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Key Earnings Announcements:
Constellation Brands, Delta Air Lines, and major banks kick off a new earnings season.
Monday (4/8): N/A
Tuesday (4/9): Aehr Test Systems, Cognyte, Tilray, WD-40 Company
Wednesday (4/10): Applied Digital, Delta, Rent the Runway
Thursday (4/11): Carmax, Constellation Brands, Fastenal
Friday (4/12): BlackRock, Citi, JPMorgan Chase & Co, Progressive, State Street, Wells Fargo
What We’re Watching:
Delta Air Lines (DAL)
Delta Air Lines braces for a challenging week as expectations set a subdued tone for its Q1 earnings and outlook amidst a tough operating climate.
Set to announce on Wednesday, the market anticipates a significant reaction as options traders are predicting a ~6% stock price swing post-announcement.
Despite a forecasted +44% rise in EPS to $0.36 and a +9.5% increase in revenue to $12.9 billion, and the stock up 14.5% YTD — analysts express concerns over Delta's forward guidance.
Key concerns for the most valuable airline in the U.S. include current geopolitical tensions, rising oil prices, and the effects of Boeing’s issues.
Delta Air Lines (DAL) Stock Performance, 5-Year Chart
Analysts expect $0.33 GAAP EPS on Revenue of $12.93 billion.
You can explore the most recent DAL investor release here and here.
JPMorgan Chase & Co (JPM)
Despite some analysts recently downwardly-revising their projections — estimates anticipate a slight increase in JPMorgan Chase earnings per share to $4.13 and an +8.9% jump in revenue to $41.7 billion — potentially the highest in the bank's history.
Shares have increased +16% YTD and the continued optimism is supported by expected gains in trading and investment banking revenues.
US banks added more net-new branches in 2023 for the first time in a decade.
JPMorgan is leading the turnaround — having opened 110 net-new branches in 2023, with plans to build 500 and renovate 1,700 more over the next three years.
Wall Street want to know more about Chase Media Solutions — JPM’s new digital media business that will allow advertisers to target the bank’s 80M+ customers based on their spending data.
JPMorgan Chase & Co (JPM) Stock Performance, 10-Year Chart
Investor Events / Global Affairs:
The economic craze of the eclipse, Google might buy HubSpot, Paramount might buy Skydance, and streaming platforms are cutting down even more on password sharing.
Solar Eclipse Economic Pump
As the solar eclipse draws near, the hospitality and tourism sector is getting a boost.
Airbnb (ABNB) released data that shows the platform's listings along the path of totality are nearing a 90% booking rate for the night preceding the event. Hotel and motel booking rates have shot up along the key cities like Indianapolis and Dallas — where visitors have arrived from all over the country.
Airbnb Inc. (ABNB) Stock Performance, 1-Year Chart
Airbnb closed up +1.8% on Friday at $161.77 for its first good showing after its seventh straight trading session dips. Regardless, Airbnb's stock has climbed nearly +19% this year — outperforming the S&P 500.
Airbnb should benefit (to a much higher degree) on a 2024 travel upswing expected for the Paris Olympics and a rebound in travel from China and Latin America. The eclipse is an added bonus for the company that had consumers booking almost a year out.
Some fun “eclipse promotions” below…
Delta Air Lines is offering a special flight from Austin to Detroit, designed to follow the path of totality and spend as much time as possible within it.
Southwest Airlines identified three flights likely to provide the best view, with five others that might cross the path of totality.
United Airlines says it has 11 flights expected to pass through the path of totality, six departing Chicago and five departing Houston.
Krispy Kreme is offering the “Solar Eclipse Donut” — with an Oreo acting as the “moon.”
Pizza Hut is offering its “Total Eclipse of the Hut” — with any large pizza for $12.
Google (GOOG) Considers Buying HubSpot (HUBS)
Alphabet, Google's parent company, is considering an acquisition of HubSpot (HUBS) — an online marketing software firm valued at ~$35 billion. This would be Google’s largest-ever acquisition.
Alphabet Inc. (GOOG) Stock Performance, 5-Year Chart
HubSpot Inc. (HUBS) Stock Performance, 5-Year Chart
Leveraging its substantial cash reserves — Google would make this move in order strengthen its presence in the customer relationship management (CRM) software market. This development reflects a broader trend of increased merger and acquisition activity in the technology sector as of late.
HubSpot has 250K businesses leveraging their CRM tool, whereas Google has 1.2M businesses using their Google Ads network. We would imagine Google is hoping to cross-pollinate a percentage of these 1.2M businesses into this “new” CRM tool — allowing them to monetize existing customers further down the funnel.
Even just a 10% crossover rate (120K customers) would increase HubSpot’s existing customer base by nearly +50% — making the acquisition pay for itself over a few short years.
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Paramount Global (PARA) Considers Buying Skydance
Paramount Global is in talks to purchase independent studio Skydance Media in an all-stock transaction valued at ~$5 billion. Separately — Skydance's involvement could also provide Paramount with much-needed cash infusion to address its debt and bolster its technology initiatives.
Paramount Global (PARA) Stock Performance, 10-Year Chart
Members of Paramount's board agreed to enter into exclusive merger talks with Skydance Media, favoring the independent studio over a $26 billion offer from private equity firm Apollo Global Management.
Password-Sharing Crackdowns Continue
Starting in June, Disney+ will enforce stricter measures against password-sharing — aiming to drive subscriber growth and profitability. CEO Bob Iger also highlighted the need for industry consolidation and expressed Disney's goal of achieving double-digit margins in the streaming business.
The Walt Disney Company (DIS) Stock Performance, 5-Year Chart
This announcement follows Netflix's success with a similar crackdown, which significantly boosted its subscriber numbers in 2023.
Iger's remarks came shortly after Disney investors supported him and the company's directors in a proxy battle against activist investors critical of Disney's performance in the streaming era.
Major Economic Events:
Inflation is not expected to improve much from the month before, Fed meeting minutes are unveiled, and more.
Monday (4/8): N/A
Tuesday (4/9): NFIB Optimism Index
Wednesday (4/10): Boston Fed President Susan Collins Speaks, Consumer Price Index, Core CPI, Minutes of Fed’s March FOMC Meeting, Monthly US Federal Budget, Wholesale Inventories
Thursday (4/11): Atlanta Fed President Raphael Bostic Speaks, Chicago Fed President Austan Goolsbee Speaks, Core PPI, Initial Jobless Claims, Producer Price Index
Friday (4/12): Atlanta Fed President Raphael Bostic Speaks, Consumer Sentiment (prelim), Import Price Index, San Francisco Fed President Mary Daly Speaks
What We’re Watching:
Consumer Price Index (CPI)
March’s inflation for consumers gets an update this Wednesday — with the Consumer Price Index (CPI) report set to be released.
Headline CPI is forecasted to rise +0.3% MoM and +3.4% YoY.
Core CPI is forecasted to rise +0.3% MoM and +3.7% YoY.
Producer Price Index (PPI)
March's inflation for producers gets an update this Thursday — with the Producer Price Index (PPI) report set to be released.
Headline PPI is forecasted to rise +0.3% MoM and +2.3% YoY
Core PPI is forecasted to rise +0.2% MoM and +2.3% YoY
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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.