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- 👉 The Investing Week Ahead: 8/14/23
👉 The Investing Week Ahead: 8/14/23
Corporate interest expenses hit a 60-year low despite rising rates...
Welcome to your new week.
Before we get started, we wanted to share our heartfelt apologies to those in Maui, Hawaii.
The coverage of this tragedy is gut-wrenching, and the whole event itself was so abrupt and shocking. Our thoughts and prayers go to our readers in Hawaii (we see that there’s more than a few) — especially if you have a direct connection to Lahaina.
Key Earnings Announcements:
Retail giants — Walmart, Target, Home Depot, etc. — are in the spotlight.
Monday (8/14): Embraer, Monday.com, Navitas, Rumble
Tuesday (8/15): Agilent Technologies, CardinalHealth, CAVA, H&R Block, Home Depot, Nu Holdings, ON Holding, Paysafe, Sea Limited, Tencent Music Entertainment
Wednesday (8/16): Cisco, JD.com, Paycor, Performance Food Group, Synopsis, Target, TJMaxx, ZIM
Thursday (8/17): Applied Materials, Arcos Dorados, Bill.com, Dole, Walmart
Friday (8/18): Estēe Lauder, John Deere, Madison Square Garden Entertainment, XPeng
What We’re Watching:
Investors want to see cash flow metrics improve from Walmart’s last investor update.
Mondays most recent earnings report was highlighted by a ”land and expand” approach toward servicing teams of all sizes, increasing the languages available for international expansion, and solidifying its Fortune 500 footprint.
Investor Events / Global Affairs:
Interest rate tidbits from JPM, and the family of golf stocks gets a bit bigger.
JPMorgan’s Interest Rate Thoughts
Rising interest rates will take time to flow through to profit margins and household balance sheets. In contrast to some US banks that made extremely poor decisions to extend asset duration at the lows in rates, many US and European companies extended liability duration and enjoy the lowest levels of interest expense to cash flow in decades.
As shown above, for the first time on record, corporate interest expense is falling as the Fed is hiking rates.
“US household debt service costs are also low. One reason: the average coupon on outstanding residential mortgages is ~3.5%, immunizing many homeowners from the spike in mortgage rates to ~7%. Credit card and auto delinquencies are rising, but from low levels and are now back at 2010-2020 averages.”
— Michael Cembalest, Chairman of Market & Investment Strategy for JPMorgan Asset & Wealth Management
New Golf Stock
The options for golf investors are getting a tad bigger this week. We’ve written before how the golf industry is very interesting — there’s just not that many pure-play stocks available.
The two big boys are Topgolf Callaway Brands (MODG) and Acushnet Holdings (GOLF).
Acushnet includes Titleist, Scotty Cameron, Pinnacle, FootJoy, and more. If something seems odd about Callaway’s name — it’s because they had a full rebrand last year. The ticker used to be ELY, and now it’s MODG “reflecting its leadership in the much larger, more dynamic and inclusive Modern Golf ecosystem.”
We’re not interested in putting funds toward Sacks Parente at all — it’s a small IPO and we’d rather buy the two previously-mentioned plays if we were going for golf exposure.
We include this because there could be a bit of a secular growth trend emerging over the coming years. The golf industry has been injected with cash, and most expect the momentum to continue. Will more golf-related IPOs become a theme?
Major Economic Events:
The Leading Economic Index is back and Retail Sales might answer some recession questions.
Monday (8/14): N/A
Tuesday (8/15): Business Inventories, Empire State Manufacturing Survey, Import Price Index, Retail Sales, Speech by Minneapolis Fed President Kashkari
Wednesday (8/16): Building Permits, Capacity Utilization, FOMC Meeting Minutes, Housing Starts, Industrial Production
Thursday (8/17): Philadelphia Fed Manufacturing Survey, US Leading Economic Index
Friday (8/18): N/A
With Walmart, Target, Home Depot, and the official release of Retail Sales data coming this week — we should have more clarity on the health of the sector. Last month’s release left more questions than answers.
Events-Driven Winners:
Which stocks moved the most last week.
Some additional newsworthy events from our friends at LevelFields.
It’s an incredible platform for AI-driven stock alerts — but at the very least you should sign up for their newsletter at the bottom of this page.
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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