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- 👉 The Investing Week Ahead: 5/22/23
👉 The Investing Week Ahead: 5/22/23
CAVA brings some spice to the IPO market, NVIDIA reports, & the Debt Ceiling lingers...
Good morning.
It’s finally happening — we have an IPO to talk about once again!
As you’re likely well-aware, the IPO madness of 2020/2021 fell flat on it’s face:
And it’s not just in the U.S. — i't’s been all around the world for the last couple of years:
Is that changing in a big way?
Eh, probably not. However — 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 — 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.
CAVA’s 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 — buying stocks right at IPO can be volatile. Video and further details coming soon!
Key Earnings Announcements:
Nvidia, Palo Alto Networks, and Lowe’s 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 We’re Watching:
Nvidia’s 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 Alto’s last earnings report mentioned four macro factors: sustained cybersecurity demand, increased deal scrutiny, trends fueling a shift to software, and some inflationary pressures easing.
Lowe’s 2022 Analyst & Investor Conference laid a clear focus on the following for 2023: drive Lowe’s 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 McDonald’s 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 — including federal spending caps and antipoverty assistance.
Morgan Stanley is labeling an agreement on a debt ceiling extension as a potentially major “sell the news” 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 — 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 Gates’ 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.
McDonald’s (MCD) Annual Meeting
McDonald’s is gearing up for its biggest event of the year — the Annual Shareholders’ 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. We’ll specifically be looking to hear more about the “Accelerating the Arches” 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 We’re Watching:
The Fed’s preferred inflation gauge has been holding steady for months now. This week’s 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 members’ true views on inflation’s course.
“They 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 inflation’s remaining so stubbornly high.” — 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) — an autonomous truck company — ended up over +100% last week after the news of laying off 30% of its workforce and keeping its Chinese business segments.
If you’re 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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