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The technology sector will be in focus next week after some hot sessions led by strength in chip stocks Nvidia (NVDA), AMD (AMD), Broadcom (AVGO), Arm Holdings (ARM) and Micron Technology (MU). Next week the focus will be on growth indicators. Key releases include preliminary US fourth quarter GDP and global flash PMIs. Central banks will also be busy, with monetary policy statements and interest rate decisions expected from the Bank of Japan, the European Central Bank and the Bank of Canada. In the US, Federal Reserve members will be in a lockdown period with no public discussions ahead of the next FOMC meeting on January 30-31. The earnings calendar is very busy as Tesla (NASDAQ:TSLA) (Preview), Netflix (NASDAQ:NFLX) (Analysis), Visa (V) (Analysis) and American Airlines Group (AAL) (Preview) are just a few of the well-known companies that will report.
Earnings Spotlight: Monday, January 22nd – Brown & Brown (BRO), United Airlines Holdings (UAL) and Zions Bancorporation (ZION).
Earnings Spotlight: Tuesday, January 23rd – Johnson & Johnson (JNJ), Procter & Gamble (PG), Netflix (NFLX), Verizon Communications (VZ), Texas Instruments (TXN), General Electric (GE) and Lockheed Martin (LMT).
Earnings Spotlight: Wednesday, January 24th – Tesla (TSLA), Abbott Laboratories (ABT), IBM (IBM), AT&T (T), General Dynamics (GD), Las Vegas Sands (LVS) and CSX (CSX).
Earnings Spotlight: Thursday, January 25th – Visa (V), Intel (INTC), Comcast (CMCSA), Union Pacific (UNP), American Airlines Group (EEL), Southwest Airlines (LUV), Levi Strauss (LEVI) and Alaska Air Group (ALK).
Earnings Spotlight: Friday, January 26th – American Express (AXP), Colgate-Palmolive (CL), Norfolk Southern (NSC) and Autoliv (ALV).
Volatility monitoring: Options trading volume on Spirit Airlines (SAVE) is still high following the news that the Justice Department blocked its merger with JetBlue Airways (BLUE). The regulatory shadow in the airline sector is also impacting the trading of merger partner Hawaiian Holdings (HA) and Alaska Airlines (ALK). Annovi's Bio (NYSE:ANVS) there have also been more option bets placed recently than normal activity. Virgin Galactic (SPCE) and EVgo (EVGO) both have elevated levels of outstanding short interest ahead of earnings season. Among the most overbought stocks according to their 14-day Relative Strength Index is Phunware (SPRAY), juniper (JNPR) and Drone Delivery Canada (OTCQX: TAKOF). The most oversold stocks according to their 14-day relative strength index include Spirit Airlines (SAVE), PNM resources (PNM) and Alternus Clean Energy (NASDAQ:ALCE).
IPO Watch: BrightSpring Health Services (BTSG) is expected to begin trading next week. The independent provider of home and community health services is offering 53.3 million shares with an expected price range of $15.00 to $18.00. The IPO blocking periods expire for the guarantee holder's share packages (NASDAQ:WRNT), Cadrenal Therapeutics (NASDAQ:CVKD), Early Works (NASDAQ:ELWS), Janover (JNVR) and ParaZero Technologies (PRZO). The analyst quiet period expires on NB (NBBK) to allow analysts to provide ratings. Investors will also be keeping an eye on developments at social media giant Reddit (REDDIT), which is reportedly looking to launch its IPO in March, nearly three years after it first hired IPO advisers.
Dividend monitoring: Companies expected to increase their quarterly dividend payouts include Nexstar Media (NXST) from $1.35 to $1.54, Elevance Health (NYSE:ELV) to $1.67 from $1.48, Blackstone (BX) to $0.90 from $0.80, Franklin Electric (NASDAQ: FELE) from $0.225 to $0.25 and Comcast (CMCSA) from $0.29 to $0.31.
Tesla preview: Electric vehicle maker Tesla (TSLA) will report its fourth-quarter results on January 24th. The Austin-based company is expected to report revenue of $25.8 billion and earnings per share of $0.74. Recent price cuts on some Tesla models in key regions mean gross margin needs to be watched closely. Tesla is expected to report gross margin of 18.1%, up from 17.9% in the third quarter and 16.0% a year ago. Free cash flow is expected to be $1.45 billion for the quarter. Looking ahead, Barclays believes the key theme for Tesla in 2024 is that the company faces volume pressure in a demand-constrained environment. The reality is that 2024 could be the first time that Tesla's production volume will likely depend on demand rather than reaching full production capacity. The company expects Tesla to deliver 1.97 million units in 2024, below the current consensus estimate of 2.1 million units and far from the 50 percent CAGR target set by Tesla a few years ago lies. Options trading implies a 7% fluctuation in the stock price following the release of the Tesla earnings report. Notably, Tesla fell 9% following its last earnings report. The stocks that were most correlated with Tesla as of the reporting date last year were Rivian Automotive (RIVN) and Polestar Automotive (PSNY).
Netflix preview: Streaming giant Netflix (NFLX) will report earnings on January 23rd. Consensus estimates for the quarter are for revenue of $8.71 billion and earnings per share of $2.24. The company is expected to have added 8.93 million net streaming subscribers during the quarter, bringing its total subscribers to 256.1 million. Analysts zeroed in on Netflix (NFLX) ahead of the report. UBS increased its price target to $560 and maintained its Buy rating. The company called Netflix the main beneficiary as the industry raises prices, consolidates platforms, cuts spending and puts a renewed focus on licensing. Seaport Research increased its price target to $541 from $482 and Piper Sandler increased its price target to $475. 30 of the last 36 EPS revisions on Netflix have been in an upward trend. Options trading implies an 8% share price swing following the report's decline. Netflix rose 16% following its latest earnings report.
Investor events: The three-day TD Securities Global Mining Conference will include Arizona Sonoran Copper Company (OTCQX:ASCUF), Endeavor Group Holdings (NYSE:EDR), E3 Lithium Limited (ETL:CA), Lithium Royalty Corp. (LIRC:CA), Pan American Silver Corp. (PAAS), Piedmont Lithium (PLL), 10x Genomics (NASDAQ:TXG) and Wheaton Precious Metals (WPM). In the consumer sector, the Jefferies Consumer Summit will include presentations from BJ's Restaurants (BJRI), Xponential Fitness (XPOF) and First Watch Restaurant Group (FWRG). Restaurant operator Jack in the Box (NASDAQ:JACK) will hold its 2024 Investor Day event on January 24, with top management presentations planned.
Editor's Note: This article discusses one or more securities that are not traded on a major U.S. exchange. Please note the risks associated with these stocks.
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