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  • 👉 The Investing Week Ahead: Trump Stock Up +55%

👉 The Investing Week Ahead: Trump Stock Up +55%

& TSMC expects quarterly revenue of $20B+...

15 Jul

Welcome to your new week.

Over the weekend…

That’s a wild Saturday and Sunday.

We’re not sure if this week will be quite as hectic — BUT we’ve got market-moving events for you to review below!

Key Earnings Announcements:

AMEX, BlackRock, Netflix, Taiwan Semi, UnitedHealth, and more.

Monday (7/15): BlackRock, FirstBank, Goldman Sachs

Tuesday (7/16): Bank of America, Charles Schwab, Interactive Brokers, J.B. Hunt, Morgan Stanley,  Progressive, PNC Financial, State Street 

Wednesday (7/17): Ally Financial, Alcoa, ASML, Discover, Johnson & Johnson, Northern Trust,  United Airlines, US bancorp

Thursday (7/18): Abbot Labs, Blackstone Group, Cintas, Domino’s Pizza, Intuitive Surgical, Netflix, Nokia, TSMC

Friday (7/19): American Express, Fifth Third Bank, Halliburton, Regions Financial, TravelersWhat We’re Watching:

Netflix's Q1’24 results showcased a strong start to the year with a +15% YoY revenue increase — reaching $9.37 billion — and a +54% rise in operating income.

The operating margin improved by seven percentage points to 28%, mostly due to strategic pricing adjustments and cutting costs. Additionally, Netflix added +9.33 million new subscribers — marking a +16% increase and bringing total global memberships to 269.6 million.

The company has raised its FY24 revenue growth forecast to +13-15% and expects a 25% operating margin, up from 24%. Netflix continues to innovate in content — with a stronger lineup of TV shows, movies, and live programming. The scaling of its ad-supported plans are expected to significantly contribute to future revenue. Analysts will also want to hear more about their ‘Netflix Houses’ that we’ve mentioned before in Rate of Return — which are massive in-person destinations.

TSMC released its June revenue report last week — ahead of this week’s full earnings report. That revenue breakdown revealed $6.5 billion in revenue for this month — with a high-double digit sales growth in each of the last three months.

Analysts are interested if TSMC is one of the best ways to get exposure to generative AI accelerator chips now that Nvidia (NVDA) stock is so extended. Taiwan Semiconductor certainly isn’t cheap — but trading at about 35x earnings could be considered relatively affordable. This becomes an increasingly interesting storyline if TSMC remains the the sole supplier of Nvidia's AI GPUs / most of its high-end chips — and Nvidia continues to soar.

TSMC is the biggest semiconductor manufacturing company in the world — with a ~61% market share. Besides Nvidia, it serves as the backbone of Apple’s (AAPL) chip supply.

Dangers for TSMC include the fact that the U.S. government is giving money to its competition. For example, Intel (INTC) has been given near $9B of grants from the CHIPS Act — mostly for enhancing manufacturing.

Investor Events / Global Affairs:

Amazon’s time to shine, Broadcom’s split, and perhaps the most highly-anticipated political convention ever.

  • Amazon (AMZN) Prime Day

Amazon Prime Day is projected to set a new record in U.S. online spending this week. Adobe Analytics is predicting $7.1 billion in e-commerce sales on July 16 (+11.3% YoY) and $6.9 billion on July 17 (+9.2% YoY).

Combined, these sales would total roughly $14 billion (+10.5% YoY). This surge is attributed to deeper discounts, with electronics discounts reaching 22% off, apparel 20% off, home furnishings 17% off, and sporting goods 11% off.

The timing of Prime Day, which is slightly later this year, is also expected to boost spending among back-to-school shoppers.

Competitors like Walmart (WMT) and Target (TGT) have already held their own sales — and they are praying for an underperformance out of Amazon.

  • Broadcom (AVGO) 10-for-1 Stock Split

This is officially the first week with Broadcom trading after its 10-for-1 stock split. Broadcom shares have soared nearly +91% in the past year as demand from AI customers picked up. In the recent quarter alone, AI revenue surged +280% to $3.1B.

Investors also have applauded Broadcom's acquisition of cloud software company VMware, a key driver of growth in the quarter.

I’ve been talking about Broadcom for many months now and I’m thrilled to continue holding. It looks like Nancy Pelosi and Dave Portnoy have decided to join me as well :^)

  • Republican National Convention (RNC) in Milwaukee

The 2024 Republican National Convention begins in Milwaukee

After everything that happened this weekend — there might not be a more highly-anticipated convention from either party in our lifetimes. Key things to watch include:

  • Trump’s first speech. He revealed yesterday that he has scrapped his speech for the convention and is working on a new one. “This is a chance to bring the whole country, even the whole world, together. The speech will be a lot different, a lot different than it would’ve been two days ago.”

  • Trump’s selection for Vice President is expected today. The favorites are Senator Marco Rubio (FL), Senator JD Vance (OH), Governor Doug Burgum (ND), Senator Ted Scott (SC), and Governor Glenn Youngkin (VA). While many voters want Vivek Ramaswamy — it appears that Trump would choose him for a Cabinet position instead.

  • Dozens of speeches from current Republican Members of Congress

  • Speeches from UFC President Dana White and billionaire David Sacks

“The Republican convention starts Monday, and given the events of yesterday, there is already a substantial boost in betting markets for a Trump victory in the election. It will be interesting to see if the polls reflect this boost as well. Given how contentious this election can be, and especially after the events of Saturday, we should start to see equity volatility pick up. Of course, this market seems to be blissfully unconcerned about anything, so for all I know that continues forever.”

— Danny Dayan, President at DSD Global Holdings

Major Economic Events:

Retail sales and housing starts are in focus.

Monday (7/15): Empire State manufacturing survey, Fed Chair Powell speaks

Tuesday (7/16): Business Inventories, Fed Gov. Adriana Kugler speaks, Home builder confidence index, Import price index, US retail sales

Wednesday (7/17): Building permits, Capacity utilization, Fed Beige Book, Housing starts

Thursday (7/18): Initial jobless claims, Philly Fed manufacturing survey, US leading economic indicators

Friday (7/19): Atlanta Fed President Raphael Bostic speaks, New York Fed President William speaks

What We’re Watching:

Retail sales in the US increased by +0.1% MoM in May 2024, following a revised -0.2% decline in April and falling short of the +0.2% forecast.

FTI Consulting (FCN) has just projected that U.S. online retail sales will reach $1.2 trillion in 2024 — an increase of nearly +10% from last year.

Housing starts in the US fell -5.5% in May 2024 to an annualized rate of 1.277 million — the lowest since July 2020.

This is a drop from April's revised 1.352 million and below the forecast of 1.37 million, indicating high interest rates are continuing to impact the housing market to a serious extent.

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.

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