The Investing Week Ahead: 7/11/22
Crazy 7-Eleven facts on its big day, major deals from Amazon & its competitors, earnings from some of America's most important companies like BlackRock & UnitedHealth, and it's inflation time baby.
And happy Slurpee Day! If you’re around a 7-Eleven convenience store — go snag one!
In honor of this sacred holiday, here’s some crazy 7-Eleven facts:
The company was started in 1927 and originally called Southland Ice Company (selling mostly ice, eggs, milk, and bread). In 1928, a manager brought a totem pole as a souvenir from Alaska and placed it in front of her store. It became such an attraction and marketing tool, that executives added totem poles in front of every store. The stores were then called “Tote’m Stores” until 1946. At that time, the company extended store hours to 7am-11pm in an effort to recover from business struggles during World War II. The name change to 7-Eleven stuck, despite most locations now being open 24/7.
While the company is headquartered in Dallas, Texas — it’s actually owned by Seven-Eleven Japan Company Ltd.
As of July 2022, there are 9,510 total locations throughout 38 states in the US. Around the world, there are over 78,000 locations. I’m not sure that too many people know that 7-Eleven is the world’s largest convenience retailer. As a tangential comparison, there are just over 10,500 Walmarts globally.
The company employs over 135,000 people around the world.
Boom! More than you’d ever need to know about the Slurpee-loving, convenience store kings. Now on to the good stuff.
The Investing Week Ahead - Too Long, Didn’t Read:
⚡ The earnings spotlight shines on BlackRock, JPMorgan, United Health, Citi, & more.
⚡ Amazon Prime Days return, competing with campaigns from Walmart & Target.
⚡ A big week of economic data features inflation, retail sales, & consumer sentiment.
Key Earnings Announcements:
Time to wake up from the summer daze — big time earnings reports are back this week!
Monday (7/11): The Greenbrier Companies
Tuesday (7/12): PepsiCo
Wednesday (7/13): Delta, Fastenal Co.
Thursday (7/14): Cintas, Conagra Brands, Ericsson, First Republic Bank, JP Morgan, Morgan Stanley, Taiwan Semiconductor Co.
Friday (7/15): BlackRock, BNY Mellon, Citi, PNC, Progressive, UnitedHealth Group, US Bancorp, Wells Fargo
What We’re Watching:
World Mover: Being the largest asset manager worldwide ($9.6T+ AUM), BlackRock (BLK) has a profound impact on essentially any and every industry. Its last investor update featured another strong quarter of heightened net inflows and a cool demeanor, despite a spiraling stock market. More specifically, revenue rose +7% last quarter to meet expectations of $4.7 billion and earnings per share came in at $9.52, beating expectations of $8.70. We’ll be watching this stock closely to see whether they’ve continued to weather the macro market’s storm, or are beginning to see some negative influences creep into the picture.
Dimon in the Rough: J.P. Morgan (JPM) CEO Jamie Dimon is well known for being both outspoken and occasionally controversial. Most recently, he made global news for predicting that an economic “hurricane” is on the way. “We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself,” he noted in early June. We’re excited to see what other insights he has for us and if J.P. Morgan — the largest bank in the country by market cap — can once again surpass top and bottom line earnings estimates.
“Health is Wealth”: America’s largest health insurer and the 8th largest company in the world by market cap, UnitedHealth Group (UNH) is set to release its earnings at the end of the week. For the last two year (8 quarters), UnitedHealth has beaten EPS estimates each report and only missed on revenue expectations once. With 9% of my total portfolio being in this position — I’m hoping that they keep the hot streak alive!
The best time to buy
stocks random junk has arrived, we see if Boeing’s struggles continue, and Google’s stock split finally takes place.
Monday (7/11): Target Deal Day 1, Dave & Busters Entertainment Investor Event
Tuesday (7/12): Amazon Prime Day 1, Target Deal Day 2
Wednesday (7/13): Amazon Prime Day 2, Target Deal Day 3
Thursday (7/14): Boeing Q2 Deliveries
Friday (7/15): Alphabet (Google) 20-for-1 Stock Split, Healthcare Realty Trust & Healthcare Trust of America Merger Vote
All Week: Walmart Deals for Days, CJS Securities’ 22nd Annual New Ideas Summer Conference, Deutsche Bank Global Consumer Conference
What We’re Watching:
Going to Be Sick of the Word ‘Deal’: The storm of discount shopping that Amazon started in 2015 is back. As the years have gone by, competitors have realized that they must attempt to match Amazon’s massive mark-downs and ride the wave of media attention. Jefferies estimates that Prime Day will add +$8.1B to GMV and +$4.7B to sales — boosts of +6% and +4%, respectively. Earlier this year, Amazon raised the price of Prime fees from $12.99 to $14.99 monthly, and from $119 to $139 annually. This price increase is expected to bring in over $2.8B in additional Prime subscription revenue, and the company hopes that Prime Day will push that figure well beyond $3B. Expect numerous videos this week on my TikTok and Instagram with the best deals we can find!
Boeing Deliveries: In May, Boeing delivered a lackluster total of 35 planes as the company deals with major supply chain issues. While we have no interest in becoming shareholders of this problem-laden company, it’s always good to check on the health of it due to its implications to both the airline and national defense.
More Slices to the Pie: According to Bank of America research, stocks that split rise by an average of +25% over the following 12 months, compared to a +9% gain in a non-split, benchmark index. Google joins heavy hitters Amazon and Shopify as key companies that are finalizing stock splits this year. Keep an eye out for Tesla to join their ranks — as the company filed a stock split proposal in late March.
Major Economic Updates:
Fresh inflation data, insights of the health of small businesses, retail sales updates, and seeing if consumer sentiment has recovered from all-time-lows.
Monday (7/11): 3-Year Inflation Expectations
Tuesday (7/12): NFIB Small Business Index
Wednesday (7/13): CPI (Inflation), Fed Beige Book, Federal Budget
Thursday (7/14): Jobless Claims, Producer Price Index
Friday (7/15): Import Price Index, Retail Sales, UMich Consumer Sentiment Index
What We’re Watching:
Worse Than Taxes: We’re obviously keeping an eye on the inflation print. Would be nice to see if the Fed’s actions have brought this down at all yet. According to MarketWatch, the median forecast comes in at +8.8%. If accurate, this would notably be above last month’s reading of +8.6%.
Down in the Dumps: The most recent reading the UMich Consumer Sentiment Index came in at a record low. We’ll be interested to see if this spirals further or has a rebound of sorts.
Daddy Needs a New Pair of Shoes: The most recent data on retail sales showed a month-over-month decrease from April to May — the first decline of 2022. Given the retail industry’s massive impact on the United States GDP overall, we’ll be looking for a dramatic rebound after the first negative month of the year. Economists project a month-over-month increase of +0.9% for June’s report. Anything less than this would likely be seen as a warning sign.
Events Driven Winners:
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.
I still hold very small positions in both Teladoc Health and Unity Software, and frankly didn’t have any idea about these events taking place without alerts coming in from LevelFields. Interested to see if Google will be one of the biggesst event-driven movers after they do their 20-for-1 stock split!
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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.