Are Consumers Still In The Mood To Spend? Investing Action Plan

Here’s your Investing Action Plan: what you need to know as an investor for the coming week. Investors brace for telling indicators on how consumer spending is looking. Key homebuilders are expected to show solid results as the trend to move into larger homes designed for remote work continues. Nike, too, will indicate if people are still feeling good enough economically to buy pricey shoes.


AMD, Microsoft Among Stocks To Watch

Advanced Micro Devices (AMD), Microsoft (MSFT), Denbury Resources (DEN), Chipotle Mexican Grill (CMG) and Domino’s Pizza (DPZ) are all finding support near their 50-day or 10-week lines, following bullish runs. MSFT stock rebounded from its 10-week line on a $60 billion buyback and dividend hike. AMD stock, Denbury and Chipotle have rebounded from these key levels, close to early entries. Domino’s stock is just below its 50-day and possible entries.

Homebuilder Earnings On Tap

Homebuilders Lennar (LEN) and KB Home (KBH) are expected to post solid quarterly results amid a cooling but still hot housing market. Lennar will report Q3 earnings on Tuesday. FactSet analysts see EPS jumping 54% year-over-year to $3.27 and sales popping 21% to $7.13 billion. KB Home is expected to post Q3 EPS of $1.61, nearly double the year-ago quarter, on sales of $1.56 billion, 57% higher than the same period last year. Despite growing inflation worries, borrowing rates remain low. Housing inventory is still tight, but more homes were available in August vs. the same period last year. That means pricing is moderating as sellers are getting fewer multiple bids. The Home Builders Association says new home sales in August 2021 are down 24% from August 2020, largely due to the sharp rise in building materials costs, namely lumber.

After Market Suffers ‘Epic’ Retreat, What To Do Now

Nike To Report Earnings Amid Production Woes

Sports apparel maker Nike (NKE) reports Q1 earnings on Thursday. FactSet analysts expect earnings of $1.12 a share, 17% above the year-ago period. Sales are seen growing 18% to $12.46 billion. North America sales are seen growing 19% year-over-year to $5.03 billion. Meanwhile, sales in Europe, the Middle East and Africa are expected to increase nearly 20% to $3.48 billion, and China sales are seen growing around 10% to $1.95 billion. But Nike stock has been under pressure in recent weeks as supply-chain issues persist. Covid cases in Southeast Asia are on the rise, disrupting production of Nike products. Vietnam accounts for about half of Nike’s footwear production.

Air Force Association Meets

The Air Force Association will hold its annual conference Sept. 20 to 22 just outside Washington D.C. in National Harbor, Md. Speakers include United Airlines (UAL) CEO Scott Kirby, Space Force chief John Raymond and Air Force Secretary Frank Kendall. Panel topics include innovation, the National Defense Strategy and space capabilities development. Boeing (BA), Northrop Grumman (NOC), Lockheed Martin (LMT) are among defense contractors showcasing their wares in the exhibition hall.

FedEx Earnings Due

FedEx (FDX) earnings are expected to show a 2% rise in the fiscal Q1 to $4.96 a share, with revenue up 13% to $21.81 billion. That would be a significant slowdown from fiscal Q4’s 98% EPS gain and revenue 30% pop, the latter accelerating for a fourth straight quarter. Year-over-year comparisons are getting tougher, as the coronavirus pandemic spurred a massive e-commerce boom. FedEx is expected to report Tuesday.

Accenture Looks For 10% Growth

Accenture (ACN) reports fiscal Q4 earnings before the market open on Thursday. Fiscal 2022 EPS guidance will be key. Analysts expect the global tech consulting and services company to report fiscal Q4 EPS of $2.19, up 10% from a year earlier. Amid an acquisition spree, revenue is expected to rise 24% to $13.42 billion. Accenture has ramped up hiring to meet a spike in digital IT services demand, analysts say.

Adobe Earnings Seen Up 18%

Digital media and marketing software firm Adobe (ADBE) plans to report its fiscal Q3 results late Tuesday. Wall Street expects Adobe to earn $3.02 a share, up 18% year over year, on sales of $3.89 billion, up 21%, according to FactSet. Adobe stock hit a record high of 673.88 on Sept. 3 before pulling back. Shares remain in the 20%-to-25% profit-taking zone following its June 11 breakout from a 40-week consolidation period at a buy point of 536.98. San Jose, Calif.-based Adobe is riding high as it sells tools to companies trying to digitally transform their businesses.

Fed Moves To Taper

The Federal Reserve is expected to take another step, not a leap, to tapering asset purchases as its two-day meeting wraps up Wednesday at 2 p.m. ET. Wall Street expects a formal taper announcement Nov. 3. The Fed’s quarterly economic projections published along with the policy statement could shift the timetable for rate hikes. The June projections saw 11 of 18 policymakers pencil in at least two 2023 rate hikes. Some economists see a possible third rate hike telegraphed in 2023. The real surprise would be if the Fed pencils in the first rate hike of the cycle in 2022. While it wouldn’t be a shock, inflation has eased a bit, the job market has downshifted with the Covid wave and the next big Democrat fiscal package is getting downsized.

In Brief

  • Costco Wholesale (COST) fiscal Q4 earnings are forecast to climb 13% to $3.53 a share, with sales up nearly 18% to $62.81 billion. It’s due to report Thursday.
  • Online apparel company Stitch Fix (SFIX) reports fiscal Q4 results late Tuesday. The estimate is a loss of 12 cents a share, vs. a 44-cent loss. Revenue is expected to climb 27% to $547.9 million.
  • Aurora Cannabis (ACB), a Canadian cannabis producer, reports fiscal Q4 earnings on Tuesday. Wall Street expects the company to lose 26 cents per share, on a 21% drop in revenue to $57.2 million, according to FactSet.
  • Car parts and accessories retailer AutoZone (AZO) reports fiscal Q4 earnings on Tuesday. FactSet analysts expect EPS to dip 4% year over year to $29.68 on a 0.5% increase in sales to $4.57 billion.


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