- GRIT
- Posts
- 👉 The Investing Week Ahead: Retail Giants Reporting
👉 The Investing Week Ahead: Retail Giants Reporting
and GameStop soars +42% premarket...
Welcome to your new week.
Amazingly — it looks like GameStop (GME) followers are trying to start another meme craze.
Last night, ‘Roaring Kitty’ — the guy who inspired the major short squeeze of GME in 2021 — posted a simple picture of a man leaning up in his seat.
10 million views + a ton of news articles later… the stock is up +42% in premarket trading (at time of writing).
Remember to always be careful about getting caught up in the crazes. Stocks can go down as quickly as they can go up. Always do your own research and know your own risk tolerance!
Now let’s dive in.
Key Earnings Announcements:
Earnings season is beginning to slow — but retail giants like Home Depot and Walmart will report this week.
Monday (5/13): Bitfarms, Paysafe, Petrobras, Stone, Terawulf
Tuesday (5/14): Alibaba Group, Home Depot, Intuitive Machines, Rumble, Sony
Wednesday (5/15): Cisco, Copa Airlines, Dole, Dynatrace, Fluent, Hut 8, Monday.com
Thursday (5/16): Applied Materials, Baidu, JD.com, John Deere, Under Armor, Walmart
Friday (5/17): Canaan, RBC Bearings
What We’re Watching:
Walmart (+15.1% YTD) releases earnings on Thursday (5/16) — aiming to showcase growth and market share expansion in a challenging inflationary climate.
Walmart not only maintains strong profit margins — with gross profit rates at a three-year high of 23.7% — but also has solidified its position as a dominant force in digital retail landscapes.
Alibaba Group (+7% YTD) will release its quarterly earnings on Tuesday (5/14). Despite the Hang Seng Index (HSI) rising +14% this year — Baba has struggled to put together the same level of gains.
This could be partly due to the intensifying competition in the Chinese e-commerce sector, notably from PDD Holdings Inc. (PDD) — whose platforms Pinduoduo and Temu have seen a +246% revenue growth over the past three years.
A positive catalysts — Alibaba released its new generation AI in its cloud services. Jingren Zhou, CTO of Alibaba Cloud said in a statement: “We will also continue to contribute a diverse array of AI models to the open-source communities, and we look forward to collaborating with our customers and developers in seizing the immense growth opportunities presented by the latest surge in the generative AI development.”
BABA could be presenting a very interesting opportunity that we’ll monitor for months to come.
Investor Events / Global Affairs:
Google’s big developer conference, BlackRock challenges the “Sell in May” sentiment, and BNPL is causing even more worries.
Google I/O Developer Conference
Fresh off of recently joining the ‘Two Trillion Market Cap Club’ — Google is set to host its highly anticipated I/O Developer Conference.
Google I/O 2024, starting with a keynote on May 14th, will heavily focus on AI developments — including Google's Gemini model and its integration into various services like Search, Google Maps, and Android.
You can learn more about the conference here.
BlackRock’s Top Strategist Challenges “Sell in May and Go Away”
BlackRock's chief global investment strategist, Wei Li, outlined three reasons why she believes that stock investors should remain in the market in May.
The Fed crystallized ‘high for longer’ and pushed against ‘HIGHER for longer’.
While still robust — the labor market may be getting less tight: lower wage growth, lower job creation, and lower vacancies (chart above).
There could continue to be a buyback boom, and its not just the big names we read in the news. Some of the bigger examples that have already conducted buybacks or have committed to doing so include Apple, Disney, Meta Platforms, Uber, and Airbnb. In case you forgot… Apple announced a historic $110B buyback during its recent earnings call.
Li's argument suggests that despite market fluctuations — these factors provide a more favorable environment than meets the eye for equities.
‘Buy Now Pay Later’ Returns to the Spotlight
Consumers' increased use of "Buy Now, Pay Later" (BNPL) services has raised concerns about "phantom debt” — with major providers like Affirm (AFRM) and Klarna not reporting these loans to credit agencies.
The lack of transparency hinders a comprehensive understanding of household financial health, affecting economic assessments by central banks and lenders.
While BNPL has gained popularity, concerns about consumer distress and overspending have emerged — especially among middle-class households. This trend, coupled with persistent inflation, poses challenges for households already strained by rising costs.
“You might get hit with an overdraft fee or a non-sufficient fund fee from your bank account and that's where people start to fall behind, and if you fall behind late enough these companies can actually turn over your loan to a debt collector and that can impact your credit score.”
Major Economic Events:
A VERY busy week with CPI, PPI, retail sales data, and a total of 12 Fed Speakers.
Monday (5/13): Fed Vice Chair Phillip Jefferson and Cleveland Fed President Loretta Mester together on panel
Tuesday (5/14): Core PPI, Fed Chair Jerome Powell Speaks, Fed Gov Lisa Cook Speaks, Producer Price Index
Wednesday (5/15): Business Inventories, Consumer Price Index, Core CPI, Empire State Manufacturing Survey, Fed Gov. Michelle Bowman Speaks, Home Builder Confidence Index, Minneapolis Fed President Neel Kashkari Speaks, US Retail Sales
Thursday (5/16): Atlanta Fed President Raphael Bostic Speaks, Building Permits, Capacity Utilization, Cleveland Fed President Loretta Mester Speaks, Fed Vice Chair for Supervision Michael Barr Testifies, Housing Starts, Import Price Index, Industrial Production, Initial Jobless Claims, New York Fed President Williams Speaks, Philadelphia Fed Manufacturing Survey
Friday (5/17): Fed Governor Christopher Waller speaks, US leading economic indicators
What We’re Watching:
The Consumer Price Index (CPI) report for April will be released this Wednesday. Economists forecast a +0.3% month-over-month and +3.6% year-over-year increase in the core inflation rate.
As we mentioned in the intro of the Week in Review yesterday – the price of coffee will no longer be included in the monthly CPI inflation data… Very interesting…
Retail sales data is expected to come in at +0.4% for April – down -0.3% from last month's print of +0.7%. Earnings from large retailers like Home Depot (HD) and Walmart (WMT) will be equally important in showing how the everyday consumer is holding up.
“Spending data has continued to surprise to the upside — but we get the sense households are increasingly prioritizing purchases."
If you’re starting your investing journey or are interested in buying T-bills yielding 5% or more, consider visiting Public.com.
If you want high-quality stock research and portfolio management tools, consider signing up for Seeking Alpha.
If you want to check out the full episode list of the Rich Habits podcast, click here.
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.
Reply