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- 👉 Earnings Season Isn't Finished
Welcome to your new week.
Before we dive in — one quick callout:
Total consumer credit increased by +$19.24 billion in October to a record $5.11 TRILLION.
As the holiday season is here and you continue to buy those presents… please be wary of your debt. Americans are absolutely drowning in it, and it’s important for you to track how much is coming in and out of your bank account at this time of year.
This is the penultimate 5-day week in the markets of the year. Let’s get into it!
Key Earnings Announcements:
Academy Sports & Outdoors, Adobe, Broadcom, Costco, GameStop, Macy’s, Oracle, RH, and more.
Monday (12/9): Braze, Casey’s, MongoDB, Oracle, Rent the Runway, Yext
Tuesday (12/10): Autozone, Dave & Busters, Gamestop, United Natural Foods,
Wednesday (12/11): Adobe, Cognyte, Macy’s
Thursday (12/12): Broadcom, Costco, Lovesac, RH
Friday (12/13): N/A
What We’re Watching:
Broadcom (AVGO)
Source: Broadcom Earnings Deck
Broadcom will report earnings this week, with expectations buoyed by its AI-centric strategy and the successful integration of VMware. In Q3, the company posted a +47% YoY revenue increase to $13.1 billion and a jump in operating profit, driven by strong AI revenue growth and cost-saving measures within VMware operations.
The simplification of VMware's offerings and higher bookings position Broadcom for continued strength, with Q4 consensus estimates rising after its Q3 beat. Broadcom’s focus on cost control, customer-centric product consolidation, and AI-driven growth sets the stage for potential outperformance this quarter.
Broadcom, Inc. (AVGO) Stock Performance, 5-Year Chart, Seeking Alpha
Macy’s (M)
Source: Macy’s Earnings Deck
Macy’s has faced a challenging first year under new CEO Tony Spring, marked by fending off overtures to take the business private, accounting irregularities, and a -12% stock decline since his appointment in February.
The company recently released preliminary Q3 results, delaying the full report to December 11 due to an investigation into $132-$154M of misclassified small-package delivery expenses spanning 11-12 quarters. While non-cash in nature, the issue raises concerns about internal controls under both Spring and his predecessor, Jeff Gennette.
Preliminary Q3 results showed signs of stabilization, with comp sales in "First 50" core stores rising to 1.9% and YoY net sales declines slowing to -2.4% from -3.5% in Q2. Credit card revenue also exceeded expectations at $120M. However, holiday sales forecasts remain muted, and Macy’s continues to focus on cost-cutting and a shift toward luxury offerings like Bloomingdale’s and Blue Mercury to revitalize growth.
Macy’s, Inc. (M) Stock Performance, 5-Year Chart, Seeking Alpha
Investor Events / Global Affairs:
A couple of big conferences will give companies one last chance to make headlines in 2024, and a new IPO has emerged.
Barclays 22nd Annual Global Tech Conference
Source: Olivia Harris / Reuters
The Barclays Global Tech Conference annually serves as one of the “last chances” for Technology companies to share market-moving news before the holidays.
Below is a list of the most notable companies participating:
Autodesk (ADSK), CoStar (CSGP), GoDaddy (GDDY), LegalZoom (LZ), Salesforce (CRM), SentenelOne (S), Twilio (TWLO), Uber (UBER), UiPath (PATH), Zscaler (ZS), and more.
Goldman Sachs U.S. Financial Services Conference
Same thing as above… The Goldman Sachs U.S. Financial Services Conference annually serves as one of the “last chances” for Financial companies to share market-moving news before the holidays.
Below is a list of the most notable companies participating:
Service Titan IPO (TTAN)
Lila Seidman / Glendale News-Press
ServiceTitan — a software startup based in Glendale, California — is seeking a valuation of up to $5.16 billion through its U.S. initial public offering (IPO) on the Nasdaq. The company plans to raise up to $502 million by offering 8.8 million shares priced between $52 and $57 each, marking one of the final IPOs in 2024's revived market for new listings.
Known for its software solutions targeting the HVAC and home services sector, ServiceTitan was valued at $7.6 billion in 2022, a decline from its $9.5 billion valuation during the 2021 fundraising boom. A successful IPO could encourage other venture-capital-backed firms to proceed with public listings amid improving market conditions.
“ServiceTitan is growing revenue impressively but faces substantial operating losses, though these losses are moderating over time…
Despite strong revenue growth, ServiceTitan's Rule of 40 metric is weak, indicating a need for significant improvement in operating margin. The market opportunity for ServiceTitan's comprehensive software suite is large and growing, but the firm faces significant competition and potential pricing pressures.”
Major Economic Events:
Inflation for consumers (CPI) and wholesale inflation (PPI) will dominate this week’s economic headlines.
Monday (12/9): Wholesale Inventories
Tuesday (12/10): NFIB Optimism Index, U.S. Productivity (revision)
Wednesday (12/11): Consumer Price Index, Core CPI, Monthly U.S. Federal Budget
Thursday (12/12): Initial Jobless Claims, Producer Price Index, Core PPI
Friday (12/13): Import Price Index
What We’re Watching:
Consumer Price Index (CPI, “Inflation for Consumers”)
In October, the Consumer Price Index for All Urban Consumers most recently rose by +0.2% on a seasonally adjusted basis — matching increases seen over the past three months, according to the U.S. Bureau of Labor Statistics. Over the past year, the overall index increased by +2.6% without seasonal adjustments.
Regarding the upcoming data releases — analysts are forecasting +2.7% for year-over-year Headline CPI and +3.2% for year-over-year Core CPI.
“Signals from inflation, employment and GDP all show that the economy has held up better than the central bank was expecting in September, president of the Cleveland Fed said. She said she thinks it might be necessary to cut rates only once more over the course of the Fed's next two meetings.”
Producer Price Index (PPI, “Wholesale Inflation”)
The Producer Price Index (PPI) for final demand most recently increased by +0.2% on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. This follows a +0.1% increase in September and a +0.2% rise in August.
Over the past year, the unadjusted final demand index rose by +2.4%. The majority of October's increase was driven by a +0.3% rise in prices for final demand services.
Regarding the upcoming data releases — analysts are forecasting +2.5% for year-over-year Headline PPI and +3.3% for year-over-year Core PPI.
“A rise in the headline and core PPI indices won’t dampen percolating fears of a higher inflation environment after Wednesday’s CPI report. And yet, while they highlight upside risks to our inflation call, the latest data don’t completely disrupt the disinflation narrative. We’re vigilant for bumps ahead.”
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