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Investors head into next week with the debt ceiling crisis resolved for the near term, but will need to stay sharp with the May jobs report resetting expectations on the game plan is for the Federal Reserve as the FOMC meeting on June 13-14 approaches. Seeking Alpha Investing Group Leader Lawrence Fuller said the headline jobs number may look strong, but the details in the report actually show a significant softening. “This is what the Fed wants to see, and it is why the Fed funds futures indicate a pause in further short-term rate increases at the next meeting on June 14,” he noted.
The week will start with some potential ripples in the energy market in the wake of the June 4-5 OPEC meeting. The calendar is light for major economic releases, with updates on factory orders, consumer credit and initial jobless claims likely to be the most notable data points. Meanwhile, the earnings calendar grinds through a few intriguing names like Campbell Soup (CPB) (analysis), DocuSign (DOCU) (analysis), and NIO (NYSE:NIO) (analysis). In the healthcare sector, the 2023 American Society of Clinical Oncology conference in Chicago will feature a flurry of presentations and data readouts. Ahead of ASCO, Seeking Alpha Investing Group Leader Terry Chrisomalis has singled out Gilead Sciences (GILD) as a potential pharmaceutical play based on the upcoming presentations. Meanwhile, the tech sector will be tuned into Apple’s (AAPL) WWDC event that could feature an augmented reality headset, new MacBooks, and a first readout from the Cupertino company on how it views the role of AI in the Apple ecosystem.
Earnings spotlight: Monday, June 5 – GitLab (GTLB) and Science Applications (SAIC).
Earnings spotlight: Tuesday, June 6 – Ferguson (FERG), J. M. Smucker (SJM), Casey’s General Stores (CASY), and Stitch Fix (SFIX).
Earnings spotlight: Wednesday, June 7 – Brown-Forman (BF.A), GameStop (GME), Campbell Soup (CPB), and HashiCorp (HCP).
Earnings spotlight: Thursday, June 8 – DocuSign (DOCU), Vail Resorts (MTN), and Signet Jewelers (SIG).
Earnings spotlight: Friday, June 9 – NIO (NIO).
Volatility watch: Options trading volume is elevated in general on Akebia Therapeutics (AKBA), Icahn Enterprises (IEP), and Nikola (NKLA).
Dividend watch: Companies forecast to boost their quarterly payouts include UnitedHealth Group (UNH) to $1.85 from $1.65, Caterpillar (CAT) to $1.26 from $1.20, and Ralph Lauren (RL) to $0.775 from $0.75. See Seeking Alpha’s list of Quick Dividend Stock Picks.
Apple WWDC preview: Apple (AAPL) is slated to host its annual developers conference to high expectations that the tech giant will talk about the company’s AI strategy and reveal the long-awaited mixed reality headset. While Apple has been very quiet on AI strategy so far, Wedbush Securities thinks Apple is likely to head down the path to have its own AI-driven solution that will be integrated within the Apple ecosystem and thus enable consumers to further tap into their iOS data, video, music, applications, and Apple devices through next generation AI capabilities. Meanwhile, a mixed reality headset introduction could mark the Cupertino company’s first major product expansion since the 2015 unveiling of the Apple Watch. Industry watchers expect the device, which could cost as much as $3,000, will surpass devices already available from competitors such as Meta Platforms (META), Sony (SONY) and others. The device will be called Reality Pro and be powered by Apple’s M2 chips. Reality Pro is anticipated to have two 1.41 inch Micro OLED screens with pixel density of 4,000 ppi and 5,000 nits of peak brightness. Users may have the option to switch between augmented and virtual reality technologies. Industry watchers expect the device will be announced at the conference, but it may not go on sale right away to give developers a chance to build apps and features for it. On the hardware front, Apple (AAPL) is also expected to unveil new MacBooks at WWDC, perhaps showing off a new 15-inch MacBook Air. In addition, Apple (AAPL) is slated to show off updates to its various operating systems – iOS, iPadOS, macOS, watchOS and tvOS. Outside of Cupertino, Barclays tipped that Apple’s long-awaited entrance to mixed reality may help validate the tens of billions of dollars that Meta Platforms (META) has invested over the past decade into the space. From META’s perspective, the exposure is seen as all upside.
NIO earnings preview: The Chinese electric vehicle maker will report earnings on June 9 with analysts forecasting revenue of $1.68B and EPS of -$0.32 to be disclosed. One of the key pullouts from the report will be any early update on orders for the new ES6. NIO started ES6 deliveries on May 25 and will launch the ET5 Touring model later in June. While vehicle gross margins are expected to hit a trough in Q1, NIO’s read on Q2 will be closely watched oh hopes battery costs will fall as volume scales. Options trading on NIO implies a share price swing of 8% after the earnings report is dropped. NIO fell 5.5% after its last earnings report.
American Society of Clinical Oncology conference: One of the biggest healthcare conferences of the year will run during the week with the American Society of Clinical Oncology taking place in Chicago. Some of the companies being closely watched for ASCO-related developments include AstraZeneca (AZN), Novartis (NVS), Eli Lilly (LLY), ImmunoGen (IMGN), Gilead (GILD), Regeneron (REGN), Seagen (SGEN), Bristol-Myers Squibb (BMY), and Merck (MRK). Analyst revisions on certain healthcare stocks could follow the ASCO posters, abstracts, and presentations.
Corporate events: Cisco (CSCO) will hold its four-day Cisco Live! IT event in Las Vegas. CEO Chuck Robbins will be one of the key speakers. StepStone Group (NASDAQ:STEP) will host an Investor Day in New York City on June 6 with presentations on the company’s progress, strategy, and outlook. Toronto-Dominion Bank (NYSE:TD) and DLocal (NASDAQ:DLO) will hold Investor Day events on June 8 with updates on strategy and growth plans. See a detailed list of key events for next week in Seeking Alpha’s Catalyst Watch.
Investor conferences: The three-day NAREIT REITWeek will begin amid heightened interest on the current status of commercial real estate. Some of the companies due to participate include Alpine Income Property Trust (PINE), National Storage Affiliates Trust (NSA), Crown Castle (CCI), Postal Realty Trust (PSTL), and Rayonier (RYN). Other notable investor gatherings that could lead to guidance updates or share price moves include Deutsche Bank Global Consumer Conference, William Blair Growth Stock Conference, Morgan Stanley Travel and Leisure Conference, Baird Global Consumer, Technology & Services Conference, Stifel 2023 Cross Sector Insight Conference, UBS Global Industrials and Transportation Conference, Bank of America Global Technology Conference, and Jefferies Healthcare Conference.
Quant ratings: Stocks with recent quant rating changes include Vipshop Holdings (VIPS) to Strong Buy from Hold, Box (BOX) to Buy from Hold, and SunOpta (STKL) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.
Barron’s mentions: Steris (NYSE:STE) was singled out this week as an appealing stock pick. The 22.3X forward price-to-earnings ratio on the medical-equipment company that specializes in sterilization and related products is seen as worth paying because of the dependability of the recurring revenue stream. Of note, Steris has notched a double-digit average compound annual growth rate for its top and bottom lines over the past five years. Looking ahead, synergies from the company’s acquisition of infection-prevention products maker Cantel is seen providing earnings an extra boost.
