👉 The Investing Week Ahead: Jensen Huang = Taylor Swift?

Over the past few months, both JetBlue (JBLU) and Southwest (LUV) have had activist investors take large stakes in their companies. If you’re unfamiliar, this means that an individual or an investing firm buys a beaten-down stock — believing that they can help right the ship. Both airlines receive great reviews from customers and Southwest was actually the largest airline by passenger volume in 2023.

However — they are all now trying to be as profitable as Delta (DAL). We aren’t overly excited about airline stocks compared to a lot of other categories, but this is the first time since COVID that airline stocks have had a lot of interesting developments. It’s a fun sector to keep an eye on between now and the fall!

What We’re Watching:

With the recent months of negative news (layoffs, slowdowns, etc.) coming out of Deloitte, McKinsey, PwC — shares of Accenture are down -17.4% YTD. Accenture serves more than 9,000 clients — including more than three quarters of the Fortune Global 100 and Fortune Global 500 — spanning the full range of industries around the world. Analysts love to use Accenture as a heat check for the ‘discretionary’ spending habits of the world’s largest companies.

“Our clients are navigating an uncertain macro-environment due to economic, geopolitical and industry-specific conditions. And in response, we are seeing them thoughtfully prioritize larger transformations, building out their digital core to improve productivity to free-up more investment capacity to focus on growth and other initiatives with near-term ROI. Our focus on being at the center of our client's business doing their most complex transformational work provides us with resilience we see overtime, as demonstrated by the fact that our top 100 clients have been clients for over 10 years.”

— Julie Sweet, CEO of Accenture

Analysts worry that Kroger will continue to have rising operating costs and it will have difficulty keeping up with retail giants like Amazon (AMZN), Costco (COST), and Walmart (WMT). Earnings reports from the likes of Kroger also help give us another perspective on inflationary pressures with groceries — a bit more directly than those of government-issued CPI reports.

“Over the last five years, we've made historic investments in associate wages, benefits and career development opportunities, including significant investments to help stabilize associates’ future pension benefits. We are increasing customer visits in growing loyal households through the strength of our retail business, which positions Kroger for more ways to drive sustainable future growth.” 

– Rodney McMullen, CEO of Kroger

Traders and investors in these markets often adjust their portfolios around triple witching to account for the increased volatility and trading activity that can occur due to the simultaneous expiration of these different types of contracts.

Overall — this synchronization of contract expirations can lead to a flurry of trading activity and market swings as traders and investors adjust their positions or close them out. We’re sharing this to say…. relax if the volatility comes this week. This happens every quarter and shouldn’t be something that makes you freak out!

NVIDIA executives will join HPE leaders in speaking at HPE Discover General sessions and Spotlight sessions, covering topics spanning HPE’s offerings — including HPE HPC, AI, compute, hybrid cloud, and storage.

Here’s the specifics:

“From June 17 to 23, we are rolling out seven days of incredible offers and savings exclusively for Walmart+ members, featuring fantastic deals on gas, travel and more.

Additionally, we’re introducing our first-ever mystery offer, set to be revealed on June 20. While I can't divulge the details just yet, I promise it will be worth watching out for.”

What We’re Watching:

The U.S. Leading Economic Index (LEI) decreased by -0.6% in April 2024 to 101.8, after decreasing by -0.3% in March. This week, we get updates for May.

“Another decline in the U.S. LEI confirms that softer economic conditions lay ahead… Deterioration in consumers’ outlook on business conditions, weaker new orders, a negative yield spread, and a drop in new building permits fueled April’s decline. In addition, stock prices contributed negatively for the first time since October of last year.

While the LEI’s six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead. Indeed, elevated inflation, high interest rates, rising household debt, and depleted pandemic savings are all expected to continue weighing on the US economy in 2024. As a result, we project that real GDP growth will slow to under 1 percent over the Q2 to Q3 2024 period.”

— Justyna Zabinska-La Monica, Business Cycle Indicators at The Conference Board

Economists anticipate a +0.3% increase in retail sales compared to the previous month — signaling a recovery in consumer spending after sales were stagnant in April.

"The personal saving rate has turned lower, consumer credit growth has slowed as delinquencies have increased, and growth in real disposable income has faded amid a moderating labor market… These mounting headwinds have weighed on discretionary spending, which will likely keep a lid on retail sales growth in the coming months."

— Wells Fargo Economics