. While gaining market share in Q3, the online pet retailer pointed to industry-wide pressure as a potential headwind. The investor day event is anticipated to shift the focus back on the long-term growth story and path to improved profitability. Analysts think that volume leverage could be one of the biggest drivers of margin gains for the online retailer and a point of emphasis at the investor meeting. “Analyzing past filings reveals a large buildout of distribution infrastructure over the past 5yrs to accommodate growth, including a tripling of facilities as well as recent automation upgrades,” noted analyst Curtis Nagle. Chewy (CHWY) could also talk up the potential to see pharmacy and vet services sales soar in the coming years. Ahead of Chewy’s (CHWY) big day, Morgan Stanley pointed to analysis suggesting the pet industry macro has posed a greater headwind to CHWY’s top-line growth than the market appreciates, although it may be bottoming. Analyst Lauren Schenk noted that while many are concerned Chewy (CHWY) is losing market share, the firm’s view is that the weak pet macro is the primary driver of CHWY’s negative net adds since the start of 2022 and not competitive pressures. Shares of Chewy (CHWY) are down more 50% over the last six months. Short interest is still elevated on the stock at 16.6% of the total float.
Event plan: The headliner event on the corporate calendar is Intel’s (INTC) AI Everywhere Event. The semiconductor giant said the event will include the launch of 5th Gen Intel Xeon processors for data centers and Intel Core Ultra processors for laptops. Other events that could jolt share prices include AECOM’s (ACM) Investor Day, Affirm Holdings’ (AFRM) Investor Meeting, L3Harris Technologies’ (LHX) Investor Day, Centene’s (CNC) Investor Day event, Couchbase’s (BASE) Analyst Day, U.S. Silica Holdings’ (SLCA) Investor Meeting, and Chewy’s (CHWY) first investor day event in the company’s history. Read Seeking Alpha’s Catalyst for a full event plan.
Conference plan: The healthcare sector will be on high alert with the 65th American Society of Hematology conference taking place in San Diego, California. The Hematology meeting has led to share price jolts from participants in the past. Arcellx (ACLX) and Pfizer (PFE) have been highlighted as two companies to watch. Other presenters of data include Eli Lilly (LLY), Agios Pharmaceuticals (AGIO), Corvus Pharmaceuticals (CRVS), IN8bio (INAB), Molecular Partners AG (MOLN), Rigel Pharmaceuticals (RIGL), Schrödinger (SDGR), Telomir Pharmaceuticals (TELO), Vor Biopharma (VOR), CRISPR Therapeutics (CRSP), Shattuck Labs (STTK), Bristol-Myers Squibb (BMY), and Incyte Corporation (INCY). Other conferences that could create some news include the Seaport Digital Media & Advertising Virtual Conference, New Street Research BCG Future Series Conference, and Northland Capital Markets Virtual Artificial Intelligence Investor Conference.
