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Investors will have their eyes on the Federal Reserve meeting and U.S. jobs report next week as they look for more direction on if the economy is heating or cooling. The interest rate policy statement from the FOMC will be watched more for any verbiage changes, with futures trading implying a 97% probability that interest rates will be kept at their current levels. There is very little consensus on the direction of the economy, and some analysts, such as Investing Group Leader Mott Capital Management, suggest that stagflation could be an issue.
In corporate earnings, major reports are due from a wide range of companies across sectors, including ConocoPhillips (COP), Pfizer (PFE), Coca-Cola (KO), McDonald’s (MCD), Starbucks (NASDAQ:SBUX), Apple (NASDAQ:AAPL), and Amazon (AMZN). Cruise line operator Viking Holdings (VIK) will launch its IPO, while A.P. Moller – Maersk (OTCPK:AMKBF) (OTCPK:AMKBY) will officially spin off its towage and marine services activities unit. Chinese electric vehicle makers NIO (NIO), Li Auto (LI), and XPeng (XPEV) will update on monthly deliveries, which could impact Tesla’s (TSLA) share price if anything dramatic falls out.
Earnings spotlight: Monday, April 29 – NXP Semiconductors (NXPI), ON Semiconductor (ON), MicroStrategy (MSTR), Domino’s Pizza (DPZ), Chegg (CHGG), and Medifast (MED). See the full earnings calendar.
Earnings spotlight: Tuesday, April 30 – Amazon (AMZN), Eli Lilly (LLY), Coca-Cola (KO), AMD (AMD), McDonald’s (MCD), Starbucks (SBUX), PayPal (PYPL), Caesars Entertainment (CZR), Mondelez International (MDLZ), Super Micro Computer (SMCI), and Lemonade (LMND) See the full earnings calendar.
Earnings spotlight: Wednesday, May 1 – CVS Health (CVS), Qualcomm (QCOM), Pfizer (PFE), Kraft Heinz (KHC), Mastercard (MA), Marriott International (MAR), DoorDash (DASH), MetLife (MET), MGM Resorts (MGM), eBay (EBAY), and DuPont (DD). See the full earnings calendar.
Earnings spotlight: Thursday, May 2 – Apple (AAPL), Shell (SHEL), CononoPhillips (COP), Amgen (AMGN), Booking Holdings (BKNG), and Fortinet (FTNT). See the full earnings calendar.
Earnings spotlight: Friday, May 3 – Hershey (HSY), Cheniere Energy (LNG), and Magna International (MGA). See the full earnings calendar.
Volatility watch: Options trading volume is elevated on Annovis Bio (NYSE:ANVS) and Petrobras (PBR). Short interest moved even higher over the last week on Scholar Rock (NASDAQ:SRRK) and NuScale Power (SMR). The most overbought stocks per their 14-day Relative Strength Index include Cannabix Technologies (OTCPK:BLOZF), Macatawa Bank (MCBC), and Alpine Immune (ALPN). The most oversold stocks per their 14-day Relative Strength Index include Ocular Therapeutix (OCUL), Kopin (KOPN), and CarParts.com (PRTS). Citi has Coty (COTY) and Plains All American Pipeline (PAA) singled out as two stocks that may see near-term rallies.
IPO watch: Viking Holdings (VIK) is expected to price its IPO next week and begin to trade. The ocean and river cruise company is planning to sell 44M shares priced between $21 and $25 per share in an initial public offering. The company disclosed in an SEC filing that in 2023 it reported a loss of $1.85B on $4.7B in revenue as cruise operating expenses increased by 33% to $2.85B. Adjusted EBITDA loss widened to $1.09B from $367M in 2022 and the adjusted EBITDA margin expanded to 35.5% from 18.4% the year prior. Viking started in 1997 with just 4 river cruise ships but has expanded to 84 ships in operation with 650K passengers in 2023. Elsewhere, the IPO quiet periods end on Contineum Therapeutics (CTNM) and Massimo Group (MAMO) to free up analysts to post ratings. The IPO lockup periods expire for blocks of shares of Alpha Technology Group (NASDAQ:ATGL) and Lexeo Therapeutics (LXEO).
Dividend watch: Companies forecast to increase their quarterly dividend payouts include Chesapeake Energy (NASDAQ:CHK) to $0.65 from $0.575, Tetra Tech (TTEK) to $0.29 from $0.26, PepsiCo (PEP) to $1.35 from $1.265, and Carlyle Group (CG) to $0.38 from $0.35. See dividend stock picks from Seeking Alpha analysts.
Jobs report preview: Investors will have their eyes on the tone coming out of the FOMC meeting on April/May 30-1 and the arrival of the U.S. jobs report on May 3. The FOMC meeting is anticipated to indicate the central bank will stick with a plan to follow the data when evaluating interest rate policy, which feeds into the importance of the jobs report release. Economists forecast the U.S. economy added 210K nonfarm jobs during the month, after 303K jobs were added in March. The unemployment rate is expected to remain at 3.8%, and average hourly earnings are seen rising 0.3% month-over-month. Bankrate Senior Economic Analyst Mark Hamrick said one of the most pleasantly surprising themes associated with the economy has been the continued strength and resilience of the job market. He noted the total number of job openings, at 8.8 million as of the end of February, is substantially down from the early 2022 peak, which topped 12 million when the great reopening of the economy was still in process. He also pointed out that the number of vacancies remains above pre-pandemic levels, suggesting a good number of opportunities for jobseekers, including the recently unemployed.
Investor events: The schedule of investor events is relatively light due to the earnings season being in full swing; however, there are some events that could still push shares around. Atlassian (TEAM) co-CEOs Mike Cannon-Brookes and Scott Farquhar will be speakers at the company’s Team24 conference. Riot Platforms (RIOT) will participate in the AIM Summit in London. Atlassian (TEAM) will host its Investor Day with financial analysts and investors. MongoDB (MDB) will host an investor session at MongoDB.local in New York City. Hyatt Hotels (H) will hold a conference call to discuss the company’s segment realignment. And finally, Sagimet Biosciences (SGMT) will host a virtual investor and analyst day.
Spotlight on coffee: Starbucks (SBUX) and Luckin Coffee (OTCPK:LKNCY) will both report earnings next week. Starbucks (SBUX) is forecast to report FQ2 revenue of $9.13B, EPS of $0.81, EBITDA of $1.68B, and same-store sales growth of 1.46% on negative traffic growth. Same-store sales are seen rising 2.10% in North America and falling 1.62% in China. Luckin Coffee (OTCPK:LKNCY) has seen its revenue double in two years but faces some new competition. Cotti Coffee is the chain with the most rapid growth recently and now has 13,296 outlets across two East Asian markets. As of March, Cotti had 6,570 stores on the Chinese mainland, compared with just six in October 2022 when it was launched by Luckin’s co-founders Lu Zhengyao and Qian Zhiya. Overall, the demand for coffee in China appears to be on the rise. Last year, the number of coffee outlets rose 58% year-over-year to almost 50K locations as the post-pandemic surge continued. China also passed the United States as the country with the most branded coffee shops in the world, according to data from the World Coffee Portal. China was noted to be the fastest growing market in East Asia, ahead of Malaysia (28% growth) and the Philippines (15.3% growth). The U.S. Department of Agriculture forecasts China’s demand for coffee will reach an estimated 5M bags in the 2023-24 season, which would make it the seventh-biggest coffee market in the world. Luckin Coffee (OTCPK:LKNCY), Starbucks (SBUX), Restaurant Brands’ (QSR) Tims China, Shanghai-based Manner, and Coca-Cola’s (KO) Costa Coffee are some of the biggest coffee chains in China.
Spinoff watch: A.P. Moller – Maersk (OTCPK:AMKBF) (OTCPK:AMKBY) will officially spin off Svitzer Group, which is the company’s towage and marine services activities unit. The company has continued to streamline its business in recent years to narrow its focus on core shipping and logistics operations. The Svitzer unit generated revenue of $839M in 2023 and EBITDA of $246 million. Maersk will still hold around 41.5% of the new standalone company. Svitzer has a fleet of 430 vessels with operations in more than 30 countries and more than 140 ports, as well as more than 25 oil and gas terminals worldwide.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.