The Investing Week Ahead: 6/20/22
Kim Kardashian's impact on the stock market, Fedex's +53% dividend hike, and housing data.
Ready for a short week?
We certainly are. The broader Rate of Return team is traveling this week, so please forgive us if we’re slow to reply to your comments. Looking for something to read while we’re gone? Below are a few of our favorite posts.
The Investing Week Ahead - Too Long, Didn’t Read:
⚡ The earnings spotlight shines on Accenture, Darden Restaurants, and FedEx.
⚡ Both Amazon and Kim Kardashian could teach us a thing or two this week.
⚡ Further updates on the Fed’s plan and how it’s impacting real estate.
Key Earnings Announcements:
After all of this market turbulence, a tame earnings week gives us a well-deserved break.
Tuesday (6/21): La-Z-Boy, Lennar Corporation
Wednesday (6/22): KB Home
Thursday (6/23): Accenture, BlackBerry, Darden Restaurants, FedEx, Rite Aid, Smith & Wesson
Friday (6/24): Carnival, CarMax
Reminder: The stock market is closed on Monday in recognition of Juneteenth.
If you recall from this post, the market clearly re-rated Accenture’s (ACN) valuation multiple given the lack of visibility into the company’s financial future. However, during their last earnings call their management team made it very clear to investors that their pipeline is robust and that only ~30% of enterprise workloads have been migrated to the cloud — representing opportunity. Let’s see just how much opportunity was still up for grabs!
Tracking Kim K’s impact on a publicly-traded company, Fortinet’s stock split, monkeypox drama, Amazon’s big-brainfest, and the movies are BACK.
Tuesday (6/21): Kim Kardashian’s Skincare Brand, SKNN, Officially Launches Through a Partnership w/ Coty (COTY)
Wednesday (6/22): Volkswagen Capital Markets Day
Thursday (6/23): Fortinet (FTNT) 5-for-1 stock split, World Health Organization Emergency Meeting on Monkeypox
Friday (6/24): Investors Assess Box Office Performances from Jurassic World: Dominion, Lightyear, and Top Gun: Maverick
All Week: Amazon’s “re: MARS” event is the primary thing to watch this week. The conference is focused on Machine learning, Automation, Robotics, and Space. It will feature leadership from a variety of divisions within Amazon, as well as external guests from MIT, NVIDIA, and more.
What We’re Watching:
Don’t Bet Against Kim K: Full transparency, we know very little about Coty or Kim Kardashian’s newest business venture. However, what we do know is that Kim’s SKIMS brand consistently sells out and has created insane hype on social media. We will be watching this beauty product line closely.
Follow the Big Fish: As we look to the near future of the stock market, it’s important to remember that over 15% of the S&P 500 is comprised of Apple, Amazon, Microsoft, and Alphabet (Google). Events like “re: MARS” can provide key insights into what the company may or may not be focused on over the coming months. As investors, we generally hope that they’d be profitable endeavors and not cash-draining investments. Here’s the Twitter account for the event if you care to follow along!
Major Economic Updates:
More details on why we shouldn’t be fighting the Fed, and how the housing market is reacting to the rate hikes.
Tuesday (6/21): Existing Home Sales
Wednesday (6/22): Fed Chair Powell Testifies to US Senate Banking Committee
Thursday (6/23): Fed Chair Powell Testifies to US House Financial Services Committee
Friday (6/24): Building Permits, New Home Sales
What We’re Watching:
How Bad Can It Get? During Jerome Powell’s most recent session before Congress, we got to see a more direct and defensive side of the Fed Chairman. This time around, we’ll be interested to see how he continues to concede that the Fed cannot singlehandedly control inflation. Expect members of Congress to attempt to have him make political statements and watch the fireworks ensue.
Tougher Sell: As interest rates continue to rise, we’ll be watching for updated New Home Sales data. The most recent reading dropped to the lowest levels since before the pandemic. Remember, mortgage rates are the highest they’ve been since 2008 — which means anyone selling a home they purchased within the last 14 years is going to see a massive hike in interest paid on their loan.
What specific events are moving stocks the most?
Our friends at LevelFields scrub through thousands of data points each week to determine how events impact stock prices.
Exciting to see FedEx significantly raise their dividend ahead of the company’s earnings call this week. Typically, this is a sign of confident forward-looking guidance and margins that have help up during these crazy times. Let’s see how it plays out!
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Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.