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- đ The Investing Week Ahead: 5/22/23
đ The Investing Week Ahead: 5/22/23
CAVA brings some spice to the IPO market, NVIDIA reports, & the Debt Ceiling lingers...
Good morning.
Itâs finally happening â we have an IPO to talk about once again!
As youâre likely well-aware, the IPO madness of 2020/2021 fell flat on itâs face:
And itâs not just in the U.S. â i'tâs been all around the world for the last couple of years:
Is that changing in a big way?
Eh, probably not. However â the delicious CAVA is officially going to be listed on the NYSE.
After growing revenue by +12.8% in 2022, the company has entered the IPO process and will eventually trade under ticker symbol CAVA. Despite not being profitable yet, CAVA has shown signs of progress toward profitability â with narrower losses and increased sales.
The chain, which acquired Zoes Kitchen in 2018 for $300 million, has been converting Zoes' locations into CAVA units and aims to have up to 1,000 U.S. locations by 2032.
CAVAâs IPO comes after a drought of restaurant IPOs specifically and may attract investor interest similar to other successful fast-casual chains like Chipotle (CMG, +54% YTD) and Sweetgreen (SG, +10% YTD).
Remember â buying stocks right at IPO can be volatile. Video and further details coming soon!
Key Earnings Announcements:
Nvidia, Palo Alto Networks, and Loweâs are in focus.
Monday (5/22): Global-E Online, HEICO, Nordson, Zoom Video Communications
Tuesday (5/23): Agilent, AutoZone, BJ's Wholesale, Dick's Sporting Goods, Intuit, Lowe's, Palo Alto Networks, Toll Brothers
Wednesday (5/24): Abercrombie & Fitch, America's Car-Mart, American Eagle, Analog Devices, Digital Turbine, Dycom, Guess?, Kohl's, Modine Manufacturing, Nvidia, Petco Health and Wellness, Photronics, Snowflake, Splunk, The Children's Place, UiPath
Thursday (5/25): 23andMe, Autodesk, Best Buy, Burlington Stores, Catalent, Costco Wholesale, Deckers Outdoor, Dollar Tree, Gap, Genesco, Lions Gate Entertainment, Manchester United, Marvell Technology, Pinduoduo, Ralph Lauren, RH, Royal Bank of Canada, Sumo Logic, Titan Machinery
Friday (5/26): Big Lots, Booz Allen Hamilton, Hibbett
What Weâre Watching:
Nvidiaâs last earnings report highlighted fixable issues in its Gaming product cycle, slowing Data Center growth due to China, and strong reception to its GeForce RTX 40 Series GPUs.
Palo Altoâs last earnings report mentioned four macro factors: sustained cybersecurity demand, increased deal scrutiny, trends fueling a shift to software, and some inflationary pressures easing.
Loweâs 2022 Analyst & Investor Conference laid a clear focus on the following for 2023: drive Loweâs Pro penetration, accelerate online business, expand installation services, drive localization, and elevate assortment.
Investor Events / Global Affairs:
The Debt Ceiling clock is ticking, Microsoft hosts its Build event, and McDonaldâs gears up for its biggest annual event.
Debt Ceiling Still Lingers
President Biden and Speaker Kevin McCarthy are set to resume negotiations on the debt limit after a weekend of faltering negotiations.
Current projections show the debt limit being reached by June 1st. Both sides remain far apart on key issues â including federal spending caps and antipoverty assistance.
Morgan Stanley is labeling an agreement on a debt ceiling extension as a potentially major âsell the newsâ event.
The two sides have found some common ground on clawing back unspent funds and implementing spending caps, but disagreements persist on details and military spending.
President Biden accused Republicans of not considering raising additional tax revenue, while Republicans ruled out tax increases as part of the debt-limit deal. The negotiations remain in limbo â the stakes are high as the deadline approaches.
Microsoft (MSFT) Developers Conference
Microsoft Build 2023, a conference for developers, will focus on AI and programming techniques, with an emphasis on responsible AI. The company hopes that the focus will remain entirely on the event and not Bill Gatesâ scandals with Jeffrey Epstein.
The event will feature keynotes from Microsoft CEO Satya Nadella, OpenAI President Greg Brockman, and Chief Product Officer Panos Panay. Topics such as AI models, fairness, and AI's impact on the future of work will be discussed.
McDonaldâs (MCD) Annual Meeting
McDonaldâs is gearing up for its biggest event of the year â the Annual Shareholdersâ Meeting. Click here for an advance note from the Chairman of the MCD Board.
Key takeaways from McDonald's Q1 2023 earnings call are below. Weâll specifically be looking to hear more about the âAccelerating the Archesâ strategy:
Major Economic Events:
Core PCE, FOMC Meeting Minutes, and Housing Market activity will heavily impact the probabilities of another rate hike in June.
Monday (5/22): Speeches by Atlanta Fed President Raphael Bostic, Richmond Fed President Tom Barkin, St. Louis Fed President James Bullard, & San Francisco Fed President Mary Daly
Tuesday (5/23): New Home Sales, S&P U.S. Manufacturing PMI, S&P U.S. Services PMI, Speech by Dallas Fed President Lorie Logan
Wednesday (5/24): FOMC Meeting Minutes, Speech by Fed Gov. Christopher Waller
Thursday (5/25): GDP (2nd Reading), Initial Jobless Claims, Pending Home Sales, Speech by Richmond Fed President Tom Barkin
Friday (5/26): Advanced Retail Inventories, Advanced U.S. Trade Balance in Goods, Advanced Wholesale Inventories, Consumer Sentiment (Final), Core PCE (YoY), Core PCE Index, Durable Goods Orders, Personal Income (Nominal), Personal Spending (Nominal), PCE (YoY)
What Weâre Watching:
The Fedâs preferred inflation gauge has been holding steady for months now. This weekâs reading will be of paramount importance for the next rate hike decision.
FOMC Meeting Minutes sometimes reveal very little, but often reveal a whole lot regarding Fed membersâ true views on inflationâs course.
âThey would like to go on hold and pause, but... if need be, raising rates further is an option⌠It comes down to the fact that inflationâs remaining so stubbornly high.â â Kathy Bostjancic, Chief Economist at Nationwide
Events-Driven Winners:
Which stocks moved the most last week.
Our friends at LevelFields scrub through thousands of data points each week to determine how events impact stock prices.
Tusimple Holdings (TSP) â an autonomous truck company â ended up over +100% last week after the news of laying off 30% of its workforce and keeping its Chinese business segments.
If youâre starting your investing journey or are interested in buying T-bills yielding 5% or more, consider visiting Public.com.
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.
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