👉 The Investing Week Ahead: Just One Rate Cut?

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What We’re Watching:

If you didn’t know — Restoration Hardware officially changed its title to “RH.” So when you see us no longer saying the full name, that’s why!

The high-end home furnishing retailer RH is slated to release its fiscal Q4 earnings on March 27.  With higher interest rates and a general slowdown in housing-related spending — investors haven’t known what to do with RH. The stock is up +13.66% over the last month, but just +1.97% YTD.

RH’s most recent report saw a “double miss” on revenue and earnings. Company leadership blamed the disappointing quarter on a reliance to product discounts when managing excess inventory.

Analysts are hoping to hear about improved inventory management and international expansion plans in this week’s report.

It’s been a brutal stretch for Walgreens. Whether it’s dealing with widespread crime, being replaced by Amazon in the Dow Jones Industrial Average, or anything in between… the stock has taken a beating.

During WBA’s last earnings call — leadership slashed its dividend from 48 cents per share to 25 cents per share “to strengthen its long-term balance sheet and cash position.” This marked the company’s first dividend cut in nearly five decades.

Despite the bad news surrounding Walgreens — its earnings beat last quarter broke a streak of two straight missed earnings estimates (something that hadn’t happened in nearly a decade). Walgreens bulls are begging for another beat.

Amid China’s escalating tensions with the U.S. — they also “sidelined Microsoft’s Windows operating system and foreign-made database software in favor of domestic options.” 

As both Intel and AMD are significant customers of TSMC’s advanced process nodes — this move is expected to influence TSMC’s future order status.

Shares of China-based semiconductor companies like ACM Research (ACMR) and Intchains Group (ICG) are both up +5-10% on the news.

"I'm definitely less confident than I was in December [that inflation will get down to the Fed’s 2% target]… If we have an economy that is growing above potential, and we have an economy where unemployment is at levels that were deemed to be unimaginable without pricing pressures, and if we have an economy where inflation is moderating… those are good things… That gives us space for patience."

— ATL Fed President Bostic

“The higher rates are, the more stress there is over time on commercial real estate, on the over-levered consumer and the over-levered company – those are really your stress points. And it’s across the spectrum.”

— Bruce Richards, CEO of Marathon Asset Management

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What We’re Watching:

The national debt has risen +$600 billion in less than three months and will continue to rise with the debt ceiling uncapped for the year. 

Brian Higgins, Co-Founder of King Street Capital Management thinks the “soft landing" could be more like a “slow-motion car crash”…

“As you go into yearend, you’ll start to begin slowing. It’ll be ultimately looked at as no landing, soft landing, progressing into a harder landing as time goes on, just because the amount of debt that is out there is just too high.”

In February, the Consumer Confidence Index dipped to 106.7 from January's revised 110.9 — marking the end to three months of gains.

This decline reflects broader concerns about the labor market and political scene —despite slight easing in inflation worries.

The Present Situation Index and Expectations Index also saw declines – with the latter flashing potential recession indicators as it fell below 80.

Latest Conference Board Press Release:

Consumers’ assessment of current business conditions fell slightly in February.

Consumers’ appraisal of the labor market was also less positive in February.

Durable goods orders are a leading economic indicator of industrial production — reflecting a change in the value of orders received by US manufacturers of durable goods (goods expected to last more than 3-years like appliances, equipment, etc.)