👉 The Investing Week Ahead: 6/19/23

Why call these things out? Well — because it’s the strangest time in the market anyone has seen in decades. The economy is screaming “danger” from a variety of metrics, jobs reports continue to show quality employment, housing is holding up fairly well, and inflation is coming down.

The main takeaway for you? Don’t take history as a perfect indicator for what’s going to happen in the market. Simply put, this is a complete anomaly of an environment and we likely haven’t seen the full impacts of the most rapid rate increases in history come to light.

With the SPY closing in on 440 and the current P/E ratio of the S&P 500 well above 25 — it’s not the most exciting time in the world to invest solely into the market as a whole. There’s a solid possibility that it will be a stock-picker’s market for quite some time.

Lastly — don’t forget about the ole’ Buffet Indicator. Albeit overly simple, it paints a picture that it’s reasonable for investors to be skeptical of current valuations.

What We’re Watching:

FedEx’s last earnings report spotlighted stagnating revenue metrics across Ground, Freight, and Express — with a massive operating income decrease in the Express segment. Investors will be looking to see if YoY volume continues to be sluggish for the shipping giant.

Darden Restaurants’ most recent report highlighted $2.79 billion in Total Sales, Total Sales Growth of +13.8% and Same-Restaurant Sales Growth of +11.7%. Leadership projected revenue to slightly slow down from the previous quarter — so we’ll be interested to see if those projections were too tame.

“We don't think the market has to give back the recent strong gains, but we do believe investors should expect some hiccups as we progress.

The longer-term path will be guided by an eventual bottoming and rebound in the economy and corporate earnings, while the short run may be subject to the dotting of "i's" and crossing of "t's" in evolving Fed commentary, as well as changes in stock-market leadership.

With proper expectations for bouts of volatility, we think these are conditions long-term investors can lean in to, buying dips and proactively rebalancing with an eye toward the broader bull market that we think will find its stride over time.”

— Craig Fehr, Investment Strategist at Edward Jones

Toyota outlined its plans to develop a new generation of EVs to compete with Tesla and BYD — including vehicles with solid-state batteries by 2027 or 2028. The company aims to achieve a driving range of 1,000 kilometers (620 miles) for its EVs and plans to produce around 1.7 million vehicles by 2030.

As the EV landscape continues to develop, we’ll be keeping an eye on Toyota.

What We’re Watching:

Purchasing Managers Indices (PMIs) — which show the prevailing direction of economic trends in the manufacturing and service sectors — have been screaming “we’re not quite out of the woods yet” for months now. This week, we get a glance at where the next S&P Global results could be coming in.

The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. You’ve heard us talk about it plenty of times before — it’s a great measure of both the overall economy and market sentiment.

Always excited to see these results.

The Consumer Product Safety Commission announced that Peloton was served a $19 million civil penalty for not immediately reporting entrapment issues with its Tread+ treadmill and continuing to sell the recalled products. 

Thanks to LevelFields, we found out that this was actually considered good news as this was a relatively small penalty for something that has been hanging over the company’s head for years now.